##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
   FORM 10-Q (Mark One) þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2005
 OR o
    
    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
    
    98-0351796(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    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 þ No o Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes þ No o The number of shares of the Registrants Class I common shares, par value 1.25 per share,
outstanding as of April 1, 2005 was 867,668,006 (which number does not include 103,625,448 issued
shares held by subsidiaries of the Registrant).




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##### 



ACCENTURE SCA INDEX PagePart I.
    
    Financial Information
    
    
    3Item 1.
    
    Financial Statements
    
    
    3Consolidated Balance Sheets as of February 28, 2005 (unaudited) and August 31, 2004
    
    
    3Consolidated Income Statements (unaudited) for the three and six months ended February 28,
2005 and February 29, 2004
    
    
    5Consolidated Shareholders Equity and Comprehensive Income Statements (unaudited) for the
six months ended February 28, 2005
    
    
    6Consolidated Cash Flows Statements (unaudited) for the six months ended February 28, 2005
and February
29, 2004
    
    
    7Notes to Consolidated Financial Statements (unaudited)
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4.
    
    Controls and Procedures
    
    
    32Part II.
    
    Other Information
    
    
    33Item 1.
    
    Legal Proceedings
    
    
    33Item 2.
    
    Unregistered Sales of Equity
Securities and Use of Proceeds; Issuer Purchases of Equity Securities
    
    
    33Item 3.
    
    Defaults under Senior Securities
    
    
    34Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    34Item 5.
    
    Other Information
    
    
    34Item 6.
    
    Exhibits
    
    
    35Signatures
 2




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##### 



PART I  FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ACCENTURE SCA CONSOLIDATED BALANCE SHEETS
February 28, 2005 and August 31, 2004
(In thousands of U.S. dollars, except share and per share amounts) February 28,2005
    
    
    August 31,(Unaudited)
    
    
    2004ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    3,060,203
    
    
    $
    2,552,958Short-term investments
    
    
    406,456
    
    
    
    285,288Receivables
from clients, net of allowances of $36,396 and $40,687
    
    
    1,816,354
    
    
    
    1,662,211Unbilled services
    
    
    1,459,331
    
    
    
    1,049,870Deferred income taxes, net
    
    
    83,558
    
    
    
    105,636Other current assets
    
    
    520,146
    
    
    
    501,231Total current assets
    
    
    7,346,048
    
    
    
    6,157,194NON-CURRENT ASSETS:Unbilled services
    
    
    288,306
    
    
    
    211,705Investments
    
    
    321,823
    
    
    
    340,121Property and equipment, net of accumulated depreciation of $1,361,767 and $1,219,500
    
    
    657,444
    
    
    
    643,946Goodwill
    
    
    242,926
    
    
    
    214,482Deferred income taxes, net
    
    
    357,779
    
    
    
    309,045Other non-current assets
    
    
    128,513
    
    
    
    136,991Total non-current assets
    
    
    1,996,791
    
    
    
    1,856,290TOTAL ASSETS
    
    $
    9,342,839
    
    
    $
    8,013,484LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term bank borrowings
    
    $
    33,012
    
    
    $
    20,103Current portion of long-term debt
    
    
    12,593
    
    
    
    16,612Accounts payable
    
    
    734,995
    
    
    
    523,931Deferred revenues
    
    
    1,321,505
    
    
    
    980,461Accrued payroll and related benefits
    
    
    1,429,326
    
    
    
    1,508,126Income taxes payable
    
    
    848,471
    
    
    
    795,948Deferred income taxes, net
    
    
    47,605
    
    
    
    42,744Other accrued liabilities
    
    
    527,062
    
    
    
    550,864Total current liabilities
    
    
    4,954,569
    
    
    
    4,438,789NON-CURRENT LIABILITIES:Long-term debt
    
    
    36,736
    
    
    
    32,161Retirement obligation
    
    
    562,484
    
    
    
    532,307Deferred income taxes, net
    
    
    22,756
    
    
    
    18,769Other non-current liabilities
    
    
    679,186
    
    
    
    578,689Total non-current liabilities
    
    
    1,301,162
    
    
    
    1,161,926MINORITY INTEREST
    
    
    56,433
    
    
    
    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 February 28, 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




---



##### 



February 28,2005
    
    
    August 31,(Unaudited)
    
    
    2004Class 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), 32,608,718
and 28,278,704 units issued and outstanding as of February 28, 2005 and August 31,
2004, respectively,
    
    
    599,249
    
    
    
    475,240Deferred compensation
    
    
    (251,567
    )
    
    
    (150,777
    )Additional paid-in capital
    
    
    2,959,365
    
    
    
    2,976,655Treasury shares, at cost, 84,957,483 and 83,869,278 Class I common shares at
February 28, 2005 and August 31, 2004, respectively
    
    
    (1,954,123
    )
    
    
    (1,898,744
    )Investment in Accenture Ltd shares, at cost, 1,719,771 and 1,421,944 shares at
February 28, 2005 and August 31, 2004, respectively
    
    
    (43,163
    )
    
    
    (35,697
    )Retained
earnings (deficit)
    
    
    151,351
    
    
    
    (497,729
    )Accumulated other comprehensive loss
    
    
    (50,339
    )
    
    
    (113,760
    )Total shareholders equity
    
    
    3,030,675
    
    
    
    2,375,090TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    9,342,839
    
    
    $
    8,013,484
 The accompanying notes are an integral part of these consolidated financial statements. 4




---



##### 



ACCENTURE SCA CONSOLIDATED INCOME STATEMENTS For the Three and Six Months Ended February 28, 2005 and February 29, 2004
(In thousands of U.S. dollars)
(Unaudited) Three Months Ended
    
    
    Six Months EndedFebruary 28, 2005
    
    
    February 29, 2004
    
    
    February 28, 2005
    
    
    February 29, 2004REVENUES:Revenues before reimbursements
    
    $
    3,813,522
    
    
    $
    3,302,209
    
    
    $
    7,543,877
    
    
    $
    6,563,794Reimbursements
    
    
    402,862
    
    
    
    380,095
    
    
    
    743,879
    
    
    
    692,998Revenues
    
    
    4,216,384
    
    
    
    3,682,304
    
    
    
    8,287,756
    
    
    
    7,256,792OPERATING EXPENSES:Cost of services:Cost of services before reimbursable expenses
    
    
    2,638,950
    
    
    
    2,212,547
    
    
    
    5,154,389
    
    
    
    4,363,437Reimbursable expenses
    
    
    402,862
    
    

    
    380,095
    
    
    
    743,879
    
    
    
    692,998Cost of services
    
    
    3,041,812
    
    
    
    2,592,642
    
    
    
    5,898,268
    
    
    
    5,056,435Sales and marketing
    
    
    376,919
    
    
    
    358,662
    
    
    
    735,862
    
    
    
    709,259General and administrative costs
    
    
    361,478
    
    
    
    316,133
    
    
    
    752,293
    
    
    
    655,489Reorganization (benefits) and restructuring costs
    
    
    (35,777
    )
    
    
    107,438
    
    
    
    (28,769
    )
    
    
    21,040Total operating expenses
    
    
    3,744,432
    
    
    
    3,374,875
    
    
    
    7,357,654
    
    
    
    6,442,223OPERATING INCOME
    
    
    471,952
    
    
    
    307,429
    
    
    
    930,102
    
    
    
    814,569Gain on investments, net
    
    
    93
    
    
    
    3,332
    
    
    
    14,633
    
    
    
    3,830Interest income
    
    
    28,063
    
    
    
    15,187
    
    
    
    48,184
    
    
    
    25,610Interest expense
    
    
    (6,300
    )
    
    
    (5,816
    )
    
    
    (12,616
    )
    
    
    (11,567
    )Other (expense) income
    
    
    (2,846
    )
    
    
    17,765
    
    
    
    (5,173
    )
    
    
    19,291Equity in losses of affiliates
    
    
    
    
    
    
    (516
    )
    
    
    
    
    
    
    (1,202
    )INCOME BEFORE INCOME TAXES
    
    
    490,962
    
    
    
    337,381
    
    
    
    975,130
    
    
    
    850,531Provision for income taxes
    
    
    150,350
    
    
    
    117,408
    
    
    
    314,967
    
    
    
    295,984INCOME BEFORE MINORITY INTEREST
    
    
    340,612
    
    
    
    219,973
    
    
    
    660,163
    
    
    
    554,547Minority interest held by Accenture Canada
    
    
    (1,770
    )
    
    
    (1,453
    )
    
    
    (3,431
    )
    
    
    (3,794
    )Minority
interest  other
    
    
    (2,138
    )
    
    
    103
    
    
    
    (3,735
    )
    
    
    27NET INCOME
    
    $
    336,704
    
    
    $
    218,623
    
    
    $
    652,997
    
    
    $
    550,780
 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 Six Months Ended February 28, 2005
(In thousands of U.S. dollars and in thousands of share amounts)
(Unaudited)
 Class I
    
    Class II
    
    RestrictedCommon
    
    Common
    
    Share Units
    
    
    
    
    
    
    
    
    
    Treasury
    
    Investment in
    
    
    
    
    
    
    
    AccumulatedOtherCompre-Shares
    
    Shares
    
    Common Shares
    
    
    
    
    
    
    
    
    
    Shares
    
    Accenture LtdDeferred
    
    Additional
    
    
    
    
    
    

    
    RetainedNo.
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    Compen-
    
    Paid-in
    
    
    
    
    
    No.
    
    
    
    
    
    No.
    
