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UNITED STATES  SECURITIES AND EXCHANGE COMMISSION  WASHINGTON, D.C. 20549




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FORM 10-K

(Mark One)x
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended August 31, 2003ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934for the transition period from ____________ to ____________


Commission File Number: 000-49713

ACCENTURE SCA(Exact name of Registrant as specified in its charter)

Luxembourg
(State or other jurisdiction of
incorporation or organization)
    
    98-0351796
(I.R.S. Employer Identification No.)


1 rue Guillaume Kroll
L-1882 Luxembourg
(Address of principal executive offices)

(352) 26 42 35 00
(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None.



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Securities registered pursuant to Section 12(g) of the Act:

Class I common shares, par value 1.25 per share

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  x  No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  x

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.) Yes  x  No  o

The aggregate market value of the common equity of the Registrant held by
non-affiliates of the Registrant on February 28, 2003 was approximately $10.8
billion dollars based on the closing price of the Accenture Class A common
shares, par value $0.0000225 per share, reported on the New York Stock Exchange
on such date of $15.34 per share, for which the Registrants Class I common
shares, par value 1.25 per share, are redeemable. There is no established
public trading market for the Registrants Class I common shares.

The number of shares of the Registrants Class I common shares, par value
1.25 per share, outstanding as of October 31, 2003 was 889,480,662 (which
number does not include 81,812,792 issued shares held by subsidiaries of the
Registrant).

Portions of the Annual Report on Form 10-K of Accenture Ltd, the general
partner of the Registrant, filed on November 18, 2003, are incorporated by
reference in Part II.



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Table of Contents

PART IItem 1.
    
    Business
    
    1Item 2.
    
    Properties
    
    23Item 3.
    
    Legal Proceedings
    
    23Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    23PART IIItem 5.
    
    Market for Registrant's Common Equity and Related Stockholder Matters
    
    23Item 6.
    
    Selected Financial Data
    
    25Item 7.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    26Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    45Item 8.
    
    Financial Statements and Supplementary Data
    
    46Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    46Item 9A.
    
    Controls and Procedures
    
    46PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    47Item 11.
    
    Executive Compensation
    
    47Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    47Item 13.
    
    Certain Transactions and Relationships
    
    47Item 14.
    
    Principal Accounting Fees and Services
    
    48PART IVItem 15.
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    48






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PART I

Disclosure Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 relating to our operations and our results of
operations that are based on our current expectations, estimates and
projections. Words such as expects, intends, plans, projects,
believes, estimates and similar expressions are used to identify these
forward-looking statements. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult
to predict. Forward-looking statements are based upon assumptions as to future
events that may not prove to be accurate. Actual outcomes and results may
differ materially from what is expressed or forecast in these forward-looking
statements. The reasons for this include changes in general economic and
political conditions, including fluctuations in exchange rates, and the factors
discussed below under the section entitled Business Risk Factors.

Available Information

We do not maintain a website, so we do not make our filings available by
website. We will provide, however, free of charge to any person who makes a
request, electronic or printed copies of our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments
to those reports as soon as reasonably practicable after such material is
electronically filed with the Securities and Exchange Commission (the SEC).
You may find, however, reports relating to our shares filed under Section 16(a)
of the Exchange Act, by the directors and officers of Accenture Ltd, our
general partner, on the Investor Relations section of its website at
http://www.accenture.com/investor. We do not have a separate code of business
ethics for Accenture SCA, nor do we have a board of directors or officers. All
persons acting on our behalf, including the directors and executive officers of
our general partner, Accenture Ltd, are subject to the terms of the Accenture
Ltd Code of Business Ethics, a copy of which can be accessed on the Investor
Relations section of Accenture Ltds website. Any amendments to, or waivers
granted to the directors or officers of Accenture Ltd from a provision of the
Accenture Ltd Code of Business Ethics will be disclosed, under existing
Accenture Ltd policy, through the Investor Relations section of Accenture Ltds
website. Requests for all materials should be made to the Investor Relations
group of Accenture Ltd, 1235 Avenue of the Americas, 18th Floor, New York, New
York 10105, telephone +1 877.ACN.5659 in the United States and Puerto Rico,
+1.703.797.1711 outside the United States and Puerto Rico, fax +1.917.527.6126,
email: investor.relations@accenture.com.

We use the terms Accenture, we, our, and us in this report to
refer to Accenture SCA and its subsidiaries. All references to years, unless
otherwise noted, refer to our fiscal year, which ends on August 31. All
references to quarters, unless otherwise noted, refer to the quarters of our
fiscal year. We use the term partner to refer to the executive employees of
Accenture with the partner title.

ITEM 1.   BUSINESS

Overview

Accenture is one of the worlds leading management consulting, technology
services and outsourcing organizations. We had approximately $11.82 billion of
revenues before reimbursements for fiscal 2003. As of August 31, 2003, we had
more than 83,000 employees based in over 110 offices in 48 countries delivering
to our clients a wide range of management consulting, technology and
outsourcing services and solutions. We operate globally with one common brand
and business model designed to enable us to serve our clients on a consistent
basis around the world. We work with clients of all sizes and have extensive
relationships with the worlds leading companies and governments.

Our leading position results from the fact that we are one of the largest
management consulting, technology services and outsourcing companies in the
world in terms of number of employees, industries served and revenues. Based on
our knowledge of our business and the business of our competitors, we believe
that few other organizations provide as broad a range of management consulting,
technology services and outsourcing solutions to as many industries in as many
geographic markets as we do.

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Our business consists of using our industry and business-process
knowledge, our service offering expertise and our insight into and access to
existing and emerging technologies to identify new business and technology
trends and formulate and implement solutions for clients under demanding time
constraints. We help clients identify and enter new markets, increase revenues
in existing markets, improve operational performance and deliver their products
and services more effectively and efficiently.

Management Consulting, Technology and Outsourcing Services and Solutions

Our business is structured around five operating groups, which together
comprise 18 industry groups serving clients in every major industry. Our
industry focus gives us an understanding of industry evolution, business issues
and applicable technologies, enabling us to deliver innovative solutions
tailored to each client or, as appropriate, more-standardized capabilities that
we offer to multiple clients.

Our capability groups, business process outsourcing (BPO) businesses and
technology businesses are the innovation engines through which we develop our
knowledge capital; build world-class skills and capabilities; and create,
acquire and manage key assets central to our delivery of solutions to our
clients.

Our two capability groups, Business Consulting and Technology &
Outsourcing, develop and deliver a full spectrum of services and solutions that
address business opportunities and challenges common across industries. The
subject matter experts within our capability groups support the industry
experts working within our operating groups. Our Technology & Outsourcing
capability group also manages our alliances with technology companies and
oversees our intellectual property program.

Our BPO businesses provide function-specific and/or industry-specific
business services to multiple clients on an outsourced basis through standard
operating models. Our technology businesses provide specialized technology and
infrastructure capabilities focused on particular technology platforms, such as
Microsoft Windows and .NET, as well as technology infrastructures designed from
Accenture-owned-and-operated capabilities.

Client engagement teams typically consist of industry experts, capability
specialists and professionals with local market knowledge. Our client teams
are complemented by professionals in our delivery centers, who capture
replicable components of methodologies and technologies to create client
solutions quickly, predictably and cost-effectively.

Operating Groups

The following table shows the organization of our five operating groups
and their 18 industry groups. For financial reporting purposes, our operating
groups are our reportable operating segments. For certain historical financial
information regarding our operating groups, please see Footnote 18 (Segment
Reporting) to our consolidated financial statements below under Financial
Statements and Supplementary Data.



Operating GroupsCommunications
    
    Financial& High Tech
    
    Services
    
    Products
    
    Resources
    
    Government Communications
 Electronics & High Tech
 Media & Entertainment
    
     Banking
 Capital Markets
 Insurance
    
     Automotive
 Health Services
 Industrial Equipment
 Pharmaceuticals &
   Medical Products
 Retail & Consumer
 Transportation &
   Travel Services
    
     Chemicals
 Energy
 Forest Products
 Metals & Mining
 Utilities
    
     Government


Communications & High Tech

We are a leading provider of management consulting, technology, BPO and
new-business development services and solutions to the communications, high
technology, media and entertainment industries. We help our clients achieve

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the results made possible by the convergence of computing, content and
communications. Examples of our services and solutions include the application
of mobile technology, advanced communications network optimization, broadband
and Internet protocol solutions as well as systems integration, customer care
and workforce transformation services. In support of these services, we have
developed an array of assets, methodologies and research facilities to
demonstrate how new technologies can be applied in new and innovative ways to
enhance our clients business performance.

Our Communications & High Tech operating group comprises the following
industry groups:



| |  |  | Communications. Our Communications industry group serves many of
the worlds leading wireline, wireless, cable and satellite
communications companies. We provide a wide range of services
designed to help our communications clients increase margins, improve
asset utilization, improve customer retention, increase revenues,
reduce overall costs and accelerate sales cycles.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Electronics & High Tech. Our Electronics & High Tech industry
group serves the aerospace, defense, consumer electronics, software,
semiconductor, high technology manufacturing and network equipment
industries. This industry group provides services in areas such as
electronic commerce and strategy, enterprise resource management,
customer relationship management and supply chain management.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Media & Entertainment. Our Media & Entertainment industry group
serves entertainment (television, music and movie), print and
publishing companies. Professionals in this industry group provide a
wide array of services, including digital content solutions designed
to help companies effectively manage and distribute content across
numerous media channels.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial Services

Our Financial Services operating group focuses on the opportunities
created by our clients need to adapt to changing market conditions, including
increased cost pressures, industry consolidation, regulatory changes, the
creation of common industry standards and protocols, and the move to a more
seamless and interconnected industry model. We help clients meet these
challenges through a variety of services and solutions, including outsourcing
strategies to increase cost efficiency and transform businesses, and
customer-relationship-management initiatives that enable them to acquire new
customers, retain profitable customers and improve their cross-selling
capabilities.

Our Financial Services operating group comprises the following industry
groups:



| |  |  | Banking. Our Banking industry group works with traditional
retail and commercial banks, diversified financial enterprises and a
variety of niche players and innovators. We help these organizations
develop and execute strategies to target, acquire and retain customers
more effectively, expand product and service offerings, comply with
new regulatory initiatives, and leverage new technologies and
distribution channels.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Capital Markets. As the reinvention of the securities industry
continues, our Capital Markets industry group helps investment banks,
broker/dealers, asset management firms, depositories, clearing
organizations and exchanges improve operational efficiency and
transform their businesses to remain competitive.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Insurance. Our Insurance industry group helps property and
casualty insurers, life insurers, reinsurance firms and insurance
brokers improve business processes, develop Internet insurance
businesses and improve the quality and consistency of risk selection
decisions. Our Insurance industry group has also developed a claims
management capability that enables insurers to provide better customer
service while optimizing claims costs. And, through Solutions
Assurance Vie (S.A.V.), one of Accentures BPO businesses, we
provide a variety of outsourced solutions to help insurers improve
working capital and cash flow, deliver permanent cost savings and
enhance long-term growth.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Products

Our Products operating group comprises the following industry groups:
Automotive, Health Services, Industrial Equipment, Pharmaceuticals & Medical
Products, Retail & Consumer, and Transportation & Travel Services.

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| |  |  | Automotive. Our Automotive industry group works with auto
manufacturers, suppliers, dealers, retailers and service providers.
Professionals in this industry group help clients develop and
implement solutions focused on customer service and retention, channel
strategy and management, branding, buyer-driven business models, cost
reduction, customer relationship management and integrated supplier
partnerships.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Health Services. Our Health Services industry group serves
integrated health care providers, health insurers, managed care
organizations, biotech and life sciences companies and policy-making
authorities. We are helping our clients in the health plan and health
insurance areas in North America accelerate their businesses by
connecting consumers, physicians and other stakeholders through
electronic commerce. In Europe, we are helping create new connections
between governments, physicians and insurers.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Industrial Equipment. Our Industrial Equipment industry group
serves the industrial and electrical equipment, construction, consumer
durable and heavy equipment industries. We help our clients increase
operating and supply chain efficiency by improving processes and
leveraging technology. We also work with clients to generate value
from strategic mergers and acquisitions. Our Industrial Equipment
industry group also develops and deploys innovative solutions in the
areas of channel management, collaborative product design, remote
field maintenance, enterprise application integration and outsourcing.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Pharmaceuticals & Medical Products. Our Pharmaceuticals &
Medical Products industry group serves pharmaceuticals, biotechnology,
medical products and other industry-related companies. With knowledge
in discovery, development, manufacturing, supply chain, and sales and
marketing issues, we help companies identify and exploit opportunities
for value creation, such as reducing the time required to develop and
deliver new drugs to market through process improvements and
implementation of technology. Our Pharmaceuticals & Medical Products
industry group also helps clients integrate new discovery
technologies, realize the potential of genomics and biotechnology,
become more patient-centric and create new business models that
deliver medical breakthroughs more rapidly.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Retail & Consumer. Our Retail & Consumer industry group serves a
wide spectrum of retailers and consumer goods companies, including
supermarkets, specialty premium retailers and large mass-merchandise
discounters, as well as food, beverage, tobacco, household products,
cosmetics and apparel companies. This industry group adds value to
companies through innovative service offerings that address, among
other things, new ways of reaching the retail trade and consumers
through precision consumer marketing, maximizing brand synergies and
cost reductions in mergers and acquisitions, improving supply chain
efficiencies through collaborative commerce business models, and
enhancing the efficiency of their internal operations.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Transportation & Travel Services. Our Transportation & Travel
Services industry group serves companies in the airline, freight
transportation, third-party logistics, hospitality, gaming, car
rental, passenger rail and travel distribution industries. We help
clients develop and implement strategies and solutions to improve
customer relationship management capabilities, operate more-efficient
networks, integrate supply chains, develop procurement and electronic
business marketplace strategies, and more effectively manage
maintenance, repair and overhaul processes and expenses. And through
Navitaire, Inc., one of Accentures BPO businesses, we provide
airlines with reservations, revenue accounting and revenue management
services on an outsourced basis.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Resources

Our Resources operating group serves the energy, chemicals, utilities,
metals, mining, forest products and related industries. With market conditions
driving energy companies to seek new ways of creating value for shareholders,
deregulation fundamentally reforming the utilities industry and yielding
cross-border opportunities, and an intensive focus on productivity and
portfolio management in the chemicals industry, we are working with clients to
create innovative solutions that are designed to help them differentiate
themselves in the marketplace and gain competitive advantage.

Our Resources operating group comprises the following industry groups:

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| |  |  | Chemicals. Our Chemicals industry group works with a wide
cross-section of industry segments, including petrochemicals,
specialty chemicals, polymers and plastics, gases and life science
companies. We also have long-term outsourcing contracts with many of
the industry leaders.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Energy. Our Energy industry group serves a wide range of
companies in the oil and gas industry, including upstream, downstream
and oil services companies. Key areas of focus include helping
clients to optimize production, manage the hydrocarbon supply chain,
streamline retail operations and realize the full potential of
third-party enterprise-wide technology solutions. In addition, our
multi-client outsourcing centers enable clients to increase
operational efficiencies and to exploit cross-industry synergies.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Forest Products. The Forest Products industry group helps our
clients in the lumber, pulp, papermaking, converting and packaging
segments of the industry develop and implement new business
strategies, manage complex change initiatives, and integrate processes
and technologies to improve business performance.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Metals & Mining. Our Metals & Mining industry group serves
clients in metals industry segments ranging from steel and aluminum to
copper, zinc and precious metals. We help clients develop innovative
business strategies, redesign business processes, exploit technologies
and improve their organizational performance and value.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Utilities. Our Utilities industry group works with electric, gas
and water utilities around the world to respond to an evolving and
highly competitive marketplace. Our work includes helping utilities
transform themselves from regulated, and sometimes state-owned, local
entities to global deregulated corporations, as well as developing
diverse products and service offerings to help our clients deliver
higher levels of service to their customers. These offerings include
customer relationship management, workforce enablement, supply chain
optimization, and trading and risk management. In addition, through
Accenture Business Services for Utilities, one of Accentures BPO
businesses, we provide outsourced customer-care services to utilities,
municipalities and retail energy companies in North America.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Government

As the worlds largest employers, governments face the challenge of
improving the efficiency of their service delivery by creating new
citizen-centric business models that leverage the power of new technologies.
Our Government operating group works with government agencies in 24 countries,
helping them transform to meet the demands of citizens and businesses. We
typically work with defense, revenue, human services, justice, postal,
education and electoral authorities, and our clients are national, provincial
or state-level government organizations, as well as cities and other
municipalities.

We advise on, implement and in some cases operate government services,
enabling our clients to use their resources more efficiently and to deliver
citizen-centric services. We are also working with clients to transform their
back-office operations, build Web interfaces and enable services to be
delivered over the Internet. And, as governments are pressed to operate at
higher levels with reduced resources, Accenture is introducing innovative
contract models from the private sector that are becoming increasingly popular
with governments. For instance, Accenture pioneered Public Sector Value, a
patent-pending approach that enables governments to measure outcomes and make
decisions that directly improve citizen satisfaction, much as public-sector
companies measure shareholder value to enhance the value they deliver to
shareholders.

In addition, through Accenture eDemocracy Services, one of Accentures BPO
businesses, we provide comprehensive election services that help governments
manage, build and deploy election solutions, reduce time to deployment and
mitigate the risks associated with the election process.

Capability Groups

Our two capability groups, Business Consulting and Technology &
Outsourcing, develop and deliver a full spectrum of services and solutions that
address business opportunities and challenges common across industries. The
professionals dedicated full-time to our capability groups help develop
knowledge and assets for clients across all of the industries we serve.

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Business Consulting Capability Group

Our Business Consulting capability group comprises five service lines and
two solution units. The five Business Consulting service lines are Customer
Relationship Management, Finance & Performance Management, Human Performance,
Strategy & Business Architecture and Supply Chain Management. Our two
Business Consulting solution units are Accenture Customer Contact Solutions and
Accenture Procurement Solutions; these solution units are responsible for
creating, managing and growing certain BPO capabilities before they reach the
mature stage of development in terms of client base, opportunities, and sales
and execution capability.

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| |  |  | Customer Relationship Management.The professionals in our Customer
Relationship Management service line help companies acquire, develop and retain
more profitable customer relationships. We offer a full range of innovative
capabilities that address every aspect of customer relationship management,
including marketing, direct sales, customer service and field support. These
capabilities include rigorous approaches to improving the return on marketing
investment, methods for building insight into customers purchase habits and
service preferences, tailoring offers and service treatment based on that
insight, and unique methods of optimizing the quality, cost and revenue impact
of sales and service operations. Together with our alliance partners, we bring
these skills to our clients to help them increase the value of their customer
relationships and enhance the economic value of their brands.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Finance & Performance Management.The professionals in our Finance
& Performance Management service line work with our clients finance
and business unit executives to develop financial transaction
processing, risk management and business performance reporting
capabilities. Among the services we provide are strategic consulting
with regard to the design and structure of the finance function,
particularly acquisition and post-merger integration, the establishment
of shared service centers, and the configuration of enterprise resource
planning platforms for streamlining transaction processing. Our
professionals, who often leverage the resources of our Accenture
Finance Solutions BPO business, work with finance executives to develop
and implement solutions that help them align their companies
investments with their business objectives and establish security
relating to the exchange of information to reporting institutions. Our
finance capability services also address pricing and yield management,
billing, credit risk and collection effectiveness, lending and debt
recovery. Our performance management services address shareholder
value targeting, scorecard and performance metrics development, and
performance reporting solutions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Human Performance.The professionals in our Human Performance
service line work with clients to solve human performance issues that
are crucial to operational success, including recruiting and motivating
key employees and management. Our integrated approach provides human
resources, knowledge management, and learning and performance
management solutions that increase the efficiency and effectiveness of
our clients employees and operations, while reducing recruiting and
training costs. Professionals in our Human Performance service line,
who often work closely with professionals in our Accenture Learning and
Accenture HR Services BPO businesses, help companies and governments
reduce employees time to competency, increase knowledge retention,
lower the costs of administering complex training content, and manage
multiple learning delivery vehicles and vendors.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Strategy & Business Architecture.The professionals in our
Strategy & Business Architecture service line work with individuals at
the highest levels of our clients organizations to help them strike
the right balance between delivering current earnings and investing for
the future. Our Strategy & Business Architecture professionals deliver
independent, fact-based analyses that identify value-led strategies and
solutions in shareholder value analysis, mergers and acquisitions,
alliances and partnerships, corporate governance, marketing strategy,
the strategic use of technology, optimization of information technology
investments, and transformational programs where information technology
is a significant component. In addition, our professionals analyze
current and emerging market trends to help clients identify new
business opportunities.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Supply Chain Management.The professionals in our Supply Chain
Management service line help clients across a broad range of industries
to plan and implement innovative operating models that support
strategies to enhance revenues, reduce costs, increase asset
productivity and improve customer service. Our professionals combine
their skills and leading-edge approaches to sourcing and procurement,
supply chain planning, manufacturing and design, fulfillment and new
solutions  such as supply chain and outsourcing, service parts
management, radio frequency identification (RFID) technologies and
supply chain education  to help our clients improve their operational
performance.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Accenture Customer Contact Solutions.The professionals in our
Accenture Customer Contact Solutions solution unit deliver an
end-to-end customer relationship management solution that uses advanced
technologies and business process innovations to help clients
revitalize sales and service capabilities. We help clients increase
revenues while reducing the cost of sales and service by targeting five
critical dimensions of customer interaction: executing marketing and
customer strategy; building and integrating deep customer-insight
capabilities; transforming customer contact and self-service
capabilities; implementing high-performance operating models; and
leveraging global labor sourcing strategies.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  |  | Accenture Procurement Solutions.The professionals in our
Accenture Procurement Solutions solution unit provide a comprehensive
range of procurement services that are tightly integrated with
Accenture consulting capabilities. We help clients quickly realize
significant cost savings, effectively control expenditures and make
better business decisions via improved management visibility and
accountability. Our solutions include strategic sourcing, procurement
effectiveness, compliance and electronic procurement solutions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Technology & Outsourcing Capability Group

Our Technology & Outsourcing capability group comprises four service
lines: Technology & Research, Global Business Solutions, Global Technology
Solutions, and Outsourcing & Infrastructure Delivery. The group also manages
our alliances with technology companies and oversees our intellectual property
program.

The four Technology & Outsourcing service lines are responsible for
developing and delivering our full suite of technology and outsourcing
capabilities. Client engagements typically incorporate professionals from
several or all of these service lines, with the specific resources being used
at a given time dependent on the requirements of the specific phase of each
project.



| |  |  | Technology & Research.Our Technology & Research service line
comprises two main components, one focusing on designing, building and
deploying complex technology solutions for clients; and the other
focusing on technology research and development. Professionals in the
former provide specialized capabilities that focus on particular
technology platforms, such as Microsoft.NET and J2EE, as well as on
supporting technology architectures. This group has expertise and
capabilities in a wide range of areas, including infrastructure
planning and transformation; security; operations management; network
management; and mobility and messaging. These professionals also
maintain and enhance Accentures methods, tools and architectures for
building technology-based solutions in an efficient, predictable and
cost-effective manner. The Technology & Research service line also
includes Accenture Technology Labs, a dedicated technology research and
development organization that identifies and develops new technologies
that we believe will be drivers of our clients growth and will enable
clients to be first to market with a unique capability or service
offering.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Global Business Solutions.Professionals in our Global Business
Solutions service line design, build and deploy complex
industry-specific, reusable and scalable solutions that typically
integrate business processes, technology and human-performance
components. The group leads all of our packaged development efforts
around applications suites such as SAP, PeopleSoft, Siebel and Oracle,
among others. Our Global Business Solutions professionals have
expertise and capabilities in a wide range of areas, including
enterprise resource planning, enterprise integration, data warehousing
and pre-packaged business solution delivery.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Global Technology Solutions.Our Global Technology Solutions
service line comprises specialists who build, deploy and maintain
technology-based solutions, focusing on application development,
systems administration work and software maintenance. Working in
concert with the other service lines within Accenture, Global
Technology Solutions professionals apply a systematic approach to
solutions delivery that capitalizes on proven repeatable processes,
methods, tools and architectures. They also possess deep expertise on
a range of hardware and software technologies. The Global Technology
Solutions service line includes Avanade, Inc., our technology business
that focuses on large-scale technology integration based on Microsofts
enterprise platform. Combining Microsofts understanding of operating
platforms and technologies with our experience in delivering solutions
to our clients, Avanade, Inc. capitalizes on the advanced capabilities
of the Microsoft Windows and .NET platforms to build customized,
scalable solutions for complex electronic business and enterprise
infrastructures.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Outsourcing & Infrastructure Delivery.Professionals in our
Outsourcing and Infrastructure Delivery service line provide
full-service outsourcing solutions, from technology infrastructure to
applications and business process outsourcing. Services offered
include communications; technical support; desktop management and
mobility; messaging and collaboration; hosting; applications
development and management; and delivery services for both customized
and industrialized business process outsourcing solutions.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Alliances

Alliances are central to our strategy, our client service business, and
the way we deliver value to our clients. We have more than 100 sales and
delivery alliances with companies whose capabilities complement our own, either
by enhancing a service offering, delivering a new technology, or helping us
extend our services to new geographies. By combining our alliance partners
products and services together with our own capabilities and expertise, we
create innovative, high-value business solutions for our clients.

Due to the highly focused nature of these business relationships, some
alliances are specifically aligned with one of our service lines, adding
skills, technology and insights that are applicable across many of the
industries we serve. Other alliances extend and enhance our offerings specific
to a single industry group. Our alliances help us to sell and deliver
innovative solutions far faster than we could do alone.

Almost all of our alliances are non-exclusive. While individual alliance
agreements do not involve direct payments to us that are material to our
business, overall our alliance relationships generate revenues for us in the
form of consulting services for implementing our alliance partners products
and our related services.

BPO Businesses

We continue to position ourselves to achieve a greater percentage of our
revenues and growth through outsourcing, including BPO. We work with clients
to develop and deliver business process innovations that transform their
businesses or deliver higher performance levels at lower costs. To date, we
have created eight BPO businesses, each providing services directly to clients
through separate, dedicated delivery teams and, in some cases, through separate
subsidiaries. Each of these BPO businesses provides function-specific and/or
industry-specific business services to multiple clients on an outsourced basis
through standard operating models. Some of our BPO businesses offer services
to clients across many industries, while others offer services only to clients
in a specific industry.

Our function-specific BPO businesses, which serve clients in numerous
industries, currently are Accenture Finance Solutions, Accenture HR Services,
Accenture Learning and Connection to eBay. Our industry-specific BPO
businesses currently are Accenture Business Services for Utilities, Accenture
eDemocracy Services, Navitaire, Inc. and S.A.V.

Accenture HR Services

Our Accenture HR Services business provides outsourced human resources
services to global enterprises seeking higher levels of employee performance,
productivity and satisfaction at a lower cost. With a network of resources
service centers and self-service delivery tools such as Web-based technology,
Accenture HR Services offers efficient, secure, integrated human resources
services across the employee lifecycle, from recruitment to payroll to
pensions, providing large organizations with more efficient and effective human
resources management systems.

Accenture Learning

Accenture Learning works with companies and governments to provide
outsourced transformational learning solutions that cover all areas of a
clients learning needs, including learning delivery, processes and
technologies, as well as multi-language delivery and content. Accenture
Learning helps clients improve the productivity and performance of their
workforces by reducing employees time to competency, increasing knowledge
retention, lowering the costs of administering complex training content, and
managing multiple learning delivery vehicles and vendors.

Accenture Finance Solutions

Accenture Finance Solutions provides outsourced financial management
services to help clients streamline financial management, improve working
capital and cash flow, and deliver permanent cost savings from operational
activities. Professionals in this BPO business provide finance operations,
applications management, financial accounting and management reporting services
that help clients transform their finance organizations from internal cost
centers to client-focused service providers. We also leverage our global
network of Accenture delivery centers to bring our high-volume transaction
processing capabilities and extensive experience in financial shared services
to enhance clients service capabilities.

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Connection to eBay

Connection
to eBay is an end-to-end service we created that enables large
resellers to liquidate unsold inventory by building a significant sales channel
on eBay. Connection to eBay customers are able to tap into eBays vast
marketplace and operate an additional, efficient online channel, quickly and
cost effectively, without having to change their internal processes and
organizations. Developed with assistance from eBay, the Connection to eBay
service offers capabilities ranging from listing management and customer
support to warehousing and logistics management. By increasing efficiencies in
the listing, sales and order-management processes, Connection to eBay can help
sellers earn greater revenues than through traditional liquidation channels.

Accenture Business Services for Utilities

Accenture Business Services for Utilities offers a full suite of
outsourced business services to utilities across North America to help them
respond to the challenges of rising customer-service costs, inefficient
operations and demands for better service at reduced costs. Among the business
services we provide are customer care, finance and accounting, human resources,
supply chain and information technology, as well as facilities and field
services. We leverage our industry experience and network to provide clients
with high-quality business services at significantly enhanced service levels
while improving their cost structures.

Accenture eDemocracy Services

Accenture eDemocracy Services combines Accentures experience in elections
process consulting with our recently acquired assets of election.com, a global
election software and services company, to provide a comprehensive suite of
services to election agencies and private-sector entities around the world. For
public agencies we provide strategy and planning, program management, election
systems management, voter registration systems development, and
transformational outsourcing services and solutions to help them manage, build
and deploy election solutions, reduce time to deployment and mitigate the risks
associated with the election process. For private-sector entities including
corporations, business and professional associations, unions and cooperatives 
we operate an Internet voting service that enables these clients to run
Internet elections in multiple geographies and languages.

Solutions Assurance Vie (S.A.V.)

Our S.A.V. subsidiary provides outsourced life insurance policy design and
management services to help insurers accelerate the marketing of life insurance
products. S.A.V. provides high-volume transaction processing capabilities and
has extensive experience in the insurance market in enhancing clients service
capabilities.

Navitaire, Inc.

Our Navitaire, Inc. subsidiary offers a full range of business services to
the airline industry, including reservations, direct ticket distribution,
revenue protection, decision support, passenger revenue accounting and revenue
management services. Through its application service provider (ASP) delivery
model, Navitaire, Inc. offers industry-leading applications with reduced
implementation time and risk, ensured operational reliability, and
cost-effective fee structures. Navitaire, Inc.s customer base includes more
than 40 airlines worldwide, including some of the worlds largest airlines as
well as a growing number of low-fare and midsize airlines.

Strategic Delivery Approach

Our global strategic delivery approach emphasizes quality, reduced risk,
speed to market and predictability. Our ultimate goal is to deliver
price-competitive solutions and services that improve performance. One of our
key strengths is our ability to create and capture replicable components of
processes, methodologies, tools and technology assets that we can use to create
tailored solutions for our clients in a cost-effective manner and under
demanding time constraints. Our global network of more than 40 delivery
centers  facilities where teams of Accenture professionals use these proven
assets to create business and technology solutions for clients  enhance our
ability to capitalize on a vast array of methodologies, tools and technology to
deliver value to our clients. Client teams use these centers to deliver
comprehensive, large-scale and customized solutions in less time than would be
required to build them from the ground up. Our delivery centers improve the
efficiency of our engagement teams through the reuse of solution designs,
infrastructure and software, and by leveraging the experience of delivery
center professionals. Reuse also increases solution longevity and reduces
delivery risks and application maintenance.

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Research and Innovation

We are committed to developing leading-edge ideas. We believe that
research and innovation have been major factors in our success and will help us
continue to grow in the future. We use our investment in research to help
create, commercialize and disseminate innovative business strategies and
technology. Our research and innovation program is designed to generate early
insights into how knowledge can be harnessed to create innovative business
solutions for our clients and to develop business strategies with significant
value. We spent $250 million, $235 million and $271 million on research and
development in fiscal 2003, fiscal 2002 and fiscal 2001, respectively,
primarily through our operating groups and our capability groups to develop
market-ready solutions for our clients. We also promote the creation of
knowledge capital and thought leadership through the Accenture Technology Labs
and the Accenture Institute for High Performance Business (formerly known as
the Accenture Institute for Strategic Change).

Accenture Organizational Structure

Accenture SCA, a Luxembourg partnership limited by shares, is a subsidiary
of Accenture Ltd. Accenture Ltd is a Bermuda holding company with no material
assets other than Class I and Class II common shares in Accenture SCA.
Accenture Ltds only business is to hold these shares and to act as the sole
general partner of Accenture SCA. Accenture Ltd owns a majority voting interest
in Accenture SCA. As the general partner of Accenture SCA and as a result of
Accenture Ltds majority voting interest in Accenture SCA, Accenture Ltd
controls Accenture SCAs management and operations and consolidates Accenture
SCAs results in its financial statements. Accenture operates its business
through subsidiaries of Accenture SCA. Accenture SCA reimburses Accenture Ltd
for its expenses but does not pay Accenture Ltd any fees.

Prior to our transition to a corporate structure in fiscal 2001, we
operated as a series of related partnerships and corporations under the control
of our partners. In connection with our transition to a corporate structure,
our partners generally exchanged all of their interests in these partnerships
and corporations for Accenture Ltd Class A common shares or, in the case of
partners in certain countries, Accenture SCA Class I common shares or
exchangeable shares issued by Accenture Canada Holdings Inc., an indirect
subsidiary of Accenture SCA (Accenture Canada Holdings). Generally, partners
who received Accenture SCA Class I common shares or Accenture Canada Holdings
exchangeable shares also received a corresponding number of Accenture Ltd Class
X common shares, which entitle their holders to vote at Accenture Ltd
shareholders meetings but do not carry any economic rights.

Each Class A common share and each Class X common share of Accenture Ltd
entitles its holder to one vote on all matters submitted to a vote of
shareholders of Accenture Ltd. The holder of a Class X common share is not,
however, entitled to receive dividends or to receive payments upon a
liquidation of Accenture Ltd.

Each Class I common share and each Class II common share of Accenture SCA
entitles its holder to one vote on all matters submitted to a vote of
shareholders of Accenture SCA. Each Accenture SCA Class II common share
entitles Accenture Ltd to receive a dividend or liquidation payment equal to
10% of any dividend or liquidation payment to which an Accenture SCA Class I
common share entitles its holder. Accenture Ltd holds all of the Class II
common shares of Accenture SCA.

Subject to contractual transfer restrictions, Accenture SCA is obligated,
at the option of the holder, to redeem any outstanding Accenture SCA Class I
common share at any time at a redemption price per share generally equal to the
market price of an Accenture Ltd Class A common share at the time of the
redemption. Accenture SCA may, at its option, pay this redemption price with
cash or by delivering Accenture Ltd Class A common shares on a one-for-one
basis. In addition, each of our partners in the United States, Australia and
Norway has agreed that we may cause that partner to exchange that partners
Accenture SCA Class I common shares for Accenture Ltd Class A common shares on
a one-for-one basis if Accenture Ltd holds more than 40% of the issued share
capital of Accenture SCA and we receive a satisfactory opinion from counsel or
a professional tax advisor that such exchange should be without tax cost to
that partner. This one-for-one redemption price and exchange ratio will be
adjusted if Accenture Ltd holds more than a de minimis amount of assets (other
than its interest in Accenture SCA and assets it holds only transiently prior
to contributing them to Accenture SCA) or incurs more than a de minimis amount
of liabilities (other than liabilities for which Accenture SCA has a
corresponding liability to Accenture Ltd). We have been advised by our legal
advisors in Luxembourg that there is no relevant legal precedent in Luxembourg
quantifying or defining the term de minimis. In the event that a question
arises in this regard, we expect that management will interpret de minimis in
light of the facts and circumstances existing at the time in question. At this
time, Accenture Ltd does not intend to hold any material assets other than its
interest in Accenture

11



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SCA or to incur any material liabilities such that this one-for-one
redemption price and exchange ratio would require adjustment and will disclose
any change in its intentions that could affect this ratio. In order to maintain
Accenture Ltds economic interest in Accenture SCA, Accenture Ltd will acquire
additional Accenture SCA common shares each time it issues additional Accenture
Ltd Class A common shares.

Holders of Accenture Canada Holdings exchangeable shares may exchange
their shares for Accenture Ltd Class A common shares at any time on a
one-for-one basis. Accenture may, at its option, satisfy this exchange with
cash at a price per share generally equal to the market price of an Accenture
Ltd Class A common share at the time of the exchange. Each exchangeable share
of Accenture Canada Holdings entitles its holder to receive distributions equal
to any distributions to which an Accenture Ltd Class A common share entitles
its holder.

Accenture Ltd may, at its option, redeem any Class X common share for a
redemption price equal to the par value of the Class X common share, or
$0.0000225 per share. Accenture Ltd may not, however, redeem any Class X common
share of a person who is a party to the Accenture Ltd Voting Agreement if such
redemption would reduce the number of Class X common shares held by that person
to a number that is less than the number of Accenture SCA Class I common shares
or Accenture Canada Holdings exchangeable shares held by that person, as the
case may be. Accenture Ltd will redeem Accenture Ltd Class X common shares upon
redemption or exchange of Accenture SCA Class I common shares and Accenture
Canada Holdings exchangeable shares so that the aggregate number of Class X
common shares outstanding at any time does not exceed the aggregate number of
Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable
shares outstanding. See Certain Transactions  Accenture Ltd Voting
Agreement in the Annual Report on Form 10-K of Accenture Ltd, which is
incorporated by reference in Item 13 of this Annual Report on Form 10-K for a
description of the material terms of that agreement.

