##### 



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



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FORM 10-Q

(Mark One)

[x]
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended November 30, 2003OR[  ]
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from _____ to _____.


Commission File Number: 000-49713



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

Luxembourg
    
    98-0351796(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    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)

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 [  ]

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

The number of shares of the Registrants Class I common shares, par value
1.25 per share, outstanding as of January 5, 2004 was 885,818,582 (which
number does not include 85,474,872 issued shares held by subsidiaries of the
Registrant).



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##### 



ACCENTURE SCA

INDEX

PagePart I
    
    Financial InformationItem 1.
    
    Financial Statements (unaudited)Consolidated Balance Sheets as of November 30, 2003 and August 31, 2003.
    
    3Consolidated Income Statements for the three months ended November 30, 2003 and 2002.
    
    4Consolidated Shareholders Equity Statement for the three months ended November 30, 2003
    
    5Consolidated Cash Flows Statements for the three months ended November 30, 2003 and 2002
    
    6Notes to Consolidated Financial Statements
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    11Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    25Item 4.
    
    Controls and Procedures
    
    25Part II
    
    Other InformationItem 1.
    
    Legal Proceedings
    
    25Item 6.
    
    Exhibits and Reports on Form 8-K
    
    26Signature
    
    
    
    27


2



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##### 






PART IFINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS

ACCENTURE SCA




CONSOLIDATED BALANCE SHEETS

November 30, 2003 and August 31, 2003
(In thousands of U.S. dollars, except share amounts)

November 30,
    
    August 31,2003
    
    2003(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    
    $2,329,651
    
    
    
    $2,332,161Restricted cash
    
    
    4,357
    
    
    
    83,280Receivables from clients, net
    
    
    1,486,133
    
    
    
    1,416,153Unbilled services
    
    
    1,004,231
    
    
    
    828,515Deferred income taxes, net
    
    
    148,298
    
    
    
    147,040Other current assets
    
    
    279,700
    
    
    
    230,062Total current assets
    
    
    5,252,370
    
    
    
    5,037,211NON-CURRENT ASSETS:Unbilled services
    
    
    156,400
    
    
    
    132,522Investments
    
    
    30,526
    
    
    
    33,330Property and equipment, net
    
    
    631,022
    
    
    
    650,455Goodwill
    
    
    199,657
    
    
    
    188,659Deferred income taxes, net
    
    
    330,581
    
    
    
    326,286Other non-current assets
    
    
    102,710
    
    
    
    90,777Total non-current assets
    
    
    1,450,896
    
    
    
    1,422,029TOTAL ASSETS
    
    
    $6,703,266
    
    
    
    $6,459,240LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term bank borrowings
    
    
    $33,655
    
    
    
    $43,500Current portion of long-term debt
    
    
    2,559
    
    
    
    2,662Accounts payable
    
    
    496,809
    
    
    
    573,201Deferred revenues
    
    
    659,021
    
    
    
    676,841Accrued payroll and related benefits
    
    
    1,063,085
    
    
    
    974,319Income taxes payable
    
    
    782,058
    
    
    
    671,026Deferred income taxes, net
    
    
    22,589
    
    
    
    22,390Other accrued liabilities
    
    
    390,837
    
    
    
    387,157Total current liabilities
    
    
    3,450,613
    
    
    
    3,351,096NON-CURRENT LIABILITIES:Long-term debt
    
    
    13,729
    
    
    
    13,955Retirement obligation
    
    
    590,907
    
    
    
    575,973Deferred income taxes, net
    
    
    3,747
    
    
    
    3,572Other non-current liabilities
    
    
    759,587
    
    
    
    836,850Total non-current liabilities
    
    
    1,367,970
    
    
    
    1,430,350MINORITY INTEREST
    
    
    34,863
    
    
    
    34,233SHAREHOLDERS EQUITY:Class I common shares, par value 1.25 euros per share, 19,868,950,000 shares authorized, 753,843,192 issued as of November 30,
2003 and August 31, 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), 33,797,847 and 33,803,376 units issued and outstanding
as of November 30, 2003 and August 31, 2003, respectively,
    
    
    495,260
    
    
    
    495,024Additional paid-in capital
    
    
    3,013,744
    
    
    
    2,687,575Treasury shares, at cost, 81,751,874 and 45,256,961 Class I common shares at November 30, 2003 and August 31, 2003, respectively
    
    
    (1,654,956
    )
    
    
    (846,959
    )Investment in Accenture Ltd shares, at cost, 275,460 and 5,229,487 shares at November 30, 2003 and August 31, 2003, respectively
    
    
    (6,567
    )
    
    
    (88,198
    )Accenture Ltd Class A shares owned by the Accenture Ltd Stock Employee Compensation Trust, at cost, 3,500,000 and 18,081,800
shares at November 30, 2003 and August 31, 2003, respectively
    
    
    (78,965
    )
    
    
    (308,878
    )Retained deficit
    
    
    (1,376,214
    )
    
    
    (1,708,371
    )Accumulated other comprehensive loss
    
    
    (162,384
    )
    
    
    (188,233
    )Total shareholders equity
    
    
    1,849,820
    
    
    
    1,643,561TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    
    $6,703,266
    
    
    
    $6,459,240


The accompanying notes are an integral part of these financial statements.

3



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##### 



ACCENTURE SCA




CONSOLIDATED INCOME STATEMENTS

For the Three Months Ended November 30, 2003 and 2002
(In thousands of U.S. dollars)
(Unaudited)

2003
    
    2002REVENUES:Revenues before reimbursements
    
    $
    3,261,585
    
    
    $
    2,929,958Reimbursements
    
    
    312,903
    
    
    
    397,489Revenues
    
    
    3,574,488
    
    
    
    3,327,447OPERATING EXPENSES:Cost of services:Cost of services before reimbursable expenses
    
    
    2,150,890
    
    
    
    1,774,197Reimbursable expenses
    
    
    312,903
    
    
    
    397,489Cost of services
    
    
    2,463,793
    
    
    
    2,171,686Sales and marketing
    
    
    350,597
    
    
    
    355,833General and administrative costs
    
    
    339,356
    
    
    
    370,731Reorganization benefit
    
    
    (86,398
    )
    
    
    Total operating expenses
    
    
    3,067,348
    
    
    
    2,898,250OPERATING INCOME
    
    
    507,140
    
    
    
    429,197Gain on investments, net
    
    
    498
    
    
    
    3,805Interest income
    
    
    10,423
    
    
    
    9,093Interest expense
    
    
    (5,751
    )
    
    
    (6,536
    )Other income (expense)
    
    
    1,526
    
    
    
    (1,775
    )Equity in losses of affiliates
    
    
    (686
    )
    
    
    (530
    )INCOME BEFORE TAXES
    
    
    513,150
    
    
    
    433,254Provision for taxes
    
    
    178,576
    
    
    
    164,637INCOME BEFORE MINORITY INTEREST
    
    
    334,574
    
    
    
    268,617Minority interest
    
    
    (2,417
    )
    
    
    (1,499
    )NET INCOME
    
    
    $332,157
    
    
    
    $267,118


The accompanying notes are an integral part of these financial statements.

4



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##### 



ACCENTURE SCA




CONSOLIDATED SHAREHOLDERS EQUITY STATEMENT

For the Three Months Ended November 30, 2003
(U.S. dollars and share amounts in thousands)
(Unaudited)

Restricted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    InvestmentClass
    
    Class
    
    Share
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment
    
    inI
    
    II
    
    Units
    
    
    
    
    
    
    
    
    
    
    
    
    
    in
    
    AccentureCommon
    
    Common
    
    Common
    
    
    
    
    
    Treasury
    
    Accenture
    
    Ltd-Shares
    
    Shares
    
    Shares
    
    Additional
    
    Shares
    
    Ltd
    
    SECTNo.
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    Paid-in
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    
    
    
    
    No.$
    
    Shares
    
    $
    
    Shares
    
    $
    
    Shares
    
    Capital
    
    $
    
    Shares
    
    $
    
    Shares
    
    $
    
    SharesBalance
at August 31, 2003
    
    $
    1,072,320
    
    
    
    958,546
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    495,024
    
    
    
    33,803
    
    
    $
    2,687,575
    
    
    $
    (846,959
    )
    
    
    (45,257
    )
    
    $
    (88,198
    )
    
    
    (5,229
    )
    
    $
    (308,878
    )
    
    
    (18,082
    )Comprehensive incomeNet incomeOther comprehensive income (loss):Unrealized gains on marketable
securities, net of
reclassification adjustment
Foreign currency translation
adjustmentsOther comprehensive income
(loss)Comprehensive incomeIncome tax benefit on stock-based
compensation plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,658Purchase of Accenture Ltd Class A
common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,324
    )
    
    
    
    
    
    
    
    
    
    
    (17,509
    )
    
    
    (657
    )
    
    
    (78,965
    )
    
    
    (3,500
    )Transfer of shares from SECT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (308,878
    )
    
    
    (18,082
    )
    
    
    308,878
    
    
    
    18,082Vesting of restricted share units, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,096
    
    
    
    278Purchases/redemptions of Accenture
Class I common shares and Canada
Holdings Inc. exchangeable shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,595
    )
    
    
    (1,602,958
    )
    
    
    (78,578
    )Issuance of common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,137
    )
    
    
    
    
    
    
    
    
    