    
    
    Earnings
    
    hensive$
    
    Shares
    
    $
    
    Shares
    
    $
    
    Shares
    
    sation
    
    Capital
    
    $
    
    Shares
    
    $
    
    Shares
    
    
    
    (Deficit)
    
    Income (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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    652,997
    
   
    
    
    
    
    
    
    652,997Other comprehensive income (loss):Unrealized loss on marketable securities, net of
reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    (3,340
    )
    
    
    (3,340
    )Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    66,761
    
    
    
    66,761Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    63,421Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    716,418Income tax benefit on stock-based compensation plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,775
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    10,775Purchase of Accenture Ltd Class A common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,699
    )
    
    
    
    
    
    
    
    
    
    
    (7,466
    )
    
    
    (298
    )
    
    
    
    
    
    
    
    
    
    
   
    
    (11,165
    )Grants of restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    138,356
    
    
    
    5,222
    
    
    
    (138,356
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,566
    
    
    
    306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    
    37,872Purchases/redemptions of Accenture SCA Class I
common shares and Canada Holdings Inc. exchangeable
shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (235,670
    )
    
    
    (9,393
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    
    (235,676
    )Issuance of Class A common shares:Employee share purchase plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,023
    )
    
    
    82,422
    
    
    
    3,586
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    
    74,399Employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,842
    )
    
    
    79,465
    
    
    
    3,895
    
    
    
    
    
    
    
    
    
    
    
    
    (3,917
    )
    
    
    
    
    
   
    
    57,706Restricted share units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,347
    )
    
    
    (892
    )
    
    
    
    
    
    
    (4,057
    )
    
    
    18,404
    
    
    
    823
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    Transaction fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,427
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    
    3,427Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,829
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   
    1,829Balance at February 28, 2005
    
    $
    1,090,621
    
    
    
    971,294
    
    
    $
    529,281
    
    
    
    470,958
    
    
    $
    599,249
    
    
    
    32,609
    
    
    $
    (251,567
    )
    
    $
    2,959,365
    
    
    $
    (1,954,123
    )
    
    
    (84,958
    )
    
    $
    (43,163
    )
    
    
    (1,720
    )
    
    
    $
    151,351
    
    
   
    $
    (50,339
    )
    
    $
    3,030,675
 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 Six Months Ended February 28, 2005 and February 29, 2004
(In thousands of U.S. dollars)
(Unaudited) February 28,
    
    
    February 29,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    652,997
    
    
    $
    550,780Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization
    
    
    121,906
    
    
    
    142,819Reorganization benefits
    
    
    (28,769
    )
    
    
    (86,216
    )Gains on investments, net
    
    
    (14,633
    )
    
    
    (3,830
    )Losses on disposal of property and equipment, net
    
    
    3,415
    
    
    
    4,446Stock-based compensation expense
    
    
    37,872
    
    
    
    31,863Deferred income taxes, net
    
    
    (16,682
    )
    
    
    (12,518
    )Minority interest
    
    
    7,166
    
    
    
    3,767Other items, net
    
    
    (2,654
    )
    
    
    2,771Change in assets and liabilities (Increase) decrease in receivables from clients, net
    
    
    (115,116
    )
    
    
    47,667(Increase) decrease in other current assets
    
    
    (2,540
    )
    
    
    1,456Increase in unbilled services, current and non-current
    
    
    (415,141
    )
    
    
    (178,381
    )Decrease (increase) in other non-current assets
    
    
    741
    
    
    
    (23,363
    )Increase (decrease) in accounts payable
    
    
    231,846
    
    
    
    (81,697
    )Increase in deferred revenues
    
    
    281,637
    
    
    
    214,047(Decrease) increase in accrued payroll and related benefits
    
    
    (151,331
    )
    
    
    164,254Increase in income taxes payable
    
    
    49,840
    
    
    
    190,137(Decrease) increase in other accrued liabilities
    
    
    (2,513
    )
    
    
    47,436Increase (decrease) in other non-current liabilities
    
    
    87,966
    
    
    
    (21,943
    )Net cash provided by operating activities
    
    
    726,007
    
    
    
    993,495CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of available-for-sale investments
    
    
    606,022
    
    
    
    103,303Purchases of available-for-sale investments
    
    
    (691,646
    )
    
    
    (400,251
    )Proceeds from sales of property and equipment
    
    
    2,325
    
    
    
    3,114Purchases of property and equipment
    
    
    (116,213
    )
    
    
    (101,240
    )Purchases of businesses and investments, net of cash acquired
    
    
    
    
    
    
    (6,131
    )Net cash used in investing activities
    
    
    (199,512
    )
    
    
    (401,205
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payment of retirement benefits to former pre-incorporation partners
    
    
    (6,258
    )
    
    
    (7,011
    )Proceeds from issuance of common shares
    
    
    135,532
    
    
    
    1,582,025Purchase of common shares
    
    
    (260,407
    )
    
    
    (1,793,497
    )Proceeds from issuance of long-term debt
    
    
    1,859
    
    
    
    395Repayments of long-term debt
    
    
    (6,520
    )
    
    
    (1,912
    )Proceeds from issuance of short-term bank borrowings
    
    
    36,639
    
    
    
    72,990Repayments of short-term bank borrowings
    
    
    (25,444
    )
    
    
    (80,214
    )Decrease in restricted cash of Accenture Share Employee Compensation Trust
    
    
    
    
    
    
    83,280Net cash used in financing activities
    
    
    (124,599
    )
    
    
    (143,944
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    105,349
    
    
    
    73,108NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    507,245
    
    
    
    521,454CASH AND CASH EQUIVALENTS,beginning of period
    
    
    2,552,958
    
    
    
    2,332,161CASH AND CASH EQUIVALENTS,end of period
    
    $
    3,060,203
    
    
    $
    2,853,615
 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 amounts or as otherwise disclosed)
(Unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited interim Consolidated Financial Statements of Accenture SCA, a
Luxemburg 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 six months ended
February 28, 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, 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. Beginning September 1, 2005, Accenture will be required to record
compensation expense for its employee stock options and share purchase rights as a result of a
revision to Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, (SFAS No. 123) issued in December 2004. Had compensation expense for employee
stock options granted under the Companys share incentive plan and 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
    
    
    Six Months EndedFebruary 28,
    
    
    February 29,
    
    
    February 28,
    
    
    February 29,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income as reported
    
    $
    336,704
    
    
    $
    218,623
    
    
    $
    652,997
    
    
    $
    550,780Add: Stock-based compensation expense already included in
net income as reported, net of tax and minority interest
    
    
    17,859
    
    
    
    15,684
    
    
    
    34,594
    
    
    
    28,704Deduct: Pro forma employee compensation cost related to
stock options, restricted share units and employee share
purchase plan, net of tax and minority interest
    
    
    (53,230
    )
    
    

    (39,950
    )
    
    
    (91,922
    )
    
    
    (80,392
    )Subtotal
    
    
    (35,371
    )
    
    
    (24,266
    )
    
    
    (57,328
    )
    
    
    (51,688
    )Pro forma net income
    
    $
    301,333
    
    
    $
    194,357
    
    
    $
    595,669
    
    
    $
    499,092
 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. 8




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS - (Continued)
(In thousands of U.S. Dollars, except share amounts or as otherwise disclosed)
(Unaudited) The Companys restructuring activity for the three and six months ended February 28, 2005 is
as follows: Three months ended
    

    
    Six months endedFiscal 2004
    
    
    Fiscal 2002
    
    
    Fiscal 2004
    
    
    Fiscal 2002Restructuring
    
    
    Restructuring
    
    
    Restructuring
    
    
    RestructuringRestructuring liability balance, beginning of period
    
    $
    78,384
    
    
    $
    21,685
    
    
    $
    78,756
    
    
    $
    24,005Payments made
    
    
    (7,245
    )
    
    
    (4,922
    )
    
    
    (10,137
    )
    
    
    (7,912
    )Other(1)
    
    
    506
    
    
    
    (1,335
    )
    
    
    3,026
    
    
    
    (665
    )Restructuring liability, end of period
    
    $
    71,645
    
    
    $
    15,428
    
    
    $
    71,645
    
    
    $
    15,428
   (1)
    
    Other represents foreign currency translation, imputed interest and immaterial changes in
lease estimates. The restructuring liabilities at February 28, 2005 were $87,073, of which $18,700 was
included in other accrued liabilities and $68,373 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 six
months ended February 28, 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
    
    
    Six months endedFebruary 28,
    
    
    February 29,
    
    
    February 28,
    
    
    February 29,2005
    
    
    2004
    
    
    2005
    
    
    2004Reorganization liability balance, beginning of period
    
    $
    502,478
    
    
    $
    438,042
    
    
    $
    454,042
    
    
    $
    510,149Net (benefit) expense recorded
    
    
    (35,777
    )
    
    
    182
    
    
    
    (28,769
    )
    
    
    (86,216
    )Foreign currency translation
    
    
    1,126
    
    
    
    23,739
    
    
    
    42,554
    
    
    
    38,030Reorganization liability, end of period
    
    $
    467,827
    
    
    $
    461,963
    
    
    $
    467,827
    
    
    $
    461,963
 The reorganization liabilities at February 28, 2005 were $467,827, of which $125,980 was
included in other accrued liabilities, because final determinations
could occur within 12 months, and $341,847 was included in other non-current liabilities. 4. ACCUMULATED OTHER COMPREHENSIVE LOSS The components of Accumulated other comprehensive loss are as follows: February 28,
    
