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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 1934
|- |  | ----------------------------------------------------------------------------------------



For the quarterly period ended February 28, 2003



OR



| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------



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 incorporation or organization) |  | (I.R.S. Employer Identification No.)



1 rue
Guillaume Kroll

L  1882 Luxembourg

(Address of principal executive offices)



(352) 26 42 35 00

(Registrants telephone
number, including area code)



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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 March 15, 2003 was 904,637,344 (which number does not include 53,908,275 issued
shares held by subsidiaries of the Registrant).



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ACCENTURE SCA



INDEX



|          |  |                                                                                              |  | Page
|--------- |  | -------------------------------------------------------------------------------------------- |  | ----
|Part I.   |  | Financial Information                                                                        |  |     
|         
|Item 1.   |  | Financial Statements (unaudited)                                                             |  |     
|         
|          |  | Consolidated Balance Sheets as of February 28, 2003 and August 31, 2002                      |  | 3   
|          |  | Consolidated Income Statements for the three and six months ended February 28, 2003 and 2002 |  | 4   
|          |  | Consolidated Shareholders Equity Statement for the six months endedFebruary 28, 2003        |  | 5   
|          |  | Consolidated Cash Flows Statements for the six months ended February 28, 2003and 2002        |  | 6   
|          |  | Notes to Consolidated Financial Statements                                                   |  | 7   
|         
|Item 2.   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations        |  | 12  
|         
|Item 3.   |  | Quantitative and Qualitative Disclosures About Market Risk                                   |  | 27  
|         
|Item 4.   |  | Controls and Procedures                                                                      |  | 28  
|         
|Part II.  |  | Other Information                                                                            |  |     
|         
|Item 1.   |  | Legal Proceedings                                                                            |  | 28  
|         
|Item 2.   |  | Changes in Securities and Use of Proceeds                                                    |  | 28  
|         
|Item 6.   |  | Exhibits and Reports on Form 8-K                                                             |  | 29  
|         
|Signature |  | 30                                                                                          



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##### Table of Contents



PART IFINANCIAL
INFORMATION



ITEM 1.  FINANCIAL STATEMENTS



ACCENTURE SCA



CONSOLIDATED BALANCE SHEETS



February 28, 2003 and August 31, 2002

(In thousands of U.S. dollars, except share amounts)



|                                                                                                                                                                                 |  | February 28, 2003 |            |   | August 31, 2002 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | - | --------------- | -
|                                                                                                                                                                                 |  | (Unaudited)       |            |   |                 |  
|ASSETS                                                                                                                                                                           |  |                   |            |   |                 |  
|CURRENT ASSETS:                                                                                                                                                                  |  |                   |            |   |                 |  
|Cash and cash equivalents                                                                                                                                                        |  | $                 | 1,684,576  |   |                 | $
|Restricted cash                                                                                                                                                                  |  |                   | 5,588      |   |                 |  
|Receivables from clients, net                                                                                                                                                    |  |                   | 1,392,494  |   |                 |  
|Unbilled services                                                                                                                                                                |  |                   | 923,169    |   |                 |  
|Due from related parties                                                                                                                                                         |  |                   | 10,220     |   |                 |  
|Deferred income taxes, net                                                                                                                                                       |  |                   | 204,769    |   |                 |  
|Other current assets                                                                                                                                                             |  |                   | 281,815    |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|Total current assets                                                                                                                                                             |  |                   | 4,502,631  |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|NON-CURRENT ASSETS:                                                                                                                                                              |  |                   |            |   |                 |  
|Unbilled services                                                                                                                                                                |  |                   | 120,679    |   |                 |  
|Investments                                                                                                                                                                      |  |                   | 47,114     |   |                 |  
|Property and equipment, net                                                                                                                                                      |  |                   | 665,946    |   |                 |  
|Goodwill                                                                                                                                                                         |  |                   | 179,036    |   |                 |  
|Deferred income taxes, net                                                                                                                                                       |  |                   | 271,353    |   |                 |  
|Other non-current assets                                                                                                                                                         |  |                   | 64,736     |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|Total non-current assets                                                                                                                                                         |  |                   | 1,348,864  |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|TOTAL ASSETS                                                                                                                                                                     |  | $                 | 5,851,495  |   |                 | $
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|LIABILITIES AND SHAREHOLDERS
EQUITY                                                                                                                                             |  |                   |            |   |                 |  
|CURRENT LIABILITIES:                                                                                                                                                             |  |                   |            |   |                 |  
|Short-term bank borrowings                                                                                                                                                       |  | $                 | 52,108     |   |                 | $
|Current portion of long-term debt                                                                                                                                                |  |                   | 2,983      |   |                 |  
|Accounts payable                                                                                                                                                                 |  |                   | 363,022    |   |                 |  
|Deferred revenue                                                                                                                                                                 |  |                   | 647,181    |   |                 |  
|Accrued payroll and related benefits                                                                                                                                             |  |                   | 1,150,280  |   |                 |  
|Income taxes payable                                                                                                                                                             |  |                   | 631,236    |   |                 |  
|Deferred income taxes, net                                                                                                                                                       |  |                   | 20,163     |   |                 |  
|Other accrued liabilities                                                                                                                                                        |  |                   | 432,652    |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|Total current liabilities                                                                                                                                                        |  |                   | 3,299,625  |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|NON-CURRENT LIABILITIES:                                                                                                                                                         |  |                   |            |   |                 |  
|Long-term debt                                                                                                                                                                   |  |                   | 3,824      |   |                 |  
|Retirement obligation                                                                                                                                                            |  |                   | 405,324    |   |                 |  
|Deferred income taxes, net                                                                                                                                                       |  |                   | 26,474     |   |                 |  
|Other non-current liabilities                                                                                                                                                    |  |                   | 834,365    |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|Total non-current liabilities                                                                                                                                                    |  |                   | 1,269,987  |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|MINORITY INTEREST                                                                                                                                                                |  |                   | 31,084     |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|SHAREHOLDERS EQUITY:                                                                                                                                                            |  |                   |            |   |                 |  
|Class I common shares, par value 1.25 euros per share, 19,868,950,000 shares authorized,
753,843,192 issued as of February 28, 2003 and August 31, 2002                          |  |                   | 845,307    |   |                 |  
|Class I-A common shares, par value 1.25 euros per share, 5,000,000 shares authorized,
issued and outstanding                                                                     |  |                   | 5,435      |   |                 |  
|Class I-B common shares, par value 1.25 euros per share, 5,000,000 shares authorized,
issued and outstanding                                                                     |  |                   | 5,435      |   |                 |  
|Class I-C common shares, par value 1.25 euros per share, 10,000,000 shares authorized,
issued and outstanding                                                                    |  |                   | 10,870     |   |                 |  
|Class I-D common shares, par value 1.25 euros per share, 10,000,000 shares authorized,
issued and outstanding                                                                    |  |                   | 10,870     |   |                 |  
|Class I-E common shares, par value 1.25 euros per share, 15,000,000 shares authorized,
issued and outstanding                                                                    |  |                   | 16,304     |   |                 |  
|Class I-F common shares, par value 1.25 euros per share, 15,000,000 shares authorized,
issued and outstanding                                                                    |  |                   | 16,304     |   |                 |  
|Class I-G common shares, par value 1.25 euros per share, 20,000,000 shares authorized,
issued and outstanding                                                                    |  |                   | 21,739     |   |                 |  
|Class I-H common shares, par value 1.25 euros per share, 25,000,000 shares authorized,
issued and outstanding                                                                    |  |                   | 27,174     |   |                 |  
|Class I-I common shares, par value 1.25 euros per share, 5,000,000 shares authorized,
issued and outstanding                                                                     |  |                   | 5,435      |   |                 |  
|Class I-J common shares, par value 1.25 euros per share, 5,000,000 shares authorized,
issued and outstanding                                                                     |  |                   | 5,435      |   |                 |  
|Class I-K common shares, par value 1.25 euros per share, 16,050,000 shares authorized,
issued and outstanding                                                                    |  |                   | 18,074     |   |                 |  
|Class I-L common shares, par value 1.25 euros per share, 5,025,720, shares authorized,
issued and outstanding                                                                    |  |                   | 5,540      |   |                 |  
|Class I-M common shares, par value 1.25 euros per share, 68,626,707, shares authorized,
issued and outstanding                                                                   |  |                   | 78,398     |   |                 |  
|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    |   |                 |  
|Restricted share units (related to Class A common shares), 40,929,017 and 58,265,829
units issued and outstanding as of February 28, 2003 and August 31, 2002, respectively      |  |                   | 596,414    |   |                 |  
|Additional paid-in capital                                                                                                                                                       |  |                   | 2,771,366  |   |                 |  
|Treasury shares, at cost, 48,165,008 and 54,276,582 shares at February 28, 2003 and
August 31, 2002, respectively                                                                |  |                   | (925,046   | ) |                 |  
|Investment in Accenture Ltd Class A common shares, at cost, 6,930,977 and 13,726,885
shares at February 28, 2003 and August 31, 2002, respectively                               |  |                   | (126,498   | ) |                 |  
|Accenture Ltd Class A common shares owned by Share Employee Compensation Trust, at cost,
17,457,100 and 12,562,300 shares at February 28, 2003 and August 31, 2002, respectively |  |                   | (300,208   | ) |                 |  
|Retained deficit                                                                                                                                                                 |  |                   | (2,281,054 | ) |                 |  
|Accumulated other comprehensive loss                                                                                                                                             |  |                   | (85,776    | ) |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|Total shareholders equity                                                                                                                                                       |  |                   | 1,250,799  |   |                 |  
|                                                                                                                                                                                 |  |                   |            |   |                 |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                       |  | $                 | 5,851,495  |   |                 | $
|                                                                                                                                                                                 |  |                   |            |   |                 |  



