##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 
 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 MAY 31, 2005 OR   ̈
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM  TO Commission File Number: 000-49713 
 ACCENTURE SCA (Exact name of Registrant as specified in its charter)
 Luxembourg
(State or other jurisdiction of
incorporation or organization)
    
    98-0351796
(I.R.S. Employer
Identification No.)
 46A, Avenue J.F. Kennedy
L-1855 Luxembourg
(Address of principal executive offices) (352) 26 42 35 00
(Registrants telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes x No  ̈ Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes x No  ̈ The number of the Registrants Class I common shares, par value 1.25 per share, outstanding as of
July 1, 2005 was 319,911,299.




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##### 



ACCENTURE SCA INDEX PagePart I.
    
    Financial Information
    
    
    3Item 1.
    
    Financial Statements
    
    
    3Consolidated Balance Sheets as of May 31, 2005 (unaudited) and August 31, 2004
    
    
    3Consolidated Income Statements (unaudited) for the three and nine months ended May 31, 2005 and 2004
    
    
    5Consolidated Shareholders Equity and Comprehensive Income Statements (unaudited) for the nine months ended May 31, 2005
    
    
    6Consolidated Cash Flows Statements (unaudited) for the nine months ended May 31, 2005 and 2004
    
    
    7Notes to Consolidated Financial Statements (unaudited)
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4.
    
    Controls and Procedures
    
    
    31Part II.
    
    Other Information
    
    
    32Item 1.
    
    Legal Proceedings
    
    
    32Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds; Issuer Purchases of Equity Securities
    
    
    33Item 3.
    
    Defaults upon Senior Securities
    
    
    33Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    33Item 5.
    
    Other Information
    
    
    33Item 6.
    
    Exhibits
    
    
    34Signatures
 2




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##### 



PART I  FINANCIAL INFORMATION 
 ITEM 1. FINANCIAL STATEMENTSACCENTURE SCA 
 CONSOLIDATED BALANCE SHEETS May 31, 2005 and August 31, 2004
(In thousands of U.S. dollars, except share and per share amounts)
 May 31,
    
    
    August 31,2005
    
    
    2004(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,773,031
    
    
    $
    2,552,958Short-term investments
    
    
    422,397
    
    
    
    285,288Receivables from clients, net of allowances of $41,454 and $40,687
    
    
    1,884,160
    
    
    
    1,662,211Unbilled services
    
    
    1,441,493
    
    
    
    1,049,870Deferred income taxes, net
    
    
    64,204
    
    
    
    105,636Other current assets
    
    
    481,509
    
    
    
    501,231Total current assets
    
    
    7,066,794
    
    
    
    6,157,194NON-CURRENT ASSETS:Unbilled services
    
    
    402,012
    
    
    
    211,705Investments
    
    
    310,174
    
    
    
    340,121Property and equipment, net of accumulated depreciation of $1,346,629 and $1,219,500
    
    
    669,086
    
    
    
    643,946Goodwill
    
    
    235,308
    
    
    
    214,482Deferred income taxes, net
    
    
    259,892
    
    
    
    309,045Other non-current assets
    
    
    136,862
    
    
    
    136,991Total non-current assets
    
    
    2,013,334
    
    
    
    1,856,290TOTAL ASSETS
    
    $
    9,080,128
    
    
    $
    8,013,484LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term bank borrowings
    
    $
    11,152
    
    
    $
    20,103Current portion of long-term debt
    
    
    14,724
    
    
    
    16,612Accounts payable
    
    
    802,878
    
    
    
    523,931Deferred revenues
    
    
    1,367,340
    
    
    
    980,461Accrued payroll and related benefits
    
    
    1,444,242
    
    
    
    1,508,126Income taxes payable
    
    
    827,669
    
    
    
    795,948Deferred income taxes, net
    
    
    44,650
    
    
    
    42,744Other accrued liabilities
    
    
    505,934
    
    
    
    550,864Total current liabilities
    
    
    5,018,589
    
    
    
    4,438,789NON-CURRENT LIABILITIES:Long-term debt
    
    
    45,638
    
    
    
    32,161Retirement obligation
    
    
    550,583
    
    
    
    532,307Deferred income taxes, net
    
    
    20,650
    
    
    
    18,769Other non-current liabilities
    
    
    589,609
    
    
    
    578,689Total non-current liabilities
    
    
    1,206,480
    
    
    
    1,161,926MINORITY INTEREST
    
    
    57,511
    
    
    
    37,679SHAREHOLDERS EQUITY:Class I common shares, par value 1.25 euros per share, 19,782,549,738 shares
authorized, 753,843,192 issued as of May 31, 2005 and August 31, 2004
    
    
    845,307
    
    
    
    845,307Class I-A common shares, par value 1.25 euros per share, 5,000,000 shares
authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-B common shares, par value 1.25 euros per share, 5,000,000 shares
authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-C common shares, par value 1.25 euros per share, 10,000,000 shares
authorized, issued and outstanding
    
    
    10,870
    
    
    
    10,870Class I-D common shares, par value 1.25 euros per share, 10,000,000 shares
authorized, issued and outstanding
    
    
    10,870
    
    
    
    10,870Class I-E common shares, par value 1.25 euros per share, 15,000,000 shares
authorized, issued and outstanding
    
    
    16,304
    
    
    
    16,304Class I-F common shares, par value 1.25 euros per share, 15,000,000 shares
authorized, issued and outstanding
    
    
    16,304
    
    
    
    16,304Class I-G common shares, par value 1.25 euros per share, 20,000,000 shares
authorized, issued and outstanding
    
    
    21,739
    
    
    
    21,739Class I-H common shares, par value 1.25 euros per share, 25,000,000 shares
authorized, issued and outstanding
    
    
    27,174
    
    
    
    27,174Class I-I common shares, par value 1.25 euros per share, 5,000,000 shares
authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-J common shares, par value 1.25 euros per share, 5,000,000 shares
authorized, issued and outstanding
    
    
    5,435
    
    
    
    5,435Class I-K common shares, par value 1.25 euros per share, 16,050,000 shares
authorized, issued and outstanding
    
    
    18,074
    
    
    
    18,074Class I-L common shares, par value 1.25 euros per share, 5,025,720 shares
authorized, issued and outstanding
    
    
    5,540
    
    
    
    5,540
 3




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##### 



May 31,
    
    
    August 31,2005
    
    
    2004(Unaudited)Class I-M common shares, par value 1.25 euros per share, 68,626,707 shares
authorized, issued and outstanding
    
    
    78,398
    
    
    
    78,398Class I-N common shares, par value 1.25 euros per share, 12,747,835 shares
authorized, issued and outstanding
    
    
    18,301
    
    
    
    18,301Class II common shares, par value 1.25 euros per share, 20,000,000,000 shares
authorized, 470,958,308 shares issued and outstanding
    
    
    529,281
    
    
    
    529,281Restricted share units (related to Accenture Ltd Class A common shares), 33,479,258
and 28,278,704 units issued and outstanding as of May 31, 2005 and August 31, 2004,
respectively
    
    
    623,865
    
    
    
    475,240Deferred compensation
    
    
    (256,580
    )
    
    
    (150,777
    )Additional paid-in capital
    
    
    2,972,051
    
    
    
    2,976,655Treasury shares, at cost, 111,026,932 and 83,869,278 Class I common shares at May
31, 2005 and August 31, 2004, respectively
    
    
    (2,601,542
    )
    
    
    (1,898,744
    )Investment in Accenture Ltd shares, at cost, 1,880,245 and 1,421,944 shares at May
31, 2005 and August 31, 2004, respectively
    
    
    (46,693
    )
    
    
    (35,697
    )Retained earnings (deficit)
    
    
    600,090
    
    
    
    (497,729
    )Accumulated other comprehensive loss
    
    
    (113,545
    )
    
    
    (113,760
    )Total shareholders equity
    
    
    2,797,548
    
    
    
    2,375,090TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    9,080,128
    
    
    $
    8,013,484
 The accompanying Notes are an integral part of these Consolidated Financial Statements. 4




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##### 



ACCENTURE SCA 
 CONSOLIDATED INCOME STATEMENTS For the Three and Nine Months Ended May 31, 2005 and 2004
(In thousands of U.S. dollars)
(Unaudited)
 Three Months Ended May 31,
    
    
    Nine Months Ended May 31,2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUES:Revenues before reimbursements
    
    $
    4,078,573
    
    
    $
    3,686,662
    
    
    $
    11,622,450
    
    
    $
    10,250,456Reimbursements
    
    
    419,037
    
    
    
    363,579
    
    
    
    1,162,916
    
    
    
    1,056,577Revenues
    
    
    4,497,610
    
    
    
    4,050,241
    
    
    
    12,785,366
    
    
    
    11,307,033OPERATING EXPENSES:Cost of services:Cost of services before reimbursable expenses
    
    
    2,669,056
    
    
    
    2,379,787
    
    
    
    7,823,445
    
    
    
    6,743,224Reimbursable expenses
    
    
    419,037
    
    
    
    363,579
    
    
    
    1,162,916
    
    
    
    1,056,577Cost of services
    
    
    3,088,093
    
    
    
    2,743,366
    
    
    
    8,986,361
    
    
    
    7,799,801Sales and marketing
    
    
    421,238
    
    
    
    391,233
    
    
    
    1,157,100
    
    
    
    1,100,492General and administrative costs
    
    
    382,430
    
    
    
    340,549
    
    
    
    1,134,723
    
    
    
    996,038Reorganization
(benefits) costs and restructuring costs
    
    
    (66,099
    )
    
    
    1,936
    
    
    
    (94,868
    )
    
    
    22,976Total operating expenses
    
    
    3,825,662
    
    
    
    3,477,084
    
    
    
    11,183,316
    
    
    
    9,919,307OPERATING INCOME
    
    
    671,948
    
    
    
    573,157
    
    
    
    1,602,050
    
    
    
    1,387,726Gain on investments, net
    
    
    4,672
    
    
    
    337
    
    
    
    19,305
    
    
    
    4,167Interest income
    
    
    29,075
    
    
    
    16,436
    
    
    
    77,259
    
    
    
    42,046Interest expense
    
    
    (6,373
    )
    
    
    (5,403
    )
    
    
    (18,989
    )
    
    
    (16,970
    )Other (expense) income
    
    
    (10,919
    )
    
    
    (18,705
    )
    
    
    (16,092
    )
    
    
    586Equity in losses of affiliates
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    (1,272
    )INCOME BEFORE INCOME TAXES
    
    
    688,403
    
    
    
    565,752
    
    
    
    1,663,533
    
    
    
    1,416,283Provision for income taxes
    
    
    202,392
    
    
    
    196,883
    
    
    
    517,359
    
    
    
    492,867INCOME BEFORE MINORITY INTEREST
    
    
    486,011
    
    
    
    368,869
    
    
    
    1,146,174
    
    
    
    923,416Minority interest held by Accenture Canada
    
    
    (2,442
    )
    
    
    (2,208
    )
    
    
    (5,873
    )
    
    
    (6,002
    )Minority interest  other
    
    
    (2,054
    )
    
    
    (1,021
    )
    
    
    (5,789
    )
    
    
    (994
    )NET INCOME
    
    $
    481,515
    
    
    $
    365,640
    
    
    $
    1,134,512
    
    
    $
    916,420
 The accompanying Notes are an integral part of these Consolidated Financial Statements. 5




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##### 



ACCENTURE SCA 
 CONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME STATEMENTS For the Nine Months Ended May 31, 2005
(In thousands of U.S. dollars and in thousands of share amounts)
(Unaudited)
 RestrictedShare Units (Relatedto Accenture LtdClass I Common
    
    
    Class II Common
    
    
    Class A Common
    
    
    
    
    
    
    
    
    
    
    
    
    Investment in
    
    
    
    
    
    AccumulatedShares
    
    
    Shares
    
    
    Shares)
    
    
    
    
    
    Additional
    
    
    Treasury Shares
    
    
    Accenture Ltd.
    
