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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
   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, 2004ORo
    
    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
    
    98-0351796(State or other jurisdiction of
incorporation or organization)
    
    (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.   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 (§229.405 of this chapter) 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 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 27, 2004 was approximately $20,448,400,111,
based on the closing price of the Accenture Ltd Class A common shares, par
value $0.0000225 per share, reported on the New York Stock Exchange on such
date of $23.10 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 29, 2004 was 889,033,554 (which
number does not include 82,259,900 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 5, 2004, are incorporated by
reference in Parts I and III.




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TABLE OF CONTENTS PART IItem 1.
    
    Business
    
    2Item 2.
    
    Properties
    
    25Item 3.
    
    Legal Proceedings
    
    26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    26PART IIItem 5.
    
    Market for Registrants Common Equity and Related Stockholder Matters
    
    27Item 6.
    
    Selected Financial Data
    
    29Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    31Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    51Item 8.
    
    Financial Statements and Supplementary Data
    
    52Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    52Item 9A.
    
    Controls and Procedures
    
    52Item 9B.
    
    Other Information
    
    52PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    53Item 11.
    
    Executive Compensation
    
    53Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    53Item 13.
    
    Certain Transactions and Relationships
    
    54Item 14.
    
    Principal Accounting Fees and Services
    
    54PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    55Certification of the CEO Pursuant to Section 302Certification of the CFO Pursuant to Section 302Certification of the CEO Pursuant to Section 906Certification of the CFO Pursuant to Section 9062001 Incorporated Portions of LTD 10-K




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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 (the Exchange Act) 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 these differences 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://investor.accenture.com. 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. You also may read and copy any materials we file with the SEC at the SECs
Public Reference Room at 450 Fifth Street, NW, Washington, DC, 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. In this Annual Report on Form 10-K, we use the terms Accenture, we,
our Company, our and us 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. We use the term partner to refer to the executive
employees of Accenture with the partner title. 1




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ITEM 1. BUSINESS Overview Accenture is one of the worlds leading management consulting, technology
services and outsourcing organizations. We had approximately $13.7 billion of
revenues before reimbursements for fiscal 2004. As of August 31, 2004, we had
more than 100,000 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. See
Managements Discussion and Analysis of Financial Condition and Results of
Operations-Revenues by Segment/Operating Group below for additional detail
regarding the geographic distribution of our revenues. 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. Our high performance business strategy builds on our expertise in
consulting, technology and outsourcing to help clients perform at the highest
levels so they can create sustainable value for their customers and
shareholders. 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 to
multiple clients. Our Business Consulting and Technology & Systems Integration capability
groups 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 the development of solutions for our clients. The
subject matter experts within these capability groups work closely with the
professionals in our operating groups to develop and deliver solutions to
clients. Through our outsourcing operations, we provide customized technology and
business services to clients on an outsourced basis. Our outsourcing
operations also include our business process outsourcing (BPO) businesses,
which provide function-specific and/or industry-specific business services to
multiple clients on an outsourced basis through standard operating models. Client engagement teams typically consist of industry experts, capability
specialists and professionals with local market knowledge. Our client teams
are supported by our Global Delivery Network, which applies a systematic
approach that focuses on creating and capturing proven, repeatable processes, 2




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methodologies, tools and architectures to deliver price-competitive
technology and outsourcing solutions and services to our clients. 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 17 (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, systems
integration and BPO services and solutions to the communications, high
technology, media and entertainment industries. Professionals in our
Communications & High Tech operating group help clients enhance their business
results by seizing the opportunities made possible by the convergence of
communications, computing and content. 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, repeatable solutions,
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. We
offer a suite of reusable solutions, called Accenture Communications
Solutions, that address major business and operational issues
related to broadband and Internet protocol-based networks and
services, including business intelligence, billing transformation,
customer contact transformation, sales force transformation, service
fulfillment, and next-generation network optimization. Our
Communications industry group 3




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represented more than two-thirds of
our Communications & High Tech operating groups revenues before
reimbursements in fiscal 2004.  
    
    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 and solutions 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, distribute and protect content
across numerous media channels. Financial Services Our Financial Services operating group focuses on the opportunities
created by our clients needs 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.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-based 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. Through Accenture
Insurance Services, one of our 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. 4




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Products Our Products operating group comprises the following industry groups:  
    
    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, biotechnology and life sciences companies and
policy-making authorities. We are helping our clients in the health
plan and health insurance
areas in North America connect 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 efficiencies by improving
processes and leveraging technology. We also work with clients to
generate value from strategic mergers and acquisitions. In
addition, our Industrial Equipment industry group 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 pharmaceutical,
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. We add 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.
Our Retail & Consumer industry group represented approximately
one-third of our Products operating groups revenues before
reimbursements in fiscal 2004.
    
    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 5




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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. Through Navitaire, Inc., one of our 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:  
    
    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
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. Our key areas of focus
include helping clients 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 exploit cross-industry
synergies.
    
    Forest Products.Our Forest Products industry group helps
companies 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
companies 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 our BPO businesses, we provide outsourced
customer-care services to utilities, municipalities and retail
energy companies in North America. 6




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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 and education agencies in
26 countries, helping them transform to meet the challenges of a rapidly
changing public-sector environment. 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. Our work with clients in the U.S.
federal government represented more than one-third of our Government operating
groups revenues before reimbursements in fiscal 2004. Our offerings help public-sector clients address their most pressing
needs, including reducing costs, increasing operational efficiency, enhancing
revenues, improving customer service, and ensuring the security of citizens and
businesses. We advise on, implement and, in some cases, operate government
services. We work with clients to transform their back-office operations,
build Web interfaces and enable
services to be delivered over the Internet. We also provide processing
services in areas such as human resources, social services, ticketing and
tolling, collections and procurement. As governments are pressed to operate at higher levels with reduced
resources, we are introducing innovative contract models from the private
sector that are becoming increasingly popular with governments. For instance,
we pioneered Public Sector Value, a patent-pending approach that enables
governments to measure outcomes and make decisions that directly improve
citizen satisfaction. This approach is similar to the ways in which publicly
traded companies measure shareholder value to enhance the value they deliver to
shareholders. Capability Groups Our Business Consulting and Technology & Systems Integration capability
groups are the skill-based innovation engines through which we develop our
knowledge capital; build world-class skills and capabilities; and create,
acquire and manage key assets central to the development of solutions for our
clients. The subject matter experts within these capability groups work
closely with the professionals in our operating groups and are intimately
involved in the delivery of the full range of consulting, technology and
outsourcing services to clients. Business Consulting Capability Group Our Business Consulting capability group comprises five service lines:  
    
    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 upon 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. 7




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
    
    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 finance capability services also address pricing
and yield management, revenue cycle management, billing, credit risk
and collection effectiveness, lending and debt recovery. Our
performance management services address shareholder value targeting,
scorecard and performance metrics development, performance reporting
solutions and applied business analytics to improve profitability.
Our professionals, who often leverage the resources of Accenture
Finance Solutions, one of our BPO businesses, 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.
    
    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 at Accenture Learning and Accenture HR
Services, two of our 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 identify and implement
high-performance business value creation and transformation
opportunities by delivering independent strategies and broad
business consulting services focused on the CEO agenda. Our
professionals work closely with the highest levels of our clients
organizations to help them achieve sustainable performance
improvement. With deep skills and capabilities in corporate
transformation and restructuring, growth and innovation strategies,
mergers and acquisitions, organization and change strategy, pricing
strategy and profitability assessment, post-merger integration,
shareholder value analysis and strategic IT effectiveness, we help
clients develop breakthrough strategic, operational and
transformation solutions to enhance shareholder value in both the
short and long term.
    
    Supply Chain Management.The professionals in our Supply
Chain Management service line work with clients across a broad range
of industries to develop high-performance supply chains that enable
profitable growth in new and existing markets. Our professionals
combine global industry expertise and skills in sourcing and
procurement, supply chain planning, manufacturing and design,
fulfillment and service management to help organizations transform
their supply chain capabilities. We work with clients to implement
innovative solutions that align operating models to support business
strategies; improve the effectiveness of pricing; leverage
outsourcing to improve supply chain services; adopt radio frequency
identification (RFID) and other emerging technologies; and enhance
the skills and capabilities of the supply chain workforce. 8




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Technology & Systems Integration Capability Group Our Technology & Systems Integration capability group comprises six main
components:  
    
    Architecture for Complex Solutions This area is
responsible for creating, building and deploying complex,
large-scale technology solutions in areas such as business
intelligence, data warehousing, enterprise resource planning,
enterprise content management and portals, and mobility and
messaging.
    
    Enterprise Solutions and Integration This group is
responsible for all of our packaged development efforts around
software application suites such as SAP, PeopleSoft, Siebel and
Oracle, among others, which typically integrate business processes,
technology and human performance components.
    
    Infrastructure Consulting Our Infrastructure Consulting
professionals provide highly specialized technology consulting
capabilities focused on infrastructure planning and transformation,
security, operations management and network management.
    
    Solutions Delivery Excellence This group is responsible
for developing and deploying our methodologies, tools and
architectures to support Accentures global delivery model for
consulting, technology and outsourcing services.
    
    Research & Development This component comprises our
research and development organization, Accenture Technology Labs,
which identifies and develops new technologies that we believe will
be the drivers of our clients growth and enable them to be first to
market with unique capabilities.
    
    Alliances & Intellectual Property This area is responsible
for managing our global alliances and overseeing our intellectual
property program, which are key enablers of our service offerings. Outsourcing Accenture provides a wide range of outsourcing services, including
business process outsourcing, application outsourcing and infrastructure
outsourcing. Business Process Outsourcing (BPO) Services We work with clients to develop and deliver business process innovations
that transform their businesses and deliver higher performance levels at lower
costs. Through our BPO services, we manage specific business processes or
functions for clients, providing solutions that are more efficient and
cost-effective than if the functions were provided in-house. We also offer more-standardized BPO services through our BPO businesses.
We currently have eight BPO businesses, each of which 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. 9




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Our eight BPO businesses are:  
    
    Accenture HR Servicesoffers enterprises seeking higher
levels of employee performance, productivity and satisfaction with
human resources services across the employee lifecycle, from
recruitment to payroll to pensions.
    
    Accenture Learningoffers companies and governments
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 Finance Solutionsoffers finance operations,
applications management, financial accounting and management
reporting services to help clients streamline financial management,
improve working capital and cash flow, and deliver permanent cost
savings from operational activities.
    
    Accenture Procurement Solutionsoffers
sourcing-to-settlement services, including strategic sourcing,
procure-to-pay transaction processing, supplier and contract
management, management reporting, procurement effectiveness, compliance and
electronic procurement services.
    
    Accenture Business Services for Utilitiesoffers utilities
across North America a variety of services including customer care,
finance and accounting, human resources, supply chain and
information technology, as well as facilities and field services.
    
    Accenture eDemocracy Servicesoffers election services to
election agencies around the world.
    
    Accenture Insurance Services (formerly Solutions Assurance
Vie, or S.A.V.)offers life insurance policy design and management
services, including high-volume transaction processing capabilities,
to help insurers accelerate the marketing of life insurance
products.
    
    Navitaireoffers leading, mid-size and low-fare airlines
with reservations, direct ticket distribution, revenue protection,
decision support, passenger revenue accounting and revenue
management services. Application Outsourcing Accenture takes a holistic approach to application outsourcing that goes
beyond traditional cost-cutting measures, helping clients improve the total
performance of application development and maintenance. We provide a wide array of application outsourcing services under flexible
arrangements, managing custom or packaged software applications  including
enterprise-wide applications such as SAP, PeopleSoft, Oracle and Siebel  over
their complete development and maintenance lifecycles. The scope of services
ranges from basic application management to application enhancement and
development for individual or multiple applications. We can also take
end-to-end responsibility for all of a clients information technology (IT)
function, including infrastructure and operations, leveraging our shared
services delivery groups and our application and infrastructure transformation
consulting expertise to deliver significant gains in client productivity. 10




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By transferring to Accenture the responsibility for one or more of their
applications, clients can leverage our assets, scale and global resources as
well as our secure, global infrastructure delivery capabilities. This allows
clients to maintain and control the overall performance of their IT
capabilities while reducing the complexity and costs associated with managing
third parties and increasing the flexibility, scalability, predictability and
security of their IT infrastructures. Infrastructure Outsourcing Accenture offers infrastructure outsourcing services coupled as part of
application outsourcing and BPO services arrangements. Our infrastructure
outsourcing services include hosting (data center operations, remote systems
management and development environment support); technical support (help desk,
eSupport and desk-side support services); network management (secure,
real-time, asynchronous voice and communications); security (security systems
management, disaster recovery and business continuity services); desktop
management and mobility (lifecycle management of desktop and mobility devices
and supporting software); and messaging and collaboration. Global Delivery Network Our Global Delivery Network  working in concert with client teams
comprising professionals from our operating groups, capability groups and
outsourcing operations  applies a systematic approach to technology and
outsourcing solutions and services delivery that capitalizes on our ability to
create and capture proven, repeatable processes, methodologies, tools and
architectures. With deep expertise in a range of hardware and software
technologies, professionals in our Global Delivery Network build, deploy and
maintain technology-based solutions, focusing on application development,
systems administration work and software maintenance. The Global Delivery Network professionals are responsible for our global
strategic delivery approach, which emphasizes quality, reduced risk, speed to
market and predictability. Our ultimate goal is to deliver price-competitive
solutions and services that drive higher levels of performance for our clients.
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  enhances our ability to capitalize on a vast
array of processes, methodologies, tools and architectures to deliver enhanced
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. The Global Delivery Network includes Avanade, Inc., our technology
business that focuses on large-scale technology integration based upon
Microsofts enterprise platform. Combining Microsofts understanding of
operating platforms and technologies with Accentures experience in delivering
solutions to 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. Alliances We have 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 with our own capabilities and
expertise, we create innovative, high-value business solutions for our clients. 11




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Some alliances are specifically aligned with one of our service lines,
thereby 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. 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 from
consulting services for implementing our alliance partners products and our
related services. Research and Innovation We are committed to developing leading-edge ideas. We believe that both
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 $272 million, $250 million and $235 million on research and development in fiscal years 2004, 2003 and 2002,
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. 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 generally
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. (Accenture Canada
Holdings), an indirect subsidiary of Accenture SCA. 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. 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 has separately agreed not to redeem any
Class X common share of a holder if such redemption would reduce the number of
Class X 12




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common shares held by that holder 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 holder, 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. For
example, see Certain Transactions -Accenture Ltd Voting Agreement in the
Annual Report on Form 10-K 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. This one-for-one redemption price and exchange ratio will be adjusted
if Accenture Ltd holds more than a de minimisamount 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 minimisamount 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 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 generally will acquire additional Accenture SCA common shares each time
additional Accenture Ltd Class A common shares are issued. Subject to contractual transfer restrictions, 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. 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 career 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. 13




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As of August 31, 2004, we had more than 100,000 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:  
    
    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;
    
    ability to deliver 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 our
intellectual property and that owned by third parties, 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. At August
31, 2004, we had 1,049 patent applications pending in the United States and
other jurisdictions and had been issued 151 U.S. patents and 50 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 14




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asset systems. We intend to 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 rates of change in the industries we serve. Uncertain global economic and political conditions continue to affect many
of our clients businesses. 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. Deterioration of global economic or
political conditions could increase these effects.  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
infrastructures 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. Negative publicity related to our client relationships, regardless
of its accuracy, may further damage our business by affecting our ability to
compete for new contracts. 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 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. 15




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Our engagements with clients may not be profitable or may be terminated by
our clients on short notice. Unexpected costs, delays or failures to achieve anticipated cost
reductions 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. When making proposals
for engagements, we estimate the costs and timing for completing the projects.
While the risks associated with all of these types of contracts are often
similar, an increasing number of outsourcing contracts entail the coordination
of operations, diverse geographic and competency workforces and geographically
distributed service centers, which further complicates the delivery of our
services and increases the magnitude of these risks. On outsourcing
engagements, we frequently hire employees from our clients and assume
responsibility for one or more of our clients business processes. Our
pricing, cost and profit margin estimates on outsourcing engagements frequently
include anticipated long-term cost savings from transformational and other
initiatives that we expect to achieve and sustain over the life of the
outsourcing
engagement. These estimates reflect our best judgment regarding our
clients costs, as well as the efficiencies of our methodologies and
professionals as we plan to deploy them on projects. Any increased or
unexpected costs, delays or failures to achieve anticipated cost reductions 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 meeting
revenue-enhancement, cost-saving or other contractually defined goals that 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, changes in client strategies 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.
Consequently, our profit margins in subsequent periods may be lower than
expected. 16




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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 from us, and any
significant extension of credit requires approval by senior levels of our
management. We had extended $455 million of such financing at August 31, 2004.  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 2004,
approximately 45% of our revenues before reimbursements were attributable to
our activities in the Americas, 48% 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;
    
    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 to these developments
in a timely manner. The pace of consolidation among our competitors, including vertical
integration of hardware and software vendors and service providers, continues.
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
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 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 serve clients and 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, 17




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including our ability to obtain and
successfully complete important client engagements and thus maintain or
increase our revenues. We continue to offer a variable component of compensation, the payment of
which is dependent upon our performance, to larger proportions of our global
workforce. We are increasing the use of equity-based incentives as a component
of our executives compensation, which may affect amounts of cash compensation.
We are also adjusting our compensation levels and adopting different methods
of compensation in order to attract and retain appropriate numbers of employees
with the diverse skills we need to serve clients, grow our business and
motivate these employees performance. Any of these actions 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.  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. A continuation of current pricing pressures
could result in permanent changes in pricing policies and delivery
capabilities. 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 off-shore resources to provide 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 18




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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, we may continue to experience erosion of
operating income as a percentage of revenues before reimbursements if present
trends continue.  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 those for personnel, support services and severance;
    
    our ability to maintain an appropriate headcount in each of our workforces;
    
    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 or payments of variable compensation to our employees; and
    
    global, regional and local economic and political conditions and
related risks, including acts of terrorism.  We continue 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 our outsourcing business
continues to grow, we may experience increased pressure on our overall
margins, particularly during the early stages of new outsourcing contracts. We continue to achieve a greater percentage of our revenues and growth
through business transformation outsourcing, our approach that combines
outsourcing with our other capabilities to help clients transform and outsource
key processes, applications and infrastructure to improve business performance.
This strategy could result in higher concentrations of revenues and
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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 terms than consulting
contracts and generally have lower gross margins than consulting contracts,
particularly in the first year. As our outsourcing business continues to grow,
we may experience increased pressure on our overall gross margins, particularly
during the early stages of these contracts.  On certain complex engagements where we partner with third parties, clients
are increasingly demanding that we guarantee the performance of our business
partners whom we do not control. Some engagements are complex and may require unique structures and
alliances. 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.  We may be exposed to potential risks relating to pending changes in our
systems and internal controls procedures and our ability to have those
controls attested to by our independent auditors. If we are not able to implement the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, our reputation, financial results and the market
price of our stock could suffer.While we believe that we have adequate
internal control procedures in place, we may be exposed to potential risks from
recent legislation requiring companies to evaluate their internal controls and
have those controls attested to by their independent auditors. We are
evaluating our internal control systems in order to allow our management to
report on, and our independent auditors to attest to, our internal controls, as
required as part of Annual Report on Form 10-K beginning with our report for
the fiscal year ending August 31, 2005. There is, at present, no precedent available with which to measure
compliance adequacy. Accordingly, there can be no assurance that we will
receive a positive attestation from our independent auditors. In the event we
identify significant deficiencies or material weaknesses in our internal
controls that we cannot remediate in a timely fashion or we are unable to
receive a positive attestation from our independent auditors with respect to
our internal controls, our reputation, financial results and the market price
of our stock could suffer. We may experience difficulties in implementing new business and financial
systems.On September 1, 2004, we transitioned certain of our business and
financial systems to new platforms. Although the transition to date has
proceeded without material adverse consequences, the process of implementing
new systems could disrupt our ability to timely and accurately process and
report key components of our results of operations and financial condition.
Any such disruption could affect our results of operations or financial
condition and cause harm to our reputation.  Recent tax legislation, future legislation and negative publicity
related to Bermuda companies such as our parent, Accenture Ltd, may lead to
an increase in our tax burden or affect our relationships with our clients. The United States Congress recently passed, and the President has signed,
legislation relating to the tax treatment of U.S. companies that have
undertaken certain types of expatriation transactions. We do not believe this
legislation applies to our parent, Accenture Ltd. However, we are not able to
predict with certainty whether the U.S. Internal Revenue Service will challenge
our interpretation of the legislation. 20




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Nor are we able to predict with
certainty the impact of regulations or other interpretations that might be
issued related to this legislation. It is possible that certain
interpretations could materially increase our tax burden. Other legislative proposals related to certain foreign corporations have
been enacted in various jurisdictions in the United States, none of which
adversely affects Accenture Ltd. Additional legislative proposals remain under
consideration in various legislatures which, if enacted, could limit or even
prohibit our eligibility to be awarded state or federal government contracts in
the United States in the future. In addition, there have been, from time to time, negative comments in the
media regarding companies incorporated in Bermuda. 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
a negative public image of Bermuda companies such as Accenture Ltd or the
possibility of our clients receiving negative media attention from doing
business with us.  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.  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. 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. 21




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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. Risks That Relate to Ownership of Our Class I Common Shares  We may 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
financial statements. As of October 29, 2004, our partners owned or controlled
shares representing, in the aggregate, a 35% 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 may, effectively, control us. This may enable 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:  
    
    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. 22




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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 upon 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
equity securities in the future. A substantial number of Class A common shares
are eligible for future sale as described below:  
    
    As of October 29, 2004, substantially all of the Accenture 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 or 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
29, 2004 an aggregate of more than 493 million 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. 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 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 23




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##### Table of Contents



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 29, 2004, 32,392,028 Class A common
shares underlying restricted share units generally were scheduled to be
delivered during the calendar years indicated below: Number of Shares
    
    Calendar Year10,916
    
    20042,934,411
    
    20053,128,919
    
    20062,826,879
    
    20072,863,807
    
    20088,242,740
    
    200912,384,356
    
    After 2009
 The delivery of some of these shares may be deferred based on elections
made by the holders. 32,382,183 of all Accenture Ltd Class A common shares issuable pursuant
to restricted share units have been granted to current and former partners.
Accenture Ltd 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 29, 2004, 66,831,532 Accenture Ltd Class
A common shares were issuable pursuant to options, of which options to
purchase an aggregate of 37,105,700 Class A common shares were
exercisable and options to purchase an aggregate of 29,725,832 Class A
common shares generally will become exercisable during the calendar
years indicated below: Number of Shares
    
    Calendar Year128,045
    
    200418,039,608
    
    20055,912,037
    
    20065,646,142
    
    After 2006
 14,798,308 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. Accenture Ltd 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 years 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. 24




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##### Table of Contents



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 United States 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. PROPERTIES We have major offices in the worlds leading business centers, including
New York, Chicago, Dallas, Los Angeles, San Francisco, Boston, 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. 25