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





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ACCENTURE SCA



CONSOLIDATED INCOME STATEMENTS



For the Three and Six Months Ended February 28, 2003 and 2002

(In thousands of U.S. dollars)

(Unaudited)



|                                              |  | Three Months Ended |           |   | Six Months Ended  |  
|--------------------------------------------- |  | ------------------ | --------- | - | ----------------- | -
|                                              |  | February 28, 2003  |           |   | February 28, 2002 |  
|REVENUES:                                     |  |                    |           |   |                   |  
|Revenues before reimbursements                |  | $                  | 2,826,196 |   |                   | $
|Reimbursements                                |  |                    | 362,827   |   |                   |  
|                                              |  |                    |           |   |                   |  
|Revenues                                      |  |                    | 3,189,023 |   |                   |  
|OPERATING EXPENSES:                           |  |                    |           |   |                   |  
|Cost of services:                             |  |                    |           |   |                   |  
|Cost of services before reimbursable expenses |  |                    | 1,816,706 |   |                   |  
|Reimbursable expenses                         |  |                    | 362,827   |   |                   |  
|                                              |  |                    |           |   |                   |  
|Cost of services                              |  |                    | 2,179,533 |   |                   |  
|Sales and marketing                           |  |                    | 369,631   |   |                   |  
|General and administrative costs              |  |                    | 272,038   |   |                   |  
|                                              |  |                    |           |   |                   |  
|Total operating expenses                      |  |                    | 2,821,202 |   |                   |  
|                                              |  |                    |           |   |                   |  
|OPERATING INCOME                              |  |                    | 367,821   |   |                   |  
|Gain (loss) on investments, net               |  |                    | 1,465     |   |                   |  
|Interest income                               |  |                    | 10,824    |   |                   |  
|Interest expense                              |  |                    | (4,501    | ) |                   |  
|Other income                                  |  |                    | 27,385    |   |                   |  
|Equity in losses of affiliates                |  |                    | (9        | ) |                   |  
|                                              |  |                    |           |   |                   |  
|INCOME BEFORE TAXES                           |  |                    | 402,985   |   |                   |  
|Provision for taxes                           |  |                    | 153,134   |   |                   |  
|                                              |  |                    |           |   |                   |  
|INCOME BEFORE MINORITY INTEREST               |  |                    | 249,851   |   |                   |  
|Minority interest                             |  |                    | (1,211    | ) |                   |  
|                                              |  |                    |           |   |                   |  
|NET INCOME                                    |  | $                  | 248,640   |   |                   | $
|                                              |  |                    |           |   |                   |  





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





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ACCENTURE
SCA



CONSOLIDATED SHAREHOLDERS EQUITY STATEMENT



For the Six Months Ended February 28, 2003

(U.S. dollars and share
amounts in thousands)

(Unaudited)



|                                                                              |  | Class I Common Shares |           | Class II Common Shares |         | Restricted Share Units Common Shares |   |            | Additional Paid-in Capital |         |  | Treasury Shares |            |   | Investment in Accenture Ltd |         |   | Investment in Accenture Ltd SECT |   |            | Retained Earnings (Deficit) |  |   | Accumulated Other Comprehensive Income (Loss) |   |            |         |  
|----------------------------------------------------------------------------- |  | --------------------- | --------- | ---------------------- | ------- | ------------------------------------ | - | ---------- | -------------------------- | ------- |  | --------------- | ---------- | - | --------------------------- | ------- | - | --------------------------------- | - | ---------- | --------------------------- |  | - | --------------------------------------------- | - | ---------- | ------- | -
|                                                                              |  | $                     |           | No.Shares              |         | $                                    |   | No. Shares |                            | $       |  |                 | No. Shares |   |                             |         | $ |                                   |   | No. Shares |                             |  | $ |                                               |   | No. Shares |         |  
|Balance at August 31, 2002                                                    |  | $                     | 1,072,320 |                        | 958,546 |                                      | $ | 529,281    |                            | 470,958 |  | $               | 848,218    |   |                             | 58,266  |   |                                   | $ | 2,944,678  |                             |  | $ | (1,052,900                                    | ) |            | (54,277 | )
|Comprehensive income:                                                         |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Net income                                                                    |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Other comprehensive income (loss):                                            |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Unrealized gains on marketable securities, net of reclassification
adjustment |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Foreign currency translation                                                  |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|                                                                              |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Other comprehensive income (loss)                                             |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|                                                                              |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Comprehensive income                                                          |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Income tax benefit on stock-based compensation plans                          |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   | 13,189     |                             |  |   |                                               |   |            |         |  
|Transfer of Class I common shares to Accenture Ltd:                           |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Employee Share Purchase Plan                                                  |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   | (54,450    | )                           |  |   | 100,653                                       |   |            | 5,188   |  
|Restricted share units                                                        |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 | (248,829   | ) |                             | (17,158 | ) |                                   |   | (75,871    | )                           |  |   | 134,890                                       |   |            | 6,953   |  
|Employee stock options                                                        |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 | (927       | ) |                             | (64     | ) |                                   |   | (13,327    | )                           |  |   | 36,637                                        |   |            | 1,888   |  
|Purchase of Accenture Ltd Class A common shares                               |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   | (39,557    | )                           |  |   |                                               |   |            |         |  
|Cancellation of restricted share units, net                                   |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 | (2,048     | ) |                             | (115    | ) |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Purchase of Accenture SCA Class I common shares                               |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   | 301        |                             |  |   | (144,326                                      | ) |            | (7,917  | )
|Contract termination                                                          |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Minority interest                                                             |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   | (3,597     | )                           |  |   |                                               |   |            |         |  
|                                                                              |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  
|Balance at February 28, 2003                                                  |  | $                     | 1,072,320 |                        | 958,546 |                                      | $ | 529,281    |                            | 470,958 |  | $               | 596,414    |   |                             | 40,929  |   |                                   | $ | 2,771,366  |                             |  | $ | (925,046                                      | ) |            | (48,165 | )
|                                                                              |  |                       |           |                        |         |                                      |   |            |                            |         |  |                 |            |   |                             |         |   |                                   |   |            |                             |  |   |                                               |   |            |         |  



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





5



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##### Table of Contents

ACCENTURE SCA



CONSOLIDATED CASH FLOWS STATEMENTS



For the Six Months Ended February 28, 2003 and 2002

(In thousands of U.S. dollars)

(Unaudited)



|                                                                                  |  | 2003 |           |   | 2002 |  
|--------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |      |           |   |      |  
|Net income                                                                        |  | $    | 515,758   |   |      | $
|                                                                                  |  |      |           |   |      |  
|Adjustments to reconcile net income to net cash provided by operating
activities |  |      |           |   |      |  
|Depreciation and amortization                                                     |  |      | 123,035   |   |      |  
|(Gain) loss on investments, net                                                   |  |      | (5,270    | ) |      |  
|Equity in losses of affiliates                                                    |  |      | 539       |   |      |  
|(Gain) loss on disposal of property and equipment, net                            |  |      | (6,592    | ) |      |  
|Stock-based compensation                                                          |  |      | 23,987    |   |      |  
|Deferred income taxes                                                             |  |      | 8,902     |   |      |  
|Minority interest                                                                 |  |      | 2,710     |   |      |  
|Other items, net                                                                  |  |      | (23,191   | ) |      |  
|Change in assets and liabilities                                                 |  |      |           |   |      |  
|(Increase) decrease in receivables from clients, net                              |  |      | (61,852   | ) |      |  
|Decrease in other current assets                                                  |  |      | 21,500    |   |      |  
|Increase in unbilled services, current and non-current                            |  |      | (161,290  | ) |      |  
|Increase in other non-current assets                                              |  |      | (942      | ) |      |  
|Decrease in accounts payable                                                      |  |      | (83,342   | ) |      |  
|Decrease in due from related parties                                              |  |      | 29,268    |   |      |  
|Increase (decrease) in deferred revenue                                           |  |      | 109,857   |   |      |  
|Increase in accrued payroll and related benefits                                  |  |      | 38,033    |   |      |  
|Increase (decrease) in income taxes payable                                       |  |      | 171,400   |   |      |  
|Decrease in other accrued liabilities                                             |  |      | (71,455   | ) |      |  
|(Decrease) increase in other non-current liabilities                              |  |      | (19,183   | ) |      |  
|                                                                                  |  |      |           |   |      |  
|Net cash provided by operating
activities                                         |  |      | 611,872   |   |      |  
|                                                                                  |  |      |           |   |      |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |      |           |   |      |  
|Proceeds from sales of investments                                                |  |      | 47,418    |   |      |  
|Proceeds from sales of property and equipment                                     |  |      | 14,859    |   |      |  
|Purchases of businesses and investments                                           |  |      | (3,796    | ) |      |  
|Property and equipment additions                                                  |  |      | (78,967   | ) |      |  
|                                                                                  |  |      |           |   |      |  
|Net cash used in investing
activities                                             |  |      | (20,486   | ) |      |  
|                                                                                  |  |      |           |   |      |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |      |           |   |      |  
|Distribution of partners pre-incorporation income                                |  |      |          |   |      |  
|Contract termination payment                                                      |  |      | (147,569  | ) |      |  
|Issuance of common shares                                                         |  |      | 106,397   |   |      |  
|Purchase of Accenture Ltd Class A common shares                                   |  |      | (157,288  | ) |      |  
|Purchase of Accenture SCA Class I common shares                                   |  |      | (144,025  | ) |      |  
|Proceeds from issuance of long-term debt                                          |  |      | 919       |   |      |  
|Repayment of long-term debt                                                       |  |      | (2,800    | ) |      |  
|Proceeds from issuance of short-term bank borrowings                              |  |      | 49,751    |   |      |  
|Repayments of short-term bank borrowings                                          |  |      | (59,146   | ) |      |  
|Decrease in restricted cash of Accenture Share Employee Compensation
Trust        |  |      | 73,857    |   |      |  
|                                                                                  |  |      |           |   |      |  
|Net cash used in financing
activities                                             |  |      | (279,904  | ) |      |  
|Effect of exchange rate changes                                                   |  |      | 56,118    |   |      |  
|                                                                                  |  |      |           |   |      |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              |  |      | 367,600   |   |      |  
|CASH AND CASH EQUIVALENTS, beginning of period                                    |  |      | 1,316,976 |   |      |  
|                                                                                  |  |      |           |   |      |  
|CASH AND CASH EQUIVALENTS, end of period                                          |  | $    | 1,684,576 |   |      | $
|                                                                                  |  |      |           |   |      |  





