##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period ended September 30, 2005.
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
 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 offices)
    
    (Zip Code)
 (703) 747-3000
 (Registrants telephone number, including area code)
 
  o þ
  þ o o
 o þ




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##### 



BEARINGPOINT, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2005
 EXPLANATORY NOTE




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##### 



BEARINGPOINT, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2005
 TABLE OF CONTENTS
 PagePART IFINANCIAL INFORMATIONItem 1: Financial Statements (unaudited)
    
    
    1Consolidated Condensed Statements of Operations for the Three and Nine Months Ended
September 30, 2005 and 2004
    
    
    1Consolidated Condensed Balance Sheets as of September 30, 2005 and December 31, 2004
    
    
    2Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 30,
2005 and 2004
    
    
    3Notes to Consolidated Condensed Financial Statements
    
    
    4Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 3: Quantitative and Qualitative Disclosures about Market Risk
    
    
    45Item 4: Controls and Procedures
    
    
    45PART IIOTHER INFORMATIONItem 1: Legal Proceedings
    
    
    47Item 1A: Risk Factors
    
    
    47Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    47Item 3: Defaults Upon Senior Securities
    
    
    48Item 4. Submission of Matters to a Vote of Security Holders
    
    
    48Item 5: Other Information
    
    
    48Item 6: Exhibits
    
    
    48SIGNATURES
    
    
    50




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##### 



PART I, ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
 BEARINGPOINT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenue
    
    $
    831,401
    
    
    $
    823,691
    
    
    $
    2,597,979
    
    
    $
    2,587,681Costs of service:Professional compensation
    
    
    412,261
    
    
    
    385,308
    
    
    
    1,295,179
    
    
    
    1,135,494Other direct contract expenses
    
    
    215,511
    
    
    
    209,609
    
    
    
    746,492
    
    
    
    758,588Lease and facilities restructuring charge
    
    
    882
    
    
    
    
    
    
    
    20,487
    
    
    
    11,699Other costs of service
    
    
    66,686
    
    
    
    60,103
    
    
    
    197,507
    
    
    
    184,915Total costs of service
    
    
    695,340
    
    
    
    655,020
    
    
    
    2,259,665
    
    
    
    2,090,696Gross profit
    
    
    136,061
    
    
    
    168,671
    
    
    
    338,314
    
    
    
    496,985Amortization of purchased intangible assets
    
    
    567
    
    
    
    793
    
    
    
    1,699
    
    
    
    2,891Selling, general and administrative expenses
    
    
    200,379
    
    
    
    144,808
    
    
    
    528,180
    
    
    
    463,298Operating income (loss)
    
    
    (64,885
    )
    
    
    23,070
    
    
    
    (191,565
    )
    
    
    30,796Interest income
    
    
    2,759
    
    
    
    399
    
    
    
    5,792
    
    
    
    691Interest expense
    
    
    (8,119
    )
    
    
    (5,115
    )
    
    
    (25,009
    )
    
    
    (13,557
    )Other expense, net
    
    
    (1,193
    )
    
    
    (193
    )
    
    
    (11,546
    )
    
    
    (4,611
    )Income (loss) before taxes
    
    
    (71,438
    )
    
    
    18,161
    
    
    
    (222,328
    )
    
    
    13,319Income tax expense (benefit)
    
    
    (1,014
    )
    
    
    13,694
    
    
    
    85,540
    
    
    
    48,280Net income (loss)
    
    $
    (70,424
    )
    
    $
    4,467
    
    
    $
    (307,868
    )
    
    $
    (34,961
    )Earnings (loss) per share  basic and diluted
    
    $
    (0.35
    )
    
    $
    0.02
    
    
    $
    (1.53
    )
    
    $
    (0.18
    )Weighted average shares  basic
    
    
    201,237,326
    
    
    
    197,789,096
    
    
    
    200,945,176
    
    
    
    196,376,059Weighted average shares  diluted
    
    
    201,237,326
    
    
    
    198,243,384
    
    
    
    200,945,176
    
    
    
    196,376,059
  1




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##### 



BEARINGPOINT, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
 September 30,
    
    
    December 31,2005
    
    
    2004ASSETSCurrent assets:Cash and cash equivalents
    
    $
    361,853
    
    
    $
    244,810Restricted cash
    
    
    40,193
    
    
    
    21,053Accounts receivable, net of allowances of $7,808 at
September 30, 2005 and $11,296 at December 31, 2004
    
    
    398,498
    
    
    
    400,285Unbilled revenue
    
    
    440,951
    
    
    
    381,681Income tax receivable
    
    
    38,223
    
    
    
    50,518Deferred income taxes
    
    
    20,355
    
    
    
    59,566Prepaid expenses
    
    
    46,778
    
    
    
    31,196Other current assets
    
    
    31,699
    
    
    
    33,038Total current assets
    
    
    1,378,550
    
    
    
    1,222,147Property and equipment, net
    
    
    178,924
    
    
    
    203,403Goodwill
    
    
    602,138
    
    
    
    656,877Other intangible assets, net
    
    
    2,111
    
    
    
    3,810Deferred income taxes, less current portion
    
    
    13,766
    
    
    
    20,522Other assets
    
    
    83,405
    
    
    
    75,948Total assets
    
    $
    2,258,894
    
    
    $
    2,182,707LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of notes payable
    
    $
    15,085
    
    
    $
    17,558Accounts payable
    
    
    274,432
    
    
    
    306,325Accrued payroll and employee benefits
    
    
    278,508
    
    
    
    269,876Deferred revenue
    
    
    129,067
    
    
    
    107,308Income tax payable
    
    
    27,633
    
    
    
    33,927Current portion of accrued lease and facilities charge
    
    
    12,099
    
    
    
    22,956Deferred income taxes
    
    
    12,386
    
    
    
    16,750Other current liabilities
    
    
    261,364
    
    
    
    134,744Total current liabilities
    
    
    1,010,574
    
    
    
    909,444Notes payable, less current portion
    
    
    667,564
    
    
    
    405,668Accrued employee benefits
    
    
    81,862
    
    
    
    84,631Accrued lease and facilities charge, less current portion
    
    
    34,314
    
    
    
    27,386Deferred income taxes, less current portion
    
    
    24,937
    
    
    
    6,810Other liabilities
    
    
    110,178
    
    
    
    124,070Total liabilities
    
    
    1,929,429
    
    
    
    1,558,009Commitments and contingencies (note 10)Stockholders equity:Preferred stock, $.01 par value 10,000,000 shares authorized
    
    
    
    
    
    
    Common stock, $.01 par value 1,000,000,000 shares authorized,
205,350,249 shares issued and 201,537,999 shares outstanding
on September 30, 2005 and 203,132,716 shares issued and
199,320,466 shares outstanding on December 31, 2004
    
    
    2,044
    
    
    
    2,022Additional paid-in capital
    
    
    1,201,140
    
    
    
    1,143,059Accumulated deficit
    
    
    (1,070,424
    )
    
    
    (762,556
    )Notes receivable from stockholders
    
    
    (7,577
    )
    
    
    (8,055
    )Accumulated other comprehensive income
    
    
    240,009
    
    
    
    285,955Treasury stock, at cost (3,812,250 shares)
    
    
    (35,727
    )
    