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ITEM 3. LEGAL PROCEEDINGS We 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 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 our operations in
the Middle East. In 2003, we voluntarily reported the incident to the
appropriate
authorities in the United States promptly after its discovery. Shortly
thereafter, the SEC advised us it would be undertaking an informal
investigation of this incident, and the U.S. Department of Justice indicated it
would also conduct a review. Since that time, there have been no further
developments. 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 HOLDERS No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 2004. 26




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PART II 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES There 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,
pursuant to separate agreements with shareholders, 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 Shares Trading 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 2003First Quarter
    
    $
    19.65
    
    
    $
    11.30Second Quarter
    
    $
    20.47
    
    
    $
    14.48Third Quarter
    
    $
    17.54
    
    
    $
    13.45Fourth Quarter
    
    $
    22.00
    
    
    $
    16.25Fiscal 2004First Quarter
    
    $
    25.37
    
    
    $
    21.00Second Quarter
    
    $
    26.95
    
    
    $
    21.85Third Quarter
    
    $
    25.91
    
    
    $
    22.61Fourth Quarter
    
    $
    28.10
    
    
    $
    23.25Fiscal 2005First Quarter (through October 29, 2004)
    
    $
    27.58
    
    
    $
    22.61
 The closing sale price of the Accenture Ltd Class A common shares as
reported by the New York Stock Exchange consolidated tape as of October 29,
2004 was $24.21. As of October 29, 2004, there were 3,222 holders of record of
the Class A common shares. As of October 29, 2004, there were 2,002 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. 27




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Dividend Policy Neither Accenture Ltd nor Accenture SCA has paid any cash dividends. We
currently do not anticipate that Accenture Ltd or Accenture SCA will pay
dividends in fiscal 2005. 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 SCA Class I common shares, if any, will
be at the discretion of the Board of Directors of Accenture Ltd, as the general
partner of Accenture SCA, 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 of Accenture Ltd may
deem relevant. Recent Sales of Unregistered Securities Over the last three years, Accenture SCA and its subsidiaries issued
and/or transferred an aggregate of 241,123,815 Class I common shares to
Accenture Ltd in connection with the issuance by Accenture Ltd of 241,123,815
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. Repurchases of Common Stock The following table provides information relating to the Companys
purchase of common shares for the fourth quarter of fiscal 2004. For further
discussion of the Companys share purchase activity, including the purchase and
redemption of Accenture SCA Class I common shares by the Companys
subsidiaries, see Managements Discussion and Analysis of Financial Condition
and Results of Operations-Liquidity and Capital Resources. Approximate DollarTotal Number of
    
    Value of SharesShares Purchased as
    
    that May Yet BeTotal Number of
    
    Average Price Paid
    
    Part of Publicly
    
    Purchased Under thePeriod
    
    Shares Purchased
    
    per Share
    
    Announced Plan
    
    PlanJune 1, 2004  June 30, 2004Class I common shares
    
    
    46,287,451
    
    
    $
    22.95
    
    
    
    
    July 1, 2004  July 31, 2004Class I common shares
    
    
    200,000
    
    
    $
    26.42
    
    
    
    
    August 1, 2004  August 31, 2004Class I common shares
    
    
    4,238,146
    
    
    $
    24.71
    
    
    
    
    Total Class I common shares(1)
    
    
    50,725,597
    
    
    $
    23.11
    
    
    
    
    
   (1)
    
    During the fourth quarter of fiscal 2004, Accenture SCA redeemed or
purchased an aggregate of 50,725,597 Class I common shares in transactions
unrelated to publicly announced purchase programs. Of this amount, 48,783,573
shares were redeemed or purchased pursuant to two issuer tender offers
(45,087,451 shares that were redeemed or purchased on June 3, 2004 with
proceeds received by Accenture Ltd in connection with its May 4, 2004 secondary
offering and 3,696,122 shares that were redeemed or purchased on August 31,
2004), and the remaining 1,942,024 shares were primarily redeemed or purchased
at the request of former partners or the estates of deceased partners in
transactions with terms similar to those provided for in Accenture SCAs
Articles of Association. 28




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ITEM 6. SELECTED FINANCIAL DATA The data as of August 31, 2004 and 2003 and for the years ended August 31,
2004, 2003 and 2002 are derived from the audited consolidated financial
statements and related notes which are included elsewhere in this report. The
data as of August 31, 2002, 2001 and 2000 and for the years ended August 31,
2001 and 2000 are derived from audited combined and consolidated 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 consolidated financial statements and related notes included elsewhere in
this report. Year Ended August 31,2004
    
    2003
    
    2002
    
    2001
    
    2000(in millions, except share amounts)Income Statement Data:Revenues:Revenues before reimbursements
    
    $
    13,673
    
    
    $
    11,818
    
    
    $
    11,574
    
    
    $
    11,444
    
    
    $
    9,752Reimbursements
    
    
    1,440
    
    
    
    1,579
    
    
    
    1,531
    
    
    
    1,618
    
    
    
    1,579Revenues
    
    
    15,113
    
    
    
    13,397
    
    
    
    13,105
    
    
    
    13,062
    
    
    
    11,331Operating expenses:Cost of services*:Cost of services before reimbursable expenses*
    
    
    9,057
    
    
    
    7,508
    
    
    
    6,897
    
    
    
    6,199
    
    
    
    5,486Reimbursable expenses
    
    
    1,440
    
    
    
    1,579
    
    
    
    1,531
    
    
    
    1,618
    
    
    
    1,579Cost of services*
    
    
    10,497
    
    
    
    9,087
    
    
    
    8,428
    
    
    
    7,817
    
    
    
    7,065Sales and marketing*
    
    
    1,488
    
    
    
    1,459
    
    
    
    1,566
    
    
    
    1,217
    
    
    
    883General and administrative costs*
    
    
    1,340
    
    
    
    1,319
    
    
    
    1,616
    
    
    
    1,516
    
    
    
    1,296Restructuring, reorganization and rebranding costs (benefits)
    
    
    29
    
    
    
    (19
    )
    
    
    111
    
    
    
    849
    
    
    
    Restricted share unit-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    967
    
    
    
    Total operating expenses*
    
    
    13,355
    
    
    
    11,846
    
    
    
    11,720
    
    
    
    12,366
    
    
    
    9,245Operating income*
    
    
    1,759
    
    
    
    1,551
    
    
    
    1,385
    
    
    
    696
    
    
    
    2,086Gain (loss) on investments, net
    
    
    3
    
    
    
    10
    
    
    
    (321
    )
    
    
    107
    
    
    
    573Interest income
    
    
    60
    
    
    
    41
    
    
    
    46
    
    
    
    80
    
    
    
    67Interest expense
    
    
    (22
    )
    
    
    (21
    )
    
    
    (49
    )
    
    
    (43
    )
    
    
    (24
    )Other income
    
    
    
    
    
    
    32
    
    
    
    15
    
    
    
    17
    
    
    
    51Equity in losses of affiliates
    
    
    (2
    )
    
    
    
    
    
    
    (9
    )
    
    
    (61
    )
    
    
    (47
    )Income before income taxes*
    
    
    1,799
    
    
    
    1,613
    
    
    
    1,068
    
    
    
    795
    
    
    
    2,707Provision for income taxes(1)
    
    
    576
    
    
    
    566
    
    
    
    491
    
    
    
    503
    
    
    
    243Income before minority interest and accounting change*
    
    
    1,223
    
    
    
    1,047
    
    
    
    576
    
    
    
    292
    
    
    
    2,464Minority interest
    
    
    (10
    )
    
    
    (7
    )
    
    
    3
    
    
    
    8
    
    
    
    Income before accounting change*
    
    
    1,213
    
    
    
    1,040
    
    
    
    579
    
    
    
    300
    
    
    
    2,464Cumulative effect of accounting change
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    Partnership income before partner distributions*(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,464Net income*
    
    $
    1,213
    
    
    $
    1,040
    
    
    $
    579
    
    
    $
    488
 As of August 31,2004
    
    2003
    
    2002
    
    2001
    
    2000(in millions)Balance Sheet Data:Cash and cash equivalents
    
    $
    2,553
    
    
    $
    2,332
    
    
    $
    1,317
    
    
    $
    1,880
    
    
    $
    1,271Working capital
    
    
    1,683
    
    
    
    1,729
    
    
    
    723
    
    
    
    401
    
    
    
    1,015Total assets
    
    
    7,988
    
    
    
    6,459
    
    
    
    5,479
    
    
    
    6,061
    
    
    
    5,451Long-term debt, net of current portion
    
    
    2
    
    
    
    14
    
    
    
    3
    
    
    
    1
    
    
    
    99Total partners capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,368Shareholders equity
    
    
    2,375
    
    
    
    1,721
    
    
    
    963
    
    
    
    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
 29




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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. 30




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The 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 Ltd 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 2004 or fiscal year 2004 means the
12-month period that ended on August 31, 2004. All references to quarters,
unless otherwise noted, refer to the quarters of our fiscal year. Overview Revenues are driven by the ability of our partners and other senior
executives 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 deliver
market-leading service offerings and to deploy skilled teams of professionals
quickly and on a global basis. Our results of operations are also affected by the economic conditions,
levels of business activity and rates 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 market and technological changes early in
their cycles is a key driver of our performance. While there continue to be no
indications of a significant new wave of technology to stimulate spending, the
strengthening economic recovery is beginning to affect the patterns of
technology investment of many companies. As a result, growth-oriented business
initiatives are again competing with cost-cutting strategies. Revenue growth
rates across our segments may be subject to more variability from quarter to
quarter during fiscal 2005 as the economic recovery continues to take hold at
different rates in different industrial and geographic markets. Revenues before reimbursements for fiscal 2004 were $13.67 billion,
compared with $11.82 billion for fiscal 2003, an increase of 16% in U.S.
dollars and 9% in local currency. Revenues before reimbursements for the
fourth quarter of fiscal 2004 were $3.42 billion, compared with $3.02 billion
for the fourth quarter of fiscal 2003, an increase of 13% in U.S. dollars and
10% in local currency. We continue to achieve an increasing percentage of our revenues and growth
through business transformation outsourcing, our approach that combines
outsourcing with our other capabilities to help clients transform and outsource
key processes, applications and infrastructure to improve business performance.
Outsourcing revenues before reimbursements for fiscal 2004 were $5.08 billion,
representing an increase of 35% in U.S. dollars and 28% in local currency terms
over fiscal 2003. Outsourcing revenues before reimbursements for the fourth
quarter of fiscal 2004 were $1.28 billion, representing an increase of 17% in
U.S. dollars and 13% in local currency terms, compared with the fourth quarter
of fiscal 2003. Outsourcing contracts typically have longer terms than
consulting contracts and generally have lower gross margins than consulting
contracts, particularly in the first year. While outsourcing will continue to
deliver solid growth to our business, it is likely to grow overall at a slower
rate than it did in fiscal 2004. 31




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Companies remain cautious about increasing their use of consulting
services. However, we are
beginning to see an upturn in demand for our consulting services, as
profit margins begin to recover and companies return to focusing on improving
business performance. For fiscal 2004, consulting revenues before
reimbursements were $8.59 billion, representing an increase of 7% in U.S.
dollars while remaining flat in local currency terms, compared to fiscal 2003.
For the fourth quarter of fiscal 2004, consulting revenues before
reimbursements were $2.14 billion, representing an increase of 12% in U.S.
dollars and 8% in local currency terms over the fourth quarter of fiscal 2003. We continue to experience ongoing pricing pressures from competitors as
well as from clients facing pressure to control costs. The pace of
consolidation and of vertical integration among our competitors continues to
increase and to affect our revenues and operating margins. In addition, the
growing use of off-shore resources to provide lower-cost service delivery
capabilities within our industry continues to be a source of pressure on our
revenues and operating margins. While we have recently experienced increases in
demand for our services and while margins in our consulting business have
recently stabilized, it is too early to tell if these developments will
translate into sustainable improvements in our pricing or margins over the long
term. 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, operating
expenses and operating income. If the U.S. dollar strengthens against other
currencies, the resulting unfavorable currency translation could lower reported
U.S. dollar revenues, operating expenses and operating income and result in
U.S. dollar revenue growth lower than growth in local currency terms. We do
not expect favorable currency translations to continue to contribute to U.S.
dollar growth rates comparable to those experienced in fiscal 2004. 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. Operating expenses include restructuring costs and reorganization
benefits. Restructuring costs include costs incurred related to global
consolidation of office space. Reorganization benefits result from final
determinations of certain reorganization liabilities established in connection
with Accentures transition to a corporate structure in 2001. Gross margins (revenues less cost of services) for the three months and
year ended August 31, 2004 were 32.4% and 33.8%, respectively, of revenues
before reimbursements, compared with 34.4% and 36.5%, respectively, for the
same periods in fiscal 2003. These decreases resulted primarily from the
continuing shift in our mix of business toward outsourcing and increased
variable compensation expense and were partly offset by lower severance costs
and higher consulting margins. 32




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Our cost-management strategy continues to be to anticipate changes in
demand for our services and to identify 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 compensation and severance costs. We continue to take
actions to create a more variable cost structure. While our chargeability
levels are at or near all-time highs, we continue to have supply-and-demand and
skill-level imbalances in certain industry segments and/or countries. We continue to take actions to balance our mix of skills and resources to
meet current and projected future demand in each of our markets and will use
our global sourcing approach, which includes our network of delivery centers
and other capabilities around the world, as part of our cost-effective delivery
model. Our headcount increased from approximately 83,000 employees worldwide at
August 31, 2003 to more than 100,000 employees as of August 31, 2004. Our
ability to grow our business could be adversely affected if we do not
effectively assimilate these new employees into our workforces. We also
continue to experience an above-average attrition rate as global economic
conditions continue to improve and the demand for talent in certain markets
increases. As a result of the substantial numbers of new hires in our
workforces, our hiring and training costs may increase. Because our talent
market is increasingly competitive, we will need to respond accordingly during
the course of the year. In fiscal 2005, we will continue to adjust
compensation in order to attract and retain appropriate numbers of employees
with the skills necessary to expand our business. These additional costs and
compensation adjustments could adversely affect our operating margins. As a result of our ongoing cost-management initiatives and the continued
shift in our mix of business toward outsourcing, sales and marketing and
general and administrative costs decreased as a percentage of revenues before
reimbursements to 21% for both the three months and year ended August 31, 2004,
respectively, from 23% for the three months and year ended August 31, 2003.
Operating income as a percentage of revenues before reimbursements decreased to
11% for the three months ended August 31, 2004 from 12% for the three months
ended August 31, 2003, primarily related to the decline in gross margins as
described above. Operating income as a percentage of revenues before
reimbursements remained flat at 13% in both fiscal years 2004 and 2003. Bookings and Backlog New contract bookings for the three months ended August 31, 2004 were
$4,024 million, an increase of $269 million, or 7%, from new bookings of $3,755
million for the three months ended August 31, 2003, with consulting bookings
increasing 11%, to $2,262 million, and outsourcing bookings increasing 2%, to
$1,762 million. For the year ended August 31, 2004, bookings were $20,116
million, an increase of 25% over the year ended August 31, 2003, with
consulting bookings increasing 11% and outsourcing bookings increasing 39%. We
provide information regarding our bookings because we believe doing so provides
useful trend information regarding changes in the volume of our new business
over time. However, the timing of large bookings can significantly affect the
level of bookings in a particular quarter. Information regarding our new
bookings is not comparable to, nor should it be substituted for, an analysis of
our revenues over time. 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 bookings attributable to these contracts as backlog. Normally, if
a 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. 33




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Critical Accounting Policies and Estimates The 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. Because 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 revenue
recognition, income taxes, variable compensation and defined benefit pension
plans. Revenue Recognition Our 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. We have 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 when acceptance, where applicable, and delivery of agreed
benefits have occurred in accordance with SEC Staff Accounting Bulletin (SAB)
No. 101, Revenue Recognition in Financial Statements, as amended by SAB No.
104, Revenue Recognition. We recognize revenues from technology integration consulting contracts
using the percentage-of-completion method pursuant to the 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 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 consolidated
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 countries. 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 have value on a stand-alone basis, fair value of the separate elements
exists and, in arrangements that include a general right of refund relative to
the delivered element, performance of the undelivered element is considered
probable and substantially in our control. While determining fair value and 34




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identifying separate elements requires judgment, generally fair value and the
separate elements are readily
identifiable as we also sell those elements unaccompanied by other
elements. Effective September 1, 2003, we adopted Emerging Issues Task Force
Issue 00-21, Accounting for Revenue Arrangements with Multiple Deliverables.
As such, for contracts signed after August 31, 2003, revenues are allocated to
each element based on the lesser of fair value or the amount that is not
contingent on future delivery of another element. If the amount of
non-contingent revenues allocated to a delivered element is less than the costs
to deliver such services, then such costs are deferred and recognized in future
periods when the revenues become non-contingent. 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, since 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 is included in
cost of services. Income Taxes Determining the consolidated provision for income tax expense, income tax
liabilities and deferred tax assets and liabilities involves judgment. As a
global company, we calculate and provide for income taxes in each of the tax
jurisdictions in which 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 income before taxes can affect the overall effective
tax rate. We apply an estimated annual effective tax rate to our quarterly operating
results to determine the provision for income tax expense. In the event there
is a significant unusual or infrequent item recognized in our quarterly
operating results, the tax attributable to that item is recorded in the interim
period in which it occurs. Our effective tax rate for the year ended August
31, 2004 was 32.0%, compared with 35.1% for the year ended August 31, 2003.
This decrease resulted primarily from a reduction in valuation allowances,
changes in our geographic mix of income and the tax effect of a reduction in
reorganization liabilities. No taxes have been provided on undistributed foreign earnings that are
planned to be indefinitely reinvested. If future events, including material
changes in estimates of cash, working capital and long term investment
requirements necessitate that these earnings be distributed, an additional
provision for withholding taxes may apply, which could materially affect our
future effective tax rate. As a matter of course, the Company is regularly audited by various taxing
authorities, and sometimes these audits result in proposed assessments where
the ultimate resolution may result in the Company owing additional taxes. We
establish reserves when, despite our belief that our tax return positions are
appropriate and supportable under local tax law, we believe certain positions
are likely to be challenged and we may not succeed in realizing the tax
benefit. We evaluate these reserves each quarter 35




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and adjust the reserves and
the related interest in light of changing facts and circumstances regarding the
probability of realizing tax benefits, such as the progress of a tax audit or
the expiration of a statute of limitations. The Company believes its tax
positions comply with applicable tax law and that it has adequately provided
for any known tax contingencies. Variable Compensation We record compensation expense for payments to be made in later fiscal
periods to our partners and other employees under the variable compensation
portions of our overall compensation programs. In fiscal 2004, we increased the
variable component of target compensation for larger portions of our global
workforce. 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 operational 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 at August
31, 2004 for variable compensation was $280 million, of which we expect to pay
approximately $215 million in the first quarter of fiscal 2005, with the
remainder payable in subsequent quarters, provided performance targets are met.
The following table shows quarterly variable compensation expense (benefit): Fiscal Year2004
    
    2003
    
    2002(in millions)First fiscal quarter
    
    $
    (4
    )
    
    $
    17
    
    
    $
    86Second fiscal quarter
    
    
    64
    
    
    
    (6
    )
    
    
    151Third fiscal quarter
    
    
    92
    
    
    
    
    
    
    
    8Fourth fiscal quarter
    
    
    125
    
    
    
    
    
    
    
    (140
    )Total variable compensation.
    
    $
    277
    
    
    $
    11
    
    
    $
    105
 Defined Benefit Pension Plans In 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. Our U.S. pension plans include plans covering certain U.S. employees and
former employees as well as a frozen plan related to basic retirement benefits
for former pre-incorporation partners. The employee plans have a June 30
measurement date, and at August 31, 2004 had a projected benefit obligation of
$566 million and assets of $596 million, after taking into account $230 million
in contributions made in fiscal 2004. In fiscal 2005, no contribution will be
required for the U.S. employee pension plans. We have not determined whether
we will make additional voluntary contributions for U.S. employee pension plans
in fiscal 2005. The frozen plan for former partners is unfunded and has a
projected benefit obligation of $126 million. Non-U.S. pension plan
obligations totaled $336 million, while pension assets totaled $243 million.
We contributed $29 million to non-U.S. plans in fiscal 2004 and expect to
contribute $39 million in fiscal 2005. Pension expense was $122 million and $72 million for fiscal years 2004 and
2003, respectively. For fiscal 2005, pension expense is estimated to be
approximately $113 million. The fiscal 2005 pension expense estimate
incorporates the 2005 assumptions and the impact of the increased pension plan
assets resulting from our discretionary contributions of $230 million in fiscal
2004. 36




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Key assumptions used to determine annual pension expense for fiscal years
2005, 2004 and 2003 are as follows: Pension Benefits2005
    
    2004
    
    2003U.S. Plans
    
    Non-U.S. Plans
    
    U.S. Plans
    
    Non-U.S. Plans
    
    U.S. Plans
    
    Non-U.S. PlansDiscount rate
    
    
    6.25
    %
    
    
    4.93
    %
    
    
    6.00
    %
    
    
    4.85
    %
    
    
    7.25
    %
    
    
    4.92
    %Expected rate of return on plan assets.
    
    
    7.50
    %
    
    
    5.19
    %
    
    
    8.00
    %
    
    
    5.66
    %
    
    
    8.50
    %
    
    
    5.35
    %Rate of increase in future compensation
    
    
    4.50
    %
    
    
    3.16
    %
    
    
    4.50
    %
    
    
    3.10
    %
    
    
    5.70
    %
    
    
    3.81
    %
 A 25 basis point increase in the discount rate would decrease our annual
pension expense by $11 million. A 25 basis point decrease in the discount rate
would increase our annual pension expense by $12 million. A 25 basis point increase in our return on plan assets would decrease our
annual pension expense by $2 million. A 25 basis point decrease in our return
on plan assets would increase our annual pension expense by $2 million. Our assumptions reflect our historical experience and managements best
judgment regarding future expectations. The assumptions, assets and
liabilities used to measure our annual pension expense are determined as of
June 30 for the majority of our U.S. benefit plans and as of August 31 for the
majority of our non-U.S. benefit plans. Since pension and postretirement
liabilities are measured on a discounted basis, the discount rate is a
significant assumption. It is based on interest rates for high-quality,
long-term corporate debt at each measurement date. Our estimated U.S. pension
expense for fiscal 2005 reflects a 25 basis point increase in our discount rate
from 6.00% to 6.25%. This change in discount rate will decrease U.S. pension
expense in fiscal 2005 by approximately $7 million. To develop the expected
long-term rate of return on assets assumption, we considered the historical
returns and the future expectations for returns for each asset class, as well
as the target asset allocation of the asset portfolio. This resulted in the
selection of the 7.50% long-term rate of return on assets assumption for our
U.S. plans for fiscal 2005 and represents a 50 basis point reduction in the
expected rate of return on plan assets from the 8.00% used in fiscal 2004. Our
estimated non-U.S. pension expense incorporates a 47 basis point reduction in
the weighted average expected return on plan assets from 5.66% to 5.19%. The
decrease in the expected rate of return on plan assets will increase
consolidated pension expense in fiscal 2005 by approximately $4 million. The
impacts of these types of changes on the pension plans in other countries will
vary depending upon the status of each respective plan. Statement of Financial Accounting Standard No. 87, Employers Accounting
for Pensions, requires recognition of a minimum pension liability if the fair
value of pension assets is less than the accumulated benefit obligation. At
August 31, 2004, Shareholders equity included a charge of $92 million,
representing a minimum pension liability of $153 million, net of a tax benefit
of $61 million. 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. 37




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Revenues by Segment/Operating Group Our 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
these are a better indicator of operating group performance than revenues. From
time to time, our operating groups work together to sell and implement certain
engagements. The resulting revenues and costs from these engagements may be
apportioned among the participating operating groups. Generally, operating
expenses for each operating group have similar characteristics and are subject
to the same factors, pressures and challenges. However, the economic
environment and its effects on the industries served by our operating segments
affect revenues and operating expenses within our operating segments to
differing degrees. Decisions relating to staffing levels are not made
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 results caused by this shift. Local currency fluctuations also tend to
affect our operating groups differently, depending on the geographic
concentrations and locations of their businesses. The following tables provide revenues for each of our operating groups,
geographic regions and types of work for the fourth quarter of fiscal years
2004 and 2003, and for fiscal years 2004 and 2003: Three Months Ended
    
    Percent
    
    Percent
    
    Percent of TotalAugust 31,
    
    Increase/
    
    Increase/
    
    2004 Revenues(Decrease)
    
    (Decrease)
    
    Before2004
    
    2003
    
    US$
    
    Local Currency
    
    Reimbursements(in millions)OPERATING GROUPSCommunications & High Tech.
    