    
    August 31,2005
    
    
    2004Foreign currency translation adjustments
    
    $
    44,009
    
    
    $
    (22,752
    )Unrealized (losses) gains on marketable securities, net of reclassification adjustments
    
    
    (2,816
    )
    
    
    524Minimum pension liability adjustments, net of tax
    
    
    (91,532
    )
    
    
    (91,532
    )Accumulated other comprehensive loss
    
    $
    (50,339
    )
    
    $
    (113,760
    )
 Comprehensive income is as follows: February 28,
    
    
    February 29,2005
    
    
    2004Three months ended
    
    $
    357,009
    
    
    $
    259,625Six months ended
    
    
    716,418
    
    
    
    617,631
 9




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS - (Continued)
(In thousands of U.S. Dollars, except share amounts or as otherwise disclosed)
(Unaudited) 5. GOODWILL The changes in the carrying amount of goodwill by reportable segment for the six months ended
February 28, 2005 are as follows: Foreign currencyBalance at
    
    
    Additions/
    
    
    translation
    
    
    Ending balance atAugust 31, 2004
    
    
    Adjustments(1)
    
    
    adjustments
    
    
    February 28, 2005Communications & High Tech
    
    $
    70,949
    
    
    $
    3,316
    
    
    $
    3,472
    
    
    $
    77,737Financial Services
    
    
    43,668
    
    
    
    8,304
    
    
    
    1,824
    
    
    
    53,796Government
    
    
    23,242
    
    
    
    1,766
    
    
    
    790
    
    
    
    25,798Products
    
    
    46,402
    
    
    
    4,485
    
    
    
    1,734
    
    
    
    52,621Resources
    
    
    30,221
    
    
    
    1,995
    
    
    
    758
    
    
    
    32,974Total
    
    $
    214,482
    
    
    $
    19,866
    
    
    $
    8,578
    
    
    $
    242,926
   (1)
    
    Includes an increase related to Accenture HR Services and reclassifications made in
fiscal 2005. 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 EndedFebruary 28,
    
    
    February 29,2005
    
    
    2004Non-U.S.
    
    
    
    
    
    
    Non-U.S.U.S. Plans
    
    
    Plans
    
    
    U.S. Plans
    
    
    PlansComponents of pension expenseService cost
    
    $
    14,000
    
    
    $
    12,270
    
    
    $
    11,312
    
    
    $
    7,032Interest cost
    
    
    8,796
    
    
    
    4,518
    
    
    
    9,065
    
    
    
    3,158Expected return on plan assets
    
    
    (10,723
    )
    
    
    (3,765
    )
    
    
    (6,184
    )
    
    
    (1,810
    )Amortization of transitional obligation
    
    
    
    
    
    
    138
    
    
    
    
    
    
    
    (55
    )Amortization
of loss (gain)
    
    
    3,360
    
    
    
    (276
    )
    
    
    5,169
    
    
    
    150Amortization of prior service cost
    
    
    323
    
    
    
    308
    
    
    
    618
    
    
    
    23Special termination benefits charge
    
    
    
    
    
    
    (546
    )
    
    
    
    
    
    
    Total
    
    $
    15,756
    
    
    $
    12,647
    
    
    $
    19,980
    
    
    $
    8,498
 Pension BenefitsSix Months EndedFebruary 28,
    
    
    February 29,2005
    
    
    2004U.S. Plans
    
    
    Non-U.S.Plans
    
    
    U.S. Plans
    
    

Non-U.S.PlansComponents of pension expenseService cost
    
    $
    28,000
    
    
    $
    23,383
    
    
    $
    22,624
    
    
    $
    13,984Interest cost
    
    
    17,591
    
    
    
    8,737
    
    
    
    18,130
    
    
    
    6,115Expected return on plan assets
    
    
    (21,446
    )
    
    
    (7,048
    )
    
    
    (12,368
    )
    
    
    (3,525
    )Amortization of transitional obligation
    
    
    
    
    
    
    269
    
    
    
    
    
    
    
    (111
    )Amortization
of loss (gain)
    
    
    6,720
    
    
    
    (535
    )
    
    
    10,338
    
    
    
    294Amortization of prior service cost
    
    
    645
    
    
    
    592
    
    
    
    1,236
    
    
    
    45Special termination benefits charge
    
    
    
    
    
    
    341
    
    
    
    
    
    
    
    Total
    
    $
    31,510
    
    
    $
    25,739
    
    
    $
    39,960
    
    
    $
    16,802
 10




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS - (Continued)
(In thousands of U.S. Dollars, except share amounts or as otherwise disclosed)
(Unaudited) Postretirement BenefitsThree Months EndedFebruary 28,
    
    
    February 29,2005
    
    
    2004Non-U.S.
    
    
    
    
    
    
    Non-U.S.U.S. Plans
    
    
    Plans
    
    
    U.S. Plans
    
    
    PlansComponents of postretirement expenseService cost
    
    $
    1,773
    
    
    $
    413
    
    
    $
    1,816
    
    
    $
    449Interest cost
    
    
    1,384
    
    
    
    448
    
    
    
    1,292
    
    
    
    420Expected return on plan assets
    
    
    (334
    )
    
    
    
    
    
    
    (356
    )
    
    
    Amortization of transitional obligation
    
    
    20
    
    
    
    
    
    
    
    20
    
    
    
    (6
    )Amortization of loss
    
    
    373
    
    
    
    24
    
    
    
    600
    
    
    
    17Amortization of prior service cost
    
    
    (200
    )
    
    
    (68
    )
    
    
    (200
    )
    
    
    Total
    
    $
    3,016
    
    
    $
    817
    
    
    $
    3,172
    
    
    $
    880
 Postretirement BenefitsSix Months EndedFebruary 28,
    
    
    February 29,2005
    
    
    2004Non-U.S.
    
    
    
    
    
    
    Non-U.S.U.S. Plans
    
    
    Plans
    
    
    U.S. Plans
    
    
    PlansComponents of postretirement expenseService cost
    
    $
    3,545
    
    
    $
    863
    
    
    $
    3,632
    
    
    $
    898Interest cost
    
    
    2,767
    
    
    
    923
    
    
    
    2,584
    
    
    
    840Expected return on plan assets
    
    
    (667
    )
    
    
    
    
    
    
    (712
    )
    
    
    Amortization of transitional obligation
    
    
    40
    
    
    
    
    
    
    
    40
    
    
    
    (12
    )Amortization of loss
    
    
    746
    
    
    
    46
    
    
    
    1,200
    
    
    
    34Amortization of prior service cost
    
    
    (401
    )
    
    
    (68
    )
    
    
    (400
    )
    
    
    Total
    
    $
    6,030
    
    
    $
    1,764
    
    
    $
    6,344
    
    
    $
    1,760
 7. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS EQUITY On December 20, 2004, a tender offer made to Accenture SCA Class I shareholders on November
16, 2004 by Accenture SCA and one of its subsidiaries resulted in the redemption and purchase of an aggregate of 3,463,488 Accenture SCA Class I common shares at a price of $24.61 per share. The
total cash outlay for these transactions was $85,236. During the six
months ended February 28, 2005, Accenture SCA purchased or redeemed
9,393,118 Accenture SCA Class I common shares with an aggregate
purchase price of $235,676. At
February 28, 2005, there was $912,546 available for open-market
share purchases of Accenture Ltd Class A common shares and
$2,135,158 of previously authorized funds available for the purchase, redemption and exchange of
Accenture shares held by partners, former partners, their permitted transferees and employees. Effective as of February 18, 2005, Accenture awarded to certain of its highest-performing
partners stock options to purchase approximately 15 million Accenture Ltd Class A common shares,
having an aggregate fair market value, at the time of grant, of $170,000. 11




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS - (Continued)
(In thousands of U.S. Dollars, except share amounts or as otherwise disclosed)
(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 additional purchase price payments
through September 30, 2008, conditional on Accenture HR Services achieving certain levels of
qualifying revenues. An amendment to the purchase agreement was signed in January 2005, increasing
the guaranteed additional purchase price by $10,000 and decreasing the total amount of additional
purchase price that Accenture may be required to make from $187,500 to $177,500. During the three
months and six months ended February 28, 2005, Accenture made payments of $0 and $11,310,
respectively. The remaining potential liability at February 28, 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 February 28, 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 February 28, 2005, Accenture estimates it
had assumed an aggregate potential liability of approximately $719,827 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 $44,232 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 February 28, 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. 12




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS - (Continued)
(In thousands of U.S. Dollars, except share amounts or as otherwise disclosed)
(Unaudited) 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: Three Months EndedFebruary 28, 2005
    
    
    February 29, 2004Revenues before
    
    
    Operating
    
    
    Revenues before
    
    
    OperatingReimbursements
    
    
    Income
    
    
    Reimbursements
    
    
    IncomeCommunications & High
Tech
    
    $
    982,088
    
    
    $
    138,496
    
    
    $
    930,812
    
    
    $
    59,488Financial Services
    
    
    859,336
    
    
    
    127,053
    
    
    
    647,531
    
    
    
    62,139Government
    
    
    521,111
    
    
    
    13,343
    
    
    
    467,926
    
    
    
    43,271Products
    
    
    851,394
    
    
    
    97,991
    
    
    
    715,386
    
    
    
    96,015Resources
    
    
    596,493
    
    
    
    95,069
    
    
    
    538,268
    
    
    
    46,783Other
    
    
    3,100
    
    
    
    
    
    
    
    2,286
    
    
    