    
    (35,727
    )Total stockholders equity
    
    
    329,465
    
    
    
    624,698Total liabilities and stockholders equity
    
    $
    2,258,894
    
    
    $
    2,182,707
  2




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##### 



BEARINGPOINT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months EndedSeptember 30,2005
    
    
    2004Cash flows from operating activities:Net loss
    
    $
    (307,868
    )
    
    $
    (34,961
    )Adjustments to reconcile net loss to net cash used in
operating activities:Deferred income taxes
    
    
    59,402
    
    
    
    (1,657
    )Provision for doubtful accounts
    
    
    2,202
    
    
    
    6,859Stock-based compensation
    
    
    25,203
    
    
    
    7,872Depreciation and amortization of property and equipment
    
    
    52,457
    
    
    
    57,002Amortization of purchased intangible assets
    
    
    1,699
    
    
    
    2,891Lease and facilities restructuring charge
    
    
    20,487
    
    
    
    11,699Amortization of debt issuance costs
    
    
    10,400
    
    
    
    1,306Other
    
    
    9,335
    
    
    
    1,406Changes in assets and liabilities:Accounts receivable
    
    
    (13,535
    )
    
    
    (14,707
    )Unbilled revenue
    
    
    (65,229
    )
    
    
    (172,143
    )Income tax receivable, prepaid expenses and other
current assets
    
    
    (2,565
    )
    
    
    (14,682
    )Other assets
    
    
    (8,892
    )
    
    
    (17,109
    )Accrued payroll and employee benefits
    
    
    14,620
    
    
    
    20,874Accounts payable and other current liabilities
    
    
    107,311
    
    
    
    116,341Other liabilities
    
    
    (15,230
    )
    
    
    9,676Net cash used in operating activities
    
    
    (110,203
    )
    
    
    (19,333
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    (32,373
    )
    
    
    (60,436
    )Increase in restricted cash
    
    
    (19,140
    )
    
    
    Net cash used in investing activities
    
    
    (51,513
    )
    
    
    (60,436
    )Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    14,897
    
    
    
    25,724Proceeds from issuance of notes payable
    
    
    282,153
    
    
    
    857,840Repayment of notes payable
    
    
    (8,787
    )
    
    
    (760,289
    )Increase (decrease) in book overdrafts
    
    
    5,083
    
    
    
    (20,971
    )Payments made in lieu of stock issuance
    
    
    (4,929
    )
    
    
    Payments on notes receivable from stockholders
    
    
    
    
    
    
    86Net cash provided by financing activities
    
    
    288,417
    
    
    
    102,390Effect of exchange rate changes on cash and cash equivalents
    
    
    (9,658
    )
    
    
    (812
    )Net increase in cash and cash equivalents
    
    
    117,043
    
    
    
    21,809Cash and cash equivalents  beginning of period
    
    
    244,810
    
    
    
    122,475Cash and cash equivalents  end of period
    
    $
    361,853
    
    
    $
    144,284
  3




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial Statements
 Note 1. Basis of Presentation and Liquidity
 Basis of Presentation
    Liquidity
  
    
    The Company has experienced significant recurring net losses. At September 30,
2005, the Company had an accumulated deficit of $1,070,424.
    
    The Companys business has not generated positive cash from operating
activities in some recent periods during fiscal 2005 and 2004.
    
    Due to the material weaknesses in its internal controls, the Company continues
to experience significant delays in completing its consolidated financial
statements and filing periodic reports with the SEC on a timely basis.
Accordingly, the Company continues to devote substantial additional internal and
external resources, and experience higher than expected fees for audit services.
 4




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 
    
    In the first quarter of fiscal 2005, the Company incurred losses of $113,257
under a significant contract with Hawaiian Telcom Communications, Inc.,
which consequently will result in significantly less cash from operating
activities in future years.
    
    The Company currently is a party to a number of disputes which involve or may
involve litigation or other legal or regulatory proceedings. See Note 10,
Commitments and Contingencies.
   Note 2. Stock-Based Compensation and Employee Stock Purchase Plan
   5




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 Stock Price
    
    Risk-Free
    
    
    
    
    
    ExpectedExpected
    
    Interest
    
    Expected
    
    DividendVolatility
    
    Rate
    
    Life
    
    YieldThree months ended September 30, 2005
    
    
    50.32
    %
    
    
    4.07
    %
    
    
    6
    
    
    
    Three months ended September 30, 2004
    
    
    62.39
    %
    
    
    3.72
    %
    
    
    6
    
    
    
    Nine months ended September 30, 2005
    
    
    51.08
    %
    
    
    4.00
    %
    
    
    6
    
    
    
    Nine months ended September 30, 2004
    
    
    64.32
    %
    
    
    3.64
    %
    
    
    6
    
    
    
    
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss)
    
    $
    (70,424
    )
    
    $
    4,467
    
    
    $
    (307,868
    )
    
    $
    (34,961
    )Add back:Total stock-based compensation expense recorded
under intrinsic value method for all stock
awards, net of tax effects
    
    
    20,069
    
    
    
    1,722
    
    
    
    25,203
    
    
    
    4,657Deduct:Total stock-based compensation expense recorded
under fair value method for all stock
awards, net of tax effects
    
    
    (36,364
    )
    
    
    (21,432
    )
    
    
    (87,508
    )
    
    
    (69,308
    )Pro forma net loss
    
    $
    (86,719
    )
    
    $
    (15,243
    )
    
    $
    (370,173
    )
    
    $
    (99,612
    )Earnings (loss) per share:Basic and diluted  as reported
    
    $
    (0.35
    )
    
    $
    0.02
    
    
    $
    (1.53
    )
    
    $
    (0.18
    )Basic and diluted  pro forma
    
    $
    (0.43
    )
    
    $
    (0.08
    )
    
    $
    (1.84
    )
    
    $
    (0.51
    )
  6




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
       7




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
  Note 3. Notes Payable
  September 30,
    
    
    December 31,2005
    
    
    2004Current portion:Yen-denominated term loan (January 31, 2003)
    
    $
    2,907
    
    
    $
    6,509Yen-denominated term loan (June 30, 2003)
    
    
    2,925
    
    
    
    3,254Yen-denominated line of credit
    
    
    7,048
    
    
    
    7,795Other
    
    
    2,205
    
    
    
    Total current portion
    
    
    15,085
    
    
    
    17,558Long-term portion:Series A and Series B Convertible Debentures
    
    
    450,000
    
    
    
    400,000April 2005 Convertible Debentures
    
    
    200,000
    
    
    
    July 2005 Convertible Debentures (net of discount of $22,728)
    
    
    17,272
    
    
    
    Yen-denominated term loan (January 31, 2003)
    
    
    
    
    
    
    3,215Yen-denominated term loan (June 30, 2003)
    
    
    
    
    
    
    1,609Other
    
    
    292
    
    
    
    844Total long-term portion
    
    
    667,564
    
    
    
    405,668Total notes payable
    
    $
    682,649
    
    
    $
    423,226
 Series A and Series B Convertible Subordinated Debentures
    8




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
        9




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 April 2005 Convertible Senior Subordinated Debentures
        July 2005 Convertible Senior Debentures
  10




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
          11




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
  2005 Credit Facility
       
    
    The financial covenants include: (i) a minimum U.S. cash collections
requirement of $125,000 monthly and $420,000 by the Company on a rolling three-month
basis, (ii) a minimum trailing twelve-month EBITDA
 12




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##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 covenant which increases quarterly from $107,600 (for the quarter ending September 30,
2005) to $333,800 (for the quarter ending March 31, 2009 and thereafter) as of the end of
the applicable quarter, (iii) a maximum leverage ratio which decreases from 7.7 to 1 (for
the quarter ending September 30, 2005) to 2.4 to 1 (for the quarter ending March 31, 2009
and thereafter) as of the end of the applicable quarter and (iv) a maximum trailing
twelve-month capital expenditures covenant which starts at $111,300 for the quarter ending
September 30, 2005 and fluctuates thereafter, including reducing to $89,700 a year
thereafter and ultimately remaining fixed at $94,100, starting with the quarter ending
December 31, 2006.
  