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



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ACCENTURE SCA



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of U.S. dollars, except share amounts
or as otherwise disclosed)

(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, 2002 included in the Companys Current Report on Form 8-K filed with the SEC on March 26, 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 and six months ended February 28, 2003 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2003. Certain prior-period amounts have been reclassified to conform with the
current-period presentation.



2.    ACCUMULATED OTHER COMPREHENSIVE LOSS



The components of Comprehensive income are as follows:



|                                                                                        |  | Three Months Ended February 28, |         |   | Six Months Ended February 28, |  
|--------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ----------------------------- | -
|                                                                                        |  | 2003                            |         |   | 2002                          |  
|Net income                                                                              |  | $                               | 248,640 |   |                               | $
|Foreign currency translation adjustments                                                |  |                                 | (5,812  | ) |                               |  
|Unrealized (losses) gains on marketable securities, net of reclassification
adjustments |  |                                 | (2,112  | ) |                               |  
|                                                                                        |  |                                 |         |   |                               |  
|Comprehensive income                                                                    |  | $                               | 240,716 |   |                               | $
|                                                                                        |  |                                 |         |   |                               |  



The
components of Accumulated other comprehensive loss are as follows:



|                                           |  | February 28, 2003 |         |   | August 31, 2002 |  
|------------------------------------------ |  | ----------------- | ------- | - | --------------- | -
|Foreign currency translation adjustments   |  | $                 | (69,826 | ) |                 | $
|Unrealized losses on marketable securities |  |                   | (3,385  | ) |                 |  
|Minimum pension liability, net of tax      |  |                   | (12,565 | ) |                 |  
|                                           |  |                   |         |   |                 |  
|Accumulated other comprehensive loss       |  | $                 | (85,776 | ) |                 | $
|                                           |  |                   |         |   |                 |  



3.    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 different markets. The
reportable operating segments are the Companys five operating groups, which are Communications & High Tech, Financial Services, Government, Products and Resources.



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ACCENTURE SCA



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands of U.S. dollars, except share amounts or as otherwise disclosed)

(Unaudited)





In the
first quarter of fiscal 2003, we transitioned our Health Services industry group from our Financial Services operating group to our Products operating group. In addition, we changed the format of internal financial information presented to our chief
executive officer to reflect changes in our internal accounting method of allocating certain costs to segments from a partner basis to a total controllable cost basis for purposes of determining segment operating income and assessing segment
performance. Segment results for all periods presented were revised to reflect these changes.



Reportable Segments



|                                    
|------------------------------------
|Three Months Ended February 28, 2003
|Revenues before reimbursements      
|Operating income                    
|                                    
|                                    
|Three Months Ended February 28, 2002
|Revenues before reimbursements      
|Operating income                    
|                                    
|                                    
|Six Months Ended February 28, 2003  
|Revenues before reimbursements      
|Operating income                    
|                                    
|                                    
|Six Months Ended February 28, 2002  
|Revenues before reimbursements      
|Operating income                    
|                                    



4.    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, including tax services, to Accenture and by which Accenture was to provide Arthur Andersen LLP and other Arthur Andersen firms with consulting services. In conjunction with the termination of all contracts and in settlement of all related
matters with Arthur Andersen LLP and other Arthur Andersen firms, Accenture paid Arthur Andersen LLP $190,290. This payment offset previously accrued amounts and resulted in an immaterial gain. In October 2002, Accenture and Arthur Andersen LLP also
entered into a new facility services agreement, which provides Accenture with the use of Arthur Andersen LLPs training facility in St. Charles, Illinois at market rates through July 1, 2007. Accenture has committed to spend a minimum of
$135,000 over the five-year period ending July 1, 2007.



5.    ACCENTURE SHARE EMPLOYEE COMPENSATION TRUST



As of August 31, 2002, $79,445 of previously authorized contributions to the Accenture share employee compensation trust (SECT) remained segregated as Restricted cash on the Companys
Consolidated Balance Sheet. During the three and six months ended February 28, 2003, the SECT purchased approximately 845,500 and 4,894,800 Accenture Ltd Class A common shares, respectively, with aggregate purchase prices totaling $14,232 and
$79,098, respectively. At February 28, 2003, $5,588 continued to be available to the SECT for share purchases and is segregated as Restricted cash on the Consolidated Balance Sheet, including $5,000 of additional cash received upon the settlement of
transaction fees received and expenses paid in connection with transactions undertaken by our partners under our Share Management Plan in November and December 2002.



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ACCENTURE SCA



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands of U.S. dollars, except share amounts or as otherwise disclosed)

(Unaudited)





On
February 26, 2003, Accenture Ltds board of directors approved an additional contribution of up to $150,000 to the SECT. Subsequently, on March 7, 2003, the Company contributed $150,000 to the SECT.



6.    RESTRUCTURING



In the fourth quarter of 2002, Accenture recognized
restructuring costs of $110,524 related to a global consolidation of office space. At August 31, 2002, the related liability for restructuring costs was $67,112. This liability was reduced by payments made in the three and six months ended February
28, 2003 of $9,534 and $20,644, respectively. The liability was also affected by immaterial changes in lease estimates, imputed interest and foreign currency translation. The liability at February 28, 2003 was $49,579, representing the net present
value of the estimated remaining obligations related to exiting operating leases.





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



In December 2002, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based CompensationTransition and Disclosurean amendment of FASB Statement No. 123. SFAS 148 provides
alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent disclosure in both
annual and interim financial statements about the method of accounting for stock-based compensation and the effect of the method used on reported results. The disclosure requirements of this statement are effective for the Company beginning in the
second quarter of fiscal 2003.



Accenture elected
to follow Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, in accounting for its employee stock options and purchase rights. No compensation expense is recognized for share
purchase rights granted under its employee stock options and employee share purchase plan. Had compensation cost for the Companys employee stock options and employee share purchase plan been determined based on fair value at the grant date
consistent with SFAS 123, the Companys net income would have been reduced to the pro forma amounts indicated below:



|                                                                                                                                                        |  | Three Months Ended February 28, |         |   | Six Months Ended February 28, |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ----------------------------- | -
|                                                                                                                                                        |  | 2003                            |         |   | 2002                          |  
|Net income as reported                                                                                                                                  |  | $                               | 248,640 |   |                               | $
|Add: Stock-based compensation expense already included in net income as
reported                                                                        |  |                                 | 7,206   |   |                               |  
|Deduct: Pro forma employee compensation cost related to stock options, restricted share
units and share purchase plan, net of tax and minority interest |  |                                 | (38,850 | ) |                               |  
|                                                                                                                                                        |  |                                 |         |   |                               |  
|Pro forma income (loss)                                                                                                                                 |  | $                               | 216,996 |   |                               | $
|                                                                                                                                                        |  |                                 |         |   |                               |  



8.    SUBSEQUENT EVENT



On March 10, 2003, pursuant to a tender offer made to Accenture SCA Class I shareholders on February 7, 2003, Accenture SCA and its wholly-owned subsidiary, Accenture International SARL, redeemed or purchased an aggregate of
5,731,030 Accenture SCA Class I shares at a price of $16.29 per share. At the same time, Accenture International SARL purchased 59,359 Accenture Canada Holdings Inc. exchangeable shares at a price of $16.29 per share. The total cash outlay for these
transactions was $94,325. These transactions were undertaken pursuant to our Share Management Plan for our partners, former partners and their permitted transferees.