    $
    913
    
    
    $
    849
    
    
    
    8
    %
    
    
    5
    %
    
    
    27
    %Financial Services
    
    
    725
    
    
    
    578
    
    
    
    25
    %
    
    
    21
    %
    
    
    21
    %Government
    
    
    501
    
    
    
    442
    
    
    
    13
    %
    
    
    10
    %
    
    
    15
    %Products
    
    
    751
    
    
    
    642
    
    
    
    17
    %
    
    
    13
    %
    
    
    22
    %Resources
    
    
    531
    
    
    
    504
    
    
    
    5
    %
    
    
    2
    %
    
    
    15
    %Other
    
    
    2
    
    
    
    2
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    0
    %TOTAL Revenues BeforeReimbursements
    
    
    3,423
    
    
    
    3,017
    
    
    
    13
    %
    
    
    10
    %
    
    
    100
    %Reimbursements
    
    
    383
    
    
    
    445
    
    
    
    (14
    )%TOTAL REVENUES
    
    $
    3,806
    
    
    $
    3,462
    
    
    
    10
    %GEOGRAPHYAmericas
    
    $
    1,503
    
    
    $
    1,485
    
    
    
    1
    %
    
    
    1
    %
    
    
    44
    %EMEA(1)
    
    
    1,662
    
    
    
    1,331
    
    
    
    25
    %
    
    
    17
    %
    
    
    48
    %Asia Pacific
    
    
    258
    
    
    
    201
    
    
    
    28
    %
    
    
    22
    %
    
    
    8
    %TOTAL Revenues Before
Reimbursements
    
    
    3,423
    
    
    
    3,017
    
    
    
    13
    %
    
    
    10
    %
    
    
    100
    %Reimbursements
    
    
    383
    
    
    
    445
    
    
    
    (14
    )%TOTAL REVENUES
    
    $
    3,806
    
    
    $
    3,462
    
    
    
    10
    %TYPE OF WORKConsulting(2)
    
    $
    2,141
    
    
    $
    1,919
    
    
    
    12
    %
    
    
    8
    %
    
    
    63
    %Outsourcing(2)
    
    
    1,282
    
    
    
    1,098
    
    
    
    17
    %
    
    
    13
    %
    
    
    37
    %TOTAL Revenues Before
    
    
    3,423
    
    
    
    3,017
    
    
    
    13
    %
    
    
    
    
    
    
    100
    %ReimbursementsReimbursements
    
    
    383
    
    
    
    445
    
    
    
    (14
    %)TOTAL REVENUES
    
    $
    3,806
    
    
    $
    3,462
    
    
    
    10
    %
 38




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##### Table of Contents



Year Ended
    
    Percent
    
    Percent
    
    Percent of TotalAugust 31,
    
    Increase/
    
    Increase/
    
    2004 Net(Decrease)
    
    (Decrease)
    
    Revenues Before2004
    
    2003
    
    US$
    
    Local Currency
    
    Reimbursements(in millions)OPERATING GROUPSCommunications & High Tech.
    
    $
    3,741
    
    
    $
    3,290
    
    
    
    14
    %
    
    
    8
    %
    
    
    27
    %Financial Services
    
    
    2,771
    
    
    
    2,355
    
    
    
    18
    %
    
    
    9
    %
    
    
    20
    %Government
    
    
    1,995
    
    
    
    1,582
    
    
    
    26
    %
    
    
    20
    %
    
    
    15
    %Products
    
    
    2,979
    
    
    
    2,613
    
    
    
    14
    %
    
    
    7
    %
    
    
    22
    %Resources
    
    
    2,178
    
    
    
    1,966
    
    
    
    11
    %
    
    
    3
    %
    
    
    16
    %Other
    
    
    9
    
    
    
    12
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    0
    %TOTAL Revenues BeforeReimbursements
    
    
    13,673
    
    
    
    11,818
    
    
    
    16
    %
    
    
    9
    %
    
    
    100
    %Reimbursements
    
    
    1,440
    
    
    
    1,579
    
    
    
    (9
    )%TOTAL REVENUES
    
    $
    15,113
    
    
    $
    13,397
    
    
    
    13
    %GEOGRAPHYAmericas
    
    $
    6,133
    
    
    $
    5,671
    
    
    
    8
    %
    
    
    7
    %
    
    
    45
    %EMEA (1)
    
    
    6,572
    
    
    
    5,353
    
    
    
    23
    %
    
    
    10
    %
    
    
    48
    %Asia Pacific
    
    
    968
    
    
    
    794
    
    
    
    22
    %
    
    
    12
    %
    
    
    7
    %TOTAL Revenues Before
Reimbursements
    
    
    13,673
    
    
    
    11,818
    
    
    
    16
    %
    
    
    9
    %
    
    
    100
    %Reimbursements
    
    
    1,440
    
    
    
    1,579
    
    
    
    (9
    )%TOTAL REVENUES
    
    $
    15,113
    
    
    $
    13,397
    
    
    
    13
    %TYPE OF WORKConsulting (2)
    
    $
    8,589
    
    
    $
    8,048
    
    
    
    7
    %
    
    
    0
    %
    
    
    63
    %Outsourcing (2)
    
    
    5,084
    
    
    
    3,770
    
    
    
    35
    %
    
    
    28
    %
    
    
    37
    %TOTAL Revenues Before
Reimbursements
    
    
    13,673
    
    
    
    11,818
    
    
    
    16
    %
    
    
    
    
    
    
    100
    %Reimbursements
    
    
    1,440
    
    
    
    1,579
    
    
    
    (9
    )%TOTAL REVENUES
    
    $
    15,113
    
    
    $
    13,397
    
    
    
    13
    %
   (1)
    
    EMEA includes Europe, the Middle East and Africa.(2)
    
    For fiscal 2003, $335 million of revenues before reimbursements previously
classified as Other have been reclassified to Consulting or Outsourcing
type of work to conform to the fiscal 2004 presentation. 39




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The Company conducts business in two countries that individually comprised
more than 10% of consolidated revenues before reimbursements within the last
three years. The United States represented 39%, 43% and 46% of revenues before
reimbursements for fiscal years 2004, 2003 and 2002, respectively, while the
United Kingdom totaled 16%, 14% and 14% for fiscal years 2004, 2003 and 2002,
respectively. Revenues are attributed to countries based on where client
services are supervised. Year Ended August 31, 2004 Compared to Year Ended August 31, 2003 Revenues Our Europe, Middle East and Africa regions (EMEA) achieved revenues
before reimbursements of $6,572 million for fiscal 2004, compared with $5,353
million for fiscal 2003, an increase of 23% in U.S. dollars and 10% in local
currency. This increase was primarily due to strong growth in the United
Kingdom, France and Spain, as well as the strengthening of the Pound Sterling
and Euro against the U.S. dollar. In our Americas region, fiscal 2004 revenues before reimbursements were
$6,133 million, compared with $5,671 million for fiscal 2003, an increase of 8%
in U.S. dollars and 7% in local currency. A key contributor to this growth was
our Canadian business, where revenues before reimbursements grew 52% in U.S.
dollars over fiscal 2003. This growth was partially offset by items mentioned
below with respect to our Communications & High Tech, Government and Resources
operating groups that were primarily concentrated in our Americas region. Our Asia Pacific region had fiscal 2004 revenues before reimbursements of
$968 million, compared with $794 million for fiscal 2003, an increase of 22% in
U.S. dollars and 12% in local currency. This increase was largely driven by
strong growth in our business in Japan and Australia. Our Communications & High Tech operating group achieved revenues before
reimbursements of $3,741 million in fiscal 2004, an increase of 14% over fiscal
2003, primarily due to increased outsourcing revenues. Consulting revenues and
favorable currency translation also contributed to increased revenues over
fiscal 2003. Outsourcing revenues benefited from strong revenue growth with our
Communications and Electronics & High Tech industry groups in the Americas and
Europe. Consulting revenues benefited from growth in Europe, Latin America and
Asia Pacific, slightly offset by a decline in North America. Operating group
revenues before reimbursements in the fourth quarter of fiscal 2004 increased 8%
over the fourth quarter of fiscal 2003 due to increased consulting revenues in
all geographies and favorable currency translation. This increase was
partially offset by lower outsourcing revenues in North America, due partly to
a substantial reduction in the scope of our work with a major
telecommunications client as a result of that clients changing business
strategies. This reduction may continue to affect outsourcing revenues for the
next several quarters. Our Financial Services operating group achieved revenues before
reimbursements of $2,771 million in fiscal 2004, an increase of 18% over fiscal
2003. Results were primarily driven by strong growth in outsourcing revenues,
higher consulting revenues and favorable currency translation. Revenue growth
in our Banking and Insurance industry groups, particularly in the United
Kingdom, contributed to the growth in outsourcing revenues. Consulting
revenues benefited from the continued economic recovery of clients in our
Capital Markets industry group. Operating group revenues before reimbursements
in the fourth quarter of fiscal 2004 increased 25% over the fourth quarter of
fiscal 2003, due to increased consulting revenues in our Capital Markets
industry group and growth in outsourcing revenues, particularly in EMEA. Our Government operating group achieved revenues before reimbursements of
$1,995 million in fiscal 2004, an increase of 26% over fiscal 2003. Results were
primarily driven by strong growth in both outsourcing and consulting revenues,
in addition to favorable currency translation. Revenue growth with European
clients, particularly in the United Kingdom and with clients in the Asia
Pacific region, contributed to increased consulting revenues, which were
partially offset by decreased revenues from clients in the United States.
Outsourcing revenue growth benefited from increased revenues in all geographic
regions, in particular with the U.S. Federal government. Operating group 40




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revenues before reimbursements in the fourth quarter of fiscal 2004 increased
13% over the fourth quarter of fiscal
2003, primarily due to increased revenues in the United Kingdom and the
Asia Pacific region. Our Products operating group achieved revenues before reimbursements of
$2,979 million in fiscal 2004, an increase of 14% from fiscal 2003, primarily
driven by increased outsourcing revenues. Consulting revenues and favorable
currency translation also contributed to increased revenues over fiscal 2003.
A majority of our industry groups, particularly the Retail & Consumer and the
Pharmaceuticals & Medical Products industry groups, contributed to the growth
in outsourcing revenues. Consulting revenues increased primarily due to growth
in our Asia Pacific region revenues, as well as growth in our Automotive and
Health Services industry groups in all geographies. Consulting revenue growth
was partially offset by decreased revenues in our Transportation & Travel
Services industry group, particularly in EMEA. Revenues before reimbursements
in the fourth quarter of fiscal 2004 increased 17% over the fourth quarter of
fiscal 2003, due to increased outsourcing revenues in our Pharmaceuticals &
Medical Products and Retail & Consumer industry groups, as well as consulting
growth in our Retail & Consumer industry group. Our Resources operating group achieved revenues before reimbursements of
$2,178 million in fiscal 2004, an increase of 11% from fiscal 2003, as increases
in our outsourcing revenues and a favorable currency translation more than
offset the slight decrease in consulting revenues. All industry groups in
Resources, in particular Utilities, contributed to the growth in outsourcing
revenues. The Euro and Pound Sterling contributed to the favorable currency
translation. Consulting revenue growth in our Energy, Metals & Mining and
Utilities industry groups was offset by a decrease in our Chemicals and Forest
Products industry group revenues. In the fourth quarter of fiscal 2004,
revenues before reimbursements for Resources grew 5% over the fourth quarter of
fiscal 2003, primarily reflecting outsourcing revenue growth in our Utilities,
Energy, Metals & Mining and Forest Products industry groups, as well as growth
in our Accenture Business Services for Utilities BPO business. Consulting
revenues remained flat, with increases in our Energy, Metals & Mining and
Forest Products industry groups offset by decreases in our Chemicals and
Utilities industry groups. Operating Expenses Operating expenses in fiscal 2004 were $13,355 million, an increase of
$1,509 million, or 13%, over fiscal 2003 and represented 88% of revenues in both
fiscal years 2004 and 2003. As a percentage of revenues before reimbursements,
operating expenses before reimbursable expenses also remained flat at 87% in
both fiscal years 2004 and 2003. In fiscal 2004, operating expenses included
restructuring costs of $107 million relating to the Companys global
consolidation of office space and a benefit of $78 million primarily resulting
from final determinations of certain reorganization liabilities established in
connection with our transition to a corporate structure in 2001. The
restructuring cost of $107 million and reorganization benefit of $78 million
increased operating expenses before reimbursable expenses as a percentage of
revenues before reimbursements by 0.2 percentage points. The strengthening of
various currencies against the U.S. dollar increased reported operating
expenses for fiscal 2004 compared to fiscal 2003, partially offsetting
corresponding increases in reported revenues. In fiscal 2004, we incurred severance costs of $111 million, compared with
$161 million of severance costs in fiscal 2003. During fiscal 2004, we expensed
$277 million for variable compensation, compared with $11 million of variable
compensation expense in fiscal 2003. Cost of Services Cost of services was $10,497 million in fiscal 2004, an increase of $1,410
million, or 16%, over fiscal 2003 and an increase as a percentage of revenues
from 68% in fiscal 2003 to 69% in fiscal 2004. Cost of services before
reimbursable expenses was $9,057 million in fiscal 2004, an increase of $1,549
million, or 21%, over fiscal 2003. Cost of services before reimbursable expenses
increased as a percentage of revenues before reimbursements from 64% in fiscal
2003 to 66% in fiscal 2004. Gross margins (revenues less cost of services) in
fiscal 2004 decreased to 34% of revenues before reimbursements in fiscal 2004
from 36% in fiscal 2003. 41




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The primary drivers of the increase in cost of services and the decrease
in total gross margins were the continued shift in our mix of business toward
outsourcing and higher variable compensation expense, partly offset by lower
severance costs. The strengthening of various currencies against the U.S.
dollar also contributed to the $1,549 million increase. Sales and Marketing Sales and marketing expense was $1,488 million in fiscal 2004, an increase
of $30 million, or 2%, over fiscal 2003, and decreased as a percentage of
revenues before reimbursements from 12% in fiscal 2003 to 11% in fiscal 2004.
Key drivers of the increase in sales and marketing expense were a $51 million
increase in market-development activities and branding costs, and a $39 million
increase in variable compensation expense, partly offset by a $69 million
decrease in business-development costs. General and Administrative Costs General and administrative costs were $1,340 million in fiscal 2004, an
increase of $21 million, or 2%, over fiscal 2003 and decreased as a percentage
of revenues before reimbursements from 11% in fiscal 2003 to 10% in fiscal 2004.
The increase in general and administrative costs was primarily due to a $60
million increase in business protection costs, partly offset by a $42 million
decrease in geographic facility costs. Restructuring and Reorganization Costs (Benefits) During fiscal 2004, we recorded restructuring costs of $107 million
relating to our global consolidation of office space, primarily in the United
States and the United Kingdom. These costs included losses on operating leases
and write-downs of related assets such as leasehold improvements resulting from
abandoned office space. During this same period, we recorded a net benefit of
$78 million resulting from final determinations of certain reorganization
liabilities established in connection with our transition to a corporate
structure in 2001. During fiscal 2003, we recorded a net benefit of $19 million resulting
from a decrease in certain reorganization liabilities established in connection
with our transition to a corporate structure in 2001. Operating Income Operating income was $1,759 million in fiscal 2004, an increase of $207
million, or 13%, over fiscal 2003. Operating income as a percentage of revenues
before reimbursements remained flat at 13% in both fiscal years 2004 and 2003. Operating income for each of the operating groups was as follows: Year Ended August 31,IncreaseOperating Income
    
    2004
    
    2003
    
    (Decrease)(in millions)Communications & High Tech
    
    $
    404
    
    
    $
    321
    
    
    $
    83Financial Services
    
    
    354
    
    
    
    306
    
    
    
    48Government
    
    
    311
    
    
    
    282
    
    
    
    29Products
    
    
    415
    
    
    
    428
    
    
    
    (13
    )Resources
    
    
    275
    
    
    
    214
    
    
    
    61Total
    
    $
    1,759
    
    
    $
    1,551
    
    
    $
    208
 Communications & High Tech operating income increased by $83 million,
primarily due to a 14% increase in revenues before reimbursements, along with
savings from cost-management initiatives and improved chargeability. The
increase in Financial Services operating income of $48 million was driven by an
18% increase in revenues before reimbursements, as well as savings from
cost-management initiatives. Government operating income increased by $29
million primarily due to a 26% increase in revenues before reimbursements,
partly offset by higher 42




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business-development costs in support of large
contracts and lower overall margins. Products operating income decreased by $13
million, despite a 14% increase in revenues before reimbursements, primarily
due to lower gross margins reflecting a decrease in consulting margins and the
continued shift in our mix of business toward
outsourcing. The increase in Resources operating income of $61 million was
driven by an 11% increase in revenues before reimbursements along with savings
from cost-management initiatives and improved chargeability, offset by
increases in outsourcing and consulting costs. Interest Income Interest income was $60 million in fiscal 2004, an increase of $19 million,
or 46%, over fiscal 2003. The increase resulted primarily from the increase in
our average cash and investment balances during fiscal 2004, compared with the
fiscal 2003 average balances. Other Income (Expense) Other income was less than $1 million in fiscal 2004, compared with $32
million in fiscal 2003, primarily resulting from lower foreign currency exchange
gains. Provision for Income Taxes The effective tax rates for fiscal years 2004 and 2003 were 32.0% and
35.1%, respectively. The reduction in the effective tax rate in 2004 resulted
primarily from a reduction in valuation allowances, changes in our geographic
distribution of income and the tax effect of a reduction in reorganization
liabilities. The decrease in reorganization liabilities in fiscal 2004 reduced
the 2004 annual effective tax rate by 1.5 percentage points. The decrease in
reorganization liabilities had the effect of increasing pre-tax income in
fiscal 2004 without a corresponding increase in the provision for income taxes. 43




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Year Ended August 31, 2003 Compared to Year Ended August 31, 2002 The following table provides revenues for each of our operating groups,
geographic regions and types of work for fiscal years 2003 and 2002: Year Ended
    
    Percent
    
    Percent
    
    Percent of TotalAugust 31,
    
    Increase/
    
    Increase/
    
    2004 Net(Decrease)
    
    (Decrease)
    
    Revenues Before2003
    
    2002
    
    US$
    
    Local Currency
    
    Reimbursements(in millions)OPERATING GROUPSCommunications & High Tech.
    