Prior Relationship with Andersen Worldwide and Arthur Andersen Firms

As a result of a restructuring in 1989, the predecessors to many of what
are now our subsidiaries became legally separate and distinct from all Arthur
Andersen firms. In August 2000, following an arbitration proceeding we
initiated in 1997, the arbitration tribunal terminated all remaining
contractual relationships with Andersen Worldwide and all Arthur Andersen
firms. On January 1, 2001, we began to conduct business under the name
Accenture. See Certain Transactions and RelationshipsPrior Relationship with
Andersen Worldwide and Arthur Andersen Firms in the Annual Report on Form 10-K
of Accenture Ltd, which is incorporated by reference in Item 13 of this Annual
Report on Form 10-K.

Employees

Our most important asset is our people. We are deeply committed to the
development of our employees. Each professional receives extensive and focused
technical and managerial skills development training appropriate to his or her
career with us. We seek to reinforce our employees commitments to our clients,
culture and values through a comprehensive performance review system and a
competitive compensation philosophy that rewards individual performance and
teamwork. We strive to maintain a work environment that reinforces our historic
partnership culture and the collaboration, motivation, alignment of interests
and sense of ownership and reward that this partnership culture has fostered.

As of August 31, 2003, we had more than 83,000 employees worldwide.
Currently approximately 2,300 of our employees are partners.

Competition

We operate in a highly competitive and rapidly changing global marketplace
and compete with a variety of organizations that offer services competitive
with those we offer. Our clients typically retain us on a non-exclusive basis.
In addition, a client may choose to use its own resources rather than engage an
outside firm for the types of services we provide. Our competitors include
global information technology service firms offering a full range of consulting
and outsourcing services, as well as consulting services firms, information
technology services providers and application service providers. Additionally,
customers in the markets we serve continue to be receptive to engaging smaller
service providers with numerous geographic, service or industry-specific
niches.

Our revenues are derived primarily from FortuneGlobal 500 and Fortune
1000 companies, medium-sized companies, governmental organizations and other
large enterprises. We believe that the principal competitive factors in the
industries in which we compete include:

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| |  |  | skills and capabilities of people;
| | - |  | ----------------------------------



| |  |  | innovative service and product offerings;
| | - |  | -----------------------------------------



| |  |  | perceived ability to add value;
| | - |  | -------------------------------



| |  |  | reputation and client references;
| | - |  | ---------------------------------



| |  |  | price;
| | - |  | ------



| |  |  | scope of services;
| | - |  | ------------------



| |  |  | service delivery approach;
| | - |  | --------------------------



| |  |  | technical and industry expertise;
| | - |  | ---------------------------------



| |  |  | quality of services and solutions;
| | - |  | ----------------------------------



| |  |  | focus on achieving results on a timely basis;
| | - |  | ---------------------------------------------



| |  |  | availability of appropriate resources; and
| | - |  | ------------------------------------------



| |  |  | global reach and scale.
| | - |  | -----------------------

Intellectual Property

Our success has resulted in part from our proprietary methodologies,
software, reusable knowledge capital, assets and other intellectual property
rights. We rely upon a combination of nondisclosure and other contractual
arrangements as well as upon trade secret, copyright, patent and trademark laws
to protect our intellectual property rights and the rights of third parties
from whom we license intellectual property. We have promulgated policies
related to confidentiality and ownership and to the use and protection of
Accentures and third parties intellectual property, and we also enter into
agreements with our employees as appropriate.

We recognize the value of intellectual property in the marketplace and
vigorously create, harvest and protect our intellectual property. As of the end
of fiscal 2003, we had 969 patent applications currently pending in the United
States and other jurisdictions and have been issued 111 U.S. patents and 40
non-U.S. patents in, among others, the following areas: goal-based educational
simulation; virtual call centers; hybrid telecommunications networks;
development architecture frameworks; emotion-based voice processing; mobile
communications networks; location-based information filtering; and computerized
multimedia asset systems. We will continue to vigorously identify, create,
harvest and protect our intellectual property.

Risk Factors

Risks That Relate to Our Business



| |  | Our results of operations are materially affected by economic conditions,
levels of business activity and levels of change in the industries we serve.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

Uncertain global economic and political conditions continue to affect many
of our clients businesses and many clients continue to reduce or defer
expenditures for consulting services. In addition, our business tends to lag
behind economic cycles and, consequently, the benefits of any economic recovery
to our business may take longer to realize. We continue to experience pricing
pressures, which are eroding our revenues. Further deterioration of global
economic or political conditions could increase these effects.

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| |  | Our business will be negatively affected if we are not able to anticipate and
keep pace with rapid changes in technology or if growth in the use of
technology in business is not as rapid as in the past.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our success depends, in part, on our ability to develop and implement
management consulting, technology and outsourcing services and solutions that
anticipate and keep pace with rapid and continuing changes in technology,
industry standards and client preferences. We may not be successful in
anticipating or responding to these developments on a timely basis, and our
offerings may not be successful in the marketplace. Also, services, solutions
and technologies developed by our competitors may make our service or solution
offerings uncompetitive or obsolete. Any one of these circumstances could have
a material adverse effect on our ability to obtain and successfully complete
client engagements.

Our business is also dependent, in part, upon continued growth in the use
of technology in business by our clients and prospective clients and their
customers and suppliers. The growth in the use of technology slows down in
challenging economic environments. There is currently no significant new
technology wave to stimulate spending. Use of new technology for commerce
generally requires the understanding and acceptance of a new way of conducting
business and exchanging information. Companies that have already invested
substantial resources in traditional means of conducting commerce and
exchanging information may be particularly reluctant or slow to adopt a new
approach that may make some of their existing personnel, processes and
infrastructure obsolete.



| |  | We may face damage to our professional reputation or legal liability if our
clients are not satisfied with our services.
| |  | ------------------------------------------------------------------------------------------------------------------------

As a professional services firm, we depend to a large extent on our
relationships with our clients and our reputation for high-caliber professional
services and integrity to attract and retain clients. As a result, if a client
is not satisfied with our services or solutions, including those of
subcontractors we employ, it may be more damaging in our business than in other
businesses. Moreover, if we fail to meet our contractual obligations or fail to
disclose our financial or other arrangements with our alliance partners, we
could be subject to legal liability or loss of client relationships. Our
exposure to legal liability may be increased in the case of outsourcing
contracts in which we become more involved in our clients operations. Our
contracts typically include provisions to limit our exposure to legal claims
relating to our services and the solutions we develop, but these provisions may
not protect us or may not be enforceable in all cases.



| |  | Our services or solutions may infringe upon the intellectual property rights
of others.
| |  | ---------------------------------------------------------------------------------------

We cannot be sure that our services and solutions, or the solutions of
others that we offer to our clients, do not infringe on the intellectual
property rights of third parties, and we may have infringement claims asserted
against us or against our clients. These claims may harm our reputation, cost
us money and prevent us from offering some services or solutions. Historically
in our contracts, we have generally agreed to indemnify our clients for any
expenses or liabilities resulting from claimed infringements of the
intellectual property rights of third parties. In some instances, the amount of
these indemnities may be greater than the revenues we receive from the client.
Any claims or litigation in this area, whether we ultimately win or lose, could
be time-consuming and costly, injure our reputation or require us to enter into
royalty or licensing arrangements. We may not be able to enter into these
royalty or licensing arrangements on acceptable terms.



| |  | Our engagements with clients may not be profitable.
| |  | ---------------------------------------------------

Unexpected costs or delays could make our contracts unprofitable. We have
many types of contracts, including time-and-materials contracts, fixed-price
contracts and contracts with features of both of these contract types. While
the risks associated with all of these types of contracts are often similar, an
increasing number of outsourcing contracts entailing the coordination of
operations, diverse geographic and competency workforces and geographically
distributed service centers further complicate the delivery of our services and
increase the magnitude of these risks. When making proposals for engagements,
we estimate the costs and timing for completing the projects. These estimates
reflect our best judgment regarding the efficiencies of our methodologies and
professionals as we plan to deploy them on projects. Any increased or
unexpected costs or unanticipated delays in connection with the performance of
these engagements, including delays caused by factors outside our control,
could make these contracts less profitable or unprofitable, which would have an
adverse effect on our profit margin.

Under many of our contracts, the payment of some or all of our fees is
conditioned upon our performance. We are increasingly moving away from
contracts that are priced solely on a time-and-materials basis and toward
contracts that also include incentives related to factors such as costs
incurred, benefits produced, goals attained and adherence to schedule. For example, we are entering into an increasing number of
outsourcing contracts, including business transformation outsourcing contracts,
under which payment of all or a portion of our fees is contingent upon our
clients

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meeting revenue-enhancement, cost-saving or other contractually defined
goals which are increasing in complexity and often dependent in some measure on
our clients actual levels of business activity. We estimate that a majority of
our contracts have some fixed-price, incentive-based or other pricing terms
that condition some or all of our fees on our ability to deliver these defined
goals. The trend to include greater incentives in our contracts related to
additional revenues generated, costs incurred, benefits produced or our
adherence to schedule may increase the variability in revenues and margins
earned on such contracts.

Our contracts can be terminated by our clients with short notice. Our
clients typically retain us on a non-exclusive, engagement-by-engagement basis,
rather than under exclusive long-term contracts. A majority of our consulting
engagements are less than 12 months in duration. While our accounting systems
identify the duration of our engagements, these systems do not track whether
contracts can be terminated upon short notice and without penalty. However, we
estimate that the majority of our contracts can be terminated by our clients
with short notice and without significant penalty. The advance notice of
termination required for contracts of shorter duration and lower revenues is
typically 30 days. Longer-term, larger and more complex contracts generally
require a longer notice period for termination and may include an early
termination charge to be paid to us. Additionally, large client projects
involve multiple engagements or stages, and there is a risk that a client may
choose not to retain us for additional stages of a project or that a client
will cancel or delay additional planned engagements. These terminations,
cancellations or delays could result from factors unrelated to our work product
or the progress of the project, but could be related to business or financial
conditions of the client or the economy generally. When contracts are
terminated, we lose the associated revenues and we may not be able to eliminate
associated costs in a timely manner.

We may fail to collect amounts extended to clients. In limited
circumstances we extend financing to our clients, which we may fail to collect.
A client must meet established criteria to receive financing, and any
significant extension of credit requires approval by senior levels of our
management. We had extended $336 million of such financing as of August 31,
2003.



| |  | If our alliances do not succeed, we may not be successful in implementing our
growth strategy.
| |  | ----------------------------------------------------------------------------------------------

Our alliances are an important component of our growth strategy. If these
relationships do not succeed, we may fail to obtain the benefits we hope to
derive from these endeavors. Similarly, we may be adversely affected by the
failure of one or more of our alliances, which could lead to reduced marketing
exposure, diminished sales and a decreased ability to develop and gain access
to solutions. As most of our alliance relationships are non-exclusive, our
alliance partners are not prohibited from forming closer or preferred
arrangements with our competitors. Poor performance or failures of our
alliances could have a material adverse impact on our growth strategy, which,
in turn, could adversely affect our financial condition and results of
operations.



| |  | Our global operations pose complex management, foreign currency, legal, tax
and economic risks, which we may not adequately address.
| |  | ------------------------------------------------------------------------------------------------------------------------------------

We have offices in 48 countries around the world. In fiscal 2003,
approximately 48% of our revenues before reimbursements were attributable to
our activities in the Americas, 45% were attributable to our activities in
Europe, the Middle East and Africa, and 7% were attributable to our activities
in the Asia/Pacific region. As a result, we are subject to a number of risks,
including:



| |  |  | the absence in some jurisdictions of effective laws to protect our intellectual property rights;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | multiple and possibly overlapping and conflicting laws;
| | - |  | -------------------------------------------------------



| |  |  | restrictions on the movement of cash;
| | - |  | -------------------------------------



| |  |  | the burdens of complying with a wide variety of national and local laws;
| | - |  | ------------------------------------------------------------------------



| |  |  | political instability;
| | - |  | ----------------------



| |  |  | currency exchange rate fluctuations;
| | - |  | ------------------------------------



| |  |  | longer payment cycles;
| | - |  | ----------------------

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| |  |  | restrictions on the import and export of certain technologies;
| | - |  | --------------------------------------------------------------



| |  |  | price controls or restrictions on exchange of foreign currencies; and
| | - |  | ---------------------------------------------------------------------



| |  |  | trade barriers.
| | - |  | ---------------



| |  | The consulting, technology and outsourcing markets are highly competitive and
the pace of consolidation, as well as vertical integration, among our
competitors continues to increase. As a result, we may not be able to
compete effectively if we cannot efficiently respond in a timely manner.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The pace of consolidation among our competitors continues, with vertical
integration of hardware and software vendors and service providers continuing.
Some of our competitors have sought access to public and private capital and
others have merged or consolidated with better-capitalized partners. Larger and
better-capitalized competitors have enhanced abilities to compete for both
clients and skilled professionals. In addition, one or more of our competitors
may develop and implement methodologies that result in superior productivity
and price reductions without adversely affecting their profit margins.
Historically, we have not relied to any material degree on mergers or
acquisitions to increase our market share, revenues, number of market offerings
or scope of services. We intend to consider acquisitions that are financially
and operationally compatible with our business. Our limited experience with
mergers and acquisitions could affect our ability to efficiently consummate
and/or integrate acquisitions into our ongoing operations. Any of these
circumstances could have an adverse effect on our revenues and profit margin or
our ability to aggressively grow our business.



| |  | If we are unable to attract, retain and motivate employees, we will not be
able to compete effectively and will not be able to grow our business.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------

Our success and ability to grow are dependent, in part, on our ability to
hire, retain and motivate sufficient numbers of talented people with the
increasingly diverse skills needed to grow our business. The inability to
attract qualified employees in sufficient numbers to meet particular demands or
the loss of a significant number of our employees could have a serious negative
effect on us, including our ability to obtain and successfully complete
important client engagements and thus maintain or increase our revenues.

We continue to extend a variable component of compensation, the payment of
which is dependent upon our performance, to larger proportions of our global
workforce. Due in part to the continuing difficult global economic environment,
this has resulted, and could continue to result, in decreases in the total cash
compensation received by many of our employees. We are also expanding the use
of equity-based incentives as a component of our senior executives variable
compensation, which may also affect the amount of cash compensation these
senior executives receive. While we adjust compensation levels in individual
geographic markets to reflect market forces, including the demand for technical
talent, we may have to adjust our compensation levels or adopt different
methods of compensation in certain markets in order to attract and retain
appropriate numbers of employees with the diverse skills we need to grow our
business and to motivate these employees performance. Doing so could adversely
affect our operating margins.

Additionally, our partners at the time of our transition to a corporate
structure received our equity in lieu of the interests in the partnerships and
corporations that they previously held. Their ownership of this equity is not
dependent upon their continued employment. There is no guarantee that the
non-competition agreements we have entered into with our partners are
sufficiently broad to prevent them from leaving us for our competitors or other
opportunities or that these agreements will be enforceable in all cases.



| |  | We have only a limited ability to protect our intellectual property rights,
which are important to our success.
| |  | ---------------------------------------------------------------------------------------------------------------

Our success depends, in part, upon our ability to protect our proprietary
methodologies and other intellectual property. Existing laws of some countries
in which we provide services or solutions may offer only limited protection of
our intellectual property rights. We rely upon a combination of trade secrets,
confidentiality policies, nondisclosure and other contractual arrangements, and
patent, copyright and trademark laws to protect our intellectual property
rights. The steps we take in this regard may not be adequate to prevent or
deter infringement or other misappropriation of our
intellectual property, and we may not be able to detect unauthorized use
of, or take appropriate and timely steps to enforce, our intellectual property
rights.

16



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##### 



Depending on the circumstances, we may be required to grant a specific
client greater rights in intellectual property developed in connection with an
engagement than we otherwise generally do, in which case we would seek to cross
license the use of the intellectual property. However, in very limited
situations, we forego rights to the use of intellectual property we help
create, which limits our ability to reuse that intellectual property for other
clients. Any limitation on our ability to provide a service or solution could
cause us to lose revenue-generating opportunities and require us to incur
additional expenses to develop new or modified solutions for future projects.



| |  | Our profitability will suffer if we are not able to maintain our pricing and
utilization rates and control our costs. A continuation of current pricing
pressures could result in permanent changes in pricing policies and delivery
capabilities.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our profit margin, and therefore our profitability, is largely a function
of the rates we are able to recover for our services and the utilization rate,
or chargeability, of our professionals. Accordingly, if we are not able to
maintain the pricing for our services or an appropriate utilization rate for
our professionals without corresponding cost reductions, our profit margin and
our profitability will suffer. The rates we are able to recover for our
services are affected by a number of factors, including:



| |  |  | our clients perceptions of our ability to add value through our services;
| | - |  | --------------------------------------------------------------------------



| |  |  | competition;
| | - |  | ------------



| |  |  | introduction of new services or products by us or our competitors;
| | - |  | ------------------------------------------------------------------



| |  |  | pricing policies of our competitors;
| | - |  | ------------------------------------



| |  |  | our ability to accurately estimate, attain and sustain
engagement revenues, margins and cash flows over increasingly longer
contract periods;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the use of globally sourced, lower-cost service delivery
capabilities by our competitors and our clients; and
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | general economic and political conditions.
| | - |  | ------------------------------------------

Our utilization rates are also affected by a number of factors, including:



| |  |  | seasonal trends, primarily as a result of our hiring cycle;
| | - |  | -----------------------------------------------------------



| |  |  | our ability to transition employees from completed projects to new engagements;
| | - |  | -------------------------------------------------------------------------------



| |  |  | our ability to forecast demand for our services and thereby
maintain an appropriate headcount in each of our workforces; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to manage attrition.
| | - |  | --------------------------------

Our profitability is also a function of our ability to control our costs
and improve our efficiency. As the continuation of current pricing pressures
could result in permanent changes in pricing policies and delivery
capabilities, we must continuously improve our management of costs. Our
short-term cost-reduction initiatives, which focus primarily on reducing
variable costs, may not be sufficient to deal with all pressures on our pricing
and utilization rates. Our long-term cost-reduction initiatives, which focus on
global reductions in infrastructure and other costs, rely upon our successful
introduction and coordination of multiple geographic and competency workforces
and a growing number of geographically distributed delivery centers. As we
increase the number of our professionals and execute our strategies for growth,
we may not be able to manage significantly larger and more diverse workforces,
control our costs or improve our efficiency.

Despite increased cost savings, including reduced variable compensation
and severance costs, we may continue to experience erosion of operating income
as a percentage of revenues before reimbursements if present trends continue.

17



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##### 





| |  | Our quarterly revenues, operating results and profitability will vary from
quarter to quarter, which may result in increased volatility of the share
price of the Accenture Ltd Class A common shares.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our quarterly revenues, operating results and profitability have varied in
the past and are likely to vary significantly from quarter to quarter, making
them difficult to predict. This may lead to volatility in the share price of
the Accenture Ltd Class A common shares. The factors that are likely to cause
these variations are:



| |  |  | seasonality, including number of workdays and holiday and summer vacations;
| | - |  | ---------------------------------------------------------------------------



| |  |  | the business decisions of our clients regarding the use of our services;
| | - |  | ------------------------------------------------------------------------



| |  |  | periodic differences between our clients estimated and actual
levels of business activity associated with ongoing engagements;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | the stage of completion of existing projects and/or their termination;
| | - |  | ----------------------------------------------------------------------



| |  |  | our ability to transition employees quickly from completed projects to new engagements;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | the introduction of new products or services by us or our competitors;
| | - |  | ----------------------------------------------------------------------



| |  |  | changes in our pricing policies or those of our competitors;
| | - |  | ------------------------------------------------------------



| |  |  | our ability to manage costs, including personnel costs, support-services costs and severance costs;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | acquisition and integration costs related to possible acquisitions of other businesses;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | changes in, or the application of changes in, accounting
principles or pronouncements under accounting principles generally
accepted in the United States, particularly those related to revenue
recognition;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | currency exchange rate fluctuations;
| | - |  | ------------------------------------



| |  |  | changes in estimates, accruals and payments of variable compensation to our employees; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | global economic and political conditions and related risks, including acts of terrorism.
| | - |  | ----------------------------------------------------------------------------------------



| |  | We continue to position ourselves to achieve greater percentages of revenues
and growth through outsourcing. This strategy could result in higher
concentrations of revenues and contributions to income from a smaller number
of larger clients on customized outsourcing solutions or, in the case of our
BPO businesses, from larger portfolios of clients for whom we provide similar
services and solutions utilizing standard operating models. As we continue
to accelerate the growth of new outsourcing contracts, we may experience
increased pressure on our overall margins during the early stages of these
contracts.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We continue to position ourselves to achieve a greater percentage of our
revenues and growth through business transformation outsourcing, our approach
that combines outsourcing, including business process outsourcing, with our
other capabilities to help clients transform key processes, applications and
infrastructure to improve business performance. This strategy could result in
higher concentrations of revenues and contributions to income from a smaller
number of larger clients on customized outsourcing solutions or, in the case of
our BPO businesses, from larger portfolios of clients for whom we provide
similar services and solutions utilizing standard operating models.

Outsourcing contracts typically have longer contract terms than consulting
contracts and may have lower margins and not generate revenues as quickly in
the early stages of the contract. The typical length of our outsourcing
contracts is three to 10 years. Generally we begin to recognize revenues within
six months after beginning work on these contracts. As we continue to
accelerate the growth of new outsourcing contracts, including BPO contracts, we
may experience increased pressure on our overall margins during the early
stages of these contracts.

18



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##### 





| |  | On certain complex engagements where we partner with others, clients are increasingly
 demanding that we guarantee the performance of our business partners whom we do not control. New accounting pronouncements
 may also affect when and how we report revenues associated with certain engagements.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Some engagements are complex and may require unique structures and
alliances to meet client demands. We will continue to manage liabilities or
risks on such engagements through rigorous transaction review, but we expect
that clients may increasingly demand that we assume certain additional
contractual obligations and potential, but reimbursable, liabilities for the
performance of our business partners whom we do not control. These liabilities
may be subject to the disclosure, recognition and measurement provisions of
recently issued Financial Accounting Standards Board Interpretation No. 45.

In November 2002, the Emerging Issues Task Force (EITF) issued a final
consensus on Issue 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables. In May 2003, the EITF issued additional interpretive guidance
regarding the application of Issue 00-21. Issue 00-21 provides guidance on how
and when to recognize revenues on arrangements requiring delivery of more than
one product or service. Issue 00-21 is effective prospectively for arrangements
entered into in fiscal periods beginning after June 15, 2003. Companies may
also elect to apply the provisions of Issue 00-21 to existing arrangements and
record the income statement impact as a cumulative effect of a change in
accounting principle.

Effective September 1, 2003, we adopted Issue 00-21 on a prospective basis
and began accounting for all new contracts in accordance with Issue 00-21,
potentially changing the timing of revenues recognition and affecting margins
in some situations, depending on our ability to structure contracts to
accommodate the requirements of Issue 00-21. We will continue to account for
contracts signed on or before August 31, 2003, under the previous accounting
principles generally accepted in the United States.



| |  | We may be named in lawsuits as a result of Arthur Andersens current legal
and financial situation based on misconceptions about the nature of our past
relationship with Arthur Andersen firms.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We may be named as a defendant in lawsuits arising from audits or other
services provided by Arthur Andersen firms as a result of concerns of
plaintiffs as to the current legal and financial situation of Arthur Andersen
LLP and the breakup of the global network of Arthur Andersen firms. Such
actions would be based on misconceptions about the nature of our past
relationship with Arthur Andersen LLP and the other Arthur Andersen firms. We
may be more likely to be named in these lawsuits if Arthur Andersen firms are,
or are perceived to be, unable to satisfy judgments against them for any
reason. If commenced, litigation of this nature could divert management time
and attention and we could incur defense costs that we might not be able to
recover from Arthur Andersen LLP and other Arthur Andersen firms under existing
indemnification agreements, given the financial condition of Arthur Andersen
LLP and the breakup of the global network of Arthur Andersen firms.



| |  | Negative publicity about Bermuda companies, such as our parent, Accenture
Ltd, may lead to new tax or other legislation that could increase our tax
burden and may affect our relationships with our clients.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Members of the U.S. Congress have introduced legislation relating to the
tax treatment of U.S. companies that have undertaken certain types of
expatriation transactions. It is possible that legislation enacted in this area
could reduce the tax benefits of our structure and materially increase our
future tax burden, or otherwise adversely affect our business. Other
legislative proposals, if enacted, could limit or even prohibit our eligibility
to be awarded U.S. government contracts in the future. In addition, similar
state legislative proposals, if enacted, could adversely affect our eligibility
to be awarded U.S. state government contracts in the future. We are unable to
predict with any level of certainty the likelihood or final form in which any
proposed legislation might become law or the nature of regulations that may be
promulgated under any such future legislative enactments. As a result of these
uncertainties, we are unable to assess the impact on us of any proposed
legislation in this area. In addition, there have recently been negative
comments regarding Bermuda companies, such as our parent, Accenture Ltd, in the
media. This negative publicity could harm our reputation and impair our ability
to generate new business if companies or government agencies decline to do
business with us as a result of the negative public image of Bermuda companies
or the possibility of our clients receiving negative media attention from doing
business with a Bermuda company, such as Accenture Ltd.

Risks That Relate to Ownership of Our Class I Common Shares



| |  | We will continue to be controlled by Accenture Ltd, which in turn will
continue to be controlled by our partners, whose interests may differ from
those of our other shareholders.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As the general partner of Accenture SCA and as a result of Accenture Ltds
majority voting interest in Accenture SCA, Accenture Ltd controls Accenture
SCAs management and operations and consolidates Accenture SCAs results in

19



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##### 



its financial statements. As of October 31, 2003, our partners owned or controlled
shares representing, in the aggregate, a 45% voting interest in Accenture Ltd.
These shares are subject to a voting agreement, which requires our partners to
vote as a group with respect to all matters submitted to shareholders. Our
partners voting interest in Accenture Ltd may increase to the extent
additional employees we name as partners are required to become parties to the
voting agreement and/or our partners receive additional equity.

As long as our partners continue to own or control a significant block of
voting rights, they will control us. This enables them, without the consent of
the other shareholders, to:



| |  |  | elect Accenture Ltds board of directors and remove directors;
| | - |  | --------------------------------------------------------------



| |  |  | control our management and policies;
| | - |  | ------------------------------------



| |  |  | determine the outcome of most corporate transactions or other
matters submitted to the Accenture Ltd shareholders for approval,
including mergers, amalgamations and the sale of all or
substantially all of our assets; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | act in their own interests as partners, which may conflict
with or not be the same as the interests of shareholders who are not
partners.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------

Furthermore, as a result of a partner matters agreement, our partners will
continue to have influence with respect to a variety of matters over which
neither shareholders nor employees of a public company typically have input.
Under the partner matters agreement our partners:



| |  |  | have, since our initial public offering, selected five
partner nominees for membership on the board of directors of
Accenture Ltd as well as their replacements, should any of these
partner-nominated directors fail to complete their specified terms
of office;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | will make a non-binding recommendation to the board of
directors of Accenture Ltd through a committee of partners regarding
the selection of a chief executive officer of Accenture Ltd in the
event a new chief executive officer needs to be appointed within the
first four years after our initial public offering;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | vote on new partner admissions;
| | - |  | -------------------------------



| |  |  | approve the partners income plan as described below; and
| | - |  | ---------------------------------------------------------



| |  |  | hold non-binding votes with respect to any decision to
eliminate or materially change the current practice of allocating
partner compensation on a relative, or unit, basis.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under the terms of the partner matters agreement, a partners income
committee, consisting of the chief executive officer and partners he or she
appoints, reviews evaluations and recommendations concerning the performance of
partners and determines relative levels of income participation, or unit
allocation. Based on its review, the committee prepares a partners income
plan, which then must be submitted to the partners in a partner matters vote.
If the plan is approved by a 66 2/3% partner matters vote, it is: (1) binding
with respect to the income participation or unit allocation of all partners
other than the principal executive officers of Accenture Ltd (including the
chief executive officer), subject to the impact on overall unit allocation of
determinations by the board of directors or the compensation committee of the
board of directors of Accenture Ltd of the unit allocation for the executive
officers, unless otherwise determined by the board of directors; and (2)
submitted to the compensation committee of the board of directors of Accenture
Ltd as a recommendation with respect to the income participation or unit
allocation of the chief executive officer and the other principal executive
officers of Accenture Ltd.



| |  | The share price of the Accenture Ltd Class A common shares may decline due
to the large number of Class A common shares eligible for future sale.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------

Sales of substantial amounts of Accenture Ltd Class A common shares, or
the perception of these sales, may adversely affect the price of the Class A
common shares and impede our ability to raise capital through the issuance of

20equity securities in the future. A substantial number of Class A common shares
are eligible for future sale as described below:
    
    As of October 31, 2003, substantially all of the Accenture
Ltd Class A common shares, Accenture SCA Class I common shares and
Accenture Canada Holdings exchangeable shares still held by our
partners, former partners and certain of their permitted transferees
and previously received in connection with our transition to a
corporate structure were directly or indirectly subject to the
provisions of a voting agreement and/or a transfer rights agreement
that permit sales by our partners and our former partners in
increasing amounts over seven years beginning July 24, 2002 and/or
other contractually agreed transfer restrictions of comparable
durations. Equity awards received by partners under Accentures
share incentive plan after our transition to a corporate structure,
while not subject to the transfer restrictions of the voting
agreement and the transfer rights agreement, are subject to vesting
and/or delivery on various deferred schedules. Current and former
partners, and their permitted transferees, holding as of October 31,
2003 an aggregate of more than 577,500,000 Accenture Ltd Class A
common shares, Accenture SCA Class I common shares and Accenture
Canada Holdings exchangeable shares, including substantially all of
such shares remaining directly or indirectly subject to the
transfer restrictions applicable to partners and former partners
under the voting agreement and/or the transfer rights agreement,
have separately agreed not to transfer any equity interests in
Accenture acquired from Accenture until July 24, 2005, except for
sales in transactions approved by Accenture. We expect that all of
our employees who become partners in the future will agree to these
separate July 24, 2005 transfer restrictions. While the transfer
restrictions in the voting agreement and the transfer rights
agreement will continue to apply, such transfer
restrictions will be waived to permit Accenture-approved
transactions. From time to time, pursuant to the terms of the voting
agreement and/or transfer rights agreement, we may also approve
limited relief from the existing share transfer restrictions for
specified partners or groups of partners in connection with
particular retirement, employment and severance arrangements that we
determine to be important to the execution of our business strategy.
After July 24, 2005, however, only the provisions of the voting
agreement and/or the transfer rights agreement, as well as the
deferred vesting and/or delivery schedules that govern equity awards
under Accentures share incentive plan and other agreements with
permitted transferees, will apply. Commencing in the first quarter of
fiscal 2003, we began affording partners and former partners and
their permitted transferees who have agreed not to transfer their
equity interests in Accenture until July 24, 2005 except in specified
Accenture-approved transactions with regular opportunities to sell or
redeem their shares. These transactions have included sales of
Accenture Ltd Class A common shares in accordance with the manner of
sale provisions of Rule 144 under the Securities Act by the holders
of these shares, as well as redemptions and purchases by Accenture of
Accenture SCA Class I common shares and Accenture Canada Holdings
exchangeable shares from the holders of those shares. These
redemptions and purchases, to date, have been at ratable volume
levels and equivalent price levels with the sales of the Class A
common shares. We expect to continue to enable these partner share
transactions. We also expect that such partners and former partners
and their permitted transferees will be permitted to transfer shares
in connection with future underwritten public offerings or private
placements. The contractual restrictions on transfer described in
this paragraph may not be enforceable in all cases.
    
    In addition, as of October 24, 2003, 46,968,386 Class A
common shares underlying restricted share units generally were
scheduled to be delivered during the calendar year indicated below:Number of Shares
    
    Calendar Year11,375
    
    
    
    200319,731,488
    
    
    20042,862,262
    
    
    20052,898,899
    
    
    20062,792,584
    
    
    20072,881,791
    
    
    20087,673,442
    
    
    20098,116,545
    
    After 2009
The delivery of some of these shares may be deferred based on elections
made by the holders. Deliveries of shares in calendar year 2004 include
shares to be delivered in connection with all remaining restricted share
units granted to our non-partner level employees in connection with our
initial public offering.2129,677,789 of all Accenture Ltd Class A common shares issuable pursuant
to these restricted share units underlay restricted share units granted
to current and former partners, and we expect that, to the extent
delivered prior to July 24, 2005, substantially all of these Class A
common shares will be subject to the contractual transfer restrictions
lasting until July 24, 2005 described above. Class A common shares
delivered pursuant to restricted share units granted to our non-partner
employees and non-employee directors are not subject to contractual
restrictions on transfer.
    
