##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



---



FORM 10-Q/A



Amendment No. 1



|x |  | Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for quarterly period ended  September 30, 2002.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------



| ̈ |  | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period
             to
|- |  | ----------------------------------------------------------------------------------------------------------------------------------



Commission File Number 001-31451



BearingPoint, Inc.

(Exact name of registrant as specified in its charter)



|DELAWARE                                                       |  | 22-3680505                       
|-------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)
|                                                               | 
|1676 International Drive, McLean, VA                           |  | 22102                            
|(Address of principal executive office)                        |  | (Zip Code)                       



(703) 747-3000

(Registrants telephone number, including area code)



(Former name, if changed since last report)



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 reports), and (2) has been subject to such filing requirements for the past 90 days.



YES  x             NO ̈



Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2
of the Exchange Act).



YES  x             NO ̈



The number of shares of common stock of the Registrant outstanding as of October 31, 2002 was
189,529,119.



1



---

##### Table of Contents

BEARINGPOINT, INC.



QUARTERLY REPORT ON FORM 10-Q/A

FOR THE QUARTER ENDED SEPTEMBER 30, 2002

INTRODUCTORY NOTE



Pursuant to Rule 12b-15 of the Rules and Regulations under the Securities
Exchange Act of 1934, the following is an amendment on Form 10Q/A of BearingPoint, Inc. for the quarter ended September 30, 2002. This amendment is being filed (i) to restate certain amounts (see also Note 2, Restatement, of the Notes to
the Consolidated Condensed Financial Statements for discussion of significant changes), (ii) to revise disclosures of the Companys Consolidated Condensed Financial Statements for the quarter ended September 30, 2002 and (iii) to amend Item 4,
Controls and Procedures, to disclose certain matters identified in connection with the audit of the Companys consolidated financial statements for the year ended June 30, 2003 and to refer to the matter described below regarding
Grant Thornton LLP. The circumstances necessitating the restatement and their effects on the quarter ended September 30, 2002 are more fully described in Note 2, Restatement, of the Notes to Consolidated Condensed Financial Statements.
This amendment continues to speak as of the date of the original filing of the Quarterly Report, and the Company has not updated the disclosures contained therein to reflect events that occurred at a later date, except for items relating to the
restatement (see Note 2, Restatement, of the Notes to the Consolidated Condensed Financial Statements), disclosure relating to segment reporting (see Note 3, Segment Reporting, of the Notes to the Consolidated Condensed
Financial Statements) and disclosure relating to controls and procedures.



In August 2003, the Company reported that it would restate its financial results for the first three quarters of fiscal year 2003 due to certain acquisition related and other accounting adjustments. The acquisition
related adjustments were primarily attributable to the Companys reassessment of the prior allocations to identifiable intangible assets and goodwill, along with restructuring charges related to certain acquisitions during fiscal year 2003.
During the Companys subsequent review of the identifiable intangible assets, such as customer contracts and relationships, it was determined that these assets were undervalued by approximately $20.8 million. Accordingly, the first three
quarters of fiscal year 2003 were restated to reflect the related additional non-cash amortization expense and the other accounting adjustments. The other accounting adjustments pertain to restructuring activities related to the recent acquisitions,
revenue recognition and contract accounting, accrued liabilities and stock awards with related shareholder notes. In total, these adjustments resulted in a decrease in previously reported net income and earnings per share for the quarter ended
September 30, 2002 of $2.9 million, or $0.02 per share.



On
September 29, 2003, the Company filed its Form 10-K for the fiscal year ended June 30, 2003, containing, among other items, the reports of Grant Thornton LLP on the Companys audited financial statements and financial statement schedule for
2001 and 2002, and the consent of Grant Thornton LLP on Exhibit 23.1. After the market close on October 3, 2003, Grant Thornton LLP informed the Company in writing that it had not provided its manually signed opinion or consent to the Company and
had not otherwise authorized the filing of such report and consent. On October 6, 2003, Grant Thornton LLP provided to the Company its two manually signed reports and consent for inclusion in the Companys Form 10-K/A filed on October 6, 2003.
Solely in light of Grant Thornton LLPs statement on October 3, 2003, PricewaterhouseCoopers LLP withdrew its reports and consent filed with the Companys Form 10-K on October 5, 2003. On October 6, 2003, PricewaterhouseCoopers LLP
provided its reports and consent with respect to the Companys audited financial statements and schedule for fiscal year 2003 in connection with the Companys Form 10-K/A filed on October 6, 2003.





2



---

##### Table of Contents

BEARINGPOINT, INC.



QUARTERLY REPORT
ON FORM 10-Q/A

FOR THE QUARTER ENDED SEPTEMBER 30, 2002



TABLE OF CONTENTS



|PART IFINANCIAL STATEMENTS                                                                            |  |   
|------------------------------------------------------------------------------------------------------ |  | --
|                                                                                                       | 
|Item 1:    Financial Statements (unaudited)                                                            |  |   
|                                                                                                       | 
|Consolidated Condensed Statements of Operations for the Three Months Ended September 30, 2002 and 2001 |  | 4 
|                                                                                                       | 
|Consolidated Condensed Balance Sheets as of September 30, 2002 and June 30, 2002                       |  | 5 
|                                                                                                       | 
|Consolidated Condensed Statements of Cash Flows for the Three Months Ended September 30, 2002 and 2001 |  | 6 
|                                                                                                       | 
|Notes to Consolidated Condensed Financial Statements                                                   |  | 7 
|                                                                                                       | 
|Item 2:    Managements Discussion and Analysis of Financial Condition and Results of Operations       |  | 17
|                                                                                                       | 
|Item 3:    Quantitative and Qualitative Disclosure about Market Risk                                   |  | 23
|                                                                                                       | 
|Item 4:    Controls and Procedures                                                                     |  | 23
|                                                                                                       | 
|PART IIOTHER INFORMATION                                                                              |  |   
|                                                                                                       | 
|Item 1:    Legal Proceedings                                                                           |  | 23
|                                                                                                       | 
|Item 2:    Changes in Securities and Use of Proceeds                                                   |  | 23
|                                                                                                       | 
|Item 5:    Other Information.                                                                          |  | 24
|                                                                                                       | 
|Item 6:    Exhibits and Reports on Form 8-K                                                            |  | 24
|                                                                                                       | 
|SIGNATURES                                                                                             |  | 25





3



---

##### Table of Contents

PART I, ITEM 1.FINANCIAL STATEMENTS



BEARINGPOINT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)



|                                                                  |  | Three Months Ended September 30, |            
|----------------------------------------------------------------- |  | -------------------------------- | -----------
|                                                                  |  | 2002                             |            
|                                                                  |  | as restated                      |            
|Revenue                                                           |  | $                                | 732,699    
|                                                                  |  |                                  |            
|Costs of service:                                                 |  |                                  |            
|Professional compensation                                         |  |                                  | 337,428    
|Other direct contract expenses                                    |  |                                  | 159,809    
|Other costs of service                                            |  |                                  | 65,394     
|                                                                  |  |                                  |            
|Total costs of service                                            |  |                                  | 562,631    
|                                                                  |  |                                  |            
|Gross profit                                                      |  |                                  | 170,068    
|Amortization of purchased intangible assets                       |  |                                  | 8,013      
|Selling, general and administrative expenses                      |  |                                  | 133,771    
|                                                                  |  |                                  |            
|Operating income                                                  |  |                                  | 28,284     
|Interest (income) expense, net                                    |  |                                  | 1,456      
|                                                                  |  |                                  |            
|Income before taxes                                               |  |                                  | 26,828     
|Income tax expense                                                |  |                                  | 14,517     
|                                                                  |  |                                  |            
|Income before cumulative effect of change in accounting principle |  |                                  | 12,311     
|Cumulative effect of change in accounting principle, net of tax   |  |                                  |           
|                                                                  |  |                                  |            
|Net income (loss)                                                 |  | $                                | 12,311     
|                                                                  |  |                                  |            
|Earnings (loss) per sharebasic and diluted:                      |  |                                  |            
|Income before cumulative effect of change in accounting principle |  | $                                | 0.07       
|                                                                  |  |                                  |            
|Cumulative effect of change in accounting principle               |  |                                  |           
|                                                                  |  |                                  |            
|Net income (loss)                                                 |  | $                                | 0.07       
|                                                                  |  |                                  |            
|Weighted average sharesbasic                                     |  |                                  | 171,500,309
|                                                                  |  |                                  |            
|Weighted average sharesdiluted                                   |  |                                  | 171,598,835
|                                                                  |  |                                  |            



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



4



---

##### Table of Contents

BEARINGPOINT, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands, except share and per share amounts)