    $
    3,290
    
    
    $
    3,182
    
    
    
    3
    %
    
    
    
    
    
    
    28
    %Financial Services
    
    
    2,355
    
    
    
    2,366
    
    
    
    0
    %
    
    
    
    
    
    
    20
    %Government
    
    
    1,582
    
    
    
    1,316
    
    
    
    20
    %
    
    
    
    
    
    
    13
    %Products
    
    
    2,613
    
    
    
    2,696
    
    
    
    (3
    )%
    
    
    
    
    
    
    22
    %Resources
    
    
    1,966
    
    
    
    2,005
    
    
    
    (2
    )%
    
    
    
    
    
    
    17
    %Other
    
    
    12
    
    
    
    9
    
    
    
    20
    %
    
    
    
    
    
    
    0
    %TOTAL Revenues Before
Reimbursements
    
    
    11,818
    
    
    
    11,574
    
    
    
    2
    %
    
    
    
    
    
    
    100
    %Reimbursements
    
    
    1,579
    
    
    
    1,531
    
    
    
    3
    %TOTAL REVENUES
    
    $
    13,397
    
    
    $
    13,105
    
    
    
    2
    %GEOGRAPHYAmericas
    
    $
    5,671
    
    
    $
    5,836
    
    
    
    (3
    )%
    
    
    (2
    )%
    
    
    48
    %EMEA (1)
    
    
    5,353
    
    
    
    4,963
    
    
    
    8
    %
    
    
    (6
    )%
    
    
    45
    %Asia Pacific
    
    
    794
    
    
    
    775
    
    
    
    2
    %
    
    
    (3
    )%
    
    
    7
    %TOTAL Revenues Before
Reimbursements
    
    
    11,818
    
    
    
    11,574
    
    
    
    2
    %
    
    
    (4
    )%
    
    
    100
    %Reimbursements
    
    
    1,579
    
    
    
    1,531
    
    
    
    3
    %TOTAL REVENUES
    
    $
    13,397
    
    
    $
    13,105
    
    
    
    2
    %TYPE OF WORKConsulting (2)
    
    $
    8,048
    
    
    $
    8,848
    
    
    
    (9
    )%
    
    
    (15
    )%
    
    
    68
    %Outsourcing (2)
    
    
    3,770
    
    
    
    2,727
    
    
    
    38
    %
    
    
    33
    %
    
    
    32
    %TOTAL Revenues Before
Reimbursements
    
    
    11,818
    
    
    
    11,574
    
    
    
    2
    %
    
    
    
    
    
    
    100
    %Reimbursements
    
    
    1,579
    
    
    
    1,531
    
    
    
    3
    %TOTAL REVENUES
    
    $
    13,397
    
    
    $
    13,105
    
    
    
    2
    %
   (1)
    
    EMEA includes Europe, the Middle East and Africa.(2)
    
    For fiscal years 2003 and 2002, $335 million and $195 million,
respectively, of revenues before reimbursements previously classified as
Other have been reclassified to Consulting or Outsourcing type of work to
conform to the fiscal 2004 presentation. Revenues 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. Our Financial Services operating group achieved revenues before
reimbursements of $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. 44




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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. Revenue growth of 20% for the year 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 Government operating group revenues also benefited from favorable
currency translation. 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 & Consumer industry
group in Europe and a decrease in our Health Services industry group revenues,
which offset favorable currency translation and growth in our Pharmaceuticals &
Medical Products industry group. 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. Operating Expenses Operating 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 fiscal 2002 to consolidate certain office facilities around the world
had the effect of increasing operating expenses as a percentage of revenues
before reimbursements by one percentage point in fiscal 2002. 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. Cost of Services Cost 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) decreased to 36% of
revenues before reimbursements in fiscal 2003 from 40% in fiscal 2002. This
decrease resulted from the shift in our mix of business toward outsourcing and
from pricing pressures. These factors more than offset the favorable effects of
other cost savings, including lower variable compensation and severance costs. Sales and Marketing Sales and marketing expense was $1,458 million in fiscal 2003, a decrease
of $107 million, or 7%, from fiscal 2002, refiecting a $55 million decrease in
business-development and market-development costs and a $25 million decrease in
variable compensation expense. As a percentage of revenues before
reimbursements, sales and marketing expense decreased from 14% in fiscal 2002 to
12% in fiscal 2003. 45




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General and Administrative Costs General and administrative costs were $1,319 million in fiscal 2003, a
decrease of $296 million, or 18%,
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 and Reorganization Costs (Benefits) In fiscal 2003, we recorded a net benefit of $19 million, primarily
resulting from final determinations of certain reorganization liabilities
established in connection with Accentures transition to a corporate structure
in 2001. In fiscal 2002, we incurred restructuring costs of $111 million
related to the costs to consolidate certain office facilities around the world. Operating Income Operating 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% in fiscal 2002 to 13% 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 refiects 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 refiects lower revenues and margins in our Retail & Consumer 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 Investments Gains 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 Income Interest 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. Interest Expense Interest 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. 46




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Equity in Losses of Affiliates Equity 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
Avanade, Inc. and Accenture HR Services subsidiaries, beginning on January 1,
2002 and March 1, 2002, respectively, which we previously accounted for under
the equity method. Provision for Income Taxes The effective tax rates for fiscal years 2003 and 2002 were 35.1% and
46.0%, respectively. 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. Liquidity and Capital Resources Our primary sources of liquidity are cash fiows from operations, debt
capacity available under various credit facilities and available cash reserves.
Cash flow generated by operating activities in fiscal 2004 totaled $1,756
million. At August 31, 2004, cash and cash equivalents totaled $2,553 million,
while total debt was $34 million. Cash and cash equivalents, combined with $601
million of liquid fixed-income securities, classified as investments on our
Consolidated Balance Sheet, totaled $3,154 million at August 31, 2004. 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
Transactions and Relationships  Share Management Plan in the Annual Report on
Form 10-K of Accenture Ltd. Our balance of cash and cash equivalents and liquid fixed-income
securities was $3,154 million at August 31, 2004, an increase of $822 million,
or 35%, over the $2,332 million balance at August 31, 2003. Our balance of cash
and cash equivalents at August 31, 2003 increased $1,015 million, or 77%, from
$1,317 million at August 31, 2002. The year-over-year increases were primarily
attributable to cash provided by operations. 47




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Net cash provided by operating activities was $1,756 million in fiscal
2004, an increase of $212 million over fiscal 2003. This increase was primarily
attributable to an increase in accrued payroll and related benefits, income
taxes payable and other accrued liabilities, which was partly offset by an
increase in net client balances (receivables, unbilled services and deferred
revenues combined) and an increase in other current assets. Net cash used in investing activities was $897 million in fiscal 2004,
compared with $109 million of cash used in investment activities in fiscal 2003.
The increase was primarily due to purchases of marketable securities and
increased capital spending on property and equipment, partially offset by
increased proceeds from sales of investments. Net cash used in financing activities was $688 million in fiscal 2004, an
increase of $165 million over fiscal 2003. Contributing to the increase in cash
used was the $414 million increase in net share purchases in fiscal 2004 over fiscal 2003,
which was partly offset by
a $148 million contract termination payment in fiscal 2003 and a net decrease in restricted cash of the predecessor
to the Accenture Share Employee Compensation Trust. Net cash provided by operating activities was $1,544 million for fiscal
2003, an increase of $454 million from fiscal 2002. Net cash provided by
operating activities benefited from lower income tax payments in fiscal 2003
compared with fiscal 2002. Net cash used in investing activities was $109
million for fiscal 2003, a decrease of $139 million from fiscal 2002, due to
increased proceeds from sales of investments and lower capital spending on
property and equipment and businesses, partly offset by a decrease in proceeds
from the sale of property and equipment in fiscal 2003. Net cash used in
financing activities was $523 million for fiscal 2003, a decrease of $919 million
from 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
made in conjunction with the termination of service arrangements and a facility
use arrangement entered into in fiscal 2001. These payments were partially
offset by proceeds of $256 million from the issuance of Accenture Ltd Class A
common shares under the Accenture employee share purchase plan and employee
share incentive plan. We have a five-year $1,500 million syndicated loan facility, providing
unsecured, revolving borrowing capacity for general working capital purposes,
including the issuance of letters of credit. Financing is provided under this
facility at the prime rate or at the London Interbank Offered Rate plus a
spread. This facility requires 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-fiow ratio not
exceeding 1.75 to 1.00. We continue to be in compliance with these terms. As of
August 31, 2004, we had no borrowings under the facility and $66 million in
letters of credit outstanding. The facility is subject to annual commitment
fees. We also maintain four separate bilateral, uncommitted, unsecured
multicurrency revolving credit facilities. As of August 31, 2004, these
facilities provided for up to $251 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,
2004, amounts available under these facilities totaled $222 million. At August
31, 2004, we had $13 million outstanding under these various facilities and $7
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 years 2004, 2003 and 2002, we invested $282 million, $212
million and $263 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 be
approximately $400 million in fiscal 2005. 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. At August 31, 2004, 2003 and 2002, $455 million, $336
million and $265 million were outstanding for 40, 35 and 25 clients,
respectively. At August 31, 2004 and 2003, $243 million and $203 million,
respectively, were included in current unbilled services, and $212 million and
$133 million, respectively, were included in non-current unbilled services in
our Consolidated Balance Sheet. 48




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Share Purchases and Redemptions Open-Market Repurchases On December 19, 2003, the Accenture Stock Employee Compensation Trust was
terminated and a wholly-owned subsidiary of Accenture Ltd that is not a
subsidiary of Accenture SCA created the new Accenture Share Employee
Compensation Trust (the SECT). Substantially all treasury shares purchased by
the predecessor trust that had not been used to fund employee share awards were
transferred to the SECT. In a series of open-market purchases during fiscal years 2004 and 2003,
the SECT and its predecessor trust acquired 8,413,050 and 8,619,800 Accenture
Ltd Class A common shares, respectively, at aggregate purchase prices of $201
million and $152 million, respectively, for use in conjunction with employee
equity awards. At August 31, 2004, the SECT had $62 million of previously
authorized contributions available for share purchases. Accenture SCA
continues to fund share repurchases by the new SECT by redeeming Class 1 shares
held by Accenture Ltd. Share Management Plan and RSU Sell-Back Program Transactions 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. The Board of
Directors of Accenture Ltd 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 awarded in connection
with our initial public offering. On November 14, 2003, the Board of Directors
of Accenture Ltd authorized an additional $600 million for such share
redemptions and purchases. Of these previously authorized amounts, $664
million was utilized in fiscal 2004, primarily pursuant to quarterly tender
offers made to Accenture SCA Class I common shareholders by controlled
subsidiaries of Accenture Ltd that redeemed or purchased an aggregate of
22,019,515 Accenture SCA Class I common shares and by related purchases of
850,885 Accenture Canada Holdings Inc. exchangeable shares. On September 29, 2003, Accenture closed an underwritten public offering of Accenture Ltd Class A common shares.  The offering was comprised of 57,394,595 shares newly issued by Accenture Ltd and 24,605,405 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 over-allotment option to purchase an additional
12,300,000 newly issued Class A common shares at the same price per
share. On October 1, 2003, Accenture Ltd received $251 million as a
result of the issuance of the additional 12,300,000 newly issued
shares. All of the proceeds from the newly issued shares were used by
Accenture SCA and its subsidiaries, together with $43 million
previously authorized for repurchases under the Accenture Share
Management Plan, to redeem or purchase a total of 71,816,561
Accenture SCA shares and Accenture Canada Holdings, Inc. exchangeable
shares from partners pursuant to a tender offer for a total cash
outlay of $1,465 million. On
May 4, 2004, Accenture closed an underwritten public offering of
Accenture Ltd Class A common shares. The offering was comprised of
35,761,232 shares newly issued by Accenture Ltd and 14,238,768 shares
offered by Accenture partners, former partners and their permitted
transferees. The price to the public was $23.50 per share and the
price net of the underwriters discount of 2.8% was $22.84.
Accenture Ltd received $817 million as the result of the issuance of
35,761,232 shares newly issued by Accenture Ltd. On May 4, 2004, the
underwriters, in connection with the underwritten public offering,
exercised their over-allotment option to purchase an additional 7,500,000 newly
issued Class A common shares at the same price per share. On
May 4, 2004, Accenture Ltd received $171 million as a result of the issuance of the additional 7,500,000
newly issued shares. All of the proceeds from the newly issued shares
were used by Accenture SCA and its subsidiaries, together with $57
million, to redeem or purchase a total of 45,741,795 Accenture SCA
shares and Accenture Canada Holdings, Inc. exchangeable shares from
partners pursuant to a tender offer for a total cash outlay of $1,045
million. During fiscal years 2004 and 2003, Accenture purchased 1,002,761 and
1,294,123 Accenture Ltd Class A common shares, respectively, delivered pursuant
to restricted share units for approximately $25 million and $22 million,
respectively. 49




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At August 31, 2004, the amount available for future share redemptions and
purchases by Accenture under the Share Management Plan and RSU Sell-Back
Program was $224 million. Other Redemptions and Purchases We continue to redeem or purchase certain Accenture SCA Class I common
shares in isolated transactions
conducted outside of our Share Management Plan in accordance with the
redemption provisions applicable to the Accenture SCA Class I common shares
pursuant to their terms or in purchase transactions on comparable terms. These
transactions do not require further approval by the Board of Directors of
Accenture Ltd, and funds used in these transactions do not reduce other
specific authorizations made by the Board of Directors of Accenture Ltd for
various share purchase or reduction activities. To date, these transactions
have consisted primarily of redemptions or purchases of shares held by the
beneficiaries and estates of deceased partners and former partners and, to a
lesser extent, by charitable foundations. During fiscal 2004, $58 million was
used for these purposes. Subsequent Developments Effective as of October 15, 2004, Accentures Board of Directors
authorized the repurchase, redemption and exchange from time to time of up to
an additional $3 billion of Accenture shares through the Companys public share
repurchase program and related to its ongoing Share Management Plan
transactions, through which it periodically redeems or acquires shares held by
partners, former partners and their permitted transferees. These additional
funds became available for use after October 15, 2004. The authorization
requires that $1 billion of these funds be used in connection with the public
share repurchase program. The timing and amount of the public share
repurchases will be at the Companys discretion and will be based on market
conditions and other factors. The United States Congress recently passed, and the President has signed,
legislation relating to the tax treatment of U.S. companies that have
undertaken certain types of expatriation transactions. We do not believe this
legislation applies to Accenture. However, we are not able to predict with
certainty whether the U.S. Internal Revenue Service will challenge our
interpretation of the legislation. Nor are we able to predict with certainty
the impact of regulations or other interpretations that might be issued related
to this legislation. It is possible that certain interpretations could
materially increase our tax burden. Obligations and Commitments As of August 31, 2004, 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
    
    3-5 years
    
    After 5 years(in millions)Long-term debt
    
    $
    14
    
    
    $
    12
    
    
    $
    2
    
    
    $
    0
    
    
    $
    0Operating leases
    
    
    2,443
    
    
    
    247
    
    
    
    480
    
    
    
    357
    
    
    
    1,359Training facility services agreement
    
    
    63
    
    
    
    29
    
    
    
    34
    
    
    
    0
    
    
    
    0Retirement obligations (1)
    
    
    300
    
    
    
    26
    
    
    
    76
    
    
    
    78
    
    
    
    120Other purchase commitments (2)
    
    
    684
    
    
    
    355
    
    
    
    284
    
    
    
    40
    
    
    
    5Total
    
    $
    3,504
    
    
    $
    669
    
    
    $
    876
    
    
    $
    475
    
    
    $
    1,484
 (1)
    
    This represents projected payments under our Basic Retirement Benefit and
Early Retirement Plans. Because both of these plans are unfunded, we pay
these benefits directly. These plans were eliminated for active partners
after May 15, 2001.(2)
    
    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 that we cannot cancel or
where we would be required to pay a termination fee in the event of
cancellation. Amounts shown do not include recourse that we may have to
recover termination fees or penalties from clients. Off-Balance Sheet Arrangements We have various agreements by which we may be obligated to indemnify the
other party with respect to certain matters. Generally, these indemnification
provisions are included in contracts arising in the normal course of 50




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business
under which we customarily agree to hold the indemnified 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 us under such indemnification clauses are generally conditioned on
the other party making a claim. Such claims are generally subject to challenge
by us and dispute resolution procedures specified in the particular contract.
Furthermore, 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, the
Company has not made any payments under these agreements that have been
material individually or in the aggregate. As of August 31, 2004, we were not
aware of any obligations under such indemnification agreements that would
require material payments. From time to time, Accenture enters into contracts with clients whereby it
has joint and several liability with other participants and third parties
providing related services and products to the client. Under these
arrangements, Accenture and other parties may assume some responsibility to the
client for the performance of others under the terms and conditions of the
contract with or for the benefit of the client. To date, Accenture has not
been required to make any payments under any of the contracts described in this
paragraph. For further discussion of these transactions, please see Footnote
16 (Commitments and Contingencies) to our consolidated financial statements
below under Financial Statements and Supplementary Data. Newly Issued Accounting Standards In May 2004, the Financial Accounting Standards Board issued FASB Staff
Position (FSP) 106-2, Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement and Modernization Act of 2003. This
statement applies to the sponsor of a single-employer defined benefit
postretirement health care plan for which (a) the employer has concluded that
prescription drug benefits available under the plan to some or all participants
for some or all future years are actuarially equivalent to Medicare Part D
and thus qualify for the subsidy under the Medicare Prescription Drug,
Improvement and Modernization Act of 2003; and (b) the expected subsidy will
offset or reduce the employers share of the cost of the underlying
postretirement prescription drug coverage on which the subsidy is based. FSP
No. 106-2 became effective for the Company on September 1, 2004 and is not
expected to have a material effect on the Company. 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign Currency Risk We are exposed to foreign currency risk in the ordinary course of
business. We hedge material cash fiow exposures when feasible using forward
and/or option contracts. These instruments are generally short-term in nature,
with typical 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
forward or option contracts of a long-term nature. Credit risk is managed
through careful selection and ongoing evaluation of the financial institutions
utilized as counterparties. 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
fiows 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 refiect the offsetting gain or loss on
the underlying exposure. As of August 31, 2004, 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 $17.9 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 $17.9 million.
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. 51




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Interest Rate Risk The interest rate risk associated with our borrowing and investing
activities at August 31, 2004 is not material in relation to our consolidated
financial position, results of operations or cash fiows. 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 Risk The equity price risk associated with our marketable equity securities
that are subject to market price volatility is not material in relation to our
consolidated financial position, results of operations or cash flows. 
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See the index included on page F-1, Index to Consolidated Financial
Statements. 
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 
 ITEM 9A. CONTROLS AND PROCEDURES Based 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 Securities and Exchange Commissions rules and forms. There has been no significant change in Accenture SCAs internal control
over financial reporting that occurred during the fourth quarter of fiscal 2004
that has materially affected, or is reasonably likely to materially affect,
Accenture SCAs internal control over financial reporting. As of September 1, 2004, we transitioned certain of our business and
financial systems to new platforms. The implementation of these platforms as of
September 1, 2004 represents a culmination of more than a year of preparation,
testing and training. Implementation of the new systems necessarily involves
changes to our procedures for control over financial reporting. Our CEO and
CFO believe that throughout this implementation process we have maintained
internal financial controls sufficient to ensure appropriate internal controls
over financial reporting for fiscal 2004. 
 ITEM 9B. OTHER INFORMATION None. 52




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PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Accenture 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 Item 10 of the Annual Report on Form
10-K of Accenture Ltd, the general partner of Accenture SCA, which was filed on
November 5, 2004, and is incorporated herein by reference. Accenture SCA Supervisory Board While 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. 
 ITEM 11. EXECUTIVE COMPENSATION Information
responsive to this Item is set forth in Item 11 of the Annual Report on Form
10-K of Accenture Ltd, the general partner of Accenture SCA, which was filed on
November 5, 2004, and is incorporated herein by reference. 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Beneficial Ownership of More than Five Percent As of October 29, 2004, the only person known by us to be a beneficial
owner of more than five percent of Accenture SCAs Class I or Class II common
shares were as follows: Accenture Ltd Class I common shares
    
    Accenture Ltd 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 (1)
    
    
    528,299,067
    
    
    
    59.4
    %
    
    
    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 Item 12 of the Annual
Report on Form 10-K of Accenture Ltd, the general partner of Accenture SCA,
which was filed on November 5, 2004, and is incorporated herein by reference. 53




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ITEM 13. CERTAIN TRANSACTIONS AND RELATIONSHIPS Information
responsive to this Item is set forth in Item 13 of the Annual Report on Form
10-K of Accenture Ltd, the general partner of Accenture SCA, which was filed on
November 5, 2004, and is incorporated herein by reference. 
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The following table describes fees for professional audit services
rendered by KPMG LLP, Accenture Ltds principal accountant, for the audit of
our annual financial statements for the years ended August 31, 2004 and August
31, 2003, and fees billed for other services rendered by KPMG LLP during those
periods. Type of Fee
    
    2004
    
    2003(in thousands)Audit Fees (1)
    
    $
    6,425
    
    
    $
    4,715Audit Related Fees (2)
    
    
    2,742
    
    
    
    2,299Tax Fees (3)
    
    
    652
    
    
    
    752All Other Fees (4)
    
    
    130
    
    
    
    618Total
    
    $
    9,949
    
    
    $
    8,384
  (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 LLP for the audit of Accenture Ltds and
Accenture SCAs annual financial statements and review of financial
statements included in Accentures Forms 10-Q and Form 10-K.  (2)
    
    Audit Related Fees include the aggregate fees paid by Accenture during
the fiscal year indicated for assurance and related services by KPMG LLP
that are reasonably related to the performance of the audit or review of
Accenture Ltds and Accenture SCA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 related 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 KPMG LLP 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 LLP,
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 Auditor Pursuant 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 LLPs engagement to conduct the audit of Accenture
Ltd was approved by the Audit Committee on November 12, 2003. Additionally,
each permissible non-audit engagement or relationship between Accenture and
KPMG LLP 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 LLP 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 LLP. 54




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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) List of documents filed as part of this report: 1.
    
    Financial Statements as of August 31, 2004 and August 31, 2003 and for
the three years ended August 31, 2004  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 the Registrant and the
covered persons party thereto (incorporated by reference to Exhibit 9.1 to the
Registrant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 the Registrant
and the partners party thereto (incorporated by reference to Exhibit 10.1 to the
April 19, 2001 Form S-1).10.2
    
    Form of Non-Competition Agreement, dated as of April 18, 2001, among the Registrant
and certain employees (incorporated by reference to Exhibit 10.2 to the April 19,
2001 Form S-1).10.3
    
    2001 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the
Registrant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)).
 55




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##### Table of Contents



ExhibitNumber
    
    Exhibit10.5B
    
    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).10.7
    
    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 the Registrant 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. Cole, Coughlan, Frerichs, Friedman, Green,
McGrath, Rohleder and Scrivner and Ms. 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 (incorporated
by reference to Exhibit 10.8 to the Accenture Ltd November 30, 2001 10-Q).10.15
    
    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).10.16
    
    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).10.17
    
    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).10.18
    
    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).10.19
    
    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)).10.20
    
    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).).
 56




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##### Table of Contents



ExhibitNumber
    
    Exhibit24.1
    
    Power of Attorney (included on the signature page hereto).31.1
    
    Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), 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 Rules 13a-14(a) and 15d-14(a), 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 (filed 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 (filed herewith).99.1
    
    Incorporated portions of
Accenture Ltds Annual Report on Form 10-K for the fiscal year
ended August 31, 2004.
 57




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SIGNATURES Pursuant 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 4, 2004 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. ScrivnerTitle:
    General Counsel and Secretary POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints William D. Green, Michael G.
McGrath 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, 2004 (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 4, 2004 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
    
    Chairman of the BoardJoe W. Forehand/s/ WILLIAM D. GREEN
    
    Chief Executive Officer and Director(principal executive officer)William D. Green




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##### Table of Contents



Signature
    Title/s/ STEVEN A. BALLMER
    
    DirectorSteven A. Ballmer/s/ DINA DUBLON
    
    DirectorDina Dublon/s/ JOEL P. FRIEDMAN
    
    DirectorJoel P. Friedman/s/ DENNIS F. HIGHTOWER
    
    DirectorDennis F. Hightower/s/ WILLIAM L. KIMSEY
    
    DirectorWilliam L. Kimsey/s/ ROBERT I. LIPP
    
    DirectorRobert I. Lipp/s/ BLYTHE J. MCGARVIE
    
    DirectorBlythe J. McGarvie/s/ SIR MARK MOODY-STUART
    
    DirectorSir Mark Moody-Stuart/s/ MASAKATSU MORI
    
    DirectorMasakatsu Mori/s/ CARLOS VIDAL
    
    DirectorCarlos Vidal/s/ WULF VON SCHIMMELMANN
    
    DirectorWulf von Schimmelmann/s/ MICHAEL G. MCGRATH
    
    Chief
Financial Officer(principal financial officer)Michael G. McGrath/s/ ANTHONY G. COUGHLAN
    
    Principal Accounting Officer and Controller(principal accounting officer)Anthony G. Coughlan




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##### Table of Contents



ACCENTURE SCA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Financial Statements as of August 31, 2004 and August 31, 2003 and for the three years
ended August 31, 2004:Consolidated Balance Sheets
    
    
    F-3Consolidated Income Statements
    
    
    F-4Consolidated Shareholders Equity and Comprehensive Income Statements
    
    
    F-5Consolidated Cash Flows Statements
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM The General Partners and Shareholders
Accenture SCA: We have audited the accompanying consolidated balance sheets of Accenture
SCA and its subsidiaries as of August 31, 2004 and 2003, and the related
consolidated statements of income, shareholders equity and comprehensive
income, and cash flows for each of the years in the three-year period ended
August 31, 2004. 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 the standards of the Public
Company Accounting Oversight Board (United States). 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, 2004 and 2003, and the results of
their operations and their cash flows for each of the years in the three-year
period ended August 31, 2004, in conformity with U.S. generally accepted
accounting principles. /S/ KPMG LLP
Chicago, Illinois
October 13, 2004 F-2




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##### Table of Contents



ACCENTURE SCA 
 CONSOLIDATED BALANCE SHEETS August 31, 2004 and 2003
(In thousands of U.S. dollars, except share amounts) 2004
    
    2003ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,552,958
    
    
    $
    2,332,161Restricted cash
    
    
    
    
    
    
    83,280Short-term investments
    
    
    285,288
    
    
    