    
    The affirmative covenants include:
  
    
    the Companys 2005 Form 10-K by November 30, 2006,
which was filed on November 22, 2006;
    
    the Forms 10-Q for the quarters ended March 31, June 30, and September
30, 2005 by the earlier of two months after the date the Company files the 2005 Form
10-K and January 31, 2007 which were filed on the date hereof;
    
    the Forms 10-Q for the quarters ended March 31 and June 30, 2006 by February 28, 2007; and
    
    the Form 10-Q for the quarter ended September 30, 2006 by March 31, 2007; and
   
    
    The negative covenants restrict certain of the Companys corporate
activities, including, among other things, its ability to make acquisitions or
investments, make capital expenditures, repay other indebtedness, merge or consolidate
with other entities, dispose of assets, incur additional indebtedness, pay dividends,
create liens, make investments (including limitations on loans to its foreign
subsidiaries) settle litigation and engage in certain transactions with affiliates.
    
    The events of default include, among others, defaults based on: certain
bankruptcy and insolvency events; nonpayment; cross-defaults to other debt; payments in
respect of judgments against the Company in excess of $18,000; breach of specified
covenants; change of control; termination of trading of Company stock; material
inaccuracy of representations and warranties; failure to timely deliver audited financial
statements; inaccuracy of the borrowing base; the prohibition or restraint on the Company
or any loan party from conducting its business in any manner that has or could reasonably
be expected to result in a material adverse effect because of any ruling, decision or
order of a court or governmental authority; an indictment, conviction or the commencement
of criminal proceedings of or against the Company or any subsidiary pursuant to which (a)
either damages or penalties could be in excess of $5,000 or (b) such indictment could
reasonably be expected to result in a material adverse effect.
  13




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
   Yen-Denominated Term Loans and Line of Credit
    Discontinued Credit Facilities
    14




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
  Early Extinguishment of Senior Notes
  Note 4. Earnings (Loss) Per Share
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss)
    
    $
    (70,424
    )
    
    $
    4,467
    
    
    $
    (307,868
    )
    
    $
    (34,961
    )Weighted average shares outstanding  basic
    
    
    201,237,326
    
    
    
    197,789,096
    
    
    
    200,945,176
    
    
    
    196,376,059Employee stock options
    
    
    
    
    
    
    446,326
    
    
    
    
    
    
    
    Stock awards
    
    
    
    
    
    
    7,962
    
    
    
    
    
    
    
    Weighted average shares outstanding  diluted
    
    
    201,237,326
    
    
    
    198,243,384
    
    
    
    200,945,176
    
    
    
    196,376,059Earnings (loss) per share  basic and diluted
    
    $
    (0.35
    )
    
    $
    0.02
    
    
    $
    (1.53
    )
    
    $
    (0.18
    )
 15




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 Note 5. Comprehensive Income (Loss)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income (loss)
    
    $
    (70,424
    )
    
    $
    4,467
    
    
    $
    (307,868
    )
    
    $
    (34,961
    )Foreign currency translation adjustment, net of tax (a)
    
    
    1,127
    
    
    
    20,644
    
    
    
    (45,946
    )
    
    
    (10,239
    )Minimum pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63
    )Unrealized loss on derivative instruments, net of tax
    
    
    
    
    
    
    (39
    )
    
    
    
    
    
    
    (117
    )Comprehensive income (loss)
    
    $
    (69,297
    )
    
    $
    25,072
    
    
    $
    (353,814
    )
    
    $
    (45,380
    )
 
 (a)
    
    Movement in the foreign currency translation adjustment is primarily due to exchange-rate
fluctuations of the Euro and Japanese Yen against the U.S. dollar. Note 6. Segment Reporting
  16




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 Three Months EndedSeptember 30,2005
    
    
    2004Operating
    
    
    
    
    
    
    OperatingRevenue
    
    
    Income (loss)
    
    
    Revenue
    
    
    Income (loss)Public Services
    
    $
    316,063
    
    
    $
    45,892
    
    
    $
    317,247
    
    
    $
    74,781Commercial Services
    
    
    160,030
    
    
    
    17,585
    
    
    
    164,789
    
    
    
    27,216Financial Services
    
    
    103,709
    
    
    
    31,108
    
    
    
    89,015
    
    
    
    23,124EMEA
    
    
    152,049
    
    
    
    9,259
    
    
    
    148,376
    
    
    
    17,469Asia Pacific
    
    
    77,811
    
    
    
    15,477
    
    
    
    82,625
    
    
    
    2,687Latin America
    
    
    21,370
    
    
    
    2,779
    
    
    
    21,930
    
    
    
    3,884Corporate/Other (1)
    
    
    369
    
    
    
    (186,985
    )
    
    
    (291
    )
    
    
    (126,091
    )Total
    
    $
    831,401
    
    
    $
    (64,885
    )
    
    $
    823,691
    
    
    $
    23,070
 Nine Months EndedSeptember 30,2005
    
    
    2004Operating
    
    
    
    
    
    
    OperatingRevenue
    
    
    Income (loss)
    
    
    Revenue
    
    
    Income (loss)Public Services
    
    $
    994,501
    
    
    $
    184,987
    
    
    $
    1,052,537
    
    
    $
    248,504Commercial Services
    
    
    509,994
    
    
    
    (47,034
    )
    
    
    513,866
    
    
    
    76,041Financial Services
    
    
    282,226
    
    
    
    72,887
    
    
    
    231,619
    
    
    
    52,254EMEA
    
    
    504,620
    
    
    
    56,550
    
    
    
    465,357
    
    
    
    55,411Asia Pacific
    
    
    241,786
    
    
    
    40,400
    
    
    
    254,945
    
    
    
    19,968Latin America
    
    
    63,548
    
    
    
    9,864
    
    
    
    63,446
    
    
    
    10,494Corporate/Other (1)
    
    
    1,304
    
    
    
    (509,219
    )
    
    
    5,911
    
    
    
    (431,876
    )Total
    
    $
    2,597,979
    
    
    $
    (191,565
    )
    
    $
    2,587,681
    
    
    $
    30,796
 
 (1)
    
    Corporate/Other operating loss is principally due to infrastructure and shared services
costs, such as facilities, information systems, finance and accounting, human resources,
legal, and marketing. Note 7. Transactions with KPMG LLP
  Infrastructure Services.
 17




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
     Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Occupancy costs
    