|                                                                                                                                                             |  | September 30,2002 |           |   | June 30,2002 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | --------- | - | ------------ | -
|                                                                                                                                                             |  | (unaudited)       |           |   |              |  
|                                                                                                                                                             |  | as restated       |           |   |              |  
|ASSETS                                                                                                                                                       |  |                   |           |   |              |  
|Current assets:                                                                                                                                              |  |                   |           |   |              |  
|Cash and cash equivalents                                                                                                                                    |  | $                 | 78,412    |   |              | $
|Accounts receivable, net                                                                                                                                     |  |                   | 351,156   |   |              |  
|Unbilled revenue                                                                                                                                             |  |                   | 225,377   |   |              |  
|Prepaid expenses and other current assets                                                                                                                    |  |                   | 93,054    |   |              |  
|                                                                                                                                                             |  |                   |           |   |              |  
|Total current assets                                                                                                                                         |  |                   | 747,999   |   |              |  
|Property and equipment, net                                                                                                                                  |  |                   | 102,718   |   |              |  
|Goodwill                                                                                                                                                     |  |                   | 875,776   |   |              |  
|Other intangible assets, net                                                                                                                                 |  |                   | 127,713   |   |              |  
|Other assets                                                                                                                                                 |  |                   | 9,124     |   |              |  
|                                                                                                                                                             |  |                   |           |   |              |  
|Total assets                                                                                                                                                 |  | $                 | 1,863,330 |   |              | $
|                                                                                                                                                             |  |                   |           |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                         |  |                   |           |   |              |  
|Current liabilities:                                                                                                                                         |  |                   |           |   |              |  
|Current portion of notes payable                                                                                                                             |  | $                 | 334,572   |   |              | $
|Accounts payable                                                                                                                                             |  |                   | 97,712    |   |              |  
|Accrued payroll and employee benefits                                                                                                                        |  |                   | 227,944   |   |              |  
|Other current liabilities                                                                                                                                    |  |                   | 159,568   |   |              |  
|                                                                                                                                                             |  |                   |           |   |              |  
|Total current liabilities                                                                                                                                    |  |                   | 819,796   |   |              |  
|Other liabilities                                                                                                                                            |  |                   | 50,666    |   |              |  
|                                                                                                                                                             |  |                   |           |   |              |  
|Total liabilities                                                                                                                                            |  |                   | 870,462   |   |              |  
|                                                                                                                                                             |  |                   |           |   |              |  
|Stockholders equity :                                                                                                                                       |  |                   |           |   |              |  
|Preferred Stock, $.01 par value 10,000,000 shares authorized                                                                                                 |  |                   |          |   |              |  
|Common Stock, $.01 par value 1,000,000,000 shares authorized, 193,341,369 shares issued on September 30, 2002 and 161,478,409
shares issued on June 30, 2002 |  |                   | 1,923     |   |              |  
|Additional paid-in capital                                                                                                                                   |  |                   | 1,060,756 |   |              |  
|Accumulated deficit                                                                                                                                          |  |                   | (21,033   | ) |              |  
|Notes receivable from stockholders                                                                                                                           |  |                   | (9,265    | ) |              |  
|Accumulated other comprehensive loss                                                                                                                         |  |                   | (3,786    | ) |              |  
|Treasury stock, at cost (3,812,250 shares)                                                                                                                   |  |                   | (35,727   | ) |              |  
|                                                                                                                                                             |  |                   |           |   |              |  
|Total stockholders' equity                                                                                                                                   |  |                   | 992,868   |   |              |  
|                                                                                                                                                             |  |                   |           |   |              |  
|Total liabilities and stockholders' equity                                                                                                                   |  | $                 | 1,863,330 |   |              | $
|                                                                                                                                                             |  |                   |           |   |              |  



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



5



---

##### Table of Contents

BEARINGPOINT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)



|                                                                                 |  | Three Months EndedSeptember 30, |         
|-------------------------------------------------------------------------------- |  | ------------------------------- | --------
|                                                                                 |  | 2002                            |         
|                                                                                 |  | as restated                     |         
|Cash flows from operating activities:                                            |  |                                 |         
|Net income (loss)                                                                |  | $                               | 12,311  
|Adjustments to reconcile to net cash provided by (used in) operating activities: |  |                                 |         
|Cumulative effect of change in accounting principle                              |  |                                 |        
|Deferred income taxes and other                                                  |  |                                 | (5,546  
|Stock awards                                                                     |  |                                 | 3,846   
|Depreciation and amortization                                                    |  |                                 | 19,233  
|Changes in assets and liabilities:                                               |  |                                 |         
|Accounts receivable                                                              |  |                                 | 5,912   
|Unbilled revenue                                                                 |  |                                 | (65,924 
|Prepaid expenses and other current assets                                        |  |                                 | 3,113   
|Other assets                                                                     |  |                                 | 2,491   
|Accrued payroll and employee benefits                                            |  |                                 | 5,320   
|Accounts payable and other current liabilities                                   |  |                                 | (886    
|Other liabilities                                                                |  |                                 | 48      
|                                                                                 |  |                                 |         
|Net cash provided by (used in) operating activities                              |  |                                 | (20,082 
|                                                                                 |  |                                 |         
|Cash flows from investing activities:                                            |  |                                 |         
|Purchases of property and equipment                                              |  |                                 | (34,831 
|Businesses acquired, net of cash acquired                                        |  |                                 | (401,098
|Purchases of other intangible assets                                             |  |                                 | (5,424  
|                                                                                 |  |                                 |         
|Net cash used in investing activities                                            |  |                                 | (441,353
|                                                                                 |  |                                 |         
|Cash flows from financing activities:                                            |  |                                 |         
|Proceeds from issuance of common stock                                           |  |                                 | 12,468  
|Repurchases of common stock                                                      |  |                                 |        
|Proceeds from notes payable                                                      |  |                                 | 330,505 
|Repayment of notes payable                                                       |  |                                 | (6,001  
|Repurchase of minority interest in subsidiary                                    |  |                                 |        
|Notes receivable from stockholders                                               |  |                                 | (87     
|                                                                                 |  |                                 |         
|Net cash provided by (used in) financing activities                              |  |                                 | 336,885 
|                                                                                 |  |                                 |         
|Effect of exchange rates on cash and cash equivalents                            |  |                                 | (635    
|                                                                                 |  |                                 |         
|Net decrease in cash and cash equivalents                                        |  |                                 | (125,185
|Cash and cash equivalentsbeginning of period                                    |  |                                 | 203,597 
|                                                                                 |  |                                 |         
|Cash and cash equivalentsend of period                                          |  | $                               | 78,412  
|                                                                                 |  |                                 |         
|Supplementary cash flow information:                                             |  |                                 |         
|Interest paid                                                                    |  | $                               | 1,768   
|Taxes paid                                                                       |  | $                               | 3,803   
|Supplemental non-cash investing and financing activities:                        |  |                                 |         
|Issuance of common stock for business acquisition                                |  | $                               | 364,437 
|Acquisition obligations from business acquisition                                |  | $                               | 5,543   



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



6



---

##### Table of Contents

BEARINGPOINT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)



Note
1.    Basis of Presentation



On
October 2, 2002, KPMG Consulting, Inc. changed its name to BearingPoint, Inc. (referred to below as we, BearingPoint or the Company). Our brand name underscores our global commitment to set a clear direction for
our clients. In conjunction with our branding initiative, BearingPoint moved to the New York Stock Exchange and began trading on October 3, 2002, under the new ticker symbol BE. BearingPoint is a global provider of management consulting
and business systems integration services.



The accompanying
unaudited interim consolidated condensed financial statements of BearingPoint, Inc. have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for quarterly reports on Form 10-Q/A. These
statements do not include all of the information and note disclosures required by generally accepted accounting principles, and should be read in conjunction with our consolidated financial statements and notes thereto for the fiscal year ended June
30, 2002, included in the Companys Annual Report on Form 10-K filed with the SEC. The accompanying consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America and reflect adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of results for these interim periods. The results of operations for the three months
ended September 30, 2002 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2003. Certain prior period amounts have been reclassified to conform with the current period presentation.



7



---

##### Table of Contents

Note 2.    Restatement



This Amendment No. 1 to Quarterly Report on Form 10-Q/A should be read in conjunction with the Companys Annual Report
on Form 10-K filed with the SEC for the year ended June 30, 2002.



BearingPoint experienced significant activity for the fiscal year ended June 30, 2003. During this period, the Company considerably expanded its global presence adding consulting resources in 8 additional countries through 15 purchase
business acquisitions (referred to in this Form 10-Q/A as acquisitions) for an aggregate purchase price of approximately $800 million. In August 2003, the Company reported that it would restate its financial results for the first three
quarters of fiscal year 2003. The restatements occurred in the following general areas:



| |  |  | Purchase accounting resulting from the application of SFAS No. 141, Business Combinations, and EITF 95-3, Recognition of Liabilities in Connection with a Purchase
Business Combination;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Revenue recognition related to contract accounting and the application of SOP 81-1, Accounting for Performance of Construction Type and Certain Production-Type
Contracts;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The accounting treatment of accrued liabilities and the use of estimated months to account for operations subsequent to certain international business acquisitions; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The accounting treatment of stock awards and related shareholder notes.
| | - |  | -----------------------------------------------------------------------



In total these adjustments resulted in a decrease in previously reported net income and earnings per share in the first quarter of fiscal year 2003 of
$2,870, or $0.02 per share.



Summarized below is a more
detailed discussion of the restatements along with a comparison of the amounts previously reported in the balance sheet and the statement of operations in our Form 10-Q for the three months ended September 30, 2002.



Purchase Accounting



During the quarter ended September 30, 2002, the Company completed various
acquisitions that were accounted for as purchase business acquisitions, resulting in approximately $26,359 in identified intangible assets. These acquisitions included the purchase of KPMG Consulting AG, a substantial consulting practice in Germany,
and the purchase of all or parts of a number of Andersen Business Consulting practices worldwide. The Company completed preliminary purchase price allocations to allocate the purchase prices to acquired assets and assumed liabilities. The excess of
the cost of the acquired entities over the amounts assigned to the acquired assets and liabilities assumed was recognized as goodwill. As part of the initial purchase price allocation, value was ascribed to only contractual backlog (order backlog)
and a trade name. This initial allocation was determined to be too low, and accordingly, an additional $20,787 of value for identified intangible assets related to customer contracts and related customer relationships was allocated to these
identified intangible assets with a corresponding reduction to goodwill. The additional intangible assets are being amortized over useful lives ranging from 12 to 15 months. As a result, approximately $2,979, of incremental amortization of purchased
intangible assets was recorded in the quarter ended September 30, 2002.



Contract Accounting



In one of our
international consulting practices, we identified an accumulation of work in process on our balance sheet. The Company identified approximately $932, in revenue related to pre-contract activities that was inappropriately recognized in the quarter
ended September 30, 2002. As such, this amount has been reversed from revenue, as no contractual arrangement existed at the time the amount was recorded and recovery of these costs was not considered probable.



In addition, the Company identified certain circumstances where the
percentage of completion method as prescribed under Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, was not appropriately applied. On a combined net basis, approximately
$1,921 has been reversed from revenue in the quarter ended September 30, 2002. In addition, costs of service was reduced by approximately $933 in the quarter ended September 30, 2002.



Accruals



During fiscal 2003, we recorded accrued liabilities for our fringe benefits based on cost factors associated with projected labor hours. During fiscal
2003, we did not adjust the accrual as assumptions were revised. As a result, an adjustment to correct the calculated fringe benefit accrual of approximately $846 reduced costs of service for the quarter ended September 30, 2002.



During the first quarter of fiscal year 2003, the Company completed a number
of business acquisitions. At the end of the first post-transaction fiscal reporting period (the quarter ended September 30, 2002), certain of the entities were not able to close their books on a timely basis for U.S. public reporting purposes. As a
result, the Company, in an effort to conform to a fiscal year convention, recorded an estimated month income statement and a net asset or liability account on the balance sheet for those entities. Subsequently, the Company did not
reverse this estimated month and began reporting results on a one-month lag basis. The Company has restated the respective quarters to conform to a fiscal period end, and has eliminated the effect of the estimated month. The
Company reduced revenue by $12,476; decreased costs of service by $10,539; and reduced selling, general and administrative expenses by $1,348 for the quarter ended September 30, 2002.