    (267
    )Total
    
    $
    3,813,522
    
    
    $
    471,952
    
    
    $
    3,302,209
    
    
    $
    307,429
 Six Months EndedFebruary 28, 2005
    
    
    February 29, 2004Revenues before
    
    
    Operating
    
    
    Revenues before
    
    
    OperatingReimbursements
    
    
    Income
    
    
    Reimbursements
    
    
    IncomeCommunications & High
Tech
    
    $
    1,955,019
    
    
    $
    287,825
    
    
    $
    1,809,822
    
    
    $
    134,520Financial Services
    
    
    1,666,029
    
    
    
    222,479
    
    
    
    1,293,580
    
    
    
    165,819Government
    
    
    1,044,914
    
    
    
    59,610
    
    
    
    946,145
    
    
    
    137,174Products
    
    
    1,713,592
    
    
    
    183,859
    
    
    
    1,416,527
    
    
    
    229,852Resources
    
    
    1,160,885
    
    
    
    176,329
    
    
    
    1,092,895
    
    
    
    147,204Other
    
    
    3,438
    
    
    
    
    
    
    
    4,825
    
    
    
    Total
    
    $
    7,543,877
    
    
    $
    930,102
    
    
    $
    6,563,794
    
    
    $
    814,569
 Reorganization benefits and restructuring costs were allocated to the reportable
operating segments as follows: Three Months Ended
    
    
    Six Months EndedFebruary 28,
    
    
    February 29,
    
    
    February 28,
    
    
    February 29,2005
    
    
    2004
    
    
    2005
    
    
    2004Income (Expense)Communications & High Tech
    
    $
    8,898
    
    
    $
    (26,998
    )
    
    $
    7,156
    
    
    $
    (5,288
    )Financial Services
    
    
    8,082
    
    
    
    (23,619
    )
    
    
    6,548
    
    
    
    (4,668
    )Government
    
    
    5,661
    
    
    
    (15,801
    )
    
    
    4,545
    
    
    
    (3,092
    )Products
    
    
    8,070
    
    
    
    (23,531
    )
    
    
    6,447
    
    
    
    (4,597
    )Resources
    
    
    5,066
    
    
    
    (17,489
    )
    
    
    4,073
    
    
    
    (3,395
    )Total
    
    $
    35,777
    
    
    $
    (107,438
    )
    
    $
    28,769
    
    
    $
    (21,040
    )
 13




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##### 



ACCENTURE SCA NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS - (Continued)
(In thousands of U.S. Dollars, except share amounts or as otherwise disclosed)
(Unaudited) 10. SUBSEQUENT EVENTS On March 7, 2005, a tender offer made to Accenture SCA Class I shareholders on February 1,
2005 by Accenture SCA and one of its subsidiaries resulted in the redemption or purchase
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 $501,277. On March 15, 2005, as a result of favorable final determinations of certain reorganization
liabilities recorded in connection with our transition to a corporate structure in 2001, we
recognized benefits of approximately $69,000. 14




---



##### 



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 our business partners whom we do not control. 15




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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 six months ended February 28, 2005 were $3.81
billion and $7.54 billion, respectively, compared with $3.30 billion and $6.56 billion,
respectively, for the three and six months ended February 29, 2004, an increase of 15% for both
periods in U.S. dollars and 10% and 9%, respectively, in local currency terms. Outsourcing revenues before reimbursements for the three and six months ended February 28,
2005 were $1.51 billion and $2.86 billion, respectively, compared with $1.28 billion and $2.44
billion, respectively, for the three and six months ended February 29, 2004, an increase of 18% and
17%, respectively, in U.S. dollars and 13% and 12%, respectively, 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. While we expect
that outsourcing will continue to deliver solid growth to our business over the remainder of this
fiscal year, it is likely to grow overall at a slower rate than it did in fiscal 2004. 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 six months of fiscal 2004. Long-term relationships with many of
our clients continue to contribute to our success in growing 16




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##### 



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 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 six months ended February 28, 2005
were $2.30 billion and $4.68 billion, respectively, compared with $2.02 billion and $4.12 billion,
respectively, for the three and six months ended February 29, 2004, an increase of 14% for both
periods in U.S. dollars and 8% for both periods in local currency terms. 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. We have experienced
temporary delays in our ability to deploy, as planned, a number of the Systems components.
The delays in deployment have resulted in lower-than-expected revenues, margins, billings and cash flows to date. We are also continuing to
carry unbilled services on the NHS Contracts in amounts significantly above our initial
estimates. For the first six months of fiscal 2005, we have recorded losses attributable to
these contracts of approximately $38 million. As of February 28, 2005, client financing and
other assets attributable to this client totaled $349 million. We
are continuing to work with the NHS to agree to alternative deployment plans and to consider
different financing arrangements. Under our contracts with the NHS our ability to bill and
collect the unbilled services we are carrying is subject to our ability to agree with our
client on alternative deployment plans and to successful deployment.
Based on agreeing to the alternative deployment plans currently under discussion, we expect that aggregate losses on the
NHS Contracts for this fiscal year could be from $110 million to $150 million, and that client financing and
other assets attributable to this client could total
between $400 million and $460 million by our fiscal year end.
Based on agreeing to these deployment plans, we currently expect contract losses to continue in
fiscal 2006, but at levels less than those expected for this fiscal year. We 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 six 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
costs, 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
include net 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 February 28, 2005 were 31% of revenues before reimbursements, compared with
33% for the three months ended February 29, 2004. This decrease
was due primarily to the
lower-than-expected margins attributable to temporary delays under the NHS Contracts and
incurred and expected
cost overruns associated with the development of reusable assets in
connection with several client contracts. To a lesser extent, a
number of delivery inefficiencies, including continuing staffing costs and
higher subcontractor usage, also
contributed to this decrease. We did not accrue variable compensation
expense for the three months ended February 28, 2005, which
partially offset the decrease in gross margins. 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. 17




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##### 



Our attrition rate for the three months ended February 28, 2005 was 18%, lower than the 20%
attrition rate we experienced in the first quarter of fiscal 2005. Increasing competition for
scarce talent will likely present us with supply-and-demand and skill-level imbalance challenges in
certain industry segments, skill sets and geographic regions for the remainder 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. 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. These compensation adjustments and the
additional costs of recruiting, hiring, training and assimilating increasing numbers of new
employees could adversely affect our operating margins. Sales and marketing and general and administrative costs as a percentage of revenues before
reimbursements were 19% and 20%, respectively, for the three and six months ended February 28,
2005, compared with 20% and 21%, respectively, for the three and six months ended February 29,
2004. Operating income as a percentage of revenues before reimbursements for the three months ended
February 28, 2005 increased to 12% from 9% for the three months ended February 29, 2004. This
increase was primarily related to restructuring costs of $107 million recorded in fiscal 2004.
Excluding reorganization and restructuring, operating income as a percentage of
revenues before reimbursements for the three months ended February 28, 2005 decreased by 1.1
percentage points compared with the three months ended February 29, 2004. For both the six months
ended February 28, 2005 and February 29, 2004, operating income as a percentage of revenues before
reimbursements was 12%. New Contract Bookings and Backlog New contract bookings for the three months ended February 28, 2005 were $4,875 million, a
decrease of $2,774 million, or 36% from the three months ended February 29, 2004, with consulting
bookings decreasing 3%, to $2,810 million, and outsourcing bookings decreasing 57%, to $2,065
million. New contract bookings for the six months ended February 28, 2005 were $8,905 million, a
decrease of $3,795 million, or 30%, from the six months ended February 29, 2004, with consulting
bookings decreasing 4% and outsourcing bookings decreasing 47%. The size and scope of many of our
new outsourcing contract bookings have decreased when compared to new outsourcing contract bookings for
the six months ended February 29, 2004. The decrease 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 three and six
months ended February 29, 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 complete description of our critical accounting policies and estimates, refer to our
Annual Report on Form 10-K for the year ended August 31, 2004. 18




---



##### 



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. Revenues for each of our operating groups, geographic regions and types of work are as
follows: Percent of Total RevenuesPercent
    
    
    Before Reimbursement forThree Months Ended
    
    
    Percent
    
    
    Increase
    
    
    the Three Months EndedFebruary 28,
    
    
    February 29,
    
    
    Increase
    
    
    Local
    
    
    February 28,
    
    
    February 29,2005
    
    
    2004
    
    
    US$
    
    
    Currency
    
    
    2005
    
    
    2004(in millions)OPERATING GROUPSCommunications & High Tech
    
    $
    982
    
    
    $
    931
    
    
    
    6
    %
    
    
    1
    %
    
    
    26
    %
    
    
    28
    %Financial Services
    
    
    859
    
    
    
    648
    
    
    
    33
    
    
    
    25
    
    
    
    22
    
    
    
    20Government
    
    
    521
    
    
    
    468
    
    
    
    11
    
    
    
    7
    
    
    
    14
    
    
    
    14Products
    
    
    851
    
    
    
    715
    
    
    
    19
    
    
    
    14
    
    
    
    22
    
    
    
    22Resources
    
    
    597
    
    
    
    538
    
    
    
    11
    
    
    
    5
    
    
    
    16
    
    
    
    16Other
    
    
    3
    
    
    
    2
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    
    
    
    
    TOTAL Revenues Before Reimbursements
    
    
    3,813
    
    
    
    3,302
    
    
    
    15
    
    
    
    10
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    403
    
    
    
    380
    
    
    
    6TOTAL REVENUES
    
    $
    4,216
    
    
    $
    3,682
    
    
    