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ACCENTURE SCA



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands of U.S. dollars, except share amounts or as otherwise disclosed)

(Unaudited)





9.    NEW ACCOUNTING STANDARDS



Guarantees



In November 2002, the FASB issued Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others. FIN
45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. The Interpretation also requires that a guarantor recognize a liability at inception of certain
guarantees. The initial recognition and measurement provisions of FIN 45 are applicable to guarantees issued or modified after December 31, 2002. The adoption of FIN 45s initial recognition and measurement provisions did not have a material
effect on the Companys financial statements.



The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. These disclosure provisions require a guarantor to disclose certain types of guarantees, even if the
likelihood of requiring the guarantors performance is remote. The following is a description of arrangements which the Company is currently required to disclose in accordance with FIN 45.



As disclosed in Note 17 to the consolidated financial
statements for the fiscal year ended August 31, 2002, as a result of the increase in its ownership percentage of Accenture HR Services (formerly e-peopleserve Ltd) from 50 percent to 100 percent, Accenture may be required to make payments totaling
up to $187,500 in additional purchase price over a five-year period starting February 28, 2002 conditional on Accenture HR Services achieving growth in revenues. As of February 28, 2003, no payments had been made and should any payments be made in
the future, they will result in an increase to goodwill.



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. Payment by
Accenture under such indemnification clauses is generally conditioned on the other party making a claim that is subject to challenge by Accenture and dispute resolution procedures specified in the particular contract. Further, the Companys
obligations under these agreements may be limited in terms of time and/or amount, and in some instances, Accenture may have recourse against third parties for certain payments made by the Company. It is not possible to predict the maximum potential
amount of future payments under these indemnification agreements due to the conditional nature of Accentures obligations and the unique facts of each particular agreement. Historically, payments made by the Company under these agreements have
not been material. As of February 28, 2003, management was not aware of any indemnification agreements, that would require material payments.



Variable Interest Entities



In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities. An
entity is subject to the consolidation rules of FIN 46 and is referred to as a variable interest entity (VIE) if the entitys equity investors lack the characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its operations without additional subordinated financial support.



FIN 46 applies immediately to VIEs created after January 31, 2003. For VIEs created prior to February 1, 2003, an enterprise with an
August 31st fiscal year end will apply the provisions beginning September 1, 2003. Additionally, FIN 46 requires disclosure of VIEs in financial statements issued after January 31, 2003 if it is



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ACCENTURE SCA



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(In thousands of U.S. dollars, except share amounts or as otherwise disclosed)

(Unaudited)



reasonably possible that as of the transition date: 1) the enterprise will be the primary beneficiary of an existing VIE that will require
consolidation or 2) the enterprise will hold a significant variable interest in, or have significant involvement with, an existing VIE.



Accenture does not have any VIEs that it will need to consolidate or disclose.



11.    GOODWILL



All of the Companys goodwill relates to acquisitions
subsequent to July 2001 and as such has been accounted for under the provisions of SFAS 142, Goodwill and Other Intangible Assets, which does not permit amortization of goodwill. On September 1, 2002, the Company adopted the impairment
provisions and disclosure requirements of SFAS 142. The Company performed the required impairment tests of goodwill as of September 1, 2002 and determined that goodwill was not impaired. Goodwill balances by segment were as follows:



|                  |  | Comm. & High Tech |        | Financial Services |   | Government |  | Products |        | Resources |   | Total 
|----------------- |  | ----------------- | ------ | ------------------ | - | ---------- |  | -------- | ------ | --------- | - | ------
|February 28, 2003 |  | $                 | 59,517 |                    | $ | 38,618     |  | $        | 20,102 |           | $ | 34,893
|August 31, 2002   |  | $                 | 55,083 |                    | $ | 36,544     |  | $        | 19,017 |           | $ | 32,686



Goodwill
changes during the six months ended February 28, 2003 resulted from foreign currency translation adjustments related to non-U.S. dollar denominated goodwill.





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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 Combined and Consolidated Financial Statements and related
notes included elsewhere in this Quarterly Report on Form 10-Q and in our Current Report on Form 8-K filed on March 26, 2003, and with the information under the heading Managements Discussion and Analysis of Financial Condition and
Results of Operations in our Current Report on Form 8-K.



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 2002 or fiscal year 2002 means the 12-month period that ended on August 31, 2002. All references to quarters, unless otherwise noted, refer
to the quarters of our fiscal year.



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 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:



| |  |  | Should the current significant economic downturn continue to affect our clients, it could have a material adverse effect on our results of operations.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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 affiliates or 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. The pace of consolidation among competitors in the markets in which we operate continues,
with vertical integration of hardware and software vendors and service providers becoming more prevalent. 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 and retain employees in appropriate numbers, we will not be able to compete effectively and will not be able to grow our business.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our transition to a corporate structure may adversely affect our ability to recruit, retain and motivate our partners and other key employees, which in turn could
adversely affect our ability to compete effectively and to grow our business.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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. The current significant downturn continues to
generate pricing pressures from our competitors and our clients that could result in permanent changes in pricing models, delivery capabilities and expectations in segments of the marketplace in which we compete.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | Our strategy to position ourselves to achieve greater percentages of revenue and growth through substantial business transformational outsourcing engagements could
result in higher concentrations of revenue, engagement backlogs and contributions to income being derived from smaller numbers of larger clients. As we continue to accelerate the growth of new outsourcing contracts, including business transformation
outsourcing contracts, we may experience increased pressure on margins during the early stages of these contracts.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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 may lead to new tax 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 our shareholders
ownership in us.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Accenture SCA is registered in Luxembourg, and a significant portion of our assets are located outside the United States. As a result, it may not be possible for
shareholders to enforce civil liability provisions of the federal or state securities laws of the United States.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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, 2002. We undertake no obligation to update or revise any forward-looking statements.



Overview



Our results of operations are affected by the economic conditions, level of business activity and level of
change in the industries we serve. Our business is also driven, in part, by the pace of technological change and the type and level of technology spending by our clients. The ability to identify and capitalize on these technological and market
changes early in their cycles is a key driver of our performance. Prior to May 31, 2001, we operated as a series of related partnerships and corporations under the control of our partners. We now operate in a corporate structure. As a business,
whether in partnership form or in a corporate structure, our profitability is driven by many of the same factors.



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.



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The primary
categories of operating expenses include cost of services, sales and marketing and general and administrative costs. Cost of services is primarily driven by the cost of client-service personnel, which consists mainly of compensation, sub-contractor
and other personnel costs, and non-payroll outsourcing costs. Cost of services as a percentage of revenues is driven by the prices we obtain for our solutions and services, the productivity of our client-service workforces and the level of
non-payroll costs associated with the continuing accelerated growth of new outsourcing contracts. 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 in line with changes in activity levels in our business.



We continue to experience increasing pricing pressures from competitors as well as from clients facing pressure to control costs under continuing uncertain global economic and political conditions. The
pace of consolidation, as well as vertical integration, among competitors in the markets in which we operate continues to increase. We continue to see clients reduce or defer their expenditures or defer the start of work already contracted. We are
continuing to monitor possible implications of the recently reported severe acute respiratory syndrome (SARS) outbreak, but at this time it is hard to quantify the impact on our business. Although new contract bookings were strong in fiscal 2002,
new contract bookings for the first quarter of fiscal 2003 decreased 27% compared to the first quarter of fiscal 2002. Bookings improved in the second fiscal quarter of 2003 as compared with the first quarter of fiscal 2003; however, they decreased
27% from record new bookings for the fiscal quarter ended February 28, 2002, primarily due to booking large business transformational outsourcing orders in that quarter. The consulting and systems integration markets remain depressed due to the
continuing uncertain global economic and political environment and the lack of a new wave of technology to stimulate spending. We continue to position ourselves to achieve a greater percentage of our revenue and growth through outsourcing, including
business transformation outsourcing, our approach that combines outsourcing, including business process outsourcing, with our other capabilities to help clients transform key processes, applications and infrastructure to improve business
performance. Outsourcing contracts typically have longer contract terms than consulting contracts and may not generate revenue or margins as quickly in the early stages of the contract. As we continue to accelerate the growth of new business
transformation outsourcing contracts, we may experience increased pressure on margins during the early stages of these contracts.



As continuation of current pricing pressures could result in permanent changes in pricing policies and delivery capabilities, we must
continuously improve our management of costs. Our cost-management strategy is to anticipate changes in demand for our services and to identify cost-management initiatives that enable us to manage costs as a percentage of revenues. We aggressively
plan and manage our payroll costs and headcount to meet the anticipated demand for our services, and we have implemented cost-management programs that have generally enabled us to maintain or improve consolidated operating margins, excluding
one-time charges. For instance, we have increased variable compensation as a percentage of our executives total compensation and continue to take actions to reduce our consulting workforce, including at the executive level, in markets where
both supply and demand and skill level imbalances have not been resolved, while continuing our hiring at entry-level positions. We continue to take actions to reduce our administrative and sales and marketing costs. We continue to build and use our
network of delivery centers and capabilities around the world as part of a more cost-effective delivery model. The growing use of globally sourced lower-cost service delivery capabilities within our industry continues to be a source of pressure on
our revenues and operating margins. Our cost-management initiatives may not be sufficient to maintain our consolidated operating margins if the current challenging economic and political environment continues for several quarters.