Stock awards and shareholders notes



The Company initially accounted for certain stock awards in prior years as fixed plan grants, with related payments to the
respective employees for tax liabilities accounted for as interest-bearing shareholder notes. The initial accounting has been revised to treat the awards as a variable grant. The revision did not have a material impact on the statements of
operations for any prior periods and therefore prior years financial statements have not been restated. Instead, the aggregate effect of the revised accounting has been reflected as adjustments to additional paid in capital, accumulated
deficit and notes receivable from stockholders as of July 1, 2002. In addition, under the revised accounting, reserves recorded against the shareholder notes during the quarter ended September 30, 2002 are not necessary and have been reversed,
decreasing selling, general and administrative expenses by approximately $1,500 for the quarter ended September 30, 2002.



Other adjustments impacting net income



Other adjustments recorded that were identified through both timely quarterly reviews as well as during the year-end closing process and ordinary course
of the audit. These adjustments were not material either individually or in the aggregate to income before taxes.



Reclassifications not impacting net income



Balance sheet and statement of operations reclassification adjustments were identified through both timely quarterly reviews as well as during the
year-end closing process and ordinary course of the audit. The reclassifications are being made to conform the amounts previously reported to the restated presentations. These reclassifications do not impact net income, as previously reported.



The following tables outline the effects of the aforementioned
adjustments in this Form 10-Q/A for the quarter ended September 30, 2002:



Statements of Operations:



|                                             |  | Three Months Ended September 30,2002 |         |            |   |        
|-------------------------------------------- |  | ------------------------------------ | ------- | ---------- | - | -------
|                                             |  | (unaudited)                          |         |            |   |        
|                                             |  | AmountsPreviouslyReported            |         | AsRestated |   | Change 
|Revenue                                      |  | $                                    | 747,560 |            | $ | 732,699
|Costs of service:                            |  |                                      |         |            |   |        
|Professional compensation                    |  |                                      | 344,847 |            |   | 337,428
|Other direct contract expenses               |  |                                      | 163,398 |            |   | 159,809
|Other costs of service                       |  |                                      | 65,356  |            |   | 65,394 
|                                             |  |                                      |         |            |   |        
|Total costs of service                       |  |                                      | 573,601 |            |   | 562,631
|                                             |  |                                      |         |            |   |        
|Gross profit                                 |  |                                      | 173,959 |            |   | 170,068
|Amortization of purchased intangible assets  |  |                                      | 5,034   |            |   | 8,013  
|Selling, general and administrative expenses |  |                                      | 137,160 |            |   | 133,771
|                                             |  |                                      |         |            |   |        
|Operating income                             |  |                                      | 31,765  |            |   | 28,284 
|Interest/other (income) expense, net         |  |                                      | 1,097   |            |   | 1,456  
|                                             |  |                                      |         |            |   |        
|Income before taxes                          |  |                                      | 30,668  |            |   | 26,828 
|Income tax expense                           |  |                                      | 15,487  |            |   | 14,517 
|                                             |  |                                      |         |            |   |        
|Net income                                   |  | $                                    | 15,181  |            | $ | 12,311 
|                                             |  |                                      |         |            |   |        
|Earnings per share - basic                   |  | $                                    | 0.09    |            | $ | 0.07   
|Earnings per share - diluted                 |  | $                                    | 0.09    |            | $ | 0.07   



Statement of
Operations components increased (decreased) as a result of the following:



(a)Revenue



|Eliminate the estimated month and conform to fiscal year reporting                                                                     |  | $ | (12,476 | )
|-------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | -
|Adjust recognition of revenue for pre-contract related activities and application of the percentage of completion method of
accounting |  |   | (2,853  | )
|Reclassifications not impacting net income                                                                                             |  |   | (80     | )
|Other adjustments impacting net income                                                                                                 |  |   | 548     |  
|                                                                                                                                       |  |   |         |  
|Net decrease                                                                                                                           |  | $ | (14,861 | )
|                                                                                                                                       |  |   |         |  



(b)Professional compensation



|Eliminate the estimated month and conform to fiscal year reporting                                 |  | $ | (5,839 | )
|-------------------------------------------------------------------------------------------------- |  | - | ------ | -
|Adjust recognition of revenue for application of the percentage of completion method of accounting |  |   | (434   | )
|Adjustment to fringe benefit accrual                                                               |  |   | (748   | )
|Reclassifications not impacting net income                                                         |  |   | (86    | )
|Other adjustments impacting net income                                                             |  |   | (312   | )
|                                                                                                   |  |   |        |  
|Net decrease                                                                                       |  | $ | (7,419 | )
|                                                                                                   |  |   |        |  



(c)Other direct contract expenses



|Eliminate the estimated month and conform to fiscal year reporting                                 |  | $ | (4,179 | )
|-------------------------------------------------------------------------------------------------- |  | - | ------ | -
|Adjust recognition of revenue for application of the percentage of completion method of accounting |  |   | (499   | )
|Reclassifications not impacting net income                                                         |  |   | 1,089  |  
|                                                                                                   |  |   |        |  
|Net decrease                                                                                       |  | $ | (3,589 | )
|                                                                                                   |  |   |        |  



(d)Other costs of service



|Eliminate the estimated month and conform to fiscal year reporting |  | $ | (521 | )
|------------------------------------------------------------------ |  | - | ---- | -
|Adjustment to fringe benefit accrual                               |  |   | (98  | )
|Reclassifications not impacting net income                         |  |   | 903  |  
|Other adjustments impacting net income                             |  |   | (246 | )
|                                                                   |  |   |      |  
|Net increase                                                       |  | $ | 38   |  
|                                                                   |  |   |      |  



8



---

##### Table of Contents

(e)Amortization of purchased intangible assets



|Incremental amortization due to the identification of customer contracts and related customer relationships |  | $ | 2,979
|----------------------------------------------------------------------------------------------------------- |  | - | -----
|                                                                                                            |  |   |      



(f)    Selling, general and administrative expenses



|Eliminate the estimated month and conform to fiscal year reporting |  | $ | (1,348 | )
|------------------------------------------------------------------ |  | - | ------ | -
|Reclassifications not impacting net income                         |  |   | (1,730 | )
|Other adjustments impacting net income                             |  |   | 1,189  |  
|Reversal of expense relating to shareholder notes                  |  |   | (1,500 | )
|                                                                   |  |   |        |  
|Net decrease                                                       |  | $ | (3,389 | )
|                                                                   |  |   |        |  



(g)    Interest/Other (income) expense, net



|Eliminate the estimated month and conform to fiscal year reporting |  | $ | 271  |  
|------------------------------------------------------------------ |  | - | ---- | -
|Other adjustments impacting net income                             |  |   | 219  |  
|Reclassifications not impacting net income                         |  |   | (256 | )
|Reversal of interest income relating to shareholder notes          |  |   | 125  |  
|                                                                   |  |   |      |  
|Net increase                                                       |  | $ | 359  |  
|                                                                   |  |   |      |  



(h)    Income tax expense



|Net decrease to income tax expense due to above adjustments |  | $ | (970 | )
|----------------------------------------------------------- |  | - | ---- | -
|                                                            |  |   |      |  



9



---

##### Table of Contents

Balance Sheets:



|                                                                                                                                                             |  | September 30, 2002        |          
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------- | ---------
|                                                                                                                                                             |  | (unaudited)               |          
|                                                                                                                                                             |  | AmountsPreviouslyReported |          
|ASSETS                                                                                                                                                       |  |                           |          
|Current assets:                                                                                                                                              |  |                           |          
|Cash and cash equivalents                                                                                                                                    |  | $                         | 86,341   
|Accounts receivable, net                                                                                                                                     |  |                           | 347,096  
|Unbilled revenue                                                                                                                                             |  |                           | 218,088  
|Prepaid expenses and other current assets                                                                                                                    |  |                           | 95,638   
|                                                                                                                                                             |  |                           |          
|Total current assets                                                                                                                                         |  |                           | 747,163  
|Property and equipment, net                                                                                                                                  |  |                           | 104,065  
|Goodwill                                                                                                                                                     |  |                           | 886,487  
|Other intangible assets, net                                                                                                                                 |  |                           | 108,627  
|Other assets                                                                                                                                                 |  |                           | 7,026    
|                                                                                                                                                             |  |                           |          
|Total assets                                                                                                                                                 |  | $                         | 1,853,368
|                                                                                                                                                             |  |                           |          
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                         |  |                           |          
|Current liabilities:                                                                                                                                         |  |                           |          
|Current portion of notes payable                                                                                                                             |  | $                         | 334,572  
|Accounts payable                                                                                                                                             |  |                           | 93,659   
|Accrued payroll and employee benefits                                                                                                                        |  |                           | 226,789  
|Other current liabilities                                                                                                                                    |  |                           | 151,538  
|                                                                                                                                                             |  |                           |          
|Total current liabilities                                                                                                                                    |  |                           | 806,558  
|Other liabilities                                                                                                                                            |  |                           | 51,197   
|                                                                                                                                                             |  |                           |          
|Total liabilities                                                                                                                                            |  |                           | 857,755  
|                                                                                                                                                             |  |                           |          
|Stockholders equity :                                                                                                                                       |  |                           |          
|Preferred Stock, $.01 par value 10,000,000 shares authorized                                                                                                 |  |                           |         
|Common Stock, $.01 par value 1,000,000,000 shares authorized, 193,341,369 shares issued on September 30, 2002 and 161,478,409
shares issued on June 30, 2002 |  |                           | 1,923    
|Additional paid-in capital                                                                                                                                   |  |                           | 1,069,823
|Accumulated deficit                                                                                                                                          |  |                           | (26,240  
|Notes receivable from stockholders                                                                                                                           |  |                           | (10,382  
|Accumulated other comprehensive loss                                                                                                                         |  |                           | (3,784   
|Treasury stock, at cost (3,812,250 shares)                                                                                                                   |  |                           | (35,727  
|                                                                                                                                                             |  |                           |          
|Total stockholders equity                                                                                                                                   |  |                           | 995,613  
|                                                                                                                                                             |  |                           |          
|Total liabilities and stockholders equity                                                                                                                   |  | $                         | 1,853,368
|                                                                                                                                                             |  |                           |          