    $
    8
    
    
    $
    5,589
    
    
    $
    2,757
    
    
    $
    17,675Other infrastructure service costs (a)
    
    
    (1,452
    )
    
    
    12,590
    
    
    
    2,357
    
    
    
    39,947Total
    
    $
    (1,444
    )
    
    $
    18,179
    
    
    $
    5,114
    
    
    $
    57,622Amounts included in:Other costs of service
    
    $
    8
    
    
    $
    5,589
    
    
    $
    2,757
    
    
    $
    17,675Selling, general and administrative expenses (a)
    
    
    (1,452
    )
    
    
    12,590
    
    
    
    2,357
    
    
    
    39,947Total
    
    $
    (1,444
    )
    
    $
    18,179
    
    
    $
    5,114
    
    
    $
    57,622
 
 a)
    
    Balance due to credits received by the Company from KPMG LLP during the third
quarter of 2005. Note 8. Goodwill and Other Intangible Assets
  Balance
    
    
    
    
    
    
    
    
    
    
    BalanceDecember 31,
    
    
    
    
    
    
    
    
    
    
    September 30,2004
    
    
    Additions
    
    
    Other (a)
    
    
    2005Public Services
    
    $
    23,581
    
    
    $
    
    
    
    $
    
    
    
    $
    23,581Commercial Services
    
    
    64,188
    
    
    
    
    
    
    
    
    
    
    
    64,188Financial Services
    
    
    9,210
    
    
    
    
    
    
    
    
    
    
    
    9,210EMEA
    
    
    485,401
    
    
    
    
    
    
    
    (51,771
    )
    
    
    433,630Asia Pacific
    
    
    73,459
    
    
    
    
    
    
    
    (3,025
    )
    
    
    70,434Latin America
    
    
    836
    
    
    
    
    
    
    
    57
    
    
    
    893Corporate/Other
    
    
    202
    
    
    
    
    
    
    
    
    
    
    
    202Total
    
    $
    656,877
    
    
    $
    
    
    
    $
    (54,739
    )
    
    $
    602,138
 
 (a)
    
    Other changes in goodwill consist of foreign currency translation adjustments.  18




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
    September 30,
    
    
    December 31,2005
    
    
    2004Other intangible assets:Backlog, customer contracts and related customer relationships
    
    $
    1,309
    
    
    $
    1,306Market rights
    
    
    10,297
    
    
    
    10,297Total other intangibles
    
    
    11,606
    
    
    
    11,603Accumulated amortization:Backlog, customer contracts and related customer relationships
    
    
    (1,257
    )
    
    
    (1,100
    )Market rights
    
    
    (8,238
    )
    
    
    (6,693
    )Total accumulated amortization
    
    
    (9,495
    )
    
    
    (7,793
    )Other intangible assets, net
    
    $
    2,111
    
    
    $
    3,810
  Note 9. Restructuring Activities
  19




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
    Lease andSeverance
    
    
    Facilities
    
    
    TotalBalance at December 31, 2004
    
    $
    532
    
    
    $
    50,342
    
    
    $
    50,8742005 charges
    
    
    
    
    
    
    20,487
    
    
    
    20,487Payments
    
    
    
    
    
    
    (24,187
    )
    
    
    (24,187
    )Other (a)
    
    
    (186
    )
    
    
    (229
    )
    
    
    (415
    )Balance at September 30, 2005
    
    $
    346
    
    
    $
    46,413
    
    
    $
    46,759
 
 (a)
    
    Other changes in the restructuring accrual consist primarily of foreign currency
translation and other adjustments.  Note 10. Commitments and Contingencies
  
    
    Claims and investigations arising from its continuing inability to timely file
periodic reports under the Securities Exchange Act of 1934, as amended (the Exchange
Act), and the restatement of its financial statements for certain prior periods to
correct accounting errors and departures from generally accepted accounting principles
for those years (SEC Reporting Matters);
    
    Claims and investigations being conducted by agencies or officers of the U.S.
Federal Government and arising in connection with its provision of services under
contracts with agencies of the U.S. Federal Government (Government Contracting
Matters); and
    
    Claims made in the ordinary course of business by clients seeking damages for
alleged breaches of contract or failure of performance and by current or former
employees seeking damages for alleged acts of wrongful termination or discrimination
(Other Matters).
   20




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 SEC Reporting Matters
 2003 Class Action Suits
  2005 Class Action Suits
  2005 Shareholders Derivative Demand
  Series B Debenture Suit
   21




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
   SEC Investigation
   Government Contracting Matters
 Government Contracts
  22




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 Grand Jury Subpoena  California
  Travel Rebate Investigation
  Department of Interior
  USAID Contract
  Core Financial Logistics System
  23




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
  General Services Administration Audit
   Other Matters
 Peregrine Litigation
 Ariko v. Moores Allocco v. Gardner Bains v. Moores Peregrine Litigation Trust v. KPMG LLP In re Peregrine Systems, Inc. Securities Litigation
 Allocco, Ariko, Bains Peregrine Litigation Trust Allocco, Ariko, Bains the Peregrine Litigation Trust Allocco Peregrine
Litigation Trust
 In re Peregrine Systems, Inc. Securities Litigation In re Peregrine Systems, Inc. Securities Litigation
 24




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
  Hawaiian
Telcom Communications, Inc.
  Telecommunication Company
  Michael Donahue
  Canon Australia
  25




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
  Transition Services Provided By KPMG LLP
    Other Commitments
   26




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 Note 11. Pension and Postretirement Benefits
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Components of net periodic pension cost:Service cost
    
    $
    1,591
    
    
    $
    1,411
    
    
    $
    4,773
    
    
    $
    4,232Interest cost
    
    
    1,042
    
    
    
    1,040
    
    
    
    3,126
    
    
    
    3,119Expected return on plan assets
    
    
    (293
    )
    
    
    (249
    )
    
    
    (879
    )
    
    
    (747
    )Amortization of loss
    
    
    4
    
    
    
    3
    
    
    
    12
    
    
    
    9Amortization of prior service cost
    
    
    194
    
    
    
    187
    
    
    
    582
    
    
    
    562Curtailment
    
    
    (208
    )
    
    
    
    
    
    
    (624
    )
    
    
    Settlement
    
    
    (58
    )
    
    
    
    
    
    
    (174
    )
    
    
    Net periodic pension cost
    
    $
    2,272
    
    
    $
    2,392
    
    
    $
    6,816
    
    
    $
    7,175Components of net periodic postretirement medical cost:Service cost
    
    $
    314
    
    
    $
    266
    
    
    $
    942
    
    
    $
    798Interest cost
    
    
    143
    
    
    
    105
    
    
    
    429
    
    
    
    316Amortization of losses
    
    
    18
    
    
    
    
    
    
    
    54
    
    
    
    Amortization of prior service cost
    
    
    120
    
    
    
    120
    
    
    
    360
    
    
    
    361Net periodic postretirement medical cost
    
    $
    595
    
    
    $
    491
    
    
    $
    1,785
    
    
    $
    1,475
 Note 12. Income Taxes
    27




---



##### 



BearingPoint, Inc.
Notes to Consolidated Condensed Financial
Statements  (Continued)
 Note 13. Recently Issued Accounting Pronouncements
        * * * * *
 28




---



##### 



PART I, ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 The following Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) should be read in conjunction with the interim Consolidated Condensed Financial
Statements and Notes to the Consolidated Condensed Financial Statements included elsewhere in this
Quarterly Report on Form 10-Q .
 Disclosure Regarding Forward-Looking Statements
  
    
    Our continuing failure to timely file certain periodic reports with the SEC poses
significant risks to our business, each of which could materially and adversely affect our
financial condition and results of operations.
    