    
    86,951
    
    
    
    4,394Employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,320
    )
    
    
    41,875
    
    
    
    2,303
    
    
    
    35,638
    
    
    
    1,897Restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,860
    )
    
    
    (283
    )
    
    
    337
    
    
    
    2,495
    
    
    
    133
    
    
    
    2,028
    
    
    
    102In September 2003 offering
    
    
    18,301
    
    
    
    12,748
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    369,582
    
    
    
    750,591
    
    
    
    39,647
    
    
    
    283,401
    
    
    
    17,300Minority Interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,968Balance
at November 30, 2003
    
    $
    1,090,621
    
    
    
    971,294
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    495,260
    
    
    
    33,798
    
    
    $
    3,013,744
    
    
    $
    (1,654,956
    )
    
    
    (81,752
    )
    
    
    $(6,567
    )
    
    
    (275
    )
    
    
    $(78,965
    )
    
    
    (3,500
    )


AccumulatedOtherRetained
    
    Compre-Earnings
    
    hensive(Deficit)
    
    Income(Loss)
    
    TotalBalance
at August 31, 2003
    
    $
    (1,708,371
    )
    
    $
    (188,233
    )
    
    $
    1,643,561Comprehensive incomeNet income
    
    
    332,157
    
    
    
    
    
    
    
    332,157Other comprehensive income (loss):Unrealized gains on marketable
securities, net of
reclassification adjustment
    
    
    
    
    
    
    1,119
    
    
    
    1,119Foreign currency translation
adjustments
    
    
    
    
    
    
    24,730
    
    
    
    24,730Other comprehensive income
(loss)
    
    
    
    
    
    
    25,849Comprehensive income
    
    
    
    
    
    
    
    
    
    
    358,006Income tax benefit on stock-based
compensation plan
    
    
    
    
    
    
    
    
    
    
    11,658Purchase of Accenture Ltd Class A
common shares
    
    
    
    
    
    
    
    
    
    
    (105,798
    )Transfer of shares from SECT
    
    
    
    
    
    
    
    
    
    
    Vesting of restricted share units, net
    
    
    
    
    
    
    
    
    
    
    5,096Purchases/redemptions of Accenture
Class I common shares and Canada
Holdings Inc. exchangeable shares
    
    
    
    
    
    
    
    
    
    
    (1,615,553
    )Issuance of common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    66,814Employee stock options
    
    
    
    
    
    
    
    
    
    
    61,193Restricted share units
    
    
    
    
    
    
    
    
    
    
    In September 2003 offering
    
    
    
    
    
    
    
    
    
    
    1,421,875Minority Interest
    
    
    
    
    
    
    
    
    
    
    2,968Balance
at November 30, 2003
    
    $
    (1,376,214
    )
    
    $
    (162,384
    )
    
    $
    1,849,820


The accompanying notes are an integral part of these financial statements.

5



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##### 



ACCENTURE SCA




CONSOLIDATED CASH FLOWS STATEMENTS

For the Three Months Ended November 30, 2003 and 2002
(In thousands of U.S. dollars)
(Unaudited)

2003
    
    2002CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    
    $332,157
    
    
    
    $267,118Adjustments to reconcile net income to net cash provided by operating
activitiesDepreciation and amortization
    
    
    62,709
    
    
    
    60,853Reorganization benefit
    
    
    (86,398
    )
    
    
    Gain on investments, net
    
    
    (498
    )
    
    
    (3,805
    )Loss on disposal of property and equipment, net
    
    
    1,805
    
    
    
    4,237Stock-based compensation expense
    
    
    14,437
    
    
    
    13,370Deferred income taxes, net
    
    
    (4,443
    )
    
    
    (10,928
    )Minority interest
    
    
    2,417
    
    
    
    1,499Other items, net
    
    
    833
    
    
    
    (2,383
    )Change in assets and liabilitiesIncrease in receivables from clients, net
    
    
    (46,721
    )
    
    
    (46,660
    )(Increase) decrease in other current assets
    
    
    (48,229
    )
    
    
    35,656Increase in unbilled services, current and non-current
    
    
    (175,759
    )
    
    
    (157,004
    )Increase in other non-current assets
    
    
    (12,094
    )
    
    
    (4,410
    )Decrease in accounts payable
    
    
    (82,018
    )
    
    
    (71,393
    )Decrease in deferred revenues
    
    
    (27,005
    )
    
    
    (1,536
    )Increase (decrease) in accrued payroll and related benefits
    
    
    71,007
    
    
    
    (52,614
    )Increase in income taxes payable
    
    
    118,508
    
    
    
    217,843Decrease in other accrued liabilities
    
    
    (1,776
    )
    
    
    (43,449
    )Increase (decrease) in other non-current liabilities
    
    
    6,955
    
    
    
    (8,087
    )Net cash provided by operating activities
    
    
    125,887
    
    
    
    198,307CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of investments
    
    
    5,535
    
    
    
    45,076Proceeds from sales of property and equipment
    
    
    2,241
    
    
    
    1,369Purchases of businesses and investments, net of cash acquired
    
    
    (6,131
    )
    
    
    (2,612
    )Purchases of property and equipment
    
    
    (46,738
    )
    
    
    (18,904
    )Net cash (used in) provided by investing activities
    
    
    (45,093
    )
    
    
    24,929CASH FLOWS FROM FINANCING ACTIVITIES:Contract termination payment
    
    
    
    
    
    
    (147,569
    )Issuance of Accenture Ltd Class A common shares
    
    
    1,549,882
    
    
    
    95,716Purchase of Accenture Ltd Class A common shares
    
    
    (105,798
    )
    
    
    (68,814
    )Purchase of Accenture SCA Class I common shares
    
    
    (1,615,553
    )
    
    
    (142
    )Proceeds from issuance of long-term debt
    
    
    481
    
    
    
    Repayment of long-term debt
    
    
    (1,116
    )
    
    
    (2,249
    )Proceeds from issuance of short-term bank borrowings
    
    
    27,713
    
    
    
    20,996Repayments of short-term bank borrowings
    
    
    (36,823
    )
    
    
    (28,927
    )Decrease in restricted cash of Accenture Ltd Stock Employee
Compensation Trust
    
    
    78,923
    
    
    
    64,789Net cash used in financing activities
    
    
    (102,291
    )
    
    
    (66,200
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    18,987
    
    
    
    (369
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (2,510
    )
    
    
    156,667CASH AND CASH EQUIVALENTS,beginning of period
    
    
    2,332,161
    
    
    
    1,316,976CASH AND CASH EQUIVALENTS,end of period
    
    
    $2,329,651
    
    
    $
    1,473,643


The accompanying notes are an integral part of these financial statements.

6



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##### 



ACCENTURE SCA




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of U.S. dollars)
(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of
Accenture SCA, a Luxembourg partnership limited by shares, and its controlled
subsidiary companies (together Accenture or the Company) have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC) for quarterly reports on Form 10-Q and do not include all of the
information and note disclosures required by accounting principles generally
accepted in the United States of America for complete financial statements.
These financial statements should therefore be read in conjunction with the
consolidated financial statements and notes thereto for the fiscal year ended
August 31, 2003 included in the Companys Annual Report on Form 10-K filed with
the SEC on November 19, 2003. The accompanying unaudited interim consolidated
financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America and reflect all
adjustments of a normal, recurring nature that are, in the opinion of
management, necessary for a fair presentation of results for these interim
periods. The results of operations for the three months ended November 30, 2003
are not necessarily indicative of the results that may be expected for the
fiscal year ending August 31, 2004. Certain prior-period amounts have been
reclassified to conform to the current-period presentation.

2. RECENTLY ADOPTED ACCOUNTING STANDARDS

In
November 2002, the Emerging Issues Task Force (EITF) issued a final
consensus on Issue 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables. In May 2003, the EITF issued additional interpretive guidance
regarding the application of Issue 00-21. Issue 00-21 provides guidance on how
and when to recognize revenues on arrangements requiring delivery of more than
one product or service. Issue 00-21 is effective prospectively for arrangements
entered into in fiscal periods beginning after June 15, 2003.

Effective September 1, 2003, Accenture adopted Issue 00-21 on a
prospective basis. The company will continue to account for contracts signed on
or before August 31, 2003, under the previous policy for contracts containing
multiple elements, as described in the notes to the consolidated financial
statements in the Companys Annual Report on Form 10-K for the fiscal year
ended August 31, 2003.

Revenues for contracts signed or amended after August 31, 2003 with
multiple elements are allocated to each element based on the lesser of its
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 that
element as described in the notes to the consolidated financial statements in
the Companys Annual Report on Form 10-K for the fiscal year ended August 31,
2003. If the amount of non-contingent revenue 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 has not had a material effect on the Companys
consolidated financial position as of November 30, 2003 or results of
operations for the three-month period then ended.