Balance Sheet
components increased (decreased) due to the following:



|(a)Cash and cash equivalents                                                                                                           |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | -
|Eliminate the estimated month and conform to fiscal year reporting                                                                     |  | $ | (7,929  | )
|                                                                                                                                       |  |   |         |  
|(b)Accounts receivable, net                                                                                                            |  |   |         |  
|Eliminate the estimated month and conform to fiscal year reporting                                                                     |  | $ | 4,060   |  
|                                                                                                                                       |  |   |         |  
|(c)Unbilled revenue                                                                                                                    |  |   |         |  
|Adjust recognition of revenue for pre-contract related activities and application of the percentage of completion method of accounting |  | $ | (1,925  | )
|Eliminate the estimated month and conform to fiscal year reporting                                                                     |  |   | 8,475   |  
|Other adjustments impacting net income                                                                                                 |  |   | 739     |  
|                                                                                                                                       |  |   |         |  
|Net decrease                                                                                                                           |  | $ | 7,289   |  
|                                                                                                                                       |  |   |         |  
|(d)Prepaid expenses and other current assets                                                                                           |  |   |         |  
|Eliminate the estimated month and conform to fiscal year reporting                                                                     |  | $ | 431     |  
|Other adjustments impacting net income                                                                                                 |  |   | (492    | )
|Reclassifications not impacting net income                                                                                             |  |   | (2,523  | )
|                                                                                                                                       |  |   |         |  
|Net decrease                                                                                                                           |  | $ | (2,584  | )
|                                                                                                                                       |  |   |         |  
|(e)    Property and equipment, net                                                                                                     |  |   |         |  
|Eliminate the estimated month and conform to fiscal year reporting                                                                     |  | $ | (61     | )
|Reclassifications not impacting net income                                                                                             |  |   | (1,286  | )
|                                                                                                                                       |  |   |         |  
|Net decrease                                                                                                                           |  | $ | (1,347  | )
|                                                                                                                                       |  |   |         |  
|(f)Goodwill                                                                                                                            |  |   |         |  
|Purchase accounting adjustments, including deferred tax impact and acquisition-related restructuring
adjustments                       |  | $ | 9,928   |  
|Reduction of goodwill due to incremental value recorded to identified intangibles assets                                               |  |   | (20,787 | )
|Other adjustments impacting net income                                                                                                 |  |   | 148     |  
|                                                                                                                                       |  |   |         |  
|Net decrease                                                                                                                           |  | $ | (10,711 | )
|                                                                                                                                       |  |   |         |  



10



---

##### Table of Contents

(g)Other intangible assets, net



|Reclassifications not impacting net income                 |  | $ | 1,292 
|---------------------------------------------------------- |  | - | ------
|Incremental value recorded to identified intangible assets |  |   | 17,794
|                                                           |  |   |       
|Net increase                                               |  | $ | 19,086
|                                                           |  |   |       



(h)Other assets



|Eliminate the estimated month and conform to fiscal year reporting |  | $ | 20   
|------------------------------------------------------------------ |  | - | -----
|Reclassifications not impacting net income                         |  |   | 2,078
|                                                                   |  |   |      
|Net increase                                                       |  | $ | 2,098
|                                                                   |  |   |      



(i)    Accounts payable



|Eliminate the estimated month and conform to fiscal year reporting |  | $ | 3,183
|------------------------------------------------------------------ |  | - | -----
|Other adjustments impacting net income                             |  |   | 870  
|                                                                   |  |   |      
|Net increase                                                       |  | $ | 4,053
|                                                                   |  |   |      



(j)Accrued payroll and employee benefits



|Adjustment to fringe benefit accrual                               |  | $ | (846  | )
|------------------------------------------------------------------ |  | - | ----- | -
|Eliminate the estimated month and conform to fiscal year reporting |  |   | 602   |  
|Other adjustments impacting net income                             |  |   | (130  | )
|Additional accrued liability that increases goodwill               |  |   | 1,529 |  
|                                                                   |  |   |       |  
|Net increase                                                       |  | $ | 1,155 |  
|                                                                   |  |   |       |  



(k)Other current liabilities



|Eliminate the estimated month and conform to fiscal year reporting |  | $ | 2,601  |  
|------------------------------------------------------------------ |  | - | ------ | -
|Reclassifications not impacting net income                         |  |   | (445   | )
|Adjustment relating to shareholder notes reserve                   |  |   | (1,500 | )
|Deferred tax adjustment related to purchase accounting             |  |   | 8,399  |  
|Net income tax payable impact from adjustments                     |  |   | (970   | )
|Other adjustments impacting net income                             |  |   | (55    | )
|                                                                   |  |   |        |  
|Net increase                                                       |  | $ | 8,030  |  
|                                                                   |  |   |        |  



(l)     Other Liabilities



|Eliminate the estimated month and conform to fiscal year reporting |  | $ | (531 | )
|------------------------------------------------------------------ |  | - | ---- | -
|                                                                   |  |   |      |  



(m)Additional paid-in capital



|Adjustment relating to shareholder notes |  | $ | (9,067 | )
|---------------------------------------- |  | - | ------ | -
|                                         |  |   |        |  



(n)Accumulated deficit



|Net increase to accumulated deficit from adjustments |  | $ | 5,207
|---------------------------------------------------- |  | - | -----
|                                                     |  |   |      



(o)    Notes receivable from stockholders



|Adjustment relating to shareholder notes |  | $ | 1,117
|---------------------------------------- |  | - | -----
|                                         |  |   |      



(p)     Accumulated other comprehensive loss



|Adjust recognition of revenue for pre-contract related activities and application of the percentage of completion method of
accounting |  | $ | (5  | )
|-------------------------------------------------------------------------------------------------------------------------------------- |  | - | --- | -
|Incremental amortization of intangibles                                                                                                |  |   | (15 | )
|Other adjustments impacting net income                                                                                                 |  |   | 18  |  
|                                                                                                                                       |  |   |     |  
|Net decrease                                                                                                                           |  | $ | (2  | )
|                                                                                                                                       |  |   |     |  



Note
3.    Segment Reporting



The Company discloses business segment information in accordance with Statement of Financial Accounting Standard (SFAS) No. 131, Disclosures About Segments of an Enterprise
and Related Information. SFAS No. 131 established standards for the way public business enterprises report information about operating segments in annual financial statements and required those enterprises to report selected information about
operating segments in interim financial statements. Performance of the segments is evaluated based on operating income excluding the costs of infrastructure functions (such as information systems, finance and accounting, human resources, legal and
marketing). Effective in the fiscal quarter ended September 30, 2002, upon completion of a series of international acquisitions, the Company has eight reportable segments in addition to the Corporate/Other category. The information presented for the
three months ended September 30, 2002 has been restated from that which was previously reported to reflect additional reportable segments. Prior year segment data has been reclassified to reflect the addition of three international reportable
segments (EMEA, the Asia Pacific and Latin America regions).



|                              |  | Three Months Ended September 30, |        
|----------------------------- |  | -------------------------------- | -------
|                              |  | 2002                             |        
|                              |  | Revenue                          |        
|                              |  | as restated                      |        
|Public Services               |  | $                                | 265,204
|Communications & Content      |  |                                  | 96,195 
|Financial Services            |  |                                  | 62,012 
|Consumer & Industrial Markets |  |                                  | 102,710
|High Technology               |  |                                  | 37,025 
|EMEA                          |  |                                  | 105,024
|Asia Pacific                  |  |                                  | 50,431 
|Latin America                 |  |                                  | 12,326 
|Corporate/Other (1)           |  |                                  | 1,772  
|                              |  |                                  |        
|Total                         |  | $                                | 732,699
|                              |  |                                  |        

---

|(1) |  | Corporate/Other operating loss is principally due to infrastructure and shared services costs.
|--- |  | ----------------------------------------------------------------------------------------------



11



---

##### Table of Contents

Note 4.    Comprehensive Income (Loss)



The Company accounts for comprehensive income (loss) under SFAS No. 130,
Reporting Comprehensive Income. Total comprehensive income (i.e., net income plus foreign currency translation adjustment and other comprehensive income), for the three months ended September 30, 2002 was $14,451. Total comprehensive
loss for the three months ended September 30, 2001 was $57,004.



Note
5.    Earnings Per Share of Common Stock



Basic earnings (loss) per share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding during
the period plus the dilutive effect of potential future issues of common stock relating to the Companys stock option program and other potentially dilutive securities. In calculating diluted earnings per share, the dilutive effect of stock
options is computed using the average market price for the period.



The following table sets forth the computation of basic and diluted earnings per share:



|                                                                            |  | Three Months Ended September 30, |            
|--------------------------------------------------------------------------- |  | -------------------------------- | -----------
|                                                                            |  | 2002                             |            
|                                                                            |  | as restated                      |            
|Net income before cumulative effect of change in accounting principlebasic |  | $                                | 12,311     
|Cumulative effect of change in accounting principle                         |  |                                  |           
|                                                                            |  |                                  |            
|Net income (loss)diluted                                                   |  | $                                | 12,311     
|                                                                            |  |                                  |            
|Weighted average shares outstandingbasic                                   |  |                                  | 171,500,309
|Assumed exercise of stock options                                           |  |                                  | 98,526     
|                                                                            |  |                                  |            
|Weighted average shares outstandingdiluted                                 |  |                                  | 171,598,835
|                                                                            |  |                                  |            
|Earnings (loss) per sharebasic and diluted                                 |  | $                                | 0.07       
|                                                                            |  |                                  |            



Common shares related
to outstanding stock options and other potentially dilutive securities that were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive were 39,531,758 and 28,091,045 for the three months ended
September 30, 2002 and 2001, respectively.