    Receivables from clients, net
    
    
    1,662,211
    
    
    
    1,416,153Unbilled services
    
    
    1,014,870
    
    
    
    828,515Deferred income taxes, net
    
    
    105,636
    
    
    
    147,040Other current assets
    
    
    475,426
    
    
    
    230,062Total current assets
    
    
    6,096,389
    
    
    
    5,037,211NON-CURRENT ASSETS:Unbilled services
    
    
    211,705
    
    
    
    132,522Investments
    
    
    340,121
    
    
    
    33,330Property and equipment, net
    
    
    643,946
    
    
    
    650,455Goodwill
    
    
    214,482
    
    
    
    188,659Deferred income taxes, net
    
    
    309,045
    
    
    
    326,286Other non-current assets
    
    
    171,991
    
    
    
    90,777Total non-current assets
    
    
    1,891,290
    
    
    
    1,422,029TOTAL ASSETS
    
    $
    7,987,679
    
    
    $
    6,459,240LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term bank borrowings
    
    $
    20,103
    
    
    $
    43,500Current portion of long-term debt
    
    
    11,612
    
    
    
    2,662Accounts payable
    
    
    523,931
    
    
    
    573,201Deferred revenues
    
    
    980,461
    
    
    
    676,841Accrued payroll and related benefits
    
    
    1,508,126
    
    
    
    974,319Income taxes payable
    
    
    795,948
    
    
    
    671,026Deferred income taxes, net
    
    
    42,744
    
    
    
    22,390Other accrued liabilities
    
    
    530,059
    
    
    
    344,384Total current liabilities
    
    
    4,412,984
    
    
    
    3,308,323NON-CURRENT LIABILITIES:Long-term debt
    
    
    2,161
    
    
    
    13,955Retirement obligation
    
    
    532,307
    
    
    
    575,973Deferred income taxes, net
    
    
    18,769
    
    
    
    3,572Other non-current liabilities
    
    
    608,689
    
    
    
    801,781Total non-current liabilities
    
    
    1,161,926
    
    
    
    1,395,281MINORITY INTEREST
    
    
    37,679
    
    
    
    34,817SHAREHOLDERS EQUITY:Class I common shares, par value 1.25 euros per share, 19,782,549,738 shares authorized, 753,843,192 issued as of
August 31, 2004 and 2003
    
    
    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 I-N common shares, par value 1.25 euros per share, 12,747,835 shares authorized, issued and outstanding
    
    
    18,301
    
    
    
    Class 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), 28,278,704 and 43,901,292 units issued
and
outstanding as of August 31, 2004 and 2003, respectively,
    
    
    475,240
    
    
    
    669,860Deferred compensation
    
    
    (150,777
    )
    
    
    (112,251
    )Additional paid-in capital
    
    
    2,976,655
    
    
    
    2,702,248Treasury
shares, at cost, 83,869,278 and 45,256,961 Class I common shares at August 31, 2004 and 2003, respectively
    
    
    (1,898,744
    )
    
    
    (846,959
    )Investment in Accenture Ltd shares, at cost, 1,421,944 and 5,229,487 shares at August 31, 2004 and 2003,
respectively
    
    
    (35,697
    )
    
    
    (88,198
    )Accenture Ltd Class A shares owned by Accenture Ltd Stock Employee Compensation Trust, at cost, 0 and 18,081,800
shares at August 31, 2004 and 2003, respectively
    
    
    
    
    
    
    (308,878
    )Retained deficit
    
    
    (497,729
    )
    
    
    (1,708,371
    )Accumulated other comprehensive loss
    
    
    (113,760
    )
    
    
    (188,233
    )Total shareholders equity
    
    
    2,375,090
    
    
    
    1,720,819TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    7,987,679
    
    
    $
    6,459,240
 The accompanying notes are an integral part of these consolidated financial statements. F-3




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##### Table of Contents



ACCENTURE SCA 
 CONSOLIDATED INCOME STATEMENTS For the Years Ended August 31, 2004, 2003 and 2002
(In thousands of U.S. dollars) 2004
    
    2003
    
    2002REVENUES:Revenues before reimbursements
    
    $
    13,673,563
    
    
    $
    11,817,999
    
    
    $
    11,574,269Reimbursements
    
    
    1,440,019
    
    
    
    1,579,241
    
    
    
    1,530,755Revenues
    
    
    15,113,582
    
    
    
    13,397,240
    
    
    
    13,105,024OPERATING EXPENSES:Cost of services:Cost of services before reimbursable expenses
    
    
    9,057,246
    
    
    
    7,508,059
    
    
    
    6,896,975Reimbursable expenses
    
    
    1,440,019
    
    
    
    1,579,241
    
    
    
    1,530,755Cost of services
    
    
    10,497,265
    
    
    
    9,087,300
    
    
    
    8,427,730Sales and marketing
    
    
    1,488,333
    
    
    
    1,458,484
    
    
    
    1,565,616General and administrative costs
    
    
    1,340,467
    
    
    
    1,319,567
    
    
    
    1,615,703Restructuring and reorganization costs (benefits)
    
    
    28,891
    
    
    
    (19,346
    )
    
    
    110,524Total operating expenses
    
    
    13,354,956
    
    
    
    11,846,005
    
    
    
    11,719,573OPERATING INCOME
    
    
    1,758,626
    
    
    
    1,551,235
    
    
    
    1,385,451Gain (loss) on investments, net
    
    
    3,397
    
    
    
    10,123
    
    
    
    (321,127
    )Interest income
    
    
    59,939
    
    
    
    41,130
    
    
    
    46,185Interest expense
    
    
    (22,044
    )
    
    
    (21,016
    )
    
    
    (48,864
    )Other income
    
    
    160
    
    
    
    31,754
    
    
    
    14,993Equity in losses of affiliates
    
    
    (1,508
    )
    
    
    (409
    )
    
    
    (9,080
    )INCOME BEFORE INCOME TAXES
    
    
    1,798,570
    
    
    
    1,612,817
    
    
    
    1,067,558Provision for income taxes
    
    
    575,543
    
    
    
    566,099
    
    
    
    491,071INCOME BEFORE MINORITY INTEREST
    
    
    1,223,027
    
    
    
    1,046,718
    
    
    
    576,487Minority interest
    
    
    (10,108
    )
    
    
    (6,832
    )
    
    
    2,723NET INCOME
    
    $
    1,212,919
    
    
    $
    1,039,886
    
    
    $
    579,210
 The accompanying notes are an integral part of these consolidated financial statements. F-4




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##### Table of Contents



ACCENTURE SCA 
 CONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME STATEMENTS For the Years Ended August 31, 2004, 2003 and 2002
(U.S. dollars and in thousands share amounts in thousands) Class I
    
    Class II
    
    Restricted Share UnitsCommon Shares
    
    Common Shares
    
    Common SharesNo.
    
    
    
    No.
    
    
    
    No.$
    
    Shares
    
    $
    
    Shares
    
    $
    
    SharesBalance at August 31, 2001
    
    $
    986,965
    
    
    
    883,634
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    1,012,869
    
    
    
    69,826Comprehensive incomeNet incomeOther comprehensive income (loss):Unrealized gains on marketable securities, net of
reclassification adjustmentsForeign currency translation adjustmentsMinimum pension liability adjustmentOther comprehensive income (loss)Comprehensive incomeIncome tax benefit on stock-based compensation plans.Issuance and repurchase of Class I common shares 
Class I- M
    
    
    67,668
    
    
    
    58,489Stock-based compensation expenseRedemption of partners SCA Class I common sharesIssuance of optionsPurchase of Accenture Ltd Class A common sharesIssuance of Class I common shares:Employee share purchase plan  Class L
    
    
    5,540
    
    
    
    5,025Restricted share units  Class I  M
    
    
    10,730
    
    
    
    9,395
    
    
    
    
    
    
    
    
    
    
    
    (67,558
    )
    
    
    (6,532
    )For acquisitions  Class I
    
    
    1,417
    
    
    
    1,259Transaction feesMinority interest
    
    
    
    
    
    
    744Balance at August 31, 2002
    
    
    1,072,320
    
    
    
    958,546
    
    
    
    529,281
    
    
    
    470,958
    
    
    
    945,311
    
    
    
    63,294Comprehensive incomeNet incomeOther comprehensive income (loss):Unrealized gains on marketable securities, net of
reclassification adjustmentsForeign currency translation adjustmentsMinimum pension liability adjustmentOther comprehensive income (loss)Comprehensive incomeIncome tax benefit on:Stock-based compensation plansContract terminationTransfer of shares from SECT to Accenture Ltd.Purchase of Accenture Ltd Class A common sharesStock-based compensation expensePurchases/redemptions of Accenture SCA Class I common shares and Canada Holdings Inc. exchangeable
sharesIssuance of Class I common shares:Employee share purchase planEmployee stock optionsRestricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (275,451
    )
    
    
    (19,393
    )Transaction feesStock option expenseContract terminationMinority interestBalance at August 31, 2003
    
    $
    1,072,320
    
    
    
    958,546
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    669,860
    
    
    
    43,901
   [Continued from above table, first column(s) repeated] Treasury
    
    Investment inAdditional
    
    Shares
    
    Accenture Ltd.Deferred
    
    Paid-in
    
    
    
    No.
    
    
    
    No.Compensation
    
    Capital
    
    $
    
    Shares
    
    $
    
    SharesBalance at August 31, 2001
    
    $
    (19,026
    )
    
    $
    1,661,261
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    Comprehensive incomeNet incomeOther comprehensive income (loss):Unrealized gains on marketable securities, net of
reclassification adjustmentsForeign currency translation adjustmentsMinimum pension liability adjustmentOther comprehensive income (loss)Comprehensive incomeIncome tax benefit on stock-based compensation plans.
    
    
    
    
    
    
    17,651Issuance and repurchase of Class I common shares 
Class I- M
    
    
    
    
    
    
    1,067,001
    
    
    
    (1,058,811
    )
    
    
    (54,578
    )Stock-based compensation expense
    
    
    55,081
    
    
    
    (354
    )
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    (1
    )Redemption of partners SCA Class I common shares
    
    
    
    
    
    
    
    
    
    
    (12,191
    )
    
    
    (547
    )Issuance of options
    
    
    
    
    
    
    (1,600
    )
    
    
    4,592
    
    
    
    237
    
    
    
    987
    
    
    
    38Purchase of Accenture Ltd Class A common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (327,417
    )
    
    
    (14,968
    )Issuance of Class I common shares:Employee share purchase plan  Class L
    
    
    
    
    
    
    47,068
    
    
    
    
    
    
    
    
    
    
    
    (10,581
    )
    
    
    165Restricted share units  Class I  M
    
    
    (98,092
    )
    
    
    117,928
    
    
    
    13,510
    
    
    
    611
    
    
    
    21,523
    
    
    
    1,039For acquisitions  Class I
    
    
    
    
    
    
    29,933Transaction fees
    
    
    
    
    
    
    1,780Minority interest
    
    
    
    
    
    
    5,790Balance at August 31, 2002
    
    
    (62,037
    )
    
    
    2,946,458
    
    
    
    (1,052,900
    )
    
    
    (54,277
    )
    
    
    (315,486
    )
    
    
    (13,727
    )Comprehensive incomeNet incomeOther comprehensive income (loss):Unrealized gains on marketable securities, net of
reclassification adjustmentsForeign currency translation adjustmentsMinimum pension liability adjustmentOther comprehensive income (loss)Comprehensive incomeIncome tax benefit on:Stock-based compensation plans
    
    
    
    
    
    
    34,081Contract terminationTransfer of shares from SECT to Accenture Ltd.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63,995
    )
    
    
    (3,100
    )Purchase of Accenture Ltd Class A common shares
    
    
    
    
    
    
    (53,389
    )
    
    
    
    
    
    
    
    
    
    
    (79,944
    )
    
    
    (4,789
    )Stock-based compensation expense
    
    
    48,970
    
    
    
    2,645Purchases/redemptions of Accenture SCA Class I common shares and Canada Holdings Inc. exchangeable
shares
    
    
    
    
    
    
    (1,536
    )
    
    
    (273,782
    )
    
    
    (15,873
    )Issuance of Class I 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
    
    
    (99,184
    )
    
    
    (108,177
    )
    
    
    218,390
    
    
    
    11,258
    
    
    
    264,422
    
    
    
    11,345Transaction fees
    
    
    
    
    
    
    13,477Stock option expense
    
    
    
    
    
    
    954Contract terminationMinority interest
    
    
    
    
    
    
    (6,734
    )Balance at August 31, 2003
    
    $
    (112,251
    )
    
    $
    2,702,248
    
    
    $
    (846,959
    )
    
    
    (45,257
    )
    
    $
    (88,198
    )
    
    
    (5,229
    )
   [Continued from above table, first column(s) repeated] Investment in
    
    
    
    
    
    AccumulatedAccenture Ltd  SECT
    
    Retained
    
    OtherNo.
    
    Earnings
    
    Comprehensive$
    
    Shares
    
    (Deficit)
    
    Income (Loss)
    
    TotalBalance at August 31, 2001
    $
    
    
    
    
    
    
    
    
    $
    (3,377,729
    )
    
    $
    (108,634
    )
    
    $
    684,987Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    579,210
    
    
    
    
    
    
    
    579,210Other comprehensive income (loss):Unrealized gains on marketable securities, net of
reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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 repurchase of Class I common shares 
Class I- M
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,858Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,729Redemption of partners SCA Class I common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,191
    )Issuance of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,979Purchase of Accenture Ltd Class A common shares
    
    
    (221,110
    )
    
    
    (12,562
    )
    
    
    
    
    
    
    
    
    
    
    (548,527
    )Issuance of Class I common shares:Employee share purchase plan  Class L
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,027Restricted share units  Class I  M
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,959
    )For acquisitions  Class I
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,350Transaction fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,780Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,790Balance at August 31, 2002
    
    
    (221,110
    )
    
    
    (12,562
    )
    
    
    (2,798,519
    )
    
    
    (80,432
    )
    
    
    962,886Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    1,039,886
    
    
    
    
    
    
    
    1,039,886Other comprehensive income (loss):Unrealized gains on marketable securities, net of
reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    48,555Transfer of shares from SECT to Accenture Ltd.
    
    
    63,995
    
    
    
    3,100
    
    
    
    
    
    
    
    
    
    
    
    Purchase of Accenture Ltd Class A common shares
    
    
    (151,763
    )
    
    
    (8,620
    )
    
    
    
    
    
    
    
    
    
    
    (285,096
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,615Purchases/redemptions of Accenture SCA Class I common shares and Canada Holdings Inc. exchangeable
shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (275,318
    )Issuance of Class I common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    157,244Employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85,363Restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Transaction fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,477Stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    954Contract termination
    
    
    
    
    
    
    
    
    
    
    1,707
    
    
    
    
    
    
    
    1,707Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,734
    )Balance at August 31, 2003
    
    $
    (308,878
    )
    
    
    (18,082
    )
    
    $
    (1,708,371
    )
    
    $
    (188,233
    )
    
    $
    1,720,819
 The accompanying notes are an integral part of these consolidated financial statements. F-5




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##### Table of Contents



ACCENTURE SCA
CONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME STATEMENTS  (Continued) For the Years Ended August 31, 2004, 2003 and 2002
(In thousands of U.S. dollars and in thousands of share amounts) Class I
    
    Class II
    
    Restricted Share UnitsCommon Shares
    
    Common Shares
    
    Common SharesNo.
    
    
    
    No.
    
    
    
    No.$
    
    Shares
    
    $
    
    Shares
    
    $
    
    SharesComprehensive incomeNet incomeOther comprehensive income (loss):Unrealized gains on marketable
securities, net of
reclassification adjustmentsForeign currency translation
adjustmentsMinimum pension liability adjustmentOther comprehensive income (loss)Comprehensive incomeIncome tax benefit on:Stock-based compensation plansContract terminationPurchase of Accenture Ltd common sharesTransfer of shares from SECTStock-based compensation expensePurchases/redemptions of Accenture SCA Class I common shares and Canada
Holdings Inc. exchangeable sharesIssuance of Class A common shares:Employee share purchase planEmployee stock optionsRestricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (194,620
    )
    
    
    (15,622
    )In September 2003 secondary offering
    
    
    18,301
    
    
    
    12,748In May 2004 secondary offeringTransactions feesMinority interestBalance at August 31, 2004
    
    $
    1,090,621
    
    
    
    971,294
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    475,240
    
    
    
    28,279
   [Continued from above table, first column(s) repeated] Treasury
    
    Investment inAdditional
    
    Shares
    
    Accenture Ltd.Deferred
    
    Paid-in
    
    
    
    No.
    
    
    
    No.Compensation
    
    Capital
    
    $
    
    Shares
    
    $
    
    SharesComprehensive incomeNet incomeOther comprehensive income (loss):Unrealized gains on marketable
securities, net of
reclassification adjustmentsForeign currency translation
adjustmentsMinimum pension liability adjustmentOther comprehensive income (loss)Comprehensive incomeIncome tax benefit on:Stock-based compensation plans
    
    
    
    
    
    
    30,235Contract terminationPurchase of Accenture Ltd common shares
    
    
    
    
    
    
    (79,491
    )
    
    
    
    
    
    
    
    
    
    
    (89,236
    )
    
    
    (3,511
    )Transfer of shares from SECT
    
    
    
    
    
    
    8,324
    
    
    
    (92,119
    )
    
    
    (3,707
    )
    
    
    (304,048
    )
    
    
    (17,879
    )Stock-based compensation expense
    
    
    59,434
    
    
    
    1,052Purchases/redemptions of Accenture SCA Class I common shares and Canada
Holdings Inc. exchangeable shares
    
    
    
    
    
    
    (44,828
    )
    
    
    (3,181,473
    )
    
    
    (146,391
    )Issuance of Class A common shares:Employee share purchase plan
    
    
    
    
    
    
    (15,668
    )
    
    
    63,407
    
    
    
    3,287
    
    
    
    86,951
    
    
    
    4,394Employee stock options
    
    
    
    
    
    
    (63,332
    )
    
    
    164,861
    
    
    
    8,467
    
    
    
    69,688
    
    
    
    3,252Restricted share units
    
    
    (97,960
    )
    
    
    (73,449
    )
    
    
    360,284
    
    
    
    16,824
    
    
    
    5,745
    
    
    
    251In September 2003 secondary offering
    
    
    
    
    
    
    369,582
    
    
    
    750,591
    
    
    
    39,647
    
    
    
    283,401
    
    
    
    17,300In May 2004 secondary offering
    
    
    
    
    
    
    105,509
    
    
    
    882,664
    
    
    
    43,261Transactions fees
    
    
    
    
    
    
    25,519Minority interest
    
    
    
    
    
    
    10,954Balance at August 31, 2004
    
    $
    (150,777
    )
    
    $
    2,976,655
    
    
    $
    (1,898,744
    )
    
    
    (83,869
    )
    
    $
    (35,697
    )
    
    
    (1,422
    )
   [Continued from above table, first column(s) repeated] Investment in Accenture
    
    
    
    
    
    AccumulatedLtd-SECT
    
    
    
    
    
    OtherNo.
    
    Retained Earnings
    
    Comprehensive$
    
    Shares
    
    (Deficit)
    
    Income (Loss)
    
    TotalComprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    1,212,919
    
    
    
    
    
    
    
    1,212,919Other comprehensive income (loss):Unrealized gains on marketable
securities, net of
reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,585
    
    
    
    1,585Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,312
    
    
    
    44,312Minimum pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    (4,350
    )
    
    
    28,576
    
    
    
    24,226Other comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,473Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,283,042Income tax benefit on:Stock-based compensation plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,235Contract termination
    
    
    
    
    
    
    
    
    
    
    2,073
    
    
    
    
    
    
    
    2,073Purchase of Accenture Ltd common shares
    
    
    (78,965
    )
    
    
    (3,500
    )
    
    
    
    
    
    
    
    
    
    
    (247,692
    )Transfer of shares from SECT
    
    
    387,843
    
    
    
    21,582
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,486Purchases/redemptions of Accenture SCA Class I common shares and Canada
Holdings Inc. exchangeable shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,226,301
    )Issuance of Class A common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    134,690Employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171,217Restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    In September 2003 secondary offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,421,875In May 2004 secondary offering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    988,173Transactions fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,519Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,954Balance at August 31, 2004
    
    
    
    
    
    
    
    
    
    $
    (497,729
    )
    
    $
    (113,760
    )
    
    $
    2,375,090
 The accompanying notes are an integral part of these consolidated financial statements. F-6




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##### Table of Contents



ACCENTURE SCA 
 CONSOLIDATED CASH FLOWS STATEMENTS For the Years Ended August 31, 2004, 2003 and 2002
(In thousands of U.S. dollars) 2004
    
    2003
    
    2002CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,212,919
    
    
    $
    1,039,886
    
    
    $
    579,210Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization
    
    
    257,080
    
    
    
    237,205
    
    
    
    285,361Reorganization benefits
    
    
    (78,365
    )
    
    
    (19,346
    )
    
    
    (Gains) losses on investments, net
    
    
    (3,397
    )
    
    
    (10,123
    )
    
    
    321,127Losses on disposal of property and equipment, net
    
    
    8,596
    
    
    
    2,826
    
    
    
    20,679Stock-based compensation expense
    
    
    60,486
    
    
    
    51,615
    
    
    
    54,729Deferred income taxes, net
    
    
    92,864
    
    
    
    53,781
    
    
    
    (138,740
    )Minority interest
    
    
    10,108
    
    
    
    6,832
    
    
    
    (2,723
    )Other items, net
    
    
    (121
    )
    
    
    1,711
    
    
    
    6,229Change in assets and liabilities (Increase) decrease in receivables from clients, net
    
    
    (182,998
    )
    
    
    23,444
    
    
    
    207,240(Increase) decrease in other current assets
    
    
    (208,802
    )
    
    
    79,381
    
    
    
    (31,133
    )Increase in unbilled services, current and non-current
    
    
    (222,428
    )
    
    
    (26,603
    )
    
    
    (78,948
    )Increase in other non-current assets
    
    
    (84,703
    )
    
    
    (26,402
    )
    
    
    (8,544
    )(Decrease) increase in accounts payable
    
    
    (65,486
    )
    
    
    106,704
    
    
    
    34,419Increase (decrease) in deferred revenues
    
    
    275,371
    
    
    
    88,365
    
    
    
    (246,807
    )Increase (decrease) in accrued payroll and related benefits
    
    
    498,293
    
    
    
    (203,187
    )
    
    
    (1,887
    )Increase (decrease) in income taxes payable
    
    
    143,229
    
    
    
    250,599
    
    
    
    (55,468
    )Increase (decrease) in other accrued liabilities
    
    
    162,675
    
    
    
    (127,444
    )
    
    
    175,352(Decrease) increase in other non-current liabilities
    
    
    (119,372
    )
    
    
    15,101
    
    
    
    (29,786
    )Net cash provided by operating activities
    
    
    1,755,949
    
    
    
    1,544,345
    
    
    
    1,090,310CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of investments
    
    
    421,003
    
    
    
    103,790
    
    
    
    16,233Proceeds from sales of property and equipment
    
    
    11,026
    
    
    
    18,768
    
    
    