3. PRO FORMA IMPACT OF EMPLOYEE STOCK OPTIONS AND SHARE PURCHASE PLANS

Accenture follows Accounting Principles Board Opinion No. 25 (APB 25),
Accounting for Stock Issued to Employees, in accounting for its employee
stock options and share purchase rights. Accordingly, no compensation expense
is recognized for stock options and share purchase rights granted under the
Companys employee share incentive and employee share purchase plans. Had
compensation cost for the Companys employee share incentive and employee share
purchase plans been determined based on fair value at the grant date consistent
with Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
for Stock-Based Compensation, the Companys net income would have been reduced to the proforma amounts indicated below:

7



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ACCENTURE SCA

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)
(Unaudited)

Three Months EndedNovember 30,2003
    
    2002Net income as reported
    
    $
    332,157
    
    
    $
    267,118Add: Stock-based compensation expense already included in net income as reported,
net of tax and minority interest
    
    
    13,020
    
    
    
    12,036Deduct: Pro forma employee compensation cost related to stock options, restricted share
units and employee share purchase plan, net of tax and minority interest
    
    
    (40,442
    )
    
    
    (53,571
    )Pro forma income
    
    $
    304,735
    
    
    $
    225,583


4. GOODWILL

A summary of the changes in the carrying amount of goodwill by segment for
the three months ended November 30, 2003 is as follows:

Comm.& High
    
    FinancialTech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    TotalBeginning balance at August 31, 2003
    
    $
    60,265
    
    
    $
    40,509
    
    
    $
    21,519
    
    
    $
    38,724
    
    
    $
    27,642
    
    
    $
    188,659Goodwill additions
    
    
    3,902
    
    
    
    341
    
    
    
    252
    
    
    
    370
    
    
    
    293
    
    
    
    5,158Foreign currency translation adjustments
    
    
    2,290
    
    
    
    1,016
    
    
    
    532
    
    
    
    1,180
    
    
    
    822
    
    
    
    5,840Ending balance at November 30, 2003
    
    $
    66,457
    
    
    $
    41,866
    
    
    $
    22,303
    
    
    $
    40,274
    
    
    $
    28,757
    
    
    $
    199,657


5. REORGANIZATION COSTS

During the three months ended November 30, 2003, Accenture recorded income
of $86,398 resulting primarily from final determinations of certain
reorganization liabilities established in connection with Accentures
transition to a corporate structure in 2001. The carrying amount of the
reorganization liabilities was $438,042 at November 30, 2003 and $510,149 at
August 31, 2003. The remaining change in the reorganization liabilities during
the three months ended November 30, 2003 was due to foreign currency
translation. The reorganization liabilities are recorded as a component of Other
non-current liabilities on the Consolidated Balance Sheet.

6. RESTRUCTURING AND SUBSEQUENT EVENT

In the fourth quarter of 2002, Accenture recognized restructuring costs of
$110,524 related to a global consolidation of office space. At August 31, 2003,
the related liability for restructuring costs was $40,327. This liability was
reduced by payments of $5,169 made in the three months ended November 30, 2003.
The liability was also affected by immaterial changes in lease estimates,
imputed interest and foreign currency translation. The liability at November
30, 2003 was $36,003, representing the net present value of the estimated
remaining obligations related to exiting operating leases.

In the second quarter of fiscal 2004, Accenture management approved a real
estate consolidation plan, which is expected to be substantially completed
during the second quarter of fiscal 2004, primarily in the United States and
the United Kingdom. The costs to consolidate the locations and dispose of the
related fixed assets are estimated to be in the range of $75,000 to $100,000
and will be recorded as the various locations are consolidated.

8



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ACCENTURE SCA

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)
(Unaudited)

7. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of Comprehensive income are as follows:

Three Months EndedNovember 30,2003
    
    2002Net income
    
    
    $332,157
    
    
    
    $267,118Foreign currency translation adjustments
    
    
    24,730
    
    
    
    (369
    )Unrealized gains on marketable securities, net of reclassification adjustments
    
    
    1,119
    
    
    
    2,949Comprehensive income
    
    
    $358,006
    
    
    
    $269,698The components of Accumulated other comprehensive income (loss) are as
follows:November 30,
    
    August 31,2003
    
    
    
    2003Foreign currency translation adjustments
    
    $
    (42,334
    )
    
    $
    (67,064
    )Unrealized gains (losses) on marketable securities
    
    
    58
    
    
    
    (1,061
    )Minimum pension liability, net of tax
    
    
    (120,108
    )
    
    
    (120,108
    )Accumulated other comprehensive loss
    
    $
    (162,384
    )
    
    $
    (188,233
    )


8. ACCENTURE STOCK EMPLOYEE COMPENSATION TRUST

During the three months ended November 30, 2003, the Accenture Stock
Employee Compensation Trust (the SECT) purchased approximately 3,500,000
Accenture Ltd Class A common shares with an aggregate purchase price totaling
$78,965. 2,904,235 shares were delivered to employees in connection
with the settlement of employee equity awards. On November 14, 2003, Accenture
Ltds board of directors authorized an additional $150,000 for the purchase of
Accenture Ltd Class A common shares for the purpose of funding equity awards to
future partners and other select employee benefits. At November 30, 2003,
$153,162 remained available for share purchases, of which $4,357 is segregated
as Restricted cash on the Consolidated Balance Sheet.

During the three months ended November
30, 2003, at Accenture's request, the trustee of the SECT and one of
the Company's subsidiaries transferred an aggregate of 18,081,800
treasury shares to a subsidiary of Accenture Ltd for the future use
of funding employee equity awards. After further review, Accenture
terminated the SECT on December 19, 2003. On December 19, 2003 the
subsidiary of Accenture Ltd to which those shares were previously
transferred created a new trust to continue the SECT's originally
stated purposes of funding equity awards to employees and to simplify
our treasury management activities. Substantially all of the treasury
shares previously transferred to the subsidiary of Accenture Ltd that
had not then been utilized to fund employee share awards were
contributed to the new trust.

9. ANDERSEN CONTRACTS

In October 2002, Accenture and Arthur Andersen LLP terminated the prior
training facility services agreement, as well as the services agreements by
which Arthur Andersen LLP and other Arthur Andersen firms were to provide
services to Accenture and by which Accenture was to provide Arthur Andersen LLP
and other Arthur Andersen firms with services. In conjunction with the
termination of all contracts and in settlement of all related matters with
Arthur Andersen LLP and other Arthur Andersen firms, Accenture paid Arthur
Andersen LLP $190,290. This payment offset previously accrued amounts and
resulted in an immaterial gain.

10. 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 growth in revenues. During the three months ended November 30, 2003,
Accenture made payments totaling $1,720. The remaining potential liability at
November 30, 2003 was $185,780.

9



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ACCENTURE SCA

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(In thousands of U.S. dollars)
(Unaudited)

In connection with Accenture increasing its ownership interest in Avanade,
Inc. from 50 percent to 78 percent, Accenture has the right to purchase
substantially all of the remaining outstanding shares of Avanade, Inc. 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. not owned by Accenture anytime
after December 31, 2006, or earlier if certain events occur, for fair market
value but not less than $28,650 and not to exceed $58,650.

Accenture has various agreements in which it may be obligated to indemnify
the other party with respect to certain matters. Generally, these
indemnification clauses are included in contracts arising in the normal course
of business under which the Company customarily agrees to hold the other party
harmless against losses arising from a breach of representations related to
such matters as title to assets sold and licensed or certain intellectual
property rights. Payments by Accenture under such indemnification clauses 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 November 30, 2003, management
was not aware of any 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. As of November 30, 2003, Accenture had
assumed potential responsibilities to its clients under such arrangements for
the performance of others for an aggregate maximum potential liability of
approximately $189,472. These contracts provide recourse provisions that would
allow Accenture to recover from the other parties all but $38,971 if Accenture
is obligated to make payments to the clients that are the consequence of a
performance default by the other parties.

11. SEGMENT REPORTING

Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker, or decision-making group, in deciding how to
allocate resources and in assessing performance.

Accentures chief operating decision maker is the chief executive officer.
The operating segments are managed separately because each operating segment
represents a strategic business unit that serves clients in different
industries. The reportable operating segments are the Companys five operating
groups, which are Communications & High Tech, Financial Services, Government,
Products and Resources.

Financial information for the Companys reportable segments is as follows:

Comm. &
    
    FinancialThree Months Ended
November 30, 2002
    
    High Tech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    Other
    
    TotalRevenues before reimbursements
    
    $
    879,010
    
    
    $
    646,049
    
    
    $
    478,219
    
    
    $
    701,141
    
    
    $
    554,627
    
    
    $
    2,539
    
    
    $
    3,261,585Operating income
    
    $
    75,032
    
    
    $
    103,680
    
    
    $
    93,903
    
    
    $
    133,837
    
    
    $
    100,421
    
    
    $
    267
    
    
    $
    507,140


Comm. &
    
    FinancialThree Months Ended
November 30, 2002
    
    High Tech
    
    Services
    
    Government
    
    Products
    
    Resources
    
    Other
    
    TotalRevenues before reimbursements
    
    $
    830,007
    
    
    $
    601,922
    
    
    $
    358,938
    
    
    $
    649,618
    
    
    $
    487,268
    
    
    $
    2,205
    
    
    $
    2,929,958Operating income
    
    $
    92,140
    
    
    $
    98,116
    
    
    $
    66,777
    
    
    $
    122,920
    
    
    $
    49,244
    
    
    $
    
    
    
    $
    429,197


The $86,398 decrease in reorganization liabilities increased each operating
groups operating income for the three months ended November 30, 2003 by the
following amounts: Communications & High Tech  $21,710; Financial Services -
$18,951; Government  $12,709; Products  $18,934; and Resources  $14,094.