    In fiscal 2004, we identified material weaknesses in our internal control over financial
reporting, which could materially and adversely affect our business and financial
condition, and as of December 31, 2005, these material weaknesses remain.
    
    We face risks related to securities litigation and regulatory actions that could
adversely affect our financial condition and business.
    
    Our business may be adversely impacted as a result of changes in demand, both globally
and in individual market segments, for consulting and systems integration services.
    
    Our operating results will suffer if we are not able to maintain our billing and
utilization rates or control our costs.
    
    The systems integration consulting markets are highly competitive, and we may not be
able to compete effectively if we are not able to maintain our billing rates or control our
costs.
    
    We have incurred significant operating losses under our contract with Hawaiian Telcom
Communications, Inc. and could incur significant additional losses and cash outflows in
fiscal 2006.
    
    Contracting with the Federal government is inherently risky and exposes us to risks that
may materially and adversely affect our business.
    
    Our ability to attract, retain and motivate our managing directors and other key
employees is critical to the success of our business. We continue to experience sustained,
higher-than-industry average levels of voluntary turnover among our workforce, which has
impacted our ability to grow our business.
    
    Our contracts can be terminated by our clients with short notice, or our clients may
cancel or delay projects.
    
    If we are not able to keep up with rapid changes in technology or maintain strong
relationships with software providers, our business could suffer.
    
    Loss of our joint marketing relationships could reduce our
revenue and growth prospects.
    
    We are not likely to be able to significantly grow our business through mergers and
acquisitions in the near term.
    
    There will not be a consistent pattern in our financial results from quarter to quarter,
which may result in increased volatility of our stock price.
    
    Our profitability may decline due to financial, regulatory and operational risks inherent in worldwide operations.
    
    We may bear the risk of cost overruns relating to our services, thereby adversely affecting our profitability.
    
    We may face legal liabilities and damage to our professional reputation from claims made against our work.
    
    Our services may infringe upon the intellectual property rights of others.
    
    We have only a limited ability to protect our intellectual property rights, which are important to our success.
    
    Our current cash resources might not be sufficient to meet our expected near-term cash
needs, especially to fund intra-quarter operating cash requirements and non-recurring cash
requirements (e.g., to settle lawsuits).
 29




---



##### 




    
    We have been unable to issue shares of our common stock under our ESPP since February 1,
2005. The longer we are unable to issue shares of our common stock, the more likely our
ESPP participants may elect to withdraw their accumulated cash contributions from the ESPP
at rates higher than those we have historically experienced.
    
    We have limited availability under our 2005 Credit Facility to borrow additional amounts
or issue additional letters of credit, and we may not be able to refinance our debt or to
do so on favorable terms.
    
    Our 2005 Credit Facility imposes a number of restrictions on the way in which we operate
our business and may negatively affect our ability to finance future needs, or do so on
favorable terms. If we violate these restrictions, we will be in default under the 2005
Credit Facility, which may cross-default to our other indebtedness.
    
    If our operating performance is materially and adversely affected, we may not be able to
service our indebtedness.
    
    We may be required to post collateral to support our obligations under our surety bonds,
and we may be unable to obtain new surety bonds, letters of credit or bank guarantees in
support of client engagements on acceptable terms.
    
    Downgrades of our credit ratings may increase our borrowing costs and materially and
adversely affect our financial condition.
    
    Our leverage may adversely affect our business and financial performance and may
restrict our operating flexibility.
    
    The holders of our debentures have the right, at their option, to require us to purchase
some or all of their debentures upon certain dates or upon the occurrence of certain
designated events, which could have a material adverse effect on our liquidity.
    
    The price of our common stock may decline due to the number of shares that may be
available for sale in the future.
    
    There are significant limitations on the ability of any person or company to acquire the
Company without the approval of our Board of Directors.
    
    The termination of services provided under the transition services agreement with KPMG
LLP could involve significant expense, which could adversely affect our financial results.
  Overview
   Economic and Industry Factors
   30




---



##### 



Revenue and Income Drivers
     Key Performance Indicators
  
    
    Bookings. We believe that information regarding our new contract bookings provides
useful trend information regarding how the volume of our new business changes over time.
Information regarding our new bookings should not be compared to, or substituted for, an
analysis of our revenue over time. There are no third-party standards or requirements
governing the calculation of bookings. New contract bookings are recorded using then
existing currency exchange rates and are not subsequently adjusted for currency
fluctuations. These amounts represent our estimate at contract signing of the
net revenue expected over the term of that contract and involve estimates and judgments
regarding new contracts as well as renewals, extensions and additions to existing
contracts. Subsequent cancellations, extensions and other matters may affect the amount of
bookings previously reported. Bookings do not include potential revenue that could be
earned from a client relationship as a result of future expansion of service offerings to
that client, nor does it reflect option years under contracts that are subject to client
discretion. Although our level of bookings provides some indication of how our business is
performing, we do not characterize our bookings, or our engagement contracts associated
with new bookings, as backlog because our engagements generally can be cancelled or
terminated on short notice or without notice.
    
    Revenue Growth. Unlike bookings, which provide only a general sense of future
expectations, period-over-period comparisons of revenue provide a meaningful depiction of
how successful we have been in growing our business over time.
 31




---



##### 




    
    Gross Margin (gross profit as a percentage of revenue). Gross margin is a
meaningful tool for monitoring our ability to control costs. Analysis of the various cost
elements, including foreign currency translation adjustments and the use of subcontractors,
as a percentage of revenue over time can provide additional information as to the key
challenges we are facing in executing our business model. The cost of subcontractors is
generally more expensive than the cost of our own workforce and can negatively impact our
gross profit. While the use of subcontractors can help us to win larger, more complex
deals, and also may be mandated by our clients, we focus on limiting the use of
subcontractors whenever possible in order to minimize our costs.
    
    Utilization. Utilization represents the percentage of time our consultants are
performing work that is chargeable to a client, and is defined as total hours charged to
client engagements divided by total available hours for any specific time period. In 2006,
we modified the calculation to include the available hours of employees working on
non-chargeable internal projects that had a general relationship to client matters, which
will have the effect of lowering our reported utilization figure by an insignificant
amount. We also further modified this calculation in 2006 by excluding the holiday and
paid vacation time for our employees from the available hours figure. This will have the
effect of raising the utilization rate but will make our reporting of this metric more
consistent with how we believe our industry peer group measures utilization.
    
    Days Sales Outstanding (DSO). DSO is an operational metric that
approximates the amount of earned revenue that remains unpaid by clients at a given time.
DSOs are derived by dividing the sum of our outstanding accounts receivable and unbilled
revenue, less deferred revenue, by our average net revenue per day. Average net revenue
per day is determined by dividing total net revenue for the most recently ended trailing
twelve-month period divided by 365.
    