    15
    %GEOGRAPHYAmericas
    
    $
    1,542
    
    
    $
    1,501
    
    
    
    3
    %
    
    
    2
    %
    
    
    41
    %
    
    
    45
    %EMEA(1)
    
    
    1,996
    
    
    
    1,576
    
    
    
    27
    
    
    
    17
    
    
    
    52
    
    
    
    48Asia Pacific
    
    
    275
    
    
    
    225
    
    
    
    22
    
    
    
    15
    
    
    
    7
    
    
    
    7TOTAL Revenues Before Reimbursements
    
    
    3,813
    
    
    
    3,302
    
    
    
    15
    
    
    
    10
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    403
    
    
    
    380
    
    
    
    6TOTAL REVENUES
    
    $
    4,216
    
    
    $
    3,682
    
    
    
    15
    %TYPE OF WORKConsulting
    
    $
    2,301
    
    
    $
    2,026
    
    
    
    14
    %
    
    
    8
    %
    
    
    60
    %
    
    
    61
    %Outsourcing
    
    
    1,512
    
    
    
    1,276
    
    
    
    18
    
    
    
    13
    
    
    
    40
    
    
    
    39TOTAL Revenues Before Reimbursements
    
    
    3,813
    
    
    
    3,302
    
    
    
    15
    
    
    
    10
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    403
    
    
    
    380
    
    
    
    6TOTAL REVENUES
    
    $
    4,216
    
    
    $
    3,682
    
    
    
    15
    %
   n/m = not meaningful(1)     EMEA includes Europe, the Middle East and Africa. 19




---



##### 



Percent of Total RevenuesPercent
    
    
    Before Reimbursement forSix Months Ended
    
    
    Percent
    
    
    Increase
    
    
    the Six Months EndedFebruary 28,
    
    
    February 29,
    
    
    Increase
    
    
    Local
    
    
    February 28,
    
    
    February 29,2005
    
    
    2004
    
    
    US$
    
    
    Currency
    
    
    2005
    
    
    2004(in millions)OPERATING GROUPSCommunications & High Tech
    
    $
    1,955
    
    
    $
    1,810
    
    
    
    8
    %
    
    
    4
    %
    
    
    26
    %
    
    
    28
    %Financial Services
    
    
    1,666
    
    
    
    1,294
    
    
    
    29
    
    
    
    21
    
    
    
    22
    
    
    
    20Government
    
    
    1,045
    
    
    
    946
    
    
    
    10
    
    
    
    6
    
    
    
    14
    
    
    
    14Products
    
    
    1,714
    
    
    
    1,416
    
    
    
    21
    
    
    
    15
    
    
    
    23
    
    
    
    21Resources
    
    
    1,161
    
    
    
    1,093
    
    
    
    6
    
    
    
    
    
    
    
    15
    
    
    
    17Other
    
    
    3
    
    
    
    5
    
    
    
    n/m
    
    
    
    n/m
    
    
    
    
    
    
    
    TOTAL Revenues Before Reimbursements
    
    
    7,544
    
    
    
    6,564
    
    
    
    15
    
    
    
    9
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    744
    
    
    
    693
    
    
    
    7TOTAL REVENUES
    
    $
    8,288
    
    
    $
    7,257
    
    
    
    14
    %GEOGRAPHYAmericas
    
    $
    3,084
    
    
    $
    2,993
    
    
    
    3
    %
    
    
    2
    %
    
    
    41
    %
    
    
    45
    %EMEA(1)
    
    
    3,915
    
    
    
    3,126
    
    
    
    25
    
    
    
    15
    
    
    
    52
    
    
    
    48Asia Pacific
    
    
    545
    
    
    
    445
    
    
    
    22
    
    
    
    17
    
    
    
    7
    
    
    
    7TOTAL Revenues Before Reimbursements
    
    
    7,544
    
    
    
    6,564
    
    
    
    15
    
    
    
    9
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    744
    
    
    
    693
    
    
    
    7TOTAL REVENUES
    
    $
    8,288
    
    
    $
    7,257
    
    
    
    14
    %TYPE OF WORKConsulting
    
    $
    4,686
    
    
    $
    4,121
    
    
    
    14
    %
    
    
    8
    %
    
    
    62
    %
    
    
    63
    %Outsourcing
    
    
    2,858
    
    
    
    2,443
    
    
    
    17
    
    
    
    12
    
    
    
    38
    
    
    
    37TOTAL Revenues Before Reimbursements
    
    
    7,544
    
    
    
    6,564
    
    
    
    15
    
    
    
    9
    
    
    
    100
    %
    
    
    100
    %Reimbursements
    
    
    744
    
    
    
    693
    
    
    
    7TOTAL REVENUES
    
    $
    8,288
    
    
    $
    7,257
    
    
    
    14
    %
   n/m = not meaningful(1)     EMEA includes Europe, the Middle East and Africa. Three Months Ended February 28, 2005 Compared to Three Months Ended February 29, 2004 Revenues Operating Groups Our Communications & High Tech operating group achieved revenues before reimbursements for the
three months ended February 28, 2005 of $982 million, compared with $931 million for the three
months ended February 29, 2004, an increase of 6% in U.S. dollars and 1% in local currency terms.
The increase was primarily due to growth in consulting revenues across all industry groups and
geographic regions, particularly in our Communications industry group. Outsourcing revenue growth
in nearly all our regions and industry groups was more than offset by a decline in our
Communications industry groups outsourcing revenues in North America. The outsourcing revenue
decline was due partly to a substantial reduction, which began in fiscal 2004, in the scope of our
work with a major telecommunications client as a result of that clients changing business
strategies. This revenue decline will continue to adversely affect the operating groups growth
rates in outsourcing revenues for the next fiscal quarter as compared to the corresponding quarter
of fiscal 2004. Our Financial Services operating group achieved revenues before reimbursements for the three
months ended February 28, 2005 of $859 million, compared with $648 million for the three months
ended February 29, 2004, an increase of 33% in U.S. dollars and 25% in local currency terms.
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. 20




---



##### 



Our Government operating group achieved revenues before reimbursements for the three months
ended February 28, 2005 of $521 million, compared with $468 million for the three months ended
February 29, 2004, an increase of 11% in U.S. dollars and 7% in local currency terms. Results were
driven by strong growth with clients in Europe and our Asia Pacific region. This growth was
partially offset by a decrease in revenues from clients in the United States at the Federal, state
and local levels. Our Products operating group achieved revenues before reimbursements for the three months
ended February 28, 2005 of $851 million, compared with $715 million for the three months ended
February 29, 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. Strong growth in outsourcing
revenues was primarily due to our Retail & Consumer industry group, whereas our Health Services
industry group contributed to our consulting revenue growth. Our Resources operating group achieved revenues before reimbursements for the three months
ended February 28, 2005 of $597 million, compared with $538 million for the three months ended
February 29, 2004, an increase of 11% in U.S. dollars and 5% in local currency terms. Strong
growth in our EMEA region, particularly in the Energy industry group, more than offset a decline in
our North America region. Geography Our Americas region achieved revenues before reimbursements for the three months ended
February 28, 2005 of $1,542 million, compared with $1,501 million for the three months ended
February 29, 2004, an increase of 3% in U.S. dollars and 2% in local currency terms. A key
contributor to this growth was our business in Brazil. Our Europe, Middle East and Africa (EMEA) region achieved revenues before reimbursements for
the three months ended February 28, 2005 of $1,996 million, compared with $1,576 million for the
three months ended February 29, 2004, an increase of 27% in U.S. dollars and 17% in local currency
terms. A key contributor to this growth was our business in the United Kingdom, where revenues
before reimbursements grew 32% in U.S. dollars and 22% in local currency terms over the same period
in fiscal 2004, due primarily to several large contracts sold there in fiscal 2004. Also
contributing to the strong growth in EMEA were our businesses in Germany, Italy, the Netherlands,
Norway and Spain. Our Asia Pacific region achieved revenues before reimbursements for the three months ended
February 28, 2005 of $275 million, compared with $225 million for the three months ended February
29, 2004, an increase of 22% in U.S. dollars and 15% in local currency terms. Our businesses in
Australia and Japan continued to drive the growth in our Asia Pacific region. Operating Expenses Operating expenses for the three months ended February 28, 2005 were $3,744 million, an
increase of $369 million, or 11%, over the three months ended February 29, 2004. Operating
expenses before reimbursements decreased as a percentage of revenues before reimbursements to 88%
for the three months ended February 28, 2005 from 91% for the three months ended February 29, 2004.
Excluding reorganization and restructuring, operating expenses before
reimbursements as a percentage of revenues before reimbursements would have increased by 1.1
percentage points for the three months ended February 28, 2005 compared with the three months ended
February 29, 2004. The strengthening of various currencies against the U.S. dollar increased our reported
operating expenses for the three months ended February 28, 2005 compared with the three months
ended February 29, 2004 and partially offset corresponding increases in reported revenues. During the three months ended February 28, 2005, we did not record any variable compensation
expense, compared with $64 million in variable compensation expense recorded for the three months
ended February 29, 2004. 21