10



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ITEM 2. 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 Quarterly Report onForm 10-Qand in our Annual Report onForm 10-Kfor
the fiscal year ended August 31, 2003, and with the information under the
heading Managements Discussion and Analysis of Financial Condition and
Results of Operations in our Annual Report onForm 10-Kfor the fiscal year
ended August 31, 2003.

We use the terms Accenture, the Company, we, our, and us in this
report to refer to Accenture SCA and its subsidiaries. All references to years,
unless otherwise noted, refer to our fiscal year, which ends on August 31. For
example, a reference to 2003 or fiscal year 2003 means the 12-month period
that ended on August 31, 2003. All references to quarters, unless otherwise
noted, refer to the quarters of our fiscal year. We use the term partner to
refer to the executive employees of Accenture with the partner title.

Disclosure Regarding Forward-Looking Statements

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



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



| |  | 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.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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



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



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



| |  | 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.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 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.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  | 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 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.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We continue to position ourselves to achieve increasing 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 business, from larger portfolios of clients for whom
we provide similar services and solutions utilizing standard operating models. As we continue to accelerate the
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11



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| |  | growth of new outsourcing contracts, we may experience increased pressure on our overall margins during the early stages of these contracts.

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



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



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



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



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



| |  | We may need additional capital in the future, and this capital may not be available to us. The raising of additional
capital may dilute shareholders ownership in us.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We are 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.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Luxembourg law differs from the laws in effect in the United States and may afford less protection to shareholders.
|- |  | -------------------------------------------------------------------------------------------------------------------

For a more detailed discussion of these factors, see the information under
the heading BusinessRisk Factors in our Annual Report on Form 10-K for the
fiscal year ended August 31, 2003. We undertake no obligation to update or
revise any forward-looking statements.

Overview

Our results of operations are affected by the economic conditions, levels
of business activity and levels of change in the industries we serve. Our
business is also driven, in part, by the pace of technological change and the
type and level of technology spending by our clients. The ability to identify
and capitalize on these market and technological changes early in their cycles
is a key driver of our performance.

Revenues are driven by our partners and senior executives ability to
secure contracts for new engagements and to deliver solutions and services that
add value to our clients. Our ability to add value to clients and therefore
drive revenues depends in part on our ability to offer market-leading service
offerings and to deploy skilled teams of professionals quickly and on a global
basis. As a global company, our revenues are denominated in multiple currencies
and may be significantly affected by currency exchange-rate fluctuations. The
strengthening of various currencies versus the U.S. dollar has resulted in
favorable currency translation and increased our reported revenues in the three
months ended November 30, 2003 as compared with the same period last year.
Revenues for the three months ended November 30, 2003 were $3,574 million, an
increase of $247 million, or 7%, in U.S. dollars over the three months ended
November 30, 2002. Revenues before reimbursements for the three months ended
November 30, 2003 were $3,262 million, an increase of $332 million, or 11%, in
U.S. dollars over the three months ended November 30, 2002. In local currency
terms, revenues before reimbursements for the three months ended November 30,
2003 increased 4% from the three months ended November 30, 2002.

We continue to achieve an increasing percentage of our revenues and growth
through business transformation outsourcing, our approach that combines
outsourcing, including business process outsourcing, with our other
capabilities to help clients transform key processes, outsourcing applications
and infrastructure to improve business performance. For the three months ended
November 30, 2003, outsourcing revenues before reimbursements increased 45% in
U.S. dollars and 37% in local currency terms compared with the three months
ended November 30, 2002. Outsourcing contracts typically have longer contract
terms than consulting contracts; may not generate revenues as quickly in the
early stages of the contract; and generally have lower gross margins than
consulting contracts, particularly in the first year. As our outsourcing
business continues to grow, we are seeing an increase in the size, geographic
scope and/or delivery complexity of many of our outsourcing contracts. These
contracts increasingly have complex pricing models that often tie portions of
our fees to achieving improvements in various business metrics. In some cases,
portions of our fees are affected by the level of a clients business activity,
which is outside of our control.

12



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Often such contracts also have major transformational components or
transitional activities, such as hiring large numbers of new employees, the
timely implementation of which can have a significant impact on the timing
and/or amount of costs incurred and revenues recognized.

Our consulting business continues to be challenged as global economic and
political conditions cause companies to be cautious about increasing their use
of consulting services even as the demand for outsourcing continues to
increase. For the three months ended November 30, 2003, consulting revenues
before reimbursements decreased by 1% in U.S. dollars and 9% in local currency
terms compared with the three months ended November 30, 2002. However, we
continue to see growth of our consulting business as a critical part of our
strategy.

We continue to experience increasing pricing pressures from competitors as
well as from clients facing pressure to control costs. The pace of
consolidation, as well as vertical integration, among competitors in the
markets in which we operate continues to increase affecting 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.

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 nonpayroll
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.

Gross margins (revenues less cost of services) for the three months ended
November 30, 2003 decreased to 34% of revenues before reimbursements from 39%
for the three months ended November 30, 2002. This decrease primarily resulted
from the shift in our mix of business toward outsourcing; continuing pricing
pressures; and lower-than-expected margins on three contracts within our Communications & High Tech
operating group. These contracts could continue to affect our margins for the next fiscal quarter.

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
variable compensation and severance costs. We continue to take actions to
create a more variable cost structure. For example, effective December 1,
2003, as part of changes to our partner compensation model, we reduced the
fixed component of our partners compensation and increased variable
compensation as a percentage of our partners total compensation. 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.

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 the three months ended November 30, 2003 from 25% for
the three months ended November 30, 2002. Year over year, operating income as a
percentage of revenues before reimbursements increased to 15.5% for the three
months ended November 30, 2003 from 14.6% for the three months ended November
30, 2002, primarily due to income of $86 million resulting primarily from final
determinations of certain reorganization liabilities established in connection
with our transition to a corporate structure in 2001. This decrease in
reorganization liabilities had the effect of increasing operating income as a
percentage of revenues before reimbursements by 2.6 percentage points from
12.9% to 15.5%.

Segments

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 it is a better indicator of
operating group performance than is revenues. Generally, operating expenses for
each operating group have similar characteristics and are subject to the same
drivers, pressures and challenges. However, the current economic environment
and its continuing effects on the industries served by our operating segments
affect revenues and operating expenses within our operating segments to
different degrees. Personnel reductions have not been taken

13



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uniformly across our operating segments, due in part to an increased need
on behalf of some of our operating groups to tailor their workforces to the
needs of their businesses. The shift to outsourcing engagements is not uniform
among our operating groups and, consequently, neither is the impact on
operating group revenues caused by these transitions. Local currency
fluctuations also tend to affect our operating groups differently, depending on
the historical and current geographic concentrations and locations of their
businesses.

Bookings and Backlog

New contract bookings for the three months ended November 30, 2003 were
$5,051 million, an increase of $2,592 million, or 105%, over new bookings of
$2,459 million for the three months ended November 30, 2002, with consulting
bookings increasing 16% to $2,073 million and outsourcing bookings increasing
341% to $2,978 million. For the twelve months ended
November 30, 2003, bookings increased by 23% over bookings for
the twelve months ended November 30, 2002, with consulting
bookings increasing by 7% and outsourcing bookings increasing
by 41%.

We provide information regarding our bookings because we believe doing so
provides useful information regarding changes in the volume of our new business
over time. However, information regarding our new bookings is not comparable
to, nor should it be substituted for, an analysis of our revenues. The majority
of our contracts are terminable by the client on short notice or without
notice. Accordingly, we do not believe it is appropriate to characterize these
contracts as backlog. Normally, 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.

Revenues

The revenue recognition method we apply depends on the type of service
being delivered. Revenues from contracts for technology integration consulting
services, where we design/re-design, build and implement new or enhanced
systems applications and related processes for our clients, are recognized on a
percentage-of-completion basis as services are provided by our employees and,
to a lesser extent, subcontractors. Percentage-of-completion is applied
pursuant to the American Institute of Certified Public Accountants Statement of
Position 81-1, Accounting for Performance of Construction Type and Certain
Production Type Contacts. Revenues from non-technology integration consulting
and outsourcing service contracts are recognized as the services are performed
and amounts are earned in accordance with SEC Staff Accounting Bulletin No.
101, ''Revenue Recognition in Financial Statements. We consider amounts to be
earned once we have evidence of an arrangement, services are delivered, fees
are fixed or determinable, and collectibility is reasonably assured. Contracts
containing multiple services are segmented into separate elements when the
services represent separate earnings processes, and revenues are recognized in
accordance with our accounting policies for the separate elements, as described
above. Effective September 1, 2003, we adopted EITF Issue 00-21, Accounting
for Revenue Arrangements with Multiple Deliverables. EITF 00-21 limits the
amount of revenue that can be allocated to a delivered element to the amount
that is not contingent on future delivery of another element. If the amount of
non-contingent revenue 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.

Client prepayments (even if nonrefundable) are deferred, i.e., classified
as a liability, and recognized over future periods as services are delivered or
performed.

Our consulting revenues are affected by the number of work days in the
quarter, which in turn is affected by the level of vacation days and holidays.
Consequently, because we typically have approximately five to 10 percent more
work days in our first and third quarters than in our second and fourth
quarters, our revenues are typically higher in our first and third quarters
than in our second and fourth quarters.