    Free Cash Flow.Free cash flow is calculated by subtracting purchases of property and
equipment from cash provided by operating activities. We believe free cash flow is a
useful measure because it allows better understanding and assessment of our ability to meet
debt service requirements and the amount of recurring cash generated from operations after
expenditures for fixed assets. Free cash flow does not represent the Companys residual
cash flow available for discretionary expenditures as it excludes certain mandatory
expenditures such as repayment of maturing debt. We use free cash flow as a measure of
recurring operating cash flow. Free cash flow is a non-GAAP financial measure. The most
directly comparable financial measure calculated in accordance with GAAP is net cash
provided by operating activities.
    
    Attrition.Attrition, or voluntary total employee turnover, is calculated by dividing
the number of our employees who have chosen to leave the Company within a certain period by
the total average number of all employees during that same period. Previously, we had
provided attrition figures for our billable employees and did not take into account our
non-consultant employees. Starting in 2006, we intend to provide attrition figures for all
of our employees, which we believe provides metrics that are more compatible with, and
comparable to, those of our competitors.
  Three and Nine Months Ended September 30, 2005 Highlights
  
    
    New contract bookings for the three months ended September 30, 2005 were $771.0 million,
as compared to new contract bookings of $728.5 million for the three months ended September
30, 2004. New contract bookings for the nine months ended September 30, 2005 increased to
$2,428.3 million from $2,299.5 million for the nine months ended September 30, 2004.
During the three months ended September 30, 2005, new contract
bookings increased, driven primarily by strong bookings in the Public
Services business unit, which offset decreased bookings in our
Commercial Services business unit and in our EMEA region. During the nine months ended September 30, 2005, new contract bookings increased in all
three industry groups in North America, driven primarily by strong bookings in our Public
Services industry group, which offset decreased bookings in the EMEA, Asia Pacific and
Latin America regions.
 32




---



##### 




    
    Our revenue for the three months ended September 30, 2005 was $831.4 million,
representing an increase of $7.7 million, or 0.9%, over revenue of $823.7 million for the
three months ended September 30, 2004. Our revenue for the nine months ended September 30,
2005 was $2,598.0 million, representing an increase of $10.3 million, or 0.4%, over the
nine months ended September 30, 2004 revenue of $2,587.7 million.
    
    Our gross profit for the three months ended September 30, 2005 was $136.1 million
compared with $168.7 million for the three months ended September 30, 2004. Gross profit as
a percentage of revenue decreased to 16.4% during the three months ended September 30, 2005
from 20.5% during the three months ended September 30, 2004. Our gross profit for the nine
months ended September 30, 2005 was $338.3 million compared with $497.0 million for the
nine months ended September 30, 2004. Gross profit as a percentage of revenue decreased to
13.0% during the nine months ended September 30, 2005 from 19.2% during the nine months
ended September 30, 2004. This decrease was primarily attributable to a $113.3 million loss
recognized on the HT Contract, which is described below.
    
    We have a significant contract (the HT Contract) with Hawaiian Telcom Communications,
Inc., a telecommunications industry client, under which we were engaged to design, build
and operate various information technology systems for the client. We incurred losses of
$113.3 million under this contract in the first quarter of 2005. The HT Contract has
experienced delays in its build and deployment phases and contractual milestones have been
missed. The client has alleged that we are responsible under the HT Contract to compensate
it for certain costs and other damages incurred as a result of these delays and other
alleged failures. We believe the clients nonperformance of its responsibilities under the
HT Contract caused delays in the project and impacted our ability to perform, thereby
causing us to incur significant damages. We also believe the terms of the HT Contract limit
the clients ability to recover certain of their claimed damages. We are negotiating with
the client to resolve these issues, apportion financial responsibility for these costs and
alleged damages, and transition remaining work under the HT Contract to others, as
requested by the client. During these negotiations, we are maintaining all of our options,
including disputing the clients claims and asserting our own claims in litigation. At this
time we cannot predict the likelihood that we will be able to resolve this dispute or the
outcome of any litigation that might ensue if we are unable to resolve the dispute. Even if
resolved, we could incur substantial additional losses under the HT Contract or agree to
pay additional amounts to facilitate termination of the HT Contract. The incurrence of
additional losses or the payment of additional amounts to the client could materially and
adversely affect our profitability, results of operations or cash flow over the near term.
    
    During the three months and nine months ended September 30, 2005, all of the material
weaknesses in our internal control over financial reporting cited for fiscal 2004 remained.
For information on the developments and progress made in fiscal 2005, please see Item 4,
Controls and Procedures  Remediation of Material Weaknesses in Internal Control over
Financial Reporting.
    
    During the three months ended September 30, 2005, we realized a net loss of $70.4
million, or a loss of $0.35 per share, compared to a net income of $4.5 million, or
earnings of $0.02 per share, during the three months ended September 30, 2004. During the
nine months ended September 30, 2005, we realized a net loss of $307.9 million, or a loss
of $1.53 per share, compared to a net loss of $35.0 million, or a loss of $0.18 per share,
during the nine months ended September 30, 2004. Included in our results for the nine
months ended September 30, 2005 were $113.3 million of operating losses related to the HT
Contract, a $57.3 million increase in the valuation allowance primarily against our U.S.
deferred tax assets, and $20.5 million of lease and facilities restructuring charges.
    
    Utilization for the three months ended September 30, 2005 was 66.2%, a decrease of 110
basis points from the three months ended September 30, 2004. Utilization for the nine
months ended September 30, 2005 was 68.7%, an increase of 90 basis points over the nine
months ended September 30, 2004. We believe that utilization levels in 2005 were affected,
in part, by the demands placed on many of our consulting professionals to assist in
preparing contracts to determine appropriate revenue recognition in light of the Companys
material weaknesses relating to revenue recognition processes.
    
    At September 30, 2005, our DSOs stood at 108 days, representing a decrease of 10 days,
or 8%, from our DSOs at September 30, 2004. Given our ongoing systems issues
related to financial accounting for our North American operations, we are currently unable
to calculate DSOs for dates later than December 31, 2005. We continue to focus on this
metric during 2006 as we believe we are at a level that is higher than the industry
average, resulting in a suboptimal use of our cash.
    
    Free cash flow for the nine months ended September 30, 2005 was ($142.6) million. Net
cash used in operating activities during the nine months ended September 30, 2005 was
$(110.2) million. Purchases of property and equipment during the nine months ended
September 30, 2005 were ($32.4) million. When this amount is subtracted from net cash used
in operating activities, the result is ($142.6) million, which is free cash flow. We use
free cash
 33




---



##### 



flow as a measure of recurring operating cash flow. Free cash flow is a non-GAAP financial
measure. The most directly comparable financial measure calculated in accordance with GAAP
is net cash provided by (used in) operating activities.
 
    
    On March 25, 2005, the Compensation Committee of our Board of Directors approved the
issuance of up to an aggregate of $165 million in restricted stock units (RSUs) under our
Long-Term Incentive Plan (the LTIP) to our current managing directors and a limited
number of key employees (the Retention RSUs), and delegated to our officers the authority
to grant these awards. During the three and nine months ended September 30, 2005, we
recorded non-cash stock compensation expense of $19.9 million and $21.4 million,
respectively, related to the vesting of Retention RSUs, which significantly impacted both
our gross profit and operating income.
    