---



##### 



Cost of Services Cost of services for the three months ended February 28, 2005 was $3,042 million, an increase
of $449 million, or 17%, over the three months ended February 29, 2004, and increased as a
percentage of revenues to 72% from 70% during this period. Cost of services before reimbursable
expenses for the three months ended February 28, 2005 was $2,639 million, an increase of $426
million, or 19%, over the three months ended February 29, 2004 and increased as a percentage of
revenues before reimbursements to 69% from 67% during this period. Gross margins (revenues before
reimbursements less cost of services before reimbursements) as a percentage of revenues before
reimbursements decreased to 31% for the three months ended February 28, 2005 from 33% for the three
months ended February 29, 2004. The increase in cost of services and the decrease in gross margins as a percentage of revenues
before reimbursements were due primarily to the lower-than-expected
margins attributable to temporary delays under the
NHS Contracts and incurred and expected cost overruns associated with
the development of reusable assets in
connection with several client contracts. To a lesser extent, a number of delivery inefficiencies, including
continuing staffing costs and higher subcontractor usage, also contributed to this
decrease. We did not accrue variable compensation expense for
the three months ended February 28, 2005, which partially offset
the decrease in gross margins. Sales and Marketing Sales and marketing expense for the three months ended February 28, 2005 was $377 million, an
increase of $18 million, or 5%, over the three months ended February 29, 2004 and decreased as a
percentage of revenues before reimbursements to 10% for the three months ended February 28, 2005
from 11% for the three months ended February 29, 2004. General and Administrative Costs General and administrative costs for the three months ended February 28, 2005 were $361
million, an increase of $45 million, or 14%, over the three months ended February 29, 2004 and
remained flat as a percentage of revenues before reimbursements
during that period. Reorganization (Benefits) and Restructuring Costs During
the three months ended February 28, 2005, Accenture recorded net reorganization benefits of
$36 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. These benefits from final determinations were partially offset by interest on reorganization liabilities. At February 28, 2005, the remaining liability for
reorganization costs was $468
million, of which $126 million was classified as current liabilities because final determinations
could occur within 12 months. During the three months ended February 29, 2004, benefits from final determinations offset interest on reorganization liabilities. During the three months ended February 29, 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 from abandoned office space. No
restructuring costs were recorded for the three months ended February 28, 2005. Operating Income Operating income for the three months ended February 28, 2005 was $472 million, an increase of
$165 million, or 54%, over the three months ended February 29, 2004 and increased as a percentage
of revenues before reimbursements to 12% from 9% during this period.
Excluding reorganization and restructuring, operating income as a percentage of revenues before
reimbursements would have decreased by 1.1 percentage points for the three months ended February
28, 2005 compared with the three months ended February 29, 2004. 22




---



##### 



Operating income for each of the operating groups was as follows: Three Months EndedIncrease (Decrease)ExcludingFebruary 28,
    
    
    February 29,
    
    
    Increase
    
    
    Reorganization and2005
    
    
    2004
    
    
    (Decrease)
    
    
    Restructuring(in millions)Communications & High Tech
    
    $
    139
    
    
    $
    59
    
    
    $
    80
    
    
    $
    45Financial Services
    
    
    127
    
    
    
    62
    
    
    
    65
    
    
    
    33Government
    
    
    13
    
    
    
    43
    
    
    
    (30
    )
    
    
    (52
    )Products
    
    
    98
    
    
    
    96
    
    
    
    2
    
    
    
    (30
    )Resources
    
    
    95
    
    
    
    47
    
    
    
    48
    
    
    
    26Total
    
    $
    472
    
    
    $
    307
    
    
    $
    165
    
    
    $
    22
 Reorganization benefits and restructuring costs were
allocated to the reportable operating groups as follows: Three Months EndedFebruary 28,
    
    
    February 29,Income (Expense)
    
    2005
    
    
    2004
    
    
    Increase(in millions)Communications & High Tech
    
    $
    9
    
    
    $
    (26
    )
    
    $
    35Financial Services
    
    
    8
    
    
    
    (24
    )
    
    
    32Government
    
    
    6
    
    
    
    (16
    )
    
    
    22Products
    
    
    8
    
    
    
    (24
    )
    
    
    32Resources
    
    
    5
    
    
    
    (17
    )
    
    
    22Total
    
    $
    36
    
    
    $
    (107
    )
    
    $
    143
 Excluding
the effects of reorganization and restructuring, operating
income for the three months ended February 28, 2005 increased by $22 million over the three months
ended February 29, 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 and restructuring:  
    Communications & High Tech operating income increased primarily due to
lower-than-expected margins on three contracts in the second quarter of fiscal 2004 and
higher gross margins in the second quarter of fiscal 2005, reflecting a higher
proportion of consulting revenues.
    The increase in Financial Services operating income reflected a 33% increase in
revenues before reimbursements.
    Government operating income decreased partly due to
lower-than-expected margins attributable to temporary delays under
the NHS Contracts, as well as cost overruns associated with the
development of reusable assets in connection with certain client
contracts and delivery inefficiencies on
several other contracts.
    Products operating income decreased, driven by the continued shift in the mix of our
business toward outsourcing and lower-than-expected margins
attributable to temporary delays under the NHS
Contracts.
    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 February 28, 2005 was $28 million, an increase of
$13 million, or 85%, over the three months ended February 29, 2004. The increase resulted
primarily from an increase in interest rates, as well as an increase in average investment
(short-term and non-current) and average client financing balances during the three months ended
February 28, 2005, compared with the average balances for the three months ended February 29, 2004. 23




---



##### 



Other (Expense) Income Other expense was $3 million for the three months ended February 28, 2005, compared with other
income of $18 million for the three months ended February 29, 2004. The decrease in other income
was primarily due to foreign currency exchange losses in fiscal 2005 compared with foreign currency
exchange gains in fiscal 2004. Provision for Income Taxes The effective tax rates for the three months ended February 28, 2005 and February 29, 2004
were 30.6% and 34.8%, respectively. The effective tax rate of 30.6% includes the effect of the
reduction in the annual effective tax rate for fiscal 2005 from 34.0% to 32.3%, due to changes in
our forecasted geographic mix of income and a reduction in reorganization liabilities. Six Months Ended February 28, 2005 Compared to Six Months Ended February 29, 2004 Revenues Operating Groups Our Communications & High Tech operating group achieved revenues before reimbursements for the
six months ended February 28, 2005 of $1,955 million, compared with $1,810 million for the six
months ended February 29, 2004, an increase of 8% in U.S. dollars and 4% in local currency terms.
The increase was primarily due to growth in consulting revenues across all industry groups and
geographic regions, particularly in our Communications industry group. Outsourcing revenue growth
in nearly all our regions and industry groups was more than offset by a decline in our
Communications industry groups outsourcing revenues in North America. The outsourcing revenue
decline was due partly to a substantial reduction, which began in fiscal 2004, in the scope of our
work with a major telecommunications client as a result of that clients changing business
strategies. This revenue decline will continue to adversely affect the operating groups growth
rates in outsourcing revenues for the next fiscal quarter as compared to the corresponding quarter
of fiscal 2004. Our Financial Services operating group achieved revenues before reimbursements for the six
months ended February 28, 2005 of $1,666 million, compared with $1,294 million for the six months
ended February 29, 2004, an increase of 29% in U.S. dollars and 21% in local currency terms.
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 for the six months
ended February 28, 2005 of $1,045 million, compared with $946 million for the six months ended
February 29, 2004, an increase of 10% in U.S. dollars and 6% in local currency terms. Results were
driven by strong growth with clients in Europe and our Asia Pacific region. This growth was
partially offset by a decrease in revenues from clients in the United States at the Federal, state
and local levels. 24




---



##### 



Our Products operating group achieved revenues before reimbursements for the six months
ended February 28, 2005, of $1,714 million, compared with $1,416 million for the six months ended
February 29, 2004 an increase of 21% in U.S. dollars and 15% 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 for the six months ended
February 28, 2005 of $1,161 million, compared with $1,093 million for the six months ended February
29, 2004, an increase of 6% in U.S. dollars and generally flat in local currency terms. Strong
growth in our EMEA region, particularly in the Energy industry group, more than offset a decline in
our North America region. Geography Our Americas region achieved revenues before reimbursements for the six months ended February
28, 2005 of $3,084 million, compared with $2,993 million for the six months ended February 29,
2004, an increase of 3% in U.S. dollars and 2% in local currency terms. A key
contributor was strong growth in our Brazilian business, partially offset by a decline in our
Canadian business. Our Europe, Middle East and Africa (EMEA) region achieved revenues before reimbursements for
the six months ended February 28, 2005 of $3,915 million, compared with $3,126 million for the six
months ended February 29, 2004, an increase of 25% in U.S. dollars and 15% in local currency terms.
A key contributor to this growth was our business in the United Kingdom, where revenues before
reimbursements grew 41% in U.S. dollars and 29% in local currency terms over the same period in
fiscal 2004. The growth in the United Kingdom was primarily due to several large contracts that
were sold during fiscal 2004. Also contributing to the strong growth in EMEA were our businesses
in Germany, Italy, the Netherlands, Norway and Spain. Our Asia Pacific region achieved revenues before reimbursements for the six months ended
February 28, 2005 of $545 million, compared with $445 million for the six months ended February 29,
2004, an increase of 22% in U.S. dollars and 17% in local currency terms. Our businesses in
Australia and Japan continued to drive the growth in our Asia Pacific region. Operating Expenses Operating expenses for the six months ended February 28, 2005 were $7,358 million, an increase
of $915 million, or 14%, over the six months ended February 29, 2004. Operating expenses before
reimbursements as a percentage of revenues before reimbursements remained flat at 88% for the six
months ended February 28, 2005 and February 29, 2004. Excluding reorganization and
restructuring, operating expenses before reimbursements as a percentage of revenues before
reimbursements would have increased by 0.8 percentage points for the six months ended February 28,
2005 compared with the six months ended February 29, 2004. The strengthening of various currencies against the U.S. dollar increased our reported
operating expenses for the six months ended February 28, 2005 compared with the six months ended
February 29, 2004 and partially offset corresponding increases in reported revenues. During the six months ended February 28, 2005, we recorded $43 million of net variable
compensation expense, including a reduction of $7 million related to finalization of estimated
payouts accrued for fiscal 2004, compared with $60 million in net variable compensation expense,
including a reduction of $4 million related to fiscal 2003, for the six months ended February 29,
2004. Cost of Services Cost of services for the six months ended February 28, 2005 was $5,898 million, an increase of
$842 million, or 17%, over the six months ended February 29, 2004 and increased as a percentage of
revenues to 71% from 70% during this period. Cost of services before reimbursable expenses for the
six months ended February 28, 2005 was $5,154 million, an increase of $791 million, or 18%, over
the six months ended February 29, 2004 and increased as a percentage of revenues before
reimbursements to 68% 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% from 34% during this period. 25