Revenues before reimbursements include the margin earned on computer
hardware and software resale contracts, as well as revenues from alliance
agreements, neither of which is material to us. Reimbursements, including those
relating to travel and out-of-pocket expenses, and other similar third-party
costs, such as the cost of hardware and software resales, are included in
revenues, and an equivalent amount of reimbursable expenses are included in
cost of services.

Operating Expenses

Operating expenses include variable and fixed direct and indirect costs
that are incurred in the delivery of our solutions and services to clients. The
primary categories of operating expenses include cost of services, sales and
marketing, and general and administrative costs.

14



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Cost of Services

Cost of services includes the direct costs to provide services to our
clients. Such costs generally consist of compensation for client-service
personnel, the cost of subcontractors hired as part of client-service teams,
and costs directly associated with the provision of client services, such as
facilities for outsourcing contracts and the recruiting, training, personnel
development and scheduling costs of our client-service personnel.
Reimbursements, including those relating to travel and other out-of-pocket
expenses, and other similar third-party costs, such as the cost of hardware and
software resales, are included in revenues, and an equivalent amount of
reimbursable expenses is included in cost of services.

Sales and Marketing

Sales and marketing expense is affected by economic conditions and is
driven primarily by business development activities; the development of new
service offerings; the level of concentration of clients in a particular
industry or market; and client-targeting, image-development and
brand-recognition activities.

General and Administrative Costs

General and administrative costs primarily include costs for non-client
service personnel, information systems and office space.

Reorganization Benefit

During the three months ended November 30, 2003, Accenture recorded income
of $86 million resulting primarily from final determinations of certain
reorganization liabilities established in connection with our transition to a
corporate structure in 2001.

Gain (Loss) on Investments

Gain (loss) on investments primarily represents gains and losses on the
sales of marketable securities and writedowns on investments in securities.
These fluctuate over time and are not predictable. They also include changes in
the fair market value of equity holdings considered to be derivatives in
accordance with Statement of Financial Accounting standard (''SFAS) No. 133,
''Accounting for Derivative Instruments and Hedging Activities.

Interest Income

Interest income represents interest earned on cash and cash equivalents.
Interest income also includes interest earned on a limited number of client
engagement receivables when we agree in advance to finance those receivables
for our clients beyond the normal billing and collection period.

Interest Expense

Interest expense reflects interest incurred on borrowings, certain
retirement obligations and other non-current liabilities.

Other Income (Expense)

Other income (expense) consists of currency exchange gains (losses) and
the recognition of income from the vesting of options for services by our
personnel on boards of directors of some of those companies in which we have
invested. In general, we earn revenues and incur related costs in the same
currency. We hedge significant planned movements of funds between countries,
which potentially give rise to currency exchange gains (losses). The changes in
the fair market value of these hedges, which are considered to be derivatives
in accordance with SFAS 133, are also included in other income (expense).

Equity in Gains (Losses) of Affiliates

Equity in gains (losses) of affiliates represents our share of the
operating results of nonconsolidated companies over which we have significant
influence.

Provision for Taxes

Tax provisions are recorded at statutory rates for taxable items included
in the Consolidated Income Statements regardless of the period for which such
items are reported for tax purposes. Deferred income taxes are recognized for
temporary differences

15



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between the financial reporting and income tax bases of assets and
liabilities. Valuation allowances are recorded against deferred tax assets
where the company believes it is more likely than not that such assets will not
be realized.

Minority Interest

Minority interest eliminates the income earned or expense incurred
attributable to the equity interest that some of our partners, former partners
and their permitted transferees have in our Accenture Canada Holdings Inc.
subsidiary. See ''Business Accenture Organizational Structure in our Annual
Report on Form 10-K for the fiscal year ended August 31, 2003. The resulting
net income of Accenture SCA represents the income attributable to the
shareholders of Accenture SCA. Since January 2002, minority interest has also
included immaterial amounts attributable to minority shareholders in our
Avanade, Inc. subsidiary.

Net Income

Net income reflects earnings after deducting minority interests and income
taxes.

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. Since the use of
estimates is inherent in the financial reporting process, actual results could
differ from those estimates. Certain of our accounting policies require higher
degrees of judgment than others in their application. These include certain
aspects of accounting for 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.

We recognize revenues from technology integration consulting contracts
using the percentage-of-completion method. Percentage-of-completion accounting
involves calculating the percentage of services provided during the reporting
period compared with the total estimated services to be provided over the
duration of the contract. This method is followed where reasonably dependable
estimates of revenues and costs can be made. Estimates of total contract
revenues and costs are continuously monitored during the term of the contract,
and recorded revenues and costs are subject to revision as the contract
progresses. Such revisions may result in increases or decreases to revenues and
income and are reflected in the financial statements in the periods in which
they are first identified.

Outsourcing contracts typically span several years and involve complex
delivery, often through multiple workforces in different geographies. We
continuously review and reassess our estimates of contract profitability. If
our estimates indicate that a contract loss will occur, a loss accrual is
recorded in the consolidated financial statements in the period it is first
identified. Circumstances that could potentially result in contract losses
over the life of the contract include decreases in volumes of transactions or
other inputs/outputs on which we are paid, failure to deliver agreed benefits,
variances from planned internal/external costs to deliver our services, and
other factors affecting revenues and costs.

Revenues for contracts with multiple elements are allocated based on the
fair value of the elements. Fair value is determined based on the prices
charged when each element is sold separately. Revenues are recognized in
accordance with our accounting policies for the separate elements when the
services represent separate earnings processes, fair value of the separate
elements exists and the undelivered elements are not essential to the
functionality of the delivered elements. In circumstances where an undelivered
element is essential to the functionality of the delivered element, no revenues
are recognized for the delivered element until the undelivered element is
delivered. While determining fair value and identifying separate elements
requires

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judgment, generally fair value and the separate elements are readily
identifiable as we also provide those elements unaccompanied by the other
elements in many contracts. For contracts signed or amended 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 revenues thus allocated are less than the cost of the delivered element,
such costs are deferred until the related revenues become non-contingent.

Income Taxes

Determining the consolidated provision for income tax expense, deferred
tax assets and liabilities and related valuation allowance involves judgment.
As a global company, we are required to calculate and provide for income taxes
in each of the tax jurisdictions where we operate. This involves estimating
current tax exposures in each jurisdiction as well as making judgments
regarding the recoverability of deferred tax assets. Tax exposures can involve
complex issues and may require an extended period to resolve. Changes in the
geographic mix or estimated level of annual pre-tax income can affect the
overall effective tax rate. Our effective tax rates for the three months ended
November 30, 2003 and 2002 were 34.8% and 38.0%, respectively.

Variable Compensation

We record compensation expense for payments to be made in later fiscal
periods to our partners and other senior employees under the variable
compensation portions of our overall compensation programs. Determining the
amount of expense to recognize as operating expenses for variable compensation
at interim and annual reporting dates involves judgment. Expenses accrued for
variable compensation are based on actual quarterly and annual 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 as of November 30, 2003 for variable compensation was $19
million, of which we expect to pay approximately $4 million in the second
quarter of fiscal 2004 with the remainder payable in subsequent quarters
provided performance targets are met. The following table shows quarterly
variable compensation expense (benefit).

First
      
      Fourth
      
      Third
      
      Second
      
      FirstQuarter
      
      Quarter
      
      Quarter
      
      Quarter
      
      Quarter2004
      
      2003
      
      2003
      
      2003
      
      2003(in
          millions)Variable
          Compensation
      
      $
      (4
      )
      
      $
      
      
      
      $
      
      
      
      $
      (6
      )
      
      $
      17


In fiscal 2004, we continue to increase the variable component of
compensation for larger proportions of our global workforce. Our fiscal 2004
plan includes variable compensation of $340 million for partners, managers and
certain other employees, subject to meeting plan performance targets. We
reversed $4 million of previously accrued variable compensation and did not
accrue variable compensation expense during the first quarter of fiscal 2004,
compared with $17 million in the first quarter of fiscal 2003, which
represented 7% of the total planned variable compensation expense of $240
million for fiscal 2003.

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. Pension expense was $29 million and $16 million
for the three months ended November 30, 2003 and 2002, respectively. The
pension assumptions used to determine annual pension expense for fiscal 2004
and fiscal 2003 are as follows:

Fiscal 2004
    
    Fiscal 2003U.S. Plans
    
    Non-U.S. Plans
    
    U.S. Plans
    
    Non-U.S. PlansDiscount rate
    
    
    6.00
    %
    
    
    4.85
    %
    
    
    7.25
    %
    
    
    4.92
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    5.66
    %
    
    
    8.50
    %
    
    
    5.35
    %


A one-percentage-point increase in the discount rate would decrease our
annual pension expense by $31 million. A one-percentage-point decrease in the
discount rate would increase our annual pension expense by $40 million.

A one-percentage-point increase in our return on plan assets would
decrease our annual pension expense by $5 million. A one-percentage-point
decrease in our return on plan assets would increase our annual pension expense
by $5 million.

SFAS 87 requires recognition of a minimum pension liability if the fair
value of pension assets is less than the accumulated benefit obligation. During
fiscal 2003, we recorded a charge to equity of $108 million representing an
adjustment to increase our pension liability by $180 million net of a tax
benefit of $72 million. This charge was included in accumulated other

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comprehensive loss in the shareholders equity section of our balance
sheet. Additional charges to equity may be required in the future depending on
future contributions to our pension plans, returns on pension plan assets and
interest rates.