12



---

##### Table of Contents

Note 6.    Acquisitions



KPMG Consulting AG



On August 22, 2002, as part of a significant expansion in our international presence, the Company acquired KPMG Consulting AG (subsequently renamed
BearingPoint GmbH (BE Germany)), the consulting practice of the German member firm of KPMG International, with operations in Germany, Switzerland and Austria, for approximately $643,020. The purchase of KPMG Consulting AG was paid for
through the issuance of 30,471,309 shares of common stock to the sellers at $11.96 per share, $273,583 in cash to the sellers, and approximately $5,000 in acquisition related transaction costs incurred to date. The preliminary allocation of the
purchase price to assets acquired and liabilities assumed was as follows:



|                        |  | Preliminary Allocation of Purchase Price |         
|----------------------- |  | ---------------------------------------- | --------
|                        |  | as restated                              |         
|Current assets          |  | $                                        | 138,332 
|Goodwill                |  |                                          | 636,631 
|Purchased intangibles   |  |                                          | 41,019  
|Acquired software       |  |                                          | 8,015   
|Other long-lived assets |  |                                          | 15,750  
|                        |  |                                          |         
|Total assets            |  | $                                        | 839,747 
|Current liabilities     |  |                                          | (141,991
|Long-term liabilities   |  |                                          | (54,736 
|                        |  |                                          |         
|Total purchase price    |  | $                                        | 643,020 
|                        |  |                                          |         



The significance of
the goodwill balance is primarily due to the value related to the acquired workforce. Purchased intangibles acquired include customer-related intangible assets for order backlog, customer contracts and related customer relationships of $39,615 and
trade name of $1,404. Goodwill is not deductible for German tax purposes.



In connection with the acquisition of the BE Germany business, the Company announced a reduction of its workforce by approximately 700 employees, in order to balance workforce capacity with market demand for services.
Severance and termination benefits related to this workforce reduction totaled $18,488 and has been accounted for as part of the acquisition of BE Germany. As of September 30, 2002 none of the liability has been paid.



Effective August 1, 2002, the results of BE Germanys operations have
been included in the consolidated financial results of the Company. The following unaudited pro forma financial information presents the combined results of operations of the Company and BE Germany as if the acquisition had occurred as of the
beginning of the periods presented. The pro forma financial information has been prepared using information derived from the Company and BE Germanys historical consolidated financial statements. The unaudited pro forma financial information is
presented for informational purposes only and does not purport to be indicative of the Companys future results of operations or financial position of what the Companys results of operations or financial position would have been had the
Company completed the acquisition of BE Germany at an earlier date. The pro forma adjustments are based on available information and upon assumptions that the Company believes are reasonable.



13



---

##### Table of Contents

|                                                                  |  | Three Months Ended September 30, 2002
|----------------------------------------------------------------- |  | -------------------------------------
|                                                                  |  | as restated                          
|Revenue                                                           |  | $                                    
|Income before cumulative effect of change in accounting principle |  |                                      
|Cumulative effect of change in accounting principle               |  |                                      
|                                                                  |  |                                      
|Net income                                                        |  | $                                    
|Earnings per sharebasic and diluted:                             |  |                                      
|Income before cumulative effect of change in accounting principle |  | $                                    
|Cumulative effect of change in accounting principle               |  |                                      
|                                                                  |  |                                      
|Net income                                                        |  | $                                    
|                                                                  |  |                                      
|Weighted average sharesbasic                                     |  |                                      
|                                                                  |  |                                      
|Weighted average sharesdiluted                                   |  |                                      
|                                                                  |  |                                      



The unaudited pro
forma financial information above reflects the following adjustments to the historical consolidated financial statements for the three months ended September 30, 2002: amortization expense on purchased intangible assets consisting of backlog and
trade name in the amount of $1,678 (net of tax), interest expense associated with the debt financing of the Companys acquisition of BE Germany of $360 (net of tax) and an increase in the number of weighted average common shares outstanding of
16,891,704 as a result of including shares issued as consideration for the equity portion of the purchase price. For the pro forma effects of this acquisition on the Companys results of operations for the year ended June 30, 2002, and the
Companys financial position at June 30, 2002, refer to the Companys Form 8-K/A filed with the SEC on October 17, 2002.



Andersen Business Consulting Practices



During the first quarter of fiscal 2003, the Company entered into a series of acquisitions of Andersen Business Consulting practices around the world, in
order to expand the Companys global presence. The acquisitions included practices from the United States, Spain, Japan, France, Brazil, Switzerland, Norway, Finland, Sweden, Singapore, South Korea and Peru. The Company also acquired the
business consulting practice of Ernst & Young in Brazil. The aggregate purchase price of the acquisitions, paid in cash, totaled $131,804, including $9,361 related to transaction costs. The allocation of the aggregate purchase price was $143,206
to goodwill, $6,127 to purchased intangibles and approximately $17,500 of net liabilities acquired, primarily employee liabilities assumed.



The significance of the goodwill balance is primarily due to the value related to the acquired workforce. Purchased intangibles acquired include
customer-related intangible assets for order backlog, customer contracts and related customer relationships of $6,127. Goodwill of $63,699 relating to the acquisition of the Andersen Business Consulting practice in the United States is expected to
be deductible for tax purposes. Goodwill of $79,507 relating to the acquisitions of the remaining Andersen Business Consulting practices is tax deductible if the earnings are remitted to the United States. The Company does not anticipate remitting
such earnings to the United States.



The results of the
operations for each of the acquisitions in the European region have been included in the consolidated financial results beginning on the consummation date of each acquisition. The results of the operations for each of the acquisitions in the Asia
Pacific and Latin America regions have been included in the consolidated financial results beginning in the month following the consummation date of each acquisition.



In connection with the acquisitions of certain European Andersen Business Consulting practices (primarily within France,
Spain and Switzerland), the Company reduced its workforce by approximately 240 employees, in order to balance workforce capacity with market demand for services. Severance and termination benefits related to these workforce reductions totaling
$3,919 have been accounted for as part of the acquisitions. As of September 30, 2002, $98 of the total liability has been paid.



14



---

##### Table of Contents

Note 7.    Notes Payable



On August 21, 2002, the Company entered into a $220,000 revolving credit facility for the purpose of funding a portion of
the acquisition cost of KCA. This credit facility matures on December 15, 2002 and is in addition to the Companys other credit facilities. Borrowings bear interest at either the prime rate, the LIBOR rate plus a margin ranging from 0.875% to
1.625% or money market rates, the option of which is determinable by the Company. On August 22, 2002, in connection with the closing of the KCA acquisition, the Company borrowed $220,000 under the new facility and $75,000 under the Companys
existing receivables purchase facility. At September 30, 2002, these borrowings bore interest at 2.98% and 2.22%, respectively.



On August 30, 2002, the Company expanded its yen-denominated line of credit facility to an aggregate principal balance not to exceed 2 billion Yen
(approximately $16,800). Borrowings under the facility accrue interest of TIBOR plus 0.90% and are used to finance working capital for the Companys Japanese operations. There are no covenants under the facility, and it matures on August 30,
2003. At September 30, 2002, there were borrowings outstanding on this line of $4,926, which accrue interest at 0.97%.



Note 8.    Derivative Instruments and Hedging Agreements



The Company has borrowings outstanding under bank credit facilities, which carry variable interest rates (see Note 7). These
debt obligations expose the Company to variability in interest payments due to changes in interest rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense decreases.



During the second quarter of fiscal year 2003, the Company intends to replace
its $220,000 short-term revolving credit facility used to fund recent acquisitions with fixed rate debt. In anticipation of this refinancing, the Company entered into treasury rate locks on $125,000 of five-year debt. The treasury locks are
derivative instruments as defined by SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and have been designated as highly effective cash flow hedges. The treasury locks are anticipated to convert fixed rate cash
flows from 6.71% to approximately 6.57% on $125,000 of the new debt.



The accumulated loss related to the treasury locks included in other comprehensive income as of September 30, 2002 was approximately $887. On November 6, 2002 the treasury locks were settled, resulting in a gain of $787. Until the
anticipated refinancing is consummated the amount of accumulated gain that will be reclassified into interest expense over the next twelve months can not be projected.



Note 9.    Transactions with KPMG LLP



During fiscal year 2002, the Company began to wind down the services provided by KPMG LLP under the transition services
agreement. In connection with winding down and terminating services, we are potentially liable for the payment of termination costs, as defined in the agreement, incurred by KPMG LLP, including transitioning personnel and contracts from KPMG LLP to
our Company. The Company has given notice to KPMG LLP of its intent to terminate certain services during fiscal year 2003, for which the amount of termination costs have yet to be determined by KPMG LLP or agreed upon by the parties. Accordingly,
the amount of termination costs that the Company will pay to KPMG LLP in the future cannot be reasonably estimated at this time. The Company believes that the amount of termination costs yet to be assessed will not have a material adverse effect on
the Companys consolidated financial position, cash flows, or liquidity. Whether such amounts could have a material effect on the results of operation in a particular quarter or fiscal year cannot be determined at this time.



During July 2002, the Company purchased $30,754 of leasehold improvements
from KPMG LLP at their net book value. These assets had been used by the Company under the transition services agreement (for which usage charges had been included in the monthly costs under the agreement) and will continue to be used in our
business. Based on information currently available, the Company anticipates paying KPMG LLP an additional $40,000 to $60,000 for the sale and transfer of additional capital assets currently used by the Company through the transition services



15



---

##### Table of Contents

agreement.



Note 10.    Capital Stock and Option Awards



On September 3, 2002, in accordance with the February 1, 2002 tender offer relating to stock options with an exercise price of $55.50, the Company issued
4,397,775 replacement options at an exercise price of $11.01, which was 110% of the closing market price on that date.



In connection with the various Andersen BC Practice transactions, the Company committed to issuing approximately 4,000,000 shares of common stock to
former partners of those practices as a retentive measure and for no monetary consideration from such persons. The shares will be issued in equal one-third increments over a three-year period on the anniversary date of the respective transactions so
long as the recipient remains employed by the Company. Compensation expense will be recorded ratably over the three-year period beginning in July 2002. Compensation expense for the three months ended September 30, 2002 was $3,380.



On September 30, 2002, the Company filed with the SEC a registration
statement on Form S-3 relating to the resale of 30,471,309 shares of the Companys common stock issued in connection with the closing of the KCA acquisition. The registration statement indicates that the Company will not be selling any of the
shares covered by the registration statement and will not receive any of the proceeds from the sale of shares to the extent that any of the shares are sold by the selling shareholders. This registration statement became effective on October 18,
2002.