    In addition, as of October 24, 2003, 77,397,262 Accenture Ltd
Class A common shares were issuable pursuant to options, of which
options to purchase an aggregate of 29,893,132 Class A common shares
were exercisable and options to purchase an aggregate of 47,504,130
Class A common shares generally will become exercisable during the
calendar year indicated below:Number of Shares
    
    Calendar Year52,670
    
    
    
    200319,525,035
    
    
    200419,074,963
    
    
    20055,344,662
    
    
    20063,506,800
    
    After 2006

14,749,140 of all Accenture Ltd Class A common shares issuable pursuant to
these options were issuable pursuant to options that have been granted to
current and former partners, and we expect that, to the extent purchased prior
to July 24, 2005, substantially all of these Class A common shares will be
subject to the contractual transfer restrictions lasting until July 24, 2005
described above. Class A common shares delivered under options granted to our
non-partner employees and non-employee directors are not subject to contractual
restrictions on transfer. The options that become exercisable in calendar year
2004 and 2005 include options that were issued to our employees in connection
with our initial public offering.We may need additional capital in the future, and this capital may not be
available to us. The raising of additional capital may dilute shareholders
ownership in us.We may need to raise additional funds through public or private debt or
equity financings in order to:
    
    take advantage of opportunities, including more rapid expansion;
    
    acquire complementary businesses or technologies;
    
    develop new services and solutions; or
    
    respond to competitive pressures.Any additional capital raised through the sale of equity may dilute
shareholders ownership percentage in us. Furthermore, any additional financing
we may need may not be available on terms favorable to us, or at all.Accenture SCA is registered in Luxembourg, and a significant portion of
our assets are located outside the United States. As a result, it may not
be possible for shareholders to enforce civil liability provisions of the
federal or state securities laws of the United States.Accenture SCA is organized under the laws of Luxembourg, and a significant
portion of our assets are located outside the United States. It may not be
possible to enforce court judgments obtained in the United States against us in
Luxembourg or in countries, other than the United States, where we have assets
based on the civil liability provisions of the federal or state securities laws
of the United States. In addition, there is some doubt as to whether the courts
of Luxembourg and other countries would recognize or enforce judgments of
United States courts obtained against us or our directors or officers based on
the civil liabilities provisions of the federal or state securities laws of the
United States or would hear actions against us or those persons based on those
laws. We have been advised by our legal advisors in Luxembourg that the United
States and Luxembourg do not currently have a treaty providing for the
reciprocal recognition and enforcement of judgments in civil and commercial
matters. Therefore, a final judgment for the payment of money rendered by any
federal or state court in the United States based on civil liability, whether
or not based solely on United22States federal or state securities laws, would
not automatically be enforceable in Luxembourg. Similarly, those judgments may
not be enforceable in countries, other than the United States, where we have
assets.Luxembourg law differs from the laws in effect in the United States and may
afford less protection to shareholders.We are organized as a Luxembourg partnership limited by shares, and are
governed by our Articles of Association and the Luxembourg Company Act of
August 10, 1915, as amended. Luxembourg law differs in certain respects from
the corporate laws of most states of the United States. Principles of law
relating to such matters as corporate procedures, fiduciary duties of
management, and the rights of our shareholders may differ from those that would
apply if we were incorporated in a state of the United States.ITEM 2.   PROPERTIESWe have major offices in the worlds leading business centers, including
New York, Chicago, Dallas, Los Angeles, San Francisco, London, Frankfurt,
Madrid, Milan, Paris, Sydney and Tokyo. In total, we have more than 110 offices
in 48 countries around the world. We do not own any material real property.
Substantially all of our office space is leased under long-term leases with
varying expiration dates. We believe that our facilities are adequate to meet
our needs in the near future.ITEM 3.   LEGAL PROCEEDINGSWe are involved in a number of judicial and arbitration proceedings
concerning matters arising in the ordinary course of our business. We do not
expect that any of these matters, individually or in the aggregate, will have a
material impact on our results of operations or financial condition.As described under Legal Proceedings in our Form 10-Q for the quarter
ended May 31, 2002, we had previously signed and extended agreements with the
lead plaintiffs in the Houston class actions on behalf of shareholders and
employees of Enron extending any statute of limitations or similar deadlines by
which we had to be added as a party to such lawsuits. These lawsuits all
involved allegations concerning the auditing and other services provided by
separate and independent Arthur Andersen firms, and we originally entered into
the tolling agreements so that we would have time to inform the plaintiffs that
adding us as a defendant in such actions would be misdirected and without
merit. Subsequently, Andersen Worldwide and certain Arthur Andersen firms
entered into an agreement to settle all claims and disputes in these lawsuits.
On November 7, 2003, the federal court in Houston approved the settlement and
the settlement is now final. Although we were not a party to the settlement
agreement, under the terms of the final settlement with the class plaintiffs,
Accenture was released from all claims that were brought by these plaintiff
groups.As previously reported in July 2003, we became aware of an incident of
possible noncompliance with the Foreign Corrupt Practices Act and/or with
Accentures internal controls in connection with certain of Accentures
operations in the Middle East. We have voluntarily reported the incident to the
appropriate authorities in the United States. The SEC has advised us it will be
undertaking an informal investigation of this incident and it is also under
review by the U.S. Department of Justice. We do not believe that this incident
will have any material impact on our results of operations or financial
condition.We currently maintain the types and amounts of insurance customary in the
industries and countries in which we operate, including coverage for
professional liability, general liability and management liability. We consider
our insurance coverage to be adequate both as to the risks and amounts for the
businesses we conduct.ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSNo matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended August 31, 2003.PART IIITEM 5.   MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERSMarket Information23There is no established public trading market for the Accenture SCA Class
I common shares. The Accenture SCA Class I common shares will not be listed on
any exchange and we expect that the restriction on transferability will
preclude the Class I common shares from being quoted by any securities dealer
or traded in any market inclusive of the over-the-counter market.We are obligated, at the option of the holder, to redeem any outstanding
Accenture SCA Class I common share. Accenture SCA may, at its option, pay for
this redemption price with cash generally in an amount equal to the market
price of an Accenture Ltd Class A common share at the time of redemption or by
delivering Accenture Ltd Class A common shares on a one-for-one basis. See
Business  Accenture Organizational Structure.Price Range of Accenture Ltd Class A Common SharesTrading in the Accenture Ltd Class A common shares commenced on the New
York Stock Exchange on July 19, 2001 under the symbol ACN. The table below
sets forth, on a per share basis for the periods indicated, the high and low
sale prices for the Class A common shares as reported by the New York Stock
Exchange.Price RangeHigh
    
    LowFiscal Year 2002First Quarter
    
    $
    22.75
    
    
    $
    11.61Second Quarter
    
    $
    28.34
    
    
    $
    22.50Third Quarter
    
    $
    30.50
    
    
    $
    19.50Fourth Quarter
    
    $
    20.99
    
    
    $
    13.70Fiscal Year 2003First Quarter
    
    $
    19.65
    
    
    $
    11.30Second Quarter
    
    $
    20.47
    
    
    $
    14.48Third Quarter
    
    $
    17.54
    
    
    $
    13.45Fourth Quarter
    
    $
    22.00
    
    
    $
    16.25Fiscal Year 2004First Quarter through October 31, 2003
    
    $
    24.00
    
    
    $
    21.17

The closing sale price of Accenture Ltd Class A common shares as reported
by the New York Stock Exchange consolidated tape as of October 31, 2003 was $23.40. As of October
31, 2003, there were 2,432 holders of record of the Class A common shares.As of October 31, 2003, there were 1,895 holders of record of the Accenture
SCA Class I common shares and Accenture Ltd was the sole holder of record of
the Accenture SCA Class II common shares.Dividend PolicyNeither Accenture Ltd nor Accenture SCA has paid any cash dividends. We
currently do not anticipate that Accenture Ltd or Accenture SCA will pay
dividends.We may from time to time enter into financing agreements that contain
financial covenants and restrictions, some of which may limit the ability of
Accenture Ltd and Accenture SCA to pay dividends.Future dividends on the Accenture Ltd Class A common shares, if any, will
be at the discretion of its board of directors and will depend on, among other
things, our results of operations, cash requirements and surplus, financial
condition, contractual restrictions and other factors that the board of
directors may deem relevant.Recent Sales of Unregistered SecuritiesOver the last three years, Accenture SCA and its subsidiaries transferred an
aggregate of 31,651,323 Class I common shares to Accenture Ltd in connection
with the issuance by Accenture Ltd of 31,651,323 of its Class A common shares.
These Class I common shares were transferred in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act of 1933, as
amended, on the basis that the transactions did not involve any public
offering.24ITEM 6.   SELECTED FINANCIAL DATAThe following selected financial data have been presented on a historical
cost basis for all periods presented. The data as of August 31, 2003 and 2002
and for the years ended August 31, 2003, 2002 and 2001 are derived from the
audited historical financial statements and related notes which are included
elsewhere in this report. The data as of August 31, 2001, 2000 and 1999 and for
the years ended August 31, 2000 and 1999 are derived from audited historical
financial statements and related notes which are not included in this report.
The selected financial data should be read in conjunction with Managements
Discussion and Analysis of Financial Condition and Results of Operations and
our historical financial statements and related notes included elsewhere in
this report.Year Ended August 31,2003
    
    2002
    
    2001
    
    2000
    
    1999(in millions, except share and per share amounts)Income Statement Data:Revenues:Revenues before reimbursements
    
    $
    11,818
    
    
    $
    11,574
    
    
    $
    11,444
    
    
    $
    9,752
    
    
    $
    9,550Reimbursements
    
    
    1,579
    
    
    
    1,531
    
    
    
    1,618
    
    
    
    1,579
    
    
    
    1,326Revenues
    
    
    13,397
    
    
    
    13,105
    
    
    
    13,062
    
    
    
    11,331
    
    
    
    10,876Operating expenses:Cost of services:*Cost of services before reimbursable expenses*
    
    
    7,508
    
    
    
    6,897
    
    
    
    6,199
    
    
    
    5,486
    
    
    
    5,457Reimbursable expenses
    
    
    1,579
    
    
    
    1,531
    
    
    
    1,618
    
    
    
    1,579
    
    
    
    1,326Cost of services*
    
    
    9,087
    
    
    
    8,428
    
    
    
    7,817
    
    
    
    7,065
    
    
    
    6,783Sales and marketing*
    
    
    1,459
    
    
    
    1,566
    
    
    
    1,217
    
    
    
    883
    
    
    
    790General and administrative costs*
    
    
    1,300
    
    
    
    1,616
    
    
    
    1,516
    
    
    
    1,296
    
    
    
    1,271Restructuring, reorganization and rebranding costs
    
    
    
    
    
    
    111
    
    
    
    849
    
    
    
    
    
    
    
    Restricted share unit-based compensation
    
    
    
    
    
    
    
    
    
    
    967
    
    
    
    
    
    
    
    Total operating expenses*
    
    
    11,846
    
    
    
    11,720
    
    
    
    12,366
    
    
    
    9,245
    
    
    
    8,844Operating income*
    
    
    1,551
    
    
    
    1,385
    
    
    
    696
    
    
    
    2,086
    
    
    
    2,032Gain (loss) on investments, net
    
    
    10
    
    
    
    (321
    )
    
    
    107
    
    
    
    573
    
    
    
    92Interest income
    
    
    41
    
    
    
    46
    
    
    
    80
    
    
    
    67
    
    
    
    60Interest expense
    
    
    (21
    )
    
    
    (49
    )
    
    
    (43
    )
    
    
    (24
    )
    
    
    (27
    )Other income (expense)
    
    
    32
    
    
    
    15
    
    
    
    17
    
    
    
    51
    
    
    
    (5
    )Equity in losses of affiliates
    
    
    
    
    
    
    (9
    )
    
    
    (61
    )
    
    
    (47
    )
    
    
    (6
    )Income before taxes*
    
    
    1,613
    
    
    
    1,068
    
    
    
    795
    
    
    
    2,707
    
    
    
    2,146Provision for taxes (1)
    
    
    566
    
    
    
    491
    
    
    
    503
    
    
    
    243
    
    
    
    123Income before minority interest and accounting change*
    
    
    1,047
    
    
    
    576
    
    
    
    292
    
    
    
    2,464
    
    
    
    2,023Minority interest
    
    
    (7
    )
    
    
    (3
    )
    
    
    8
    
    
    
    
    
    
    
    Income before accounting change*
    
    
    1,040
    
    
    
    579
    
    
    
    300
    
    
    
    2,464
    
    
    
    2,023Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    
    
    
    
    Partnership income before partner distributions* (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,464
    
    
    $
    2,023Net income*
    
    $
    1,040
    
    
    $
    579
    
    
    $
    488

As of August 31,2003
    
    2002
    
    2001
    
    2000
    
    1999(in millions)Balance Sheet Data:Cash and cash equivalents
    
    $
    2,332
    
    
    $
    1,317
    
    
    $
    1,880
    
    
    $
    1,271
    
    
    $
    1,111Working capital
    
    
    1,686
    
    
    
    725
    
    
    
    401
    
    
    
    1,015
    
    
    
    913Total assets
    
    
    6,459
    
    
    
    5,479
    
    
    
    6,061
    
    
    
    5,451
    
    
    
    4,615Long-term debt
    
    
    14
    
    
    
    3
    
    
    
    1
    
    
    
    99
    
    
    
    127Total partners capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,368
    
    
    
    2,208Shareholders equity
    
    
    1,644
    
    
    
    926
    
    
    
    685
    
    
    
    
    
    
    
    

*
    
    Excludes payments for partner distributions for periods ended on or prior to May 31, 2001.(1)
    
    For periods ended on or prior to May 31, 2001, we operated through partnerships in many countries. Therefore, we generally were not subject to income taxes in those countries. Taxes related to income earned by our partnerships were the responsibility of
the individual partners. In other countries, we operated through corporations, and in these circumstances we were subject to income taxes.(2)
    
    Partnership income before partner distributions is not comparable to net income of a corporation similarly determined. Partnership income for periods ended on or prior to May 31, 2001 is not executive compensation in the customary sense because
partnership income is comprised of distributions of current earnings. Accordingly, compensation and benefits for services rendered by partners have not been reflected as an expense in our historical financial statements for periods prior to May 31, 2001.25ITEM 7.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis should be read in conjunction with
our Consolidated Financial Statements and related notes included elsewhere in
this Annual Report onForm 10-K. This discussion and analysis also contains
forward-looking statements and should also be read in conjunction with the
disclosures and information contained in the sections of this Annual Report on
Form 10-K entitled Disclosure Regarding Forward-Looking Statements and Risk
Factors.We use the terms Accenture, we, our Company, our, and us in this
report to refer to Accenture SCA and its subsidiaries. All references to years,
unless otherwise noted, refer to our fiscal year, which ends on August 31. For
example, a reference to fiscal 2003 or fiscal year 2003 means the 12-month
period that ended on August 31, 2003. All references to quarters, unless
otherwise noted, refer to the quarters of our fiscal year.OverviewOur results of operations are affected by the economic conditions, levels
of business activity and levels of change in the industries we serve. Our
business is also driven, in part, by the pace of technological change and the
type and level of technology spending by our clients. The ability to identify
and capitalize on these technological and market changes early in their cycles
is a key driver of our performance.Revenues are driven by our partners and senior executives ability to
secure contracts for new engagements and to deliver solutions and services that
add value to our clients. Our ability to add value to clients and therefore
drive revenues depends in part on our ability to offer market-leading service
offerings and to deploy skilled teams of professionals quickly and on a global
basis. As a global company, our revenues are denominated in multiple
currencies and may be significantly affected by currency exchange-rate
fluctuations. The strengthening of various currencies versus the U.S. dollar
has resulted in favorable currency translation and increased our reported
revenues in fiscal 2003 as compared with fiscal 2002 and fiscal 2001. A
reversal of this trend could reduce reported revenues in future quarters.
Revenues for fiscal 2003 were $13,397 million, an increase of $292 million, or
2%, over fiscal 2002. Revenues before reimbursements for fiscal 2003 were
$11,818 million, an increase of $244 million, or 2%, over fiscal 2002 in U.S.
dollars. In local currency terms, revenues before reimbursements in fiscal 2003
decreased 4% from fiscal 2002.The market for consulting, including technology integration services,
remained depressed during fiscal 2003 due to the continuing uncertain global
economic and political environment and the lack of a significant new wave of
technology to stimulate spending. New contract bookings for fiscal 2003
remained strong at $16,142 million and were slightly higher than fiscal 2002
new bookings of $16,114 million, with consulting bookings decreasing 6% and
outsourcing bookings increasing 8%.We continue to position ourselves to achieve a greater percentage of our
revenues and growth through outsourcing, including business transformation
outsourcing, our approach that combines outsourcing, including business process
outsourcing, with our other capabilities to help clients transform key
processes to improve business performance. Outsourcing contracts typically
have longer contract terms than consulting contracts and may not generate
revenues as quickly in the early stages of the contract.We continue to experience increasing pricing pressures from competitors as
well as from clients facing pressure to control costs under continuing
uncertain global economic and political conditions. The pace of consolidation,
as well as vertical integration, among competitors in the markets in which we
operate continues to increase. The growing use of globally sourced lower-cost
service delivery capabilities within our industry continues to be a source of
pressure on our revenues and operating margins.The primary categories of operating expenses include cost of services,
sales and marketing, and general and administrative costs. Cost of services is
primarily driven by the cost of client-service personnel, which consists mainly
of compensation, sub-contractor and other personnel costs, and non-payroll
outsourcing costs. Cost of services as a percentage of revenues is driven by
the prices we obtain for our solutions and services, the chargeability or
utilization of our client-service workforces and the level of non-payroll costs
associated with the continuing accelerated growth of new outsourcing contracts.
Chargeability, or utilization, represents the percentage of our
professionals time spent on billable work. Sales and marketing expense is
driven primarily by business-development activities; the development of new
service offerings; the level of concentration of clients in a particular
industry or market; and client-targeting, image-development and
brand-recognition activities. General and administrative costs primarily
include costs for non-client-facing personnel, information systems and office
space, which we seek to manage at levels consistent with changes in activity
levels in our business.Clients continue to reduce or defer their expenditures or defer the start
of work already contracted. As continuation of current pricing pressures could
result in permanent changes in pricing policies and delivery capabilities, we
must continuously improve our management of costs. Our cost-management
strategy is to anticipate changes in demand for our services and to26identify cost-management initiatives. We aggressively plan and manage our
payroll costs to meet the anticipated demand for our services as operating
expenses can be significantly affected by variable compensation and severance
costs. For instance, in fiscal 2003 we increased variable compensation as a
percentage of our executives total compensation and continued to take actions
to reduce our consulting workforce, including at the executive level, in
markets where both supply and demand and skill-level imbalances had not been
resolved, while continuing to hire at entry-level positions. We continue to
build and use our network of delivery centers and capabilities around the world
as part of a more cost-effective delivery model.Gross margins (revenues less cost of services) decreased to 36.5% of
revenues before reimbursements in fiscal 2003 from 40.4% in fiscal 2002. This
decrease resulted primarily from the shift in our mix of business toward
outsourcing and from pricing pressures. Outsourcing contracts generally have
lower gross margins than consulting contracts, particularly in the first year
of new outsourcing contracts. These factors more than offset the favorable
effects of other cost savings, including lower variable compensation costs.Our cost-management initiatives continue to produce improved efficiencies
in sales and marketing and general and administrative costs. As a result of
these initiatives, sales and marketing and general and administrative costs
decreased as a percentage of revenues before reimbursements from 27% for fiscal
2002 to 23% for fiscal 2003. Cost-management initiatives generally were
sufficient to offset reductions in gross margins and to maintain our operating
income as a percentage of revenues before reimbursements for fiscal 2003. Year
over year, operating income as a percentage of revenues before reimbursements
increased to 13.1% for fiscal 2003 from 12.0% for fiscal 2002. In fiscal 2002,
restructuring costs of $111 million related to the consolidation of certain
office facilities around the world reduced operating income as a percentage of
revenues before reimbursements from 12.9% to 12.0%. Despite the year-over-year
increase, we could experience erosion of operating income as a percentage of
revenues before reimbursements if we incur additional restructuring costs
and/or gross margins continue to decline and if cost-management initiatives are
insufficient to offset additional restructuring costs or declines in gross
margins.PresentationPrior to May 31, 2001, we operated as a series of related partnerships and
corporations under the control of our partners, and our partners generally
participated in profits, rather than receiving salaries. Therefore, our
historical financial statements for periods ended on or prior to May 31, 2001
do not reflect any compensation or benefit costs for services rendered by our
partners. Following our transition to a corporate structure, operating expenses
have included partner compensation, which consists of salary, variable cash
compensation, restricted share compensation, stock options and benefits.
Similarly, in periods when we operated primarily in the form of partnerships,
our partners paid income tax on their shares of the partnerships income.
Therefore, our historical financial statements for periods ended on or prior to
May 31, 2001 do not reflect the income tax liability that we would have paid as
a corporation. Since our transition to a corporate structure, we have been
subject to corporate tax on our income.SegmentsOur five reportable operating segments are our operating groups, which are
Communications & High Tech, Financial Services, Government, Products and
Resources. Operating groups are managed on the basis of revenues before
reimbursements because our management believes it is a better indicator of
operating group performance than is revenues. Generally, operating expenses for
each operating group have similar characteristics and are subject to the same
drivers, pressures and challenges. However, the current economic environment
and its continuing effects on the industries served by our operating segments
affect operating expenses within our operating segments to different degrees.
Personnel reductions have not been taken uniformly across our operating
segments, due in part to an increased need on behalf of some of our operating
groups to tailor their workforces to the needs of their businesses. The shift
to outsourcing engagements is not uniform among our operating groups and,
consequently, neither is the impact on operating group revenues caused by these
transitions. Local currency fluctuations also tend to affect our operating
groups differently, depending on the historical and current geographic
concentrations and locations of their businesses.In the first quarter of fiscal 2003, we transitioned our Health Services
industry group from our Financial Services operating group to our Products
operating group. In addition, we changed the format of internal financial
information presented to our chief executive officer to reflect changes in our
internal accounting method of allocating certain costs to segments from a
partner basis to a total controllable cost basis for purposes of determining
segment operating income and assessing segment performance. Segment results for
all periods presented were revised to reflect these changes.Bookings and BacklogWe provide information regarding our bookings because we believe doing so
provides useful information regarding changes in the volume of our new business
over time. However, information regarding our new bookings is not comparable
to, nor should it be substituted for, an analysis of our revenues. The
majority of our contracts are terminable by the client on short notice or
without notice. Accordingly, we do not believe it is appropriate to
characterize these contracts as backlog. Normally, if27a client terminates a project, the client remains obligated to pay for
commitments we have made to third parties in connection with the project,
services performed and reimbursable expenses incurred by us through the date of
termination.RevenuesThe revenue recognition method we apply depends on the type of service
being delivered. Revenues from contracts for technology integration consulting
services, where we design/re-design, build and implement new or enhanced
systems applications and related processes for our clients, are recognized on a
percentage-of-completion basis as services are provided by our employees and,
to a lesser extent, subcontractors. Percentage-of-completion is applied
pursuant to the American Institute of Certified Public Accountants Statement of
Position 81-1, Accounting for Performance of Construction Type and Certain
Production Type Contacts. Revenues from non-technology integration consulting
and outsourcing service contracts are recognized as the services are performed
and amounts are earned in accordance with SEC Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements. We consider amounts to be
earned once we have evidence of an arrangement, services are delivered, fees
are fixed or determinable, and collectibility is reasonably assured. Contracts
containing multiple services are segmented into separate elements when the
services represent separate earnings processes and revenues are recognized in
accordance with our accounting policies for the separate elements, as described
above.Client prepayments (even if nonrefundable) are deferred, i.e., classified
as a liability, and recognized over future periods as services are delivered or
performed.Our consulting revenues are affected by the number of work days in the
quarter, which in turn is affected by the level of vacation days and holidays.
Consequently, because we typically have approximately five to ten percent more
work days in our first and third quarters than in our second and fourth
quarters, our revenues are typically higher in our first and third quarters
than in our second and fourth quarters.Revenues before reimbursements include the margin earned on computer
hardware and software resale contracts, as well as revenues from alliance
agreements, neither of which is material to us. Reimbursements, including those
relating to travel and out-of-pocket expenses, and other similar third-party
costs, such as the cost of hardware and software resales, are included in
revenues, and an equivalent amount of reimbursable expenses are included in
cost of services.Operating ExpensesOperating expenses include variable and fixed direct and indirect costs
that are incurred in the delivery of our solutions and services to clients. The
primary categories of operating expenses include cost of services, sales and
marketing, and general and administrative costs.In fiscal 2003, we extended a variable component of compensation to our
managers and reduced the quarterly component of variable partner cash
compensation. In fiscal 2004 we will continue to extend a variable component
of compensation to larger proportions of our global workforce.Cost of ServicesCost of services includes the direct costs to provide services to our
clients. Such costs generally consist of compensation for client-service
personnel, the cost of subcontractors hired as part of client-service teams and
costs directly associated with the provision of client service, such as
facilities for outsourcing contracts and the recruiting, training, personnel
development and scheduling costs of our client-service personnel.
Reimbursements, including those relating to travel and other out-of-pocket
expenses, and other similar third-party costs, such as the cost of hardware and
software resales, are included in revenues, and an equivalent amount of
reimbursable expenses is included in cost of services.Sales and MarketingSales and marketing expense is affected by economic conditions and is
driven primarily by business development activities; the development of new
service offerings; the level of concentration of clients in a particular
industry or market; and client-targeting, image-development and
brand-recognition activities.General and Administrative CostsGeneral and administrative costs primarily include costs for non-client
service personnel, information systems and office space.Restructuring, Reorganization and Rebranding Costs28In fiscal 2002, we incurred restructuring costs to consolidate certain
office space facilities around the world. In fiscal 2001, we incurred
reorganization and rebranding costs to rename our organization Accenture and
other costs to transition to a corporate structure.Restricted Share Unit-based CompensationRestricted share unit-based compensation reflects restricted share unit
awards granted at the time of the initial public offering of the Accenture Ltd
Class A common shares on July 19, 2001, and vested prior to August 31, 2001.
These restricted share units were granted to some of our partners, former
partners, employees and former employees pursuant to a formula adopted by the
board of directors of Accenture Ltd. Restricted share unit-based compensation
subsequent to the initial public offering is included in cost of services,
sales and marketing and general and administrative costs.Gain (Loss) on InvestmentsGain (loss) on investments primarily represents gains and losses on the
sales of marketable securities and writedowns on investments in securities.
These fluctuate over time and are not predictable. Since September 1, 2000,
they have also included changes in the fair market value of equity holdings
considered to be derivatives in accordance with Statement of Financial
Accounting Standard (SFAS) No. 133, Accounting for Derivative Instruments
and Hedging Activities. In fiscal 2002, they included writedowns incurred in
connection with our decision to sell substantially all of our minority
interests in our venture and investment portfolio.Interest IncomeInterest income represents interest earned on cash and cash equivalents.
Interest income also includes interest earned on a limited number of client
engagement receivables when we agree in advance to finance those receivables
for our clients beyond the normal billing and collection period.Interest ExpenseInterest expense reflects interest incurred on borrowings, certain
retirement obligations and other non-current liabilities.Other Income (Expense)Other income (expense) consists of currency exchange gains (losses) and
the recognition of income from the vesting of options for services by our
personnel on boards of directors of some of those companies in which we have
invested. In general, we earn revenues and incur related costs in the same
currency. We hedge significant planned movements of funds between countries,
which potentially give rise to currency exchange gains (losses). The changes in
the fair market value of these hedges, which are considered to be derivatives
in accordance with SFAS 133, are also included in other income (expense).Equity in Gains (Losses) of AffiliatesEquity in gains (losses) of affiliates represents our share of the
operating results of non-consolidated companies over which we have significant
influence.Provision for TaxesPrior to our transition to a corporate structure, we were generally not
subject to income taxes in most countries because we operated in partnership
form in those countries. Since taxes related to income earned by the
partnerships were the responsibility of the individual partners, our partners
reported and paid taxes on their share of the partnerships income on their
individual tax returns. In other countries, however, we operated in the form of
a corporation or were otherwise subject to entity-level taxes on income and
withholding taxes. As a result, prior to our transition to a corporate
structure, we paid some entity-level taxes, with the amount varying from year
to year depending on the mix of earnings among the countries. Where applicable,
we accounted for these taxes under the asset and liability method. Therefore,
our historical financial statements that include periods ended on or prior to
May 31, 2001 do not reflect the income tax liability that we would have paid as
a corporation. Subsequent to May 31, 2001, Accenture has been subject to
corporate income tax.Minority InterestMinority interest eliminates the income earned or expense incurred
attributable to the equity interest that some of our partners, former partners
and their permitted transferees have in our Accenture Canada Holdings Inc.
subsidiary. See Business  Accenture Organizational Structure. The resulting
net income of Accenture SCA represents the income attributable to the
shareholders of Accenture SCA. Since January 2002, minority interest has also
included immaterial amounts attributable to minority shareholders in our
Avanade, Inc. subsidiary.29Partnership Income Before Partner DistributionsOur historical financial statements that include periods ended on or prior
to May 31, 2001 reflect our organization as a series of related partnerships
and corporations under the control of our partners. The income of our partners
in historical periods is not executive compensation in the customary sense
because in those periods partner compensation was comprised of distributions of
current earnings, out of which our partners were responsible for their payroll
taxes and benefits.Net IncomeNet income reflects the earnings of our organization in a corporate
structure.Critical Accounting Policies and EstimatesThe preparation of our consolidated financial statements in conformity
with accounting principles generally accepted in the United States requires us
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenues
and expenses. Our estimates, judgments and assumptions are continually
evaluated based on available information and experience. Since the use of
estimates is inherent in the financial reporting process, actual results could
differ from those estimates. Certain of our accounting policies require higher
degrees of judgment than others in their application. These include certain
aspects of accounting for revenues recognition, income taxes, variable
compensation and defined benefit pension plans.Revenue RecognitionAccentures contracts have different terms based on the scope,
deliverables and complexity of the engagement, the terms of which frequently
require Accenture to make judgments and estimates in recognizing revenues.
Accenture has many types of contracts, including time-and-materials contracts,
fixed-price contracts and contracts with features of both of these contract
types. In addition, there is a trend to include greater incentives in our
contracts related to costs incurred, benefits produced or adherence to schedule
that may increase the variability in revenues and margins earned on such
contracts. We conduct rigorous reviews prior to signing such contracts to
evaluate whether these incentives are reasonably achievable. For technology
integration contracts, estimated revenues for applying the
percentage-of-completion method include estimated incentives for which
achievement of defined goals is deemed probable. For non-technology
integration consulting and outsourcing contracts, revenues relating to such
incentive payments are recorded when the contingency is satisfied and
acceptance, where applicable, and delivery of agreed benefits have occurred.We recognize revenues from technology integration consulting contracts
using the percentage-of-completion method. Percentage-of-completion accounting
involves calculating the percentage of services provided during the reporting
period compared with the total estimated services to be provided over the
duration of the contract. This method is followed where reasonably dependable
estimates of revenues and costs can be made. Estimates of total contract
revenues and costs are continuously monitored during the term of the contract,
and recorded revenues and costs are subject to revision as the contract
progresses. Such revisions may result in increases or decreases to revenues
and income and are reflected in the financial statements in the periods in
which they are first identified.Outsourcing contracts typically span several years and involve complex
delivery, often through multiple workforces in different geographies. We
continuously review and reassess our estimates of contract profitability. If
our estimates indicate that a contract loss will occur, a loss accrual is
recorded in the consolidated financial statements in the period it is first
identified. Circumstances that could potentially result in contract losses over
the life of the contract include decreases in volumes of transactions or other
inputs/outputs on which we are paid, failure to deliver agreed benefits,
variances from planned internal/external costs to deliver our services, and
other factors affecting revenues and costs.Revenues for contracts with multiple elements are allocated based on the
fair value of the elements. Fair value is determined based on the prices
charged when each element is sold separately. Revenues are recognized in
accordance with our accounting policies for the separate elements when the
services represent separate earnings processes, fair value of the separate
elements exists and the undelivered elements are not essential to the
functionality of the delivered elements. In circumstances where an undelivered
element is essential to the functionality of the delivered element, no revenues
is recognized for the delivered element until the undelivered element is
delivered. While determining fair value and identifying separate elements
requires judgment, generally fair value and the separate elements are readily
identifiable as we also provide those elements unaccompanied by the other
elements in many contracts.30Income TaxesDetermining the consolidated provision for income tax expense, deferred
tax assets and liabilities and related valuation allowance involves judgment.
As a global company, we are required to calculate and provide for income taxes
in each of the tax jurisdictions where we operate. This involves estimating
current tax exposures in each jurisdiction as well as making judgments
regarding the recoverability of deferred tax assets. Tax exposures can involve
complex issues and may require an extended period to resolve. Changes in the
geographic mix or estimated level of annual pre-tax income can affect the
overall effective tax rate. Our effective tax rate in fiscal 2002 was 46.0%,
but would have been 8.0 percentage points lower had investment writedowns been
excluded. In fiscal 2003 the effective tax rate was 35.1%. The reduction in
the effective tax rate to 35.1% in fiscal 2003 was primarily due to a reversal
of previously accrued taxes following the favorable settlement of certain
prior-year non-U.S. income tax liabilities and lower-than-estimated non-U.S.
withholding tax requirements.Variable CompensationWe record compensation expense for payments to be made in later fiscal
periods to our partners and other senior employees under the variable
compensation portions of our overall compensation programs. Determining the
amount of expense to recognize as operating expenses for variable compensation
at interim and annual reporting dates involves judgment. Expenses accrued for
variable compensation are based on actual quarterly and annual performance
versus plan targets and other factors. Amounts accrued are subject to change in
future periods if future performance is below plan targets or is below the
performance levels anticipated in prior periods. Management believes it makes
reasonable judgments using all significant information available. The
liability recorded as of August 31, 2003 for variable compensation was $40
million, of which we expect to pay approximately $19 million in the first
quarter of fiscal 2004 with the remainder payable in subsequent quarters
provided performance targets are met. The following table shows quarterly
variable compensation expense (benefit).Fiscal Year Ended August 31, 2003
    
    Fiscal Year Ended August 31, 2002First
    
    Second
    
    Third
    
    Fourth
    
    First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter(in millions)Variable Compensation
    
    $
    17
    
    
    $
    (6
    )
    
    $
    
    
    
    $
    
    
    
    $
    86
    
    
    $
    151
    
    
    $
    8
    
    
    $
    (140
    )

In fiscal 2003 we extended a variable component of compensation to
managers and reduced the quarterly component of variable partner cash
compensation. The expense of $17 million recorded in the first quarter of
fiscal 2003 represented 7% of the total planned variable compensation expense
of $240 million for fiscal 2003. The benefit recorded in the second quarter of
fiscal 2003 related to an adjustment to estimated payouts accrued for fiscal
2002. We did not accrue additional fiscal 2003 variable compensation expense
during the second, third or fourth quarters. In the fourth quarter of fiscal
2002, as a result of the difficult economic environment and higher expenses
partly relating to increased severance costs, we reversed $140 million of
previously accrued fiscal 2002 variable partner compensation. Variable
compensation expense in fiscal 2002 totaled $105 million, or 35% of the planned
amount for fiscal 2002. Based on fiscal 2002 performance we did not award
performance options to our partners in fiscal 2003, and based on fiscal 2003
performance, we will not award performance options to our partners in fiscal
2004. Our fiscal 2004 plan includes $340 million of planned variable
compensation expense for partners, managers and certain other employees.Defined Benefit Pension PlansIn the United States and certain other countries, Accenture maintains and
administers defined benefit pension plans. The annual cost of these plans can
be significantly affected by changes in assumptions and differences between
expected and actual experience. In fiscal 2003, pension expense was $72
million, compared with $53 million in fiscal 2002 and $35 million in fiscal
2001. The pension assumptions at August 31, 2003 and 2002 were as follows:2003
    
    2002U.S. Plans
    
    Non-U.S. Plans
    
    U.S. Plans
    
    Non-U.S. PlansDiscount rate
    
    
    6.00
    %
    
    
    4.85
    %
    
    
    7.25
    %
    
    
    4.92
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    5.66
    %
    
    
    8.50
    %
    
    
    5.35
    %

A one percentage point increase in the discount rate would decrease our
pension expense by $31 million. A one percentage point decrease in the
discount rate would increase our pension expense by $40 million.A one percentage point increase in our return on plan assets would
decrease our pension expense by $5 million. A one percentage point decrease in
our return on plan assets would increase our pension expense by $5 million.SFAS 87 requires recognition of a minimum pension liability if the fair
value of pension assets is less than the accumulated benefit obligation.
During the year ended August 31, 2003 we recorded a charge to equity of $108
million representing an31adjustment to increase our pension liability by $180
million net of a tax benefit of $72 million. This charge is included in
accumulated other comprehensive loss in the shareholders equity section of our
balance sheet. Additional charges to equity may be required in the future
depending on future contributions to our pension plans, returns on pension plan
assets and interest rates.Our TransitionOur management believes that presentation of financial information for the
year ended August 31, 2001 that is adjusted to reflect our transition to a
corporate structure, our name change to Accenture and Accenture Ltds initial
public offering provides useful information because it facilitates a meaningful
comparison between the different periods presented in this report. This
adjusted financial information has previously been presented in the prospectus
filed in connection with Accenture Ltds initial public offering and in our
annual reports on Form 10-K filed subsequent to the initial public offering.The following adjusted financial information gives effect to the following
as if they occurred on September 1, 2000:
    
    the transactions related to our transition to a corporate structure
described under Certain Transactions and RelationshipsReorganization
and Related Transactions;
    
    compensation payments to employees who were partners prior to our transition to a corporate structure;
    
    provision for corporate income taxes; and
    
    Accenture Ltds initial public offering in July 2001.The adjusted financial information also gives effect to the exclusion of
rebranding costs of $304 million incurred in connection with our name change to
Accenture.The adjusted financial information also excludes events directly
attributable to Accenture Ltds initial public offering. These events include:
    
    net compensation cost of approximately $967 million resulting from
the grant of restricted share units in connection with Accenture Ltds
initial public offering; and
    
    approximately $544 million for costs associated with our transition
to a corporate structure.We refer to all of these adjustments, collectively, as the adjustments to
reflect our transition.32The following financial information adjusted to reflect our transition is
based on, and should be read in conjunction with, our historical consolidated
financial statements and the related notes included elsewhere in this Annual
Report onForm 10-K. The information presented is not necessarily indicative of
the results of operations that might have occurred had the events described
above actually taken place as of the dates specified or that may be expected to
occur in the future.Year ended August 31, 2001% ofAs reported
    
    As adjusted
    
    revenues(in millions, except share and per share data)Revenues:Revenues before reimbursements
    
    $
    11,444
    
    
    $
    11,444
    
    
    
    88
    %Reimbursements
    
    
    1,618
    
    
    
    1,618
    
    
    
    12Revenues
    
    
    13,062
    
    
    
    13,062
    
    
    
    100Operating expenses:Cost of services:Cost of services before reimbursable expenses
    
    
    6,200
    
    
    
    6,925
    
    
    
    53Reimbursable expenses
    
    
    1,618
    
    
    
    1,618
    (a)
    
    
    12Cost of services
    
    
    7,818
    
    
    
    8,543
    
    
    
    65Sales and marketing
    
    
    1,217
    
    
    
    1,507
    (a)
    
    
    12General and administrative costs
    
    
    1,516
    
    
    
    1,560
    (a)
    
    
    12Reorganization and rebranding costs
    
    
    848
    
    
    
    
    (b)(c)
    
    
    n/mRestricted share compensation
    
    
    967
    
    
    
    
    (d)
    
    
    n/mTotal operating expenses
    
    
    12,366
    
    
    
    11,610
    
    
    
    89Operating income
    
    
    696
    
    
    
    1,452
    
    
    
    11Gain on investments, net
    
    
    107
    
    
    
    107
    
    
    
    1Interest income
    
    
    80
    
    
    
    80
    
    
    
    n/mInterest expense
    
    
    (44
    )
    
    
    (59
    )(e)
    
    
    n/mOther income
    
    
    17
    
    
    
    17
    
    
    
    n/mEquity in losses of affiliates
    
    
    (61
    )
    
    
    (61
    )
    
    
    n/mIncome before taxes
    
    
    795
    
    
    
    1,536
    
    
    
    12Provision for taxes
    
    
    503
    
    
    
    614
    (f)
    
    
    5Income before minority interest and accounting change
    
    
    292
    
    
    
    922
    
    
    
    7Minority interest
    
    
    8
    
    
    
    (9
    )(g)
    
    
    n/mIncome before accounting change
    
    $
    300
    
    
    $
    913
    
    
    
    7
    %

n/m
    =
    not meaningful(a)
    