Revenues by Operating Group

We provide services through five operating groups. The following table
provides revenues for each of these operating groups.

Percentage
    
    PercentageThree Months Ended
    
    Increase
    
    IncreaseNovember 30,
    
    (Decrease)
    
    (Decrease)2003
    
    2002
    
    US$
    
    Local Currency(in millions, except for percentages)Revenues:Communications & High Tech
    
    $
    879
    
    
    $
    830
    
    
    
    6
    %
    
    
    0
    %Financial Services
    
    
    646
    
    
    
    602
    
    
    
    7
    
    
    
    (1
    )Government
    
    
    478
    
    
    
    359
    
    
    
    33
    
    
    
    27Products
    
    
    701
    
    
    
    650
    
    
    
    8
    
    
    
    1Resources
    
    
    555
    
    
    
    487
    
    
    
    14
    
    
    
    7Other
    
    
    2
    
    
    
    2
    
    
    
    n/m
    
    
    
    n/mTotal revenues before reimbursements
    
    
    3,261
    
    
    
    2,930
    
    
    
    11
    %
    
    
    4
    %Reimbursements
    
    
    313
    
    
    
    397Total
    
    $
    3,574
    
    
    $
    3,327Revenues as a percentage of total:Communications & High Tech
    
    
    25
    %
    
    
    25
    %Financial Services
    
    
    18
    
    
    
    18Government
    
    
    13
    
    
    
    11Products
    
    
    20
    
    
    
    19Resources
    
    
    15
    
    
    
    15Other
    
    
    n/m
    
    
    
    n/mTotal revenues before reimbursements
    
    
    91
    
    
    
    88Reimbursements
    
    
    9
    
    
    
    12Total
    
    
    100
    %
    
    
    100
    %


__________

n/m = not meaningful

Geographic Information

Revenues are attributed to geographic areas based on where client services
are supervised.

Three Months Ended
      
      Percentage
      
      PercentageNovember 30,
      
      Increase
      
      Increase(Decrease)
      
      (Decrease)2003
      
      2002
      
      US$
      
      
      Local
          Currency(in millions, except
        for percentages)Revenues:Americas
      
      $
      1,491
      
      
      $
      1,392
      
      
      
      7
      %
      
      
      5
      %EMEA
          (1)
      
      
      1,550
      
      
      
      1,331
      
      
      
      16
      
      
      
      4Asia/Pacific
      
      
      220
      
      
      
      207
      
      
      
      6
      
      
      
      (3
      )Total
          revenues before reimbursements
      
      
      3,261
      
      
      
      2,930
      
      
      
      11
      %
      
      
      4
      %Reimbursements
      
      
      313
      
      
      
      397Total
      
      $
      3,574
      
      
      $
      3,327Revenues
          as a percentage of total:Americas
      
      
      42
      %
      
      
      42
      %EMEA
          (1)
      
      
      43
      
      
      
      40Asia/Pacific
      
      
      6
      
      
      
      6Total
          revenues before reimbursements
      
      
      91
      
      
      
      88Reimbursements
      
      
      9
      
      
      
      12Total
      
      
      100
      %
      
      
      100
      %


____________________

|(1) |  | EMEA includes Europe, the Middle East and Africa.
|--- |  | -------------------------------------------------

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Revenues by Type of Work

The following table presents revenues before reimbursements by types of
services.

Three Months EndedNovember 30,
      
      Percentage Increase
      
      Percentage Increase(Decrease)
      
      (Decrease)2003
      
      2002
      
      US$
      
      Local Currency(in millions, except
        for percentages)Consulting
      
      $
      2,095
      
      
      $
      2,126
      
      
      
      (1
      )%
      
      
      (9
      )%Outsourcing
      
      
      1,166
      
      
      
      804
      
      
      
      45
      
      
      
      37Revenues
          before reimbursements
      
      
      3,261
      
      
      
      2,930
      
      
      
      11
      %
      
      
      4
      %Reimbursements
      
      
      313
      
      
      
      397Revenues
      
      $
      3,574
      
      
      $
      3,327


Note:
      
      For the three months ended
        November 30, 2002, $69 million of revenues before reimbursements
        previously classified as Other have been reclassified to Consulting
        or Outsourcing type of work to conform to the current presentation.


Three Months Ended November 30, 2003 Compared to Three Months Ended November 30, 2002

Revenues

Revenues for the three months ended November 30, 2003 were $3,574 million,
an increase of $247 million, or 7%, over the three months ended November 30,
2002. Revenues before reimbursements for the three months ended November 30,
2003 were $3,262 million, an increase of $332 million, or 11%, over the three
months ended November 30, 2002 in U.S. dollars. In local currency terms,
revenues before reimbursements for the three months ended November 30, 2003
increased 4% over the three months ended November 30, 2002. For the three
months ended November 30, 2003, revenues before reimbursements in Europe, the
Middle East and Africa grew 16% in U.S. dollars and 4% in local currency terms;
revenues before reimbursements in the Americas grew 7% in U.S. dollars and 5%
in local currency terms; and revenues before reimbursements in Asia/Pacific
grew 6% in U.S. dollars and declined 3% in local currency terms. Outsourcing
revenues before reimbursements increased 45% in U.S. dollars and 37% in local
currency terms for the three months ended November 30, 2003 compared with the
three months ended November 30, 2002 and represented 36% of revenues before
reimbursements for the three months ended November 30, 2003, up from 27% for
the three months ended November 30, 2002. Consulting revenues before
reimbursements for the three months ended November 30, 2003 declined 1% in U.S.
dollars and 9% in local currency terms compared with the three months ended
November 30, 2002.

Our Communications & High Tech operating group achieved revenues before
reimbursements of $879 million for the three months ended November 30, 2003, an
increase of 6% over the three months ended November 30, 2002, primarily due to
favorable currency translation and increased revenues from large outsourcing
contracts, which offset lower consulting revenues.

Our Financial Services operating group revenues before reimbursements were
$646 million for the three months ended November 30, 2003, an increase of 7%
over the three months ended November 30, 2002, due to the strength of the Euro
and to outsourcing revenue growth in our Banking and Insurance industry groups,
which offset lower consulting revenues. Revenue growth in our Capital Markets
industry group also contributed to the revenue growth within Financial
Services.

Our Government operating group achieved revenues before reimbursements of
$478 million for the three months ended November 30, 2003, an increase of 33%
over the three months ended November 30, 2002, reflecting strong growth in both
new consulting and outsourcing engagements and growth across all geographical
areas, particularly from U.S. Federal government clients.

Our Products operating group achieved revenues before reimbursements of
$701 million for the three months ended November 30, 2003, an increase of 8%
over the three months ended November 30, 2002, primarily as a result of
favorable currency translation and growth in our Pharmaceuticals & Medical
Products industry group, partly offset by decreases in our Transportation &
Travel Services industry group.

Our Resources operating group achieved revenues before reimbursements of
$555 million for the three months ended November 30, 2003, an increase of 14%
over the three months ended November 30, 2002, as strong growth in outsourcing
more than offset decreases in our consulting revenues. Growth in our Utilities
industry group and favorable currency translation more than offset declines in
most of our other industry groups within Resources.

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Operating Expenses

Operating expenses for the three months ended November 30, 2003 were
$3,067 million, an increase of $169 million, or 6%, over the three months ended
November 30, 2002 and a decrease as a percentage of revenues from 87% for the
three months ended November 30, 2002 to 86% for the three months ended November
30, 2003. As a percentage of revenues before reimbursements, operating expenses
before reimbursable expenses declined from 85% to 84% over this period. For the
three months ended November 30, 2003, operating expenses included a benefit of
$86 million resulting primarily from final determinations of certain
reorganization liabilities established in connection with our transition to a
corporate structure in 2001. As a percentage of revenues before
reimbursements, operating expenses before reimbursable expenses would have been
87%, or 2.6 percentage points higher, had this benefit not been included. The
strengthening of various currencies against the U.S. dollar increased reported
operating expenses for the three months ended November 30, 2003 compared to the same
three month period of the prior year partially offsetting corresponding
increases in reported revenues.

Cost of Services

Cost of services was $2,464 million for the three months ended November
30, 2003, an increase of $292 million, or 13%, over the three months ended
November 30, 2002 and an increase as a percentage of revenues from 65% to 69%
over this period. Cost of services before reimbursable expenses was $2,151
million for the three months ended November 30, 2003, an increase of $377
million, or 21%, over the three months ended November 30, 2002. Cost of
services before reimbursable expenses increased as a percentage of revenues
before reimbursements from 61% to 66% over this period. The primary
drivers of
the increase in cost of services were higher outsourcing costs resulting from a
45% increase in outsourcing revenues and higher costs on three
contracts. The strengthening of various currencies against
the U.S. dollar also contributed to the $377 million increase.

Gross margins (revenues less cost of services) in the three months ended
November 30, 2003 decreased to 34% of revenues before reimbursements from 39%
in the three months ended November 30, 2002. This decrease resulted from the
continuing shift in our mix of business toward outsourcing; pricing pressures;
and lower-than-expected margins on three contracts within our Communications & High Tech operating group,
which may continue for the next fiscal quarter. The unplanned reduction in
margins on these three contracts reduced gross margins
for the three months ended November 30, 2003 by approximately $50 million and
reduced gross margins as a percentage of revenues before reimbursements by 1.2
percentage points. 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 $351 million for the three months ended
November 30, 2003, a decrease of $5 million, or 1%, from the three months ended
November 30, 2002, reflecting a $6 million decrease in business development and
market development costs and a $5 million decrease in variable compensation
expense, partly offset by a $6 million increase in global image and advertising
costs. As a percentage of revenues before reimbursements, sales and marketing
expense decreased from 12% for the three months ended November 30, 2002 to 11%
in the three months ended November 30, 2003.