    
    Retained
    
    
    Other$
    
    
    No.Shares
    
    
    $
    
    
    No.Shares
    
    
    $
    
    
    No.Shares
    
    
    DeferredCompensation
    
    
    Paid-inCapital
    
    
    $
    
    
    No.Shares
    
    
    $
    
    
    No.Shares
    
    
    Earnings(Deficit)
    
    
    ComprehensiveIncome (Loss)
    
    
    TotalBalance at August 31, 2004
    
    $
    1,090,621
    
    
    
    971,294
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    475,240
    
    
    
    28,279
    
    
    $
    (150,777
    )
    
    $
    2,976,655
    
    
    $
    (1,898,744
    )
    
    
    (83,869
    )
    
    $
    (35,697
    )
    
    
    (1,422
    )
    
    $
    (497,729
    )
    
    $
    (113,760
    )
    
    $
    2,375,090Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,134,512
    
    
    
    
    
    
    
    1,134,512Other comprehensive income:Unrealized losses on marketable
securities, net of reclassification
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,776
    )
    
    
    (1,776
    )Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,991
    
    
    
    1,991Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    215Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,134,727Income tax benefit on:Stock-based compensation plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,655
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,655Costs related to issuance of shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,846
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,846Purchases of Accenture Class A common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,901
    )
    
    
    
    
    
    
    
    
    
    
    (10,996
    )
    
    
    (458
    )
    
    
    
    
    
    
    
    
    
    
    (18,897
    )Grants of restricted share units, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    166,697
    
    
    
    6,276
    
    
    
    (166,697
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,894
    
    
    
    458
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,352Purchase/redemption of Accenture SCA Class
I common shares and Accenture Canada
Holdings Inc. exchangeable shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,940
    )
    
    
    (1,023,395
    )
    
    
    (41,713
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,038,335
    )Issuance of Class A common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,023
    )
    
    
    196,343
    
    
    
    8,543
    
    
    
    
    
    
    
    
    
    
    
    (19,682
    )
    
    
    
    
    
    
    168,638Employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,746
    )
    
    
    103,066
    
    
    
    5,052
    
    
    
    
    
    
    
    
    
    
    
    (16,518
    )
    
    
    
    
    
    
    74,802Restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,072
    )
    
    
    (1,076
    )
    
    
    
    
    
    
    (2,623
    )
    
    
    21,188
    
    
    
    960
    
    
    
    
    
    
    
    
    
    
    
    (493
    )
    
    
    
    
    
    
    Transaction fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,209
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,209Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,461
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,461Balance at May 31, 2005
    
    $
    1,090,621
    
    
    
    971,294
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    623,865
    
    
    
    33,479
    
    
    $
    (256,580
    )
    
    $
    2,972,051
    
    
    $
    (2,601,542
    )
    
    
    (111,027
    )
    
    $
    (46,693
    )
    
    
    (1,880
    )
    
    $
    600,090
    
    
    $
    (113,545
    )
    
    $
    2,797,548
 The accompanying Notes are an integral part of these Consolidated Financial Statements. 6




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##### 



ACCENTURE SCA 
 CONSOLIDATED CASH FLOWS STATEMENTS For the Nine Months Ended May 31, 2005 and 2004
(In thousands of U.S. dollars)
(Unaudited)
 2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,134,512
    
    
    $
    916,420Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization
    
    
    206,989
    
    
    
    197,958Reorganization benefits
    
    
    (94,868
    )
    
    
    (84,280
    )Gains on investments, net
    
    
    (19,305
    )
    
    
    (4,167
    )Losses on disposal of property and equipment, net
    
    
    4,268
    
    
    
    7,560Stock-based compensation expense
    
    
    61,352
    
    
    
    47,126Deferred income taxes, net
    
    
    97,622
    
    
    
    9,972Minority interest
    
    
    11,662
    
    
    
    6,996Other items, net
    
    
    (574
    )
    
    
    7,225Change in assets and liabilities Increase in receivables from clients, net
    
    
    (167,561
    )
    
    
    (13,406
    )Decrease (increase) in other current assets
    
    
    22,202
    
    
    
    (28,741
    )Increase in unbilled services, current and non-current
    
    
    (609,393
    )
    
    
    (343,619
    )Increase in other non-current assets
    
    
    (9,988
    )
    
    
    (53,462
    )Increase (decrease) in accounts payable
    
    
    235,924
    
    
    
    (54,335
    )Increase in deferred revenues
    
    
    413,076
    
    
    
    207,470(Decrease) increase in accrued payroll and related benefits
    
    
    (85,524
    )
    
    
    317,817Increase in income taxes payable
    
    
    52,898
    
    
    
    266,432Increase in other accrued liabilities
    
    
    31,315
    
    
    
    93,487Increase (decrease) in other non-current liabilities
    
    
    35,316
    
    
    
    (133,819
    )Net cash provided by operating activities
    
    
    1,319,923
    
    
    
    1,362,634CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of available-for-sale investments
    
    
    772,306
    
    
    
    210,599Purchases of available-for-sale investments
    
    
    (852,804
    )
    
    
    (815,294
    )Proceeds from sales of property and equipment
    
    
    3,270
    
    
    
    4,618Purchases of property and equipment
    
    
    (186,513
    )
    
    
    (179,891
    )Purchases of businesses and investments, net of cash acquired
    
    
    (6,865
    )
    
    
    (17,950
    )Net cash used in investing activities
    
    
    (270,606
    )
    
    
    (797,918
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payment of retirement benefits to former pre-incorporation partners
    
    
    (10,859
    )
    
    
    (13,194
    )Proceeds from issuance of common shares
    
    
    251,649
    
    
    
    2,661,691Purchase of common shares
    
    
    (1,070,798
    )
    
    
    (2,141,275
    )Proceeds from issuance of long-term debt
    
    
    5,388
    
    
    
    435Repayments of long-term debt
    
    
    (8,444
    )
    
    
    (2,553
    )Proceeds from issuance of short-term bank borrowings
    
    
    39,198
    
    
    
    89,659Repayments of short-term bank borrowings
    
    
    (51,102
    )
    
    
    (86,225
    )Decrease in restricted cash of Accenture Share Employee Compensation Trust
    
    
    
    
    
    
    83,280Net cash (used in) provided by financing activities
    
    
    (844,968
    )
    
    
    591,818Effect of exchange rate changes on cash and cash equivalents
    
    
    15,724
    
    
    
    25,952NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    220,073
    
    
    
    1,182,486CASH AND CASH EQUIVALENTS,beginning of period
    
    
    2,552,958
    
    
    
    2,332,161CASH AND CASH EQUIVALENTS,end of period
    
    $
    2,773,031
    
    
    $
    3,514,647
 The accompanying Notes are an integral part of these Consolidated Financial Statements. 7




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##### 



ACCENTURE SCA 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands of U.S. Dollars, except share and per 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 (the 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 Consolidated
Financial Statements should therefore be read in conjunction with the Consolidated Financial
Statements and Notes thereto for the fiscal year ended August 31, 2004 included in the Companys
Annual Report on Form 10-K filed with the SEC on November 5, 2004. 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 nine months ended
May 31, 2005 are not necessarily indicative of the results that may be expected for the fiscal year
ending August 31, 2005. Certain prior-period amounts have been reclassified to conform to the
current-period presentation. 2. PRO FORMA IMPACT OF EMPLOYEE STOCK OPTIONS AND SHARE PURCHASE PLANS Accenture follows the intrinsic value method in accordance with Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees(APB No. 25), to account for its
employee stock options and share purchase rights. Accordingly, no compensation expense is
recognized for share purchase rights granted in connection with the issuance of stock options under
the Companys employee share incentive plan and through its employee share purchase plan; however,
compensation expense is recognized in connection with the issuance of restricted share units
granted under the Companys share incentive plan. In December 2004, the Financial Accounting
Standards Board issued Statement of Accounting Standards No. 123R, Share-Based Payment(SFAS No.
123R). This Statement is a revision of SFAS No. 123, Accounting for Stock-Based Compensation
(SFAS No. 123), and supersedes APB No. 25 and its related implementation guidance. Beginning
September 1, 2005, Accenture will be required to record compensation expense for its employee stock
options and share purchase rights in accordance with SFAS No. 123R. Had compensation expense for employee stock options granted under the Companys share
incentive plan and for employee share purchase rights under its share purchase plan been determined
based on fair value at the grant date consistent with SFAS
No. 123, with stock options expensed
using the accelerated expense attribution method, the Companys net income would have been reduced to the pro forma amounts indicated below: Three Months Ended May 31,
    
    
    Nine Months Ended May 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income as reported
    
    $
    481,515
    
    
    $
    365,640
    
    
    $
    1,134,512
    
    
    $
    916,420Add: Stock-based compensation expense already included in
net income as reported, net of tax and minority interest
    
    
    21,123
    
    
    
    13,760
    
    
    
    55,713
    
    
    
    42,464Deduct: Pro forma employee compensation cost related to
stock options, restricted share units and employee share
purchase plan, net of tax and minority interest
    
    
    (67,252)
    
    
    
    (35,986
    )
    
    
    (159,162)
    
    
    
    (116,377
    )Subtotal
    
    
    (46,129)
    
    
    
    (22,226
    )
    
    
    (103,449)
    
    
    
    (73,913
    )Pro forma net income
    
    $
    435,386
    
    
    $
    343,414
    
    
    $
    1,031,063
    
    
    $
    842,507
 8




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued) (In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
 3. RESTRUCTURING AND REORGANIZATION Restructuring In fiscal 2002, Accenture recognized restructuring costs of $110,524 (Fiscal 2002
Restructuring) related to a global consolidation of office space, consisting of $67,112 to
consolidate various locations and $43,412 to abandon the related fixed assets. In the second quarter of fiscal 2004, Accenture recognized restructuring costs of $107,256
(Fiscal 2004 Restructuring), primarily in the United States and the United Kingdom, consisting of
$89,331 to consolidate various locations and $17,925 to abandon the related fixed assets. The
Fiscal 2004 Restructuring costs were allocated to the reportable operating segments as follows:
$26,952 to Communications & High Tech; $23,579 to Financial Services; $15,774 to Government;
$23,491 to Products; and $17,460 to Resources. The Companys restructuring activity is as follows: Three Months Ended May 31, 2005
    
    
    Nine Months Ended May 31, 2005Fiscal 2004
    
    
    Fiscal 2002
    
    
    Fiscal 2004
    
    
    Fiscal 2002Restructuring
    
    
    Restructuring
    
    
    Restructuring
    
    
    RestructuringRestructuring liability balance, beginning of period
    
    $
    71,645
    
    
    $
    15,428
    
    
    $
    78,756
    
    
    $
    24,005Payments made
    
    
    (2,287
    )
    
    
    (2,169
    )
    
    
    (12,425
    )
    
    
    (10,081
    )Other(1)
    
    
    (4,611
    )
    
    
    (538
    )
    
    
    (1,584
    )
    
    
    (1,203
    )Restructuring liability, end of period
    
    $
    64,747
    
    
    $
    12,721
    
    
    $
    64,747
    
    
    $
    12,721
 
 (1)
    
    Other represents foreign currency translation, imputed interest and immaterial changes in
lease estimates. The restructuring liabilities at May 31, 2005 were $77,468, of which $18,110 was included
in other accrued liabilities and $59,358 was included in other non-current liabilities. The
recorded liabilities represent the net present value of the estimated remaining obligations related
to existing operating leases. Other than immaterial changes in lease estimates, there have been no
adjustments to the original liabilities recorded, and Accenture does not expect to make future
material adjustments. Reorganization In fiscal 2001, Accenture recognized reorganization liabilities in connection with its
transition to a corporate structure. Favorable final determinations of certain reorganization
liabilities accrued in 2001 resulted in net benefits in our Consolidated Income Statement for the
three and nine months ended May 31, 2005. Interest related to reorganization liabilities is
included in net reorganization benefit/expense. The Companys reorganization activity for the
period is as follows: Three Months Ended May 31,
    
    
    Nine Months Ended May 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Reorganization liability balance, beginning of period
    
    $
    467,827
    
    
    $
    461,963
    
    
    $
    454,042
    
    
    $
    510,149Net (benefit) expense recorded
    
    
    (66,099
    )
    
    
    1,936
    
    
    
    (94,868
    )
    
    
    (84,280
    )Foreign currency translation
    
    
    (21,653
    )
    
    
    (19,365
    )
    
    
    20,901
    
    
    
    18,665Reorganization liability, end of period
    
    $
    380,075
    
    
    $
    444,534
    
    
    $
    380,075
    
    
    $
    444,534
 The reorganization liabilities at May 31, 2005 were $380,075, of which $78,017 was included in
other accrued liabilities, because final determinations could occur within 12 months, and $302,058
was included in other non-current liabilities. 9




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued) (In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
 4. ACCUMULATED OTHER COMPREHENSIVE LOSS The components of Accumulated other comprehensive loss are as follows: May 31,
    
    
    August 31,2005
    
    
    2004Foreign currency translation adjustments
    
    $
    (20,761
    )
    
    $
    (22,752
    )Unrealized (losses) gains on marketable securities, net of reclassification adjustments
    
    
    (1,252
    )
    
    
    524Minimum pension liability adjustments, net of tax
    
    
    (91,532
    )
    
    
    (91,532
    )Accumulated other comprehensive loss
    
    $
    (113,545
    )
    
    $
    (113,760
    )
 Comprehensive income is as follows: May 31,
    
    
    May 31,2005
    
    
    2004Three months ended
    
    $
    418,309
    
    
    $
    329,471Nine months ended
    
    
    1,134,727
    
    
    
    947,102
 5. GOODWILL The changes in the carrying amount of goodwill by reportable operating segment for the nine months ended
May 31, 2005 are as follows: Foreign currencyBalance at
    
    
    Additions/
    
    
    translation
    
    
    Balance atAugust 31, 2004
    
    
    Adjustments
    
    
    adjustments
    
    
    May 31, 2005Communications & High Tech
    
    $
    70,949
    
    
    $
    3,817
    
    
    $
    (819
    )
    
    $
    73,947Financial Services
    
    
    43,668
    
    
    
    8,743
    
    
    
    (377
    )
    
    
    52,034Government
    
    
    23,242
    
    
    
    2,045
    
    
    
    (164
    )
    
    
    25,123Products
    
    
    46,402
    
    
    
    5,935
    
    
    
    (403
    )
    
    
    51,934Resources
    
    
    30,221
    
    
    
    2,295
    
    
    
    (246
    )
    
    
    32,270Total
    
    $
    214,482
    
    
    $
    22,835
    
    
    $
    (2,009
    )
    
    $
    235,308
 6. PROFIT SHARING AND RETIREMENT PLANS In the United States and certain other countries, Accenture maintains and administers
retirement plans and postretirement medical plans for certain active, retired and resigned
Accenture employees. The components of net periodic pension and postretirement expense are as
follows: Pension BenefitsThree Months Ended May 31,2005
    
    
    2004Non-U.S.
    