Presentation



As a result of a restructuring in 1989, we and our
member firms, which are now our subsidiaries, became legally separate and distinct from the Arthur Andersen firms. Thereafter, until August 7, 2000, we had



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contractual relationships with an administrative entity, Andersen Worldwide, and indirectly with the separate Arthur Andersen firms. Under
these contracts, called member firm agreements, we and our member firms, on the one hand, and the Arthur Andersen firms, on the other hand, were two stand-alone business units linked through such agreements to Andersen Worldwide for administrative
and other services. In addition, during this period our partners individually were members of Andersen Worldwide. Following arbitration proceedings between us and Andersen Worldwide and the Arthur Andersen firms that were completed in August 2000,
the tribunal terminated our contractual relationships with Andersen Worldwide and all the Arthur Andersen firms. On January 1, 2001, we began to conduct business under the name Accenture.



Because we historically operated as a series of related partnerships and corporations under the control of
our partners, our partners generally participated in profits, rather than receiving salaries. Therefore, our historical financial statements for periods ended on or prior to May 31, 2001 do not reflect any compensation or benefit costs for services
rendered by them. Following our transition to a corporate structure, operating expenses include partner compensation, which consists of salary, variable cash compensation, restricted share compensation, stock options and benefits. Similarly, in
periods when we operated primarily in the form of partnerships, our partners paid income tax on their shares of the partnerships income. Therefore, our historical financial statements for periods ended on or prior to May 31, 2001 do not
reflect the income tax liability that we would have paid as a corporation. Since our transition to a corporate structure, we have been subject to corporate tax on our income.



Segments



Our five reportable operating segments are our operating groups (formerly referred to as global market units), 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
revenues. Generally, operating expenses for each operating group have similar characteristics and are subject to the same drivers, pressures and challenges. However, the current economic environment and its continuing effects on the industries
served by our operating segments affect operating expenses within our operating segments to different degrees. Personnel reductions have not been taken uniformly across our operating segments in part due to an increased need on behalf of some of our
operating groups to tailor their workforces to the needs of their businesses. Our segments shift to outsourcing engagements is not uniform and, consequently, neither are the impacts on operating group revenues caused by these transitions.
Local currency fluctuations also tend to affect our operating groups differently, depending on the historical and current geographic concentrations and locations of their businesses.



In the first quarter of fiscal 2003, we transitioned our Health Services industry group from our Financial
Services operating group to our Products operating group. In addition, we changed the format of internal financial information presented to our chief executive officer to reflect changes in our internal accounting method of allocating certain costs
to segments from a partner basis to a total controllable cost basis for purposes of determining segment operating income and assessing segment performance. Segment results for all periods presented were revised to reflect these changes.



Revenues



Revenues include all amounts that are billable to clients.
Revenues are recognized on a time-and-materials, straight-line, or percentage-of-completion basis, depending on the contract, as services are provided by employees and subcontractors.



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



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



Generally, 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.



We have many types of contracts, including time-and-materials contracts, fixed-price contracts and contracts with features of both of these contract types. We estimate that a majority of our contracts have some fixed-price,
incentive-based or other pricing terms that condition our fee on our ability to deliver defined goals such as incentives related to costs incurred, benefits produced and our adherence to schedule. The trend to include greater incentives in our
contracts related to costs incurred, benefits produced or adherence to schedule 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.



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.



We provide variable compensation and bonuses,
including performance options, to our partners and other senior employees based on our quarterly and annual results as compared to our budgets and taking into account other factors, including industry-wide results and the general economic
environment. In fiscal 2003, we extended a variable component of compensation to our managers and reduced the quarterly component of variable partner cash compensation. Based on fiscal 2002 performance, we did not award performance options to
partners in fiscal 2003.



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



Sales and Marketing



Sales and marketing expense is affected by economic conditions and is driven 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.



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, are not predictable and may not recur.



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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,
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 service by our personnel on the 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).



Equity in Gains (Losses) of Affiliates



Equity in gains (losses) of affiliates represents our share
of the operating results of non-consolidated 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 between the financial reporting and income tax bases of assets and liabilities.



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 subsidiary, Accenture Canada Holdings Inc. See BusinessAccenture Organizational Structure in our Annual Report on Form 10-K for the fiscal year ended August 31, 2002. The
resulting net income of Accenture SCA represents the income attributable to the shareholders of Accenture SCA. Effective January 2002, minority interest also includes immaterial amounts attributable to minority shareholders in our Avanade, Inc.
subsidiary.



Critical Accounting Policies and Estimates



Revenue Recognition



Revenues from contracts for management
consulting and technology service offerings that we develop and implement for our clients are recognized on a time-and-materials basis or on a percentage-of-completion basis as services are provided by our employees and, to a lesser extent,
subcontractors. Revenues from time-and-materials service contracts are recognized as the services are provided. Revenues from long-term system integration contracts are recognized based on the percentage of services provided during the period
compared to the total estimated services to be provided over the duration of the contract. This method is followed where reasonably dependable estimates of the revenues and costs applicable to various elements of a contract can be made. Estimates of
total contract revenues and costs are continuously monitored during the term of the contract, and



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recorded revenues and costs are subject to revision as the contract progresses. Such revisions, which may result in increases or decreases to
revenues and income, are reflected in the financial statements in the period in which they are first identified.



Each contract has different terms based on the scope, deliverables and complexity of the engagement, the terms of which frequently require
us to make judgments and estimates about recognizing revenue. We have many types of contracts including time-and-materials contracts, fixed-price contracts and contracts with features of both of these contract types. We estimate that a majority of
our contracts have some fixed-price, incentive-based or other pricing terms that condition some or all of our fees on our ability to deliver defined goals such as costs incurred, benefits produced, goals attained or our adherence to schedule. For
systems integration contracts, estimated revenues for applying the percentage-of-completion method include estimated incentives for which achievement of defined goals is deemed probable. Incentives relating to non-systems integration projects are
recorded when the contingency is satisfied.



In
recent years, our outsourcing business has increased significantly. Determining revenue and costs on outsourcing contracts requires judgment. Typically the terms of these contracts span several years. In a number of these arrangements we hire client
employees and become responsible for client obligations. Revenues are recognized on a straight-line basis as services are performed or as transactions are processed in accordance with contractual terms. Costs on outsourcing contracts are generally
charged to expense as incurred. Outsourcing contracts can also include incentive payments for benefits delivered to clients and/or charges for failure to meet schedule or deliver agreed benefits, which may create variability in these revenues and
related margin percentages. Revenues relating to such incentive payments are recorded when the contingency is satisfied.



Contracts containing multiple products and/or services, such as consulting and outsourcing, are segmented into separate units of
accounting where the separate elements represent separate earnings processes. Revenues are allocated among the elements based on the relative fair values of the elements and are recognized in accordance with our accounting policies for the separate
elements unless the undelivered elements are essential to the functionality of the delivered elements. In circumstances where an undelivered element is essential to the functionality of the delivered element, no revenue is recognized for the
delivered element until the undelivered element is delivered. While identifying separate elements requires considerable judgment, generally the separate elements are readily identifiable, as we also provide those elements unaccompanied by the other
elements in many contracts.



Income Taxes



Determining the consolidated provision for
income taxes, 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 geographic mix
or estimated level of annual pre-tax income can affect our overall effective tax rate.



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 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



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liability recorded as of February 28, 2003 for variable compensation was $55 million. The following table shows variable compensation expense
(benefit) for the past six fiscal quarters.



|                      |  | First Quarter 2002 |    | Second Quarter 2002 |   | Third Quarter 2002 |  | Fourth Quarter 2002 |   |  | First Quarter 2003 |      | Second Quarter 2003 | 
|--------------------- |  | ------------------ | -- | ------------------- | - | ------------------ |  | ------------------- | - |  | ------------------ | ---- | ------------------- | 
|                      |  | (in millions)     
|Variable Compensation |  | $                  | 86 |                     | $ | 151                |  | $                   | 8 |  | $                  | (140 | )                   | 



The
benefit recorded in the second quarter of fiscal 2003 related to an adjustment to estimated payouts accrued for fiscal 2002. We did not accrue additional fiscal 2003 variable compensation expense during the second quarter of fiscal 2003. In the
fourth quarter of fiscal 2002, as a result of the difficult economic environment and higher expenses partly relating to increased severance costs, we reversed $140 million of previously accrued 2002 variable partner compensation.