    During fiscal 2005, we completed a number of private securities offerings in an effort
to improve our overall liquidity. We issued an additional $25.0 million aggregate principal
amount of our Series A Debentures and $25.0 million aggregate principal amount of our
Series B Debentures. We also issued an aggregate principal amount of $200.0 million of our
April 2005 Senior Debentures and an aggregate principal amount of $40.0 million of our July
2005 Senior Debentures. In total, we received approximately $280.3 million in net proceeds
from all of these offerings. For additional information regarding our debt restructuring,
see Liquidity and Capital Resources and Note 3, Notes Payable, of the Notes to
Consolidated Condensed Financial Statements.
 Segments
   Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004
 Revenue.
 34




---



##### 



Three Months EndedSeptember 30,2005
    
    
    2004
    
    
    $ Change
    
    
    % ChangeRevenuePublic Services
    
    $
    316,063
    
    
    $
    317,247
    
    
    $
    (1,184
    )
    
    
    (0.4
    %)Commercial Services
    
    
    160,030
    
    
    
    164,789
    
    
    
    (4,759
    )
    
    
    (2.9
    %)Financial Services
    
    
    103,709
    
    
    
    89,015
    
    
    
    14,694
    
    
    
    16.5
    %EMEA
    
    
    152,049
    
    
    
    148,376
    
    
    
    3,673
    
    
    
    2.5
    %Asia Pacific
    
    
    77,811
    
    
    
    82,625
    
    
    
    (4,814
    )
    
    
    (5.8
    %)Latin America
    
    
    21,370
    
    
    
    21,930
    
    
    
    (560
    )
    
    
    (2.6
    %)Corporate/Other
    
    
    369
    
    
    
    (291
    )
    
    
    660
    
    
    
    n/mTotal
    
    $
    831,401
    
    
    $
    823,691
    
    
    $
    7,710
    
    
    
    0.9
    %
 Impact of
    
    Revenue growthcurrency
    
    (decline), net offluctuations
    
    currency impact
    
    TotalRevenuePublic Services
    
    
    0.0
    %
    
    
    (0.4
    %)
    
    
    (0.4
    %)Commercial Services
    
    
    0.0
    %
    
    
    (2.9
    %)
    
    
    (2.9
    %)Financial Services
    
    
    0.0
    %
    
    
    16.5
    %
    
    
    16.5
    %EMEA
    
    
    (0.2
    %)
    
    
    2.7
    %
    
    
    2.5
    %Asia Pacific
    
    
    2.2
    %
    
    
    (8.0
    %)
    
    
    (5.8
    %)Latin America
    
    
    17.1
    %
    
    
    (19.7
    %)
    
    
    (2.6
    %)Corporate/Other
    
    
    n/m
    
    
    
    n/m
    
    
    
    n/mTotal
    
    
    0.5
    %
    
    
    0.4
    %
    
    
    0.9
    %
 
 n/m = not meaningful 
    
    Public Servicesrevenue slightly decreased during the three months ended
September 30, 2005, primarily attributable to a revenue reduction of $10.0 million
associated with two loss contracts, which more than offset increases in headcount and
chargeable hours resulting from our expanding use of employees at lower average bill
rates.
    
    Commercial Servicesrevenue decreased during the three months ended September 30,
2005, primarily driven by revenue declines in the Manufacturing and High-tech sectors.
    
    Financial Servicesrevenue increased during the three months ended September 30, 2005,
primarily due to revenue growth in all sectors, with especially strong growth in the
Insurance and Global Market sectors. Revenue growth was principally due to an increase
in demand for our services. Our average billing rates improved quarter-over quarter, as
our ability to obtain higher rates per hour on certain of our market offerings offset the
increasing use of lower-priced offshore personnel as a component of our overall pricing
model.
    
    EMEArevenue increased during the three months ended September 30, 2005, primarily due
to combined revenue growth in France and the United Kingdom of $13.3 million. This growth
was partially offset by revenue declines in Germany and Switzerland. Our business in
France experienced a significant shift into systems integration work, while revenue
growth in the United Kingdom was driven by our continued expansion in that region.
Revenue for Germany and Switzerland declined as a result of decreasing utilization caused
by continued deterioration of market conditions in these countries which led to lower
billable headcount.
    
    Asia Pacificrevenue decreased during the three months ended September 30, 2005,
driven primarily by the planned elimination of subcontractor usage in the region, which
more than offset the improved billing rates achieved across the region in third quarter
of 2005 due to significantly lower revenue write-off during the period.
 35




---



##### 




    
    Latin Americarevenue decreased during the three months ended September 30, 2005,
primarily due to reduction in headcount and engagements hours partially offset by the
weakening of the U.S. dollar against local currencies in Latin America (particularly the
Brazilian Real).
    
    Corporate/Other: Our Corporate/Other segment does not contribute significantly to our
revenue.
 Gross Profit .
 
    
    Professional compensation expense increased as a percentage of revenue to 49.6% for the
three months ended September 30, 2005, compared to 46.8% for the three months ended
September 30, 2004. We experienced a net increase in professional compensation expense of
$27.0 million, or 7.0%, to $412.3 million for the three months ended September 30, 2005
from $385.3 million for the three months ended September 30, 2004. The increase in
professional compensation expense is primarily the result of hiring additional billable
employees in response to overall market demand for our services. Additionally, $17.1
million of this amount was related to the vesting of Retention RSUs.
    
    Other direct contract expenses increased slightly as a percentage of revenue to 25.9%
for the three months ended September 30, 2005 compared to 25.4% for the three months ended
September 30, 2004. We experienced a net increase in other direct contract expenses of
$5.9 million, or 2.8%, to $215.5 million for the three months ended September 30, 2005
from $209.6 million for the three months ended September 30, 2004. The change was driven
primarily by increased subcontractor usage and additional hardware/software purchases from
various vendors particularly in the Public Services and Financial Services business units.
    
    Other costs of service as a percentage of revenue increased to 8.0% for the three
months ended September 30, 2005 from 7.3% for the three months ended September 30, 2004.
We experienced a net increase in other costs of service of $6.6 million, or 11.0%, to
$66.7 million for the three months ended September 30, 2005 from $60.1 million for the
three months ended September 30, 2004. The change was driven primarily by an increase in
recruiting charges.
    