    
    
    
    
    
    Non-U.S.Components of pension expense
    
    U.S. Plans
    
    
    Plans
    
    
    U.S. Plans
    
    
    PlansService cost
    
    $
    14,003
    
    
    $
    12,430
    
    
    $
    11,312
    
    
    $
    10,805Interest cost
    
    
    8,794
    
    
    
    4,739
    
    
    
    9,065
    
    
    
    2,578Expected return on plan assets
    
    
    (10,723
    )
    
    
    (3,892
    )
    
    
    (6,184
    )
    
    
    (1,894
    )Amortization of transitional obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51
    )Amortization of loss (gain)
    
    
    3,360
    
    
    
    (247
    )
    
    
    5,169
    
    
    
    502Amortization of prior service cost
    
    
    324
    
    
    
    301
    
    
    
    618
    
    
    
    22Total
    
    $
    15,758
    
    
    $
    13,331
    
    
    $
    19,980
    
    
    $
    11,962
 10




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued) (In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
 Pension BenefitsNine Months Ended May 31,2005
    
    
    2004Non-U.S.
    
    
    
    
    
    
    Non-U.S.Components of pension expense
    
    U.S. Plans
    
    
    Plans
    
    
    U.S. Plans
    
    
    PlansService cost
    
    $
    42,003
    
    
    $
    35,813
    
    
    $
    33,936
    
    
    $
    24,789Interest cost
    
    
    26,385
    
    
    
    13,476
    
    
    
    27,195
    
    
    
    8,693Expected return on plan assets
    
    
    (32,169
    )
    
    
    (10,940
    )
    
    
    (18,552
    )
    
    
    (5,419
    )Amortization of transitional obligation
    
    
    
    
    
    
    269
    
    
    
    
    
    
    
    (162
    )Amortization of loss (gain)
    
    
    10,080
    
    
    
    (782
    )
    
    
    15,507
    
    
    
    796Amortization of prior service cost
    
    
    969
    
    
    
    893
    
    
    
    1,854
    
    
    
    67Special termination benefits charge
    
    
    
    
    
    
    341
    
    
    
    
    
    
    
    Total
    
    $
    47,268
    
    
    $
    39,070
    
    
    $
    59,940
    
    
    $
    28,764
 Postretirement BenefitsThree Months Ended May 31,2005
    
    
    2004Non-U.S.
    
    
    
    
    
    
    Non-U.S.Components of postretirement expense
    
    U.S. Plans
    
    
    Plans
    
    
    U.S. Plans
    
    
    PlansService cost
    
    $
    1,774
    
    
    $
    411
    
    
    $
    1,816
    
    
    $
    449Interest cost
    
    
    1,385
    
    
    
    444
    
    
    
    1,292
    
    
    
    420Expected return on plan assets
    
    
    (335
    )
    
    
    
    
    
    
    (356
    )
    
    
    Amortization of transitional obligation
    
    
    20
    
    
    
    
    
    
    
    20
    
    
    
    (6
    )Amortization of loss
    
    
    373
    
    
    
    24
    
    
    
    600
    
    
    
    17Amortization of prior service cost
    
    
    (199
    )
    
    
    (65
    )
    
    
    (200
    )
    
    
    Total
    
    $
    3,018
    
    
    $
    814
    
    
    $
    3,172
    
    
    $
    880
 Postretirement BenefitsNine Months Ended May 31,2005
    
    
    2004Non-U.S.
    
    
    
    
    
    
    Non-U.S.Components of postretirement expense
    
    U.S. Plans
    
    
    Plans
    
    
    U.S. Plans
    
    
    PlansService cost
    
    $
    5,319
    
    
    $
    1,274
    
    
    $
    5,448
    
    
    $
    1,346Interest cost
    
    
    4,152
    
    
    
    1,367
    
    
    
    3,876
    
    
    
    1,260Expected return on plan assets
    
    
    (1,002
    )
    
    
    
    
    
    
    (1,068
    )
    
    
    Amortization of transitional obligation
    
    
    60
    
    
    
    
    
    
    
    60
    
    
    
    (18
    )Amortization of loss
    
    
    1,119
    
    
    
    70
    
    
    
    1,800
    
    
    
    52Amortization of prior service cost
    
    
    (600
    )
    
    
    (133
    )
    
    
    (600
    )
    
    
    Total
    
    $
    9,048
    
    
    $
    2,578
    
    
    $
    9,516
    
    
    $
    2,640
 7. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS EQUITY On February 1, 2005, the Company and one of its subsidiaries made a tender offer to Accenture
SCA Class I common shareholders that resulted in the redemption or purchase on March 7, 2005 of an
aggregate of 18,745,917 Accenture SCA Class I common shares at a price of $26.30 per share. At the
same time, a subsidiary of the Company purchased 314,038 Accenture Canada Holdings Inc.
exchangeable shares at a price of $26.30 per share. The total cash outlay for these transactions
was $501,277. For the nine months ended May 31, 2005, the total cash outlay for Accenture SCA
Class I common shares redeemed or purchased from tender offers was $578,254 and the total cash
outlay for purchases of Accenture Canada Holdings Inc. exchangeable shares was $8,259. In addition to the tender offers, during the three and nine months ended May 31, 2005, the Company purchased and redeemed
Accenture SCA Class I common shares for aggregate purchase prices of $19,942 and $21,348, respectively. Effective as of February 18, 2005,
Accenture awarded to certain of its highest-performing partners stock options to purchase approximately
15,000,000 Accenture Ltd Class A common shares, having an aggregate fair market value, at the time of grant, of $170,000. At May 31, 2005, there was $631,106
available for open-market share purchases and $1,612,892 of previously authorized funds available for the purchase, redemption and exchange of Accenture shares held by partners, former partners, their permitted transferees and employees. 11




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued) (In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
 8. COMMITMENTS AND CONTINGENCIES Guarantees As a result of our increase in ownership of Accenture HR Services from 50 percent to 100
percent in February 2002, Accenture may be required to make up to $177,500 of additional purchase
price payments through September 30, 2008, conditional on Accenture HR Services achieving certain
levels of qualifying revenues. During the three and nine months ended May 31, 2005, Accenture made
payments of $0 and $11,310, respectively. The remaining potential liability at May 31, 2005 was
$164,470. In February 2005, Accenture signed an amendment to the Avanade Inc. stockholders agreement.
As a result of the amendment, there is no longer a fixed purchase price minimum or maximum payable
by Accenture for the Avanade Inc. shares not already owned by Accenture. Accenture now has the
right to purchase substantially all of the remaining outstanding shares of Avanade Inc. not owned
by Accenture at fair market value if certain events occur. Accenture may also be required to
purchase substantially all of the remaining outstanding shares of Avanade Inc. at fair market value
if certain events occur. Accenture has various agreements in which it may be obligated to indemnify the other parties
with respect to certain matters. Generally, these indemnification provisions are included in
contracts arising in the normal course of business under which the Company customarily agrees to
hold the indemnified party harmless against losses arising from a breach of representations related
to such matters as title to assets sold and licensed or certain intellectual property rights.
Payments by Accenture under such indemnification clauses are generally conditioned on the other
party making a claim. Such claims are typically subject to challenge by Accenture and to dispute
resolution procedures specified in the particular contract. Further, the Companys obligations
under these agreements may be limited in terms of time and/or amount and, in some instances,
Accenture may have recourse against third parties for certain payments made by the Company. It is
not possible to predict the maximum potential amount of future payments under these indemnification
agreements due to the conditional nature of Accentures obligations and the unique facts of each
particular agreement. Historically, the Company has not made any payments under these agreements
that have been material individually or in the aggregate. As of May 31, 2005, management was not
aware of any obligations arising under indemnification agreements that would require material
payments. From time to time, Accenture enters into contracts with clients whereby it has joint and
several liability with other participants and third parties providing related services and products
to clients. Under these arrangements, Accenture and other parties may assume some responsibility to
the client for the performance of others under the terms and conditions of the contract with or for
the benefit of the client. In some arrangements, the extent of Accentures obligations for the
performance of others is not expressly specified. As of May 31, 2005, Accenture estimates it had
assumed an aggregate potential liability of approximately
$1,232,905 to its clients for the
performance of others under arrangements described in this paragraph. These contracts typically
provide recourse provisions that would allow Accenture to recover from the other parties all but
approximately $119,300 if Accenture is obligated to make payments to the clients that are the
consequence of a performance default by the other parties. To date, Accenture has not been required
to make any payments under any of the contracts described in this paragraph. Legal Contingencies At May 31, 2005, Accenture or its present personnel had been named as a defendant in various
litigation matters. All of these are civil in nature. Based on the present status of these
litigation matters, the management of Accenture believes they will not ultimately have a material
effect on the results of operations, financial position or cash flows of Accenture. 9. SEGMENT REPORTING Operating segments are defined by SFAS No. 131, Disclosures about Segments of an Enterprise
and Related Information, as components of an enterprise about which separate financial information
is available that is evaluated regularly by the chief operating decision maker, or decision-making
group, in deciding how to allocate resources and in assessing performance. Accentures chief operating decision maker is its chief executive officer. The operating
segments are managed separately because each operating segment represents a strategic business unit
providing management consulting, technology and outsourcing services that serves clients in
different industries. The reportable operating segments are the five operating groups, which are Communications &
High Tech, Financial Services, Government, Products and Resources. Revenues before reimbursements
and operating income by reportable operating segment are as follows: 12




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued) (In thousands of U.S. Dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)
 Three Months Ended May 31,2005
    
    
    2004Revenues before
    
    
    
    
    
    
    Revenues beforeReimbursements
    
    
    Operating Income
    
    
    Reimbursements
    
    
    Operating IncomeCommunications & High
Tech
    
    $
    1,036,972
    
    
    $
    222,520
    
    
    $
    1,018,385
    
    
    $
    145,241Financial Services
    
    
    909,421
    
    
    
    163,218
    
    
    
    752,600
    
    
    
    106,090Government
    
    
    577,248
    
    
    
    69,181
    
    
    
    547,616
    
    
    
    110,365Products
    
    
    932,680
    
    
    
    117,381
    
    
    
    811,548
    
    
    
    141,965Resources
    
    
    620,564
    
    
    
    99,648
    
    
    
    554,620
    
    
    
    69,496Other
    
    
    1,688
    
    
    
    
    
    
    
    1,893
    
    
    
    Total
    
    $
    4,078,573
    
    
    $
    671,948
    
    
    $
    3,686,662
    
    
    $
    573,157
 Nine Months Ended May 31,2005
    
    
    2004Revenues before
    
    
    
    
    
    
    Revenues beforeReimbursements
    
    
    Operating Income
    
    
    Reimbursements
    
    
    Operating IncomeCommunications & High
Tech
    
    $
    2,991,991
    
    
    $
    510,345
    
    
    $
    2,828,207
    
    
    $
    279,761Financial Services
    
    
    2,575,450
    
    
    
    385,697
    
    
    
    2,046,180
    
    
    
    271,909Government
    
    
    1,622,162
    
    
    
    128,791
    
    
    
    1,493,761
    
    
    
    247,539Products
    
    
    2,646,272
    
    
    
    301,240
    
    
    
    2,228,075
    
    
    
    371,817Resources
    
    
    1,781,449
    
    
    
    275,977
    
    
    
    1,647,515
    
    
    
    216,700Other
    
    
    5,126
    
    
    
    
    
    
    
    6,718
    
    
    
    Total
    
    $
    11,622,450
    
    
    $
    1,602,050
    
    
    $
    10,250,456
    
    
    $
    1,387,726
 Reorganization benefits and restructuring costs were allocated to the reportable
operating segments as follows: Three Months Ended May 31,
    
    
    Nine Months Ended May 31,Income (Expense)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Communications & High Tech
    
    $
    15,493
    
    
    $
    (486
    )
    
    $
    22,649
    
    
    $
    (5,774
    )Financial Services
    
    
    15,289
    
    
    
    (420
    )
    
    
    21,837
    
    
    
    (5,088
    )Government
    
    
    9,626
    
    
    
    (272
    )
    
    
    14,171
    
    
    
    (3,364
    )Products
    
    
    15,936
    
    
    
    (437
    )
    
    
    22,383
    
    
    
    (5,034
    )Resources
    
    
    9,755
    
    
    
    (321
    )
    
    
    13,828
    
    
    
    (3,716
    )Total
    
    $
    66,099
    
    
    $
    (1,936
    )
    
    $
    94,868
    
    
    $
    (22,976
    )
 10. SUBSEQUENT EVENTS On May 4, 2005, the Company and one of its subsidiaries made a tender offer to Accenture SCA
Class I shareholders that resulted in the redemption or purchase on June 7, 2005 of an aggregate of
17,712,575 Accenture SCA Class I common shares at a price of $22.64 per share. At the same time, a
subsidiary of the Company purchased 324,287 Accenture Canada Holdings Inc. exchangeable shares at a
price of $22.64 per share. The total cash outlay for these transactions was $408,355. On June 15, 2005, Accenture acquired the net assets of Capgeminis North American Health
practice for $175,000 in cash. As a result of the acquisition, approximately 600 Capgemini
professionals have joined Accentures Products operating group in North America. The preliminary
allocation of the purchase price is expected to be completed during the fourth quarter of fiscal
2005. The pro forma effects on Accentures operations are not material. 13




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##### 



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our Consolidated
Financial Statements and related Notes included elsewhere in this Quarterly Report onForm 10-Qand
in our Annual Report onForm 10-Kfor the year ended August 31, 2004, and with the information
under the heading Managements Discussion and Analysis of Financial Condition and Results of
Operations in our Annual Report onForm 10-Kfor the year ended August 31, 2004. We use the terms Accenture, we, our Company, our and us in this report to refer to
Accenture SCA and its subsidiaries. All references to years, unless otherwise noted, refer to our
fiscal year, which ends on August 31. For example, a reference to fiscal 2004 or fiscal year
2004 means the 12-month period that ended on August 31, 2004. All references to quarters, unless
otherwise noted, refer to the quarters of our fiscal year. We use the term partner to refer to
the executive employees of Accenture with the partner title. Disclosure Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
relating to our operations, results of operations and other matters that are based on our current
expectations, estimates and projections. Words such as expects, intends, plans, projects,
believes, estimates and similar expressions are used to identify these forward-looking
statements. These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Forward-looking statements are based
upon assumptions as to future events that may not prove to be accurate. Actual outcomes and
results may differ materially from what is expressed or forecast in these forward-looking
statements. The reasons for this include changes in general economic and political conditions,
including fluctuations in currency exchange rates, and the following factors:  
    
    Our results of operations are materially affected by economic conditions, levels of business activity and rates of
change in the industries we serve.
    
    Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in
technology or if growth in the use of technology in business is not as rapid as in the past.
    
    We may face damage to our professional reputation or legal liability if our clients are not satisfied with our services.
    
    Our engagements with clients may not be profitable or may be terminated by our clients on short notice.
    
    Our global operations pose complex management, foreign currency, legal, tax and economic risks, which we may not
adequately address.
    
    The consulting, technology and outsourcing markets are highly competitive and the pace of consolidation, as well as
vertical integration, among our competitors continues to increase. As a result, we may not be able to compete effectively if
we cannot efficiently respond to these developments in a timely manner.
    
    If we are unable to attract, retain and motivate employees, we will not be able to compete effectively and will not be
able to grow our business.
    
    Our profitability will suffer if we are not able to maintain our pricing and utilization rates and control our costs. A
continuation of current pricing pressures could result in permanent changes in pricing policies and delivery capabilities.
    
    Our quarterly revenues, operating results and profitability will vary from quarter to quarter, which may result in
increased volatility of our share price.
    
    We continue to achieve greater percentages of revenues and growth through outsourcing. This strategy could result in
higher concentrations of revenues and contributions to income from a smaller number of larger clients on customized
outsourcing solutions or, in the case of more-standardized business process outsourcing services provided through our BPO
businesses, from larger portfolios of clients for whom we provide similar services and solutions utilizing standard
operating models. As our outsourcing business continues to grow, we may continue to experience increased pressure on our
overall margins, particularly during the early stages of new outsourcing contracts.
    
    On certain complex engagements where we partner with third parties, clients are increasingly demanding that we
guarantee the performance of these third parties, whom we do not control. Regardless of whether we guarantee the
performance of third parties, our own performance may nonetheless be impacted if other software or infrastructure providers
cannot deliver their contributions in a timely manner. 14




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##### 




    
    If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 or attain an
unqualified report from our independent auditors as to our internal controls as required as of the end of the current fiscal
year, our reputation, our financial results and the market price of the Accenture Ltd Class A common shares could suffer.
    
    We may experience difficulties with new business and financial systems implemented as of September 1, 2004 that could
disrupt our ability to timely and accurately process and report key components of our results of operations and financial
condition, although, to date, we have not experienced any significant difficulties.
    
    Recent tax legislation, future legislation and negative publicity related to Bermuda companies such as Accenture Ltd,
our parent, may lead to an increase in our tax burden or affect our relationships with our clients.
    
    Our services or solutions may infringe upon the intellectual property rights of others.
    
    We have only a limited ability to protect our intellectual property rights, which are important to our success.
    
    If our alliances do not succeed, we may not be successful in implementing our growth strategy.
    
    We will continue to be controlled by Accenture Ltd, which in turn may continue to be controlled by our partners, whose
interests may differ from those of our other shareholders.
    
    The share price of Accenture Ltd Class A common shares may decline due to the large number of Class A common shares
eligible for future sale.
    
    We may need additional capital in the future, and this capital may not be available to us. The raising of additional
capital may dilute shareholders ownership in us.
    
    We are registered in Luxembourg, and a significant portion of our assets is 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 year ended August 31, 2004. We
undertake no obligation to update or revise any forward-looking statements. Overview Revenues are driven by the ability of our senior executives to secure contracts for new
engagements and to deliver solutions and services that add value to our clients. Our ability to
add value to clients and therefore drive revenues depends in part on our ability to deliver
market-leading service offerings and to deploy skilled teams of professionals quickly and on a
global basis. Our results of operations are also affected by the economic conditions, levels of business
activity and rates of change in the industries we serve, as well as by the pace of technological
change and the type and level of technology spending by our clients. The ability to identify and
capitalize on these market and technological changes early in their cycles is a key driver of our
performance. The strengthening economic recovery continues to stimulate the technology spending of
many companies. We are continuing to see increasing numbers of opportunities from companies
seeking both revenue-generating and cost-cutting initiatives. We expect revenue growth rates
across our segments to continue to vary from quarter to quarter during fiscal 2005 as the economic
recovery continues to take hold at different rates in different industries and geographic markets. Revenues before reimbursements for the three and nine months ended May 31, 2005 were $4.08
billion and $11.62 billion, respectively, compared with $3.69 billion and $10.25 billion,
respectively, for the three and nine months ended May 31, 2004, increases of 11% and 13%,
respectively, in U.S. dollars and 7% and 8%, respectively, in local currency terms. Outsourcing revenues before reimbursements for the three and nine months ended May 31, 2005
were $1.58 billion and $4.44 billion, respectively, compared with $1.36 billion and $3.80 billion,
respectively, for the three and nine months ended May 31, 2004, increases  of 16% and 17%,
respectively, in U.S. dollars and 12% for both periods in local currency terms. Outsourcing
contracts typically have longer terms than consulting contracts and generally have lower gross
margins than consulting contracts, particularly in the first year. The average size of most new
outsourcing opportunities we see in the market continues to be smaller than those contracts we
executed in the first nine months of fiscal 2004. Long-term relationships with many of our clients
continue to contribute to our success in growing our outsourcing business. Long-term, complex
outsourcing contracts, including their consulting components, require ongoing review of their terms
and scope of work, in light of our clients evolving business needs and our performance
expectations. Should the size or number of modifications to these arrangements 15




---



##### 



increase, as our business continues to grow and these contracts evolve, we may experience
increased variability in expected cash flows, revenues and profitability. Consulting revenues before reimbursements for the three and nine months ended May 31, 2005
were $2.50 billion and $7.18 billion, respectively, compared with $2.33 billion and $6.45 billion,
respectively, for the three and nine months ended May 31, 2004, increases  of 7% and 11%,
respectively, in U.S. dollars and 4% and 6%, respectively, in local currency terms. As previously reported, we have certain contracts (the NHS Contracts) under which we have
been engaged to design, develop and deploy new patient administration, assessment and care systems
(the Systems) for the National Health Service in England (the NHS) and, subsequently, to
provide ongoing operational services once these Systems have been deployed. Under the NHS
Contracts, our ability to bill and collect for the unbilled services we have performed is subject
to our ability to deploy the Systems components. To date, delays in deployment have resulted in
lower-than-expected revenues, margins, billings and cash flows. We are also continuing to carry
unbilled services on the NHS Contracts in amounts significantly above our initial estimates. We have agreed with the NHS upon deployment plans through December 31, 2005. We are continuing
to work with the NHS on program plans for 2006 and beyond. We continue to expect aggregate losses
on the NHS Contracts for this fiscal year to be $110 million to $150 million, and that client
financing and other assets, net of deferred revenues, attributable to this client could total
between $400 million and $460 million by our fiscal year end. We continue to expect contract losses
for fiscal 2006, but at levels less than those expected for this fiscal year. We continue to
expect further improved performance in fiscal 2007 and the contracts to achieve expected
profitability over the remainder of their terms. The revenues and costs from the NHS Contracts are
apportioned equally between our Government and Products operating groups. As a global company, our revenues are generated in multiple currencies and may be
significantly affected by currency exchange-rate fluctuations. During the first nine months of
fiscal 2005, the strengthening of various currencies versus the U.S. dollar continued to result in
favorable currency translation and increased our reported revenues, operating expenses and
operating income. If the U.S. dollar strengthens against other currencies, the resulting
unfavorable currency translation could decrease our reported U.S. dollar revenues, operating
expenses and operating income and also result in our reported U.S. dollar revenue growth being
lower than our growth in local currency terms. The primary categories of operating expenses are 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 by non-payroll outsourcing costs. Cost of services as a percentage of revenues is
driven by the prices we obtain for our solutions and services; the chargeability, or utilization,
of our client-service workforces; and the level of non-payroll costs associated with the continuing
accelerated growth of new outsourcing contracts. Chargeability represents the percentage of our
professionals time spent on billable work. Sales and marketing expense is driven primarily by
business-development activities; the development of new service offerings; the level of
concentration of clients in a particular industry or market; and client-targeting,
image-development and brand recognition activities. General and administrative costs primarily
include costs for non-client-facing personnel, information systems and office space, which we seek
to manage at levels consistent with changes in activity levels in our business. Operating expenses
also include reorganization benefits and costs and restructuring costs, which may vary
substantially from quarter to quarter. Gross margins (revenues before reimbursements less cost of services before reimbursements) for
the three months ended May 31, 2005 was 34.6% of revenues before reimbursements, compared with
35.4% for the three months ended May 31, 2004. This decrease was due primarily to the
lower-than-expected margins attributable to delays under the NHS Contracts and a small number of
delivery inefficiencies in certain operating groups, offset by lower variable compensation expense. Our cost-management strategy continues to be to anticipate changes in demand for our services
and to identify cost-management initiatives. We aggressively plan and manage our payroll costs to
meet the anticipated demand for our services, given that payroll costs are the most significant
portion of our operating expenses. Attrition for the three months ended May 31, 2005 remained stable, at a rate comparable to
that experienced in the second quarter of fiscal 2005. We continue to add substantial numbers of
new employees and will continue to actively recruit new employees to balance our mix of skills and
resources to meet current and projected future demands, replace departing employees and expand our
global sourcing approach, which includes our network of delivery centers and other capabilities
around the world. We may need to continue to adjust compensation over the course of the year in
certain industry segments, skill sets and geographies in order to attract and retain appropriate
numbers of qualified employees. These compensation adjustments and the additional costs of
recruiting, hiring, training and assimilating increasing numbers of new employees could adversely
affect our 16




---



##### 



operating margins. Our ability to grow our business could also be adversely affected if we do
not effectively assimilate substantial numbers of new employees into our workforces. Sales and marketing and general and administrative as a percentage of revenues before
reimbursements remained flat at 20% for both the three and nine months ended May 31, 2005 and 2004. Operating income as a percentage of revenues before reimbursements remained flat at 16% for
the three months ended May 31, 2005 compared with the three months ended May 31, 2004. Excluding
the effects of reorganization, operating income as a percentage of revenues before reimbursements
for the three months ended May 31, 2005 decreased 0.7 percentage points compared with the three
months ended May 31, 2004. Operating income as a percentage of revenues before reimbursements
remained flat at 14% for the nine months ended May 31, 2005 compared with the nine months ended May
31, 2004. Excluding the effects of reorganization, operating income as a percentage of revenues
before reimbursements for the nine months ended May 31, 2005 decreased 0.8 percentage points
compared with the nine months ended May 31, 2004. New Contract Bookings and Backlog New contract bookings for the three months ended May 31, 2005 were $3,964 million, an increase
of $571 million, or 17%, over the three months ended May 31, 2004, with consulting bookings
increasing 18%, to $2,532 million, and outsourcing bookings increasing 15%, to $1,432 million. New
contract bookings for the nine months ended May 31, 2005 were $12,869 million, a decrease of $3,224
million, or 20%, from the nine months ended May 31, 2004, with consulting bookings increasing 3%
and outsourcing bookings decreasing 38%. The decreases in new contract bookings were partially
attributable to the signing of the two large NHS Contracts in the second quarter of fiscal 2004,
which significantly increased new contract bookings for the nine months ended May 31, 2004. The
size and scope of many of our new outsourcing contract bookings have decreased when compared to new
outsourcing contract bookings for the nine months ended May 31, 2004. We provide information regarding our new contract bookings because we believe doing so
provides useful trend information regarding changes in the volume of our new business over time.
However, the timing of large new contract bookings can significantly affect the level of bookings
in a particular quarter. Information regarding our new bookings is not comparable to, nor should it
be substituted for, an analysis of our revenues over time. New contract bookings include new
contracts as well as renewals, extensions and additions to existing contracts. New contract
bookings for prior-period amounts are not adjusted for currency fluctuations. The majority of our contracts are terminable by the client on short notice or without notice.
Accordingly, we do not believe it is appropriate to characterize bookings attributable to these
contracts as backlog. Normally, if a client terminates a project, the client remains obligated to
pay for commitments we have made to third parties in connection with the project, services
performed and reimbursable expenses incurred by us through the date of termination. Critical Accounting Policies and Estimates For a description of our critical accounting policies and estimates, refer to our Annual
Report on Form 10-K for the year ended August 31, 2004. Segments/Operating Groups Our five reportable operating segments are our operating groups, which are Communications &
High Tech, Financial Services, Government, Products and Resources. Operating groups are managed on
the basis of revenues before reimbursements because our management believes these are a better
indicator of operating group performance than revenues. From time to time, our operating groups
work together to sell and implement certain contracts. The resulting revenues and costs from these
contracts may be apportioned among the participating operating groups. Generally, operating
expenses for each operating group have similar characteristics and are subject to the same factors,
pressures and challenges. However, the economic environment and its effects on the industries
served by our operating groups affect revenues and operating expenses within our operating groups
to differing degrees. Decisions relating to staffing levels are not made uniformly across our
operating groups, due in part to the needs of our operating groups to tailor their workforces to
meet the specific needs of their businesses. The shift in mix toward outsourcing contracts is not
uniform among our operating groups and, consequently, neither is the impact on operating group
results caused by this shift. Local currency fluctuations also tend to affect our operating groups
differently, depending on the geographic concentrations and locations of their businesses. 17