    Adjustments totaling $1,059 million reflect the effects of partner
compensation and benefit costs as if our transition to a corporate
structure had occurred on September 1, 2000. Prior to our transition to a
corporate structure, payments to our partners were generally accounted for
as distributions of partners income, rather than compensation expense.
For the year ended August 31, 2001, compensation and benefit costs of
partners have been allocated 69% to cost of services, 27% to sales and
marketing, and 4% to general and administrative costs based on an estimate
of the time spent on each activity at the appropriate cost rates. The
compensation plan adopted upon our transition to a corporate structure
includes a fixed salary, benefits and performance-based bonuses. All
elements of the new compensation plan, including bonuses, have been
reflected in the pro forma adjustments because our partners would have
earned the bonuses based on our results of operations for the historical
periods. Benefit costs are medical, dental and payroll taxes, all of which
are based on estimated costs that would have been incurred had these
benefits been in place during the historical periods.(b)
    
    Reorganization costs include $89 million of restructuring costs relating
to our transition to a corporate structure and $455 million of indirect
taxes, such as capital and stamp duty imposed on transfers of assets to
the new corporate holding company structure.(c)
    
    Rebranding costs include $157 million for the amortization of intangible
assets relating to the final resolution of arbitration with Andersen
Worldwide and Arthur Andersen as well as $147 million from changing our
name to Accenture. These amounts are considered pro forma adjustments due
to their nonrecurring nature.(d)
    
    In connection with Accenture Ltds initial public offering, 68,481,815
fully vested restricted share units at $14.50 per share were granted in
July 2001 to certain partners, former partners, employees and former
employees. The $967 million expense represents the fair value of fully
vested restricted share units less $26 million relating to cancelled
liabilities for a deferred bonus plan for employees. Each restricted share
unit represents an unfunded, unsecured right, which is nontransferable
except in the event of death, of a participant to receive an Accenture Ltd
Class A common share on the date specified in the participants award
agreement.(e)
    
    Reflects adjustments of $15 million representing estimated interest
expense on early-retirement benefits payable to partners.(f)
    
    Reflects adjustments for an estimated income tax provision as if we had
operated in a corporate structure at a pro forma tax rate of 40%. The
adjustment is net of $222 million relating to the revaluation of deferred
tax liabilities upon change in tax status, including income taxes relating
to mandatory changes in tax accounting methods, from a partnership to a
corporate structure. As a series of related partnerships and corporations
under the control of our partners, we generally were not subject to income
taxes. However, some of the corporations were subject to income taxes in
their local jurisdictions.33(g)
    
    Minority interest is based on the assumption that minority interest
existed throughout the year. As of August 31, 2001, partners owned a
0.81% minority interest in Accenture Canada Holdings Inc. Since Accenture
SCA controls Accenture Holdings, Inc., Accenture SCA consolidates
Accenture Canada Holdings Inc.Revenues by Operating GroupWe provide services through five operating groups. The following table
provides revenues for each of these operating groups.Three Months Ended
    
    Year EndedAugust 31,
    
    August 31,2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001(in millions, except for percentages)Revenues:Communications & High Tech
    
    $
    849
    
    
    $
    804
    
    
    $
    746
    
    
    $
    3,290
    
    
    $
    3,182
    
    
    $
    3,238Financial Services
    
    
    578
    
    
    
    539
    
    
    
    593
    
    
    
    2,355
    
    
    
    2,366
    
    
    
    2,627Government
    
    
    443
    
    
    
    328
    
    
    
    275
    
    
    
    1,582
    
    
    
    1,316
    
    
    
    1,003Products
    
    
    642
    
    
    
    589
    
    
    
    658
    
    
    
    2,613
    
    
    
    2,696
    
    
    
    2,624Resources
    
    
    504
    
    
    
    432
    
    
    
    504
    
    
    
    1,966
    
    
    
    2,005
    
    
    
    1,933Other
    
    
    2
    
    
    
    
    
    
    
    1
    
    
    
    12
    
    
    
    9
    
    
    
    19Total revenues before reimbursements
    
    
    3,017
    
    
    
    2,692
    
    
    
    2,777
    
    
    
    11,818
    
    
    
    11,574
    
    
    
    11,444Reimbursements
    
    
    445
    
    
    
    393
    
    
    
    373
    
    
    
    1,579
    
    
    
    1,531
    
    
    
    1,618Total
    
    $
    3,462
    
    
    $
    3,085
    
    
    $
    3,150
    
    
    $
    13,397
    
    
    $
    13,105
    
    
    $
    13,062Revenues as a percentage of total:Communications & High Tech
    
    
    24
    %
    
    
    26
    %
    
    
    23
    %
    
    
    24
    %
    
    
    24
    %
    
    
    25
    %Financial Services
    
    
    17
    
    
    
    17
    
    
    
    19
    
    
    
    18
    
    
    
    18
    
    
    
    20Government
    
    
    13
    
    
    
    11
    
    
    
    9
    
    
    
    12
    
    
    
    10
    
    
    
    8Products
    
    
    18
    
    
    
    19
    
    
    
    21
    
    
    
    19
    
    
    
    21
    
    
    
    20Resources
    
    
    15
    
    
    
    14
    
    
    
    16
    
    
    
    15
    
    
    
    15
    
    
    
    15Other
    
    
    n/m
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    n/mTotal revenues before reimbursements
    
    
    87
    
    
    
    87
    
    
    
    88
    
    
    
    88
    
    
    
    88
    
    
    
    88Reimbursements
    
    
    13
    
    
    
    13
    
    
    
    12
    
    
    
    12
    
    
    
    12
    
    
    
    12Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %

n/m
    =
    not meaningful34Geographic InformationRevenues are attributed to geographic areas based on where client services
are supervised.Three Months Ended
    
    Year EndedAugust 31,
    
    August 31,2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001(in millions, except for percentages)Revenues:Americas
    
    $
    1,485
    
    
    $
    1,394
    
    
    $
    1,464
    
    
    $
    5,671
    
    
    $
    5,836
    
    
    $
    6,113EMEA(1)
    
    
    1,331
    
    
    
    1,111
    
    
    
    1,090
    
    
    
    5,353
    
    
    
    4,963
    
    
    
    4,484Asia/Pacific
    
    
    201
    
    
    
    187
    
    
    
    223
    
    
    
    794
    
    
    
    775
    
    
    
    847Total revenues before reimbursements
    
    
    3,017
    
    
    
    2,692
    
    
    
    2,777
    
    
    
    11,818
    
    
    
    11,574
    
    
    
    11,444Reimbursements
    
    
    445
    
    
    
    393
    
    
    
    373
    
    
    
    1,579
    
    
    
    1,531
    
    
    
    1,618Total
    
    $
    3,462
    
    
    $
    3,085
    
    
    $
    3,150
    
    
    $
    13,397
    
    
    $
    13,105
    
    
    $
    13,062Revenues as a percentage of total:Americas
    
    
    43
    %
    
    
    45
    %
    
    
    46
    %
    
    
    42
    %
    
    
    44
    %
    
    
    47
    %EMEA
    
    
    38
    
    
    
    36
    
    
    
    35
    
    
    
    40
    
    
    
    38
    
    
    
    34Asia/Pacific
    
    
    6
    
    
    
    6
    
    
    
    7
    
    
    
    6
    
    
    
    6
    
    
    
    7Total revenues before reimbursements
    
    
    87
    
    
    
    87
    
    
    
    88
    
    
    
    88
    
    
    
    88
    
    
    
    88Reimbursements
    
    
    13
    
    
    
    13
    
    
    
    12
    
    
    
    12
    
    
    
    12
    
    
    
    12Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %

(1)
    
    EMEA includes Europe, the Middle East and Africa.Revenues by Type of WorkThe following table presents revenues before reimbursements by the major
types of services:Three Months Ended
    
    Year EndedAugust 31,
    
    August 31,2003
    
    2002
    
    2001
    
    2003
    
    2002
    
    2001(in millions)Consulting
    
    $
    1,875
    
    
    $
    1,881
    
    
    $
    2,224
    
    
    $
    7,916
    
    
    $
    8,770
    
    
    $
    9,409Outsourcing
    
    
    1,036
    
    
    
    737
    
    
    
    533
    
    
    
    3,567
    
    
    
    2,609
    
    
    
    1,969Other
    
    
    106
    
    
    
    74
    
    
    
    20
    
    
    
    335
    
    
    
    195
    
    
    
    66Revenues before reimbursements
    
    
    3,017
    
    
    
    2,692
    
    
    
    2,777
    
    
    
    11,818
    
    
    
    11,574
    
    
    
    11,444Reimbursements
    
    
    445
    
    
    
    393
    
    
    
    373
    
    
    
    1,579
    
    
    
    1,531
    
    
    
    1,618Revenues
    
    $
    3,462
    
    
    $
    3,085
    
    
    $
    3,150
    
    
    $
    13,397
    
    
    $
    13,105
    
    
    $
    13,062

Year Ended August 31, 2003 Compared to Year Ended August 31, 2002RevenuesRevenues for fiscal 2003 were $13,397 million, an increase of $292
million, or 2%, over fiscal 2002. Revenues before reimbursements for fiscal
2003 were $11,818 million, an increase of $244 million, or 2%, over fiscal 2002
in U.S. dollars. In local currency terms, revenues before reimbursements in
fiscal 2003 decreased 4% from fiscal 2002. In the fourth quarter of fiscal
2003, revenues before reimbursements increased 12% in U.S. dollars and 5% in
local currency terms over the fourth quarter of fiscal 2002. In fiscal 2003,
revenues before reimbursements in Europe, the Middle East and Africa grew 8% in
U.S. dollars and declined 6% in local currency terms; revenues before
reimbursements in the Americas declined 3% in U.S. dollars and 2% in local
currency terms; and revenues before reimbursements in Asia/Pacific grew by 2%
in U.S. dollars and declined 3% in local currency terms. Outsourcing revenues
before reimbursements grew by 37% in fiscal 2003 compared with fiscal 2002 and
represented 30% of revenues before reimbursements for fiscal 2003, up from 23%
in fiscal 2002. Outsourcing revenues before reimbursements in the fourth
quarter of fiscal 2003 grew by 41% over the fourth quarter of fiscal 2002.
Consulting revenues before reimbursements in fiscal 2003 declined 10% compared
with fiscal 2002 and remained constant as a percentage of revenues in the
fourth quarter of fiscal 2003 compared with the corresponding period in fiscal
2002.Our Communications & High Tech operating group achieved revenues before
reimbursements of $3,290 million in fiscal 2003, an increase of 3% over fiscal
2002, primarily due to increased revenues from large outsourcing contracts and
favorable currency translation, which offset lower consulting revenues.
Outsourcing revenues benefited from strong revenue growth with an existing
communications client in North America. Communications & High Tech revenues
before reimbursements in the35fourth quarter of fiscal 2003 increased 6% over the fourth quarter of
fiscal 2002 due to increased outsourcing revenues and favorable currency
translation.Our Financial Services operating group revenues before reimbursements were
$2,355 million in fiscal 2003, compared with $2,366 million in fiscal 2002, as
favorable currency translation and growth in outsourcing were offset by lower
consulting revenues primarily due to the impact of the economic downturn in the
capital markets industry. Financial Services revenues before reimbursements in
the fourth quarter of fiscal 2003 increased 7% over the fourth quarter of
fiscal 2002, primarily due to the strength of the Euro and outsourcing revenues
growth in our Banking and Insurance industry groups.Our Government operating group achieved revenues before reimbursements of
$1,582 million in fiscal 2003, an increase of 20% over fiscal 2002. Results
were primarily driven by strong growth in outsourcing revenues, higher
consulting revenues and favorable currency translation. Revenues growth of 20%
for the year and 35% for the fourth quarter 2003 was primarily sourced from
clients within the U.S. Federal government, U.S. state and local government
clients, particularly in California, and clients in Western Europe. Fiscal
2003 and fourth-quarter 2003 Government operating group revenues also benefited
from favorable currency translation. The 35% growth in revenues before
reimbursements in the fourth quarter of 2003 includes significant growth in
both consulting and outsourcing for our U.S. Federal government clients.Our Products operating group achieved revenues before reimbursements of
$2,613 million in fiscal 2003, a decrease of 3% from fiscal 2002, primarily as
a result of planned reductions in activity in our Retail industry group in
Europe and decreases in our Health Services industry group revenues, which
offset favorable currency translation and growth in our Pharmaceuticals &
Medical Products industry group. Despite the year-over-year decline,
fourth-quarter 2003 revenues before reimbursements for the Products operating
group increased 9% compared with the fourth quarter of 2002, due primarily to
strong revenues growth in our Pharmaceuticals & Medical Products industry group
and increased outsourcing revenues across most industry groups within Product.Our Resources operating group achieved revenues before reimbursements of
$1,966 million in fiscal 2003, a decrease of 2% from fiscal 2002, as decreases
in our consulting revenues offset strong growth in outsourcing. Growth in our
Utilities industry group and favorable currency translation were offset by
weakness in our Chemicals, Energy, Forest Products and Metals & Mining industry
groups. In the fourth quarter of 2003, revenues before reimbursements for
Resources grew 17% over the fourth quarter of 2002, primarily reflecting strong
growth in our Utilities and Energy industry groups, which was partially offset
by declines in our Chemicals, Forest Products and Metals & Mining industry
groups.Operating
ExpensesOperating expenses in fiscal 2003 were $11,846 million, an increase of
$126 million, or 1%, over fiscal 2002 and a decrease as a percentage of
revenues from 89% in fiscal 2002 to 88% in fiscal 2003. As a percentage of
revenues before reimbursements, operating expenses before reimbursable expenses
decreased from 88% in fiscal 2002 to 87% in fiscal 2003. A charge of $111
million in the fourth quarter of 2002 to consolidate certain office facilities
around the world had the effect of increasing operating expenses as a
percentage of revenues before reimbursements by 1 percentage point in fiscal
2002.In response to continued pricing pressures affecting our business and to
the faster growth in outsourcing, where we generally experience lower margins
in the early stages of contracts, we continue to focus on managing our cost
structure. We aggressively plan and manage our payroll costs to meet the
anticipated demand for our services. Our long-term initiatives focus on global
reductions in delivery infrastructure costs. Our short-term initiatives focus
on managing payroll costs by reducing headcount and variable compensation
expense; lowering other costs by limiting travel and meeting expenses; reducing
infrastructure by decreasing internal service levels, moving to a shared
services structure and optimizing office space utilization; and reducing
corporate expenses by deferring non-critical initiatives and through increased
hiring scrutiny. Our cost-management initiatives may not be sufficient to
maintain our margins if current trends continue.In fiscal 2003, we incurred severance costs of $161 million, compared with
$190 million of severance costs in fiscal 2002. During fiscal 2003, we expensed
$11 million for variable compensation, compared with $105 million of variable
compensation expense in fiscal 2002.Operating expenses for the fourth quarter of 2003 benefited by $30
million, due to reductions in estimated liabilities related to favorable
experience in bad debts and other estimated liabilities, which are not expected
to recur. In the fourth quarter of fiscal 2002, we recorded a benefit of $140
million from the reversal of previously accrued variable compensation as a
result of reducing fiscal 2002 variable compensation to approximately 35% of
the fiscal 2002 planned amount due to the difficult economic environment and
higher expenses partly related to increased severance costs. In addition, in
the fourth quarter of 2002 we recorded costs of $93 million related to
severance and $32 million for retention payments. The net effect of these
actions was to reduce fourth-quarter operating expenses in fiscal 2002 by $15
million.36Cost of ServicesCost of services was $9,087 million in fiscal 2003, an increase of $660
million, or 8%, over fiscal 2002 and an increase as a percentage of revenues
from 64% in fiscal 2002 to 68% in fiscal 2003. Cost of services before
reimbursable expenses was $7,508 million in fiscal 2003, an increase of $611
million, or 9%, over fiscal 2002. Cost of services before reimbursable expenses
increased as a percentage of revenues before reimbursements from 60% in fiscal
2002 to 64% in fiscal 2003. The primary driver of the increase in cost of
services was higher outsourcing costs of $875 million, partly offset by a
decrease in variable compensation expenses of $66 million and lower consulting
employee compensation costs of $143 million. Of the $875 million increase in
outsourcing costs, $268 million was driven by higher payroll costs and $607
million was due to an increase in non-payroll costs.Gross margins (revenues less cost of services) in fiscal 2003 decreased to
36.5% of revenues before reimbursements in fiscal 2003 from 40.4% in fiscal
2002. This decrease resulted from the shift in our mix of business toward
outsourcing and from pricing pressures. Outsourcing contracts generally have
lower gross margins than consulting contracts, particularly in the first year
of new outsourcing contracts. These factors more than offset the favorable
effects of other cost savings, including lower variable compensation and
severance costs.Sales and MarketingSales and marketing expense was $1,458 million in fiscal 2003, a decrease
of $107 million, or 7%, from fiscal 2002, reflecting lower business development
and market development costs of $55 million and lower variable compensation
expense of $25 million. As a percentage of revenues before reimbursements,
sales and marketing expense decreased from 14% in fiscal 2002 to 12% in fiscal
2003.General and Administrative CostsGeneral and administrative costs were $1,300 million in fiscal 2003, a
decrease of $316 million, or 20%, from fiscal 2002 and decreased as a
percentage of revenues before reimbursements from 14% in fiscal 2002 to 11% in
fiscal 2003. Key drivers of the decline were geographic facility and
technology cost reductions of $143 million, lower bad debt expense of $100
million and reductions in business protection costs of $61 million.Restructuring CostsIn fiscal 2002, we incurred restructuring costs of $111 million related to
the costs to consolidate certain office facilities around the world. We did
not incur similar costs in fiscal 2003.Operating IncomeOperating income was $1,551 million in fiscal 2003, an increase of $166
million, or 12%, over fiscal 2002. Operating income increased as a percentage
of revenues before reimbursements from 12.0% in fiscal 2002 to 13.1% in fiscal
2003. The fiscal 2002 restructuring costs had the effect of reducing operating
income as a percentage of revenues before reimbursements by 0.9 percentage
points in fiscal 2002. Savings in sales and marketing and general and
administrative costs and favorable currency translation due to strengthening of
various currencies against the U.S. dollar more than offset lower gross
margins.The $166 million increase in operating income for fiscal 2003 compared
with fiscal 2002 primarily reflects increases of $99 million, $15 million, $123
million and $12 million in operating income from our Communications & High
Tech, Financial Services, Government and Resources operating groups,
respectively, partially offset by a decrease of $83 million in operating income
from our Products operating group. The decrease in Products operating income
primarily reflects lower revenues and margins in our Retail industry group.
Communications & High Tech operating income increased primarily due to
operating efficiencies resulting from workforce reductions. The increase in
Government operating income was driven by a 20% increase in revenues and
improved productivity and chargeability.Gain (Loss) on InvestmentsGains on investments totaled $10 million for fiscal 2003, compared with a
loss on investments of $321 million in fiscal 2002. The loss in fiscal 2002
included a charge of $212 million recorded in the second quarter for investment
writedowns and $90 million of other-than-temporary impairment writedowns
recorded in the first quarter.Interest IncomeInterest income was $41 million in fiscal 2003, a decrease of $5 million,
or 11%, from fiscal 2002. The decrease resulted primarily from the impact of
lower interest rates in fiscal 2003.37Interest ExpenseInterest expense was $21 million in fiscal 2003, a decrease of $28
million, or 57%, from fiscal 2002. The decrease resulted primarily from lower
imputed interest expense due to reductions in other long-term liabilities
resulting from payments made to Arthur Andersen LLP in October 2002 in
conjunction with the termination of the service arrangements and facility use
arrangement entered into in fiscal 2001.Other Income (Expense)Other income was $32 million in fiscal 2003, an increase of $17 million
over fiscal 2002, primarily resulting from an increase in currency exchange
gains.Equity in Gains (Losses) of AffiliatesEquity in losses of affiliates totaled less than $1 million in fiscal
2003, compared with losses of $9 million in fiscal 2002, primarily due to the
consolidation of the investment in our subsidiaries Avanade Inc. and Accenture
HR Services, beginning on January 1, 2002 and March 1, 2002, respectively,
which we previously accounted for under the equity method.Provision for TaxesThe effective tax rate for fiscal 2003 was 35.1%. The effective tax rate
for fiscal 2002 was 46.0%. The $212 million charge to write down investments
had the effect of increasing the effective tax rate for fiscal 2002 by 8.0
percentage points. The reduction in the effective tax rate in fiscal 2003 was
primarily due to a reversal of previously accrued taxes following the favorable
settlement of certain prior-year non-U.S. income tax liabilities and
lower-than-estimated non-U.S. withholding tax requirements.Year Ended August 31, 2002 Compared to Year Ended August 31, 2001Our results of operations that include periods ended on or prior to May
31, 2001 reflect the fact that we operated as a series of related partnerships
and corporations prior to that date, and our results of operations for periods
ending after May 31, 2001 reflect that we commenced operations in corporate
structure on that date. Accordingly, in order to provide a more meaningful
comparison of our results for fiscal 2002 compared with fiscal 2001, we comment
below on our results both on a historical basis and a basis adjusted to reflect
our transition. See  Our Transition above.RevenuesRevenues for fiscal 2002 were $13,105 million, an increase of $43 million
over fiscal 2001. Revenues before reimbursements for fiscal 2002 were $11,574
million, an increase of $131 million, or 1%, over fiscal 2001 in U.S. dollars.
In local currency terms, revenues before reimbursements in fiscal 2002 grew by
2% over fiscal 2001. In the fourth quarter of 2002, revenues before
reimbursements decreased by 3% in U.S. dollars and 6% in local currency from
the fourth quarter of 2001. Our fiscal 2002 revenues before reimbursements in
Europe, the Middle East and Africa grew by 11% in U.S. dollars and by 9% in
local currency terms, revenues before reimbursements in the Americas declined
by 5% in U.S. dollars and 3% in local currency terms, and revenues before
reimbursements in Asia/Pacific declined by 8% in U.S. dollars and 4% in local
currency terms. Outsourcing revenues before reimbursements grew 33% in fiscal
2002 and represented 23% of revenues before reimbursements for fiscal 2002, up
from 17% in fiscal 2001. Outsourcing revenues before reimbursements for the
fourth quarter of fiscal 2002 grew 38% over the fourth quarter of fiscal 2001.
Consulting revenues before reimbursements in fiscal 2002 declined 7% from
fiscal 2001, and consulting revenues before reimbursements for the fourth
quarter of fiscal 2002 declined 15% from the fourth quarter of 2001.As a result of the difficult economic environment, revenues growth slowed
during fiscal 2002. Some clients reduced or deferred expenditures for our
services and we also experienced pricing pressure, which eroded our revenues.
However, we implemented cost-management programs such that operating margins
for fiscal 2002, excluding restructuring costs related to real estate
consolidation, were improved.Despite the challenging environment and an unusually high number of
bankruptcies among our clients, our Communications & High Tech operating group
achieved revenues before reimbursements of $3,182 million in fiscal 2002, a
decrease of 2% from fiscal 2001. This decrease was primarily due to global
economic weakening in the electronics and high technology industries which this
operating group serves, partly offset by growth in our Communications industry
group. Despite a decrease of 2% year over year, Communications & High Tech
revenues before reimbursements increased 8% in the fourth quarter of 2002
compared with the fourth quarter of 2001. Our Communications industry group led
the growth in the fourth quarter due to increased revenues from several large
transformational outsourcing contracts.38Our Financial Services operating group achieved revenues before
reimbursements of $2,366 million in fiscal 2002, a decrease of 10% from fiscal
2001, primarily due to the impact of the economic downturn in the capital
markets industry. Financial Services fourth-quarter 2002 revenues before
reimbursements declined 9% from the fourth quarter of 2001.Our Government operating group achieved revenues before reimbursements of
$1,316 million in fiscal 2002, an increase of 31% over fiscal 2001, primarily
driven by strong growth in North America and Europe. Despite year-over-year
growth of 31% in fiscal 2002 compared with fiscal 2001, growth in revenues
before reimbursements for the fourth quarter of 2002 slowed to 19% compared
with the fourth quarter of 2001.Our Products operating group achieved revenues before reimbursements of
$2,696 million in fiscal 2002, an increase of 3% over fiscal 2001. This
reflected strong growth in our Retail industry group in Europe led by a series
of engagements with a large retail client. Despite year-over-year growth in
revenues before reimbursements of 3% in fiscal 2002, fourth quarter 2002
revenues before reimbursements decreased 10% compared with the fourth quarter
of 2001. With the exception of Transportation & Travel Services, all industry
groups within our Products operating group contributed to the fourth-quarter
decline due to economic conditions.Our Resources operating group achieved revenues before reimbursements of
$2,005 million in fiscal 2002, an increase of 4% over fiscal 2001, as a result
of strong growth in our Chemicals and Utilities industry groups. Revenues
before reimbursements for Resources for the fourth quarter of 2002 declined 14%
from the fourth quarter of 2001, due in large part to lower revenues in our
Chemicals industry group in North America and a slowdown in North America
resulting from economic problems in the U.S. energy and utilities industries,
including the collapse of the energy trading industry and the slowing of
utilities work due to regulatory actions.Operating ExpensesOperating expenses in fiscal 2002 were $11,720 million, a decrease of $646
million, or 5%, from fiscal 2001 and a decrease as a percentage of revenues
from 95% in fiscal 2001 to 89% in fiscal 2002. As a percentage of revenues
before reimbursements, operating expenses before reimbursable expenses
decreased from 94% in fiscal 2001 to 88% in fiscal 2002. These decreases
primarily resulted because in fiscal 2001 we incurred expenses of $848 million
for reorganization and rebranding and $967 million for restricted share
unit-based compensation costs. These reductions from fiscal 2001 were partially
offset by higher employee compensation costs following our transition to a
corporate structure. Prior to our transition to a corporate structure, payments
to our partners were generally accounted for as distributions of partners
income, rather than as compensation expense.Operating expenses for fiscal 2002 increased $110 million, or 1%, over the
adjusted operating expenses for fiscal 2001 and remained constant as a
percentage of revenues at 89%. As a percentage of revenues before
reimbursements, operating expenses before reimbursable expenses increased from
87% in fiscal 2001 to 88% in fiscal 2002. Operating expenses for fiscal 2002
included a charge of $111 million relating to the consolidation of office
facilities.In fiscal 2002, we continued to implement long and short-term
cost-management initiatives aimed at keeping overall growth in operating
expenses less than the growth in revenues before reimbursements. Our long-term
initiatives focus on global reductions in infrastructure costs. In addition,
increasing our use of Web-enabled and other lower-cost distribution methods
enabled us to reduce the costs of delivering training. Our short-term
initiatives focus on reducing variable costs, such as limiting travel and
meeting costs, and reducing infrastructure and corporate expenses principally
through a hiring freeze and the deferral of non-critical initiatives.In response to the continued difficult economic conditions affecting our
business and the faster growth in outsourcing, we increased our focus on
reducing our cost structure and on correcting supply-and-demand, skill and
pay-level imbalances in our workforce. In the fourth quarter of 2002, we
recorded costs of $93 million related to severance and $32 million for
retention payments. In addition, annual bonus expense and variable compensation
recorded in prior quarters was reduced by $140 million. The net effect of these
actions was to reduce fourth-quarter operating expenses by $15 million.Cost of ServicesCost of services was $8,428 million in fiscal 2002, an increase of $611
million, or 8%, over fiscal 2001 and an increase as a percentage of revenues
from 60% in fiscal 2001 to 64% in fiscal 2002. Cost of services before
reimbursable expenses was $6,897 million in fiscal 2002, an increase of $698
million, or 11%, over fiscal 2001. Cost of services before reimbursable
expenses increased as a percentage of revenues before reimbursements from 54%
in fiscal 2001 to 60% in fiscal 2002. These increases were primarily
attributable to higher employee compensation costs following our transition to
a corporate structure.Cost of services before reimbursable expenses for fiscal 2002 decreased
$27 million over the adjusted cost of services before reimbursable expenses for
fiscal 2001 and decreased as a percentage of revenues before reimbursements
from 61% in fiscal 2001 to 60% in fiscal 2002. The slowdown in the global
economy led us to reduce variable costs and redirect some of our39resources to selling and marketing efforts in order to promote our
business. However, these cost reductions were partially offset by higher
employee compensation and severance costs partly attributable to workforce
imbalances that resulted from the difficult economic environment and shift in
the relative proportion of our business from consulting to outsourcing.Sales and MarketingSales and marketing expense was $1,566 million in fiscal 2002, an increase
of $348 million, or 29%, over fiscal 2001 and an increase as a percentage of
revenues from 9% in fiscal 2001 to 12% in fiscal 2002. This increase was
primarily due to not expensing partner compensation prior to our transition to
a corporate structure.Sales and marketing expense for fiscal 2002 increased $59 million, or 4%,
over the adjusted sales and marketing expense for fiscal 2001 and increased as
a percentage of revenues before reimbursements from 13% in fiscal 2001 to 14%
in fiscal 2002. Since the second half of fiscal 2001, the slowdown in the
global economy resulted in longer selling cycles and led us to increase our
selling and marketing efforts in order to promote our business.General and Administrative CostsGeneral and administrative costs were $1,616 million in fiscal 2002, an
increase of $100 million, or 7%, over fiscal 2001 and remained constant as a
percentage of revenues at 12%. The exclusion of partner compensation prior to
May 31, 2001 accounted for $44 million of this increase.General and administrative costs for fiscal 2002 increased $56 million, or
4%, over the adjusted general and administrative costs for fiscal 2001 and
remained constant as a percentage of revenues before reimbursements at 14%.
Expense reductions from cost-management initiatives offset the addition of the
general and administrative costs of Accenture HR Services (formerly
e-peopleserve) and Avanade, Inc. as a result of consolidating these
subsidiaries beginning in the second quarter of 2002. We incurred bad debt
expense of $80 million in fiscal 2002, which also contributed to the increase.Restructuring, Reorganization and Rebranding CostsRestructuring costs of $111 million in fiscal 2002 represent costs to
consolidate certain office facilities around the world, including costs for
losses on operating leases and write-downs of assets such as leasehold
improvements resulting from abandoned office space.In fiscal 2001, reorganization and rebranding costs were $848 million, or
7% of revenues before reimbursements. Reorganization costs include $89 million
of restructuring costs relating to our transition to a corporate structure and
$455 million of indirect taxes and other costs imposed on transfers of assets
to the new corporate holding company structure. Rebranding costs include $157
million for the amortization of intangible assets related to the final
resolution of the arbitration with Andersen Worldwide and Arthur Andersen and
$147 million resulting from changing our name to Accenture. These costs were
excluded from our adjusted financial results.Restricted Share Unit-based CompensationGrants of Accenture Ltds restricted share units to partners, former
partners and employees resulted in compensation cost of $967 million in the
fourth quarter of fiscal 2001. These costs were excluded from our fiscal 2001
adjusted financial results. In fiscal 2002, restricted share unit-based
compensation expense totaled $59 million. This is included in cost of services,
sales and marketing and general and administrative expense.Operating IncomeOperating income was $1,385 million in fiscal 2002, an increase of $690
million, or 99%, over fiscal 2001 and increased as a percentage of revenues
before reimbursements from 6% in fiscal 2001 to 12% in fiscal 2002.Operating income was $1,385 million in fiscal 2002, a decrease of $67
million, or 5%, from fiscal 2001 adjusted operating income. The fiscal 2002
costs of $111 million associated with consolidating offices had the effect of
reducing fiscal 2002 operating income as a percentage of revenues before
reimbursements by 0.9 percentage points.Gain (Loss) on InvestmentsLosses on investments totaled $321 million for fiscal 2002. This loss
includes a charge of $212 million recorded in the second quarter of 2002 for
the anticipated loss on the planned disposal of substantially all of our
minority ownership interests in our venture and investment portfolio. The loss
of $321 million also included other-than-temporary impairment writedowns of $90
million recorded in the first quarter of 2002.40Gains on investments totaled $107 million for fiscal 2001. This gain
represented the sale of $382 million of a marketable security purchased in 1995
and $11 million from the sale of other marketable securities, net of
other-than-temporary impairment investment writedowns of $94 million, and
unrealized investment losses of $192 million. Other-than-temporary impairment
writedowns consisted of $19 million in publicly traded equity securities and
$75 million in privately traded equity securities. The writedowns related to
investments in companies where the market value had been less than our cost for
an extended time period, or the issuer had experienced significant financial
declines or difficulties in raising capital to continue operations.Interest IncomeInterest income was $46 million in fiscal 2002, a decrease of $34 million,
or 42%, from fiscal 2001. The decrease resulted primarily from the impact of
lower interest rates in fiscal 2002.Interest ExpenseInterest expense was $49 million in fiscal 2002, an increase of $6
million, or 13%, over fiscal 2001. Interest expense in fiscal 2002 decreased
$10 million, or 17%, from adjusted fiscal 2001 interest expense. The decrease
resulted primarily from lower interest rates in fiscal 2002 and a decrease in
short-term bank borrowings in fiscal 2002 compared with fiscal 2001.Other Income (Expense)Other income (expense) was $15 million in fiscal 2002, a decrease of $2
million from fiscal 2001, primarily resulting from lower income from the
vesting of options partially offset by currency exchange gains. As of August
31, 2002, the fair value of foreign currency exchange contracts was
approximately $1 million, and we did not have any interest rate derivative
contracts.Equity in Gains (Losses) of AffiliatesEquity in losses of affiliates totaled $9 million in fiscal 2002, compared
with losses of $61 million in fiscal 2001, primarily due to the consolidation
of the investment in our subsidiaries Avanade Inc. and Accenture HR Services
(formerly e-peopleserve) commencing on January 1, 2002 and March 1, 2002,
respectively, which we previously accounted for under the equity method.Provision for TaxesThe effective tax rate for fiscal 2002 was 46.0%. Excluding certain
charges for investment write-downs, the effective tax rate for fiscal 2002 was
38.0%. On an adjusted basis, the effective tax rate for fiscal 2001 was 40.0%.
The actual effective tax rate for fiscal 2001 is not comparable to the
effective tax rate for fiscal 2002 because, prior to May 31, 2001, we operated
as a series of related partnerships and corporations and, therefore, generally
did not pay income taxes as a corporation.Cumulative Effect of Accounting ChangeIn fiscal 2001, the adoption of SFAS 133 resulted in cumulative income of
$188 million on September 1, 2000 representing the cumulative unrealized gains
resulting from changes in the fair market value of equity holdings considered
to be derivatives.Liquidity and Capital ResourcesOur primary sources of liquidity are cash flows from operations, debt
capacity available under various credit facilities and available cash reserves.
Cash flow generated by operating activities in fiscal 2003 totaled $1,513
million. At August 31, 2003, cash and cash equivalents, combined with
restricted cash, totaled $2,415 million, while total debt was $60 million. We
may also be able to raise additional funds through public or private debt or
equity financings in order to:
    
    take advantage of opportunities, including more rapid expansion;
    
    acquire complementary businesses or technologies;
    
    develop new services and solutions;
    