    68,309Purchases of businesses and investments, net of cash acquired
    
    
    (31,662
    )
    
    
    (19,833
    )
    
    
    (69,743
    )Purchases of available-for-sale investments
    
    
    (1,014,998
    )
    
    
    
    
    
    
    Purchases of property and equipment
    
    
    (281,986
    )
    
    
    (211,565
    )
    
    
    (262,831
    )Net cash used in investing activities
    
    
    (896,617
    )
    
    
    (108,840
    )
    
    
    (248,032
    )CASH FLOWS FROM FINANCING ACTIVITIES:Distribution of partners pre-incorporation income
    
    
    
    
    
    
    
    
    
    
    (765,631
    )Payment of retirement benefits to former pre-incorporation partners
    
    
    (30,606
    )
    
    
    (44,714
    )
    
    
    (28,708
    )Contract termination payment
    
    
    
    
    
    
    (147,569
    )
    
    
    Proceeds from issuance of Accenture Ltd Class A common shares
    
    
    2,741,474
    
    
    
    256,084
    
    
    
    123,644Purchases of Accenture SCA Class I common shares
    
    
    (3,459,934
    )
    
    
    (560,414
    )
    
    
    (560,718
    )Proceeds from issuance of long-term debt
    
    
    799
    
    
    
    2,006
    
    
    
    8,476Repayments of long-term debt
    
    
    (4,058
    )
    
    
    (5,953
    )
    
    
    (2,017
    )Proceeds from issuance of short-term bank borrowings
    
    
    96,851
    
    
    
    116,978
    
    
    
    364,552Repayments of short-term bank borrowings
    
    
    (115,491
    )
    
    
    (135,449
    )
    
    
    (501,836
    )Decrease (increase) in restricted cash of Accenture Share Employee Compensation Trust
    
    
    83,280
    
    
    
    (3,835
    )
    
    
    (79,445
    )Net cash used in financing activities
    
    
    (687,685
    )
    
    
    (522,866
    )
    
    
    (1,441,683
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    49,150
    
    
    
    102,546
    
    
    
    36,298NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    220,797
    
    
    
    1,015,185
    
    
    
    (563,107
    )CASH AND CASH EQUIVALENTS,beginning of period
    
    
    2,332,161
    
    
    
    1,316,976
    
    
    
    1,880,083CASH AND CASH EQUIVALENTS,end of period
    
    $
    2,552,958
    
    
    $
    2,332,161
    
    
    $
    1,316,976Supplemental cash flow informationInterest paid
    
    $
    21,970
    
    
    $
    20,117
    
    
    $
    32,876Income taxes paid
    
    $
    387,450
    
    
    $
    255,219
    
    
    $
    716,578
 The accompanying notes are an integral part of these consolidated financial statements. F-7




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ACCENTURE SCA 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Accenture is one of the worlds leading management consulting, technology
services and outsourcing organizations. We had $13,673,563 of revenues before
reimbursements in fiscal 2004. As of August 31, 2004, we had more than 100,000
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. Principles of Consolidation The consolidated financial statements include the accounts of Accenture SCA, a
Luxembourg partnership limited by shares, and its controlled subsidiary
companies (together Accenture, the Company, we, our, or
us). 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. F-8




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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. Accenture continues to use the term partner to refer to executive
employees who have been granted that title. Revenue Recognition 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 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 reporting 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 revenues and costs F-9




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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 consolidated financial statements in
the period in which they are first identified. 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 as the
services are performed and amounts are earned in accordance with SEC Staff
Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial
Statements, as amended by SAB 104, Revenue Recognition. 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 represent 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 and involve complex
delivery, often through multiple workforces in different countries. In a number
of these arrangements, we hire client employees and become responsible for
certain 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, as amended by SAB 104. 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, F-10




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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. In November 2002, the Emerging Issues Task Force (EITF) issued a final
consensus on Issue 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables (Issue 00-21). In May 2003, the EITF issued additional
interpretive guidance regarding the application of Issue 00-21. Issue 00-21,
which provides guidance on how and when to recognize revenues on arrangements
requiring delivery of more than one product or service, is effective
prospectively for arrangements entered into in fiscal periods beginning after
June 15, 2003. Effective September 1, 2003, Accenture adopted Issue 00-21 on a
prospective basis. Revenues related to new revenue arrangements with multiple elements signed
after August 31, 2003 are allocated to each element based on the lesser of the
elements relative fair value or the amount that is not contingent on future
delivery of another element. Revenues allocated to separate elements are
recognized for each separate element in accordance with Accentures accounting
policy for revenues described above. If the amount of non-contingent revenues
allocated to a delivered element is less than the costs to deliver such
services, then such costs are deferred and recognized in future periods when
the revenue becomes non-contingent. The adoption of Issue 00-21 reduced
revenues by approximately $44,000 and reduced operating income by approximately
$41,000 in fiscal 2004. For contracts signed on or before August 31, 2003, 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 F-11




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) are recognized in accordance with our accounting policies for the separate
elements when the services have value on a stand-alone basis, fair value of the
separate elements exists and, in arrangements that include a general right of
refund relative to the delivered element, performance of the undelivered
element is considered probable and substantially in our control. While
determining fair value and identifying separate elements requires judgment,
generally fair value and the separate elements are readily identifiable as we
also sell those elements unaccompanied by other elements. 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,
2004 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. Revenues before
reimbursements include the margin earned on computer hardware and software as
well as revenue from alliance agreements. 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 Expenses Subcontractor costs are included in Cost of services when they are
incurred. Training costs were $401,266, $390,803 and $433,566 in fiscal 2004,
fiscal 2003 and fiscal 2002, respectively. Research and development and
advertising costs are expensed as incurred. Research and development costs were
$271,943, $250,374 and $234,558 in fiscal 2004, fiscal 2003 and fiscal 2002,
respectively. Advertising costs were $61,932, $69,544 and $74,722 in fiscal
2004, fiscal 2003 and fiscal 2002, respectively. The F-12




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Provision for doubtful accounts was ($641), ($20,243) and $80,100 in fiscal
2004, fiscal 2003 and fiscal 2002, respectively. The related Allowance for
doubtful accounts was $40,687 and $37,663 at August 31, 2004 and 2003,
respectively. Translation of Non-U.S. Currency Amounts The 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 $1,033, $32,025 and $9,832 in fiscal 2004, fiscal 2003
and fiscal 2002, respectively. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of all cash balances and liquid
investment with original maturities of three months or less, including time
deposits and certificates of deposit of $893,248 and $521,056 at August 31, 2004
and 2003, 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 at August 31, 2003 represented cash available
for the public market share repurchase program, which is currently conducted
through the Accenture Share Employee Compensation Trust (SECT). F-13




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Client Receivables and Allowance for Doubtful Accounts Accenture carries its client receivables at their face amounts less an
allowance for doubtful accounts. On a periodic basis, the Company evaluates
its receivables and establishes the allowance for doubtful accounts based on
historical experience and other currently available information. Investments All liquid investments with a maturity greater than 90 days, but less than
one year, are considered to be short-term investments. Investments with a
maturity greater than one year are considered to be long-term investments.
Marketable short- and long-term investments are classified and accounted for as
available-for-sale. Available-for-sale investments are reported at fair value
with unrealized gains and losses recorded as a separate component of
Accumulated other comprehensive income (loss) in shareholders equity until
realized. Interest and amortization of premiums and discounts for debt
securities are included in interest income. Realized gains and losses on
securities are determined based on the FIFO method and are included in Gain
(loss) on investments, net. The Company does not hold these investments for
speculative or trading purposes. 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. 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. F-14




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Foreign Exchange Instruments In the normal course of business, Accenture uses derivative financial
instruments to manage foreign currency exchange rate risk. We hedge material
cash flow exposures when feasible using forward and/or option 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 forward or option contracts that are of
a long-term nature. Credit risk is managed through careful selection and
ongoing evaluation of the financial institutions utilized as counterparties.
Substantially all of Accentures financial instruments are recorded at
estimated fair value or amounts that approximate fair value. Accenture does not have any material derivatives designated as hedges as
defined by Statement of Financial Accounting Standards (SFAS) No. 133,
Accounting for Derivative Instruments and Hedging Activities. The changes
in fair market value of all derivatives are recognized in the Consolidated
Income Statements and included in Other income (expense). Short-term Financial Assets and Liabilities Cash and cash equivalents, Restricted cash, Receivables from clients, net,
Unbilled services, Short-term bank borrowings, Accounts payable, and Other
accrued liabilities are short-term in nature and, accordingly, their carrying
values approximate fair value. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation.
Depreciation of property and equipment is F-15




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) computed on a straight-line basis over the following estimated useful
lives: Buildings
    
    20 to 33 yearsLeasehold improvements
    
    Term of lease, 15 years maximumComputers, related equipment and software
    
    2 to 7 yearsFurniture and fixtures
    
    5 to 10 years
 Long-Lived Assets Long-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 groups 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 Awards Accenture follows the intrinsic value method in accordance with Accounting
Principles Board Opinion No. 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
plans. Had compensation cost for the Companys employee stock option and
employee share purchase plans been determined based on fair value at the grant
date consistent with SFAS No. 123, Accounting for Stock- F-16




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Based Compensation, the Companys net income would have been reduced to
the pro forma amounts indicated below: 2004
    
    2003
    
    2002Net income as reported
    
    $
    1,212,919
    
    
    $
    1,039,886
    
    
    $
    579,210Add: Stock-based
compensation expense
already included in
net income as
reported, net of tax
and minority
interest
    
    
    55,205
    
    
    
    46,464
    
    
    
    49,609Deduct: Pro forma
employee compensation
cost related to stock
options, restricted
share units and
employee share
purchase plans, net
of tax and minority
interest
    
    
    (150,594
    )
    
    
    (173,131
    )
    
    
    (294,913
    )Pro forma net income
    
    $
    1,117,530
    
    
    $
    913,219
    
    
    $
    333,906
 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: 2004
    
    2003
    
    2002Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-Stock Options
    
    Partners
    
    partners
    
    Partners
    
    partners
    
    Partners
    
    partnersExpected life (in years)
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    5Risk-free interest rate
    
    
    3.58
    %
    
    
    3.29
    %
    
    
    3.33
    %
    
    
    2.89
    %
    
    
    4.59
    %
    
    
    3.35
    %Expected volatility
    
    
    44
    %
    
    
    44
    %
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
 F-17




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Employee Share Purchase Plan
    
    2004
    
    2003
    
    2002Expected life (in years)
    
    
    0.5
    
    
    
    0.5
    
    
    
    0.5Risk-free interest rate
    
    
    1.10
    %
    
    
    1.50
    %
    
    
    2.50
    %Expected volatility
    
    
    45
    %
    
    
    50
    %
    
    
    50
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
 Use of Estimates The preparation of consolidated 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. Reclassifications Certain amounts reported in previous years have been reclassified to
conform to the fiscal 2004 presentation. Concentrations of Credit Risk Accenture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 F-18




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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 countries; therefore,
concentrations of credit risk are limited. Newly Issued Accounting Standards In May 2004, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position (FSP) 106-2, Accounting and Disclosure Requirements Related
to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
FSP 106-2 applies to the sponsor of a single-employer defined benefit
postretirement health care plan for which: (a) the employer has concluded that
prescription drug benefits available under the plan to some or all participants
for some or all future years are actuarially equivalent to Medicare Part D
and thus qualify for the subsidy under the Medicare Prescription Drug,
Improvement and Modernization Act of 2003; and (b) the expected subsidy will
offset or reduce the employers share of the cost of the underlying
postretirement prescription drug coverage on which the subsidy is based. FSP
106-2 became effective for the Company on September 1, 2004 and is not expected
to have a material effect on the Company. 2. RESTRUCTURING AND REORGANIZATION COSTS (BENEFITS) In the fourth quarter of fiscal 2002, Accenture recognized restructuring
costs of $110,524 related to a global consolidation of office space, consisting
of $67,112 to consolidate various locations and $43,412 to abandon the related
fixed assets. At August 31, 2002, the related liability for restructuring costs
was $67,112. This liability was reduced by payments made in fiscal 2004 and
fiscal 2003 of $20,394 and $33,158, respectively. The liability was also
affected by immaterial changes in lease estimates, imputed interest and foreign
currency translation. The remaining liability at August 31, 2004 was $24,005,
of which $8,631 was classified as Other accrued liabilities and $15,374 as
Other non-current liabilities, representing the net present value of the
estimated remaining obligations related to existing operating leases. F-19




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) In the second quarter of fiscal 2004, Accenture recognized restructuring
costs of $107,256, primarily in the United States and the United Kingdom,
consisting of $89,331 to consolidate various locations and $17,925 to abandon
the related fixed assets. Payments totaling $10,463 were made in fiscal 2004.
The liability was also affected by immaterial changes in lease estimates,
imputed interest and foreign currency translation. The remaining liability at
August 31, 2004 was $78,756, of which $11,399 was classified as Other accrued
liabilities and $67,357 as Other non-current liabilities, representing the net
present value of the estimated remaining obligations related to existing
operating leases. In fiscal 2004 and fiscal 2003, Accenture recorded a net benefit of
$78,365 and $19,346, respectively, primarily resulting from final
determinations of certain reorganization liabilities established in connection
with Accentures transition to a corporate structure in 2001. The remaining
liability at August 31, 2004 was $454,042, of which $131,832 was classified as
Other accrued liabilities and $322,210 as Other non-current liabilities. The
carrying amount of the reorganization liabilities was $510,149 at August 31,
2003. The remaining change in the reorganization liabilities in fiscal 2004
was due to foreign currency translation. 3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of Accumulated other comprehensive income (loss) at August
31, are as follows: 2004
    
    2003Foreign currency translation adjustments
    
    $
    (22,752
    )
    
    $
    (67,064
    )Unrealized gains (losses) on securities:Net unrealized holding gains arising during the year
    
    
    354
    
    
    
    1,067Reclassification adjustments for realized losses included in net income
    
    
    1,231
    
    
    
    2,094Net unrealized gains
    
    
    1,585
    
    
    
    3,161
 F-20




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Unrealized losses on securities, beginning of year
    
    
    (1,061
    )
    
    
    (4,222
    )Net unrealized gains/(losses), end of year
    
    
    524
    
    
    
    (1,061
    )Minimum pension liability adjustments, net of tax
    
    
    (91,532
    )
    
    
    (120,108
    )Accumulated other comprehensive loss
    
    $
    (113,760
    )
    
    $
    (188,233
    )
 4. PROPERTY AND EQUIPMENT Property and equipment, net at August 31, was composed of the following: 2004
    
    2003Buildings and land
    
    $
    3,206
    
    
    $
    3,058Leasehold improvements
    
    
    437,780
    
    
    
    429,144Computers, related equipment and software
    
    
    1,144,252
    
    
    
    1,060,782Furniture and fixtures
    
    
    278,208
    
    
    
    266,617Total accumulated depreciation
    
    
    (1,219,500
    )
    
    
    (1,109,146
    )Property and equipment, net
    
    $
    643,946
    
    
    $
    650,455
 5. BUSINESS COMBINATIONS AND GOODWILL On February 28, 2002, Accenture increased its ownership interest in
Accenture HR Services, a human resource outsourcing business, from
approximately 50 percent to 100 percent. The original purchase price for the
additional interest, including assumed F-21




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\

ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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 may require Accenture 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 certain levels of
qualifying revenues. The allocation of the purchase price to acquired assets
and liabilities, determined in accordance with SFAS No. 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. In fiscal 2004, Accenture made payments and
accrued for payments due, but not yet remitted, of $13,018. The remaining
potential liability at August 31, 2004 was $174,482. On December 31, 2001, Accenture increased its ownership interest in
Avanade, Inc. from approximately 50 percent to 78 percent. The original
purchase price for the additional interest was $81,350, of which $31,350
represented 1,259,272 Accenture Ltd Class A common shares and $50,000
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 No. 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 No. 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 No. 142. The Company performed impairment
tests of goodwill as of May 31, 2004 and 2003 and determined that goodwill was
not impaired. A summary of the changes in the carrying amount of goodwill by
reportable segment is as follows: F-22




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Comm.& High
    
    FinancialTech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    TotalBeginning balance at August 31, 2002
    
    $
    55,083
    
    
    $
    36,544
    
    
    $
    19,017
    
    
    $
    32,686
    
    
    $
    24,273
    
    
    $
    167,603Additions / Adjustments
    
    
    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
    
    
    
    188,659Additions / Adjustments
    
    
    3,865
    
    
    
    312
    
    
    
    232
    
    
    
    4,369
    
    
    
    273
    
    
    
    9,051Foreign currency translation adjustments
    
    
    6,819
    
    
    
    2,847
    
    
    
    1,491
    
    
    
    3,309
    
    
    
    2,306
    
    
    
    16,772Ending balance at August 31, 2004
    
    $
    70,949
    
    
    $
    43,668
    
    
    $
    23,242
    
    
    $
    46,402
    
    
    $
    30,221
    
    
    $
    214,482
 6. INVESTMENTS AND FINANCIAL INSTRUMENTS Available-for-sale investments held at August 31, 2004 are as follows: F-23




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Amortized
    
    Unrealized
    
    Unrealized
    
    Estimated FairCost
    
    Gains
    
    Losses
    
    ValueU.S. treasury securities
    
    $
    103,950
    
    
    $
    1,036
    
    
    $
    (163
    )
    
    $
    104,823Asset-backed securities
    
    
    149,272
    
    
    
    104
    
    
    
    (379
    )
    
    
    148,997Corporate debt securities
    
    
    355,593
    
    
    
    500
    
    
    
    (380
    )
    
    
    355,713Foreign government securities
    
    
    3,098
    
    
    
    25
    
    
    
    (8
    )
    
    
    3,115Total available-for-sale debt securities
    
    
    611,913
    
    
    
    1,665
    
    
    
    (930
    )
    
    
    612,648Total available-for-sale equity securities
    
    
    11,944
    
    
    
    49
    
    
    
    (249
    )
    
    
    11,744Total available-for-sale securities
    
    
    623,857
    
    
    
    1,714
    
    
    
    (1,179
    )
    
    
    624,392Other
    
    
    1,028
    
    
    
    
    
    
    
    (11
    )
    
    
    1,017Total investments
    
    $
    624,885
    
    
    $
    1,714
    
    
    $
    (1,190
    )
    
    $
    625,409
 At August 31, 2003, the amortized cost, unrealized gains, unrealized
losses and estimated fair value of available-for-sale investments were $32,221,
$18, $1,079 and $31,160, respectively. The amortized cost and estimated fair value of available-for-sale
investments in debt securities at August 31, 2004, by contractual maturity,
were as follows: F-24




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##### Table of Contents



ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Amortized
    
    Estimated FairCost
    
    ValueDue in 1 year or less
    
    $
    285,287
    
    
    $
    285,288Due in 1-2 years
    
    
    185,918
    
    
    
    185,693Due in 2-3 years
    
    
    32,877
    
    
    
    33,037Due in 3-4 years
    
    
    33,175
    
    
    
    33,561Due in 4-5 years
    
    
    51,142
    
    
    
    51,669Due after 5 years
    
    
    23,514
    
    
    
    23,400Total investments in available-for-sale debt securities
    
    $
    611,913
    
    
    $
    612,648
 In fiscal 2004, proceeds from the sale of available-for-sale investments
were $421,003, with $9,357 and $8,382 in gross realized gains and gross
realized losses, respectively. Equity Method Investments As 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 $5,552 and $32,568 at August 31, 2004 and 2003, respectively. The
negative basis difference is being amortized over three years on a
straight-line basis. Amortization of the negative basis difference of $27,016,
$62,327 and $66,211 was reflected in the accompanying Consolidated Income
Statements in fiscal 2004, fiscal 2003 and fiscal 2002, respectively. F-25




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Other-Than-Temporary Writedowns In fiscal 2002, Accenture recorded other-than-temporary impairment
writedowns of $325,335, of which $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. Of the $325,335 of other-than-temporary impairment writedowns, $211,900
related to the loss Accenture expected to incur on the sale of substantially
all of the minority ownership interests contained in the Companys venture and
investment portfolio. The Company completed this transaction in fiscal 2003
and retained an immaterial ownership interest in the venture and investment
portfolio. Foreign Exchange Instruments Market 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: 2004
    
    2003Notional
    
    Fair
    
    Notional
    
    FairValue
    
    Value
    
    Value
    
    ValueForeign currency forward exchange contracts:To sell
    
    $
    137,230
    
    
    $
    1,381
    
    
    $
    210,973
    
    
    $
    (245
    )To buy
    
    
    313,887
    
    
    
    904
    
    
    
    152,035
    
    
    
    (703
    )
 F-26




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##### Table of Contents



ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 7. BORROWINGS AND INDEBTEDNESS Lines of Credit We have a five-year $1,500,000 syndicated loan facility, providing
unsecured, revolving borrowing capacity for general working capital purposes,
including the issuance of letters of credit on behalf of Accenture affiliates.
Financing is provided under this facility at the prime rate or at the London
Interbank Offered Rate plus a spread. This facility requires 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 continue to be in
compliance with these terms. As of August 31, 2004, we had no borrowings under
the facility and $66,152 in letters of credit outstanding. The facility is
subject to annual commitment fees. We also maintain four separate bilateral, uncommitted, unsecured
multicurrency revolving credit facilities. As of August 31, 2004, these
facilities provided for up to $251,335 of local currency financing in countries
where we cannot readily access our syndicated facilities. At August 31, 2004
and 2003, we had $12,799 and $24,124, respectively, outstanding under these
various facilities and $7,304 and $19,376 of other short-term borrowings. We
also maintain local guaranteed and non-guaranteed lines of credit. As of August
31, 2004, amounts available under these facilities totaled $221,594. Interest
rate terms on the bilateral revolving facilities and local lines of credit are
at market rates prevailing in the relevant local markets. The weighted average
interest rate on borrowings under these multicurrency credit facilities and
lines of credit, based on the average annual balances, was approximately 7%, 7%
and 8% in fiscal 2004, fiscal 2003 and fiscal 2002, respectively. F-27




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##### Table of Contents



ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 8. INCOME TAXES The provision for income taxes includes the following: 2004
    
    2003
    
    2002Current taxes:U.S. federal
    
    $
    135,510
    
    
    $
    142,941
    
    
    $
    241,228U.S. state and local
    
    
    19,359
    
    
    
    20,420
    
    
    
    34,461Non-U.S.
    
    
    318,800
    
    
    
    322,971
    
    
    
    358,055Total current tax expense
    
    
    473,669
    
    
    
    486,332
    
    
    
    633,744Deferred taxes:U.S. federal
    
    
    52,399
    
    
    
    48,523
    
    
    
    (143,035
    )U.S. state and local
    
    
    7,486
    
    
    
    6,932
    
    
    
    (20,434
    )Non-U.S.
    