Note 11.    Commitment to Re-Branding



In August 2002, the Company announced its commitment to a
re-branding initiative, under which the Company expects to spend $20,000 to $40,000 during fiscal year 2003. For the three months ended September 30, 2002, the Company has incurred costs of $6,790 ($4,016 after tax, or $0.02 per share).



Note 12.    Goodwill and Other Intangible Assets



Effective July 1, 2001, the Company adopted SFAS No. 142, Goodwill and
Other Intangible Assets, which established financial accounting and reporting standards for acquired goodwill and other intangible assets and superseded Accounting Principles Board Opinion (APB) No. 17, Intangible
Assets. Under SFAS No. 142, goodwill and indefinite-lived purchased intangible assets are no longer amortized but are reviewed at least annually for impairment; the Company has elected to perform this review annually as of April 1.
Identifiable intangible assets that have finite lives, continue to be amortized over their estimated useful lives.



In connection with adopting this standard as of July 1, 2001, the Company recognized a transitional impairment loss of $79,960, or $0.51 per basic and
diluted earnings per share, as the cumulative effect of a change in accounting principle. There was no tax benefit recorded in connection with this change. The transitional impairment charge resulted from a change in the criteria for the measurement
of the impairment loss.



Goodwill and other identifiable
intangible assets consisted of the following at September 30, 2002 and June 30, 2002:



16



---

##### Table of Contents

|                               |  | September 30, |           |   | June 30, |  
|------------------------------ |  | ------------- | --------- | - | -------- | -
|                               |  | 2002          |           |   | 2002     |  
|                               |  | as restated   |           |   |          |  
|Internal-use software          |  | $             | 92,634    |   |          | $
|Purchased intangibles          |  |               | 60,418    |   |          |  
|Marketed software              |  |               | 18,371    |   |          |  
|Other                          |  |               | 2,612     |   |          |  
|Total accumulated amortization |  |               | (46,322   | ) |          |  
|                               |  |               |           |   |          |  
|Other intangible assets, net   |  |               | 127,713   |   |          |  
|Goodwill                       |  |               | 875,776   |   |          |  
|                               |  |               |           |   |          |  
|Total                          |  | $             | 1,003,489 |   |          | $
|                               |  |               |           |   |          |  



Identifiable
intangible assets include purchased or internally developed software and finite-lived purchased intangible assets, which primarily consist of market rights, backlog and software license rights. Identifiable intangible assets are amortized
principally by the straight-line method over their expected period of benefit.



The changes in the carrying amount of goodwill for the three months ended September 30, 2002 are as follows:



|                              |  | BalanceJune 30,2002 |        | Additions   |   | Other(a)    |  |   | BalanceSeptember 30, 2002
|----------------------------- |  | ------------------- | ------ | ----------- | - | ----------- |  | - | -------------------------
|                              |  |                     |        | as restated |   | as restated |  |   | as restated              
|Public Services               |  | $                   | 11,537 |             | $ | 11,812      |  | $ |                         
|Communications & Content      |  |                     | 8,509  |             |   | 15,542      |  |   |                         
|Financial Services            |  |                     | 2,871  |             |   | 6,217       |  |   |                         
|Consumer & Industrial Markets |  |                     | 8,283  |             |   | 23,624      |  |   |                         
|High Technology               |  |                     | 2,388  |             |   | 4,973       |  |   |                         
|EMEA                          |  |                     | 10,750 |             |   | 705,771     |  |   | 4,759                    
|Asia Pacific                  |  |                     | 43,123 |             |   | 15,448      |  |   | (366                     
|Latin America                 |  |                     |       |             |   | 333         |  |   |                         
|Corporate/Other               |  |                     | 202    |             |   |            |  |   |                         
|                              |  |                     |        |             |   |             |  |   |                          
|Total                         |  | $                   | 87,663 |             | $ | 783,720     |  | $ | 4,393                    
|                              |  |                     |        |             |   |             |  |   |                          

---

|(a) |  | Other changes in goodwill consist primarily of foreign currency translation adjustments primarily related to fluctuation in the Euro.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------



Note 13.    Restructuring Charges



The following table summarizes the restructuring activities for the three
months ended September 30, 2002 (including those activities accounted for as part of the acquisitions (see Note 6)).



17



---

##### Table of Contents

|                                  |  | Severance   |       
|--------------------------------- |  | ----------- | ------
|                                  |  | as restated |       
|Balance at June 30, 2002          |  | $           | 1,162 
|Acquisition related restructuring |  |             | 22,407
|Operating charges                 |  |             |      
|Payments                          |  |             | (337  
|Other (a)                         |  |             | 163   
|                                  |  |             |       
|Balance at September 30, 2002     |  | $           | 23,395
|                                  |  |             |       

---

| | (a) |  | Other changes in restructuring accrual consist primarily of foreign currency translation adjustments.
| | --- |  | -----------------------------------------------------------------------------------------------------



This restructuring accrual is recorded within the balance sheet caption Accrued payroll and employee benefits.
The remaining severance accrual is expected to be paid by the end of fiscal year 2004.



Note 14.    Subsequent Events



On October 1, 2002, the Company acquired the consulting unit of the KPMG international member firm in Finland for approximately $4,000. The Company is currently in the process of determining the allocation of the purchase price to the
acquired assets and liabilities.



* * * * *



18



---

##### Table of Contents

PART I, ITEM 2.    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following information has been amended to reflect the restatements made to the Consolidated Condensed Financial Statements as further discussed in
Note 2, Restatement, of the Notes to Consolidated Condensed Financial Statements.



This information should be read in conjunction with the information contained in the Consolidated Condensed Financial Statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q/A. This
Quarterly Report on Form 10-Q/A contains forward-looking statements that involve risks and uncertainties. See the discussion relating to Forward-Looking Statements below.



Accounting policies that management believes are most critical to the Companys financial condition and operating
results pertain to revenue recognition and valuation of unbilled revenues (including estimates of costs to complete engagements); collectibility of accounts receivable; valuation of goodwill; and estimates pertaining to discretionary compensation
costs and global effective income tax rates. In deriving accounting estimates, management considered available information and exercised reasonable judgment. However, actual results could differ from these estimates. See also Company Overview
 Financial Statement Presentation  Critical Accounting Policies and Estimates in the Companys Form 10-K for the fiscal year ended June 30, 2002.



Company Overview



BearingPoint, Inc. is a large business consulting and systems integration firms with approximately 17,000 employees. We serve Global 2000 companies, small
and medium-sized businesses, government agencies and other organizations. The Company provides business and technology strategy, systems design and architecture, applications implementation, network infrastructure and managed services. Our service
offerings are designed to help our clients deploy business systems to access information on a timely basis, and to create value in their enterprises.



On October 2, 2002, KPMG Consulting, Inc. changed its name to BearingPoint, Inc. Our brand name underscores our global commitment to help our clients set
clear direction and achieve results. In conjunction with our branding initiative, BearingPoint moved to the New York Stock Exchange and began trading on October 3, 2002, under the new ticker symbol BE. This move strengthens
BearingPoints reach to potential international investors.



We have provided consulting services through five industry groups in which we have significant industry-specific knowledge. These groups are Public Services, Communications & Content, Financial Services, Consumer & Industrial
Markets and High Technology. In addition, as a result of our significant international acquisitions, we have established three new international reportable segments. Our focus on specific industries provides us with the ability to tailor our service
offerings to reflect an understanding of the marketplaces in which our clients operate, enabling our clients to achieve their business objectives more quickly and efficiently.



We now have multinational operations covering North and South America, Europe and the Asia Pacific region. We utilize this
multinational network to provide consistent integrated service to our clients throughout the world. During the first quarter of fiscal year 2003, we significantly expanded our European presence with the purchase of KPMG Consulting AG
(KCA), which has approximately 3,000 employees in Germany, Switzerland and Austria. We furthered our global strategy enabling us to better serve our multinational clients by acquiring all or portions of selected Andersen Business
Consulting Practices (Andersen BC Practices) in Australia, China/Hong Kong, Finland, France, Japan, Norway, Peru, Singapore, South Korea, Spain, Sweden and Switzerland, as well as hiring professionals from Andersen BC Practices in the
United States and Brazil. In addition, we strengthened our Latin American business with the acquisition of Ernst & Youngs Brazilian consulting practice.



HISTORICAL RESULTS OF OPERATIONS OVERVIEW



During the three months ended September 30, 2002, the Company completed its acquisition of KCA and a number of acquisitions involving Andersen BC
Practices around the globe.



The Company realized net income
for the three months ended September 30, 2002 of $12.3 million, or $0.07 per share, compared to a net loss of $57.6 million, or $0.36 per share including a transitional impairment charge relating to the cumulative effect



19



---

##### Table of Contents

of change in accounting principle of $80.0 million (net of tax) or $0.51 per share, for the three months ended September 30, 2001. Net income before
cumulative effect of change in accounting principle for the quarters ended September 30, 2002 and 2001, were $12.3 million and $22.3 million, respectively.



This decrease is principally due to the integration of approximately 1,500 personnel hired from the Andersen BC Practice in the United States, as these
professionals were hired on July 1, 2002 and their utilization was, as expected, significantly below our existing business for most of the quarter.



Three Months Ended September 30, 2002 Compared to Three Months Ended September 30, 2001



Revenues.    Revenues increased $123.8 million, or 20.3%, from $608.9 million in the three months
ended September 30, 2001, to $732.7 million in the three months ended September 30, 2002. The overall increase in revenue is attributable to international acquisitions, including collaborative market action with our core business. Public Services,
the Companys largest business unit, generated strong revenue growth of $46.5 million, up 21.3% excluding the impact of acquisitions and other transactions compared to the prior year. International revenue increased $125.7 million from $42.1
million for the three months ended September 30, 2001 to $167.8 million for the three months ended September 30, 2002 primarily due to acquisitions. Growth in revenue from Public Services and acquisitions was offset by declines in the High
Technology and Communications & Content business units, whose clients have been impacted by the uncertain economic environment, thereby impacting their contributions to our business.



The Company expects this period of economic uncertainty may continue to impact revenue growth for at least another quarter
with the most significant impact being in the Communications & Content industry. However, this is expected to be more than offset by the addition of revenues from recent acquisitions.