    respond to competitive pressures; or
    
    facilitate share dispositions by our partners, former partners and
their permitted transferees pursuant to our Share Management Plan and
certain purchases from our other employees.For a more detailed description of our Share Management Plan, see Certain
Transaction and Relationships Share Management Plan.Our balance of cash and cash equivalents was $2,332 million at August 31,
2003, an increase of $1,015 million, or 77%, over the $1,317 million balance at
August 31, 2002. This increase is primarily attributable to cash provided by
operations. Our balance of cash and cash equivalents at August 31, 2002
decreased $563 million, or 30%, from $1,880 million at August 31,412001. This decrease is largely attributable to distributions of
pre-incorporation partnership income and purchases of treasury shares.Net cash provided by operating activities was $1,513 million in fiscal
2003, an increase of $450 million over fiscal 2002. Net cash provided by
operating activities benefited from lower income tax payments in fiscal 2003
compared with fiscal 2002. In fiscal 2003, income tax payments totaled $255
million compared with $716 million in fiscal 2002. Fiscal 2002 income tax
payments include payments for prior periods relating to our initial corporate
tax year ended August 31, 2001 and our transition to a corporate structure on
May 31, 2001. Fiscal 2003 income tax payments were significantly reduced by
refunds of prior-year income tax payments. In October 2002, we paid Arthur
Andersen LLP $190 million in conjunction with the termination of the service
arrangements and facility use arrangement entered into in fiscal 2001 with
Arthur Andersen LLP and other Arthur Andersen firms. A portion of this payment
reduced net cash provided by operating activities by $42 million in fiscal
2003.Net cash used by investing activities was $109 million in fiscal 2003,
compared with $248 million of cash used in investment activities in fiscal
2002. Increased proceeds from sales of investments and lower capital spending
on property and equipment and businesses were partially offset by a decrease in
proceeds from sales of property and equipment in fiscal 2003. The reduction in
capital spending for businesses in fiscal 2003 reflects the acquisition of
Accenture HR Services (formerly e-peopleserve Ltd.) in fiscal 2002.Net cash used by financing activities was $492 million in fiscal 2003, a
decrease of $923 million from fiscal 2002, primarily due to pre-incorporation
earnings distributions of $766 million to our partners in fiscal 2002. In
fiscal 2003, cash used in financing activities included $560 million for
Accenture Ltd Class A and Accenture SCA Class I common share purchases and $148
million for the $190 million payment to Arthur Andersen LLP described above.
These payments were partially offset by proceeds of $243 million from the
issuance of Accenture Ltd Class A common shares under the Accenture employee
share purchase plan and employee share incentive plan.Net cash provided by operating activities was $1,063 million for fiscal
2002, a decrease of $1,217 million from fiscal 2001. Net cash used by investing
activities was $248 million for fiscal 2002, a decrease of $163 million from
fiscal 2001, due to lower capital expenditures and higher proceeds from the
sale of property and equipment in fiscal 2002. Net cash used in financing
activities was $1,415 million for fiscal 2002, an increase of $248 million over
fiscal 2001. This included net proceeds of $1,791 million from the initial
public offering and sale of the Accenture Ltd Class A common shares in the
fourth quarter of 2001 offset by earnings distributions to partners of $2,282
million, repayments of partners capital totaling $524 million, and a payment
of $314 million to Andersen Worldwide and Arthur Andersen of amounts due in
connection with the final resolution of the arbitration.We have two $537.5 million syndicated facilities, including one 364-day
facility and one three-year facility, providing unsecured, revolving borrowing
capacity for general working capital purposes. Financing is provided under
these facilities at the prime rate or at the London Interbank Offered Rate plus
a spread, and bid option financing is available. These facilities require us
to: (1) limit liens placed on our assets to (a) liens incurred in the ordinary
course of business (subject to certain limitations) and (b) other liens
securing aggregate amounts not in excess of 30% of our total assets; and (2)
maintain a debt-to-cash-flow ratio not exceeding 1.75 to 1.00. We are in
compliance with these terms. As of August 31, 2003, we had no borrowings under
either facility and $79 million in letters of credit outstanding under the
three-year facility. On June 20, 2003, we renewed the 364-day facility at terms
that are slightly more favorable than the expiring arrangement. The three-year
facility is scheduled to expire on June 21, 2005.We also maintain four separate bilateral, uncommitted, unsecured
multicurrency revolving credit facilities. As of August 31, 2003, these
facilities provided for up to $252 million of local currency financing in
countries where we cannot readily access our syndicated facilities. We also
maintain local guaranteed and non-guaranteed lines of credit. As of August 31,
2003, amounts available under these facilities totaled $215 million. At August
31, 2003, we had $24 million outstanding under these various facilities and $19
million of other short-term borrowings. Interest rate terms on the bilateral
revolving facilities and local lines of credit are at market rates prevailing
in the relevant local markets.During fiscal 2003, fiscal 2002 and fiscal 2001 we invested $212 million,
$263 million and $378 million, respectively, in capital expenditures, primarily
for technology assets, furniture and equipment and leasehold improvements to
support our operations. We expect that our capital expenditures will
approximate $300 million in fiscal 2004.In limited circumstances, we agree to extend financing to clients. The
terms vary by engagement, but generally we contractually link payment for
services to the achievement of specified performance milestones. We finance
these client obligations primarily with existing working capital and bank
financing in the country of origin. As of August 31, 2003, 2002 and 2001, $336
million, $265 million and $182 million were outstanding for 35, 25 and 17
clients, respectively. As of August 31, 2003 and 2002, $203 million and $159
million, respectively, were included in current unbilled services and $133
million and $106 million, respectively, were included in non-current unbilled
services on our Consolidated Balance Sheet.42Accenture SCAs shareholders equity includes investments in Accenture
Ltds Class A common shares. On April 17, 2002, Accenture Ltds board of
directors authorized the creation of the Accenture Stock Employee Compensation
Trust (SECT). At August 31, 2002, the SECT had $79 million of previously
authorized contributions available for share purchases which were segregated as
restricted cash on the Consolidated Balance Sheet. On March 7, 2003, Accenture
contributed $150 million to the SECT. The SECT purchased 8,619,800 Accenture
Ltd Class A common shares totaling $152 million in fiscal 2003. On July 15,
2003, the SECT transferred 3,100,300 shares to Accenture for issuance to
Accenture employees under various equity programs. Substantially all of these
transferred shares have now been awarded to employees. At August 31, 2003, the
SECT had an additional $83 million available for share purchases, which is
segregated as Restricted cash on the Consolidated Balance Sheet.In addition to our ongoing open-market share purchases, we continue to
redeem or purchase certain shares pursuant to our Share Management Plan. See
Certain Transactions and Relationships  Share Management Plan in the Annual
Report on Form 10-K of Accenture Ltd, which is incorporated by reference by
Item 13 of this Annual Report on Form 10-K. Accenture Ltds board of
directors previously granted authority to utilize $600 million for such
acquisitions from partners, former partners and their permitted transferees and
for acquisition of certain Accenture Ltd Class A common shares awarded to
employees pursuant to restricted share units issued in connection with the our
public offering. Of the $600 million previously authorized, $311 million was
utilized in fiscal 2003, primarily pursuant to quarterly tender offers made to
Accenture SCA Class I shareholders by controlled subsidiaries of Accenture Ltd
that redeemed or purchased an aggregate of 15,387,401 Accenture SCA Class I
common shares and by related purchases of 85,153 Accenture Canada Holdings Inc.
exchangeable shares.Subsequent EventsOn September 8, 2003, pursuant to a tender offer made to Accenture SCA
Class I shareholders on August 7, 2003, Accenture SCA and one of its controlled
subsidiaries redeemed or purchased an aggregate of 6,519,532 Accenture SCA
Class I common shares at a price of $19.91 per share. At the same time,
Accenture International SARL purchased 52,861 Accenture Canada Holdings Inc.
exchangeable shares at a price of $19.91 per share. The total cash outlay for
these transactions was $131 million. These transactions were also undertaken
pursuant to Accentures Share Management Plan for Accentures partners, former
partners and their permitted transferees and the acquisitions were undertaken
pursuant to the previously mentioned board of directors authorization.On September 29, 2003, also as part of its Share Management Plan,
Accenture Ltd closed an underwritten public offering of Accenture Ltd Class A
common shares. The offering was comprised of 57,394,595 such shares newly
issued by Accenture Ltd and 24,605,405 of such shares offered by Accenture
partners, former partners and their permitted transferees. The price to the
public was $21.00 per share and the price net of the underwriters discount of
2.85% was $20.40 per share. Accenture Ltd received $1,171 million as a result
of the issuance of 57,394,595 shares newly issued by Accenture Ltd. On
September 30, 2003, the underwriters, in connection with the underwritten
public offering, exercised their option to purchase an additional 12,300,000
newly issued Class A common shares at the same price per share.On October 30, 2003, pursuant to a tender offer made to Accenture SCA
Class I shareholders, Accenture SCA and one of its controlled subsidiaries
redeemed or purchased an aggregate of 71,000,000 Accenture SCA Class I shares
at a price of $21.00 per share. At the same time, Accenture International SARL
purchased 816,561 Accenture Canada Holdings Inc. exchangeable shares at a price
of $21.00 per share. All proceeds received by Accenture Ltd from the secondary
offering that concluded on September 29, 2003, and exercise of the related
underwriters option, as well as $45 million of the $600 million previously
authorized for acquisitions from partners, former partners and their permitted
transferees, were utilized by Accenture SCA and one of its controlled
subsidiaries to make these redemptions and purchases.On November 14, 2003, Accenture Ltds board of directors authorized an
additional $150 million for the purchase of Accenture Ltd Class A common shares
from time to time in the open market. Shares acquired in open-market purchases
by Accenture will continue to be used by the SECT to provide shares for select
Accenture employee benefits, including equity awards to future partners. The
Accenture Ltd board of directors also authorized an additional $600 million for
use in connection with acquisitions of shares from partners, former partners and
their permitted transferees and for acquisition of certain Accenture Ltd Class
A common shares awarded to employees pursuant to restricted share units issued
in connection with our initial public offering. Accenture SCA, its controlled
subsidiaries and the SECT will be receiving these funds and will utilize them in
accordance with the authorizations of the Accenture Ltd board of
directors.43Obligations and CommitmentsAs of August 31, 2003, we had the following obligations and commitments to
make future payments under contracts, contractual obligations and commercial
commitments:Payments due by periodContractual Cash Obligations
    
    Total
    
    Less than 1 year
    
    1-3 years
    
    4-5 years
    
    After 5 years(in thousands)Long-term debt
    
    $
    16,617
    
    
    $
    2,662
    
    
    $
    13,771
    
    
    $
    184
    
    
    $
    Operating leases
    
    
    2,156,981
    
    
    
    261,212
    
    
    
    420,212
    
    
    
    336,637
    
    
    
    1,138,920Training facility services agreement
    
    
    99,377
    
    
    
    33,710
    
    
    
    49,417
    
    
    
    16,250
    
    
    
    Retirement obligations (a)
    
    
    314,825
    
    
    
    32,427
    
    
    
    67,226
    
    
    
    78,428
    
    
    
    136,744Other purchase commitments (b)
    
    
    405,593
    
    
    
    221,617
    
    
    
    136,737
    
    
    
    34,847
    
    
    
    12,392Total
    
    $
    2,993,393
    
    
    $
    551,628
    
    
    $
    687,363
    
    
    $
    466,346
    
    
    $
    1,288,056

(a)
    
    This represents projected payments under our Basic Retirement
Benefit and Early Retirement Plans. Both of these plans are unfunded
and as such we pay these benefits directly. These plans were eliminated
for active partners after May 15, 2001.(b)
    
    Other purchase commitments include, among other things, information
technology, software support and maintenance obligations as well as
other obligations in the ordinary course of business where we cannot
cancel or would be required to pay a termination fee in the event of
cancellation. Amounts shown do not include recourse we may have to
recover termination fees or penalties from clients.
Off-Balance Sheet ArrangementsWe have various agreements in which we may be obligated to indemnify the
other party with respect to certain matters. Generally, these indemnification
clauses are included in contracts arising in the normal course of business
under which we customarily agree to hold the other party harmless against
losses arising from a breach of representations related to such matters as
title to assets sold and licensed or certain intellectual property rights.
Payment by us under such indemnification clauses is generally conditioned on
the other party making a claim that is subject to challenge by us and dispute
resolution procedures specified in the particular contract. Further, our
obligations under these arrangements may be limited in terms of time and/or
amount, and in some instances, we may have recourse against third parties for
certain payments made by us. It is not possible to predict the maximum
potential amount of future payments under these indemnification agreements due
to the conditional nature of our obligations and the unique facts of each
particular agreement. Historically, payments made by us under these agreements
have not been material. As of August 31, 2003, we were not aware of any
indemnification agreements that would require material payments.As part of a new agreement to provide services to a group of European
clients for approximately seven years, we and each of our two other consortium
participants agreed to guarantee the performance of each other consortium
participant. As of August 31, 2003, under this arrangement, in the event of
performance default by one or both of the other consortium participants, we
could be liable to the clients up to a maximum of $163 million for damages
incurred and penalties. There are recourse provisions among the consortium
participants that would allow us to recover from the other consortium
participants all but $38 million if our remittances to the clients are the
result of a performance default by one or both of the other consortium
participants.We have entered into contracts with certain non-U.S. government agencies
whereby we have joint and several liability with our consortium participants.
Under these arrangements, we could be liable to our clients for any default of
our consortium participants. As of August 31, 2003, the total value of work to
be performed by our consortium participants was $22 million. We have recourse
against our consortium participants for the full amount of any payment made to
a client as a result of a performance default by the other consortium
participants.We are not aware of any material variable interest entities.Newly Issued Accounting StandardsIn November 2002, the Emerging Issues Task Force (EITF) issued a final
consensus on Issue 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables. In May 2003, the EITF issued additional interpretive guidance
regarding the application of Issue 00-21. Issue 00-21 provides guidance on how
and when to recognize revenues on arrangements requiring delivery of more than
one product or service. Issue 00-21 is effective prospectively for arrangements
entered into in fiscal periods beginning after June 15, 2003. Companies may
also elect to apply the provisions of Issue 00-21 to existing arrangements and
record the income statement impact as the cumulative effect of a change in
accounting principle.Effective September 1, 2003, we adopted Issue 00-21 on a prospective
basis. The company will continue to account for contracts signed on or before
August 31, 2003, under the previous Generally Accepted Accounting Principles.
Beginning on September 1, 2003, we began accounting for all new contracts in
accordance with Issue 00-21, potentially changing the timing of revenue
recognition and affecting margins in some situations, depending on our ability
to structure contracts to accommodate the requirements of Issue 00-21.If we had applied Issue 00-21 in the past, diluted earnings per share
would have been approximately $0.02 lower in fiscal 2003 and $0.0l lower in
fiscal 2002, and we would have reported, cumulatively, approximately $114
million less in revenues before reimbursements, of which $65 million relates to
fiscal 2003, $35 million relates to fiscal 2002, and $14 million relates to44fiscal 2001; and $54 million less in operating income, of which $33
million relates to fiscal 2003, $15 million relates to fiscal 2002, and $6
million relates to fiscal 2001. We believe that the impact of Issue 00-21 will
continue to be modest going forward because we plan to structure our new client
agreements taking into consideration the new rules. However, should we sign a
larger number of business transformation outsourcing agreements with clients,
there could be a greater delay in revenue recognition and an increased effect
on margins.In May 2003, the EITF reached a consensus on Issue 01-08, Determining
Whether an Arrangement Contains a Lease. Issue 01-08 provides guidance on how
to determine whether an arrangement contains a lease that is within the scope
of FASB Statement No. 13, Accounting for Leases. The guidance in Issue 01-08
is based on whether the arrangement conveys to the purchasers (lessee) the
right to use a specific asset. Issue 01-08 was effective for arrangements
entered into or modified beginning in the fourth quarter of fiscal 2003. Issue
01-08 did not have a material impact on our consolidated financial position and
results of operations.In May 2003, the FASB issued Statement No. 150 (SFAS 150), Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity. SFAS 150 establishes standards for classifying and measuring as
liabilities certain financial instruments that have characteristics of both
liabilities and equity. This statement is effective for all financial
instruments created, entered into or modified after May 31, 2003, and is
otherwise effective beginning September 1, 2003. We are currently evaluating
the impact of adopting this statement.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKForeign Currency RiskWe are exposed to foreign currency risk in the ordinary course of
business. We hedge cash flow exposures for our major countries using a
combination of forward and option contracts. These instruments are generally
short-term in nature, with typical maturities of less than one year. From time
to time, we enter into forward or option contracts of a long-term nature.For purposes of specific risk analysis, we use sensitivity analysis to
determine the effects that market risk exposures may have on the fair value of
our hedge portfolio. The foreign currency exchange risk is computed based on
the market value of future cash flows as affected by the changes in the rates
attributable to the market risk being measured. The sensitivity analysis
represents the hypothetical changes in value of the hedge position and does not
reflect the opposite gain or loss on the underlying transaction. As of August
31, 2003, a 10% decrease in the levels of foreign currency exchange rates
against the U.S. dollar with all other variables held constant would have
resulted in a decrease in the fair value of our financial instruments of $6.0
million, while a 10% increase in the levels of foreign currency exchange rates
against the U.S. dollar would have resulted in an increase in the fair value of
our financial instruments of $6.0 million. As of August 31, 2002, a 10%
decrease in the levels of foreign currency exchange rates against the U.S.
dollar with all other variables held constant would have resulted in a decrease
in the fair value of our financial instruments of $1.5 million, while a 10%
increase in the levels of foreign currency exchange rates against the U.S.
dollar would have resulted in an increase in the fair value of our financial
instruments of $1.5 million.Interest Rate RiskThe interest rate risk associated with our borrowing and investing
activities at August 31, 2003 is not material in relation to our consolidated
financial position, results of operations or cash flows. While we may do so in
the future, we have not used derivative financial instruments to alter the
interest rate characteristics of our investment holdings or debt instruments.Equity Price RiskWe hold marketable equity securities that are subject to market price
volatility. Marketable equity securities include common stock, warrants and
options. Our investment portfolio includes warrants and options in both
publicly traded and privately held companies. Warrants in public companies and
those that can be net share settled in private companies are deemed derivative
financial instruments and are recorded on our consolidated balance sheet at
fair value. The privately held investments are inherently risky because the
markets for the technologies or products they develop are less established than
those of most publicly traded companies and we may be unable to liquidate our
investments if desired. Since September 1, 2000, warrants have been deemed
derivative financial instruments by SFAS 133. As such, they are recorded on the
balance sheet at fair value with unrealized gains or losses recorded on the
income statement. As of August 31, 2003, we owned marketable equity securities
totaling $31 million. We have entered into forward contracts to offset the
equity price risks associated with $12 million of options and $7 million of
shares included in our marketable equity securities portfolio at August 31,
2003. Gains and losses associated with changes in the fair value of those
forward contracts offset changes in the fair value of the underlying options
and shares. As of August 31, 2003, the fair value of the underlying options and
shares was $19 million, while the forward contracts had a cumulative net loss
of approximately $5 million. The forward contracts allow net cash settlement
and are being accounted for as45derivatives. Pursuant to SFAS 133, changes in the fair value of the
forward contract are recorded on the income statement in the periods they arise
and unrealized gains or losses are included in other current assets or other
accrued liabilities.The following analysis presents the hypothetical change in the fair value
of our marketable equity securities at August 31, 2003 and 2002, assuming the
same hypothetical price fluctuations of plus or minus 10%, 20% and 30%.Valuation of investments
    
    
    
    
    
    Valuation of investmentsassuming indicated decrease
    
    August 31,
    
    assuming indicated increase2003 fair-30%
    
    -20%
    
    -10%
    
    value
    
    +10%
    
    +20%
    
    +30%(in thousands)Marketable Equity
Securities and
Warrants Deemed
Derivatives by SFAS
133
    
    $
    21,812
    
    
    $
    24,928
    
    
    $
    28,044
    
    
    $
    31,160
    
    
    $
    34,276
    
    
    $
    37,392
    
    
    $
    40,508

Valuation of investments
    
    
    
    
    
    Valuation of investmentsassuming indicated decrease
    
    August 31,
    
    assuming indicated increase2002 fair-30%
    
    -20%
    
    -10%
    
    value
    
    +10%
    
    +20%
    
    +30%(in thousands)Marketable Equity
Securities and
Warrants Deemed
Derivatives by SFAS
133
    
    $
    21,067
    
    
    $
    24,077
    
    
    $
    27,086
    
    
    $
    30,096
    
    
    $
    33,106
    
    
    $
    36,115
    
    
    $
    39,125

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATASee the index included on page F-1, Index to Consolidated Financial
Statements.ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A. CONTROLS AND PROCEDURESBased on their evaluation as of a date as of the end of the period covered
by this Annual Report on Form 10-K, the chief executive officer and the chief
financial officer of Accenture Ltd have concluded that Accenture SCAs
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act) are effective to ensure that information required to be disclosed
by Accenture SCA in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported, within the time periods
specified in the SECs rules and forms.There has been no significant change in Accenture SCAs internal control
over financial reporting that occurred during the fourth fiscal quarter that
has materially affected, or is reasonably likely to materially affect,
Accenture SCAs internal control over financial reporting.Implementation of the transition of certain of our business and financial
systems to new platforms is ongoing. We continue to monitor resource and
personnel requirements to ensure that our internal controls are not adversely
affected during this transition.46PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTAccenture SCA has no board of directors or officers. Accenture Ltd, as the
sole general partner of Accenture SCA, is vested by Accenture SCAs articles of
association with the management of Accenture SCA and controls Accenture SCAs
management and operations.Information responsive to this Item with respect to directors and
executive officers of Accenture Ltd is set forth in the Annual Report on Form
10-K of Accenture Ltd, the general partner of Accenture SCA, which was filed on
November 18, 2003, and is incorporated herein by reference.Accenture SCA Supervisory BoardWhile Accenture Ltd, as the general partner of Accenture SCA, manages
Accenture SCA and is vested with the broadest powers to perform all acts of
administration and disposition in Accenture SCAs interest which are not
expressly reserved by law or Accenture SCAs articles of association to the
shareholders or the supervisory board, the supervisory board supervises the
affairs of Accenture SCA and its financial situation, including its books and
accounts. Certain decisions, such as the appointment of the individuals put
forward from time to time by the general partner to exercise the general
partners powers and the transfer of shares, require the approval of the
supervisory board. The supervisory board may be consulted on such matters as
the general partner may determine.The supervisory board is composed of at least three members, each of whom
is elected by a simple majority vote of the shareholders of Accenture SCA for a
maximum term of six years, which may be renewable. Because Accenture Ltd has a
majority voting interest in Accenture SCA, it controls the election of all of
the members of the supervisory board. The supervisory board is currently
composed of Messrs. Forehand, James, Flöther, Friedman, Green, Mori and Vidal.ITEM 11. EXECUTIVE COMPENSATIONInformation responsive to this Item is set forth in Annual Report on Form
10-K of Accenture Ltd, the general partner of Accenture SCA, which was filed on
November 18, 2003, and is incorporated herein by reference.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTBeneficial Ownership of More than Five PercentAs of October 31, 2003, the only person known by us to be a beneficial
owner of more than 5% of Accenture SCAs Class I or Class II common shares was
as follows:Accenture SCA Class I common shares
    
    Accenture SCA Class II common sharesshares
    
    % of shares
    
    shares
    
    % of sharesbeneficially
    
    beneficially
    
    beneficially
    
    beneficiallyName and Address of Beneficial Owner
    
    owned
    
    owned
    
    owned
    
    ownedAccenture LtdCanons Court, 22 Victoria StreetHamilton HM12, Bermuda
    
    
    466,126,380
    
    
    
    52
    %
    
    
    470,958,308
    
    
    
    100
    %

Accenture SCAs issued share capital is composed only of Class I and Class
II common shares. Accenture SCA does not intend to issue any additional
Accenture SCA common shares to anyone other than Accenture Ltd.Additional information responsive to this Item is set forth in Annual
Report on Form 10-K of Accenture Ltd, the general partner of Accenture SCA,
which was filed on November 18, 2003, and is incorporated herein by reference.ITEM 13. CERTAIN TRANSACTIONS AND RELATIONSHIPSInformation responsive to this Item is set forth in Annual Report on Form
10-K of Accenture Ltd, the general partner of Accenture SCA, which was filed on
November 18, 2003, and is incorporated herein by reference.47ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESPrincipal Accountant Audit Fees and Services FeesThe following table describes fees for professional audit services
rendered by KPMG, Accenture Ltds principal accountant, for the audit of our
annual financial statements for the years ended August 31, 2003, and August 31,
2002; and fees billed for other services rendered by KPMG during those periods.
Certain amounts for fiscal 2002 have been reclassified to conform to the fiscal
2003 presentation.Type of Fee
    
    2003
    
    2002(in thousands)Audit Fees (1)
    
    $
    4,715
    
    
    $
    3,410Audit Related Fees (2)
    
    
    2,299
    
    
    
    183Tax Fees (3)
    
    
    752
    
    
    
    802All Other Fees (4)
    
    
    618
    
    
    
    100Total
    
    $
    8,384
    
    
    $
    4,495

(1)
    
    Audit Fees, including those for statutory audits,
include the aggregate fees paid by Accenture during the
fiscal year indicated for professional services rendered by
KPMG for the audit of Accenture Ltds annual financial
statements and review of financial statements included in
Accentures Forms 10-Q.(2)
    
    Audit Related Fees include the aggregate fees paid
by Accenture during the fiscal year indicated for assurance
and related services by KPMG that are reasonably related to
the performance of the audit or review of Accenture Ltds
financial statements and not included in Audit Fees,
including review of registration statements and issuance of
consents. Also included in Audit Related Fees are fees for
internal control review, accounting advice and opinions
relating to various employee benefit plans.(3)
    
    Tax Fees include the aggregate fees paid by
Accenture during the fiscal year indicated for professional
services rendered by the principal accountant for tax
compliance, tax advice and tax planning.(4)
    
    All Other Fees include the aggregate fees paid by
Accenture during the fiscal year indicated for products and
services provided by KPMG, other than the services reported
above, including due diligence reviews.Procedures For Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent AuditorPursuant to its charter, the Audit Committee of Accenture Ltds Board of
Directors is responsible for reviewing and approving, in advance, any audit and
any permissible non-audit engagement or relationship between Accenture and its
independent auditors. KPMGs engagement to conduct the audit of Accenture SCA
was approved by the Audit Committee on November 13, 2002. Additionally, each
permissible non-audit engagement or relationship between Accenture and KPMG
entered into since May 2, 2003 has been reviewed and approved by the Audit
Committee, as provided in its charter.We have been advised by KPMG that substantially all of the work done in
conjunction with its audit of Accenture SCAs financial statements for the most
recently completed fiscal year was performed by permanent full time employees
and partners of KPMG.PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K(a) List of documents filed as part of this report:481.
    
    Financial Statements as of August 31, 2003 and August 31, 2002 and for
the three years ended August 31, 2003  Included in Part II of this Form
10-K:Consolidated Balance SheetsConsolidated Income StatementsConsolidated Shareholders Equity and Comprehensive Income StatementsConsolidated Cash Flows StatementsNotes to Consolidated Financial Statements2.
    
    Financial Statement Schedules:None3.
    
    Exhibit Index:ExhibitNumber
    
    Exhibit3
    .1
    
    Form of Articles of Association of Accenture SCA
(incorporated by reference to Exhibit 10.2 to Accenture
Ltds Quarterly Report on Form 10-Q for the period ended
November 30, 2001 filed on January 14, 2002 (the Accenture
Ltd November 30, 2001 10-Q)).9
    .1
    
    Form of Voting Agreement, dated as of April 18, 2001, among
Accenture Ltd and the covered persons party thereto
(incorporated by reference to Exhibit 9.1 to Accenture
Ltds Registration Statement on Form S-1 filed on April 19,
2001 (the Accenture Ltd April 19, 2001 Form S-1)).9
    .2
    
    Form of Transfer Restriction Agreement dated as of October
1, 2002 among the Registrant and the transferors and
transferees signatory thereto (incorporated by reference to
Exhibit 9.1 to Accenture SCA Quarterly Report on Form 10-Q
for the period ended November 30, 2002 filed on January 14,
2003).10
    .1
    
    Form of Partner Matters Agreement, dated as of April 18,
2001, among Accenture Ltd and the partners party thereto
(incorporated by reference to Exhibit 10.1 to the Accenture
Ltd April 19, 2001 Form S-1).10
    .2
    
    Form of Non-Competition Agreement, dated as of April 18,
2001, among Accenture Ltd and certain employees
(incorporated by reference to Exhibit 10.2 to the Accenture
Ltd April 19, 2001 Form S-1).10
    .3
    
    2001 Share Incentive Plan (incorporated by reference to
Exhibit 10.3 to Accenture Ltds Registration Statement on
Form S-1/A filed on June 8, 2001 (the Accenture Ltd June
8, 2001 S-1/A)).10
    .4
    
    2001 Employee Share Purchase Plan (incorporated by
reference to Exhibit 10.4 to the Accenture Ltd June 8, 2001
S-1/A).10
    .5A
    
    Memorandum of Continuance of Accenture Ltd, dated February
21, 2001 (incorporated by reference to Exhibit 3.1 to
Accenture Ltds Registration Statement on Form S-1/A filed
on July 2, 2001 (the Accenture Ltd July 2, 2001 Form
S-1/A)).10
    .5B
    
    Form of Bye-laws of Accenture Ltd (incorporated by
reference to Exhibit 3.2 to the Accenture Ltd July 2, 2001
Form S-1/A).10
    .6
    
    Form of Accenture SCA Transfer Rights Agreement, dated as
of April 18, 2001, among Accenture SCA and the covered
persons party thereto (incorporated by reference to Exhibit
10.6 to the Accenture Ltd April 19, 2001 Form S-1).


49ExhibitNumber
    
    Exhibit10
    .7
    
    Form of Non-Competition Agreement, dated as of April 18,
2001, among Accenture SCA and certain employees
(incorporated by reference to Exhibit 10.7 to the Accenture
Ltd April 19, 2001 Form S-1).10
    .8
    
    Form of Letter Agreement, dated April 18, 2001, between
Accenture SCA and certain shareholders of Accenture SCA
(incorporated by reference to Exhibit 10.8 to the Accenture
Ltd April 19, 2001 Form S-1).10
    .9
    
    Form of Support Agreement, dated as of May 23, 2001,
between Accenture Ltd and Accenture Canada Holdings Inc.
(incorporated by reference to Exhibit 10.9 to the Accenture
Ltd July 2, 2001 Form S-1/A).10
    .10
    
    Form of Employment Agreement of Messrs. Forehand, James,
Green, Wilson, McGrath, Hartemayer, Scrivner, Friedman,
You, Copacino and Rohleder and Mmes. Craig and Comerford
(incorporated by reference to Exhibit 10.10 to the
Accenture Ltd June 8, 2001 S-1/A).10
    .11
    
    Form of Employment Agreement of Karl-Heinz Flöther
(incorporated by reference to Exhibit 10.3 to the Accenture
Ltd November 30, 2001 10-Q).10
    .12
    
    Form of Employment Agreement of Masakatsu Mori (English
translation) (incorporated by reference to Exhibit 10.5 to
the Accenture Ltd November 30, 2001 10-Q).10
    .13
    
    Form of Employment Agreement of Diego Visconti (English
translation) (incorporated by reference to Exhibit 10.6 to
the Accenture Ltd November 30, 2001 10-Q).10
    .14
    
    Form of Employment Agreement of Messrs. Breene, Foster and
Thomlinson and Ms. Rider (incorporated by reference to
Exhibit 10.8 to the Accenture Ltd November 30, 2001 10-Q).10
    .15
    
    Form of Employment Agreement of David R. Hunter
(incorporated by reference to Exhibit 10.9 to the Accenture
Ltd November 30, 2001 10-Q).10
    .16
    
    Form of Employment Agreement of Jose Luis Manzanares and
Carlos Vidal (incorporated by reference to Exhibit 10.10 to
the Accenture Ltd November 30, 2001 10-Q).10
    .17
    
    Form of Articles of Association of Accenture Canada
Holdings Inc. (incorporated by reference to Exhibit 10.11
to the Accenture Ltd July 2, 2001 Form S-1/A).10
    .18
    
    Form of Exchange Trust Agreement by and between Accenture
Ltd and Accenture Canada Holdings Inc. and CIBC Mellon
Trust Company, made as of May 23, 2001 (incorporated by
reference to Exhibit 10.12 to the Accenture Ltd July 2,
2001 Form S-1/A).10
    .19
    
    Form of Letter Agreement, dated May 21, 2001, between
Accenture Ltd and Stichting Naritaweg I (incorporated by
reference to Exhibit 10.13 to the Accenture Ltd July 2,
2001 Form S-1/A).10
    .20
    
    Form of Letter Agreement, dated May 21, 2001, between
Accenture Ltd and Stichting Naritaweg II (incorporated by
reference to Exhibit 10.14 to the Accenture Ltd July 2,
2001 Form S-1/A).10
    .21
    
    Form of Accenture Ltd Common Agreement (incorporated by
reference to Exhibit 10.22 to Accenture Ltds Registration
Statement on Form S-1 filed on April 26, 2002 (the
Accenture Ltd April 26, 2002 Form S-1/A)).10
    .22
    
    Form of Accenture SCA Common Agreement (incorporated by
reference to Exhibit 10.23 to the Accenture Ltd April 26,
2002 Form S-1/A).21
    .1
    
    Subsidiaries of Accenture SCA (incorporated by reference to
Exhibit 21.1 to Accenture Ltds Annual Report on Form 10-K
for the year ended August 31, 2003 filed on November 18,
2003).


50ExhibitNumber
    
    Exhibit24.1
    
    
    Power of Attorney (included on the signature page hereto).31.1
    
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).32.1
    
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (furnished herewith).32.2
    
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (furnished herewith).