    
    41,989
    
    
    
    24,312
    
    
    
    20,796Total deferred tax expense (benefit)
    
    
    101,874
    
    
    
    79,767
    
    
    
    (142,673
    )Total
    
    $
    575,543
    
    
    $
    566,099
    
    
    $
    491,071
 Deferred income tax expense (benefit) related to the additional minimum
pension liability was $16,217 and ($71,920) in fiscal 2004 and fiscal 2003,
respectively, and was recorded in Accumulated other comprehensive loss in the
Consolidated Balance Sheet. Income before income taxes from U.S. sources was $503,257, $566,896 and
$247,271 in fiscal 2004, fiscal 2003 and fiscal 2002, respectively. Income
before income taxes from non-U.S. sources was $1,295,313, $1,045,921 and
$820,287 in fiscal 2004, fiscal 2003 and fiscal 2002, respectively. F-28




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) A reconciliation of the U.S. federal statutory income tax rate to
Accentures effective income tax rate is set forth below: 2004
    
    2003
    
    2002U.S. federal statutory income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %U.S. state and local taxes, net
    
    
    1.4
    
    
    
    1.6
    
    
    
    1.2Non-deductible investment losses
    
    
    0.2
    
    
    
    
    
    
    
    11.7Non-U.S. operations
    
    
    (3.7
    )
    
    
    (1.6
    )
    
    
    0.4Reorganization benefits
    
    
    (1.5
    )
    
    
    (0.4
    )
    
    
    Other
    
    
    0.6
    
    
    
    0.5
    
    
    
    (2.3
    )Effective income tax rate
    
    
    32.0
    %
    
    
    35.1
    %
    
    
    46.0
    %
 Significant components of Accentures deferred tax assets and liabilities
include the following: 2004
    
    2003Deferred tax assets:Pensions
    
    $
    125,567
    
    
    $
    175,476Revenue recognition
    
    
    46,387
    
    
    
    88,174Compensation and benefits
    
    
    127,318
    
    
    
    106,961Investments
    
    
    40,937
    
    
    
    37,748Tax credit carryforwards
    
    
    20,160
    
    
    
    21,673
 F-29




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##### Table of Contents



ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Net operating loss carryforwards
    
    
    151,663
    
    
    
    162,271Depreciation and amortization
    
    
    139,386
    
    
    
    121,006Restructuring costs
    
    
    37,005
    
    
    
    28,029Other
    
    
    34,358
    
    
    
    17,508722,781
    
    
    
    758,846Valuation allowance
    
    
    (240,661
    )
    
    
    (258,438
    )Total deferred tax assets
    
    
    482,120
    
    
    
    500,408Deferred tax liabilities:Revenue recognition
    
    
    (58,263
    )
    
    
    (19,959
    )Depreciation and amortization
    
    
    (23,934
    )
    
    
    (18,674
    )Restructuring costs
    
    
    (21,859
    )
    
    
    Other
    
    
    (24,896
    )
    
    
    (14,411
    )Total deferred tax liabilities
    
    
    (128,952
    )
    
    
    (53,044
    )Net deferred tax assets
    
    $
    353,168
    
    
    $
    447,364
 Accenture recorded a valuation allowance of $240,661 and $258,438 at
August 31, 2004 and 2003, 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, 2004 and 2003, F-30




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ACCENTURE SCA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) respectively, $65,081 and $72,409 of the valuation allowances related 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,
$7,978 and $9,231 of the valuation allowance at August 31, 2004 and 2003,
respectively, relates to tax attributes, the reversal of which in future years
will be allocated to Additional paid in capital and Retained earnings. Accenture had net operating loss carryforwards at August 31, 2004 of
$475,043. Of this amount, $318,364 expires at various dates through 2024 and
$156,679 has an indefinite carryforward period. Accenture had tax credit
carryforwards at August 31, 2004 of $20,160, $17,252 of which will expire at
various dates through 2014 and $2,908 of which will expire between 2015 and
2024. At August 31, 2004, Accenture had not recognized a deferred tax liability
on $875,442 of undistributed earnings for certain foreign subsidiaries, because
these earnings are intended to be permanently reinvested. If such earnings
were distributed, some countries may impose withholding taxes. It is not
practicable to determine the amount of the related unrecognized deferred income
tax liability. Certain of Accentures subsidiaries income tax returns are under
examination by tax authorities. Accenture does not believe that any
significant additional taxes in excess of those already provided will arise as
a result of the examinations. 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. F-31




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Because of the application of complex U.S. tax rules regarding attribution
of ownership, Accenture met the definition of a foreign personal holding company
in fiscal 2004 and fiscal 2003. 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 did not have any foreign personal holding company income in
fiscal
2004 and fiscal 2003, no such taxes have been provided. After fiscal 2004, Accenture no longer meets the definition of a foreign
personal holding company, although certain non-U.S. subsidiaries may still meet
the definition through fiscal 2005. 9. PROFIT SHARING AND RETIREMENT PLANS Pension
and Other Postretirement Benefits In the United States and certain other countries, Accenture maintains and
administers retirement plans and postretirement medical plans for certain
active, retired and resigned Accenture employees. The majority of the plans
are non-contributory. Benefits under the employee retirement plans are primarily
based on years of service and compensation during the years immediately
preceding retirement or termination of participation in the plan. In
addition, certain postemployment benefits, including severance
benefits, disability-related benefits F-32




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) and
continuation of benefits such as healthcare benefits and
life insurance coverage, are provided to former or inactive employees after
employment but before retirement. These costs are substantially provided for on
an accrual basis. Accenture uses a June 30 measurement date for the majority of its U.S.
benefit plans and an August 31 measurement date for the majority of its
non-U.S. benefit plans. The following tables provide the components of net periodic pension and
postretirement cost for the three-year period ended August 31, 2004: Pension Benefits2004
    
    2003
    
    2002U.S.
    
    Non-U.S.
    
    U.S.
    
    Non-U.S.
    
    U.S.
    
    Non-U.S.Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    PlansComponents of pension expenseService cost
    
    $
    45,247
    
    
    $
    34,802
    
    
    $
    29,215
    
    
    $
    24,503
    
    
    $
    28,852
    
    
    $
    14,925Interest cost
    
    
    36,262
    
    
    
    12,799
    
    
    
    30,878
    
    
    
    10,843
    
    
    
    26,150
    
    
    
    6,503Expected return on plan assets
    
    
    (24,735
    )
    
    
    (9,932
    )
    
    
    (25,886
    )
    
    
    (6,011
    )
    
    
    (26,171
    )
    
    
    (3,717
    )Amortization of transitional obligation
    
    
    
    
    
    
    (213
    )
    
    
    (6
    )
    
    
    (181
    )
    
    
    (10
    )
    
    
    574Amortization of loss/(gain)
    
    
    20,673
    
    
    
    782
    
    
    
    4,847
    
    
    
    1,730
    
    
    
    462
    
    
    
    368Amortization of prior service cost
    
    
    2,472
    
    
    
    90
    
    
    
    2,267
    
    
    
    81
    
    
    
    2,269
    
    
    
    Curtailment loss cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    761
    
    
    
    Special termination benefits charge
    
    
    
    
    
    
    3,643
    
    
    
    
    
    
    
    
    
    
    
    1,903
    
    
    
    Total
    
    $
    79,919
    
    
    $
    41,971
    
    
    $
    41,315
    
    
    $
    30,965
    
    
    $
    34,216
    
    
    $
    18,653
 F-33




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Other Benefits2004
    
    2003
    
    2002U.S.
    
    Non-U.S.
    
    U.S.
    
    Non-U.S.
    
    U.S.Plans
    
    Plans
    
    Plans
    
    Plans
    
    PlansComponents of postretirement expenseService cost
    
    $
    7,263
    
    
    $
    1,677
    
    
    $
    7,338
    
    
    $
    817
    
    
    $
    5,277Interest cost
    
    
    5,167
    
    
    
    1,561
    
    
    
    5,683
    
    
    
    799
    
    
    
    3,824Expected return on plan assets
    
    
    (1,424
    )
    
    
    
    
    
    
    (1,406
    )
    
    
    
    
    
    
    (1,380
    )Amortization of transitional obligation
    
    
    79
    
    
    
    204
    
    
    
    79
    
    
    
    183
    
    
    
    79Amortization of loss/(gain)
    
    
    2,401
    
    
    
    74
    
    
    
    2,210
    
    
    
    36
    
    
    
    686Amortization of prior service cost
    
    
    (801
    )
    
    
    
    
    
    
    (251
    )
    
    
    
    
    
    
    Curtailment loss cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83Special termination benefits charge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    759Total
    
    $
    12,685
    
    
    $
    3,516
    
    
    $
    13,653
    
    
    $
    1,835
    
    
    $
    9,328
 The weighted-average assumptions used to determine the net periodic
pension and postretirement expense for the three-year period ended August 31,
2004 were as follows: Pension Benefits
    
    Other Benefits2004
    
    2003
    
    2002
    
    2004
    
    2003
    
    2002Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.SPlans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    PlansDiscount rate
    
    6.00%
    
    4.85%
    
    7.25%
    
    4.92%
    
    7.50%
    
    5.19%
    
    6.00%
    
    6.50%
    
    7.25%
    
    6.50%
    
    7.50%Expected rate of return on plan assets
    
    8.00%
    
    5.66%
    
    8.50%
    
    5.35%
    
    8.50%
    
    5.56%
    
    8.00%/5.00%
    
    N/A
    
    8.00%/5.00%
    
    N/A
    
    8.00%/5.00%Rate of increase in future
compensation
    
    4.50%
    
    3.10%
    
    5.70%
    
    3.81%
    
    8.68%
    
    4.93%
    
    N/A
    
    4.00%
    
    N/A
    
    4.00%
    
    N/A
 F-34




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) For the U.S. defined benefit pension plans, the weighted-average
assumptions in fiscal 2005 include a discount rate of 6.25%, an expected rate
of return on plan assets of 7.50% and a rate of salary increase of 4.50%. For
the non-U.S. defined benefit pension plans, the weighted-average assumptions in
fiscal 2005 include a discount rate of 4.93%, an expected rate of return on
plan assets of 5.19% and a rate of salary increase of 3.16%. For the U.S. postretirement plans, the weighted-average assumptions in
fiscal 2005 include a discount rate of 6.25% and an expected rate of return on
plan assets of 7.50% and 3.50% for each of the two plans comprising the U.S.
postretirement plans. For the non-U.S. postretirement plans, the
weighted-average assumptions in fiscal 2005 include a discount rate of 6.75%
and a rate of salary increase of 4.50%. To develop the expected long-term rate of return on assets assumption, we
considered the historical returns and the future expectations for returns for
each asset class, as well as the target asset allocation of the asset
portfolio. This resulted in the selection of the 7.50% long-term rate of
return on assets assumption for our U.S. plans. As a result, our estimated U.S.
pension expense in fiscal 2005 incorporates a 50 basis point reduction in the
expected rate of return on plan assets from 8.00% to 7.50%. Our estimated
non-U.S. pension expense in fiscal 2005 incorporates a 47 basis point reduction
from 5.66% to 5.19%. The decrease in the rate of return on plan assets will
increase pension expense in fiscal 2005 by approximately $4,100. F-35




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) The following tables summarize the changes in the benefit obligation and
plan assets, the funded status of the benefit plans and the major assumptions
used to determine these amounts. Pension Benefits
    
    Other Benefits2004
    
    2003
    
    2004
    
    2003Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-U.S.
    
    U.S
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    PlansChanges in benefit obligationBenefit obligation, beginning of year
    
    $
    609,167
    
    
    $
    233,446
    
    
    $
    412,648
    
    
    $
    147,940
    
    
    $
    86,868
    
    
    $
    24,539
    
    
    $
    78,983
    
    
    $
    Adjustment cost
    
    
    
    
    
    
    13,002
    
    
    
    
    
    
    
    2,038
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Service cost
    
    
    45,247
    
    
    
    34,802
    
    
    
    29,215
    
    
    
    24,503
    
    
    
    7,263
    
    
    
    1,677
    
    
    
    7,338
    
    
    
    817Interest cost
    
    
    36,262
    
    
    
    12,799
    
    
    
    30,878
    
    
    
    10,843
    
    
    
    5,167
    
    
    
    1,561
    
    
    
    5,683
    
    
    
    799Amendments
    
    
    
    
    
    
    4,322
    
    
    
    1,529
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,462
    )
    
    
    Termination benefits
    
    
    
    
    
    
    3,643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Participants contributions
    
    
    
    
    
    
    3,767
    
    
    
    
    
    
    
    844
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Acquisitions/divestitures/transfers
    
    
    
    
    
    
    38,863
    
    
    
    17,613
    
    
    
    23,453
    
    
    
    
    
    
    
    (2,878
    )
    
    
    
    
    
    
    18,783Curtailment (gain)/loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,722
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Actuarial loss/(gain)
    
    
    11,646
    
    
    
    (13,262
    )
    
    
    129,198
    
    
    
    22,513
    
    
    
    (7,733
    )
    
    
    (774
    )
    
    
    2,293
    
    
    
    2,112Benefits paid
    
    
    (10,294
    )
    
    
    (15,691
    )
    
    
    (11,914
    )
    
    
    (5,961
    )
    
    
    (2,089
    )
    
    
    (49
    )
    
    
    (967
    )
    
    
    Exchange rate loss
    
    
    
    
    
    
    20,128
    
    
    
    
    
    
    
    15,995
    
    
    
    
    
    
    
    978
    
    
    
    
    
    
    
    2,028Benefit obligation, end of year
    
    $
    692,028
    
    
    $
    335,819
    
    
    $
    609,167
    
    
    $
    233,446
    
    
    $
    89,476
    
    
    $
    25,054
    
    
    $
    86,868
    
    
    $
    24,539Changes in plan assetsFair value of plan assets, beginning of year
    
    $
    311,360
    
    
    $
    146,261
    
    
    $
    306,380
    
    
    $
    70,494
    
    
    $
    23,102
    
    
    $
    
    
    
    $
    22,883
    
    
    $
    Adjustment
    
    
    
    
    
    
    15,524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 F-36




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Expected return on plan assets
    
    
    24,735
    
    
    
    9,932
    
    
    
    25,886
    
    
    
    6,011
    
    
    
    1,424
    
    
    
    
    
    
    
    1,406
    
    
    
    Actuarial gain/(loss)
    
    
    35,041
    
    
    
    3,615
    
    
    
    (16,078
    )
    
    
    (3,959
    )
    
    
    1,017
    
    
    
    
    
    
    
    (220
    )
    
    
    Acquisitions/divestitures/transfers
    
    
    
    
    
    
    37,170
    
    
    
    
    
    
    
    31,718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employer contributions
    
    
    109,950
    
    
    
    28,852
    
    
    
    7,086
    
    
    
    38,980
    
    
    
    1,131
    
    
    
    49
    
    
    
    
    
    
    
    Participants contributions
    
    
    
    
    
    
    3,767
    
    
    
    
    
    
    
    844
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Benefits paid
    
    
    (10,294
    )
    
    
    (15,691
    )
    
    
    (11,914
    )
    
    
    (5,961
    )
    
    
    (2,089
    )
    
    
    (49
    )
    
    
    (967
    )
    
    
    Exchange rate gain
    
    
    
    
    
    
    13,994
    
    
    
    
    
    
    
    8,134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fair value of plan assets, end of year
    
    $
    470,792
    
    
    $
    243,424
    
    
    $
    311,360
    
    
    $
    146,261
    
    
    $
    24,585
    
    
    $
    
    
    
    $
    23,102
    
    
    $
    Reconciliation of funded statusFunded status
    
    $
    (221,236
    )
    
    $
    (92,395
    )
    
    $
    (297,807
    )
    
    $
    (87,185
    )
    
    $
    (64,891
    )
    
    $
    (25,054
    )
    
    $
    (63,766
    )
    
    $
    (24,539
    )Unrecognized transitional obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,290
    )
    
    
    677
    
    
    
    
    
    
    
    756
    
    
    
    2,230Unrecognized loss
    
    
    181,856
    
    
    
    8,589
    
    
    
    225,924
    
    
    
    26,197
    
    
    
    27,830
    
    
    
    2,696
    
    
    
    38,981
    
    
    
    3,412Unrecognized prior service cost
    
    
    5,179
    
    
    
    5,250
    
    
    
    7,651
    
    
    
    905
    
    
    
    (8,908
    )
    
    
    
    
    
    
    (9,709
    )
    
    
    Contributions made after measurement date
    
    
    125,000
    
    
    
    714
    
    
    
    
    
    
    
    870
    
    
    
    169
    
    
    
    10
    
    
    
    
    
    
    
    Net amount recognized at year-end
    
    $
    90,799
    
    
    $
    (77,842
    )
    
    $
    (64,232
    )
    
    $
    (66,503
    )
    
    $
    (45,123
    )
    
    $
    (22,348
    )
    
    $
    (33,738
    )
    
    $
    (18,897
    )Amounts recognized in the Consolidated Balance
Sheets consist of:Prepaid benefit cost
    
    $
    
    
    
    $
    18,459
    
    
    $
    
    
    
    $
    9,350
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Accrued benefit liability
    
    
    (186,428
    )
    
    
    (102,885
    )
    
    
    (257,749
    )
    
    
    (84,096
    )
    
    
    (45,292
    )
    
    
    (22,358
    )
    
    
    (33,738
    )
    
    
    (18,897
    )Intangible asset
    
    
    5,179
    
    
    
    32
    
    
    
    7,651
    
    
    
    479
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated other comprehensive loss
    
    
    147,048
    
    
    
    5,838
    
    
    
    185,866
    
    
    
    6,894
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Contributions made after measurement date
    
    
    125,000
    
    
    
    714
    
    
    
    
    
    
    
    870
    
    
    
    169
    
    
    
    10
    
    
    
    
    
    
    
    Net amount recognized at year-end
    
    $
    90,799
    
    
    $
    (77,842
    )
    
    $
    (64,232
    )
    
    $
    (66,503
    )
    
    $
    (45,123
    )
    
    $
    (22,348
    )
    
    $
    (33,738
    )
    
    $
    (18,897
    )
 F-37




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) The weighted-average assumptions used to determine the fiscal year-end
benefit obligations were as follows: Pension Benefits
    
    Other Benefits2004
    
    2003
    
    2004
    
    2003Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-
    
    
    
    
    
    Non-U.S.
    
    U.S
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.
    
    U.S.Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    PlansDiscount rate
    
    
    6.25
    %
    
    
    4.93
    %
    
    
    6.00
    %
    
    
    4.85
    %
    
    
    6.25
    %
    
    
    6.75
    %
    
    
    6.00
    %
    
    
    6.50
    %Rate of increase in
future compensation
    
    
    4.50
    %
    
    
    3.16
    %
    
    
    4.50
    %
    
    
    3.10
    %
    
    
    N/A
    
    
    
    4.50
    %
    
    
    N/A
    
    
    
    4.00
    %
 F-38




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Funded Status for Defined Benefit Plans Generally, annual contributions are made at such times and in amounts as
required by law and may, from time to time, exceed minimum funding
requirements. Our U.S. Pension plans include plans covering certain U.S. employees and
former employees as well as a Basic Retirement Plan for former
pre-incorporation partners which was frozen in 2001. Accenture made
discretionary contributions of $229,625 to its U.S. employees pension plans in
fiscal 2004 and did not make any contributions in fiscal 2003. Basic
retirement benefits of $5,325 and $7,086 were paid in fiscal 2004 and fiscal
2003, respectively. There were contributions of $28,696 and $39,850 for the
non-U.S. pension plans in fiscal 2004 and fiscal 2003, respectively. SFAS No. 87, Employers Accounting for Pensions, requires recognition of
a minimum pension liability if the fair value of pension assets is less than
the accumulated benefit obligation. In fiscal 2003, we recorded a charge to
equity of $107,543, representing an adjustment to increase our pension
liability by $179,463, net of a tax benefit of $71,920. In fiscal 2004 and
based on contributions made during the year, we reduced the charge by $28,576,
representing an adjustment to decrease our pension liability by $39,874, net of
a tax benefit of $16,217 and reclassification adjustments of $(4,919). These
adjustments were included in Accumulated other comprehensive loss in the
shareholders equity section of our Consolidated Balance Sheet. The accumulated benefit obligation for all U.S. defined benefit pension
plans was $657,221 and $569,109 at August 31, 2004 and 2003, respectively. The
accumulated benefit obligation for all non-U.S. defined benefit pension plans
was $284,432 and $172,019 at August 31, 2004 and 2003, respectively. The projected benefit obligations and fair value of plan assets for
defined benefit pension plans with projected benefit F-39




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) obligations in excess of plan assets were $953,298 and $622,631,
respectively, as of August 31, 2004, and $789,540 and $393,119, respectively,
as of August 31, 2003. The accumulated benefit obligations and fair value of
plan assets for plans with accumulated benefit obligations in excess of plan
assets were $775,584 and $515,037, respectively, as of August 31, 2004 and
$715,814 and $389,378, respectively, as of August 31, 2003. Investment Strategies U.S. Pension Plans The overall investment objective of the plans is to provide growth in the
assets of the plans to help fund future benefit obligations while managing risk
in order to meet current benefit obligations. The plans future prospects,
their current financial condition, Accentures current funding levels and other
relevant factors suggest that the plans can tolerate some interim fluctuations
in market value and rates of returns in order to achieve long-term objectives
without undue risk to the plans ability to meet their current benefit
obligations. Accentures investment committee recognizes that asset allocation of the
pension plans assets is an important factor in determining long-term
performance. Actual asset allocations at any point in time may vary from the
specified targets below and will be dictated by current and anticipated market
conditions, required cash flows, and investment decisions of the investment
committee and the pension plans investment funds and managers. Ranges are
established to provide flexibility for the asset allocation to vary around the
targets without the need for immediate rebalancing. F-40




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Non-U.S. Pension Plans Our plan assets in non-U.S. pension plans conform to the investment
policies and procedures of each plan and to relevant legislation. The pension
committee or trustee of the plan regularly, but at least annually, reviews the
investment policy and the performance of the investment managers. In certain
countries, the trustee is also required to consult with the Company. Generally,
the investment return objective of each plan is to achieve a total annualized
rate of return that exceeds inflation over the long term by an amount based on
the target asset mix of that plan. In certain countries, plan assets are
invested in funds that are required to hold a majority of assets in bonds, with
a smaller proportion in equities. Also, certain plan assets are entirely
invested in contracts held with the plan insurer, who determines the investment
strategy. Pension plans in certain countries are unfunded. F-41




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Plan Assets The Companys target allocation for fiscal 2005 and weighted-average asset
allocations at August 31, 2004 and 2003 and by asset category, for its pension
and postretirement benefit plans are as follows: Pension Plans Plan Assets at August 31,2005 Target Allocation
    
    2004
    
    2003U.S.
    
    Non-U.S.
    
    U.S.
    
    Non-U.S.
    
    U.S.
    