---



##### 



The increase in cost of services and the decrease in gross margins as a percentage of revenues
before reimbursements were due primarily to the lower-than-expected
margins attributable to temporary delays under the NHS
Contracts and incurred and expected cost overruns
associated
with the development of reusable assets in connection with several
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 six months ended February 28, 2005 was $736 million, an
increase of $27 million, or 4%, over the six months ended
February 29, 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 six months ended February 28, 2005 were $752 million,
an increase of $97 million, or 15%, over the six months ended February 29, 2004 and remained flat
as a percentage of revenues before reimbursements at 10% for the six months ended February 28, 2005
and February 29, 2004. Reorganization (Benefits) and Restructuring Costs During the six months ended February 28, 2005 and February 29, 2004, Accenture recorded net
reorganization benefits of $29 million and $86 million, respectively, primarily driven by final
determinations of certain reorganization liabilities established in connection with our transition to a
corporate structure in 2001. At February 28, 2005, the remaining liability for reorganization
costs was $468 million, of which $126 million was classified as current liabilities because
final determinations could occur within 12 months. During the six months ended February 29, 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 six months ended February 28, 2005. Operating Income Operating income for the six months ended February 28, 2005 was $930 million, an increase of
$115 million, or 14%, over the six months ended February 29, 2004 and remained flat as a percentage
of revenues before reimbursements at 12% for the six months ended February 28, 2005 and February
29, 2004. Excluding reorganization and restructuring, operating income as a
percentage of revenues before reimbursements would have decreased by 0.8 percentage points for the
six months ended February 28, 2005, compared with the six months ended February 29, 2004. Operating income for each of the operating groups was as follows: Six Months EndedIncrease (Decrease)ExcludingFebruary 28,
    
    

February 29,
    
    
    Increase
    
    
    Reorganization and2005
    
    
    2004
    
    
    (Decrease)
    
    
    Restructuring(in millions)Communications & High Tech
    
    $
    288
    
    
    $
    135
    
    
    $
    153
    
    
    $
    141Financial Services
    
    
    222
    
    
    
    166
    
    
    
    56
    
    
    
    44Government
    
    
    60
    
    
    
    137
    
    
    
    (77
    )
    
    
    (85
    )Products
    
    
    184
    
    
    
    230
    
    
    
    (46
    )
    
    
    (57
    )Resources
    
    
    176
    
    
    
    147
    
    
    
    29
    
    
    
    22Total
    
    $
    930
    
    
    $
    815
    
    
    $
    115
    
    
    $
    65
 26




---



##### 



Reorganization benefits and restructuring costs were allocated to the reportable operating
groups as follows: Six Months EndedIncome (Expense)
    

February
28,
2005
    
    

February
29,
2004
    
    
    Increase(in millions)Communications & High Tech
    
    $
    7
    
    
    $
    (5
    )
    
    $
    12Financial Services
    
    
    7
    
    
    
    (5
    )
    
    
    12Government
    
    
    5
    
    
    
    (3
    )
    
    
    8Products
    
    
    6
    
    
    
    (5
    )
    
    
    11Resources
    
    
    4
    
    
    
    (3
    )
    
    
    7Total
    
    $
    29
    
    
    $
    (21
    )
    
    $
    50
 Excluding the effects of reorganization and restructuring, operating
income increased by $65 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 29% increase in
revenues before reimbursements.
    Government operating income decreased partly due to
lower-than-expected margins attributable to temporary delays under the NHS Contracts, as well as cost overruns associated with the
development of reusable assets in connection with certain client contracts and delivery inefficiencies on
several other contracts.
    Products operating income decreased, driven by the continued shift in the mix of our
business toward outsourcing and lower-than-expected margins
attributable to temporary delays under the NHS
Contracts.
    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 was $15 million for the six months ended February 28, 2005, an
increase of $11 million over the six months ended February 29, 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 six months ended February 28, 2005 was $48 million, an increase of $23
million, or 88%, over the six months ended February 29, 2004. The increase resulted primarily from
an increase in interest rates, as well as an increase in average investment (short-term and
non-current) and average client financing balances during the six months ended February 28, 2005
compared with the average balances for the six months ended February 29, 2004. Other (Expense) Income Other expense was $5 million for the six months ended February 28, 2005, compared with other
income of $19 million for the six months ended February 29, 2004. The decrease in other income is
primarily due to foreign currency exchange losses in fiscal 2005 compared with foreign currency
exchange gains in fiscal 2004. 27




---



##### 



Provision for Income Taxes The effective tax rates for the six months ended February 28, 2005 and February 29, 2004 were
32.3% and 34.8%, respectively. The fiscal 2005 annual effective tax rate declined from 34.0% to
32.3% as a result of changes in our forecasted geographic mix of income and a reduction in
reorganization liabilities. 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 February 28, 2005, cash and cash equivalents of $3,060 million combined with $702 million
of liquid fixed-income securities that are classified as investments on our Consolidated Balance
Sheet, totaled $3,762 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: Six Months EndedFebruary
28,
2005
    
    

February
29,
 2004
    
    

Increase
(Decrease)(in millions)Net cash provided by (used in):Operating activities
    
    $
    726
    
    
    $
    993
    
    
    $
    (267
    )Investing activities
    
    
    (199
    )
    
    
    (401
    )
    
    
    202Financing activities
    
    
    (125
    )
    
    
    (144
    )
    
    
    19Effect of exchange rate changes on cash and cash equivalents
    
    
    105
    
    
    
    73
    
    
    
    32Net increase in cash and cash equivalents
    
    $
    507
    
    
    $
    521
    
    
    $
    (14
    )
 Operating Activities.The $267 million decrease in cash provided was primarily due to an
increase in net client balances (receivables from clients, unbilled services (current and
non-current) and deferred revenues), planned variable compensation payments of $216 million and an
increase in income taxes paid in fiscal 2005, partially offset by an increase in accounts payable
and other non-current liabilities. The increase in net client balances was due to growth in
revenues and an increase in total client financing, partially offset by an increase in client
prepayments. 28




---



##### 



Investing Activities.The $202 million decrease in cash used was primarily due to a decrease
in net purchases of marketable securities. During the six months ended February 28, 2005 and
February 29, 2004, we invested $116 million and $101 million, respectively, in capital
expenditures, primarily for technology assets, furniture and equipment, and leasehold improvements
to support our operations. We expect that our capital expenditures will be approximately $400
million in fiscal 2005. Financing Activities.The $19 million decrease in cash used was primarily driven by net
proceeds from the issuance of short-term borrowings and lower net
purchases of Accenture Ltd Class
A common shares in fiscal 2005, partly offset by a net decrease in restricted cash of the
predecessor to the Accenture Share Employee Compensation Trust. At February 28, 2005, we had the following borrowing capacity, including the issuance of
letters of credit, available for general working capital purposes: Facility
    
    
    BorrowingsAmount
    
    
    Outstanding(in millions)Syndicated loan facility
    
    $
    1,500
    
    
    $
    Separate bilateral, uncommitted, unsecured multicurrency revolving credit facilities
    
    
    251
    
    
    
    23Local guaranteed and non-guaranteed lines of credit
    
    
    240
    
    
    
    Other short-term borrowings
    
    
    n/a
    
    
    
    10Total
    
    $
    1,991
    
    
    $
    33
 We continue to be in compliance with the terms of these facilities. In addition to the short-term borrowings noted above, at February 28, 2005 and August 31, 2004
we had total outstanding debt of $49 million, 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: February 28,
    
    
    August 31,2005
    
    
    2004(in millions, except number of clients)Number of clients
    
    
    34
    
    
    
    40Client financing included in current unbilled services
    
    $
    423
    
    
    $
    243Client financing included in non-current unbilled services
    
    
    288
    
    
    
    212Total client financing
    
    $
    711
    
    
    $
    455
 The increase in client financing from August 31, 2004 is primarily due to balances increasing
at certain large contracts that were signed in fiscal 2004, including the NHS Contracts. Share Purchases and Redemptions From
time to time Accenture SCA and/or Accenture Ltd purchases, redeems
and exchanges Accenture shares through open-market purchases and through purchases, redemptions and exchanges of
shares held by partners, former partners and their permitted
transferees. Accenture Ltd also purchases, pursuant to our RSU Sell-Back Program, certain Accenture Ltd Class A common shares
awarded to employees pursuant to restricted share units issued in connection with our initial
public offering. For a complete description of Accenture SCAs share purchase and redemption activity for the
three months ended February 28, 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 through the Accenture Share Employee Compensation Trust
(the SECT) and its predecessor trust. These trusts utilized purchased shares to provide for
select employee benefits, such as equity awards to our partners. Shares held in the SECT and its
predecessor trust have been treated as treasury shares of Accenture
Ltd. Accenture Ltd dissolved the SECT in February 2005 after
determining that it could continue to
meet its obligations related to its compensation and employee benefit plans without the SECT. All
remaining Accenture Ltd Class A common shares held by the 29