---



##### 



Revenues for each of our operating groups, geographic regions and types of work are as
follows: Percent
    
    
    Percent of Total RevenuesIncrease
    
    
    Before Reimbursements forThree Months Ended
    
    
    Percent
    
    
    (Decrease)
    
    
    the Three Months EndedMay 31,
    
    
    Increase
    
    
    Local
    
    
    May 31,2005
    
    
    2004
    
    
    US$
    
    
    Currency
    
    
    2005
    
    
    2004(in millions)OPERATING GROUPSCommunications & High Tech
    
    $
    1,037
    
    
    $
    1,018
    
    
    
    2
    %
    
    
    (1
    %)
    
    
    26
    %
    
    
    28
    %Financial Services
    
    
    909
    
    
    
    753
    
    
    
    21
    
    
    
    16
    
    
    
    22
    
    
    
    20Government
    
    
    577
    
    
    
    548
    
    
    
    5
    
    
    
    2
    
    
    
    14
    
    
    
    15Products
    
    
    933
    
    
    
    812
    
    
    
    15
    
    
    
    11
    
    
    
    23
    
    
    
    22Resources
    
    
    621
    
    
    
    555
    
    
    
    12
    
    
    
    7
    
    
    
    15
    
    
    
    15Other
    
    
    2
    
    
    
    1
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    
    
    
    
    TOTAL Revenues Before Reimbursements
    
    
    4,079
    
    
    
    3,687
    
    
    
    11
    
    
    
    7
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    419
    
    
    
    363
    
    
    
    15TOTAL REVENUES
    
    $
    4,498
    
    
    $
    4,050
    
    
    
    11
    %GEOGRAPHYAmericas
    
    $
    1,723
    
    
    $
    1,637
    
    
    
    5
    %
    
    
    4
    %
    
    
    42
    %
    
    
    45
    %EMEA(1)
    
    
    2,086
    
    
    
    1,785
    
    
    
    17
    
    
    
    10
    
    
    
    51
    
    
    
    48Asia Pacific
    
    
    270
    
    
    
    265
    
    
    
    2
    
    
    
    
    
    
    
    7
    
    
    
    7TOTAL Revenues Before Reimbursements
    
    
    4,079
    
    
    
    3,687
    
    
    
    11
    
    
    
    7
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    419
    
    
    
    363
    
    
    
    15TOTAL REVENUES
    
    $
    4,498
    
    
    $
    4,050
    
    
    
    11
    %TYPE OF WORKConsulting
    
    $
    2,498
    
    
    $
    2,327
    
    
    
    7
    %
    
    
    4
    %
    
    
    61
    %
    
    
    63
    %Outsourcing
    
    
    1,581
    
    
    
    1,360
    
    
    
    16
    
    
    
    12
    
    
    
    39
    
    
    
    37TOTAL Revenues Before Reimbursements
    
    
    4,079
    
    
    
    3,687
    
    
    
    11
    
    
    
    7
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    419
    
    
    
    363
    
    
    
    15TOTAL REVENUES
    
    $
    4,498
    
    
    $
    4,050
    
    
    
    11
    %
 
 n/m = not meaningful
(1) EMEA includes Europe, the Middle East and Africa. 18




---



##### 



Percent of Total RevenuesPercent
    
    
    Before Reimbursements forNine Months Ended
    
    
    Percent
    
    
    Increase
    
    
    the Nine Months EndedMay 31,
    
    
    Increase
    
    
    Local
    
    
    May 31,2005
    
    
    2004
    
    
    US$
    
    
    Currency
    
    
    2005
    
    
    2004(in millions)OPERATING GROUPSCommunications & High Tech
    
    $
    2,992
    
    
    $
    2,828
    
    
    
    6
    %
    
    
    2
    %
    
    
    26
    %
    
    
    28
    %Financial Services
    
    
    2,576
    
    
    
    2,046
    
    
    
    26
    
    
    
    19
    
    
    
    22
    
    
    
    20Government
    
    
    1,622
    
    
    
    1,494
    
    
    
    9
    
    
    
    5
    
    
    
    14
    
    
    
    14Products
    
    
    2,646
    
    
    
    2,228
    
    
    
    19
    
    
    
    14
    
    
    
    23
    
    
    
    22Resources
    
    
    1,781
    
    
    
    1,648
    
    
    
    8
    
    
    
    3
    
    
    
    15
    
    
    
    16Other
    
    
    5
    
    
    
    6
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    
    
    
    
    TOTAL Revenues Before Reimbursements
    
    
    11,622
    
    
    
    10,250
    
    
    
    13
    
    
    
    8
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    1,163
    
    
    
    1,057
    
    
    
    10TOTAL REVENUES
    
    $
    12,785
    
    
    $
    11,307
    
    
    
    13
    %GEOGRAPHYAmericas
    
    $
    4,807
    
    
    $
    4,630
    
    
    
    4
    %
    
    
    3
    %
    
    
    41
    %
    
    
    45
    %EMEA(1)
    
    
    6,000
    
    
    
    4,910
    
    
    
    22
    
    
    
    13
    
    
    
    52
    
    
    
    48Asia Pacific
    
    
    815
    
    
    
    710
    
    
    
    15
    
    
    
    11
    
    
    
    7
    
    
    
    7TOTAL Revenues Before Reimbursements
    
    
    11,622
    
    
    
    10,250
    
    
    
    13
    
    
    
    8
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    1,163
    
    
    
    1,057
    
    
    
    10TOTAL REVENUES
    
    $
    12,785
    
    
    $
    11,307
    
    
    
    13
    %TYPE OF WORKConsulting
    
    $
    7,183
    
    
    $
    6,448
    
    
    
    11
    %
    
    
    6
    %
    
    
    62
    %
    
    
    63
    %Outsourcing
    
    
    4,439
    
    
    
    3,802
    
    
    
    17
    
    
    
    12
    
    
    
    38
    
    
    
    37TOTAL Revenues Before Reimbursements
    
    
    11,622
    
    
    
    10,250
    
    
    
    13
    
    
    
    8
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    1,163
    
    
    
    1,057
    
    
    
    10TOTAL REVENUES
    
    $
    12,785
    
    
    $
    11,307
    
    
    
    13
    %
 
 n/m = not meaningful(1)
    
    EMEA includes Europe, the Middle East and Africa. Three Months Ended May 31, 2005 Compared to Three Months Ended May 31, 2004 Revenues Operating Groups Our Communications & High Tech operating group achieved revenues before reimbursements of
$1,037 million for the three months ended May 31, 2005, compared with $1,018 million for the three
months ended May 31, 2004, an increase of 2% in U.S. dollars and a decrease of 1% in local currency
terms. The decrease in local currency revenues was due to a substantial reduction, which began in
the fourth quarter of fiscal 2004, in the scope of our outsourcing work with a major
telecommunications client as a result of that clients changing business strategies. This decrease
was partially offset by continued outsourcing revenue growth in nearly all our regions and industry
groups and by increases in consulting revenues in our Americas and Europe, Middle East and Africa
(EMEA) regions. Our Financial Services operating group achieved revenues before reimbursements of $909 million
for the three months ended May 31, 2005, compared with $753 million for the three months ended May
31, 2004, an increase of 21% in U.S. dollars and 16% in local currency terms, with both consulting
and outsourcing contributing to the growth in revenues. This growth was driven by the strength of
our business in both the Americas and EMEA regions, particularly in the United Kingdom, and in our
Insurance and Banking industry groups, partially offset by a decline in our Capital Markets
industry groups revenues. Our Government operating group achieved revenues before reimbursements of $577 million for the
three months ended May 31, 2005, compared with $548 million for the three months ended May 31 2004,
an increase of 5% in U.S. dollars and 2% in 19




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##### 



local currency terms. The increase in revenues was driven by strong outsourcing growth in all
regions. This growth was partially offset by a decline in consulting revenues in our Americas and
EMEA regions. Our Products operating group achieved revenues before reimbursements of $933 million for the
three months ended May 31, 2005, compared with $812 million for the three months ended May 31,
2004, an increase of 15% in U.S. dollars and 11% in local currency terms, with both consulting and
outsourcing contributing to the growth in revenues. Our Retail & Consumer industry group in the
Americas and our Health Services and Transportation & Travel Services industry groups were the
strongest contributors to the revenue growth. Our Resources operating group achieved revenues before reimbursements of $621 million for the
three months ended May 31, 2005, compared with $555 million for the three months ended May 31,
2004, an increase of 12% in U.S. dollars and 7% in local currency terms. Strong growth in our EMEA
region, in all industry groups, more than offset a slight decline in our North America region. Geography Our Americas region achieved revenues before reimbursements for the three months ended May 31,
2005 of $1,723 million, compared with $1,637 million for the three months ended May 31, 2004, an
increase of 5% in U.S. dollars and 4% in local currency terms. Contributing to this growth was our
business in the United States. Our EMEA region achieved revenues before reimbursements for the three months ended May 31,
2005 of $2,086 million, compared with $1,785 million for the three months ended May 31, 2004, an
increase of 17% in U.S. dollars and 10% in local currency terms. A key contributor to this growth
was our business in the United Kingdom, where revenues before reimbursements grew 15% in U.S.
dollars and 11% in local currency terms over the same period in fiscal 2004, due primarily to
certain large contracts sold there in fiscal 2004. Also contributing to the strong growth in EMEA
was our business in Germany, Italy, the Netherlands and Spain. Our Asia Pacific region achieved revenues before reimbursements for the three months ended May
31, 2005 of $270 million, compared with $265 million for the three months ended May 31, 2004, an
increase of 2% in U.S. dollars and remained flat in local currency terms. Growth in Australia and
India was offset by a decrease in Japan. Operating Expenses Operating expenses for the three months ended May 31, 2005 were $3,826 million, an increase of
$349 million, or 10%, over the three months ended May 31, 2004. Operating expenses before
reimbursements as a percentage of revenues before reimbursements remained flat at 84% for the three
months ended May 31, 2005 and 2004. Excluding the effects of reorganization, operating expenses
before reimbursements as a percentage of revenues before reimbursements would have increased 0.7
percentage points for the three months ended May 31, 2005 compared with the three months ended May
31, 2004. The strengthening of various currencies against the U.S. dollar increased our reported
operating expenses for the three months ended May 31, 2005 compared with the three months ended May
31, 2004 and partially offset corresponding increases in reported revenues. During the three months ended May 31, 2005, we recorded $14 million of variable compensation
expense, compared with $93 million of variable compensation expense recorded for the three months
ended May 31, 2004. Cost of Services Cost of services for the three months ended May 31, 2005 was $3,088 million, an increase of
$345 million, or 13%, over the three months ended May 31, 2004, and increased as a percentage of
revenues to 69% from 68% during this period. Cost of services before reimbursable expenses for the
three months ended May 31, 2005 was $2,669 million, an increase of $289 million, or 12%, over the
three months ended May 31, 2004 and remained flat as a percentage of revenues before reimbursements
at 65% during this period. Gross margins (revenues before reimbursements less cost of services
before reimbursements) as a percentage of revenues before reimbursements decreased to 34.6% from
35.4% during this period. The increase in cost of services and the decrease in gross margins as a percentage of revenues
before reimbursements was due primarily to the lower-than-expected margins attributable to delays
under the NHS Contracts and a small number of delivery inefficiencies in certain operating groups,
offset by lower variable compensation expense. 20




---



##### 



Sales and Marketing Sales and marketing expense for the three months ended May 31, 2005 was $421 million, an
increase of $30 million, or 8%, over the three months ended May 31, 2004 and decreased as a
percentage of revenues before reimbursements to 10% for the three months ended May 31, 2005, from
11% for the three months ended May 31, 2004. General and Administrative Costs General and administrative costs for the three months ended May 31, 2005 were $382 million, an
increase of $42 million, or 12%, over the three months ended May 31, 2004 and remained flat as a
percentage of revenues before reimbursements at 9% during this period. Reorganization (Benefits) and Restructuring Costs During the three months ended May 31, 2005, Accenture recorded net reorganization benefits of
$66 million. The current year benefit was primarily driven by final determinations of certain
reorganization liabilities established in connection with our transition to a corporate structure
in 2001. At May 31, 2005, the remaining liability for reorganization costs was $380 million, of
which $78 million was classified as current liabilities because final determinations could occur
within 12 months. Operating Income Operating income for the three months ended May 31, 2005 was $672 million, an increase of $99
million, or 17%, over the three months ended May 31, 2004 and remained flat as a percentage of
revenues before reimbursements at 16% during this period. Excluding the effects of reorganization,
operating income as a percentage of revenues before reimbursements would have decreased 0.7
percentage points for the three months ended May 31, 2005 compared with the three months ended May
31, 2004. 21