(b) Reports on Form 8-K.During the quarter ended August 31, 2003, the following reports on Form
8-K were filed by the Registrant.Current Report on Form 8-K dated July 15, 2003 with respect to issuance of
a press release announcing results for the third quarter of fiscal 2003 of
Accenture Ltd, general partner of Accenture SCA.(c) See Item 14(a)(3) above.(d) See Item 14(a)(2) above.51ACCENTURE SCA AND SUBSIDIARIESINDEX TO CONSOLIDATED FINANCIAL STATEMENTSPageIndependent Auditors Report
    
    
    F-2Report of Independent Accountants
    
    
    F-3Financial Statements as of August 31, 2003 and August 31, 2002 and for the three years ended August 31, 2003:Consolidated Balance Sheets
    
    
    F-4Consolidated Income Statements
    
    
    F-5Consolidated Shareholders Equity and Comprehensive Income Statements
    
    
    F-6Consolidated Cash Flows Statements
    
    
    F-9Notes to Consolidated Financial Statements
    
    
    F-10



INDEPENDENT AUDITORS REPORTTo the General Partner and Shareholders of Accenture SCA:We have audited the accompanying consolidated balance sheets of Accenture
SCA and its subsidiaries as of August 31, 2003 and 2002, and the related
consolidated statements of income, shareholders equity and comprehensive
income, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Accenture
SCA and its subsidiaries as of August 31, 2003 and 2002, and the results of
their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America./s/ KPMG LLP
Chicago, Illinois
October 9, 2003F-2REPORT OF INDEPENDENT ACCOUNTANTSTo the General Partner and Shareholders of Accenture SCA:In our opinion, the accompanying consolidated income statement,
consolidated shareholders equity and comprehensive income statement and
consolidated cash flows statement present fairly, in all material respects, the
results of operations of Accenture SCA and its subsidiaries and their cash
flows for the year ended August 31, 2001 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Companys management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.As discussed in Note 7 to the consolidated financial statements, in 2001
the Company changed its method of accounting for derivative instruments and
hedging activities./s/ PricewaterhouseCoopers LLP
October 11, 2001, except as to Note 18
which is as of February 7, 2003
Chicago, IllinoisF-3ACCENTURE SCACONSOLIDATED BALANCE SHEETSAugust 31, 2003 and 2002
(In thousands of U.S. dollars except share amounts)2003
    
    2002ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,332,161
    
    
    $
    1,316,976Restricted cash
    
    
    83,280
    
    
    
    79,445Receivables from clients, net
    
    
    1,416,153
    
    
    
    1,330,642Unbilled services
    
    
    828,515
    
    
    
    774,214Due from related parties
    
    
    739
    
    
    
    39,488Deferred income taxes, net
    
    
    147,040
    
    
    
    189,976Other current assets
    
    
    229,323
    
    
    
    321,570Total current assets
    
    
    5,037,211
    
    
    
    4,052,311NON-CURRENT ASSETS:Unbilled Services
    
    
    132,522
    
    
    
    106,162Investments
    
    
    33,330
    
    
    
    84,794Property and equipment, net
    
    
    650,455
    
    
    
    716,504Goodwill
    
    
    188,659
    
    
    
    167,603Deferred income taxes, net
    
    
    326,286
    
    
    
    283,969Other non-current assets
    
    
    90,777
    
    
    
    67,605Total non-current assets
    
    
    1,422,029
    
    
    
    1,426,637TOTAL ASSETS
    
    $
    6,459,240
    
    
    $
    5,478,948LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term bank borrowings
    
    $
    43,500
    
    
    $
    57,922Current portion of long-term debt
    
    
    2,662
    
    
    
    5,177Accounts payable
    
    
    573,201
    
    
    
    450,208Deferred revenues
    
    
    676,841
    
    
    
    543,917Accrued payroll and related benefits
    
    
    974,319
    
    
    
    1,139,887Income taxes payable
    
    
    671,026
    
    
    
    459,836Deferred income taxes, net
    
    
    22,390
    
    
    
    18,884Other accrued liabilities
    
    
    387,157
    
    
    
    651,231Total current liabilities
    
    
    3,351,096
    
    
    
    3,327,062NON-CURRENT LIABILITIES:Long-term debt
    
    
    13,955
    
    
    
    3,428Retirement obligation
    
    
    575,973
    
    
    
    382,180Deferred income taxes, net
    
    
    3,572
    
    
    
    16,674Other non-current liabilities
    
    
    836,850
    
    
    
    791,582Total non-current liabilities
    
    
    1,430,350
    
    
    
    1,193,864MINORITY INTEREST
    
    
    34,233
    
    
    
    31,972SHAREHOLDERS EQUITY:Class I common shares, par value 1.25 euros per share, 19,868,950,000 shares authorized, 753,843,192 issued as of
August 31, 2003 and 2002
    
    
    845,307
    
    
    
    845,307Class I-A common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-B common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-C common shares, par value 1.25 euros per share, 10,000,000 shares authorized, issued and outstanding
    
    
    10,870
    
    
    
    10,870Class I-D common shares, par value 1.25 euros per share, 10,000,000 shares authorized, issued and outstanding
    
    
    10,870
    
    
    
    10,870Class I-E common shares, par value 1.25 euros per share, 15,000,000 shares authorized, issued and outstanding
    
    
    16,304
    
    
    
    16,304Class I-F common shares, par value 1.25 euros per share, 15,000,000 shares authorized, issued and outstanding
    
    
    16,304
    
    
    
    16,304Class I-G common shares, par value 1.25 euros per share, 20,000,000 shares authorized, issued and outstanding
    
    
    21,739
    
    
    
    21,739Class I-H common shares, par value 1.25 euros per share, 25,000,000 shares authorized, issued and outstanding
    
    
    27,174
    
    
    
    27,174Class I-I common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-J common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-K common shares, par value 1.25 euros per share, 16,050,000 shares authorized, issued and outstanding
    
    
    18,074
    
    
    
    18,074Class I-L common shares, par value 1.25 euros per share, 5,025,720 shares authorized, issued and outstanding
    
    
    5,540
    
    
    
    5,540Class I-M common shares, par value 1.25 euros per share, 68,626,707 shares authorized, issued and outstanding
    
    
    78,398
    
    
    
    78,398Class II common shares, par value 1.25 euros per share, 20,000,000,000 shares authorized, 470,958,308 shares issued and
outstanding
    
    
    529,281
    
    
    
    529,281Restricted share units (related to Accenture Ltd Class A common shares), 33,803,376 and 58,265,829 units issued and
outstanding as of August 31, 2003 and 2002, respectively,
    
    
    495,024
    
    
    
    848,218Additional paid-in capital
    
    
    2,687,575
    
    
    
    2,944,678Treasury shares, at cost, 45,256,961 and 54,276,582 Class I common shares at August 31, 2003 and 2002, respectively
    
    
    (846,959
    )
    
    
    (1,052,900
    )Investment in Accenture Ltd shares, at cost, 5,229,487 and 13,726,885 shares at August 31, 2003 and 2002, respectively
    
    
    (88,198
    )
    
    
    (315,486
    )Accenture Ltd Class A shares owned by Accenture Ltd Stock Employee Compensation Trust, at cost, 18,081,800 and 12,562,300
shares at August 31, 2003 and 2002, respectively
    
    
    (308,878
    )
    
    
    (221,110
    )Retained deficit
    
    
    (1,708,371
    )
    
    
    (2,798,519
    )Accumulated other comprehensive loss
    
    
    (188,233
    )
    
    
    (80,432
    )Total shareholders equity
    
    
    1,643,561
    
    
    
    926,050TOTAL
LIABILITIES AND SHAREHOLDERS EQUITY

    
    $
    6,459,240
    
    
    $
    5,478,948


The accompanying notes are an integral part of these financial statements.F-4ACCENTURE SCACONSOLIDATED INCOME STATEMENTSFor the Years Ended August 31, 2003, 2002 and 2001
(In thousands of U.S. dollars)2003
    
    2002
    
    2001REVENUES:Revenues before reimbursements
    
    $
    11,817,999
    
    
    $
    11,574,269
    
    
    $
    11,443,720Reimbursements
    
    
    1,579,241
    
    
    
    1,530,755
    
    
    
    1,618,152Revenues
    
    
    13,397,240
    
    
    
    13,105,024
    
    
    
    13,061,872OPERATING EXPENSES:Cost of services*:Cost of services before reimbursable expenses*
    
    
    7,508,059
    
    
    
    6,896,975
    
    
    
    6,199,213Reimbursable expenses
    
    
    1,579,241
    
    
    
    1,530,755
    
    
    
    1,618,152Cost of services*
    
    
    9,087,300
    
    
    
    8,427,730
    
    
    
    7,817,365Sales and marketing*
    
    
    1,458,484
    
    
    
    1,565,616
    
    
    
    1,217,343General and administrative costs*
    
    
    1,300,221
    
    
    
    1,615,703
    
    
    
    1,515,683Restructuring, reorganization and rebranding costs*
    
    
    
    
    
    
    110,524
    
    
    
    848,615Restricted share unit-based compensation at initial public offering
    
    
    
    
    
    
    
    
    
    
    967,110Total operating expenses*
    
    
    11,846,005
    
    
    
    11,719,573
    
    
    
    12,366,116OPERATING INCOME*
    
    
    1,551,235
    
    
    
    1,385,451
    
    
    
    695,756Gain (loss) on investments, net
    
    
    10,123
    
    
    
    (321,127
    )
    
    
    107,016Interest income
    
    
    41,130
    
    
    
    46,185
    
    
    
    79,778Interest expense
    
    
    (21,016
    )
    
    
    (48,864
    )
    
    
    (43,278
    )Other income
    
    
    31,754
    
    
    
    14,993
    
    
    
    16,973Equity in losses of affiliates
    
    
    (409
    )
    
    
    (9,080
    )
    
    
    (61,388
    )INCOME BEFORE TAXES*
    
    
    1,612,817
    
    
    
    1,067,558
    
    
    
    794,857Provision for taxes
    
    
    566,099
    
    
    
    491,071
    
    
    
    502,616INCOME BEFORE MINORITY INTEREST AND ACCOUNTING
CHANGE*
    
    
    1,046,718
    
    
    
    576,487
    
    
    
    292,241Minority interest
    
    
    (6,832
    )
    
    
    2,723
    
    
    
    7,940INCOME BEFORE ACCOUNTING CHANGE*
    
    
    1,039,886
    
    
    
    579,210
    
    
    
    300,181Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    187,974NET INCOME
    
    $
    1,039,886
    
    
    $
    579,210
    
    
    $
    488,155


*
    
    Excludes payments for partner distributions for periods ended on or prior to
May 31, 2001.The accompanying notes are an integral part of these financial statements.F-5ACCENTURE SCACONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME STATEMENTSFor the Years Ended August 31, 2003, 2002 and 2001
(In thousands of U.S. dollars and in thousands of share amounts)RestrictedClass I
    
    Class II
    
    Share Units
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment in
    
    Investment inCommon
    
    Common
    
    Common
    
    
    
    
    
    Treasury
    
    Accenture
    
    AccentureShares
    
    Shares
    
    Shares
    
    
    
    Shares
    
    Ltd
    
    Ltd  SECTAdditionalNo.
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    Paid-in
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    
    
    
    
    No.$
    
    Shares
    
    $
    
    Shares
    
    $
    
    Shares
    
    Capital
    
    $
    
    Shares
    
    $
    
    Shares
    
    $
    
    SharesBalance at August 31, 2000
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    Comprehensive income
Partnership income before partner
distributions for the nine months ended
May 31, 2001
Net loss for the three months ended
August 31, 2001Other comprehensive income (loss):Unrealized losses on marketable
securities, net of reclassification
adjustmentForeign currency translation adjustmentsOther comprehensive income (loss)Comprehensive incomeCapital paid in by partnersRepayment of paid-in capital to partnersDistribution to AW-SCDistribution of partners incomePartner retirement and vacation benefitsTransfer to retained earnings (deficit)Issuance of shares:Shares issued upon reorganization to
corporate structure
    
    
    843,890
    
    
    
    752,584
    
    
    
    529,281
    
    
    
    470,958Sale of shares to Accenture Ltd
    
    
    143,075
    
    
    
    131,050
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,648,369Accenture Ltd restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    993,380
    
    
    
    68,482Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,892Balance at August 31, 2001
    
    
    986,965
    
    
    
    883,634
    
    
    
    529,281
    
    
    
    470,958
    
    
    
    993,380
    
    
    
    68,482
    
    
    
    1,661,261
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


[Additional columns below][Continued from above table, first column(s) repeated]AccumulatedRetained
    
    
    
    
    
    
    
    
    
    OtherEarnings
    
    Paid-in
    
    Undistributed
    
    Comprehensive(Deficit)
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    TotalBalance at August 31, 2000
    
    $
    
    
    
    $
    403,483
    
    
    $
    1,347,905
    
    
    $
    617,065
    
    
    $
    2,368,453Comprehensive income
Partnership income before partner
distributions for the nine months ended
May 31, 2001
    
    
    
    
    
    
    
    
    
    
    1,427,185
    
    
    
    
    
    
    
    1,427,185Net loss for the three months ended
August 31, 2001
    
    
    (939,030
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (939,030
    )Other comprehensive income (loss):Unrealized losses on marketable
securities, net of reclassification
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (700,857
    )
    
    
    (700,857
    )Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,842
    )
    
    
    (24,842
    )Other comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (725,699
    )Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (237,544
    )Capital paid in by partners
    
    
    
    
    
    
    146,328
    
    
    
    
    
    
    
    
    
    
    
    146,328Repayment of paid-in capital to partners
    
    
    
    
    
    
    (549,811
    )
    
    
    
    
    
    
    
    
    
    
    (549,811
    )Distribution to AW-SC
    
    
    
    
    
    
    
    
    
    
    (268,781
    )
    
    
    
    
    
    
    (268,781
    )Distribution of partners income
    
    
    
    
    
    
    
    
    
    
    (3,106,350
    )
    
    
    
    
    
    
    (3,106,350
    )Partner retirement and vacation benefits
    
    
    
    
    
    
    
    
    
    
    (465,487
    )
    
    
    
    
    
    
    (465,487
    )Transfer to retained earnings (deficit)
    
    
    (1,065,528
    )
    
    
    
    
    
    
    1,065,528
    
    
    
    
    
    
    
    Issuance of shares:Shares issued upon reorganization to
corporate structure
    
    
    (1,373,171
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sale of shares to Accenture Ltd
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,791,444Accenture Ltd restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    993,380Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,892Balance at August 31, 2001
    
    
    (3,377,729
    )
    
    
    
    
    
    
    
    
    
    
    (108,634
    )
    
    
    684,524


The accompanying notes are an integral part of these financial statements.F-5ACCENTURE SCACONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME STATEMENTS(Continued)For the Years Ended August 31, 2003, 2002 and 2001
(In thousands of U.S. dollars and in thousands of share amounts)RestrictedShareClass I
    
    Class II
    
    Units
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment in
    
    Investment inCommon
    
    Common
    
    Common
    
    
    
    
    
    Treasury
    
    Accenture
    
    AccentureShares
    
    Shares
    
    Shares
    
    
    
    Shares
    
    Ltd
    
    Ltd - SECTAdditionalNo.
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    Paid-in
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    
    
    
    
    No.$
    
    Shares
    
    $
    
    Shares
    
    $
    
    Shares
    Capital
    
    
    $
    
    Shares
    
    
    $
    
    Shares
    
    $
    
    SharesComprehensive incomeNet incomeOther comprehensive
income (loss):Unrealized gains on
marketable
securities, net of
reclassification
adjustmentForeign currency
translation
adjustmentsMinimum pension
liability adjustmentOther comprehensive
income (loss)Comprehensive incomeIncome tax benefit on
stock-based compensation
plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,651Issuance and purchase of
Class I common shares 
Class I-M
    
    
    67,668
    
    
    
    58,488
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,067,001
    
    
    
    (1,058,811
    )
    
    
    (54,578
    )Issuance of Class I
common shares:Employee Share
Purchase Plan  Class
L
    
    
    5,540
    
    
    
    5,026
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,068
    
    
    
    
    
    
    
    
    
    
    
    (10,581
    )
    
    
    165Restricted share
units Class I-M
    
    
    10,730
    
    
    
    9,395
    
    
    
    
    
    
    
    
    
    
    
    (165,650
    )
    
    
    (11,228
    )
    
    
    117,928
    
    
    
    13,510
    
    
    
    611
    
    
    
    21,523
    
    
    
    1,039For acquisitions 
Class I
    
    
    1,417
    
    
    
    1,259
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,933Issuance of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,600
    )
    
    
    4,592
    
    
    
    237
    
    
    
    987
    
    
    
    38Purchase of Accenture Ltd
Class A common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (327,417
    )
    
    
    (14,968
    )
    
    
    (221,110
    )
    
    
    (12,562
    )Vesting of restricted
share units, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,488
    
    
    
    1,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    (1
    )Redemption of partners
SCA Class I common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,191
    )
    
    
    (547
    )Minority interest
    
    
    
    
    
    
    744
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,436Balance at August 31, 2002
    
    
    1,072,320
    
    
    
    958,546
    
    
    
    529,281
    
    
    
    470,958
    
    
    
    848,218
    
    
    
    58,266
    
    
    
    2,944,678
    
    
    
    (1,052,900
    )
    
    
    (54,277
    )
    
    
    (315,486
    )
    
    
    (13,727
    )
    
    
    (221,110
    )
    
    
    (12,562
    )


[Additional columns below][Continued from above table, first column(s) repeated]AccumulatedRetained
    
    
    
    
    
    
    
    
    
    OtherEarnings
    
    Paid-in
    
    Undistributed
    
    Comprehensive(Deficit)
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    TotalComprehensive
incomeComprehensive
income
Net income
    
    
    579,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    579,210Other comprehensive
income (loss)
Unrealized gains on
marketable
securities, net of
reclassification
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,469
    
    
    
    4,469Foreign currency
translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,298
    
    
    
    36,298Minimum pension
liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,565
    )
    
    
    (12,565
    )Other comprehensive
income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,202Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    607,412Income tax benefit on
stock-based compensation
plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,651Issuance and purchase of
Class I common shares 
Class I-M
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,858Issuance of Class I
common shares:Employee Share
Purchase Plan  Class
L
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,027Restricted share
units Class I-M
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,959
    )For acquisitions 
Class I
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,350Issuance of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,979Purchase of Accenture Ltd
Class A common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (548,527
    )Vesting of restricted
share units, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,490Redemption of partners
SCA Class I common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,191
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,436Balance at August 31, 2002
    
    
    (2,798,519
    )
    
    
    
    
    
    
    
    
    
    
    (80,432
    )
    
    
    926,050


The accompanying notes are an integral part of these financial statements.F-6ACCENTURE SCACONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME STATEMENTS(Continued)For the Years Ended August 31, 2003, 2002 and 2001
(In thousands of U.S. dollars and in thousands of share amounts)RestrictedClass I
    
    Class II
    
    Share Units
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment in
    
    Investment inCommon
    
    Common
    
    Common
    
    
    
    
    
    Treasury
    
    Accenture
    
    AccentureShares
    
    Shares
    
    Shares
    
    
    
    
    
    Shares
    
    Ltd
    
    Ltd - SECTAdditionalNo.
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    Paid-in
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    
    
    
    
    No.$
    
    Shares
    
    $
    
    Shares
    
    $
    
    Shares
    
    Capital
    
    $
    
    Shares
    
    $
    
    Shares
    
    $
    
    SharesComprehensive
income
Net Income
Other Comprehensive income (loss)
Unrealized gains on marketable
securities, net of reclassification
adjustment
Foreign currency translation
adjustments
Minimum pension liability adjustmentOther comprehensive income (loss)Comprehensive income
Income tax benefit on:Stock-based compensation plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,081Contract terminationPurchases of common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53,389
    )
    
    
    
    
    
    
    
    
    
    
    (79,944
    )
    
    
    (4,789
    )
    
    
    (151,763
    )
    
    
    (8,620
    )Transfer of shares for issuance to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63,995
    )
    
    
    (3,100
    )
    
    
    63,995
    
    
    
    3,100Vesting of restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,452
    
    
    
    1,195Cancellation of restricted share units, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,011
    )
    
    
    (124
    )Purchases/redemptions of Accenture SCA
Class I common shares and Canada
Holdings Inc. exchangeable shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,536
    )
    
    
    (273,782
    )
    
    
    (15,873
    )Issuance of Class A common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (99,478
    )
    
    
    174,229
    
    
    
    8,981
    
    
    
    82,493
    
    
    
    3,877Employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,053
    )
    
    
    87,104
    
    
    
    4,654
    
    
    
    24,312
    
    
    
    1,165Restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (374,635
    )
    
    
    (25,534
    )
    
    
    (108,177
    )
    
    
    218,390
    
    
    
    11,258
    
    
    
    264,422
    
    
    
    11,345Contract
termination
Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    954Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,505
    )Balance at August 31, 2003
    
    $
    1,072,320
    
    
    
    958,546
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    495,024
    
    
    
    33,803
    
    
    $
    2,687,575
    
    
    $
    (846,959
    )
    
    
    (45,257
    )
    
    $
    (88,198
    )
    
    
    (5,229
    )
    
    $
    (308,878
    )
    
    
    (18,082
    )


[Additional columns below][Continued from above table, first column(s) repeated]AccumulatedRetained
    
    
    
    
    
    
    
    
    
    OtherEarnings
    
    Paid-in
    
    Undistributed
    
    Comprehensive(Deficit)
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    TotalComprehensive
income
Net Income
    
    
    1,039,886
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,039,886Other
Comprehensive income (loss):
Unrealized gains on marketable
securities, net of reclassification
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,161
    
    
    
    3,161Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,419
    )
    
    
    (3,419
    )Minimum pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (107,543
    )
    
    
    (107,543
    )Other comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (107,801
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    932,085Income tax benefit on:Stock-based compensation plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,081Contract termination
    
    
    48,555
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,555Purchases of common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (285,096
    )Transfer of shares for issuance to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vesting of restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,452Cancellation of restricted share units, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,011
    )Purchases/redemptions of Accenture SCA
Class I common shares and Canada
Holdings Inc. exchangeable shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (275,318
    )Issuance of Class A common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    157,244Employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85,363Restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Contract termination
    
    
    1,707
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,707Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    954Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,505
    )Balance at August 31, 2003
    
    $
    (1,708,371
    )
    
    $
    
    
    
    $
    
    
    
    $
    (188,233
    )
    
    $
    1,643,561


The accompanying notes are an integral part of these financial statements.F-8ACCENTURE SCA
CONSOLIDATED CASH FLOWS STATEMENTSFor the Years Ended August 31, 2003, 2002 and 2001
(In thousands of U.S. dollars)2003
    
    2002
    
    2001CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,039,886
    
    
    $
    579,210
    
    
    $
    488,155Adjustments to reconcile net income to net cash provided by operating activities 
Depreciation and amortization
    
    
    237,205
    
    
    
    285,361
    
    
    
    414,072(Gains) losses on investments, net
    
    
    (10,123
    )
    
    
    321,127
    
    
    
    (107,016
    )Equity in losses of affiliates
    
    
    409
    
    
    
    9,080
    
    
    
    61,388Losses on disposal of property and equipment, net
    
    
    2,826
    
    
    
    20,679
    
    
    
    24,725Stock-based compensation expense
    
    
    51,615
    
    
    
    54,729
    
    
    
    967,110Deferred income taxes, net
    
    
    63,012
    
    
    
    (138,740
    )
    
    
    (299,647
    )Minority interest
    
    
    6,832
    
    
    
    (2,723
    )
    
    
    (7,940
    )Other items, net
    
    
    1,302
    
    
    
    (2,851
    )
    
    
    (25,646
    )Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    (187,974
    )Change
in assets and liabilities 
Decrease (increase) in receivables from clients, net
    
    
    23,444
    
    
    
    207,240
    
    
    
    (48,257
    )Decrease (increase) in other current assets
    
    
    40,691
    
    
    
    (30,504
    )
    
    
    (91,696
    )Increase in unbilled services, current and non-current
    
    
    (26,603
    )
    
    
    (78,948
    )
    
    
    (4,827
    )(Increase) decrease in other non-current assets
    
    
    (26,402
    )
    
    
    (8,544
    )
    
    
    774Increase in accounts payable
    
    
    106,704
    
    
    
    34,419
    
    
    
    138,057Increase (decrease) in due from related parties
    
    
    38,690
    
    
    
    (629
    )
    
    
    (89,180
    )Increase (decrease) in deferred revenues
    
    
    88,365
    
    
    
    (246,807
    )
    
    
    (114,942
    )(Decrease) increase in accrued payroll and related benefits
    
    
    (203,187
    )
    
    
    (1,887
    )
    
    
    250,968Increase (decrease) in income taxes payable
    
    
    241,368
    
    
    
    (55,468
    )
    
    
    231,573(Decrease) increase in other accrued liabilities
    
    
    (113,967
    )
    
    
    177,132
    
    
    
    11,418(Decrease) increase in other non-current liabilities
    
    
    (48,959
    )
    
    
    (58,494
    )
    
    
    669,499Net cash provided by operating activities
    
    
    1,513,108
    
    
    
    1,063,382
    
    
    
    2,280,614CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of investments
    
    
    103,790
    
    
    
    16,233
    
    
    
    427,561Proceeds from sales of property and equipment
    
    
    18,768
    
    
    
    68,309
    
    
    
    22,778Purchases of businesses and investments, net of cash acquired
    
    
    (19,833
    )
    
    
    (69,743
    )
    
    
    (326,086
    )Purchase of intangible assets
    
    
    
    
    
    
    
    
    
    
    (157,000
    )Purchases of property and equipment
    
    
    (211,565
    )
    
    
    (262,831
    )
    
    
    (377,930
    )Net cash used in investing activities
    
    
    (108,840
    )
    
    
    (248,032
    )
    
    
    (410,677
    )CASH FLOWS FROM FINANCING ACTIVITIES:Capital paid in by partners
    
    
    
    
    
    
    
    
    
    
    146,328Repayment of paid-in capital to partners
    
    
    
    
    
    
    
    
    
    
    (524,130
    )Distribution of partners pre-incorporation income
    
    
    
    
    
    
    (765,631
    )
    
    
    (2,282,141
    )Payment to AW-SC
    
    
    
    
    
    
    
    
    
    
    (313,832
    )Contract termination payment
    
    
    (147,569
    )
    
    
    
    
    
    
    Issuance of Accenture Ltd Class A common shares
    
    
    242,607
    
    
    
    121,864
    
    
    
    1,791,444Purchase of Accenture Ltd Class A common shares
    
    
    (285,096
    )
    
    
    (548,527
    )
    
    
    Purchase of Accenture SCA Class I common shares
    
    
    (275,318
    )
    
    
    (12,191
    )
    
    
    Proceeds from issuance of long-term debt
    
    
    2,006
    
    
    
    8,476
    
    
    
    1,787Repayments of long-term debt
    
    
    (5,953
    )
    
    
    (2,017
    )
    
    
    (19,653
    )Proceeds from issuance of short-term bank borrowings
    
    
    116,978
    
    
    
    364,552
    
    
    
    876,495Repayments of short-term bank borrowings
    
    
    (135,449
    )
    
    
    (501,836
    )
    
    
    (843,264
    )Increase in restricted cash of Accenture Stock Employee Compensation Trust
    
    
    (3,835
    )
    
    
    (79,445
    )
    
    
    Net cash used in financing activities
    
    
    (491,629
    )
    
    
    (1,414,755
    )
    
    
    (1,166,966
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    102,546
    
    
    
    36,298
    
    
    
    (93,404
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    1,015,185
    
    
    
    (563,107
    )
    
    
    609,567CASH AND CASH EQUIVALENTS,beginning of period
    
    
    1,316,976
    
    
    
    1,880,083
    
    
    
    1,270,516CASH AND CASH EQUIVALENTS,end of period
    
    $
    2,332,161
    
    
    $
    1,316,976
    
    
    $
    1,880,083Supplemental
cash flow informationInterest paid
    
    $
    20,117
    
    
    $
    32,876
    
    
    $
    37,091Income taxes paid
    
    $
    255,219
    
    
    $
    716,578
    
    
    $
    187,640


The accompanying notes are an integral part of these financial statements.F-9ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In thousands of U.S. dollars)


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of BusinessAccenture is one of the worlds leading management consulting, technology
services and outsourcing organizations. We had approximately $11.82 billion of
revenues before reimbursements for the fiscal year ended August 31, 2003. As
of August 31, 2003, we had more than 83,000 employees based in over 110 offices
in 48 countries delivering to our clients a wide range of management
consulting, technology and outsourcing services and solutions. We operate
globally with one common brand and business model designed to enable us to
serve our clients on a consistent basis around the world. We work with clients
of all sizes and have extensive relationships with the worlds leading
companies and governments.Our leading position results from the fact that we are one of the largest
management consulting, technology services and outsourcing companies in the
world in terms of number of employees, industries served and revenues. Based on
our knowledge of our business and the business of our competitors, we believe
that few other organizations provide as broad a range of management consulting,
technology and outsourcing services and solutions to as many industries in as
many geographic markets as we do.Our business consists of using our industry and business-process
knowledge, our service offering expertise and our insight into and access to
existing and emerging technologies to identify new business and technology
trends and formulate and implement solutions for clients under demanding time
constraints. We help clients identify and enter new markets, increase revenues
in existing markets, improve operational performance and deliver their products
and services more effectively and efficiently.Principles of ConsolidationThe consolidated financial statements include the accounts of Accenture
SCA, a Luxembourg partnership limited by shares, and its controlled subsidiary
companies (together Accenture or the Company). In May 2001, the Accenture
Worldwide Organization completed a transition to a corporate structure with
Accenture Ltd becoming the holding company of Accenture SCA.Accenture Ltds only business is to hold Class I and Class II common
shares in, and to act as the sole general partner of, its subsidiary, Accenture
SCA. Accenture operates its business through Accenture SCA and subsidiaries of
Accenture SCA. Accenture Ltd controls Accenture SCAs management and operations
and consolidates Accenture SCAs results in its financial statements.Prior to the transition to a corporate structure, the predecessors of many
of what are now Accenture Ltds controlled subsidiary companies operated as a
series of related partnerships and corporations under the control of the
partners and shareholders of these entities. Partners, who became employees
following the transition, received Accenture Ltd Class A common shares or, in
the case of partners resident in specified countries, Class I common shares
issued by Accenture SCA or exchangeable shares issued by Accenture Canada
Holdings Inc., an indirect subsidiary of Accenture SCA, in lieu of their
interests in these partnerships and corporations. The transition to a corporate
structure was accounted for as a reorganization at carryover basis.The shares of Accenture Canada Holdings Inc. held by persons other than
Accenture are treated as a minority interest in the consolidated financial
statements of Accenture SCA. Purchases and/or redemptions of Accenture Canada
Holdings Inc. exchangeable shares are accounted for at carryover basis.The accompanying financial statements for periods ended on or prior to May
31, 2001 have been prepared on a combined basis and reflect the accounts of the
predecessors of what are now Accenture Ltds controlled subsidiary companies
which prior to May 31, 2001, included Accenture Partners Société Coopérative
(Geneva, Switzerland  the administrative coordinating entity, APSC) and a
number of entities, many of which operated as partnerships, that had entered
into contractual relationships with APSC, together with all entities controlled
by them. Accordingly, compensation and benefits for services rendered by
partners have not been reflected as an expense in the combined financial
statements for periods ended on or prior to May 31, 2001.Accenture continues to use the term partner to refer to executive
employees who have been granted that title.F-10ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)


Revenue RecognitionRevenues from contracts for technology integration consulting services
where we design/re-design, build and implement new or enhanced systems
applications and related processes for our clients are recognized on the
percentage-of-completion method in accordance with American Institute of
Certified Public Accountants Statement of Position 81-1, Accounting for
Performance of Construction-Type and Certain Production-Type Contracts.
Percentage-of-completion accounting involves calculating the percentage of
services provided during the period compared to the total estimated services to
be provided over the duration of the contract. This
method is followed where reasonably dependable estimates of the revenues
and costs applicable to various elements of a contract can be made. Estimates
of total contract revenues and costs are continuously monitored during the term
of the contract, and recorded revenues and costs are subject to revision as the
contract progresses. Such revisions may result in increases or decreases to
revenues and income and are reflected in the financial statements in the period
in which they are first identified. For technology integration contracts,
estimated revenues for applying the percentage-of-completion method include
estimated incentives for which achievement of defined goals is deemed probable.Revenues from contracts for non-technology integration consulting services
with fees based on time and materials or cost-plus are recognized in accordance
with SEC Staff Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in
Financial Statements, as the services are performed (as measured by time
incurred) and amounts earned. We consider amounts to be earned once evidence
of an arrangement has been obtained, services are delivered, fees are fixed or
determinable, and collectibility is reasonably assured. In such contracts, our
efforts, measured by time incurred, typically represents the contractual
milestones or output measure, which is the contractual earnings pattern. For
non-technology integration consulting contracts with fixed fees, we recognize
revenues as amounts become billable in accordance with contract terms provided
the billable amounts are not contingent, are consistent with the services
delivered, and are earned. Contingent or incentive revenues relating to
non-technology integration consulting contracts are recognized when the
contingency is satisfied and we conclude the amounts are earned.Outsourcing contracts typically span several years. In a number of these
arrangements we hire client employees and become responsible for client
obligations. Revenues are recognized on outsourcing contracts as amounts become
billable in accordance with contract terms, unless the amounts are billed in
advance of performance of services in which case revenues are recognized when
the services are performed and amounts are earned in accordance with SAB 101.
Revenues from time and materials or cost-plus contracts are recognized as the
services are performed. In such contracts, our effort, measured by time
incurred, represents the contractual milestones or output measure, which is the
contractual earnings pattern. Revenues from unit-priced contracts are
recognized as transactions are processed based on objective measures of output.
Revenues from fixed price contracts are recognized on a straight-line basis
unless we can determine revenues are earned and obligations are fulfilled in a
different pattern. Outsourcing contracts can also include incentive payments
for benefits delivered to clients. Revenues relating to such incentive payments
are recorded when the contingency is satisfied and we conclude the amounts are
earned.Contracts containing multiple services are segmented into separate
elements when the services represent separate earnings processes. Revenues for
contracts with multiple elements are allocated based on the fair value of the
elements and are recognized in accordance with our accounting policies for each
separate element, as described above. Fair value is determined based on the
prices charged when each element is sold separately.Losses on contracts are recognized during the period in which the loss
first becomes probable and reasonably estimable. Contract losses are determined
to be the amount by which the estimated direct and indirect costs of the
contract exceed the estimated total revenues that will be generated by the
contract. Losses recognized during each of the three years ended August 31,
2003 were insignificant.Revenues recognized in excess of billings are recorded as Unbilled
services. Billings in excess of revenues recognized are recorded as Deferred
revenues until revenue recognition criteria are met. Reimbursements, including
those relating to travel and other out-of-pocket expenses, and other similar
third-party costs, such as the cost of hardware and software resales, are
included in Revenues, and an equivalent amount of reimbursable expenses are
included in Cost of services.Operating ExpensesSubcontractor costs are included in Cost of services when they are
incurred. Training costs were $390,803, $433,566 and $691,513 in fiscal 2003,
fiscal 2002 and fiscal 2001, respectively. Research and development and
advertising costs are expensed asF-11ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

incurred. Research and development costs were
$250,374, $234,558 and $271,336 in fiscal 2003, fiscal 2002 and fiscal 2001,
respectively. Advertising costs were $69,544, $74,722 and $149,900 in fiscal
2003, fiscal 2002 and fiscal 2001, respectively. The Provision for doubtful
accounts was ($20,243), $80,100 and $1,587 in fiscal 2003, fiscal 2002 and
fiscal 2001, respectively. The related Allowance for doubtful accounts was
$37,663 and $51,496 at August 31, 2003 and 2002, respectively.Translation of Non-U.S. Currency AmountsThe net assets and operations of entities outside of the United States are
translated into U.S. dollars. Assets and liabilities are translated at
year-end exchange rates and income and expense items are translated at average
exchange rates prevailing during the
year. Translation adjustments are included in Accumulated other
comprehensive income (loss). Gains and losses arising from intercompany
foreign currency transactions that are of a long-term-investment nature are
reported in the same manner as translation adjustments.Foreign currency transaction gains/(losses) are included in Other income
(expense) and totaled $32,025, $9,832 and ($1,279) in fiscal 2003, fiscal 2002
and fiscal 2001, respectively.Cash and Cash Equivalents and Restricted CashCash and cash equivalents consist of all cash balances and highly liquid
investments with original maturities of three months or less, including time
deposits and certificates of deposit of $521,056 and $406,574 at August 31,
2003 and 2002, respectively. As a result of certain subsidiaries cash
management systems, checks issued but not presented to the banks for payment
may create negative book cash payables. Such negative balances are classified
as Short-term bank borrowings. Restricted cash represents cash available to the
Accenture Stock Employee Compensation Trust (SECT) for open-market share
purchases that will be used to fund equity-based awards for Accenture
employees.Concentrations of Credit RiskAccentures financial instruments that are exposed to concentrations of
credit risk consist primarily of cash and cash equivalents, foreign exchange
derivatives and client receivables. Accenture places its cash and cash
equivalents and foreign exchange derivatives with highly-rated financial
institutions, limits the amount of credit exposure with any one financial
institution and conducts ongoing evaluation of the credit worthiness of the
financial institutions with which it does business. Client receivables are
dispersed across many different industries and geographies; therefore,
concentrations of credit risk are limited.InvestmentsInvestments in marketable equity securities are recorded at fair value and
are classified as available-for-sale. The difference between cost and fair
value is recorded in Accumulated other comprehensive income (loss). The cost of
securities sold is determined on an average cost basis.Accenture may receive warrants issued by other companies primarily in
exchange for services, alliances and directorships. At the measurement date,
these warrants are recorded at estimated fair value. Warrants received in
connection with services and alliances are recorded as Revenues. Warrants
received in connection with directorships are recorded as Other income
(expense). Warrants in public companies and those that can be net share settled
in private companies are deemed derivative financial instruments and are
recorded on the Consolidated Balance Sheets at fair value. Changes in fair
value of these warrants are recognized in the Consolidated Income Statements
and included in Gain (loss) on investments, net.Management conducts a quarterly impairment review of each investment in
the portfolio, including historical and projected financial performance,
expected cash needs and recent funding events. Other-than-temporary impairments
of investments are recognized if the market value of the investment is below
its cost basis for an extended period or the issuer has experienced significant
financial declines or difficulties in raising capital to continue operations.The equity method of accounting is used for unconsolidated investments in
which Accenture exercises significant influence. All other investments are
accounted for under the cost method.F-12ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)


Foreign Exchange InstrumentsIn the normal course of business, Accenture uses derivative financial
instruments to manage foreign currency exchange rate risk. We hedge cash flow
exposures for our countries using a combination of forwards and options
contracts. These instruments are generally short term in nature, with
maturities of less than one year and are subject to fluctuations in foreign
exchange rates and credit risk. From time to time, we enter into forwards or
options contracts that are long term. Credit risk is managed through careful
selection and ongoing evaluation of the financial institutions it utilizes as
counterparties.Accenture does not designate any of its derivatives as hedges as defined
by Statement of Financial Accounting Standards (SFAS) No. 133, Accounting
for Derivative Instruments and Hedging Activities. Therefore, the changes in
fair market value of all derivatives are recognized in the Consolidated Income
Statements and included in Other income (expense).Property and EquipmentProperty and equipment is stated at cost, less accumulated depreciation.
Depreciation of property and equipment is computed on a straight-line basis
over the following estimated useful lives:Buildings
    
    
    20 to 25 yearsLeasehold improvements
    
    Term of lease,15 years maximumComputers, related equipment and software
    
    
    2 to 5 yearsFurniture and fixtures
    
    
    7 to 10 years


Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset or group of
assets may not be recoverable. Recoverability of long-lived assets or group of
assets is assessed by a comparison of the carrying amount to the estimated
future net cash flows. If estimated future undiscounted net cash flows are less
than the carrying amount, the asset is considered impaired and expense is
recorded at an amount required to reduce the carrying amount to fair value.Employee Stock-Based Compensation AwardsAccenture follows Accounting Principles Board Opinion No. 25 (APB 25),
Accounting for Stock Issued to Employees, in accounting for its employee
stock options and share purchase rights. Accordingly, no compensation expense
is recognized for share purchase rights granted under the Companys employee
stock option and employee share purchase plan. Had compensation cost for the
Companys employee stock option and employee share purchase plan been
determined based on fair value at the grant date consistent with SFAS 123,
Accounting for Stock-Based Compensation, the Companys net income would have
been reduced to the pro forma amounts indicated below:2003
    
    2002
    
    2001Net income as reported
    
    $
    1,039,886
    
    
    $
    579,210
    
    
    $
    488,155Add: Stock-based compensatio n expense already included in net income as
reported, net of tax and minority interest
    
    
    46,464
    
    
    
    49,609
    
    
    
    869,801Deduct: Pro forma employee compensation cost related to stock options,
restricted share units and employee share purchase plan, net of tax
and minority interest
    
    
    (173,131
    )
    
    
    (294,913
    )
    
    
    (882,417
    )Pro forma income
    
    $
    913,219
    
    
    $
    333,906
    
    
    $
    475,539


The fair value of each option grant and employee share purchase right is
estimated on the date of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions:F-13ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

2003
    
    2002
    
    2001Stock Options
    
    Partners
    
    Non-partners
    
    Partners
    
    Non-partners
    
    Partners
    
    Non-partnersExpected life (in years)
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    5Risk-free interest rate
    
    
    3.33
    %
    
    
    2.89
    %
    
    
    4.59
    %
    
    
    3.35
    %
    
    
    4.93
    %
    
    
    4.73
    %Expected volatility
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %

Employee Share Purchase Plan
    
    2003
    
    2002
    
    2001Expected life (in years)
    
    
    0.5
    
    
    
    0.5
    
    
    