General and Administrative Costs

General and administrative costs were $339 million for the three months
ended November 30, 2003, a decrease of $31 million, or 8%, from the three
months ended November 30, 2002, and decreased as a percentage of revenues
before reimbursements from 13% to 10% over this period. Key drivers of the
decline were a $33 million decrease in geographic facility and technology costs
and an $8 million decrease in severance costs, partly offset by a $17 million
increase in business protection costs.

Reorganization Benefit

During the three months ended November 30, 2003, Accenture recorded income
of $86 million resulting primarily from final determinations of certain
reorganization liabilities established in connection with our transition to a
corporate structure in 2001.

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Operating Income

Operating income was $507 million for the three months ended November 30,
2003, an increase of $78 million, or 18%, over the three months ended November
30, 2002. Operating income increased as a percentage of revenues before
reimbursements from 14.6% to 15.5% over this period. For the three months
ended November 30, 2003, operating income included a benefit of $86 million
resulting from a decrease in certain liabilities established in connection with
our transition to a corporate structure in 2001. Had this benefit not been
included, operating income would have been $421 million, or 12.9% of revenues
before reimbursements, a decrease of 2.6 percentage points. Lower gross
margins offset 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.

The $86 million decrease in reorganization liabilities was allocated to
the operating groups, increasing the operating groups operating income for the
three months ended November 30, 2003 by the following amounts: Communications &
High Tech  $21 million; Financial Services  $19 million; Government  $13
million; Products  $19 million; and Resources  $14 million.

Operating income would have decreased by $8 million had the $86 million
decrease in reorganization liabilities not been included. This $8 million
decrease reflects decreases of $39 million, $13 million and $8 million in
Communications & High Tech, Financial Services and Products operating groups,
respectively, partially offset by increases of $37 million and $15 million in
the Resources and Government operating groups, respectively. The decrease in
Communications & High Tech operating income primarily reflects
lower-than-expected gross margins on three
contracts. Financial Services and Products operating income decreased
primarily from lower gross margins reflecting the shift in the mix of our
business toward outsourcing. The increase in Resources operating income was
driven by a 14% increase in revenues before reimbursements, improved
chargeability and savings from cost-management initiatives. Government
operating income increased primarily due a 33% increase in revenues, partly
offset by higher business development costs in support of large contracts.

Gain (Loss) on Investments

Gains on investments totaled less than $1 million for the three months
ended November 30, 2003, compared with a gain on investments of $4 million for
the three months ended November 30, 2002.

Interest Income

Interest income for the three months ended November 30, 2003 was $10
million, an increase of $1 million over the three months ended November 30,
2002, resulting primarily from higher average cash balances during the three
months ended November 30, 2003.

Interest Expense

Interest expense for the three months ended November 30, 2003 was $6
million, a decrease of $1 million, or 12%, from the three months ended November
30, 2002.

Provision for Taxes

The effective tax rate for the three months ended November 30, 2003 was
34.8%. We expect our effective tax rate for fiscal 2004 to be 34.8%. The
decrease in reorganization liabilities during the three months ended November
30, 2003 reduced the 2004 annual effective tax rate by 1.8 percentage points.
The decrease in reorganization liabilities has the effect of increasing pre-tax
income in fiscal 2004 without a corresponding increase in the provision for
income taxes.

The effective tax rate for the three months ended November 30, 2002 was
38.0%, while the effective tax rate for the fiscal year ended August 31, 2003
was 35.1%. The rate declined from 38.0% to 35.1% during fiscal 2003 as a
result of 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. The decrease from
38.0% to 34.8% results from the tax effect of the reduction in reorganization
liabilities and a reduction of prior-year income tax liabilities as a result of
a favorable settlement of a non-U.S. tax audit in fiscal 2004.

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations, debt
capacity available under various credit facilities, and available cash
reserves. Cash flow generated by operating activities for the three months
ended November 30, 2003 totaled $126

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million. At November 30, 2003, cash and cash equivalents, combined with
restricted cash, totaled $2,334 million, while total debt was $50 million. We
may also raise additional funds through public or private debt or equity
financings in order to:



| |  | take advantage of opportunities, including more rapid expansion;
|- |  | ----------------------------------------------------------------



| |  | acquire complementary businesses or technologies;
|- |  | -------------------------------------------------



| |  | develop new services and solutions;
|- |  | -----------------------------------



| |  | respond to competitive pressures; or
|- |  | ------------------------------------



| |  | facilitate share dispositions by our partners, former partners and
their permitted transferees pursuant to our Share Management Plan and
certain purchases from our other employees.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For a more detailed description of our Share Management Plan, see
''Certain Transaction and RelationshipsShare Management Plan in Accenture
Ltds Annual Report on Form 10-K for the fiscal year ended August 31, 2003,
which was incorporated by reference into Accenture SCAs Annual Report on Form
10-K for such period.

Net cash provided by operating activities was $126 million for the three
months ended November 30, 2003, a decrease of $72 million from the three months
ended November 30, 2002. This decrease was primarily attributable to an
increase in net client balances (receivables, unbilled services and deferred
revenues combined), an increase in other current assets, and tax refunds
received during the three months ended November 30, 2002 that did not recur
during the three months ended November 30, 2003. These decreases were partially
offset by higher accrued payroll and related benefits.

Net cash used by investing activities was $45 million for the three months
ended November 30, 2003, compared with $25 million of cash provided by
investing activities in the prior-year period. Lower proceeds from sales of
investments and increased capital spending on property and equipment
contributed to the increase in cash used in investing activities.

Net cash used in financing activities was $102 million for the three
months ended November 30, 2003, an increase of $36 million from the three
months ended November 30, 2002. During the three months ended November 30,
2003, cash was primarily used to purchase or redeem Accenture Ltd Class A and
Accenture SCA Class I common shares.

We have two $537.5 million syndicated facilities, including one 364-day
facility and one three year facility, providing unsecured, revolving borrowing
capacity for general working capital purposes, including, in the case of the
three-year facility, the issuance of letters of credit on behalf of Accenture
affiliates. Financing is provided under these facilities at the prime rate or
at the London Interbank Offered Rate plus a spread, and bid option financing is
available. These facilities require us to: (1) limit liens placed on our assets
to (a) liens incurred in the ordinary course of business (subject to certain
limitations) and (b) other liens securing aggregate amounts not in excess of
30% of our total assets; and (2) maintain a debt-to-cash-flow ratio not
exceeding 1.75 to 1.00. We are in compliance with these terms. As of November
30, 2003, we had no borrowings under either facility and $84 million in letters
of credit outstanding under the three-year facility.

We also maintain four separate bilateral, uncommitted, unsecured
multicurrency revolving credit facilities. As of November 30, 2003, these
facilities provided for up to $253 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 November
30, 2003, amounts available under these facilities totaled $224 million. At
November 30, 2003, we had $27 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 the three months ended November 30, 2003 and 2002, we invested $47
million and $19 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 in the range of $300 million to $350 million in fiscal 2004.

In limited circumstances, we agree to extend financing to clients. The
terms vary by engagement, but generally we contractually link payment for
services to the achievement of specified performance milestones. We finance
these client obligations primarily with existing working capital and bank
financing in the country of origin. As of November 30, 2003 and August 31,
2003, $346 million and $336 million were outstanding for 33 and 35 clients,
respectively. As of November 30, 2003 and August 31, 2003, $190 million and
$203 million, respectively, were included in current unbilled services and $156
million and $133 million, respectively, were included in non-current unbilled
services on our Consolidated Balance Sheet.

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Share Purchases and Redemptions

Open-Market Repurchases

At August 31, 2003, the Accenture Stock Employee Compensation Trust
(SECT) had $83 million of previously authorized contributions available for
share purchases which were segregated as Restricted cash on the Consolidated
Balance Sheet. During the three months ended November 30, 2003, the SECT
purchased approximately 3,500,000 Accenture Ltd Class A common shares with an
aggregate purchase price totaling $78,965. 2,904,235 of such shares were
delivered to employees in connection with the settlement of employee equity
awards. On November 14, 2003, Accenture Ltds board of directors authorized an
additional $150 million, for the purchase of Accenture Ltd Class A common
shares for the purpose of funding equity awards to future partners and other
select employee benefits. At November 30, 2003, $153 million remained
available for such share purchases, of which $4 million, is segregated as
Restricted cash on the Consolidated Balance Sheet.

During the three months ended November 30, 2003, at Accentures request,
the trustee of the SECT and one of the Companys subsidiaries transferred an
aggregate of 18,081,800 treasury shares to a subsidiary of Accenture Ltd for
the future use of funding employee equity awards. After further review,
Accenture terminated the SECT on December 19, 2003. On
December 19, 2003, the
subsidiary of Accenture Ltd to which those shares were previously transferred
created a new trust to continue the SECTs originally stated purposes of
funding equity awards to employees and to simplify our treasury management
activities. Substantially all of the treasury shares previously transferred to
the subsidiary of Accenture Ltd that had not then been utilized to fund
employee share awards were contributed to the new trust.