---



##### 



Operating income for each of the operating groups was as follows: Three Months Ended May 31,Increase (Decrease)Increase
    
    
    
    Excluding2005
    
    
    2004
    
    
    (Decrease)
    
    
    Reorganization(in millions)Communications & High Tech
    
    $
    223
    
    
    $
    145
    
    
    $
    78
    
    
    $
    62Financial Services
    
    
    163
    
    
    
    106
    
    
    
    57
    
    
    
    41Government
    
    
    69
    
    
    
    110
    
    
    
    (41
    )
    
    
    (51
    )Products
    
    
    117
    
    
    
    142
    
    
    
    (25
    )
    
    
    (41
    )Resources
    
    
    100
    
    
    
    70
    
    
    
    30
    
    
    
    20Total
    
    $
    672
    
    
    $
    573
    
    
    $
    99
    
    
    $
    31
 Reorganization benefits and costs were allocated to the reportable operating groups as follows: Three Months Ended May 31,Income (Expense)
    
    2005
    
    
    2004
    
    
    Increase(in millions)Communications & High Tech
    
    $
    15.5
    
    
    $
    (0.5
    )
    
    $
    16.0Financial Services
    
    
    15.3
    
    
    
    (0.4
    )
    
    
    15.7Government
    
    
    9.6
    
    
    
    (0.3
    )
    
    
    9.9Products
    
    
    15.9
    
    
    
    (0.4
    )
    
    
    16.3Resources
    
    
    9.8
    
    
    
    (0.3
    )
    
    
    10.1Total
    
    $
    66.1
    
    
    $
    (1.9
    )
    
    $
    68.0
 Excluding the effects of reorganization, operating income for the three months ended May
31, 2005 increased by $31 million over the three months ended May 31, 2004, reflecting increases in
Communications & High Tech, Financial Services and Resources, which were partially offset by
decreases in Government and Products. The following commentary excludes the effects of
reorganization:  
    
    Communications & High Tech operating income increased primarily due to
lower-than-expected margins on three contracts in the third quarter of fiscal 2004 and
higher gross margins in the third quarter of fiscal 2005, reflecting a higher
proportion of consulting revenues and improved margins on outsourcing.
    
    The increase in Financial Services operating income reflected a 21% increase in
revenues before reimbursements and improved margins.
    
    Government operating income decreased partly due to lower-than-expected margins
attributable to temporary delays under the NHS Contracts, delivery inefficiencies on
a small number of other contracts, and a favorable contract settlement in fiscal 2004.
    
    Products operating income decreased, due to lower-than-expected margins attributable
to temporary delays under the NHS Contracts, delivery inefficiencies on
a small number of other contracts, and the continued shift in the mix of our business
toward outsourcing.
    
    The increase in Resources operating income was driven by improved pricing and
reduced delivery costs. The NHS Contracts will continue to adversely affect the operating income of our Government and
Products operating groups for the remainder of this fiscal year and, to a lesser extent, for fiscal
2006. Interest Income Interest income for the three months ended May 31, 2005 was $29 million, an increase of $13
million, or 77%, over the three months ended May 31, 2004. The increase resulted from an increase
in interest rates, and an increase in average investment (short-term and non-current) and average
client financing balances during the three months ended May 31, 2005, compared with the average
balances for the three months ended May 31, 2004. 22




---



##### 



Other (Expense) Income Other expense for the three months ended May 31, 2005 was $11 million, compared with $19
million for the three months ended May 31, 2004. The decrease in other expense was primarily due
to a decrease in net foreign currency exchange losses in fiscal 2005 compared with fiscal 2004. Provision for Income Taxes The effective tax rates for the three months ended May 31, 2005 and 2004 were 29.4% and 34.8%,
respectively. The effective tax rate of 29.4% includes the effect of the reduction in the annual
effective tax rate for fiscal 2005 to 31.1% from 32.3% due to a reduction in reorganization
liabilities. The decrease in reorganization liabilities has the effect of increasing pre-tax
income in fiscal 2005 without a corresponding increase in the provision for income taxes. Also,
during the three months ended May 31, 2005, Accenture had a final determination of income tax
issues related to our transition to a corporate structure in fiscal 2001 as well as revisions to
various income tax reserves as a result of updates to estimates of current and prior year income
tax exposures in various tax jurisdictions. Nine Months Ended May 31, 2005 Compared to Nine Months Ended May 31, 2004 Revenues Operating Groups Our Communications & High Tech operating group achieved revenues before reimbursements of
$2,992 million for the nine months ended May 31, 2005, compared with $2,828 million for the nine
months ended May 31, 2004, an increase of 6% in U.S. dollars and 2% in local currency terms. The
increase was primarily due to growth in consulting revenues across all industry groups and
geographic regions. Outsourcing revenue growth in nearly all our regions and industry groups was
more than offset by a substantial reduction, which began in the fourth quarter of fiscal 2004, in
the scope of our work with a major telecommunications client as a result of that clients changing
business strategies. Our Financial Services operating group achieved revenues before reimbursements of $2,576
million for the nine months ended May 31, 2005, compared with $2,046 million for the nine months
ended May 31, 2004, an increase of 26% in U.S. dollars and 19% in local currency terms, with both
consulting and outsourcing contributing to the growth in revenues. This growth was driven by the
strength of our business in both the Americas and EMEA regions, particularly in the United Kingdom,
and in our Insurance and Banking industry groups. Our Government operating group achieved revenues before reimbursements of $1,622 million for
the nine months ended May 31, 2005, compared with $1,494 million for the nine months ended May 31,
2004, an increase of 9% in U.S. dollars and 5% in local currency terms. Results were driven by
strong growth with clients in our EMEA and Asia Pacific regions, which was partially offset by a
decrease in consulting revenues from clients in the Americas. Our Products operating group achieved revenues before reimbursements of $2,646 million for the
nine months ended May 31, 2005, compared with $2,228 million for the nine months ended May 31,
2004, an increase of 19% in U.S. dollars and 14% in local currency terms, with both consulting and
outsourcing contributing to the growth in revenues. All industry groups, particularly our Retail &
Consumer industry group, contributed to the strong outsourcing revenue growth, whereas our Health
Services and Retail & Consumer industry groups contributed to consulting revenue growth. Our Resources operating group achieved revenues before reimbursements of $1,781 million for
the nine months ended May 31, 2005, compared with $1,648 million for the nine months ended May 31,
2004, an increase of 8% in U.S. dollars and 3% in local currency terms. Strong growth in our EMEA
region, in the Energy, Chemicals, Metals & Mining and Forest Products industry groups, more than
offset a decline in revenues in our North America region. Geography Our Americas region achieved revenues before reimbursements for the nine months ended May 31,
2005 of $4,807 million, compared with $4,630 million for the nine months ended May 31, 2004, an
increase of 4% in U.S. dollars and 3% in local currency terms. Contributing to this growth was our
business in the United States and Brazil. 23




---



##### 



Our EMEA region achieved revenues before reimbursements for
the nine months ended May 31, 2005 of $6,000 million, compared with $4,910 million for the nine
months ended May 31, 2004, an increase of 22% in U.S. dollars and 13% in local currency terms. A
key contributor to this growth was our business in the United Kingdom, where revenues before
reimbursements grew 31% in U.S. dollars and 22% in local currency terms over the same period in
fiscal 2004. The growth in the United Kingdom was primarily due to certain large contracts that
were sold during fiscal 2004. Also contributing to the strong growth in EMEA was our business in
Germany, Italy, the Netherlands and Spain. Our Asia Pacific region achieved revenues before reimbursements for the nine months ended May
31, 2005 of $815 million, compared with $710 million for the nine months ended May 31, 2004, an
increase of 15% in U.S. dollars and 11% in local currency terms. Our business in Australia and in
India contributed to the increase in revenues. Operating Expenses Operating expenses for the nine months ended May 31, 2005 were $11,183 million, an increase of
$1,264 million, or 13%, over the nine months ended May 31, 2004. Operating expenses before
reimbursements as a percentage of revenues before reimbursements remained flat at 86% during this
period. Excluding the effects of reorganization and restructuring, operating expenses before
reimbursements as a percentage of revenues before reimbursements would have increased 0.8
percentage points for the nine months ended May 31, 2005 compared with the nine months ended May
31, 2004. The strengthening of various currencies against the U.S. dollar increased our reported
operating expenses for the nine months ended May 31, 2005 compared with the nine months ended May
31, 2004 and partially offset corresponding increases in reported revenues. During the nine months ended May 31, 2005, we recorded $56 million of net variable
compensation expense, including a reduction of $8 million related to finalization of estimated
payouts accrued for fiscal 2004, compared with $153 million of net variable compensation expense,
including a reduction of $4 million related to fiscal 2003, for the nine months ended May 31, 2004. Cost of Services Cost of services for the nine months ended May 31, 2005 was $8,986 million, an increase of
$1,187 million, or 15%, over the nine months ended May 31, 2004, and increased as a percentage of
revenues to 70% from 69% during this period. Cost of services before reimbursable expenses for the
nine months ended May 31, 2005 was $7,823 million, an increase of $1,080 million, or 16%, over the
nine months ended May 31, 2004, and increased as a percentage of revenues before reimbursements to
67% from 66% during this period. Gross margins (revenues before reimbursements less cost of
services before reimbursements) as a percentage of revenues before reimbursements decreased to
32.7% from 34.2% during this period. The increase in cost of services and the decrease in gross margins as a percentage of revenues
before reimbursements were due primarily to lower-than-expected margins attributable to delays
under the NHS Contracts and incurred and expected cost overruns associated with the development of
reusable assets in connection with certain client contracts. To a lesser extent, a number of
delivery inefficiencies, including continuing staffing costs and
higher subcontractor usage, also
contributed to this decrease. Sales and Marketing Sales and marketing expense for the nine months ended May 31, 2005 was $1,157 million, an
increase of $57 million, or 5%, over the nine months ended May 31, 2004, and decreased as a
percentage of revenues before reimbursements to 10% from 11% during this period. General and Administrative Costs General and administrative costs for the nine months ended May 31, 2005 were $1,135 million,
an increase of $139 million, or 14%, over the nine months ended May 31, 2004 and remained flat as a
percentage of revenues before reimbursements at 10% during this period. Reorganization (Benefits) and Restructuring Costs During the nine months ended May 31, 2005 and 2004, Accenture recorded net reorganization
benefits of $95 million and $84 million, respectively, primarily driven by final determinations of
certain reorganization liabilities established in connection 24




---



##### 



with our transition to a corporate structure in 2001. At May 31, 2005, the remaining
liability for reorganization costs was $380 million, of which $78 million was classified as current
liabilities because final determinations could occur within 12 months. During the nine months ended May 31, 2004, Accenture recorded restructuring costs of $107
million relating to the Companys global consolidation of office space, primarily in the United
States and United Kingdom. These costs include losses on operating leases and write-downs of
related assets such as leasehold improvements resulting form abandoned office space. No
restructuring costs were recorded for the nine months ended May 31, 2005. Operating Income Operating income for the nine months ended May 31, 2005 was $1,602 million, an increase of
$214 million, or 15%, over the nine months ended May 31, 2004 and remained flat as a percentage of
revenues before reimbursements at 14% during this period. Excluding the effects of reorganization
and restructuring, operating income as a percentage of revenues before reimbursements would have
decreased 0.8 percentage points for the nine months ended May 31, 2005, compared with the nine
months ended May 31, 2004. Operating income for each of the operating groups was as follows: Nine Months Ended May 31,Increase (Decrease)ExcludingReorganization and2005
    
    
    2004
    
    
    Increase (Decrease)
    
    
    Restructuring(in millions)Communications & High Tech
    
    $
    510
    
    
    $
    280
    
    
    $
    230
    
    
    $
    201Financial Services
    
    
    386
    
    
    
    272
    
    
    
    114
    
    
    
    87Government
    
    
    129
    
    
    
    248
    
    
    
    (119
    )
    
    
    (136
    )Products
    
    
    301
    
    
    
    371
    
    
    
    (70
    )
    
    
    (97
    )Resources
    
    
    276
    
    
    
    217
    
    
    
    59
    
    
    
    41Total
    
    $
    1,602
    
    
    $
    1,388
    
    
    $
    214
    
    
    $
    96
 Reorganization benefits and restructuring costs were allocated to the reportable
operating groups as follows: Nine Months Ended May 31,Income (Expense)
    
    2005
    
    
    2004
    
    
    Increase(in millions)Communications & High Tech
    
    $
    23
    
    
    $
    (6
    )
    
    $
    29Financial Services
    
    
    22
    
    
    
    (5
    )
    
    
    27Government
    
    
    14
    
    
    
    (3
    )
    
    
    17Products
    
    
    22
    
    
    
    (5
    )
    
    
    27Resources
    
    
    14
    
    
    
    (4
    )
    
    
    18Total
    
    $
    95
    
    
    $
    (23
    )
    
    $
    118
 Excluding the effects of reorganization and restructuring, operating income increased by
$96 million, reflecting increases in Communications & High Tech, Financial Services and Resources,
which were partially offset by decreases in Government and Products. The following commentary
excludes the effects of reorganization and restructuring:  
    
    Communications & High Tech operating income increased primarily due to
lower-than-expected margins on three contracts in fiscal 2004 and higher gross margins
in fiscal 2005, reflecting a higher proportion of consulting revenues.
    