    N/ARisk-free interest rate
    
    
    1.50
    %
    
    
    2.50
    %
    
    
    N/AExpected volatility
    
    
    50
    %
    
    
    50
    %
    
    
    N/AExpected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    N/A


Use of EstimatesThe preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect amounts reported in the consolidated
financial statements and accompanying disclosures. Although these estimates are
based on managements best knowledge of current events and actions that
Accenture may undertake in the future, actual results may be different from the
estimates.ReclassificationsCertain amounts reported in previous years have been reclassified to
conform to the fiscal 2003 presentation.Recently Adopted Accounting StandardsGuaranteesIn November 2002, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure
Requirements for Guarantees, including Indirect Guarantees of Indebtedness to
Others. FIN 45 elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also requires that a guarantor recognize a
liability at inception of certain guarantees. The initial recognition and
measurement provisions of FIN 45 are applicable to guarantees issued or
modified after December 31, 2002. The adoption of FIN 45s initial recognition
and measurement provisions did not have a material effect on the Companys
financial statements.The disclosure requirements are effective for financial statements of
interim or annual periods ending December 15, 2002. These disclosure
provisions require a guarantor to disclose certain types of guarantees, even if
the likelihood of requiring the guarantors performance is remote.See footnote 17. Commitments and Contingencies  Guarantees for further
discussion.Variable Interest EntitiesIn January 2003, the FASB issued Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities. An entity is subject to the
consolidation rules of FIN 46 and is referred to as a variable interest entity
(VIE) if the entitys equity investors lack the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its operations without additional subordinated financial
support.FIN 46 applies to VIEs created after January 31, 2003. For VIEs created
prior to February 1, 2003, an enterprise with an August 31 fiscal year end is
required to apply the provisions of FIN 46 beginning March 1, 2004.
Additionally, FIN 46 requiresF-14ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

disclosure of VIEs in financial statements issued
after January 31, 2003 if it is reasonably possible that as of the transition
date: 1) the enterprise will be the primary beneficiary of an existing VIE
that will require consolidation or 2) the enterprise will hold a significant
variable interest in, or have significant involvement with, an existing VIE.We are not aware of any material VIEs that we need or will need to
consolidate or disclose.Newly Issued Accounting StandardsIn November 2002, the Emerging Issues Task Force (EITF) issued a final
consensus on Issue 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables. In May 2003, the EITF issued additional interpretive guidance
regarding the application of Issue 00-21. Issue 00-21 provides guidance on how
and when to recognize revenues on arrangements requiring delivery of more than
one product or service. Issue 00-21 is effective prospectively for arrangements
entered into in fiscal periods beginning after June 15, 2003. Companies may
also elect to apply the provisions of Issue 00-21 to existing arrangements and
record the income statement impact as a cumulative effect of a change in
accounting principle.Effective September 1, 2003, Accenture adopted Issue 00-21 on a
prospective basis. The company will continue to account for contracts signed
on or before August 31, 2003, under the previous Generally Accepted Accounting
Principles. Beginning on September 1, 2003, the Company began accounting for
all new contracts in accordance with Issue 00-21, potentially changing the
timing of revenue recognition and affecting margins in some situations,
depending on the Companys ability to structure contracts to accommodate the
requirements of Issue 00-21.F-15ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)


2. RESTRUCTURING, REORGANIZATION AND REBRANDINGIn the fourth quarter of 2002, Accenture recognized restructuring costs of
$110,524 related to a global consolidation of office space. At August 31, 2002,
the related liability for restructuring costs was $67,112. This liability was
reduced by payments made in the year ended August 31, 2003 of $33,158. The
liability was also affected by immaterial changes in lease estimates, imputed
interest and foreign currency translation. Included in the August 31, 2003
Consolidated Balance Sheet is $16,780 in Other accrued liabilities and $23,547
in Other non-current liabilities representing the net present value of the
estimated remaining obligations related to existing operating leases.Reorganization and rebranding costs were $848,615 for the year ended
August 31, 2001. Reorganization costs include $89,430 of restructuring costs
relating to our transition to a corporate structure and $455,100 of indirect
taxes and other costs imposed on transfers of assets to the new corporate
holding company structure. Rebranding costs include $157,100 for the
amortization of intangible assets related to the final resolution of the
arbitration with Andersen Worldwide and Arthur Andersen and $147,085 resulting
from changing our name to Accenture.3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)The components of Accumulated other comprehensive income (loss) at August
31, are as follows:2003
    
    2002Foreign currency translation adjustments
    
    $
    (67,064
    )
    
    $
    (63,645
    )Unrealized gains (losses) on securities:Net unrealized holding gains (losses) arising during the year
    
    
    1,067
    
    
    
    (28,961
    )Reclassification adjustments for realized losses included in net income
    
    
    2,094
    
    
    
    33,430Net unrealized gains
    
    
    3,161
    
    
    
    4,469Unrealized losses on securities, beginning of year
    
    
    (4,222
    )
    
    
    (8,691
    )Net unrealized losses, end of year
    
    
    (1,061
    )
    
    
    (4,222
    )Minimum pension liability adjustments, net of tax
    
    
    (120,108
    )
    
    
    (12,565
    )Accumulated other comprehensive loss
    
    $
    (188,233
    )
    
    $
    (80,432
    )


4. PROPERTY AND EQUIPMENTProperty and equipment, net at August 31, is composed of the following:2003
    
    2002Buildings and land
    
    $
    3,058
    
    
    $
    10,699Leasehold improvements
    
    
    429,144
    
    
    
    374,969Computers, related equipment and software
    
    
    1,060,782
    
    
    
    933,702Furniture and fixtures
    
    
    266,617
    
    
    
    249,832Total accumulated depreciation
    
    
    (1,109,146
    )
    
    
    (852,698
    )$
    650,455
    
    
    $
    716,504


5. BUSINESS COMBINATIONS AND GOODWILLOn February 28, 2002, Accenture increased its ownership interest in
Accenture HR Services, a human resource outsourcing business, from
approximately 50 to 100 percent. The purchase price for the additional
interest, including assumed liabilities, was $115,000 primarily consisting of a
$70,000 cash payment and $35,000 to be paid over a five-year period. The
contract also includes an earn-out provision, which could result in up to
$187,500 of additional purchase price over a five-year period. The allocation
of the purchase price to acquired assets and liabilities, determined in
accordance with SFAS 141, Business Combinations, resulted in an allocation of
$115,003 to non-tax-deductible goodwill and $10,250 to finite-lived
intangibles. The pro forma effects on operations are not material.On December 31, 2001, Accenture increased its ownership interest in
Avanade, Inc. from approximately 50 percent to 78 percent. The purchase price
for the additional interest was $81,350, of which $31,350 represented 1,259,272
Accenture Ltd Class AF-16ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

common shares and $49,995 represented Accentures
interest in Avanade, Inc. shares repurchased by Avanade, Inc. The allocation of
the purchase price to acquired assets and liabilities, determined in accordance
with SFAS 141, resulted in an allocation of $52,600 to non-tax-deductible
goodwill and $3,976 to finite-lived intangibles. The pro forma effects on
operations are not material.All of the Companys goodwill relates to acquisitions subsequent to July
2001 and as such has been accounted for under the provisions of SFAS 142,
Goodwill and Other Intangible Assets, which does not permit amortization of
goodwill. On September 1, 2002, the Company adopted the impairment provisions
and disclosure requirements of SFAS 142. The Company performed impairment
tests of goodwill as of May 31, 2003 and September 1, 2002 and determined that
goodwill was not impaired. A summary of goodwill balances by segment is as
follows:Comm& High
    
    FinancialTech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    TotalBeginning balance at August 31, 2002
    
    $
    55,083
    
    
    $
    36,544
    
    
    $
    19,017
    
    
    $
    32,686
    
    
    $
    24,273
    
    
    $
    167,603Goodwill arising in fiscal 2003
business combinations
    
    
    1,030
    
    
    
    2,122
    
    
    
    1,537
    
    
    
    3,956
    
    
    
    1,877
    
    
    
    10,522Foreign currency translation adjustments
    
    
    4,152
    
    
    
    1,843
    
    
    
    965
    
    
    
    2,082
    
    
    
    1,492
    
    
    
    10,534Ending balance at August 31, 2003
    
    $
    60,265
    
    
    $
    40,509
    
    
    $
    21,519
    
    
    $
    38,724
    
    
    $
    27,642
    
    
    $
    188,659


6. INVESTMENTSInvestments held at August 31, are as follows:2003
    
    2002Marketable equity securities
    
    $
    31,160
    
    
    $
    54,297Non-marketable and other
    
    
    2,170
    
    
    
    30,497Total
    
    $
    33,330
    
    
    $
    84,794


Marketable Equity SecuritiesMarketable equity securities include common stock, warrants and options,
all of which are classified as available-for-sale. The unrealized gains and
losses on these investments included in Accumulated other comprehensive income
(loss) at August 31, are as follows:2003
    
    2002Fair value
    
    $
    31,160
    
    
    $
    54,297Cost
    
    
    32,221
    
    
    
    58,519Gross unrealized gains
    
    
    18
    
    
    
    1,100Gross unrealized losses
    
    
    (1,079
    )
    
    
    (5,322
    )


Equity Method InvestmentsAs a result of a negative basis difference arising from the formation of a
joint venture accounted for at carryover basis, the underlying equity in net
assets of the joint venture exceeded Accentures carrying value by
approximately $32,568 and $94,895 at August 31, 2003 and 2002, respectively.
The negative basis difference is being amortized over three years on a
straight-line basis. Amortization of the negative basis difference of $62,327,
$66,211 and $31,545 was reflected in the accompanying Consolidated Income
Statements for the years ended August 31, 2003, 2002 and 2001, respectively.Other-Than-Temporary WritedownsF-17ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)For the years ended August 31, 2003, 2002 and 2001, Accenture recorded
other-than-temporary impairment writedowns of $0, $325,335 and $94,489,
respectively. Of the $325,335 recorded in fiscal 2002, $36,288 was reclassified
from Other comprehensive income (loss) to Gain (loss) on investments, net and
$289,047 was charged directly to Gain (loss) on investments, net.In fiscal 2002, the Company decided to sell substantially all of the
minority ownership interests contained in its venture and investment portfolio.
Related to this decision, the Company recorded an other-than-temporary
impairment writedown of $211,900 which represented the loss it expected to
incur on the sale. The Company completed this transaction in fiscal 2003 and
retained an immaterial ownership interest in the venture and investment
portfolio.7. FINANCIAL INSTRUMENTSSubstantially all of Accentures financial instruments are recorded at
estimated fair value or amounts that approximate fair value.Short-term Financial Assets and LiabilitiesCash and cash equivalents, Receivables from clients, Short-term bank
borrowings, Accounts payable, and Other accrued liabilities are short-term in
nature and accordingly, their carrying values approximate fair value.InvestmentsEffective September 1, 2000, Accenture adopted SFAS 133, which establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. All derivatives are required to be recorded in the Consolidated
Balance Sheets at fair value. The fair values of Accentures warrants and
options are approximated using the Black-Scholes valuation model after
considering restrictions on exercisability or sale. The adoption of SFAS 133
resulted in an increase to Net Income of $187,974 based upon the recognition of
the fair value at September 1, 2000, of Accentures warrants and options in
public companies and those that can be net share settled in private companies.
For the years ended August 31, 2003, 2002 and 2001, Gain (loss) on investments,
net includes $410, $1,470 and $191,892, respectively, of unrealized investment
losses recognized in accordance with SFAS 133.Quoted market prices are used to determine the fair values of common
equity and debt securities that were issued by publicly traded entities. Those
debt and equity securities issued by non-public entities were valued by
reference to the most recent round of financing as an approximation of the
market value.Foreign Exchange InstrumentsMarket quoted exchange rates are used to determine the fair value of
foreign exchange instruments. The notional values and fair values of such
instruments at August 31, are as follows:2003
    
    2002Notional
    
    Fair
    
    Notional
    
    FairValue
    
    Value
    
    Value
    
    ValueForeign currency forward exchange contracts:To sell
    
    $
    210,973
    
    
    $
    (245
    )
    
    $
    133,695
    
    
    $
    (1,405
    )To buy
    
    
    152,035
    
    
    
    (703
    )
    
    
    147,958
    
    
    
    2,117


8. BORROWINGS AND INDEBTEDNESSLines of CreditWe have two $537,500 syndicated credit facilities, including one 364-day
facility and one three-year facility, providing unsecured, revolving borrowing
capacity for general working capital purposes. Financing is provided under
these facilities at the prime rate or at the London Interbank Offered Rate plus
a spread, and bid option financing is available. These facilities require us
to:F-18ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)(1) limit liens placed on our assets to (a) liens incurred in the ordinary
course of business (subject to certain limitations) and (b) other liens
securing aggregate amounts not in excess of 30% of our total assets; and (2)
maintain a debt-to-cash-flow ratio not exceeding 1.75 to 1.00. We are in
compliance with these terms. As of August 31, 2003, we had no borrowings under
either facility and $78,641 in letters of credit outstanding under the
three-year facility. These facilities are subject to annual commitment fees. In
fiscal year 2002, there were one-time costs paid for an arrangement fee and a
syndication fee totaling $1,760, which is being amortized over three years. On
June 20, 2003, we renewed the 364-day facility at terms that are slightly more
favorable than the expiring arrangement. The three-year facility is scheduled
to expire on June 21, 2005.We also maintain four separate bilateral, uncommitted, unsecured
multicurrency revolving credit facilities. As of August 31, 2003, these
facilities provided for up to $252,410 of local currency financing in countries
where we cannot readily access our syndicated facilities. We also maintain
local guaranteed and non-guaranteed lines of credit. As of August 31, 2003,
amounts available under these facilities totaled $214,810. Interest rate terms
on these facilities are at market rates prevailing in the relevant local
markets. At August 31, 2003 and 2002, respectively, we had $24,124 and
$42,082 outstanding under these various facilities and $19,376 and $15,840 of
other short-term borrowings. Certain of the agreements are subject to annual
commitment fees. The weighted
average interest rate on borrowings under these multicurrency credit
facilities and lines of credit, based on the average annual balances, was
approximately 5%, 5% and 8% in fiscal 2003, fiscal 2002 and fiscal 2001,
respectively.9. INCOME TAXESPrior to our transition to a corporate structure, Accenture operated
through partnerships in many countries and generally was not subject to income
taxes in those countries. Taxes related to income earned by the partnerships
were the responsibility of the individual partners. In some non-U.S. countries,
Accenture operated through corporations and was subject to local income taxes.
In addition, Accenture was subject to local unincorporated business taxes in
some jurisdictions. Effective with the transition to a corporate structure on
May 31, 2001, Accenture became subject to U.S. federal and other national,
state and local corporate income taxes.The provision for taxes includes the following:2003
    
    2002
    
    2001Current taxes:U.S. federal
    
    $
    142,941
    
    
    $
    241,228
    
    
    $
    382,690U.S. state and local
    
    
    20,420
    
    
    
    34,461
    
    
    
    66,080Non-U.S
    
    
    322,971
    
    
    
    358,055
    
    
    
    330,590Total current tax expense
    
    
    486,332
    
    
    
    633,744
    
    
    
    779,360Deferred taxes:U.S. federal
    
    
    48,523
    
    
    
    (143,035
    )
    
    
    (85,520
    )U.S. state and local
    
    
    6,932
    
    
    
    (20,434
    )
    
    
    (19,612
    )Non-U.S
    
    
    24,312
    
    
    
    20,796
    
    
    
    (171,612
    )Total deferred tax expense (benefit)
    
    
    79,767
    
    
    
    (142,673
    )
    
    
    (276,744
    )Total
    
    $
    566,099
    
    
    $
    491,071
    
    
    $
    502,616


Deferred income tax expenses (benefits) related to the additional minimum
pension liability were ($71,920) in fiscal 2003 and were recorded in
Accumulated other comprehensive income in the Consolidated Balance Sheet.Income before taxes from U.S. sources was $566,896 and $247,271 in fiscal
2003 and fiscal 2002, respectively. Income before taxes from non-U.S. sources
was $1,045,921 and $820,287 in fiscal 2003 and fiscal 2002, respectively.A reconciliation of the U.S. federal statutory income tax rate to
Accentures effective income tax rate is set forth below:F-19ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)2003
    
    2002
    
    2001U.S. federal statutory income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %U.S. state and local taxes, net
    
    
    1.6
    
    
    
    1.2
    
    
    
    1.0Non-deductible investment losses
    
    
    
    
    
    
    11.7
    
    
    
    0.2Non-U.S. operations
    
    
    (2.0
    )
    
    
    0.4
    
    
    
    1.6Rate benefit for partnership period
    
    
    
    
    
    
    
    
    
    
    (49.0
    )Revaluation of deferred tax liabilities (1)
    
    
    
    
    
    
    
    
    
    
    13.6Cost of transition to a corporate structure
    
    
    
    
    
    
    
    
    
    
    59.6Other
    
    
    0.5
    
    
    
    (2.3
    )
    
    
    1.2Effective income tax rate
    
    
    35.1
    %
    
    
    46.0
    %
    
    
    63.2
    %


(1)
 
 The revaluation of deferred tax liabilities upon change in tax status is
a deferred tax expense recognized upon Accentures change in tax status
from partnership to corporate form.Significant components of Accentures deferred tax assets and liabilities
include the following:2003
    
    2002Deferred tax assets:Pensions
    
    $
    175,476
    
    
    $
    94,481Revenue recognition
    
    
    88,174
    
    
    
    97,126Compensation and benefits
    
    
    106,961
    
    
    
    117,570Investments
    
    
    37,748
    
    
    
    69,832Tax credit carryforwards
    
    
    21,673
    
    
    
    17,448Net operating loss carryforwards
    
    
    162,271
    
    
    
    104,288Depreciation and amortization
    
    
    121,006
    
    
    
    113,908Other
    
    
    47,697
    
    
    
    60,533761,006
    
    
    
    675,186Valuation allowance
    
    
    (258,438
    )
    
    
    (180,304
    )Total deferred tax assets
    
    
    502,568
    
    
    
    494,882Deferred tax liabilities:Pensions
    
    
    (1,238
    )
    
    
    (2,174
    )Revenue recognition
    
    
    (19,959
    )
    
    
    (22,041
    )Investments
    
    
    (2,125
    )
    
    
    (452
    )Depreciation and amortization
    
    
    (18,674
    )
    
    
    (17,562
    )Other
    
    
    (13,208
    )
    
    
    (14,266
    )Total deferred tax liabilities
    
    
    (55,204
    )
    
    
    (56,495
    )Net deferred tax assets
    
    $
    447,364
    
    
    $
    438,387


Accenture recorded a valuation allowance of $258,438 and $180,304 at
August 31, 2003 and 2002, respectively, against deferred tax assets associated
with capital losses on certain investments and certain tax net operating loss
and tax credit carryforwards, as Accenture believes it is more likely than not
that these assets will not be realized. At August 31, 2003 and 2002,
respectively, $72,409 and $63,060 of the valuation allowances relate to
pre-acquisition tax attributes recorded under purchase accounting, the reversal
of which in future years will be allocated first to reduce goodwill and then to
reduce other non-current intangible assets of the acquired entity. In
addition, at August 31, 2003, $9,231 of the valuation allowance relates to tax
attributes, the reversal of which in future years will be allocated to
Additional paid in capital and Retained earnings.Accenture has net operating loss carryforwards at August 31, 2003 of
$487,344. Of this amount, $356,941 expires at various dates through 2023 and
$130,403 has an indefinite carryforward period. Accenture has tax credit
carryforwards at August 31, 2003 of $21,673, $20,725 of which will expire at
various dates through 2013 and $948 of which will expire between 2014 and 2023.F-20ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)If Accenture or one of its non-U.S. subsidiaries were classified as a
foreign personal holding company, Accentures U.S. shareholders would be
required to include in income, as a dividend, their pro rata share of
Accentures (or Accentures relevant non-U.S. subsidiarys) undistributed
foreign personal holding company income.Because of the application of complex U.S. tax rules regarding attribution
of ownership, Accenture meets the definition of a foreign personal holding
company in fiscal 2003 and fiscal 2002. However, there is no foreign personal
holding company income that its U.S. shareholders are required to include in
income for such years.In the event that Accenture has net foreign personal holding company
income, Accenture may distribute a dividend to shareholders to avoid having
taxable income imputed under these rules. Under certain circumstances, such a
distribution could create additional income tax costs to Accenture. Since
Accenture does not have any foreign personal holding company income in fiscal
2003 and fiscal 2002, no such taxes have been provided.10. PROFIT SHARING AND RETIREMENT PLANSPension and Other Postretirement BenefitsIn the United States and certain other countries, Accenture maintains and
administers noncontributory retirement and postretirement medical plans for
active, retired and resigned Accenture employees. Benefits under the
noncontributory employee retirement plans are based on years of service and
compensation during the years immediately preceding retirement or termination
of participation in the plan. Plan assets of the noncontributory employee
retirement plans consist of investments in equities, fixed income securities
and cash equivalents. Annual contributions are made at such times and in
amounts as required by law and may, from time to time, exceed minimum funding
requirements.In addition, certain postemployment benefits are provided to former or
inactive employees after employment but before retirement, including severance
benefits, disability-related benefits (including workers compensation) and
continuation of benefits such as healthcare benefits and life insurance
coverage. These costs are substantially provided for on an accrual basis.F-21ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)The following schedules provide information concerning the material
defined benefit pension and postretirement benefit plans.Pension Benefits2003
    
    2002
    
    2001Non-U.S.
    
    
    
    
    
    Non-U.S.
    
    
    
    
    
    Non-U.S.Components of pension expense
    
    U.S. Plans
    
    Plans
    
    U.S. Plans
    
    Plans
    
    U.S. Plans
    
    PlansService cost
    
    $
    29,215
    
    
    $
    24,503
    
    
    $
    28,852
    
    
    $
    14,925
    
    
    $
    27,802
    
    
    $
    12,023Interest cost
    
    
    30,878
    
    
    
    10,843
    
    
    
    26,150
    
    
    
    6,503
    
    
    
    16,285
    
    
    
    5,180Expected return on plan assets
    
    
    (25,886
    )
    
    
    (6,011
    )
    
    
    (26,171
    )
    
    
    (3,717
    )
    
    
    (19,683
    )
    
    
    (4,281
    )Amortization of transitional obligation
    
    
    (6
    )
    
    
    (181
    )
    
    
    (10
    )
    
    
    574
    
    
    
    (10
    )
    
    
    611Amortization of loss/(gain)
    
    
    4,847
    
    
    
    1,730
    
    
    
    462
    
    
    
    368
    
    
    
    (4,692
    )
    
    
    (538
    )Amortization of prior service cost
    
    
    2,267
    
    
    
    81
    
    
    
    2,269
    
    
    
    
    
    
    
    2,293
    
    
    
    Curtailment loss cost
    
    
    
    
    
    
    
    
    
    
    761
    
    
    
    
    
    
    
    
    
    
    
    Special termination benefits charge
    
    
    
    
    
    
    
    
    
    
    1,903
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    41,315
    
    
    $
    30,965
    
    
    $
    34,216
    
    
    $
    18,653
    
    
    $
    21,995
    
    
    $
    12,995

Other Benefits2003
    
    2002
    
    2001Non-U.S.Components of postretirement expense
    
    U.S. Plans
    
    Plans
    
    U.S. Plans
    
    U.S. PlansService cost
    
    $
    7,338
    
    
    $
    817
    
    
    $
    5,277
    
    
    $
    4,136Interest cost
    
    
    5,683
    
    
    
    799
    
    
    
    3,824
    
    
    
    2,426Expected return on plan assets
    
    
    (1,406
    )
    
    
    
    
    
    
    (1,380
    )
    
    
    (1,147
    )Amortization of transitional obligation
    
    
    79
    
    
    
    183
    
    
    
    79
    
    
    
    87Amortization of loss/(gain)
    
    
    2,210
    
    
    
    36
    
    
    
    686
    
    
    
    Amortization of prior service cost
    
    
    (251
    )
    
    
    
    
    
    
    
    
    
    
    Curtailment loss cost
    
    
    
    
    
    
    
    
    
    
    83
    
    
    
    Special termination benefits charge
    
    
    
    
    
    
    
    
    
    
    759
    
    
    
    Total
    
    $
    13,653
    
    
    $
    1,835
    
    
    $
    9,328
    
    
    $
    5,502



F-22ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)Pension Benefits
    
    Other Benefits2003
    
    2002
    
    2003
    
    2002Non-U.S
    
    
    
    
    
    Non-U.S.
    
    
    
    
    
    Non-U.S.U.S. Plans
    
    Plans
    
    U.S. Plans
    
    Plans
    
    U.S. Plans
    
    Plans
    
    U.S. PlansChanges in projected benefit obligationProjected benefit obligation, beginning of year
    
    $
    412,648
    
    
    $
    147,940
    
    
    $
    354,088
    
    
    $
    109,943
    
    
    $
    78,983
    
    
    $
    
    
    
    $
    51,762Adjustment cost
    
    
    
    
    
    
    2,038
    
    
    
    
    
    
    
    14,153
    
    
    
    
    
    
    
    
    
    
    
    Service cost
    
    
    29,215
    
    
    
    24,503
    
    
    
    28,852
    
    
    
    14,925
    
    
    
    7,338
    
    
    
    817
    
    
    
    5,277Interest cost
    
    
    30,878
    
    
    
    10,843
    
    
    
    26,150
    
    
    
    6,503
    
    
    
    5,683
    
    
    
    799
    
    
    
    3,824Amendments
    
    
    1,529
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,462
    )
    
    
    
    
    
    
    (3,498
    )Special termination benefit
    
    
    
    
    
    
    
    
    
    
    1,903
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    759Participants contributions
    
    
    
    
    
    
    844
    
    
    
    
    
    
    
    244
    
    
    
    
    
    
    
    
    
    
    
    Acquisitions/divestitures
    
    
    17,613
    
    
    
    23,453
    
    
    
    
    
    
    
    (1,448
    )
    
    
    
    
    
    
    18,783
    
    
    
    Curtailment gain
    
    
    
    
    
    
    (8,722
    )
    
    
    (4,366
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,065
    )Actuarial loss
    
    
    129,198
    
    
    
    22,513
    
    
    
    13,013
    
    
    
    (7,808
    )
    
    
    2,293
    
    
    
    2,112
    
    
    
    22,385Benefits paid
    
    
    (11,914
    )
    
    
    (5,961
    )
    
    
    (6,992
    )
    
    
    (1,930
    )
    
    
    (967
    )
    
    
    
    
    
    
    (461
    )Exchange rate loss
    
    
    
    
    
    
    15,995
    
    
    
    
    
    
    
    13,358
    
    
    
    
    
    
    
    2,028
    
    
    
    Projected benefit obligation, end of year
    
    $
    609,167
    
    
    $
    233,446
    
    
    $
    412,648
    
    
    $
    147,940
    
    
    $
    86,868
    
    
    $
    24,539
    
    
    $
    78,983Changes in plan assetsFair value of plan assets, beginning of year
    
    $
    306,380
    
    
    $
    70,494
    
    
    $
    309,427
    
    
    $
    64,552
    
    
    $
    22,883
    
    
    $
    
    
    
    $
    20,155Expected return on plan assets
    
    
    25,886
    
    
    
    6,011
    
    
    
    26,171
    
    
    
    3,717
    
    
    
    1,406
    
    
    
    
    
    
    
    1,380Actuarial loss
    
    
    (16,078
    )
    
    
    (3,959
    )
    
    
    (46,430
    )
    
    
    (10,199
    )
    
    
    (220
    )
    
    
    
    
    
    
    (721
    )Acquisitions/divestitures
    
    
    
    
    
    
    31,718
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    Employer contributions
    
    
    7,086
    
    
    
    38,980
    
    
    
    24,204
    
    
    
    8,492
    
    
    
    
    
    
    
    
    
    
    
    2,530Participants contributions
    
    
    
    
    
    
    844
    
    
    
    
    
    
    
    244
    
    
    
    
    
    
    
    
    
    
    
    Benefits paid
    
    
    (11,914
    )
    
    
    (5,961
    )
    
    
    (6,992
    )
    
    
    (1,930
    )
    
    
    (967
    )
    
    
    
    
    
    
    (461
    )Exchange rate gain
    
    
    
    
    
    
    8,134
    
    
    
    
    
    
    
    5,578
    
    
    
    
    
    
    
    
    
    
    
    Fair value of plan assets, end of year
    
    $
    311,360
    
    
    $
    146,261
    
    
    $
    306,380
    
    
    $
    70,494
    
    
    $
    23,102
    
    
    $
    
    
    
    $
    22,883Reconciliation of funded statusFunded status
    
    $
    (297,807
    )
    
    $
    (87,185
    )
    
    $
    (106,269
    )
    
    $
    (77,445
    )
    
    $
    (63,766
    )
    
    $
    (24,539
    )
    
    $
    (56,100
    )Unrecognized transitional obligation
    
    
    
    
    
    
    (7,290
    )
    
    
    (6
    )
    
    
    1,222
    
    
    
    756
    
    
    
    2,230
    
    
    
    835Unrecognized loss
    
    
    225,924
    
    
    
    26,197
    
    
    
    85,495
    
    
    
    9,443
    
    
    
    38,981
    
    
    
    3,412
    
    
    
    38,678Unrecognized prior service cost
    
    
    7,651
    
    
    
    905
    
    
    
    8,390
    
    
    
    
    
    
    
    (9,709
    )
    
    
    
    
    
    
    (3,498
    )Fourth quarter contributions
    
    
    
    
    
    
    870
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accrued benefit cost as of August 31
    
    $
    (64,232
    )
    
    $
    (66,503
    )
    
    $
    (12,390
    )
    
    $
    (66,780
    )
    
    $
    (33,738
    )
    
    $
    (18,897
    )
    
    $
    (20,085
    )Amounts recognized in the Consolidated Balance
Sheets consist of:Prepaid benefit cost
    
    $
    
    
    
    $
    9,350
    
    
    $
    51,956
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Accrued benefit liability
    
    
    (257,749
    )
    
    
    (84,096
    )
    
    
    (76,205
    )
    
    
    (69,184
    )
    
    
    (33,738
    )
    
    
    (18,897
    )
    
    
    (20,085
    )Intangible asset
    
    
    7,651
    
    
    
    479
    
    
    
    
    
    
    
    966
    
    
    
    
    
    
    
    
    
    
    
    Accumulated other comprehensive income
    
    
    185,866
    
    
    
    6,894
    
    
    
    11,859
    
    
    
    1,438
    
    
    
    
    
    
    
    
    
    
    
    Fourth quarter contributions
    
    
    
    
    
    
    870
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net amount recognized at year-end
    
    $
    (64,232
    )
    
    $
    (66,503
    )
    
    $
    (12,390
    )
    
    $
    (66,780
    )
    
    $
    (33,738
    )
    
    $
    (18,897
    )
    
    $
    (20,085
    )



F-23ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)Pension Benefits
    
    Other Benefits2003
    
    2002
    
    2003
    
    2002Non-U.S
    
    
    
    
    
    Non-U.S.
    
    
    
    
    
    Non-U.S.U.S. Plans
    
    Plans
    
    U.S. Plans
    
    Plans
    
    U.S. Plans
    
    Plans
    
    U.S. PlansWeighted-average assumptionsDiscount rate
    
    
    6.00
    %
    
    
    4.85
    %
    
    
    7.25
    %
    
    
    4.92
    %
    
    
    6.00
    %
    
    
    6.50
    %
    
    
    7.25
    %Expected rate of return on plan assets
    
    
    8.00
    %
    
    
    5.66
    %
    
    
    8.50
    %
    
    
    5.35
    %
    
    
    8.00%/5.00
    %
    
    
    N/A
    
    
    
    8.00%/5.00
    %Rate of increase in future compensation
    
    
    4.50
    %
    
    
    3.10
    %
    
    
    5.70
    %
    
    
    3.81
    %
    
    
    N/A
    
    
    
    4.00
    %
    
    
    N/A


The projected benefit obligations and fair value of plan assets for
defined benefit pension plans with projected benefit obligations in excess of
plan assets were $789,540 and $393,119, respectively, as of August 31, 2003 and
$560,588 and $376,874, respectively, as of August 31, 2002. The accumulated
benefit obligations and fair value of plan assets for plans with accumulated
benefit obligations in excess of plan assets were $715,814 and $389,378,
respectively, as of August 31, 2003 and $150,076 and $23,213, respectively, as
of August 31, 2002.Assumed Health Care Cost TrendAnnual rate increases in the per capita cost of health care benefits of
11.2% (under age 65) and 13.0% (over age 65) were assumed for the plan year
ending June 30, 2004. The trend rate assumptions are changed beginning for the
plan year ending June 30, 2004. The rate is assumed to decrease on a
straight-line basis to 5% for the plan year ending June 30, 2011 and remain at
that level thereafter. Assumed health care cost trend rates have a significant
effect on the amounts reported for the health care plan. A one percentage point
change in the assumed health care cost trend rates would have the following
effects:One Percentage Point Increase2003
    
    2002Effect on total of service and interest cost components
    
    $
    2,941
    
    
    $
    1,632Effect on year-end postretirement benefit obligation
    
    
    18,007
    
    
    
    13,827

One Percentage Point Decrease2003
    
    2002Effect on total of service and interest cost components
    
    $
    (2,342
    )
    
    $
    (1,342
    )Effect on year-end postretirement benefit obligation
    
    
    (14,263
    )
    
    
    (11,254
    )

Basic Retirement BenefitsObligations relating to basic retirements benefits are included in pension
benefits discussed above. This plan was eliminated for active partners after
May 15, 2001 in connection with the transition to a corporate structure. All
qualifying Accenture partners or their qualifying surviving spouses prior to
May 15, 2001 will receive basic retirement benefits for life. The amount of
annual benefit payments is periodically adjusted for cost-of-living adjustments
at the beginning of each calendar year. The plan is unfunded and its projected
benefit obligation (PBO) at August 31, 2003 was $113,996.Early Retirement BenefitsObligations related to early-retirement benefits are not included in
pension benefits disclosed above. For periods ended on or prior to May 15,
2001 partners retiring after age 56 and prior to age 62 received early
retirement benefits based on two years earnings on a straight-line declining
basis that resulted in no payout to partners retiring at age 62. Retired
partners could elect to receive benefits in the form of a lump-sum payment or
ten-year installment payments. Partners electing installment payments accrue
interest based on a US Treasury bond index. This plan was eliminated for active
partners after May 15, 2001, in connection with the transition to a corporate
structure. Early retirement benefits of $56,466, $34,614 and $37,685 in fiscal
2003, fiscal 2002 and fiscal 2001, respectively, were paid to retired partners.
The amount due for early retirement benefits is $200,829 at August 31, 2003,
which is being paid out over the period through 2011.F-24ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)The liabilities for both basic and early retirement benefits were recorded
as reductions of partners capital as of May 31, 2001, as payments related to
these obligations were previously recorded as distributions of partners
income.Defined Contribution PlansIn the United States, Accenture maintains and administers a trusteed
profit sharing plan, the Accenture Profit Sharing and 401(k) Plan, that
includes 18,062 active employees of Accenture and affiliates. The annual profit
sharing contribution is determined by management. The contribution to the
profit sharing plan was $59,879, $92,515 and $97,439 in fiscal 2003, fiscal
2002 and fiscal 2001, respectively. The contribution approximated 4% of plan
members compensation in fiscal 2003 and 6% in fiscal 2002 and fiscal 2001.In the United Kingdom, Accenture also maintains and administers a defined
contribution plan, the Accenture Retirement Savings Plan, which includes 5,310
active employees of Accenture. The Company provides matching contributions up
to certain amounts based upon the age of the eligible employee. The
contribution to the plan was $32,057, $28,189 and $17,735 in fiscal 2003,
fiscal 2002 and fiscal 2001, respectively.11. EMPLOYEE SHARE PLANSEmployee Share Purchase PlanThe Accenture Ltd 2001 Employee Share Purchase Plan (the ESPP) is a
nonqualified plan that allows eligible employee participants to purchase
Accenture Ltd Class A common shares at a discount through payroll deductions.
Under this plan, substantially all employees may elect to contribute 1% to 10%
of their compensation during each offering period (up to a per participant
maximum of $25 per calendar year) to purchase Accenture Ltd Class A common
shares. The purchase price of Accenture Ltd Class A common shares is 85% of the
lower of its beginning of offering period or end of offering period market
price. A maximum of 75,000,000 Accenture Ltd Class A common shares may be
issued under the ESPP.The following table summarizes information related to the ESPP:Fair Value of ShareOffering Period Ended
    
    Participants
    
    Shares Purchased
    
    Share Purchase Price
    
    Purchase RightsMarch 31, 2002
    
    
    27,375
    
    
    
    6,112,599
    
    
    $
    10.90
    
    
    $
    5.19September 30, 2002
    
    
    28,762
    
    
    
    6,376,120
    
    
    
    11.77
    
    
    
    7.78May 1, 2003
    
    
    25,242
    
    
    
    6,813,791
    
    
    
    12.20
    
    
    