Operating Group Revenues



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



|                                     |  | Three Months Ended February 28,   |       |   | Six Months Ended February 28, |  
|------------------------------------ |  | --------------------------------- | ----- | - | ----------------------------- | -
|                                     |  | 2003                              |       |   | 2002                          |  
|                                     |  | (in millions, except percentages) |      
|Revenues:                            |  |                                   |       |   |                               |  
|Communications & High Tech           |  | $                                 | 786   |   |                               | $
|Financial Services                   |  |                                   | 570   |   |                               |  
|Government                           |  |                                   | 362   |   |                               |  
|Products                             |  |                                   | 642   |   |                               |  
|Resources                            |  |                                   | 464   |   |                               |  
|Other                                |  |                                   | 2     |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total revenues before reimbursements |  |                                   | 2,826 |   |                               |  
|Reimbursements                       |  |                                   | 363   |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total                                |  | $                                 | 3,189 |   |                               | $
|                                     |  |                                   |       |   |                               |  
|Revenues as a percentage of total:   |  |                                   |       |   |                               |  
|Communications & High Tech           |  |                                   | 25    | % |                               |  
|Financial Services                   |  |                                   | 18    |   |                               |  
|Government                           |  |                                   | 11    |   |                               |  
|Products                             |  |                                   | 20    |   |                               |  
|Resources                            |  |                                   | 15    |   |                               |  
|Other                                |  |                                   | n/m   |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total revenues before reimbursements |  |                                   | 89    |   |                               |  
|Reimbursements                       |  |                                   | 11    |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total                                |  |                                   | 100   | % |                               |  
|                                     |  |                                   |       |   |                               |  

---

n/m = not meaningful



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Geographic Information



Revenues are attributed to geographic areas
based on where client services are supervised. The following table provides unaudited geographic financial information.

|                                     |  | Three Months Ended February 28,   |       |   | Six Months Ended February 28, |  
|------------------------------------ |  | --------------------------------- | ----- | - | ----------------------------- | -
|                                     |  | 2003                              |       |   | 2002                          |  
|                                     |  | (in millions, except percentages) |      
|Revenues:                            |  |                                   |       |   |                               |  
|Americas                             |  | $                                 | 1,345 |   |                               | $
|EMEA (1)                             |  |                                   | 1,290 |   |                               |  
|Asia Pacific                         |  |                                   | 191   |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total revenues before reimbursements |  |                                   | 2,826 |   |                               |  
|Reimbursements                       |  |                                   | 363   |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total                                |  | $                                 | 3,189 |   |                               | $
|                                     |  |                                   |       |   |                               |  
|Revenues as a percentage of total:   |  |                                   |       |   |                               |  
|Americas                             |  |                                   | 42    | % |                               |  
|EMEA (1)                             |  |                                   | 41    |   |                               |  
|Asia Pacific                         |  |                                   | 6     |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total revenues before reimbursements |  |                                   | 89    |   |                               |  
|Reimbursements                       |  |                                   | 11    |   |                               |  
|                                     |  |                                   |       |   |                               |  
|Total                                |  |                                   | 100   | % |                               |  
|                                     |  |                                   |       |   |                               |  

---

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



Three Months Ended February 28, 2003 Compared to Three Months Ended February 28, 2002



Revenues



Revenues for the three months ended February 28, 2003 were $3,189 million, a decrease of $139 million from the three months ended February
28, 2002. Revenues before reimbursements for the three months ended February 28, 2003 were $2,826 million, a decrease of $87 million, or 3%, from the three months ended February 28, 2002. In local currency terms, revenues before reimbursements
for the three months ended February 28, 2003 decreased 9% from the three months ended February 28, 2002. Our revenues before reimbursements in Europe, the Middle East and Africa grew 2% in U.S. dollars and declined 13% in local currency terms,
and revenues before reimbursements in the Americas decreased 9% in U.S. dollars and 6% in local currency terms. Revenues before reimbursements in Asia/Pacific grew 7% in U.S. dollars and were flat in local currency terms.



As a result of the continuing difficult global economic and
political environment, clients continue to reduce or defer expenditures for consulting services, and we continue to experience pricing pressure, which has eroded our revenues. Growth in outsourcing revenues largely offset lower consulting revenues.
Outsourcing revenues for the three months ended February 28, 2003 grew by 33% over the three months ended February 28, 2002, led by strong growth in Communications & High Tech and Government. Outsourcing represented 29% of revenues before
reimbursements for the three months ended February 28, 2003, compared with 21% for the corresponding period last year. Consulting revenues declined by 15% from the second quarter of fiscal 2002, a slightly higher rate of decline than in the first
quarter of fiscal 2003, when consulting revenue declined by 13% versus the first quarter of fiscal 2002.





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Our
Communications & High Tech operating group achieved revenues before reimbursements of $786 million in the three months ended February 28, 2003, an increase of 5% over the three months ended February 28, 2002, primarily due to increased
revenues from large outsourcing contracts, particularly with respect to strong revenue growth with an existing communications client, which offset lower consulting revenues. Our Financial Services operating group achieved revenues before
reimbursements of $570 million in the three months ended February 28, 2003, a decrease of 5% from the three months ended February 28, 2002, primarily due to the continued impact of the economic downturn on the capital markets and insurance
industries. Our Government operating group achieved revenues before reimbursements of $362 million in the three months ended February 28, 2003, an increase of 12% over the three months ended February 28, 2002. This increase was primarily driven by
growth in North America and Western Europe. Our Products operating group achieved revenues before reimbursements of $642 million in the three months ended February 28, 2003, a decrease of 10% from the three months ended February 28, 2002, primarily
as a result of reductions in activity in our Retail industry group in Europe and in most industry groups in North America. Our Resources operating group achieved revenues before reimbursements of $464 million in the three months ended February 28,
2003, a decrease of 12% from the three months ended February 28, 2002. Growth in our Utilities industry group partly offset declines in our Chemical and Energy industry groups. The significant challenges and difficult environment that these
industries are currently confronting may continue for several quarters.



Operating Expenses



Operating expenses for the three months ended February 28, 2003 were $2,821 million, a decrease of $119 million, or 4%, from the three months ended February 28, 2002 and remained constant as a percentage of revenues at 88% over
the same period. As a percentage of revenues before reimbursements, operating expenses before reimbursable expenses remained constant at 87% for the three months ended February 28, 2003 and 2002.



In response to continued pricing pressures affecting our
business and to the faster growth in outsourcing, where we generally experience lower margins in the early stages of contracts, we continue to focus on managing our cost structure and on anticipating and correcting supply-and-demand, skill and
pay-level imbalances in our workforce. Our long-term and short-term cost-management initiatives are aimed at managing operating expenses as a percentage of revenues. Our long-term initiatives focus on global reductions in delivery and infrastructure
costs. Our short-term initiatives focus on managing payroll costs, through headcount reductions and variable compensation plans, and reducing other costs, such as limiting travel and meeting costs, and reducing infrastructure and corporate expenses
principally through increased hiring scrutiny and the deferral of non-critical initiatives. Our cost-management initiatives may not be sufficient to maintain our margins if current uncertain economic and political conditions continue for several
quarters.



During the three months ended February
28, 2003, no variable compensation was accrued for fiscal 2003 as compared with $151 million of variable compensation expense recorded in last years quarter. In the second half of fiscal 2002, we recorded a benefit $132 million from the
reversal of previously accrued variable compensation as a result of reducing 2002 variable compensation to approximately 35% of the 2002 planned amount due to the difficult economic environment and higher expenses partly related to increased
severance costs. This benefit will not recur in the second half of fiscal 2003.



Cost of Services



Cost of services was $2,179 million in the three months ended February 28, 2003, an increase of $56 million, or 3%, over the three months ended February 28, 2002 and an increase as a percentage of revenues from 64% to
68% over the same period. Cost of services before reimbursable expenses was $1,817 million in the three months ended February 28, 2003, an increase of $109 million, or 6%, over the three months ended February 28, 2002 and increased as a
percentage of revenues before reimbursements from 59% to 64% over the same period. Higher outsourcing costs of $218 million, partly offset by lower variable compensation expenses of



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$108 million, primarily drove the increase over the corresponding quarter last year. Of the $218 million increase in outsourcing costs, $31
million was driven by higher payroll costs and $187 million was due to an increase in non-payroll costs.



Sales and Marketing



Sales and marketing expense was $370 million in the three months ended February 28, 2003, a decrease of $29 million, or 7%, from the three
months ended February 28, 2002 and decreased as a percentage of revenues before reimbursements from 14% to 13% over the same period, reflecting $42 million of lower variable compensation expenses.



General and Administrative Costs



General and administrative costs were $272 million in the
three months ended February 28, 2003, a decrease of $146 million, or 35% from the three months ended February 28, 2002, and decreased as a percentage of revenues before reimbursements from 14% to 10% over the same period. This decrease is primarily
due to lower geographic facility and technology costs of $50 million, as well as $41 million of lower bad debt expense and $7 million of lower variable compensation expenses. Although we continue to manage our cost structure, we do not expect the
level of expense reductions in General and administrative costs realized during the three months ended February 28, 2003 to continue at the same rate throughout the remainder of fiscal 2003.



Operating Income



Operating income was $368 million in the three months ended
February 28, 2003, a decrease of $20 million, or 5% from the three months ended February 28, 2002, and remained constant as a percentage of revenues at 12% over the same period. Operating income as a percentage of revenues before reimbursements
declined slightly from 13.3% in the second quarter of fiscal 2002 to 13.0% in the second quarter of fiscal 2003.



Gain (Loss) on Investments



Gain on investments totaled $1 million in the three months ended February 28, 2003, compared with a loss of $211 million in the three months ended February 28, 2002. The loss on investments in the
three months ended February 28, 2002 included a charge of $212 million to recognize investment writedowns.



Other Income (Expense)



Other income (expense) was $27 million in the three months ended February 28, 2003, an increase of $18 million, or 183%, over the three months ended February 28, 2002, primarily reflecting foreign
currency gains caused by the devaluation of the U.S. dollar compared with the Euro and British pound during the three months ended February 28, 2003.



Provision for Taxes



The effective tax rates for the three months ended February 28, 2003 and 2002 were 38% and 85%, respectively. Excluding the charge to
write down investments, the effective tax rate for the three months ended February 28, 2002 was 38%.