    The increase in Financial Services operating income reflected a 26% increase in
revenues before reimbursements and improved margins.
    
    Government operating income decreased partly due to lower-than-expected margins
attributable to temporary delays under the NHS Contracts, cost overruns associated with
the development of reusable assets in connection with certain client contracts,
delivery inefficiencies on a small number of other contracts and a favorable contract settlement
in fiscal 2004. 25




---



##### 




    
    Products operating income decreased, due to lower-than-expected margins attributable
to temporary delays under the NHS Contracts, delivery inefficiencies on
a small number of other contracts, and the continued shift in the mix of our business toward
outsourcing.
    
    The increase in Resources operating income was driven by improved pricing and
reduced delivery costs. The NHS Contracts will continue to adversely affect the operating income of our Government and
Products operating groups for the remainder of this fiscal year and, to a lesser extent, for fiscal
2006. Gain on Investments, Net Gain on investments, net for the nine months ended May 31, 2005 was $19 million, an increase
of $15 million over the nine months ended May 31, 2004. This reflects a gain on our retained
interests in our venture and investment portfolio, which we sold in fiscal 2003. Interest Income Interest income for the nine months ended May 31, 2005 was $77 million, an increase of $35
million, or 84%, over the nine months ended May 31, 2004. The increase resulted from an increase
in interest rates, and an increase in average investment (short-term and non-current) and average
client financing balances during the nine months ended May 31, 2005 compared with the average
balances for the nine months ended May 31, 2004. Other (Expense) Income Other expense for the nine months ended May 31, 2005 was $16 million, compared with other
income of $1 million for the nine months ended May 31, 2004. The decrease in other income was
primarily due to net foreign currency exchange losses in fiscal 2005 compared with net foreign
currency exchange gains in fiscal 2004. Provision for Income Taxes The effective tax rates for the nine months ended May 31, 2005 and 2004 were 31.1% and 34.8%,
respectively. The fiscal 2005 annual effective tax rate declined to 31.1% from 32.3% as a result
of a reduction in reorganization liabilities. The decrease in reorganization liabilities has the
effect of increasing pre-tax income in fiscal 2005 without a corresponding increase in the
provision for income taxes. Also, during the nine months ended May 31, 2005, Accenture had final
determinations of income tax issues related to our transition to the corporate structure in fiscal
2001, as well as revisions to various income tax reserves as a result of updates to estimates of
current and prior year income tax exposures in various tax jurisdictions. The fiscal 2004
effective tax rate was 32.0%. Liquidity and Capital Resources Our primary sources of liquidity are cash flows from operations, debt capacity available under
various credit facilities and available cash reserves. We may also be able to raise additional
funds through public or private debt or equity financings in order to:  
    
    take advantage of opportunities, including more rapid expansion;
    
    acquire complementary businesses or technologies;
    
    develop new services and solutions;
    
    respond to competitive pressures; or
    
    facilitate purchases, redemptions and exchanges of Accenture shares held by our partners, former partners and
their permitted transferees as previously authorized by the Board of Directors of Accenture Ltd and certain other
share purchases from our other employees. At May 31, 2005, cash and cash equivalents of $2,773 million combined with $704 million of
liquid fixed-income securities that are classified as investments on our Consolidated Balance Sheet
totaled $3,477 million. Our cash flows from operating, investing and financing activities, as
reflected in the Consolidated Statement of Cash Flows, are summarized in the following table: 26




---



##### 



Nine Months Ended May 31,2005
    
    
    2004
    
    
    Change(in millions)Net cash provided by (used in):Operating activities
    
    $
    1,320
    
    
    $
    1,362
    
    
    $
    (42
    )Investing activities
    
    
    (271
    )
    
    
    (798
    )
    
    
    527Financing activities
    
    
    (845
    )
    
    
    592
    
    
    
    (1,437
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    16
    
    
    
    26
    
    
    
    (10
    )Net increase in cash and cash equivalents
    
    $
    220
    
    
    $
    1,182
    
    
    $
    (962
    )
 Operating Activities.The $42 million decrease in cash provided was primarily due to planned
variable compensation payments of $216 million, partially offset by an increase in net income.
Increases in net client balances, due primarily to growth in revenues and an increase in total
client financing, were offset by an increase in accounts payable. Investing Activities.The $527 million decrease in cash used was primarily due to a decrease
in net purchases of marketable securities. We expect that our capital expenditures will be
approximately $350 million in fiscal 2005. Financing Activities.The $1,437 million increase in cash used was primarily driven by common
share issuance and purchase activity. The nine months ended May 31, 2004 includes $988 million of
proceeds from a secondary offering, which was subsequently disbursed on June 3, 2004 to redeem
Accenture SCA Class I common shares. At May 31, 2005, we had the following borrowing facilities, including the issuance of letters
of credit, to support general working capital purposes: Facility Amount(in millions)Syndicated loan facility
    
    $
    1,500Separate bilateral, uncommitted, unsecured multicurrency revolving credit facilities
    
    
    251Local guaranteed and non-guaranteed lines of credit
    
    
    223Total
    
    $
    1,974
 At May 31, 2005, we had $11 million of short-term borrowings outstanding under these various
facilities. We continue to be in compliance with the terms of these facilities. In addition to the short-term borrowings noted above, at May 31, 2005 and August 31, 2004, we
had total outstanding debt of $60 million and $49 million, respectively, which was primarily
incurred in conjunction with our ownership of Accenture HR Services. In isolated circumstances, we agree to extend financing to clients. The terms vary by
contract, 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. Information pertaining to client financing is
as follows: May 31,
    
    
    August 31,2005
    
    
    2004(in millions, except number of clients)Number of clients
    
    
    33
    
    
    
    40Client financing included in current unbilled services
    
    $
    332
    
    
    $
    243Client financing included in non-current unbilled services
    
    
    402
    
    
    
    212Total client financing
    
    $
    734
    
    
    $
    455
 The increase in client financing from August 31, 2004 was primarily due to balances increasing
at certain large contracts that were signed in fiscal 2004, including the NHS Contracts. 27




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Share Purchases and Redemptions From time to time Accenture SCA and/or Accenture Ltd purchases
Accenture shares through open-market purchases and also purchases, redeems and exchanges
shares held by partners, former partners and their permitted transferees. Accenture Ltd also
purchases, pursuant to its RSU Sell-Back Program, certain Accenture Ltd Class A common shares
awarded to employees pursuant to restricted share units issued in
connection with its initial public
offering. For a complete description of Accenture SCAs share purchase and redemption activity for
the three months ended May 31, 2005, see Item 2 of Part II, Unregistered Sales of Equity
Securities and Use of Proceeds; Issuer Purchases of Equity Securities. Open-Market Purchases Since April 2002, Accenture Ltd has conducted a publicly announced, open-market share purchase
program for Accenture Ltd Class A common shares. These purchased
shares are currently utilized to provide
for select employee benefits, such as equity awards to our partners. These shares are held by one
or more subsidiaries of Accenture Ltd and are treated as treasury shares. During the nine months
ended May 31, 2005, an aggregate of 18,588,970 Accenture Ltd Class A common shares were purchased
for an aggregate purchase price of $430 million. Share Management Plan and RSU Sell-Back Program Transactions For a more detailed description of our Share Management Plan, see Certain Transactions and
RelationshipsShare Management Plan in our Annual Report on Form 10-K for the year ended August
31, 2004 and Annex C: Share Management Plan in Accenture Ltds proxy statement for the 2005
annual general meeting of shareholders. As we have previously announced through our Share Management Plan, we intend for the remainder
of fiscal 2005 to allow quarterly transactions to provide our partners, former partners and their
permitted transferees with the opportunity to dispose of those shares that are currently eligible
for transfer under the terms of the various transfer restrictions applicable to them. Accenture Ltd does not expect to permit the aggregate
number of Accenture Ltd Class A common shares sold in any quarterly transaction in fiscal 2005 to
exceed the average weekly volume of trading in the Accenture Ltd Class A common shares on the New
York Stock Exchange for the four weeks prior to the start of these
transactions. Based on recent weekly trading volumes and the
methodology we use to determine the size of offers made to our
partners, former partners and their permitted transferees who hold
Accenture SCA Class I common shares and Accenture Canada
Holdings Inc. exchangeable shares, in any future quarterly
transaction we could expect to offer to purchase or redeem numbers of
shares no greater than the numbers of shares offered in our June 7, 2005 transactions. On February 1, 2005, Accenture SCA and one of its subsidiaries made a tender offer to
Accenture SCA Class I common shareholders that resulted in the redemption and purchase on March 7,
2005 of an aggregate of 18,745,917 Accenture SCA Class I common shares at a price of $26.30 per
share. At the same time, a subsidiary of Accenture SCA purchased 314,038 Accenture Canada Holdings
Inc. exchangeable shares at a price of $26.30 per share. The total cash outlay for these
transactions was $501 million. During the nine months ended May 31, 2005, $21 million was used
to facilitate purchases and redemptions of 914,838 Accenture SCA Class I common shares at the request of
former partners and the estates of deceased partners in accordance with the terms of the Articles
of Association of Accenture SCA. During the nine months ended May 31, 2005, Accenture purchased 204,351 Accenture Ltd Class A
common shares under the RSU Sell-Back Program for an aggregate
purchase price of $5 million. Other Redemptions and Purchases During the nine months ended May 31, 2005, Accenture acquired 592,530 Accenture Ltd Class A
common shares from employees electing net share delivery under the Accenture Ltd 2001 Employee
Share Purchase Plan and Accenture Ltd 2001 Share Incentive Plan for a cost of $14 million. Subsequent Developments On May 4, 2005, Accenture SCA and one of its subsidiaries made a tender offer to Accenture SCA
Class I shareholders that resulted in the redemption or purchase on June 7, 2005 of an aggregate of
17,712,575 Accenture SCA Class I common shares at a price of $22.64 per share. At the same time, a
subsidiary of Accenture SCA purchased 324,287 Accenture Canada Holdings Inc. exchangeable shares at
a price of $22.64 per share. The total cash outlay for these transactions was $408 million. 28




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On June 15, 2005, Accenture acquired the net assets of Capgeminis North American Health
practice for $175 million in cash. As a result of the acquisition, approximately 600 Capgemini
professionals have joined Accentures Products operating group
in North America. The preliminary allocation of the purchase price is
expected to be completed during the fourth quarter of fiscal 2005.
The pro forma effects on Accentures operations are not material. On June 28, 2005, Accenture SCA held an Extraordinary Meeting of Shareholders, as more fully
described in an information statement filed with the SEC on June 8, 2005. Accenture SCAs
shareholders approved all of the items considered at the meeting. There were 993,600,956 shares
present, which were all voted in favor of each proposal. There were no shares voted against or
withheld, no abstentions and no broker non-votes. Among other things, the shareholders approved
certain amendments to the rights of the Class II common shares held by Accenture Ltd, as well as
the creation of a new class of common shares to be known as Class III common shares (and various
lettered, sub-series of that class) into which all Accenture SCA Class I common shares held by
Accenture Ltd and its affiliates (and all various lettered, sub-series of that class) would be
reclassified. After giving effect to this approved proposal, all outstanding Accenture SCA Class I
common shares will be held only by our partners, former partners and their permitted transferees. The amendment of the existing Accenture SCA Class II common shares, the creation of the
Accenture SCA Class III common shares (and all lettered sub-series of that class), or the
reclassification of the Accenture SCA Class I common shares currently held by Accenture Ltd and its
subsidiaries will not have any effect on the effective voting control that Accenture Ltd, as
general partner of Accenture SCA, holds over Accenture SCA, or any other rights attributable to
Accenture Ltds current shareholdings in Accenture SCA. Each of the following matters was approved: 1. Acknowledge the amendment to Article 7 and the addition of a new Article 8 to the Articles
of Association of the Company as well as the renumbering of Articles 8 through 23, including
all references thereto, as new Articles 9 through 24 of the Articles of Association of the
Company have become effective on February 2, 2005 as a result of the condition (condition
suspensive) set in the shareholders meeting of the Company dated January 17, 2005 having been
satisfied on February 2, 2005. 2. Amend Articles 5, 7, 19 and 20 of the Articles of Association of the Company in order to:  (a)
    
    amend the rights of the Class II common shares;(b)
    
    create a new class of common shares known as Class III common shares (and various
lettered, sub-series of that class);(c)
    
    provide that the Class II common shares and the Class III common shares (and any
sub-series of that class) may be held only by the general partner of the Company and its
subsidiaries; and(d)
    
    reclassify all of the Companys Class I common shares held by Accenture Ltd, the
general partner of the Company, and its subsidiaries (and all various lettered, sub-series
of that class) into Class III common shares (and various lettered, sub-series thereof). 3. Amend Article 7 of the Articles of Association of the Company in order to permit the Company
to refuse to honor any request for the redemption of Class I common shares if the redemption
would be prohibited under applicable law or regulation (in each case regardless of whether the
redemption price is payable in Accenture Ltd Class A common shares, cash or other
consideration) or from the date of the announcement of a tender offer by the Company or any of
its affiliates for Class I common shares or any securities convertible into, or exchangeable or
exercisable for, Class I common shares, until the expiration of ten United States business days
after the termination of such tender offer. 4. Amend Article 7 of the Articles of Association of the Company in order to revise the date
used for determining the redemption price of a Class I common share. 5. Amend Articles 6, 7 and 8 of the Articles of Association of the Company in order to clarify
the definition of Transfer used throughout the Articles and clarify procedures in connection
with various methods of Transfer of the Companys Class I common shares. 6. Amend Article 10 of the Articles of Association of the Company in order to change the date
of the annual general meeting of shareholders to November 15 of each year. 29