Gross Profit.    Gross profit as a percentage of revenues decreased to 23.2% from 26.9% for the
three months ended September 30, 2002 and 2001, respectively. This decrease is primarily due to the lower utilization rates for the former U.S. Andersen BC Practice personnel hired on July 1, 2002. In dollar terms, gross profit increased by $6.1
million, or 3.7%, from $164.0 million for the three months ended September 30, 2001, to $170.1 million for the three months ended September 30, 2002. The increase in gross profit was due to an increase in revenue of $123.8 million described above,
partially offset by:



| |  |  | A net increase in professional compensation of $92.3 million, or 37.7%, to $337.4 million compared to $245.1 million in the prior years quarter. This increase was
predominantly due to the addition of approximately 7,000 billable employees through acquisitions (including a $3.4 million noncash charge relating to common stock awards to be made to our managing directors from Andersen BC Practices), partially
offset by the Companys workforce actions that have occurred over the last 12 months in response to a challenging economy. Overall the Companys average billable headcount has increased 51.2% from approximately 8,400 in the first quarter
of fiscal year 2002 to 12,700 in the current quarter.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A net increase in other direct contract expenses of $15.6 million, or 10.8%, to $159.8 million, representing 21.8% of revenue, compared to $144.2 million, or 23.7% of revenue in the
prior years quarter. The $15.6 million increase is attributable to higher revenue levels while the improvement as a percentage of revenue is due to the Companys continued efforts to limit the use of subcontractors and travel expenses as
well as historically lower use of subcontractors internationally.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A net increase in other costs of service of $9.7 million, or 17.5%, to $65.4 million from $55.6 million, was primarily due to acquisitions, partially offset by lower levels of bad
debt expense and tighter controls on discretionary expenses.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Amortization of Purchased Intangible Assets.    Amortization of purchased intangible assets increased $8.0 million for the three months ended September 30, 2002. This increase in
amortization expense primarily relates to $45.7 million of backlog acquired as part of our acquisitions, which is being amortized over 12 to 15 months.



Selling, General and Administrative Expenses.    Selling, general and administrative expenses was $133.8 million for the three
months ended September 30, 2002. This reflects an increase of $14.6 million, or 12.2%, from $119.2 million for the three month period ended September 30, 2001. This increase is principally due to $6.8 million of re-branding costs, and the impact of
the various acquisitions, partially offset by reduced discretionary spending and current cost control initiatives.



20



---

##### Table of Contents

Interest (Income) Expense, Net.    Interest (income) expense, net, increased
$0.9 million to $1.5 million of net interest expense from $0.6 million of net interest expense for the three months ended September 30, 2002 and 2001, respectively. This increase in net interest expense is due to the increase in borrowings
outstanding of $322.2 million from $12.3 million at September 30, 2001. The increase in borrowings is primarily due to borrowings of $220.0 million under the Companys new short-term revolving credit facility and $75.0 million of borrowings on
its receivables purchase facility predominantly used to finance a portion of the cost of the acquisition of KCA in August 2002.



Income Tax Expense.    For the three month period ended September 30, 2002, the Company earned income before taxes of $26.8
million and provided income taxes of $14.5 million resulting in an effective tax rate for the quarter of 54.1%. For the three months ended September 30, 2001, the Company earned income before taxes and cumulative effect of change in accounting
principle of $44.2 million and provided income taxes of $21.9 million resulting in an effective tax rate for the quarter of 49.5%. The tax rates have been impacted by the non-deductibility of losses associated with certain international operations.



Income before Cumulative Effect of Change in Accounting
Principle.    Income before cumulative effect of change in accounting principle decreased by $10.0 million, from $22.3 million for the three months ended September 30, 2001, to $12.3 million for the three months ended
September 30, 2002. This decrease in profitability reflects lower utilization on billable headcount from acquisitions, increased amortization on finite lived intangibles, and re-branding costs partially offset by increased revenues, reduced
discretionary spending and cost control initiatives.



Cumulative Effect of Change in Accounting Principle.    The Company adopted SFAS No. 142 during the first fiscal quarter of the prior year (as of July 1, 2001). This standard eliminated goodwill amortization upon
adoption and required an assessment for goodwill impairment upon adoption and at least annually thereafter. As a result of adoption of this standard, the Company no longer amortizes goodwill and during the quarter ended September 30, 2001 incurred a
non-cash transitional impairment charge of $80.0 million (net of tax). This transitional impairment charge is a result of the change in accounting principle to measuring impairments on a discounted versus an undiscounted cash flow basis.



Net Income (Loss).    For the three months
ended September 30, 2002, the Company realized net income of $12.3 million, or $0.07 per share. For the three months ended September 30, 2001, the Company realized a net loss applicable to common stockholders of $57.6 million, or $0.36 per share,
largely due to recording a transitional impairment charge as a result of a cumulative effect of change in accounting principle.



LIQUIDITY AND CAPITAL RESOURCES



At September 30, 2002, the Company had a cash balance of $78.4 million, which is down $125.2 million from June 30, 2002 predominantly due to funding
various acquisitions around the globe. The Company has funded these transactions and operations through cash generated from operations, borrowings from various credit agreements of $334.6 million and the issuance of 30.5 million shares of common
stock valued at $11.96 per share. The Company has borrowing arrangements available including a revolving credit facility with an outstanding balance of $24.0 million at September 30, 2002 (not to exceed $250 million), a short-term revolving credit
facility with an outstanding balance of $220.0 million at September 30, 2002 (not to exceed $220 million), and an accounts receivable financing facility with an outstanding balance of $75.0 million at September 30, 2002 (not to exceed $150 million).
The $250 million and $220 million revolving credit facilities expire on May 29, 2005 and December 15, 2002, respectively. The accounts receivable purchase agreement permits sales of accounts receivable through May 23, 2003, subject to
annual renewal. The accounts receivable purchase agreement is accounted for as a financing transaction; accordingly, it is not an off-balance sheet financing arrangement. The Company intends to replace the short-term revolving credit facility with
other financing prior to December 15, 2002.



21



---

##### Table of Contents

The $250 million revolving credit facility includes affirmative, negative and financial covenants,
including, among others, covenants restricting the Companys ability to incur liens and indebtedness, purchase the Companys securities, and pay dividends and requiring the Company to maintain a minimum level of net worth ($823.1 million
as of September 30, 2002), maintain fixed charge coverage of at least 1.25 to 1.00 (as defined) and maintain a leverage ratio not to exceed 2.50 to 1.00 (as defined). We are in compliance with the financial ratios, covenants and other restrictions
imposed by this credit facility. The credit facility contains customary events of default and a default (i) upon the acquisition by a person or group of beneficial ownership of 30% or more of the Companys common stock, or (ii) if within a
period of six calendar months, a majority of the officers of the Companys executive committee cease to serve on its executive committee, and their terminations or departures materially affect the Companys business. The receivables
purchase agreement contains covenants that are consistent with the Companys $250 million revolving credit facility and cross defaults to the $250 million revolving credit facility. The short-term revolving credit facility provides that upon
receipt of proceeds by the Company from certain dispositions of assets or issuances of equity or debt securities, the revolving credit commitments will automatically be reduced by certain amounts in the case of such dispositions, or by the amount of
proceeds received in the case of an issuance of securities, and the Company is required to repay amounts due that exceed the reduced credit commitments.



Under the transition services agreement with KPMG LLP (which terminates no later than February 8, 2004 for non-technology services and February 8, 2005
for technology-related services), the Company contracted to receive certain infrastructure support services from KPMG LLP until the Company completes the build-out of its own infrastructure. If the Company terminates services prior to the end of the
term for such services, the Company may be obligated to pay KPMG LLP termination costs, as defined in the transition services agreement, incurred as a result of KPMG LLP winding down and terminating such services. KPMG LLP and the Company have
agreed that during the term of the transition services agreement the parties will work together to minimize any termination costs (including transitioning personnel and contracts from KPMG LLP to our Company), and our Company will wind down its
receipt of services from KPMG LLP and develop its own internal infrastructure and support capabilities or seek third party providers of such services. The Company has given notice to KPMG LLP of its intent to terminate certain services in fiscal
year 2003 for which the amount of termination costs have either not been determined by KPMG LLP or not agreed upon by the parties. In July 2002, the Company purchased from KPMG LLP $30.8 million of leasehold improvements. Based on information
currently available, the Company anticipates paying KPMG LLP approximately $40 million to $60 million for the sale and transfer of additional capital assets (such as computer equipment, furniture and leasehold improvements). Currently the Company
contracts for the use of such capital assets through the transition services agreement (for which usage charges are included in the monthly cost under the agreement). The amount of termination costs that the Company will pay to KPMG LLP in the
future cannot be reasonably estimated at this time. Whether the amount of termination costs yet to be assessed will not have a material adverse effect on the Companys consolidated financial position, cash flows or liquidity in a particular
quarter cannot be determined at this time.



Cash used in
operating activities during the three months ended September 30, 2002 was $20.1 million, principally due to cash operating results of $29.8 million (which consists of net income adjusted for the changes in deferred income taxes and other, stock
awards and depreciation and amortization) more than offset by an increase in accounts receivable and unbilled revenues of $60.0 million. The increase in accounts receivable and unbilled revenues is primarily due to receivables and unbilled balances
from acquired entities and other transactions for which no balance sheet was acquired.



Cash used in investing activities during the three months ended September 30, 2002 was $441.4 million principally due to $4.0 million in purchases of property and equipment, $30.8 million for the purchase of capital
assets from KPMG LLP, and $401.1 million paid for acquisitions.



Cash provided by financing activities for the three months ended September 30, 2002 was $336.9 million, principally due to net proceeds from borrowings of $324.5 million and $12.5 million from the issuance of common stock primarily relating
to the Companys employee stock purchase plan.



22



---

##### Table of Contents

While the Company expects this period of economic uncertainty may continue to impact revenue growth for
at least another quarter, we continue to actively manage client billings and collections and maintain tight controls over discretionary expenses. The Company believes that the cash provided from operations, borrowings available under the various
existing credit facilities, and existing cash balances along with additional financing expected to be completed prior to December 15, 2002 will be sufficient to meet working capital and capital expenditure needs for at least the next 12 months.



RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS



On July 30, 2002, The Financial Accounting Standards Board
(FASB) issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. The statement requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. Examples of costs covered by the statement include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing,
or other exit or disposal activity. SFAS No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. The Company is currently evaluating the requirements and impact of this statement on our consolidated
results of operations and financial position.