Six Months Ended February 28, 2003 Compared to Six Months Ended February 28, 2002



Revenues



Revenues for the six months ended February 28, 2003 were $6,516 million, a decrease of $153 million, or 2%, from the six months ended
February 28, 2002. Revenues before reimbursements for the six months ended February 28, 2003 were $5,756 million, a decrease of $146 million, or 2%, from the six months ended February 28, 2002. In local currency terms, revenues before
reimbursements for the six months ended



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February 28, 2003 decreased 6% from the six months ended February 28, 2002. Our revenues before reimbursements in Europe, the Middle
East and Africa grew by 1% in U.S. dollars and decreased 9% in local currency terms; revenues before reimbursements in the Americas declined by 6% in U.S. dollars and 4% in local currency terms; and revenues before reimbursements in Asia/Pacific
remained constant in U.S. dollars while decreasing 4% in local currency terms.



As a result of the continuing difficult global economic and political environment, clients continue to reduce or defer expenditures for consulting services, and we continue to experience pricing
pressure, which has eroded our revenues. Growth in transformational outsourcing offset lower consulting revenues. Outsourcing revenues grew by 35% over the six months ended February 28, 2002, led by strong growth in our Communications & High
Tech and Government operating groups. Outsourcing represented 27% of revenues before reimbursements for the six months ended February 28, 2003, compared with 20% for the corresponding period last year. Consulting revenues for the six months ended
February 28, 2003 declined by 14% from the same period last year.



Our Communications & High Tech operating group achieved revenues before reimbursements of $1,617 million in the six months ended February 28, 2003, an increase of 8% over the six months ended February 28, 2002,
primarily due to increased revenues from large outsourcing contracts, particularly with respect to strong revenue growth with an existing communications client in North America, which offset lower consulting revenues. Our Financial Services
operating group achieved revenues before reimbursements of $1,172 million in the six months ended February 28, 2003, a decrease of 6% from the six months ended February 28, 2002, primarily due to the continued impact of the economic
downturn on the capital markets and insurance industries. Our Government operating group achieved revenues before reimbursements of $720 million in the six months ended February 28, 2003, an increase of 9% over the six months ended February 28,
2002, primarily driven by strong growth in North America and Western Europe. Our Products operating group achieved revenues before reimbursements of $1,292 million in the six months ended February 28, 2003, a decrease of 10% from the six months
ended February 28, 2002, primarily as a result of reductions in activity in our Retail industry group in Europe and our Health Services and Travel and Transportation industry groups in North America. Our Resources operating group achieved revenues
before reimbursements of $951 million in the six months ended February 28, 2003, a decrease of 11% from the six months ended February 28, 2002. Growth in our Utilities industry group partly offset declines in all other industry groups within our
Resources operating group. The significant challenges and difficult environment that these industries are currently confronting may continue for several quarters.



Operating Expenses



Operating expenses in the six months ended February 28, 2003 were $5,719 million, a decrease of $148 million, or 3%, from the six
months ended February 28, 2002, and remained constant as a percentage of revenues at 88% over the same period. As a percentage of revenues before reimbursements, operating expenses before reimbursable expenses remained constant at 86% for the six
months ended February 28, 2003 and 2002.



In
response to continued pricing pressures affecting our business and to the faster growth in outsourcing, where we generally experience lower margins in the early stages of contracts, we continue to focus on managing our cost structure and on
anticipating and correcting supply-and-demand, skill and pay-level imbalances in our workforce. Our long-term and short-term cost-management initiatives are aimed at managing operating expenses as a percentage of revenues. Our long-term initiatives
focus on global reductions in delivery and infrastructure costs. Our short-term initiatives focus on managing payroll costs, through headcount reductions and variable compensation plans, and reducing other costs, such as limiting travel and meeting
costs, and reducing infrastructure and corporate expenses principally through increased hiring scrutiny and the deferral of non-critical initiatives. Our cost-management initiatives may not be sufficient to maintain our margins if current uncertain
economic and political conditions continue for several quarters.



During the six months ended February 28, 2003, we accrued $17 million of variable compensation for fiscal 2003 as compared with $237 million of variable compensation expense recorded in the first half of fiscal 2002.



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In the second half of fiscal 2002, we recorded a benefit of $132 million from the reversal of previously accrued variable compensation as a
result of reducing 2002 variable compensation to approximately 35% of the 2002 planned amount due to the difficult economic environment and higher expenses partly related to increased severance costs. This benefit will not recur in the second half
of fiscal 2003.





Cost of Services



Cost of services was $4,351 million in the six months ended February 28, 2003, an increase of $69 million, or 2%, over the six months ended February 28, 2002 and an increase as a percentage of revenues from 64% to 67% over
the same period. Cost of services before reimbursable expenses was $3,591 million in the six months ended February 28, 2003, an increase of $77 million, or 2%, over the six months ended February 28, 2002 and an increase as a percentage of revenues
before reimbursements from 60% to 62% over the same period. The primary driver of the increase in cost of services was higher outsourcing costs of $378 million, which were largely offset by lower employee compensation costs resulting from lower
variable compensation expenses of $156 million and reduced headcount.



Sales and Marketing



Sales and marketing expense was $725 million in the six months ended February 28, 2003, a decrease of $34 million, or 4%, from the six months ended February 28, 2002, reflecting lower variable compensation expense of $61 million. As
a percentage of revenues before reimbursements, sales and marketing expense remained constant at 13% for the six months ended February 28, 2003 and 2002.



General and Administrative Costs



General and administrative costs were $643 million in the six months ended February 28, 2003, a decrease of $183 million, or 22% from the
six months ended February 28, 2002, and decreased as a percentage of revenues before reimbursements from 14% to 11% over the same period. Key drivers of the decline were geographic facility and technology expense reductions of $85 million, lower bad
debt expenses of $61 million and lower variable compensation expenses of $9 million. Although we continue to manage our cost structure, we do not expect the level of expense reductions in General and administrative costs realized during the six
months ended February 28, 2003 to continue at the same rate throughout the remainder of fiscal 2003.



Operating Income



Operating income was $797 million in the six months ended February 28, 2003, a decrease of $6 million, or 1%, from the six months ended February 28, 2002, and remained constant as a percentage of
revenues at 12% over the same period. Operating income as a percentage of revenues before reimbursements remained constant at 14% for the six months ended February 28, 2003 and 2002.



Gain (Loss) on Investments



Gains on investments totaled $5 million for the six months ended February 28, 2003, compared with a loss on
investments of $306 million for the six months ended February 28, 2002. This loss included a charge of $212 million recorded in the second quarter of fiscal 2002 for investment writedowns and other-than-temporary impairment writedowns of $90
million recorded in the first quarter of fiscal 2002.



Other Income (Expense)



Other income (expense) was $26 million in the six months ended February 28, 2003, an increase of $24 million over the six months ended February 28, 2002, primarily reflecting foreign currency gains caused by the devaluation of
the U.S. dollar compared with the Euro and British pound.



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Provision for Taxes



The effective tax rates for the six
months ended February 28, 2003 and 2002 were 38% and 54%, respectively. Excluding the charge to write down investments, the effective tax rate for the six months ended February 28, 2002 was 38%.



Liquidity and Capital Resources



Our primary sources of liquidity are cash flow from
operations, debt capacity available under various credit facilities and available cash reserves. Cash flows generated by operating activities in the six months ended February 28, 2003 totaled $612 million. Cash and cash equivalents were $1,685
million at February 28, 2003 and total debt was $59 million. We may also be able to raise additional funds through public or private debt or equity financings in order to:



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



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



| |  |  | develop new services or 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 the information under the heading Certain Transactions and Relationships in our Annual Report on Form 10-K for the fiscal year ended August 31, 2002.



At February 28, 2003, our balance of cash and cash equivalents
was $1,685 million, an increase of $368 million, or 28%, from August 31, 2002. The increase is largely attributable to cash provided by operations, proceeds from the issuance of Accenture Ltd Class A common shares to employees and proceeds from
the sale of investments. These inflows were partially offset by share repurchases, a contract termination payment to Arthur Andersen LLP and property and equipment additions.



Net cash provided by operating activities was $612 million in the six months ended February 28, 2003, an
increase of $356 million from the six months ended February 28, 2002, primarily due to lower net income tax payments. Operating cash benefited from a decrease in net client balances (receivables, unbilled services and deferred revenue combined),
however, this was offset by reductions in accrued payroll, accounts payable and other liabilities. In the six months ended February 28, 2002, operating cash flow was significantly reduced by income tax payments related to the Companys initial
corporate tax year ended August 31, 2001 and its transition to a corporate structure on May 31, 2001. In October 2002, we paid Arthur Andersen LLP $190 million in conjunction with the termination of all services and facility contracts subsequent to
our final arbitration award in August 2000 and in settlement of all related matters with Arthur Andersen LLP and other Arthur Andersen firms. A portion of this payment reduced net cash provided by operating activities by $42 million.



Net cash used in investing activities was $20 million in the
six months ended February 28, 2003, compared with $61 million of cash used in investment activities in the prior-year period. A decrease in proceeds from sales of property and equipment was largely offset by proceeds from sales of our minority
interests in our investment portfolio in fiscal 2003 and lower capital spending on property and equipment and businesses in 2003. The reduction in capital spending for businesses reflects the acquisition of Accenture HR Services (formerly
e-peopleserve Ltd.) in the prior-year period.