    Non-U.S.Plans
    
    Plans
    
    Plans
    
    Plans
    
    Plans
    
    PlansAsset CategoryEquity securities
    
    
    81
    %
    
    
    33
    %
    
    
    81
    %
    
    
    21
    %
    
    
    79
    %
    
    
    31
    %Debt securities
    
    
    19
    %
    
    
    30
    %
    
    
    18
    %
    
    
    23
    %
    
    
    20
    %
    
    
    25
    %Cash and short term investments
    
    
    
    
    
    
    5
    %
    
    
    1
    %
    
    
    24
    %
    
    
    1
    %
    
    
    27
    %Insurance contracts
    
    
    
    
    
    
    32
    %
    
    
    
    
    
    
    32
    %
    
    
    
    
    
    
    17
    %Totals
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 U.S. Postretirement Plan (1) Plan Assets at August 31,2005 TargetAllocation
    
    2004
    
    2003Asset CategoryEquity securities
    
    
    37
    %
    
    
    36
    %
    
    
    34
    %Debt securities
    
    
    14
    %
    
    
    14
    %
    
    
    11
    %Cash and short-term investments
    
    
    49
    %
    
    
    50
    %
    
    
    55
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  (1)
    
    The non-U.S. plans are unfunded and thus the table only relates to the
U.S. Plans. F-42




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Expected Contributions In fiscal 2005, Accenture expects to pay approximately $8,900 of benefit
payments, as part of its Basic Retirement Plan, and expects to contribute
$38,700 to its non-U.S. pension plans. Cash funding for retiree medical plans
in fiscal 2005 is estimated to be approximately $1,100. In fiscal 2005, no
contribution will be required for U.S. employees pension plans. Accenture has
not determined whether it will make additional voluntary contributions for
employee pension plans. Estimated Future Benefit Payments Benefit payments, which reflect expected future service, as appropriate,
are expected to be paid as follows: Pension Benefits
    
    Other BenefitsU.S. Plans
    
    Non-U.S. Plans
    
    U.S. Plans
    
    Non-U.S. Plans2005
    
    $
    14,600
    
    
    $
    11,500
    
    
    $
    1,900
    
    
    $
    1002006
    
    
    14,000
    
    
    
    12,200
    
    
    
    2,300
    
    
    
    2002007
    
    
    16,100
    
    
    
    12,800
    
    
    
    2,900
    
    
    
    3002008
    
    
    18,000
    
    
    
    13,600
    
    
    
    3,500
    
    
    
    4002009
    
    
    20,400
    
    
    
    14,200
    
    
    
    4,200
    
    
    
    5002010-2014
    
    
    146,100
    
    
    
    84,700
    
    
    
    34,200
    
    
    
    4,600
 F-43




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Assumed Health Care Cost Trend Annual
rate increases in the per capita cost of health care benefits of
11.5% (under age 65) and 12.0% (over age 65) were assumed for the plan year
ending June 30, 2005. 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. A one percentage point change in the assumed health care cost trend
rates would have the following effects: One Percentage Point Increase
    
    One Percentage Point Decrease2004
    
    2003
    
    2004
    
    2003Effect on total of service and interest cost components
    
    $
    2,664
    
    
    $
    2,941
    
    
    $
    (2,089
    )
    
    $
    (2,342
    )Effect on year-end postretirement benefit obligation
    
    
    17,868
    
    
    
    18,007
    
    
    
    (14,250
    )
    
    
    (14,263
    )
 Basic Retirement Benefits Obligations relating to basic retirement benefits for former pre-incorporation
partners under the Basic Retirement Plan are included in the U.S. pension plans
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 at August 31, 2004 was $126,051. F-44




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Early
Retirement Benefits Obligations 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 U.S. 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 $37,958, $56,466 and $34,614 were paid
to retired partners in fiscal 2004, fiscal 2003 and fiscal 2002, respectively. The
amount due for early retirement benefits was $173,650 at August 31, 2004, which
is being paid out over the period through 2011. Defined Contribution Plans As of January 1, 2004, Accenture established a trusteed employer 401(k)
match plan, the Accenture U.S. 401(k) Match and Savings Plan in the United
States. Through August 31, 2004, 19,076 employees have received matched
contributions. Accentures contribution to the 401(k) match plan was $30,762
in fiscal 2004. In
the United States, Accenture maintains and administers a trusteed
profit
sharing plan, the Accenture U.S. Discretionary Profit Sharing Plan, which
includes 18,648 active eligible employees of Accenture and its affiliates. The
annual discretionary profit sharing contribution is determined by management
after the end of the fiscal year. The liability recorded as of August 31, 2004
for profit sharing was $44,961, which we expect to pay in the first quarter of
fiscal 2005. The contributions to the plan were $59,879 and $92,515 in fiscal
2003 fiscal 2002, respectively. In
the United Kingdom, Accenture also maintains and administers a defined
contribution plan, the Accenture Retirement Savings Plan, which includes 5,596
active employees of Accenture. The Company provides matching contributions up
to certain F-45




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##### Table of Contents



ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) amounts based upon the age of the eligible employee. The contribution to
the plan was $37,636, $32,057 and $28,189 in fiscal 2004, fiscal 2003
and fiscal
2002, respectively.  10.
    
    EMPLOYEE SHARE PLANS Employee Share Purchase Plan The
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 of which 27,437,202 had been issued as of August 31,
2004. The following table summarizes information related to the ESPP: Fair Value of ShareOffering Period Ended
    
    Participants
    
    Shares Purchased
    
    Share Purchase Price
    
    Purchase RightsNovember 1, 2003
    
    
    23,781
    
    
    
    4,749,267
    
    
    $
    13.97
    
    
    $
    4.80May 1, 2004
    
    
    24,627
    
    
    
    3,385,425
    
    
    $
    20.05
    
    
    $
    6.49
 F-46




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Share Incentive Plan The
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.
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, 2004, 208,410,996 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 Options Incentive 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 in fiscal 2004,
fiscal 2003 and fiscal 2002 was as follows: 2004
    
    2003
    
    2002Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExercisePrice per
    
    
    
    
    
    Price per
    
    
    
    
    
    Price perNumber
    
    Option
    
    Number
    
    Option
    
    Number
    
    OptionOptions outstanding, beginning of year
    
    
    75,599,090
    
    
    $
    14.80
    
    
    
    86,131,490
    
    
    $
    14.73
    
    
    
    95,820,431
    
    
    $
    14.54Granted
    
    
    5,965,602
    
    
    
    22.40
    
    
    
    6,251,959
    
    
    
    15.24
    
    
    
    3,993,818
    
    
    
    18.78Exercised
    
    
    11,717,958
    
    
    
    14.61
    
    
    
    5,816,252
    
    
    
    14.55
    
    
    
    273,931
    
    
    
    14.53Forfeited
    
    
    5,907,951
    
    
    
    16.33
    
    
    
    10,968,107
    
    
    
    14.68
    
    
    
    13,408,828
    
    
    
    14.55Options outstanding, end of year
    
    
    63,938,783
    
    
    $
    15.40
    
    
    
    75,599,090
    
    
    $
    14.80
    
    
    
    86,131,490
    
    
    $
    14.73Exercisable at year end
    
    
    36,387,546
    
    
    $
    14.66
    
    
    
    32,140,118
    
    
    $
    14.66
    
    
    
    20,542,137
    
    
    $
    14.54Weighted average fair value of
options granted during the year
    
    
    
    
    
    $
    11.21
    
    
    
    
    
    
    $
    7.27
    
    
    
    
    
    
    $
    9.44
 The following table summarizes information about stock options outstanding
at August 31, 2004: Options Outstanding
    
    Options ExercisableWeightedOptions
    
    Avg. Contractual
    
    Weighted Average
    
    Options
    
    Weighted AverageRange of Exercise Prices
    
    Outstanding
    
    Life Remaining
    
    Exercise Price
    
    Exercisable
    
    Exercise Price$12.82 - $15.50
    
    
    54,909,737
    
    
    
    6.9
    
    
    $
    14.55
    
    
    
    35,348,819
    
    
    $
    14.55$16.02 - $18.34
    
    
    3,180,055
    
    
    
    8.2
    
    
    $
    17.32
    
    
    
    921,134
    
    
    $
    17.85$19.02 - $27.50
    
    
    5,848,991
    
    
    
    9.1
    
    
    $
    22.32
    
    
    
    117,593
    
    
    $
    22.19$12.82 - $27.50
    
    
    63,938,783
    
    
    
    7.2
    
    
    $
    15.40
    
    
    
    36,387,546
    
    
    $
    14.66
 F-47




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Restricted Share Units Under 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 ten-year period. For awards with
graded vesting, compensation expense is recognized over the vesting term of
each separately vesting portion. Compensation expense is recognized on a
straight-line basis for awards with cliff vesting. Information with respect to
restricted share units is as follows: 2004
    
    2003
    
    2002Shares granted
    
    
    4,715,894
    
    
    
    6,908,328
    
    
    
    5,124,912Weighted average fair value of shares
    
    $
    22.62
    
    
    $
    16.13
    
    
    $
    20.58Pre-tax compensation expense charged to earnings, net of cancellations
    
    $
    60,486
    
    
    $
    51,615
    
    
    $
    54,729
  11.
    
    SHAREHOLDERS EQUITY AND CERTAIN SHAREHOLDERS AGREEMENTS Class I and Class II Common Shares 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. Accenture Ltd holds all of the Class II common
shares of Accenture SCA. F-48




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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. 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. F-49




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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, 2004, $65,000 of Accenture SCAs undistributed, unconsolidated
retained earnings is legally reserved and the maximum legal reserve requirement
is approximately $215,000. 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. Accenture SCA Transfer Rights Agreement Accenture 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. F-50




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 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 partners 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 by delivering
Accenture Ltd Class A common shares. All transfer restrictions applicable to a
covered person under the transfer rights agreement terminate upon death. F-51




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) The transfer rights agreement will continue in effect until the earlier of
April 18, 2051 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 Agreement Accenture 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. F-52




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 12. MINORITY INTEREST Partners 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 at 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
entities its
holder. 13. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS EQUITY Secondary Offerings On May 22, 2002, Accenture closed an underwritten public offering of
Accenture Ltd Class A common shares. The offering was comprised of 59,233,912
shares newly issued by Accenture Ltd and 34,242,003 shares offered by Accenture
partners, former partners and their permitted transferees. The price to the
public was $20.00 per share and the price net of the underwriters discount of
2.50% was $19.50 per share. Accenture Ltd received $1,155,061 as a result of
the issuance of 59,233,912 newly issued shares. The proceeds from the newly
issued shares were used by Accenture SCA and its subsidiaries to subsequently
redeem or purchase Accenture SCA class I shares, Accenture Canada Holdings Inc.
exchangeable shares and F-53




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Accenture Ltd Class A shares from partners, former partners and their
permitted transferees. On September 29, 2003, Accenture closed an underwritten public offering of
Accenture Ltd Class A common shares. The offering was comprised of 57,394,595
shares newly issued by Accenture Ltd and 24,605,405 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 over allotment option to purchase an additional
12,300,000 newly issued Class A common shares at the same price per share. On
October 1, 2003, Accenture Ltd received $250,939 as a result of the issuance of
the additional 12,300,000 newly issued shares. All of the proceeds from the
newly issued shares were used by Accenture SCA and its subsidiaries, together
with $43,291 previously
authorized for repurchases under the Accenture Share Management Plan,
to redeem or purchase a total of 71,816,561
Accenture SCA shares and Accenture Canada Holdings, Inc. exchangeable shares
from partners pursuant to a tender offer for a total cash outlay of $1,465,166. On May 4, 2004, Accenture closed an underwritten public offering of
Accenture Ltd Class A common shares. The offering was comprised of 35,761,232
shares newly issued by Accenture Ltd and 14,238,768 shares offered by Accenture
partners, former partners and their permitted transferees. The price to the
public was $23.50 per share and the price net of the underwriters discount of
2.8% was $22.84. Accenture Ltd received $816,858 as the result of the issuance
of 35,761,232 shares newly issued by Accenture Ltd. On May 4, 2004, the
underwriters, in connection with the underwritten public offering, exercised
their option to purchase an additional 7,500,000 newly issued Class A common
shares at the same price per share. On May 4, 2004, Accenture Ltd received
$171,315 as a result of the issuance of the additional 7,500,000 newly issued
shares. All of the proceeds from the newly issued shares were used by
Accenture SCA and its subsidiaries, together with $56,661,
to redeem or purchase a total of 45,741,795 Accenture SCA shares and Accenture
Canada Holdings, Inc. exchangeable shares from partners F-54




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) pursuant to a tender offer
for a total cash outlay of $1,044,834. Accenture Share Employee Compensation Trust On April 17, 2002, Accenture Ltds Board of Directors approved the
creation of the Accenture Stock Employee Compensation Trust (SECT). The
purpose of the trust was to acquire Accenture Ltd Class A common shares to be
used to fund equity-based awards for Accenture employees, including future
Accenture partners. The Accenture Stock Employee Compensation Trust was a
non-qualified grantor trust whose financial statements are consolidated with the
Companys financial statements. In fiscal 2002 and fiscal 2003, Accenture
contributed $300,000 and $150,000, respectively, to the trust. As of August 31,
2003, $83,280 of Restricted cash on the Consolidated Balance Sheet remained
available for share purchases. On December 19, 2003, the Accenture Stock Employee Compensation Trust was
terminated. A subsidiary of Accenture Ltd that is not a subsidiary of Accenture
SCA created a new Share Employee Compensation Trust (the SECT). Substantially
all treasury shares purchased by the predecessor trust that had not been used
to fund employee share awards were transferred to the new SECT. In fiscal 2004, fiscal 2003 and fiscal 2002, the SECT and its predecessor
trust purchased approximately 8,413,050, 8,619,800 and 12,562,300 Accenture Ltd
Class A common shares, respectively, with aggregate purchase prices totaling
$201,326, $151,763 and $221,110, respectively. As of August 31, 2004, the SECT
had $61,578 of previously authorized contributions available for share
purchases. Accenture SCA continues to fund share repurchases by the
new SECT by redeeming Class I shares held by Accenture Ltd. F-55




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Share Management Plan Accenture 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. On November 14, 2003, Accenture Ltds Board of Directors
authorized an additional $600,000 for such share redemptions and purchases. Of
the previously authorized amounts, $664,338 was utilized in fiscal 2004,
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 22,019,515 Accenture SCA Class I common shares and
850,885 Accenture Canada Holdings Inc. exchangeable shares for a combined cost
of $511,189. Of the $1,200,000 previously authorized, $224,404 remained
available for future share purchases at August 31, 2004. Other Share Purchases Accenture 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 in fiscal 2002. Accenture did not purchase any such
shares in open-market purchases in fiscal 2003 or fiscal 2004. In fiscal 2004 and
fiscal 2003, Accenture acquired Accenture Ltd Class A common shares for a cost
of $138,817 and $98,810, respectively, from employees electing net share
delivery under the ESPP and Share Incentive Plan. In fiscal 2004 and
fiscal 2003, Accenture acquired Accenture SCA Class I common shares
for a cost of $58,112 and $125, respectively, in accordance with
redemption provisions applicable to SCA Class I common shares. F-56




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 14. RELATIONSHIP WITH ARTHUR ANDERSEN In October 2002, in conjunction with the termination of a training
facility services agreement and other services agreements 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. At
August 31, 2004, Accenture has committed to spend a minimum of $63,450 over the
remaining term of the agreement. 15. LEASE COMMITMENTS Accenture
has various lease agreements, principally for office space, with
various renewal options. Rental expense including operating costs and taxes was
$287,559, $280,714 and $264,982 in fiscal 2004, fiscal 2003 and fiscal 2002,
respectively. Sublease income from third parties was $22,806, $18,950 and
$13,824 in fiscal 2004, fiscal 2003 and fiscal 2002, respectively. Future
minimum rental commitments under non-cancelable operating leases as of August
31, 2004, are as follows: Operating
    
    OperatingLease
    
    SubleasePayments
    
    Income2005
    
    $
    246,902
    
    
    
    ($12,708
    )2006
    
    
    249,381
    
    
    
    (12,990
    )2007
    
    
    230,114
    
    
    
    (11,611
    )2008
    
    
    198,327
    
    
    
    (12,380
    )2009
    
    
    158,976
    
    
    
    (17,426
    )Thereafter
    
    
    1,358,926
    
    
    
    (22,238
    )$
    2,442,626
    
    
    
    ($89,353
    )
 F-57




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 16. COMMITMENTS AND CONTINGENCIES Guarantees As 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 certain levels of qualifying revenues. In fiscal 2004, Accenture made
payments and accrued for payments due, but not yet remitted, of $13,018. The
remaining potential liability at August 31, 2004 was $174,482. In connection with Accenture increasing its ownership interest in Avanade,
Inc. from 50 percent to 78 percent in December 2001, Accenture has the right to
purchase substantially all of the remaining outstanding shares of Avanade, Inc.
not owned by Accenture 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 parties with respect to certain matters. Generally, these
indemnification provisions are included in contracts arising in the normal
course of business under which the Company customarily agrees to hold the
indemnified 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 F-58




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Accenture
under such indemnification clauses are generally conditioned on
the other party making a claim. Such claims are typically subject to challenge
by Accenture and to 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, the Company has not made any payments under these agreements that
have been material individually or in the aggregate. As of August 31, 2004, management
was not aware of any obligations arising under indemnification agreements that
would require material payments. From time to time, Accenture enters into contracts with clients whereby it
has joint and several liability with other participants and third parties
providing related services and products to clients. Under these arrangements,
Accenture and other parties may assume some responsibility to the client for
the performance of others under the terms and conditions of the contract with
or for the benefit of the client. In some arrangements, the extent of
Accentures obligations for the performance of others is not expressly
specified. As of August 31, 2004, Accenture estimates it had assumed an
aggregate potential liability of approximately $603,852 to its clients for
the performance of others under arrangements described in this paragraph. These
contracts typically provide recourse provisions that would allow Accenture to
recover from the other parties all but approximately $41,330 if Accenture is
obligated to make payments to the clients that are the consequence of a
performance default by the other parties. In some of these contracts, the
guarantee is contractually given to the client by one of the other parties
providing services to the client. In the event of Accentures performance
default, Accenture could be responsible for repayment to the other party. To
date, Accenture has not been required to make any payments under any of the
contracts described in this paragraph. F-59




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Legal Contingencies At August 31, 2004, 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. 17. SEGMENT REPORTING Operating
segments are defined by SFAS No. 131, Disclosures about Segments
of an Enterprise and Related Information, 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 providing management consulting,
technology and outsourcing services 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. Reportable Segments Comm. &Year ended
    
    High
    
    FinancialAugust 31, 2004
    
    Tech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    Other
    
    TotalRevenues before reimbursements
    
    $
    3,741,451
    
    
    $
    2,770,990
    
    
    $
    1,994,655
    
    
    $
    2,978,892
    
    
    $
    2,178,569
    
    
    $
    9,006
    
    
    $
    13,673,563Depreciation(1)
    
    
    81,739
    
    
    
    66,813
    
    
    
    35,463
    
    
    
    56,112
    
    
    
    39,869
    
    
    
    
    
    
    
    279,996Operating income
    
    
    403,698
    
    
    
    353,904
    
    
    
    311,050
    
    
    
    414,501
    
    
    
    275,473
    
    
    
    
    
    
    
    1,758,626Assets at August 31(2)
    
    $
    538,125
    
    
    $
    107,206
    
    
    $
    569,612
    
    
    $
    342,314
    
    
    $
    217,217
    
    
    $
    133,851
    
    
    $
    1,908,325
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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Comm. &Year ended
    
    High
    
    FinancialAugust 31, 2003
    
    Tech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    Other
    
    TotalRevenues before reimbursements
    
    $
    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
   (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. 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 10. Restructuring costs and reorganization benefit in fiscal 2004 and fiscal
2003 were allocated to the operating groups as follows: Year Ended August 31,Increase (Decrease) to Operating Income
    
    2004
    
    2003
    
    2002Communications & High Tech
    
    $
    (7,230
    )
    
    $
    4,778
    
    
    $
    (35,948
    )Financial Services
    
    
    (6,403
    )
    
    
    4,319
    
    
    
    (26,591
    )Government
    
    
    (4,247
    )
    
    
    2,526
    
    
    
    (13,605
    )Products
    
    
    (6,356
    )
    
    
    4,278
    
    
    
    (19,344
    )Resources
    
    
    (4,655
    )
    
    
    3,445
    
    
    
    (15,036
    )Total
    
    $
    (28,891
    )
    
    $
    19,346
    
    
    $
    (110,524
    )
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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) Revenues are attributed to geographic areas and countries based on where
client services are supervised. Americas
    
    EMEA(1)
    
    Asia Pacific
    
    TotalFiscal 2004Revenues before reimbursements
    
    $
    6,133,081
    
    
    $
    6,572,011
    
    
    $
    968,471
    
    
    $
    13,673,563Reimbursements
    
    
    682,087
    
    
    
    627,368
    
    
    
    130,564
    
    
    
    1,440,019Revenues
    
    
    6,815,168
    
    
    
    7,199,379
    
    
    
    1,099,035
    
    
    
    15,113,582Long lived assets at August 31
    
    
    282,431
    
    
    
    253,323
    
    
    
    108,192
    
    
    
    643,946Fiscal 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
    
    
    
    650,455Fiscal 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
   (1)
    
    EMEA includes Europe, Middle East and Africa. The Company conducts business in two countries that individually comprised
over 10% of consolidated revenues before reimbursements within the last three
years. The United States represented 39%, 43%, and 46% of revenues before
reimbursements in fiscal 2004, fiscal 2003 and fiscal 2002, respectively, while
the United Kingdom totaled 16%, 14%, and 14% in fiscal 2004, fiscal 2003 and
fiscal 2002, respectively. The following table presents revenues before reimbursements by major types
of services: Year Ended August 31,2004
    
    2003
    
    2002Consulting
    
    $
    8,589,645
    
    
    $
    8,048,134
    
    
    $
    8,847,717Outsourcing
    
    
    5,083,918
    
    
    
    3,769,865
    
    
    
    2,726,552Revenues before reimbursements
    
    
    13,673,563
    
    
    
    11,817,999
    
    
    
    11,574,269Reimbursements
    
    
    1,440,019
    
    
    
    1,579,241
    
    
    
    1,530,755Revenues
    
    $
    15,113,582
    
    
    $
    13,397,240
    
    
    $
    13,105,024
   Note:
    
    In fiscal 2003 and fiscal 2002, $334,972 and $194,669, respectively, of
revenues before reimbursements previously classified as Other have been
reclassified to Consulting or Outsourcing type of work to conform to
the current presentation. F-62




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ACCENTURE SCA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(In thousands of U.S. dollars, except share amounts or as otherwise disclosed) 18. QUARTERLY DATA (unaudited) First
    
    Second
    
    Third
    
    FourthFiscal 2004
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    AnnualRevenues before reimbursements
    
    $
    3,261,585
    
    
    $
    3,302,209
    
    
    $
    3,686,662
    
    
    $
    3,423,107
    
    
    $
    13,673,563Reimbursements
    
    
    312,903
    
    
    
    380,095
    
    
    
    363,579
    
    
    
    383,442
    
    
    
    1,440,019Revenues
    
    
    3,574,488
    
    
    
    3,682,304
    
    
    
    4,050,241
    
    
    
    3,806,549
    
    
    
    15,113,582Operating income
    
    
    507,140
    
    
    
    307,429
    
    
    
    573,157
    
    
    
    370,900
    
    
    
    1,758,626Net income
    
    
    332,157
    
    
    
    218,623
    
    
    
    365,640
    
    
    
    296,499
    
    
    
    1,212,919
 First
    
    Second
    
    Third
    
    FourthFiscal 2003
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    AnnualRevenues 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
    
    
    
    1,039,886
 F-63