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7. Amend Article 5 of the Articles of Association of the Company to authorize the general
partner of the Company to render effective any increase of the subscribed and issued capital,
in whole or in part, from time to time, within a period starting as of June 28, 2005 and
expiring on the fifth anniversary of such date, including the authorization to issue new shares
of any share class by way of a whole or partial increase of the capital up to the total amount
of the authorized share capital and for the number and classes of shares being the object of
the current authorization. 8. Hear and approve a report prepared by the general partner of the Company with respect to the
cancellation or the limitation of the preferential subscription right of the shareholders of
the Company, in accordance with article 32-3 paragraph 5 of the law on commercial companies of
August 10, 1915, as amended; and amend Articles 5 of the Articles of Association of the Company
to authorize the general partner of the Company, at its discretion, to waive entirely or
partially or to limit, or to set conditions in respect of any preferential subscription rights
of the existing shareholders for the period of five years, and to determine the amount of issue
premium (if any) which will have to be paid and other conditions (if any) which will have to be
met by the subscriber(s) in the context of a capital increase. 9. Amend Article 5 of the Articles of Association of the Company in order to correct a clerical
error made in the notarial deed dated September 29, 2003 recording the increase of the share
capital of the Company to the effect that the reference to 766,591,027 Class I common shares in
the first paragraph of Article 5 of the Articles of Association of the Company must be deleted
and replaced by a reference to 753,843,192 Class I common shares. On
July 1, 2005, Accenture implemented a new senior executive
trading policy that, among other things, will affect how our partners
may dispose of shares they acquired in connection with our transition
to a corporate structure in 2001. The policy will replace our Share
Management Plan in our 2006 fiscal year. For more information on this
policy see Annex C: Share Management Plan in our proxy
statement for the 2005 annual general meeting of shareholders. Off-Balance Sheet Arrangements We have various agreements by which we may be obligated to indemnify the other party with
respect to certain matters. Generally, these indemnification provisions are included in contracts
arising in the normal course of business under which we customarily agree to hold the indemnified
party harmless against losses arising from a breach of representations related to such matters as
title to assets sold and licensed or certain intellectual property rights. Payments by us under
such indemnification clauses are generally conditioned on the other party making a claim. Such
claims are generally subject to challenge by us and dispute resolution procedures specified in the
particular contract. Furthermore, our obligations under these arrangements may be limited in terms
of time and/or amount and, in some instances, we may have recourse against third parties for
certain payments made by us. It is not possible to predict the maximum potential amount of future
payments under these indemnification agreements due to the conditional nature of our obligations
and the unique facts of each particular agreement. Historically, the Company has not made any
payments under these agreements that have been material individually or in the aggregate. As of May
31, 2005, we were not aware of any obligations under such indemnification agreements that would
require material payments. From time to time, Accenture enters into contracts with clients whereby it has joint and
several liability with other participants and third parties providing related services and products
to the client. Under these arrangements, Accenture and other parties may assume some
responsibility to the client for the performance of others under the terms and conditions of the
contract with or for the benefit of the client. To date, Accenture has not been required to make
any payments under any of the contracts described in this paragraph. For further discussion of
these transactions, please see Footnote 8, Commitments and Contingencies, to our Consolidated
Financial Statements above under Item 1, Financial Statements. Newly Issued Accounting Standards In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123R, Share-Based Payment(SFAS No. 123R). This Statement is
a revision of SFAS No. 123, Accounting for Stock-Based Compensation(SFAS No. 123), and
supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees,
and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment transactions. The
Statement requires entities to recognize compensation expense for awards of equity instruments to
employees based on the grant-date fair value of those awards (with limited exceptions). SFAS No.
123R is effective for the first annual reporting period that begins after June 15, 2005. Accenture expects to adopt SFAS No. 123R on September 1, 2005, using the Statements modified
prospective application method. Adoption of SFAS No. 123R will not affect Accentures cash flows
or financial position, but it will reduce reported income because Accenture currently uses the
intrinsic value method as permitted by Opinion No. 25. Accordingly, no compensation expense is
currently recognized for share purchase rights granted under the Companys employee stock option
and employee share purchase plans. Specifically, adopting SFAS No. 123R will result in Accenture recording compensation expense
for employee stock options and employee share purchase rights. Had Accenture expensed employee
stock options and employee share purchase rights under 30




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SFAS No. 123 for the three and nine months ended May 31, 2005, the following reported items
would have been reduced: income before income taxes by $66 million and $148 million, respectively;
income before minority interest by $46 million and $104 million, respectively; and net income by
$46 million and $103 million, respectively. If Accenture
were to expense employee stock options and employee share purchase
rights under SFAS No. 123 for the full fiscal year, we estimate
that the related pre-tax expense would be in the range of $205 to
$215 million for fiscal 2005. We currently estimate our pre-tax
stock option and employee share purchase rights expense for fiscal
2006 to be in the range of $110 to $125 million. We expect the
reduction in stock option and employee share purchase plan expense to
be partially offset by increased restricted share unit expense as we
expect to increase the use of restricted share units and reduce
the use of stock options in our employee incentive awards for fiscal
2006. In addition, at September 1, 2005, upon adoption of SFAS No. 123R using the modified
prospective application method, Accenture will recognize a one-time pre-tax gain of $15 million to
$30 million, representing the reversal of compensation costs recorded in prior years for
restricted share units that are not expected to vest due to future forfeitures. This gain will be
recorded as a separate line item on the face of the income statement, net of tax and minority
interest, as a cumulative effect of a change in accounting principle. 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK During the three and nine months ended May 31, 2005, there were no material changes in our
market risk exposure. For a discussion of our market risk associated with foreign currency risk,
interest rate risk and equity price risk as of August 31, 2004, see Quantitative and Qualitative
Disclosures about Market Risk in Part II, Item 7A, of Accenture SCAs Annual Report on Form 10-K
for the year ended August 31, 2004. 
 ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Based on their evaluation for the period covered by this Quarterly Report on Form 10-Q, the
chief executive officer and the chief financial officer of Accenture Ltd have concluded that, as of
the end of such period, Accenture SCAs disclosure controls and procedures (as defined in Rule
13a-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms. Transition of Business and Financial Systems As of September 1, 2004, we transitioned certain of our business and financial systems to new
platforms. Implementation of the new systems necessarily involves changes to our procedures for
control over financial reporting. The new systems were subjected to testing prior to and after
September 1, 2004 and are functioning to ensure that information required to be disclosed by
Accenture SCA in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms. We have not experienced any significant difficulties to date in
connection with the implementation or operation of the new systems. 31




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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 previously reported in July 2003, we became aware of an incident of possible noncompliance
with the Foreign Corrupt Practices Act and/or with Accentures internal controls in connection with
certain of our operations in the Middle East. In 2003, we voluntarily reported the incident to the
appropriate authorities in the United States promptly after its discovery. Shortly thereafter, the
SEC advised us it would be undertaking an informal investigation of this incident, and the U.S.
Department of Justice indicated it would also conduct a review. Since that time, there have been no
further developments. We do not believe that this incident will have any material impact on our
results of operations or financial condition. We currently maintain the types and amounts of insurance customary in the industries and
countries in which we operate, including coverage for professional liability, general liability and
management liability. We consider our insurance coverage to be adequate both as to the risks and
amounts for the businesses we conduct.   32




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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS; ISSUER PURCHASES OF EQUITY SECURITIES The following table provides information relating to the Companys purchases of Accenture SCA
Class I common shares for the third quarter of fiscal 2005. For year-to-date information on all
share purchases, redemptions and exchanges by the Company and further discussion of the Companys
share purchase activity, see Managements Discussion and Analysis of Financial Condition and
Results of OperationsLiquidity and Capital ResourcesShare Purchases and Redemptions. Approximate DollarTotal Number of
    
    
    Value of SharesShares Purchased as
    
    
    that May Yet BePart of Publicly
    
    
    Purchased UnderTotal Number of
    
    
    Average Price
    
    
    Announced Plans or
    
    
    Publicly AnnouncedPeriod
    
    Shares Purchased(1)
    
    
    Paid per Share
    
    
    Programs
    
    
    Plans or ProgramsMarch 1, 2005 - March 31, 2005Class I common shares
    
    
    19,017,942
    
    
    $
    26.28
    
    
    
    
    
    
    
    April 1, 2005 - April 30, 2005Class I common shares
    
    
    6,888,183
    
    
    $
    22.22
    
    
    
    
    
    
    
    May 1, 2005 - May 31, 2005Class I common shares
    
    
    6,413,970
    
    
    $
    22.06
    
    
    
    
    
    
    
    TotalClass I common shares(2)(3)(4)
    
    
    32,320,095
    
    
    $
    24.58
    
    
    
    
    
    
    
    
 
 (1)
    
    To date, the Board of Directors of Accenture Ltd has authorized an aggregate of $3.2
billion for Share Management Plan purchases and redemptions from our partners, former partners
and their permitted transferees. At May 31, 2005, an aggregate of $1.6 billion remained
available for Share Management Plan purchases and redemptions.(2)
    
    During the third quarter of fiscal 2005, Accenture SCA redeemed or purchased 18,745,917
Accenture SCA Class I common shares pursuant to an issuer tender offer. At the same time, a
subsidiary of Accenture SCA purchased 314,038 Accenture Canada Holdings Inc. exchangeable
shares. The share numbers in the table above do not reflect the issuer tender offer completed
on June 7, 2005, pursuant to which Accenture SCA purchased or redeemed a total of 17,712,575
Accenture SCA Class I common shares. At the same time, a subsidiary of Accenture SCA
purchased 324,287 Accenture Canada Holdings Inc. exchangeable shares at a price of $22.64 per
share. These redemptions and purchases were made in transactions unrelated to publicly
announced share plans or programs.(3)
    
    During the third quarter of fiscal 2005, Accenture SCA redeemed or purchased an aggregate of
860,208 Class I common shares at the request of former partners or the estates of deceased
partners in transactions on terms similar to those provided for in the Articles of Association
of Accenture SCA. These redemptions and purchases were made in transactions unrelated to
publicly announced share plans or programs.(4)
    
    During the third quarter of fiscal 2005, Accenture SCA purchased 12,713,970 Accenture SCA
Class I common shares from Accenture Ltd in conjunction with Accenture Ltds publicly
announced open-market share purchase program. These purchases were made in transactions
unrelated to publicly announced share plans or programs. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 
 ITEM 5. OTHER INFORMATION (a) None. (b) None. 33




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ITEM 6. EXHIBITS Exhibit Index: ExhibitNumber
    
    Exhibit10.1
    
    Form of Articles of Association of Accenture SCA, consolidated and
updated as of June 28, 2005 (incorporated by reference to
Exhibit 10.1 to the Accenture Ltd 10-Q filed on July 11,
2005)10.2
    
    Form of SCA Transfer Restriction
Agreement for the Accenture Family and Charitable Transfer Program
dated as of April 1, 2005
among Accenture SCA and the transferors and transferees signatory thereto (incorporated by reference to Exhibit 10.2 to the Accenture Ltd
10-Q filed on July 11, 2005)10.3
    
    Form of Ltd Transfer Restriction Agreement for the Accenture Family and Charitable Transfer Program
dated as of April 1, 2005
among Accenture Ltd and the transferors and transferees signatory thereto (incorporated by reference to Exhibit 10.3 to the Accenture Ltd
10-Q filed on July 11, 2005)10.4
    
    Form of SCA Transfer Agreement for
the Accenture Family and Charitable Transfer Program dated as of
April 1, 2005 among Accenture SCA and the transferors and transferees signatory thereto (incorporated by
reference to Exhibit 10.4 to the Accenture Ltd 10-Q filed on
July 11, 2005)10.5
    
    Form of Ltd Transfer Agreement
for the Accenture Family and Charitable Transfer Program dated as of
April 1, 2005 among Accenture Ltd and the transferors and transferees signatory thereto (incorporated by
reference to Exhibit 10.5 to the Accenture Ltd 10-Q filed on
July 11, 2005)31.1
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith)31.2
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith)32.1
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith)32.2
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith)
 34




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized. Date: July 11, 2005
    ACCENTURE SCA
represented by its general partner, Accenture Ltd, itself represented by its duly
authorized signatoryBy:
    /s/ Michael G. McGrathName:
    Michael G. McGrathTitle:
    Chief Financial Officer of Accenture Ltd,
General Partner of Accenture SCA