Share Management Plan and RSU Sell Back Program Transactions

At August 31, 2003, the amount available for future share redemptions and
purchases by Accenture under its Share Management Plan (in transactions other
than those related to secondary offerings) and its program for employees
holding restricted share units awarded in connection with our initial public
offering (the RSU Sell Back Program) was $289 million. On November 14, 2003,
Accenture Ltds board of directors authorized an additional $600 million for
such share redemptions and purchases.

On September 8, 2003, pursuant to the above-mentioned authorizations of
Accenture Ltds board of directors, a tender offer made to Accenture SCA Class
I shareholders on August 7, 2003 by Accenture SCA and one of its controlled
subsidiaries resulted in the redemption or purchase of an aggregate of
6,519,532 Accenture SCA Class I common shares at a price of $19.91 per share.
At the same time, Accenture International SARL purchased 52,861 Accenture
Canada Holdings Inc. exchangeable shares at a price of $19.91 per share. The
total cash outlay for these transactions was $131 million.

An additional $45 million from the above-mentioned authorizations of
Accenture Ltds board of directors were utilized in connection with the October
30, 2003 tender offer for Accenture SCA Class I common shares described below
in Share Transactions Subsequent to Secondary Offering.

During the three months ended November 30, 2003, Accenture purchased
264,028 Accenture Ltd Class A common shares delivered pursuant to restricted
share units for approximately $6 million.

At November 30, 2003, the amount remaining for future share redemptions
and purchases under the Share Management Plan and RSU Sell Back Program
transactions was $705 million.

Accenture Ltd Secondary Offering and Subsequent Transactions

On September 29, 2003, in transactions separately authorized by Accenture
Ltds board of directors, 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 overallotment 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.

On October 30, 2003, pursuant to a tender offer made to Accenture SCA
Class I shareholders, Accenture SCA and one of its controlled subsidiaries
redeemed or purchased an aggregate of 71,000,000 Accenture SCA Class I shares
at a price of $21.00 per share. At the same time, Accenture International SARL
purchased 816,561 Accenture Canada Holdings Inc. exchangeable shares at a price
of $21.00 per share. These redemptions and purchases were made with all
proceeds received by Accenture Ltd

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from the secondary offering that concluded on September 29, 2003, proceeds
from the exercise of the related underwriters overallotment option, and $45
million of the previously described Accenture Ltd board of directors
authorizations for purchases and redemptions in connection with the share
management plan and RSU Sell Back Program transactions. The total cash outlay
for these transactions was $1,465 million.

Other Redemptions and Purchases

Additionally, 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 Accenture Ltd board of directors, and funds utilized in these
transactions do not reduce other specific authorizations made by the Accenture
Ltd board of directors for various share purchase or redemption 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 not subject to the
terms of our Share Management Plan. During the three months ended November 30,
2003, $25 million was utilized for these purposes.

Subsequent Events

In the second quarter of fiscal 2004, Accenture management approved a real
estate consolidation plan, which is expected to be substantially completed
during the second quarter of fiscal 2004, primarily in the United States and
the United Kingdom. The costs to consolidate the locations and dispose of the
related fixed assets are estimated to be in the range of $75 million to $100
million and will be recorded as the various locations are consolidated.

Obligations and Commitments

As of November 30, 2003, we had the following obligations and commitments
to make future payments under contracts, contractual obligations and commercial
commitments:

Payments due by periodLess thanContractual
          Cash Obligations
    
    Total
    
    1 year
    
    1-3 years
    
    4-5 years
    
    After 5 years(in thousands)Long-term debt
    
    $
    16,288
    
    
    $
    2,559
    
    
    $
    13,545
    
    
    $
    184
    
    
    $
    Operating leases
    
    
    2,091,678
    
    
    
    249,564
    
    
    
    411,302
    
    
    
    331,308
    
    
    
    1,099,504Training facility services agreement
    
    
    87,374
    
    
    
    29,707
    
    
    
    46,292
    
    
    
    11,375
    
    
    
    Retirement obligations (a)
    
    
    313,737
    
    
    
    35,120
    
    
    
    69,346
    
    
    
    39,296
    
    
    
    169,975Other purchase commitments (b)
    
    
    440,320
    
    
    
    183,985
    
    
    
    223,464
    
    
    
    32,871
    
    
    
    Total
    
    $
    2,949,397
    
    
    $
    500,935
    
    
    $
    763,949
    
    
    $
    415,034
    
    
    $
    1,269,479




|   
|---
|(a)



|(b) |  | Other purchase commitments include, among other things, information
technology, software support and maintenance obligations as well as other
obligations in the ordinary course of business 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 we may have to recover
termination fees or penalties from clients.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Off-Balance Sheet Arrangements

We have various agreements in which we may be obligated to indemnify the
other party with respect to certain matters. Generally, these indemnification
clauses are included in contracts arising in the normal course of business
under which we customarily agree to hold the other party harmless against
losses arising from a breach of representations related to such matters as
title to assets sold and licensed or certain intellectual property rights.
Payments by us under such indemnification clauses are generally conditioned on
the other party making a claim. Such claims are typically subject to challenge
by us and to dispute resolution procedures specified in the particular
contract. Further, our obligations under these arrangements may be limited in
terms of time and/or amount and, in some instances, we may have recourse
against third parties for certain payments made by us. It is not possible to
predict the maximum potential amount of future payments under these
indemnification agreements due to the conditional nature of our obligations and
the unique facts of each particular agreement. Historically, the Company has
not made any payments under these agreements that have been material
individually or in the aggregate. As of November 30, 2003, we were not aware of
any indemnification agreements that would require material payments.

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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. As of November 30, 2003,
Accenture had assumed potential responsibilities to its clients under such
arrangements for the performance of others for an aggregate maximum potential
liability of approximately $189 million. These contracts provide recourse
provisions that would allow Accenture to recover from the other parties all but
$39 million if Accenture is obligated to make payments to the clients that are
the consequence of a performance default by the other parties.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of our market risk associated with foreign currency risk,
interest rate risk and equity price risk as of August 31, 2003, see
Quantitative and Qualitative Disclosures about Market Risk in Part II, Item
7A, Managements Disclosure and Analysis of Financial Condition and Results of
Operations, of Accenture SCAs Annual Report on Form 10-K for the fiscal year
ended August 31, 2003. During the three months ended November 30, 2003, there
were no material changes in our market risk exposure.




ITEM 4. CONTROLS AND PROCEDURES

Based on their evaluation as of a date as of the end of the period covered
by this Quarterly Report on Form 10-Q, the chief executive officer and the
chief financial officer of Accenture Ltd have concluded that Accenture SCAs
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act) are effective to ensure that information required to be disclosed
by Accenture SCA in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms.

There has been no change in Accenture SCAs internal control over
financial reporting that occurred during the three months ended November 30,
2003 that has materially affected, or is reasonably likely to materially
affect, Accenture SCAs internal control over financial reporting.

Implementation of the transition of certain of our business and financial
systems to new platforms is ongoing. We continue to monitor resource and
personnel requirements to ensure that our internal controls are not adversely
affected during this transition.




PART IIOTHER INFORMATION




ITEM 1. 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 described under Legal Proceedings in Accenture Ltds Form 10-Q for
the quarter ended May 31, 2002, we had previously signed and extended
agreements with the lead plaintiffs in the Houston class actions on behalf of
shareholders and employees of Enron extending any statute of limitations or
similar deadlines by which we had to be added as a party to such lawsuits.
These lawsuits all involved allegations concerning the auditing and other
services provided by separate and independent Arthur Andersen firms, and we
originally entered into the tolling agreements so that we would have time to
inform the plaintiffs that adding us as a defendant in such actions would be
misdirected and without merit. Subsequently, Andersen Worldwide and certain
Arthur Andersen firms entered into an agreement to settle all claims and
disputes in these lawsuits. On November 7, 2003, the federal court in Houston
approved the settlement and the settlement is now final. Although we were not a
party to the settlement agreement, under the terms of the final settlement with
the class plaintiffs, Accenture was released from all claims that were brought
by these plaintiff groups.

As previously reported in July 2003, we became aware of an incident of
possible noncompliance with the Foreign Corrupt Practices Act and/or with
Accentures internal controls in connection with certain of Accentures
operations in the Middle East. We have voluntarily reported the incident to
the appropriate authorities in the United States. The SEC has advised us it
will be undertaking an informal investigation of this incident, which is also
under review by the U.S. Department of Justice. We do not believe that this
incident will have any material impact on our results of operations or
financial condition.

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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 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibit Index:

31.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (filed herewith).31.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (filed herewith).32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (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).


(b) Reports on Form 8-K:

During the quarter ended November 30, 2003, the following report on Form
8-K was filed by the Registrant:

Current Report on Form 8-K dated and filed September 17, 2003 with respect
to the issuance of a press release providing a preliminary estimate of results
for the fourth quarter and full fiscal year ended August 31, 2003.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf on January
13, 2004 by the undersigned, thereunto duly authorized.

ACCENTURE
          SCA, represented by its
          general partner, Accenture Ltd,
          itself represented by its duly
          authorized signatoryBy:
      /s/
          HARRY L. YOU
          Name: Harry L. You


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