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SECT were transferred to a
subsidiary of Accenture Ltd and continue to be Accenture Ltd treasury shares.
The dissolution of the SECT has no effect on Accenture Ltds publicly announced, open-market share purchase
program, which it will continue through one or more subsidiaries of Accenture Ltd. During the six
months ended February 28, 2005, an aggregate of 5,875,000
Accenture Ltd Class A common shares
were purchased for an aggregate purchase price of $149 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. We may also approve the inclusion of
additional shares that will become eligible for transfer on or before July 24, 2005 in these
quarterly transactions. 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
preferred shares, in any future
quarterly transaction we could expect to offer to purchase or redeem numbers of
shares comparable to the numbers of shares offered in our March 7, 2005
transactions. On
December 20, 2004 a tender offer made to Accenture SCA Class I shareholders on November
16, 2004 by Accenture SCA and one of its subsidiaries
resulted in the redemption and purchase of an aggregate of 3,463,488 Accenture SCA Class I common shares at a price of $24.61 per share. The
total cash outlay for these transactions was $85 million. During the six months ended February 28,
2005, $1.4 million was used to facilitate isolated redemptions of 54,630 Accenture SCA Class I
common shares from the estates of deceased partners in accordance with the terms of the Accenture
SCA Class I common shares. During the six months ended
February 28, 2005, Accenture purchased or redeemed 9,393,118 Accenture SCA Class I common shares for an aggregate
purchase price of $236 million. During the six months ended February 28, 2005, Accenture purchased 158,431 Accenture Ltd Class
A common shares under the RSU Sell-Back Program for an aggregate purchase price of $4 million. Senior Executive Compensation As previously announced, effective February 18, 2005, Accenture awarded to certain of its
highest-performing partners stock options to purchase approximately 15 million Accenture Ltd Class
A common shares, having an aggregate fair market value, at the time of grant, of $170 million.
Beginning in fiscal 2006, the enhanced program for senior executives will expand the use of equity
in the form of restricted share units, relative to cash and stock options, both as a reward at the
time of a promotion and to recognize outstanding performance measured on an annual basis. Other Redemptions and Purchases During the six months ended February 28, 2005, Accenture acquired 270,842 Accenture Ltd Class
A common shares for a cost of $6.7 million from employees electing net share delivery under the
Accenture Ltd 2001 Employee Share Purchase Plan and Accenture Ltd 2001 Share Incentive Plan. Subsequent Developments On March 7, 2005, a tender offer made to Accenture SCA Class I shareholders on February 1,
2005 by Accenture SCA and one of its subsidiaries resulted in the
redemption and purchase
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. 30




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On March 15, 2005, as a result of favorable final determinations of certain reorganization
liabilities recorded in connection with our transition to a corporate structure in 2001, we
recognized benefits of approximately $69 million. 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
February 28, 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 (FASB) 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,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 interim or annual reporting period that begins after June 15, 2005. 31




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Accenture expects to adopt SFAS No. 123R on September 1, 2005. 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 SFAS No. 123 for the three and six months
ended February 28, 2005, the following reported items would have been reduced: income before income
taxes by $50 million and $82 million, respectively; income before minority interest by $36 million
and $58 million, respectively; and net income by
$35 million and $57 million, respectively. Assuming the continuation of current programs,
our preliminary estimate is that stock based compensation expense for fiscal 2006 will be in the
range of $155 million to $175 million. This estimate includes expenses for fiscal 2006 related to
the $170 million in stock options that were granted on February 18, 2005. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK During the three and six months ended February 28, 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. 32




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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. 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 second 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 ProgramsDecember 1, 2004  December 31, 2004Class I common shares
    
    
    3,463,488
    
    
    $
    24.61
    
    
    
    
    
    
    
    January 1, 2005  January 31, 2005Class I common shares
    
    
    2,841,000
    
    
    $
    25.84
    
    
    
    
    
    
    
    February 1, 2005  February 28, 2005Class I common shares
    
    
    1,800,000
    
    
    $
    25.66
    
    
    
    
    
    
    
    TotalClass I common shares(2)(3)(4)
    
    
    8,104,488
    
    
    $
    25.27
    
    
    
    
    
    
    
    
   (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 February 28, 2005, an aggregate of $2.1 billion
remained available for Share Management Plan purchases and redemptions.(2)
    
    During the second quarter of fiscal 2005, Accenture SCA redeemed or purchased 3,463,488
Accenture SCA Class I common shares pursuant to an issuer tender offer. The share numbers in
the table above do not reflect the issuer tender offer completed on March 7, 2005, pursuant to
which Accenture SCA purchased or redeemed a total of 18,745,917 Accenture SCA Class I common
shares. 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. These redemptions or
purchases were made in transactions unrelated to publicly announced share plans or programs.(3)
    
    During the second quarter of fiscal 2005, Accenture SCA redeemed or purchased an aggregate of
41,000 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. The share numbers in the table above do not reflect
the redemption or purchase of an aggregate of 272,025 Class I
common shares at the request of former partners or the estates of
deceased partners completed after February 28, 2005.
These redemptions or purchases were made in transactions unrelated to
publicly announced share plans or programs.(4)
    
    During the second quarter of fiscal 2005,
Accenture SCA redeemed 4,600,000 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. 33




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##### 



ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On January 17, 2005, Accenture SCA held its 2005 General Meeting of Shareholders, at which the
shareholders voted upon: (1) the approval of Accenture
SCAs Consolidated Financial Statements for the year
ended August 31, 2004; (2) the discharge of the general partner, commissaire aux comptesand
supervisory board in connection with the fiscal year ended August 31, 2004; (3) the appointment of
the members of Accenture SCAs supervisory board; (4) the re-appointment of KPMG LLP as independent
auditors for the fiscal year ending August 31, 2005; and
(5) proposed amendments to the Articles of
Association of Accenture SCA for the purpose of relocating into the
Articles of Association of
Accenture SCA existing contractual restrictions on transfers and redemptions of Accenture SCA Class
I common shares held by partners of Accenture SCA, as described in Accenture SCAs information
statement filed with the SEC on December 27, 2004. Accenture SCAs shareholders approved all of the items considered at the meeting. The number
of votes cast for, against or withheld and the number of abstentions and broker non-votes with
respect to each matter voted upon, as applicable, is set forth below. Abstain/
    
    
    BrokerFor(1)
    
    
    Against
    
    
    Withheld
    
    
    Non-Votes1. Approval
of Accenture SCAs Consolidated Financial Statements for
the year ended August 31, 2004
    
    
    1,002,456,332
    
    
    
    0
    
    
    
    0
    
    
    
    *2. Discharge of the general partner, commissaire aux
comptesand supervisory board in connection with the
fiscal year ended August 31, 2004
    
    
    1,002,456,332
    
    
    
    0
    
    
    
    0
    
    
    
    *3. Appointment of the members of Accenture SCAs
supervisory board
    
    
    1,002,456,332
    
    
    
    0
    
    
    
    0
    
    
    
    *4. Re-appointment of KPMG LLP
    
    
    1,002,456,332
    
    
    
    0
    
    
    
    0
    
    
    
    *5. Amendments to Accenture SCAs articles of association
    
    
    1,002,456,332
    
    
    
    0
    
    
    
    0
    
    
    
    *
   *
    
    Not applicable.(1)
    
    Consists of 531,498,024 Accenture SCA Class I common shares and 470,958,308 Accenture SCA
Class II common shares present and entitled to vote at the meeting. For a description of matters submitted to a vote of security holders of Accenture Ltd
during the three months ended February 28, 2005, please see Item 8.01 of our Form 8-K dated
February 3, 2005 filed with the SEC on February 9, 2005. ITEM 5. OTHER INFORMATION (a) None. (b) None. 34




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##### 



ITEM 6. EXHIBITS Exhibit Index: ExhibitNumber
    
    Exhibit3.1
    
    Form of Articles of Association of Accenture SCA, consolidated
and updated as of January 17, 2005 (incorporated by reference
to Exhibit 10.1 to the Accenture Ltd 10-Q filed on April 8,
2005)9.1
    
    Form of Voting Agreement, dated as of April 18, 2001, among
Accenture Ltd and the covered persons party thereto, as
amended and restated as of February 3, 2005 (incorporated by
reference to Exhibit 9.1 to the Accenture Ltd 10-Q filed on
April 8, 2005)10.1
    
    Form of Bye-laws of Accenture Ltd, effective as of February 2,
2005 (incorporated by reference to Exhibit 3.1 to the
Accenture Ltd 10-Q filed on April 8, 2005)10.2
    
    Form of Accenture SCA Transfer Rights Agreement, dated as of
April 18, 2001, among Accenture SCA and the covered persons
party thereto, as amended and restated as of February 3, 2005
(incorporated by reference to Exhibit 10.2 to the Accenture
Ltd 10-Q filed on April 8, 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)
 35




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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: April 8, 2005
    
    ACCENTURE SCArepresented by its general partner, Accenture Ltd,itself represented by its duly authorized signatoryBy:
    
    /s/ Michael G. McGrathName:
Title:
    
    Michael G. McGrath
Chief Financial Officer of Accenture Ltd,General Partner of Accenture SCA