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Net cash used
in financing activities was $280 million in the six months ended February 28, 2003, a decrease of $645 million from the six months ended February 28, 2002, that was primarily due to pre-incorporation earnings distributions of $764 million to our
partners in the prior-year period. For the six months ended February 28, 2003, cash used in financing activities included $301 million of Class A and Class I common share repurchases and $148 million of the $190 million payment to Arthur Andersen
LLP described above. These payments were partially offset by proceeds of $106 million from the issuance of Class A common shares under the Companys employee share purchase and employee share incentive plans and a $74 million decrease in the
restricted cash of our Share Employee Compensation Trust.



We have two syndicated credit facilities, each of $537.5 million, providing unsecured, revolving borrowing capacity for general working capital purposes. The facilities consist of 364 day and three-year committed facilities.
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 February 28, 2003, we had no borrowings under either facility and $71 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 February 28, 2003, these facilities provided for up to $384 million of local currency financing in countries that cannot readily access our syndicated facilities. We also maintain local guaranteed and non-guaranteed lines of credit. As of
February 28, 2003, amounts available under these lines of credit facilities totaled $187 million. At February 28, 2003, we had $32 million outstanding under these various facilities and $20 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 six months ended February 28, 2003 and 2002, we made $79 million and $91 million in capital expenditures, respectively,
primarily for technology assets, furniture and equipment and leasehold improvements to support our operations. We currently expect that our capital expenditures in fiscal 2003 will approximate fiscal 2002 spending levels.



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 February 28, 2003 and August 31, 2002, $298 million and $265 million were outstanding for 32 and 25 clients, respectively. As of February 28, 2003, $177 million was included in current unbilled services and $121 million
was included in non-current unbilled services. As of August 31, 2002, $159 million was included in current unbilled services and $106 million was included in non-current unbilled services on our Consolidated Balance Sheet.



Accenture SCAs shareholders equity includes
investments in Accenture Ltd Class A common shares. The Accenture share employee compensation trust (SECT) made repurchases of 4,894,800 Accenture Ltd Class A common shares totaling $79 million in the six months ended February 28, 2003.
At February 28, 2003, the SECT had an additional $6 million available for share repurchases, which is segregated as Restricted cash on the Consolidated Balance Sheet, including $5 million of additional cash received upon the settlement of
transaction fees received and expenses paid in connection with transactions undertaken by our partners under our Share Management Plan in November and December 2002. In addition, on February 26, 2003, Accenture Ltds board of directors approved
an additional contribution of up to $150 million to the SECT. Subsequently, on March 7, 2003, the Company contributed $150 million to the SECT.



In addition to our ongoing open-market share repurchases, we expect to redeem or purchase certain Class A and Class I common shares
pursuant to our Share Management Plan. In November 2002, Accenture Ltds board



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of directors granted additional discretionary authority to a committee of officers to utilize a portion of $600 million previously authorized
for acquisitions of shares from partners, former partners and their permitted transferees for acquisitions of certain Class A common shares previously awarded to employees pursuant to restricted share units issued in connection with our initial
public offering, provided appropriate local regulatory approvals are first obtained to permit such acquisitions. In January 2003, we began offering this program in most countries in which we operate, including the United States. Of the $600 million
share repurchase authorization, $154 million had been utilized and $446 million remained available for share repurchase at February 28, 2003.



On March 10, 2003, pursuant to a tender offer made to Accenture SCA Class I shareholders on February 7, 2003, Accenture SCA and its
wholly-owned subsidiary, Accenture International SARL, redeemed or purchased an aggregate of 5,731,030 Accenture SCA Class I common shares at a price of $16.29 per share. At the same time, Accenture International SARL purchased 59,359 Accenture
Canada Holdings Inc. exchangeable shares at a price of $16.29 per share. The total cash outlay for these transactions was $94,325. These transactions were undertaken pursuant to our Share Management Plan for our partners, former partners and their
permitted transferees.



Obligations and Commitments



As of February 28, 2003, we had the
following obligations and commitments to make future payments under contracts, contractual obligations and commercial commitments:



|                                     |  | Payments due by period
|------------------------------------ |  | ----------------------
|Contractual Cash Obligations         |  | Total                 
|                                     |  | (in thousands)        
|Long-term debt                       |  | $                     
|Operating leases                     |  |                       
|Training facility services agreement |  |                       
|Retirement obligations               |  |                       



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, 2002, see Quantitative and Qualitative Disclosures about
Market Risk in Part II, Item 7A, Managements Discussion and Analysis of Financial Condition and Results of Operations, of the Companys Annual Report on Form 10-K for the fiscal year then ended. During the six months
ended February 28, 2003, there were no material changes in our market risk exposure.



Newly Issued Accounting Standards



In June 2002, the FASB issued SFAS 146,Accounting for Costs Associated with Exit or Disposal Activities. Exit or disposal activities addressed by the standard include one-time involuntary employee termination
benefits, contract termination costs and costs to consolidate facilities or relocate employees. SFAS 146 requires that a liability for costs associated with exit or disposal activities to be recognized and measured at fair value only when the
liability has been incurred, generally the communication date for one-time termination benefits and the contract termination or cease use date for contract costs. The provisions of SFAS 146 are effective for exit or disposal
activities that are initiated after December 31, 2002, and thus we adopted SFAS 146 on January 1, 2003. The adoption of SFAS 146 did not materially affect our results of operations or financial condition.



In November 2002, the Emerging Issues Task Force issued a
final consensus on Issue 00-21: Accounting for Revenue Arrangements with Multiple Deliverables. 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



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effective prospectively for arrangements entered into in fiscal periods beginning after June 15, 2003. Companies may also elect to apply the
provisions of Issue 00-21 to existing arrangements and record the income statement impact as the cumulative effect of a change in accounting principle. We currently intend to adopt Issue 00-21 prospectively for contracts beginning after September 1,
2003. We are evaluating Issue 00-21 to determine its impact, if any, on our results of operations.



ITEM 4.    
CONTROLS AND PROCEDURES



(a) Based on their evaluation as of a date within 90 days of the filing date of this Quarterly Report on Form 10-Q, the chief executive officer and the chief financial officer of Accenture have concluded that Accentures
disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the Exchange Act)) are effective to ensure that information required to be disclosed by Accenture in reports that
it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.



(b) Based on the current knowledge of the chief executive officer and chief financial officer of Accenture,
including information from recent inquiries of officers responsible for establishing and maintaining disclosure controls and procedures and other personnel, there have been no significant changes made, or significant deficiencies or material
weaknesses identified in Accentures internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation identified in the previous paragraph. 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 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. In March 2003, we entered into extensions of these tolling agreements in order to permit the settlement described below to be
completed and approved. 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. Although we were not a party to this agreement, we have confirmed that, under the terms of the proposed settlement with the class plaintiffs, Accenture will be released from all claims that were brought, or might have been brought, by
these plaintiff groups once the settlement is finally approved by the court. The settlement is subject to normal contingencies, including the negotiation of a definitive agreement and final approval by the federal court in Houston.



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 2.    
CHANGES IN SECURITIES AND USE OF PROCEEDS



On December 13, 2002 and January 13, January 19 and February 21, 2003, Accenture SCA and its subsidiaries transferred an aggregate of 7,662,514 Class I common shares to Accenture Ltd in connection with



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the issuance by Accenture Ltd of 7,662,514 of its Class A common shares. These Class I common shares were transferred in reliance on the
exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended, on the basis that the transaction did not involve any public officering.



ITEM 6.    
EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibit Index:
|--- |  | --------------



|99.1 |  | 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).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|99.2 |  | 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 February 28, 2003, no report on Form 8-K was filed by the Registrant.



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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 April 14, 2003 by the undersigned, thereunto duly authorized.



ACCENTURE SCA, represented by its general partner, Accenture
Ltd, itself represented by its duly authorized signatory/S/    HARRY L.
YOUName:    Harry L. You




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CHIEF EXECUTIVE OFFICER CERTIFICATION



I, Joe W. Forehand, Chief Executive Officer and Chairman of the Board of
Accenture Ltd, the general partner of Accenture SCA, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Accenture SCA (the Registrant);
| | -- |  | ---------------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The Registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the Registrant and we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the Registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The Registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrants auditors and the audit committee
of Registrants board of directors (or persons performing the equivalent function):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrants ability to record, process, summarize
and report financial data and have identified for the Registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The Registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



/s/    JOE W.
FOREHANDChief Executive Officer and Chairman of the Board (principal executive officer)




Dated: April 14, 2003



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CHIEF FINANCIAL OFFICER CERTIFICATION



I, Harry L. You, Chief Financial Officer of Accenture Ltd, the general partner
of Accenture SCA, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Accenture SCA (the Registrant);
| | -- |  | ---------------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The Registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the Registrant and we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the Registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | Registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrants auditors and the audit committee of
Registrants board of directors (or persons performing the equivalent function):
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrants ability to record, process, summarize
and report financial data and have identified for the Registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The Registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



/s/    HARRY L. YOUChief Financial Officer (principal financial and accounting officer)




Dated: April 14, 2003









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