On October 25,
2002 the Emerging Issues Task Force (EITF) reached a tentative consensus on Issue 00-21, Accounting for Revenue Arrangements with Multiple Deliverables which addresses how to account for arrangements that may involve the
delivery or performance of multiple products, services, and/or rights to use assets. The EITF plans to ratify this decision at its November 20-21, 2002 meeting and make the final consensus applicable to transactions completed in fiscal years
beginning after December 15, 2002. The Company is currently evaluating the requirements and impact of this issue on our consolidated results of operations and financial position.





23



---

##### Table of Contents

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS



Some of the statements in this report constitute forward-looking statements within the meaning of the United
States Private Securities Litigation Reform Act of 1995. These statements relate to our operations that are based on our current expectations, estimates and projections. Words such as may, will, could,
would, should, anticipate, predict, potential, continue, expects, intends, plans, projects, believes,
estimates and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such 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 or our future financial performance 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. As a result, these statements speak only as of the date they were made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise.



Our actual results may differ from
the forward-looking statements for many reasons, including:



| |  |  | the business decisions of our clients regarding the use of our services;
| | - |  | ------------------------------------------------------------------------



| |  |  | the timing of projects and their termination;
| | - |  | ---------------------------------------------



| |  |  | the availability of talented professionals to provide our services;
| | - |  | -------------------------------------------------------------------



| |  |  | the pace of technological change;
| | - |  | ---------------------------------



| |  |  | the strength of our joint marketing relationships;
| | - |  | --------------------------------------------------



| |  |  | the actions of our competitors; and
| | - |  | -----------------------------------



| |  |  | unexpected difficulties associated with our recent acquisitions, involving KCA and the former Andersen BC Practices.
| | - |  | --------------------------------------------------------------------------------------------------------------------



In addition, our results and forward-looking statements could be affected by
general domestic and international economic and political conditions, including the current slowdown in the economy, uncertainty as to the future direction of the economy and vulnerability of the economy to domestic or international incidents, as
well as market conditions in our industry. For a more detailed discussion of certain of these factors, see Exhibit 99.1 to this Form 10-Q/A. We caution the reader that the factors we have identified above may not be exhaustive. We operate in a
continually changing business environment, and new factors that may affect our forward-looking statements emerge from time to time. Management cannot predict such new factors, nor can it assess the impact, if any, of such new factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those implied by any forward-looking statements.





24



---

##### Table of Contents

PART I, ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK



We are exposed to a number of market risks in the ordinary course of business. These risks, which include interest rate risk and foreign currency exchange
risk, arise in the normal course of business rather than from trading activities.



Our exposure to changes in interest rates arises primarily because our indebtedness under our bank credit facilities carries variable interest rates. In anticipation of refinancing our $220 million short-term
revolving credit facility used to fund recent acquisitions, the Company entered into treasury rate locks on $125 million of five year debt. The treasury locks are expected to convert fixed rate cash flows at 6.71% associated with the $125 million to
a fixed rate of approximately 6.57%. See also Note 7 in the Notes to Consolidated Condensed Financial Statements above.



Our exposure to changes in foreign currency rates primarily relates to net investment exposure, arising from acquisitions in and working capital advances
provided to certain international operations, including risk from the recent acquisitions, in Europe, Asia Pacific and Latin America.



PART I, ITEM 4.    CONTROLS AND PROCEDURES



As of September 30, 2002, the Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer, Chief Financial
Officer, and General Counsel, of the effectiveness of the design and operation of the Companys disclosure controls and procedures. Based upon that evaluation and subsequent evaluations conducted in connection with the audit of the
Companys consolidated financial statements for the year ended June 30, 2003, the Chief Executive Officer and Chief Financial Officer have concluded that, except as stated in the Introductory Note and as noted below under
Changes in Internal Controls, the Companys disclosure controls and procedures are adequately designed to timely notify them of material information relating to the Company required to be disclosed in the Companys SEC filings.



CHANGES IN INTERNAL CONTROLS



There has been no change in the Companys internal control over
financial reporting that occurred during the first quarter of fiscal year 2003 and that has materially affected, or is reasonably likely to affect, the Companys internal control over financial reporting. However, we intend to continue to
refine our internal controls on an ongoing basis with a view towards continuous improvements. Management and PricewaterhouseCoopers LLP (PwC), our independent accountants, have reported to our Audit Committee certain matters involving
internal controls that PwC considers to be material weaknesses or reportable conditions under standards established by the American Institute of Certified Public Accountants. The identified material weaknesses relate to financial review and analysis
at the corporate/consolidation and certain local reporting levels, primarily with respect to the Germanic region. The identified reportable conditions relate to protocol and documentation for reviewing and assessing contract revenue recognition;
monitoring of unusual Work in Process activity; lack of a formal documented policy relating to evidence of a contractual arrangement with respect to revenue recognition based on local legal requirements; cross-training of employees for key finance
and accounting positions; and documentation for certain critical, significant and judgmental accounting areas.



These matters should be viewed in the context of the many special challenges for the Company in fiscal year 2003 that placed much greater demands on our
accounting function. During the year, the Company significantly expanded its global presence by acquiring substantial consulting resources in 15 countries through a series of transactions totaling $800 million. The transactions brought a variety of
disparate accounting systems of varying quality, all of which had to be evaluated and integrated into the Companys systems. In addition, a new Chief Financial Officer was hired, and there was a change in the Corporate Controller.



In June 2003, PwC was retained as the new worldwide independent auditor
for the Company. Fiscal year 2003 saw significant growth and acquisition activity by the Company, important changes in the Companys financial management and a new worldwide independent auditor that carefully reviewed all substantial
transactions and other matters.



Given the material weaknesses
and reportable conditions identified above, management devoted additional resources to resolving questions that arose during the year-end audit. As a result, management is confident that its consolidated financial statements for the quarter ended
September 30, 2002 and the year ended June 30, 2003 fairly present, in all material respects, the financial condition and results of operation of the Company.



The material weaknesses and reportable conditions have been discussed in detail among management, our Audit Committee and PwC. We have assigned the
highest priority to the correction of these material weaknesses and reportable conditions, and we are committed to addressing and resolving them fully. We have already taken several steps that address these matters. In July 2003, the Company
implemented a new European financial accounting system and continues to develop and improve the Germanic consolidation and reporting process. In addition, a new Controller has been appointed for Europe, with special responsibility for Germany and
the other European practices. The Company also is scheduled to implement a new North American financial accounting system during the third quarter of fiscal year 2004. In connection with these initiatives, all finance-related policies and procedures
are currently being updated and enhanced. Standard global documentation requirements have been established for the assessment of critical, significant and judgmental accounting areas, including the evaluation of contract revenue recognition for
non-standard contracts. As part of the monthly closing process, analytical review procedures have been established at the local reporting levels as well as the consolidated level and will continue to be improved upon. As part of our fiscal 2004 goal
setting process, all finance employees are required to achieve a minimum of 40 hours of training in various areas and disciplines. Also, in July 2003, the

Company engaged Ernst & Young LLP to provide a global internal audit function.



DISCLOSURE CONTROLS AND PROCEDURES



PART II.    OTHER INFORMATION



ITEM 1.    LEGAL PROCEEDINGS



We are from time to time the subject of lawsuits and other claims and regulatory proceedings 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 financial condition or results of operations.



ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS



On August 22, 2002, as partial consideration for its acquisition of KCA, the Company issued 30,471,309 shares of its common stock to the former
stockholders of KCA pursuant to a share purchase agreement among the Company, KPMG DTG, the majority stockholder of KCA, and the minority stockholders of KCA as set forth in the share purchase agreement. The shares were issued in a private placement
pursuant to the exemption from registration under Section 4(2) of the Securities Act of 1933.



ITEMS 3-4.    NONE



25



---

##### Table of Contents

ITEM 5.    OTHER INFORMATION



Robert C. Lamb, Jr., Executive Vice President and Chief Financial Officer of the Company, has accepted a comparable position with FleetBoston Financial. Mr. Lamb will be Executive Vice President and Chief Financial
Officer of FleetBoston Financial. His responsibilities will be transitioned prior to calendar year end. Mr. Lamb held a variety of positions during a 14-year career with FleetBoston Financial, including as its Corporate Controller from 1993 to 2000.
In June 2000, he joined our Company in his current position. We have commenced a search for Mr. Lambs replacement.



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K



| | a) |  | Exhibits  Reference is made to the Exhibit Index.
| | -- |  | --------------------------------------------------



| | b) |  | The Company filed three reports on Form 8-K and one report of Form 8-K/A during the period of July 1, 2002 through the date of this report. The Form 8-K that was filed on September
6, 2002 reported the acquisition of KPMG Consulting AG and a related amendment to the Rights Agreement between the Company and EquiServe Trust Company, N.A., as rights agent, dated October 2, 2001. The Form 8-K filed on September 30, 2002 reported
that the Companys Chairman and Chief Executive Officer had submitted to the SEC statements under oath in accordance with Commission Order No. 4-460 and provided certifications pursuant to 18 U.S.C. (S) 1350 adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. The Form 8-K filed on October 4, 2002 reported that the Company had changed its name to BearingPoint, Inc. and would be listing on the New York Stock Exchange under the trading symbol BE. The Form 8-K/A
that was filed on October 17, 2002 contained the pro forma financial statements relating to the Companys acquisition of KCA and the historical financial statements of KCA.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Exhibit Index



|     | 
|---- | 
|3.3  | 
|     | 
|4.1  | 
|     | 
|10.1 | 
|     | 
|10.2 | 
|     | 
|10.3 | 
|     | 
|10.4 | 
|     | 
|10.5 | 
|     | 
|31.1 | 
|     | 
|31.2 | 
|     | 
|32.1 | 
|     | 
|32.2 | 
|     | 
|99.1 | 



26



---

##### Table of Contents

SIGNATURES



Pursuant to the
requirements 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.



|                      |  | BearingPoint, Inc.                        
|--------------------- |  | ------------------------------------------
|                      |  |                                           
|DATE: October 6, 2003 |  | By:                                       
|                      |  |                                           
|                      |  |                                           
|                      |  |                                           
|                      |  |                                           
|                      | 
|                      |  | Principal Financial and Accounting Officer
|                      |  |                                           
|DATE: October 6, 2003 |  | By:                                       
|                      |  |                                           
|                      |  |                                           
|                      |  |                                           
|                      |  |                                           



27