    4.36

Share Incentive PlanThe Accenture Ltd 2001 Share Incentive Plan (the SIP) permits the grant
of nonqualified share options, incentive stock options, share appreciation
rights, restricted shares, restricted share units and other share-based awards
to employees, directors, third-party consultants, former United States
employees or former partners of, or other persons who perform services for,
Accenture Ltd and its affiliates. A maximum of 375,000,000 Accenture Ltd Class
A common shares may be subject to awards under the share incentive plan. At
August 31, 2003, 212,652,840 shares were available for future grants under the
SIP. Accenture Ltd Class A common shares covered by awards that expire,
terminate or lapse will again be available for the grant of awards under the
SIP. The SIP is administered by the compensation committee of the board of
directors of Accenture Ltd.Stock OptionsIncentive stock options generally have an exercise price that is at least
equal to the fair market value of the Class A common shares on the date the
option is granted.Options currently outstanding under the SIP have a maximum term of ten
years and vest under varying schedules. Stock option activity for fiscal 2003,
fiscal 2002 and fiscal 2001 was as follows:F-25ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)2003
    
    2002
    
    2001Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExercisePrice per
    
    
    
    
    
    Price per
    
    
    
    
    
    Price perNumber
    
    Option
    
    Number
    
    Option
    
    Number
    
    OptionOptions outstanding, beginning of year
    
    
    86,131,490
    
    
    $
    14.73
    
    
    
    95,820,431
    
    
    $
    14.54
    
    
    
    
    
    
    $
    Granted
    
    
    6,251,959
    
    
    
    15.24
    
    
    
    3,993,818
    
    
    
    18.78
    
    
    
    96,360,395
    
    
    
    14.54Exercised
    
    
    5,816,252
    
    
    
    14.55
    
    
    
    273,931
    
    
    
    14.53
    
    
    
    
    
    
    
    Forfeited
    
    
    10,968,107
    
    
    
    14.68
    
    
    
    13,408,828
    
    
    
    14.55
    
    
    
    539,964
    
    
    
    14.51Options outstanding, end of year
    
    
    75,599,090
    
    
    $
    14.80
    
    
    
    86,131,490
    
    
    $
    14.73
    
    
    
    95,820,431
    
    
    $
    14.54Exercisable at year end
    
    
    32,140,118
    
    
    $
    14.66
    
    
    
    20,542,137
    
    
    $
    14.54
    
    
    
    
    
    
    $
    Weighted average fair value of
options granted during the year
    
    
    
    
    
    $
    7.27
    
    
    
    
    
    
    $
    9.44
    
    
    
    
    
    
    $
    7.74


The following table summarizes information about stock options outstanding
at August 31, 2003:Options Outstanding
    
    Options ExercisableWeightedOptions
    
    Avg. Contractual
    
    Weighted Average
    
    Options
    
    Weighted AverageRange of Exercise Prices
    
    Outstanding
    
    Life Remaining
    
    Exercise Price
    
    Exercisable
    
    Exercise Price$12.82 - $15.31
    
    
    70,294,812
    
    
    
    7.9
    
    
    $
    14.54
    
    
    
    31,184,717
    
    
    $
    14.5415.32 -   18.32
    
    
    2,716,604
    
    
    
    9.2
    
    
    
    16.23
    
    
    
    365,244
    
    
    
    16.1218.33 -   27.23
    
    
    2,587,674
    
    
    
    8.9
    
    
    
    20.16
    
    
    
    590,157
    
    
    
    19.9412.82 -   27.23
    
    
    75,599,090
    
    
    
    8.0
    
    
    $
    14.80
    
    
    
    32,140,118
    
    
    $
    14.66


Restricted Share UnitsUnder the SIP, participants may be granted restricted share units without
cost to the participant. Each restricted share unit awarded to a participant
represents an unfunded, unsecured right, which is nontransferable except in the
event of death, of the participant to receive an Accenture Ltd Class A common
share on the date specified in the participants award agreement. The
restricted share units granted under this plan vest at various times, generally
ranging from immediate vesting to vesting over a five-year period. Compensation
expense is recognized using a graded-vesting attribution method. Information
with respect to restricted share units is as follows:2003
    
    2002
    
    2001Shares granted
    
    
    6,908,328
    
    
    
    5,124,912
    
    
    
    68,481,815Weighted average fair value of shares
    
    $
    16.13
    
    
    $
    20.58
    
    
    $
    14.98Pre-tax compensation expense charged to earnings, net of cancellations
    
    $
    51,615
    
    
    $
    54,729
    
    
    $
    967,110


Deferred Bonus PlanOn September 1, 2000, Accenture implemented a deferred bonus plan for
employees based on tenure and performance. The plan provided for a loyalty
award, which vested immediately, and a performance award, which vested over a
period of three years. In connection with the grant of restricted share units,
Accenture terminated the deferred bonus plan for employees on July 19, 2001.
For all remaining vested and unvested benefits, 7,968,826 restricted share
units were granted to employees on July 19, 2001. At August 31, 2001, the
remaining liability for vested benefits under the terminated bonus plan was
$73,218, which was paid in cash in the first quarter of fiscal 2002.F-26ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)12. SHAREHOLDERS EQUITY AND CERTAIN SHAREHOLDERS AGREEMENTSClass I and II Common SharesEach Class I common share and each Class II common share of Accenture SCA
entitles its holder to one vote on all matters submitted to a vote of
shareholders of Accenture SCA. Each Accenture SCA Class II common share
entitles Accenture Ltd to receive a dividend or liquidation payment equal to
10% of any dividend or liquidation payment to which an Accenture SCA Class I
common share entitles its holder. Accenture Ltd holds all of the Class II
common shares of Accenture SCA. In the opinion of our counsel, under Accenture
SCAs articles of association, shares in Accenture SCA held by Accenture Ltd
are actions de commandite, or general partnership interests, and shares in
Accenture SCA held by our partners are actions de commanditaires, or limited
partnership interests. Accenture Ltd, as general partner of Accenture SCA, has
unlimited liability for the liabilities of Accenture SCA.Subject to contractual transfer restrictions, Accenture SCA is obligated,
at the option of the holder, to redeem any outstanding Accenture SCA Class I
common share at any time at a redemption price per share generally equal to the
market price of an Accenture Ltd Class A common share at the time of the
redemption. Accenture SCA may, at its option, pay this redemption price with
cash or
by delivering Accenture Ltd Class A common shares on a one-for-one basis.
In addition, each of our partners in the United States, Australia and Norway
has agreed that we may cause that partner to exchange that partners Accenture
SCA Class I common shares for Accenture Ltd Class A common shares on a
one-for-one basis if Accenture Ltd holds more than 40% of the issued share
capital of Accenture SCA and we receive a satisfactory opinion from counsel or
a professional tax advisor that such exchange should be without tax cost to
that partner. This one-for-one redemption price and exchange ratio will be
adjusted if Accenture Ltd holds more than a de minimis amount of assets (other
than its interest in Accenture SCA and assets it holds only transiently prior
to contributing them to Accenture SCA) or incurs more than a de minimis amount
of liabilities (other than liabilities for which Accenture SCA has a
corresponding liability to Accenture Ltd). Accenture Ltd does not intend to
hold any material assets other than its interest in Accenture SCA or to incur
any material liabilities such that this one-for-one redemption price and
exchange ratio would require adjustment. In order to maintain Accenture Ltds
economic interest in Accenture SCA, Accenture SCA will issue common shares to
Accenture Ltd each time additional Accenture Ltd Class A common shares are
issued.Holders of Accenture Canada Holdings Inc. exchangeable shares may exchange
their shares for Accenture Ltd Class A common shares at any time on a
one-for-one basis. Accenture Canada Holdings Inc. may, at its option, satisfy
this exchange with cash at a price per share generally equal to the market
price of an Accenture Ltd Class A common share at the time of the exchange.
Each exchangeable share of Accenture Canada Holdings Inc. entitles its holder
to receive distributions equal to any distributions to which an Accenture Ltd
Class A common share entitles its holder.In accordance with Luxembourg company law, the company is required to
transfer a minimum of 5% of its unconsolidated net profit as determined in
accordance with the Luxembourg legal and regulatory requirements for each
financial year to a legal reserve. This requirement ceases to be necessary
once the balance on the legal reserve reaches 10% of the issued share capital.
The legal reserve is not available for distribution to the shareholders. As of
August 31, 2003, $50,000,000 of Accenture SCAs undistributed, unconsolidated
retained earnings is legally reserved and the maximum legal reserve requirement
is approximately $150,000,000. We currently do not anticipate that Accenture
SCA will pay dividends. We may from time to time enter into financing
agreements that contain financial covenants and restrictions, some of which may
limit the ability of Accenture SCA to pay dividends.Common Shares IssuedNo common shares were issued during the year ended August 31, 2003. The
following common shares were issued during the year ended August 31, 2002:Balance at August
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at August31, 2001
    
    Acquisition
    
    ESPP
    
    Secondary
    
    31, 2002(in thousands)Class I
    
    
    752,584
    
    
    
    1,259
    
    
    
    
    
    
    
    
    
    
    
    753,843Class I-A
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Class I-B
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Class I-C
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000



F-27ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(In thousands of U.S. dollars)Class I-D
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000Class I-E
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000Class I-F
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000Class I-G
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000Class I-H
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000Class I-I
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Class I-J
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Class I-K
    
    
    16,050
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,050Class I-L
    
    
    
    
    
    
    
    
    
    
    5,026
    
    
    
    
    
    
    
    5,026Class I-M
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,627
    
    
    
    68,627Class II
    
    
    470,958
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    470,958

Accenture Stock Employee Compensation TrustOn April 17, 2002 Accenture Ltds board of directors approved the creation
of the SECT. The purpose of the SECT is to acquire Accenture Ltd Class A common
shares to be used to fund equity-based awards for Accenture employees,
including future Accenture
partners. The SECT is a non-qualified grantor trust whose financial
statements are consolidated with the Companys. In fiscal 2002, Accenture
contributed $300,000 to the SECT. In March 2003, the Company contributed an
additional $150,000 to the SECT. During fiscal 2003 and fiscal 2002, the SECT
purchased approximately 8,619,800 and 12,562,300 Accenture Ltd Class A common
shares, respectively, with aggregate purchase prices totaling $151,763 and
$221,110, respectively. The SECT transferred 3,100,300 shares for issuance to
Accenture employees under various equity programs. As of August 31, 2003,
$83,280 of Restricted cash on the Consolidated Balance Sheet remained available
for share purchases.Share Management PlanAccenture redeems or purchases certain shares from partners and employees.
On July 11, 2002, Accenture Ltds board of directors authorized the
utilization of $600,000 for such acquisitions from partners, former partners
and their permitted transferees and for acquisition of certain Accenture Ltd
Class A common shares awarded to employees pursuant to restricted share units
issued in connection with the initial public offering of the Accenture Ltd
Class A common shares. Of the $600,000 previously authorized, $311,258 was
utilized in fiscal 2003, primarily pursuant to quarterly tender offers made to
Accenture SCA Class I shareholders by controlled subsidiaries of Accenture SCA
that redeemed or purchased an aggregate of 15,387,401 Accenture SCA Class I
common shares and 85,153 Accenture Canada Holdings Inc. exchangeable shares for
a combined cost of $269,966. Of the $600,000 previously authorized, $288,742
remained available for future share purchases at August 31, 2003.Other Share PurchasesAccenture purchased $249,073 of Accenture Ltd Class A common shares in
open-market purchases in addition to Accenture Ltd Class A common shares
purchased by the SECT during the year ended August 31, 2002. Accenture did not
purchase any such shares in open-market purchases in fiscal 2003. During
fiscal 2003, Accenture acquired Accenture Ltd Class A common shares for a cost
of $98,810 from employees electing net share delivery under the ESPP and Share
Incentive Plan.Accenture SCA Transfer Rights AgreementAccenture SCA and each of the partners who own shares of Accenture SCA
have entered into a transfer rights agreement. The parties to the transfer
rights agreement, other than Accenture SCA, are referred to as covered
persons.The Accenture SCA shares covered by the transfer rights agreement
generally include all Class I common shares of Accenture SCA owned by a covered
person. The shares covered by the transfer rights agreement are referred to as
covered shares.The articles of association of Accenture SCA provide that shares of
Accenture SCA (other than those held by Accenture Ltd) may be transferred only
with the consent of the Accenture SCA supervisory board or its delegate, the
Accenture SCA partnersF-28ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

committee. In addition, by entering into the transfer rights agreement, each
party (other than Accenture Ltd) agrees, among other things, to:
    
    except as described below, maintain beneficial ownership of his
or her covered shares received on or prior to the date of Accenture
Ltds initial public offering for a period of eight years thereafter;
and
    
    maintain beneficial ownership of at least 25% of his or her
covered shares received on or prior to the date of Accenture Ltds
initial public offering as long as he or she is an employee of
Accenture.Covered persons who continue to be employees of Accenture will be
permitted to transfer a percentage of the covered shares owned by them on each
anniversary of the offering commencing on the first anniversary of Accenture
Ltds initial public offering and in increasing amounts over the subsequent
seven years.In addition, at any time after the third anniversary of the date of the
consummation of our transition to a corporate structure, covered persons
holding Accenture SCA Class I common shares may, without restriction, require
Accenture SCA to redeem any Accenture SCA Class I common share held by such
holder for a redemption price per share generally equal to the lower of the
market price of an Accenture Ltd Class A common share and $1. Accenture SCA
may, at its option, pay this redemption price in cash or be delivering
Accenture Ltd Class A common shares. All transfer restrictions applicable to a
covered person under the transfer rights agreement terminate upon death.The transfer rights agreement will continue in effect until the earlier of
50 years from the date of the transfer rights agreement and the time it is
terminated by the vote of 66 2/3% of the votes represented by the covered
shares owned by covered persons who are employees of Accenture. The transfer
restrictions will not terminate upon the expiration or termination of the
transfer rights agreement unless they have been previously waived or terminated
under the terms of the transfer rights agreement. The transfer rights agreement
may generally be amended at any time by the affirmative vote of 66 2/3% of the
votes represented by the covered shares owned by covered persons who are
employees of Accenture. Amendment of the transfer restrictions also requires
the consent of Accenture SCA.The transfer restrictions and the other provisions of the transfer rights
agreement may be waived at any time by the Accenture SCA partners committee in
specified circumstances. Subject to the foregoing, the provisions of the
transfer rights agreement may generally be waived by the affirmative vote of 66
2/3% of the votes represented by the covered shares owned by covered persons
who are employees of Accenture. A general waiver of the transfer restrictions
also requires the consent of Accenture SCA.Accenture Ltd and Accenture SCA Common AgreementAccenture Ltd and Accenture SCA and certain of the covered persons under
the transfer rights agreement described above under  Accenture SCA Transfer
Rights Agreement have entered into a common agreement, and each other person
who becomes a partner in the future will be required to enter into the common
agreement, under which each such covered person agrees not to transfer any of
his or her covered shares under the transfer rights agreement until July 24,
2005, except to participate as a seller in underwritten public offerings, share
purchases, sales or redemptions or other transactions, in each case as approved
in writing by Accenture SCA or Accenture Ltd; and/or to transfer to estate
and/or tax planning vehicles, family members and charitable organizations that
become bound by the terms of the common agreement, in each case as approved in
writing by Accenture SCA or Accenture Ltd.13. MINORITY INTERESTPartners resident in Canada and New Zealand received Accenture Canada
Holdings Inc. exchangeable shares and Accenture Ltd Class X common shares in
connection with the transition to a corporate structure. Holders of Accenture
Canada Holdings Inc. exchangeable shares may exchange their shares for
Accenture Ltd Class A common shares on a one-for-one basis. Accenture Canada
Holdings Inc. may, at its, option, satisfy this exchange with cash at a price
per share generally equal to the market price of an Accenture Ltd Class A
common share at the time of the exchange. Each exchangeable share of Accenture
Canada Holdings Inc.F-29ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

entitles its holder to receive distributions equal to any
distributions to which an Accenture Ltd Class A common share entitles its
holder.14. RELATED PARTIESAmounts due to/due from related parties at August 31, 2003 and 2002 are
payable to/receivable from those individuals who were partners of Accenture
prior to May 31, 2001 in relation to pre-incorporation matters
        .15. RELATIONSHIP WITH ARTHUR ANDERSENThe International Chamber of Commerce appointed a Tribunal, that by its
Final Award dated July 28, 2000, ruled that Andersen Worldwide Société
Coopérative (AW-SC) had breached its material obligations under its
agreements with the predecessors of many of what are now Accenture Ltds
controlled subsidiaries in fundamental respects and those entities were excused
from any further obligations to AW-SC and member firms of Arthur Andersen (
AA) as of August 7, 2000. The ruling stated that amounts due under those
agreements, which were escrowed between 1998 and 1999 of $512,324 plus accrued
interest, should be paid to AA as directed by AW-SC and allocated the costs of
the proceeding among the parties. The escrowed funds, along with net
accumulated interest on investments, were transferred to AA by the escrow agent
on various dates in September 2000. Accenture, AW-SC and AA entered into a
Memorandum of Understanding (MOU), which provided for payments to AA of
$556,000, including the payment of $313,832 for amounts due to AW-SC, the
purchase of intangible assets for $157,000 and the payment of $85,000 for the
settlement of all interfirm payables.Pursuant to the MOU, Accenture and AA entered into (1) a six-year services
agreement under which AA would provide certain services to Accenture for
payments to AA of $60,000 per year, (2) a five-year agreement under which AA
would provide certain training facilities to Accenture for payments to AA of
$60,000 per year, and (3) a five-year agreement under which Accenture would
provide $22,500 per year of certain services at no cost to AA; each agreement
was effective January 1, 2001. Payments due under the five-year and six-year
services agreements were to be based upon rates established by AA that
Accenture determined would exceed the rates that they charge for similar
services to unrelated parties (the fair value of those services). The present
value of the fair values of these services determined by reference to the fees
usually received for such services was recorded as a liability and as a
distribution to partners as of December 2000. These liabilities, which
aggregated $190,962, were reported as distributions to partners because the
liabilities were incurred in connection with Accentures separation from AA.
At August 31, 2001, amounts due to/from AA/AW-SC and Accenture were no longer
classified as related party balances.In October 2002, Accenture and Arthur Andersen LLP terminated the prior
training facility services agreement, as well as the services agreements by
which Arthur Andersen LLP and other Arthur Andersen firms were to provide
services to Accenture and by which Accenture was to provide Arthur Andersen LLP
and other Arthur Andersen firms with services. In conjunction with the
termination of all contracts and in settlement of all related matters with
Arthur Andersen LLP and other Arthur Andersen firms, Accenture paid Arthur
Andersen LLP $190,290. This payment offset previously accrued amounts and
resulted in an immaterial gain. In October 2002, Accenture and Arthur Andersen
LLP also entered into a new facility services agreement, which provides
Accenture with the use of Arthur Andersen LLPs training facility in St.
Charles, Illinois, at market rates through July 1, 2007. Accenture has
committed to spend a minimum of $135,000 over the five-year period ending July
1, 2007.16. LEASE COMMITMENTSAccenture has various lease agreements, principally for office space, with
various renewal options. Rental expense (net of sublease income from third
parties of $18,950 in fiscal 2003, $13,824 in fiscal 2002, and $12,911 in
fiscal 2001) including operating costs and taxes, was $280,714 in fiscal 2003,
$264,982 in fiscal 2002, and $207,757 in fiscal 2001. Future minimum rental
commitments under non-cancelable operating leases as of August 31, 2003, are as
follows:Operating
    
    OperatingLease
    
    SubleasePayments
    
    Income2004
    
    $
    261,212
    
    
    $
    (14,803
    )2005
    
    
    214,619
    
    
    
    (6,049
    )



F-30ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

2006
    
    
    205,593
    
    
    
    (5,154
    )2007
    
    
    178,977
    
    
    
    (4,050
    )2008
    
    
    157,660
    
    
    
    (3,507
    )Thereafter
    
    
    1,138,920
    
    
    
    (13,501
    )$
    2,156,981
    
    
    $
    (47,064
    )


17. COMMITMENTS AND CONTINGENCIESGuaranteesAs a result of our increase in ownership percentage of Accenture HR
Services from 50 percent to 100 percent, Accenture may be required to make
payments totaling up to $187,500 in additional purchase price over a five-year
period starting February 28, 2002 conditional on Accenture HR Services
achieving growth in revenues. As of August 31, 2003, no payments had been
made, and should any payments be made in the future, they will result in an
increase to goodwill.In connection with Accenture increasing its ownership interest in Avanade,
Inc. from 50 percent to 78 percent, Accenture has the right to purchase
substantially all of the remaining outstanding shares of Avanade, Inc. at fair
market value but not less than $28,650 and not to exceed $58,650 anytime after
December 31, 2004 or earlier if certain events occur. Accenture may also be
required to purchase substantially all of the remaining outstanding shares of
Avanade, Inc. anytime after December 31, 2006, or earlier if certain events
occur, for fair market value but not less than $28,650 and not to exceed
$58,650.Accenture has various agreements in which it may be obligated to indemnify
the other party with respect to certain matters. Generally, these
indemnification clauses are included in contracts arising in the normal course
of business under which the Company customarily agrees to hold the other party
harmless against losses arising from a breach of representations related to
such matters as title to assets sold and licensed or certain intellectual
property rights. Payments by Accenture under such indemnification clauses is
generally conditioned on the other party making a claim that is subject to
challenge by Accenture and dispute resolution procedures specified in the
particular contract. Further, the Companys obligations under these agreements
may be limited in terms of time and/or amount, and in some instances, Accenture
may have recourse against third parties for certain payments made by the
Company. It is not possible to predict the maximum potential amount of future
payments under these indemnification agreements due to the conditional nature
of Accentures obligations and the unique facts of each particular agreement.
Historically, payments made by the Company under these agreements have not been
material. As of August 31, 2003, management was not aware of any
indemnification agreements that would require material payments.As part of a new agreement to provide services to a group of European
clients for approximately seven years, Accenture and each of its two other
consortium participants agreed to guarantee the performance of each other
consortium participant. As of August 31, 2003, under this arrangement, in the
event of performance default by one or both of the other consortium
participants, Accenture could be liable to the clients up to a maximum of
$163,319 for damages incurred and penalties. There are recourse provisions
among the consortium participants that would allow Accenture to recover from
the other consortium participants all but $38,233 if Accentures remittances to
the clients are the result of a performance default by one or both of the other
consortium participants.Accenture has entered into contracts with certain non-U.S. government
agencies whereby it has joint and several liability with its consortium
participants. Under these arrangements, Accenture could be liable to its
clients for any default of its consortium participants. As of August 31, 2003,
the total value of work being performed by the consortium participants was
$22,267. Accenture has recourse against its consortium participants for the
full amount of any payment made to a client as a result of performance default
by the other consortium participants.Legal ContingenciesAt August 31, 2003, Accenture or its present personnel had been named as a
defendant in various litigation matters. All of these are civil in nature.
Based on the present status of these litigation matters, the management of
Accenture believes they will not ultimately have a material effect on the
results of operations, financial position, or cash flows of Accenture.F-31ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)


18. SEGMENT REPORTINGOperating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker, or decision making group, in deciding how to
allocate resources and in assessing performance.Accentures chief operating decision maker is the chief executive officer.
The operating segments are managed separately because each operating segment
represents a strategic business unit that serves clients in different
industries. The reportable operating segments are the five operating groups,
which are Communications & High Tech, Financial Services, Government, Products
and Resources.In the first quarter of fiscal 2003, we transitioned our Health Services
industry group from our Financial Services operating group to our Products
operating group. In addition, we changed the format of internal financial
information presented to our chief executive officer to reflect changes in our
internal accounting method of allocating certain costs to segments from a
partner basis to a total controllable cost basis for purposes of determining
segment operating income and assessing segment performance. Segment results for
all periods presented were revised to reflect these changes.F-32ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)


Reportable SegmentsComm. &Year ended
    
    High
    
    FinancialAugust 31, 2003
    
    Tech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    Other
    
    TotalRevenues before reimbursement
    
    $
    3,290,372
    
    
    $
    2,355,321
    
    
    $
    1,581,758
    
    
    $
    2,613,303
    
    
    $
    1,966,043
    
    
    $
    11,202
    
    
    $
    11,817,999Depreciation (1)
    
    
    88,479
    
    
    
    62,599
    
    
    
    31,186
    
    
    
    60,127
    
    
    
    51,422
    
    
    
    
    
    
    
    293,813Operating income
    
    
    321,168
    
    
    
    306,094
    
    
    
    282,308
    
    
    
    428,217
    
    
    
    213,448
    
    
    
    
    
    
    
    1,551,235Assets at August 31 (2)
    
    $
    365,101
    
    
    $
    213,441
    
    
    $
    354,444
    
    
    $
    362,443
    
    
    $
    295,114
    
    
    $
    109,806
    
    
    $
    1,700,349

Comm. &Year ended
    
    High
    
    FinancialAugust 31, 2002
    
    Tech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    Other
    
    TotalRevenues before reimbursements
    
    $
    3,181,658
    
    
    $
    2,366,427
    
    
    $
    1,315,819
    
    
    $
    2,695,978
    
    
    $
    2,005,045
    
    
    $
    9,342
    
    
    $
    11,574,269Depreciation (1)
    
    
    100,341
    
    
    
    74,732
    
    
    
    30,737
    
    
    
    65,785
    
    
    
    61,672
    
    
    
    
    
    
    
    333,267Operating income
    
    
    221,821
    
    
    
    291,186
    
    
    
    159,232
    
    
    
    511,674
    
    
    
    201,538
    
    
    
    
    
    
    
    1,385,451Assets at August 31 (2)
    
    $
    434,805
    
    
    $
    293,696
    
    
    $
    312,270
    
    
    $
    283,906
    
    
    $
    302,653
    
    
    $
    39,769
    
    
    $
    1,667,099

Comm. &Year ended
    
    High
    
    FinancialAugust 31, 2001
    
    Tech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    Other(3)
    
    TotalRevenues before reimbursements
    
    $
    3,238,256
    
    
    $
    2,626,567
    
    
    $
    1,003,235
    
    
    $
    2,623,440
    
    
    $
    1,933,225
    
    
    $
    18,997
    
    
    $
    11,443,720Depreciation (1)
    
    
    76,901
    
    
    
    59,701
    
    
    
    21,053
    
    
    
    51,512
    
    
    
    47,905
    
    
    
    
    
    
    
    257,072Operating income
    
    
    429,452
    
    
    
    665,783
    
    
    
    (7,708
    )
    
    
    298,085
    
    
    
    250,126
    
    
    
    (939,982
    )
    
    
    695,756Assets at August 31 (2)
    
    $
    500,762
    
    
    $
    274,301
    
    
    $
    161,584
    
    
    $
    270,826
    
    
    $
    258,146
    
    
    $
    17,523
    
    
    $
    1,483,142


(1)
    
    This amount includes depreciation on property and equipment controlled by
each operating segment as well as an allocation for depreciation on
property and equipment they do not directly control.(2)
    
    Operating segment assets directly attributed to an operating segment and
provided to the chief operating decision maker include Receivables from
clients, current and non-current Unbilled services and Deferred revenues.(3)
    
    In 2001, Other primarily includes the cost of the restricted share units
that were granted and vested as of August 31, 2001, as this amount was not
charged to the operating groups.The accounting policies of the operating segments are the same as those
described in Note 1, Summary of Significant Accounting Policies, except for the
cost of restricted share units as described in footnote 2.Geographic InformationRevenues are attributed to geographic areas based on where client services
are supervised.Americas
    
    EMEA (1)
    
    Asia Pacific
    
    TotalFiscal 2003Revenues before reimbursements
    
    $
    5,671,026
    
    
    $
    5,352,850
    
    
    $
    794,123
    
    
    $
    11,817,999Reimbursements
    
    
    907,628
    
    
    
    560,391
    
    
    
    111,222
    
    
    
    1,579,241Revenues
    
    
    6,578,654
    
    
    
    5,913,241
    
    
    
    905,345
    
    
    
    13,397,240Long lived assets at August 31
    
    
    325,250
    
    
    
    252,001
    
    
    
    73,204
    
    
    
    650,455



F-33ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)For the Years Ended August 31, 2003, 2002 and 2001
(In thousands of U.S. dollars)Americas
    
    EMEA (1)
    
    Asia Pacific
    
    TotalFiscal 2002Revenues before reimbursements
    
    $
    5,835,992
    
    
    $
    4,962,942
    
    
    $
    775,335
    
    
    $
    11,574,269Reimbursements
    
    
    872,019
    
    
    
    530,534
    
    
    
    128,202
    
    
    
    1,530,755Revenues
    
    
    6,708,011
    
    
    
    5,493,476
    
    
    
    903,537
    
    
    
    13,105,024Long lived assets at August 31
    
    
    403,915
    
    
    
    265,023
    
    
    
    47,566
    
    
    
    716,504

Americas
    
    EMEA (1)
    
    Asia Pacific
    
    TotalFiscal 2001Revenues before reimbursements
    
    $
    6,112,986
    
    
    $
    4,484,075
    
    
    $
    846,659
    
    
    $
    11,443,720Reimbursements
    
    
    987,947
    
    
    
    516,567
    
    
    
    113,638
    
    
    
    1,618,152Revenues
    
    
    7,100,933
    
    
    
    5,000,642
    
    
    
    960,297
    
    
    
    13,061,872Long lived assets at August 31
    
    
    567,987
    
    
    
    199,296
    
    
    
    55,035
    
    
    
    822,318


(1)
    
    EMEA includes Europe, Middle East and Africa.The following table presents revenues before reimbursements by major types of
services:Year EndedAugust 31,2003
    
    2002
    
    2001Consulting
    
    $
    7,915,773
    
    
    $
    8,770,396
    
    
    $
    9,409,623Outsourcing
    
    
    3,567,254
    
    
    
    2,609,204
    
    
    
    1,968,771Other
    
    
    334,972
    
    
    
    194,669
    
    
    
    65,326Revenues before reimbursements
    
    
    11,817,999
    
    
    
    11,574,269
    
    
    
    11,443,720Reimbursements
    
    
    1,579,241
    
    
    
    1,530,755
    
    
    
    1,618,152Revenues
    
    $
    13,397,240
    
    
    $
    13,105,024
    
    
    $
    13,061,872


19. SUBSEQUENT EVENTSOn September 8, 2003, pursuant to a tender offer made to Accenture SCA
Class I shareholders on August 7, 2003, Accenture SCA and one of its controlled
subsidiaries redeemed or purchased an aggregate of 6,519,532 Accenture SCA
Class I common shares at a price of $19.91 per share. At the same time,
Accenture International SARL purchased 52,861 Accenture Canada Holdings Inc.
exchangeable shares at a price of $19.91 per share. The total cash outlay for
these transactions was $130,856. These transactions were also undertaken
pursuant to Accentures Share Management Plan for Accentures partners, former
partners and their permitted transferees and the acquisitions were undertaken
pursuant to the previously mentioned board of directors authorization.On September 29, 2003, also as part of its Share Management Plan,
Accenture Ltd closed an underwritten public offering of Accenture Ltd Class A
common shares. The offering was comprised of 57,394,595 such shares newly
issued by Accenture Ltd and 24,605,405 of such shares offered by Accenture
partners, former partners and their permitted transferees. The price to the
public was $21.00 per share and the price net of the underwriters discount of
2.85% was $20.40 per share. Accenture Ltd received $1,170,936 as a result of
the issuance of 57,394,595 shares newly issued by Accenture Ltd. On September
30, 2003, the underwriters, in connection with the underwritten public
offering, exercised their option to purchase an additional 12,300,000 newly
issued Class A common shares at the same price per share.On October 30, 2003, pursuant to a tender offer made to Accenture SCA
Class I shareholders, Accenture SCA and one of its controlled subsidiaries
redeemed or purchased an aggregate of 71,000,000 Accenture SCA Class I shares
at a price of $21.00 perF-34ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)

share. At the same time, Accenture International SARL
purchased 816,561 Accenture Canada Holdings Inc. exchangeable shares at a price
of $21.00 per share.On November 14, 2003, Accenture Ltds board of directors authorized an
additional $150,000 for the purchase of Accenture Ltd Class A common shares
from time to time in the open market. Shares acquired in open-market purchases
by Accenture will continue to be used by the SECT to provide shares for select
Accenture employee benefits, including equity awards to future partners. The
Accenture Ltd board of directors also authorized an additional
$600,000 for use in connection with acquisitions of shares from partners, former partners and
their permitted transferees and for acquisition of certain Accenture Ltd Class
A common shares awarded to employees pursuant to restricted share units issued
in connection with our initial public offering. Accenture SCA, its controlled
subsidiaries and the SECT will be receiving these funds and will
utilize them in accordance with the authorizations of the Accenture
Ltd board of directors.F-35ACCENTURE SCANOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(In thousands of U.S. dollars)


20. QUARTERLY DATA (unaudited)First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    AnnualFiscal 2003Revenues before reimbursements
    
    $
    2,929,958
    
    
    $
    2,826,196
    
    
    $
    3,044,836
    
    
    $
    3,017,009
    
    
    $
    11,817,999Reimbursements
    
    
    397,489
    
    
    
    362,827
    
    
    
    373,593
    
    
    
    445,332
    
    
    
    1,579,241Revenues
    
    
    3,327,447
    
    
    
    3,189,023
    
    
    
    3,418,429
    
    
    
    3,462,341
    
    
    
    13,397,240Operating income
    
    
    429,197
    
    
    
    367,821
    
    
    
    404,122
    
    
    
    350,095
    
    
    
    1,551,235Net income
    
    
    267,118
    
    
    
    248,640
    
    
    
    272,845
    
    
    
    251,283
    
    
    
    1,039,886Fiscal 2002Revenues before reimbursements
    
    $
    2,988,630
    
    
    $
    2,913,289
    
    
    $
    2,980,678
    
    
    $
    2,691,672
    
    
    $
    11,574,269Reimbursements
    
    
    352,692
    
    
    
    415,148
    
    
    
    369,982
    
    
    
    392,933
    
    
    
    1,530,755Revenues
    
    
    3,341,322
    
    
    
    3,328,437
    
    
    
    3,350,660
    
    
    
    3,084,605
    
    
    
    13,105,024Operating income
    
    
    414,257
    
    
    
    388,279
    
    
    
    434,986
    
    
    
    147,929
    
    
    
    1,385,451Net income
    
    
    198,517
    
    
    
    25,821
    
    
    
    274,591
    
    
    
    80,281
    
    
    
    579,210



F-36ACCENTURE SCA
SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf on November 13, 2003 by the undersigned, thereunto duly
authorized.ACCENTURE SCA, represented by its general
partner, Accenture Ltd, itself represented
by its duly authorized signatoryBy:
    
    /s/ DOUGLAS G. SCRIVNERName: Douglas G. Scrivner


POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Joe W. Forehand, Harry L. You and
Douglas G. Scrivner, and each of them, as his or her true and lawful
attorneys-in-fact and agents, with power to act with or without the others and
with full power of substitution and resubstitution, to do any and all acts and
things and to execute any and all instruments which said attorneys and agents
and each of them may deem necessary or desirable to enable the Registrant to
comply with the U.S. Securities Exchange Act of 1934, as amended, and any
rules, regulations and requirements of the U.S. Securities and Exchange
Commission thereunder in connection with the Registrants Annual Report on Form
10-K for the fiscal year ended August 31, 2003 (the Annual Report), including
specifically, but without limiting the generality of the foregoing, power and
authority to sign the name of the Registrant and the name of the undersigned,
individually and in his or her capacity as a director or officer of the general
partner of the Registrant, to the Annual Report as filed with the U.S.
Securities and Exchange Commission, to any and all amendments thereto, and to
any and all instruments or documents filed as part thereof or in connection
therewith; and each of the undersigned hereby ratifies and confirms all that
said attorneys and agents and each of them shall do or cause to be done by
virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on November 13, 2003 by the following persons on
behalf of Accenture Ltd, the general partner of the Registrant, and in the
capacities indicated.Signature
    
    Title*/s/ JOE W. FOREHAND
    
    Chief Executive Officer andChairman of the Board of Accenture LtdJoe W. Forehand
    
    (principal executive officer)/s/ STEPHAN A. JAMES
    
    DirectorStephan A. James/s/ STEVEN A. BALLMER
    
    DirectorSteven A. Ballmer/s/ DINA DUBLON
    
    DirectorDina Dublon/s/ KARL-HEINZ FLÖTHER
    
    DirectorKarl-Heinz Flöther/s/ JOEL P. FRIEDMAN
    
    DirectorJoel P. Friedman



S-1Signature
    
    Title/s/ WILLIAM D. GREEN
    
    DirectorWilliam D. GreenDennis
F. Hightower
    
    DirectorWilliam
L. Kimsey
    
    DirectorRobert
I. Lipp
    
    Director/s/ BLYTHE J. MCGARVIE
Blythe J. McGarvie
    
    Director/s/ SIR MARK MOODY-STUART
Sir Mark Moody-Stuart
    
    Director/s/ MASAKATSU MORI
Masakatsu Mori
    
    Director/s/ WULF VON SCHIMMELMANN
Wulf von Schimmelmann
    
    Director/s/ CARLOS VIDAL
Carlos Vidal
    
    Director/s/ HARRY L. YOU
Harry L. You
    
    Chief Financial Officer of Accenture Ltd
(principal financial and accounting officer)


*
    
    Title indicates position with the general partner, Accenture Ltd.S-2