    During the three months ended September 30, 2005 we recorded, within the
Corporate/Other operating segment, a charge of $0.9 million for lease and facilities
restructuring costs, compared with a $0 charge for lease and facilities restructuring
costs in the three months ended September 30, 2004. These costs for the three months
ended September 30, 2005 related to our previously announced reduction in office space
primarily within the North America, EMEA and Asia Pacific regions.
 Gross Profit by Segment.
 36




---



##### 



Three Months EndedSeptember 30,2005
    
    
    2004
    
    
    $ Change
    
    
    % ChangeGross ProfitPublic Services
    
    $
    58,699
    
    
    $
    86,847
    
    
    $
    (28,148
    )
    
    
    (32.4
    %)Commercial Services
    
    
    26,679
    
    
    
    37,228
    
    
    
    (10,549
    )
    
    
    (28.3
    %)Financial Services
    
    
    37,741
    
    
    
    28,128
    
    
    
    9,613
    
    
    
    34.2
    %EMEA
    
    
    16,979
    
    
    
    21,394
    
    
    
    (4,415
    )
    
    
    (20.6
    %)Asia Pacific
    
    
    19,019
    
    
    
    7,269
    
    
    
    11,750
    
    
    
    161.6
    %Latin America
    
    
    3,649
    
    
    
    4,690
    
    
    
    (1,041
    )
    
    
    (22.2
    %)Corporate/Other
    
    
    (26,705
    )
    
    
    (16,885
    )
    
    
    (9,820
    )
    
    
    n/mTotal
    
    $
    136,061
    
    
    $
    168,671
    
    
    $
    (32,610
    )
    
    
    (19.3
    %)
 Three Months EndedSeptember 30,2005
    
    2004Gross Profit as a % of revenuePublic Services
    
    
    18.6
    %
    
    
    27.4
    %Commercial Services
    
    
    16.7
    %
    
    
    22.6
    %Financial Services
    
    
    36.4
    %
    
    
    31.6
    %EMEA
    
    
    11.2
    %
    
    
    14.4
    %Asia Pacific
    
    
    24.4
    %
    
    
    8.8
    %Latin America
    
    
    17.1
    %
    
    
    21.4
    %Corporate/Other
    
    
    n/m
    
    
    
    n/mTotal
    
    
    16.4
    %
    
    
    20.5
    %
 
 n/m = not meaningful  
    
    Public Servicesgross profit decreased in the three months ended September 30, 2005,
in large measure due to a $17.0 million increase in compensation expense (including
non-cash compensation expense of $6.1 million relating to the vesting of Retention RSUs),
along with increases in other direct contract expenses and other costs of services of
$5.1 million and $4.5 million, respectively.
    
    Commercial Servicesgross profit decreased in the three months ended September 30,
2005, due to increased compensation expense relating to the vesting of Retention RSUs of
$2.5 million.
    
    Financial Servicesgross profit increased in the three months ended September 30,
2005, as higher revenue across all sectors more than offset incremental increases in
compensation expense related to a substantial increase in headcount along with non-cash
compensation expense relating to vesting of Retention RSUs of $1.6 million.
    
    EMEAgross profit decreased in the three months ended September 30, 2005, as
incremental increases in compensation expense due to a substantial increase in headcount
in both France and the United Kingdom and non-cash compensation expense relating to
vesting of Retention RSUs more than offset increases in revenue.
    
    Asia Pacificgross profit increased substantially in the three months ended September
30, 2005, despite a decrease in revenue due to significant demonstrated improvements in
cost management and realization of contract revenue.
 37




---



##### 




    
    Latin Americagross profit decreased in the three months ended September 30, 2005, as
lower revenue combined with slight increases in other direct contract expenses and
compensation expense attributable to salaries/fringe benefits, non-cash compensation
expense related to Retention RSUs and workforce realignments.
    
    Corporate/Otherconsists primarily of rent expense and other facilities related
charges, which increased in the three months ended September 30, 2005 primarily due to
the lease and facilities restructuring charges discussed above.
 Amortization of Purchased Intangible Assets .
 Selling, General and Administrative Expenses .
 Interest Income.
 Interest Expense.
 Other Expense, net.
 Income Tax Expense .
 Net Income (Loss) .
 Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004
 Revenue.
 38




---



##### 



Nine Months EndedSeptember 30,2005
    
    
    2004
    
    
    $ Change
    
    
    % ChangeRevenuePublic Services
    
    $
    994,501
    
    
    $
    1,052,537
    
    
    $
    (58,036
    )
    
    
    (5.5
    %)Commercial Services
    
    
    509,994
    
    
    
    513,866
    
    
    
    (3,872
    )
    
    
    (0.8
    %)Financial Services
    
    
    282,226
    
    
    
    231,619
    
    
    
    50,607
    
    
    
    21.8
    %EMEA
    
    
    504,620
    
    
    
    465,357
    
    
    
    39,263
    
    
    
    8.4
    %Asia Pacific
    
    
    241,786
    
    
    
    254,945
    
    
    
    (13,159
    )
    
    
    (5.2
    %)Latin America
    
    
    63,548
    
    
    
    63,446
    
    
    
    102
    
    
    
    0.2
    %Corporate/Other
    
    
    1,304
    
    
    
    5,911
    
    
    
    (4,607
    )
    
    
    n/mTotal
    
    $
    2,597,979
    
    
    $
    2,587,681
    
    
    $
    10,298
    
    
    
    0.4
    %
 Impact of
    
    Revenue growthcurrency
    
    (decline), net offluctuations
    
    currency impact
    
    TotalRevenuePublic Services
    
    
    0.0
    %
    
    
    (5.5
    %)
    
    
    (5.5
    %)Commercial Services
    
    
    0.0
    %
    
    
    (0.8
    %)
    
    
    (0.8
    %)Financial Services
    
    
    0.0
    %
    
    
    21.8
    %
    
    
    21.8
    %EMEA
    
    
    3.3
    %
    
    
    5.1
    %
    
    
    8.4
    %Asia Pacific
    
    
    3.1
    %
    
    
    (8.3
    %)
    
    
    (5.2
    %)Latin America
    
    
    12.7
    %
    
    
    (12.5
    %)
    
    
    0.2
    %Corporate/Other
    
    
    n/m
    
    
    
    n/m
    
    
    
    n/mTotal
    
    
    1.2
    %
    
    
    (0.8
    %)
    
    
    0.4
    %
 
 n/m = not meaningful 
    
    Public Servicesrevenue decreased during the nine months ended September 30,
2005, primarily attributable to an expected reduction of $21.6 million in revenue derived
from our subcontractors and resales of procured materials (which we must bill our
clients, thereby increasing our revenue), and revenue reductions of $10.0 million
associated with two loss contracts, which more than offset increases in headcount and
chargeable hours resulting from our expanding use of employees at lower average bill
rates.
    
    Commercial Servicesrevenue decreased during the nine months ended September 30, 2005,
primarily driven by revenue declines in the Communications & Content, Manufacturing and
High-tech, and Energy sectors, which was partially offset by revenue growth in the
Transportation sector.
    
    Financial Servicesrevenue increased during the nine months ended September 30, 2005,
primarily due to revenue growth in all sectors, with especially strong growth in the
Insurance and Global Market sectors. Revenue growth was principally due to an increase
in demand for our services. Our average billing rates improved slightly year-over-year,
as our ability to obtain higher rates per hour on certain of our market offerings offset
the increasing use of lower-priced offshore personnel as a component of our overall
pricing model.
    
    EMEArevenue increased during the nine months ended September 30, 2005, primarily due
to combined revenue growth in France and the United Kingdom of $43.2 million, partially
offset by a revenue decline in Germany. Our business in France experienced a significant
shift into systems integration work, while revenue growth in the United Kingdom was
driven by our continued expansion in that region. Revenue for Germany declined as a
result of decreasing utilization caused by continued deterioration of market conditions
in these countries which, consequently, led us to lower billable headcount.
    
    Asia Pacificrevenue decreased during the nine months ended September 30, 2005, driven
primarily by the planned elimination of subcontractor usage in the region, which more
than offset the improved billing rates achieved across the region due to significantly
lower revenue write-off during the period.
 39




---



##### 




    
    Latin Americarevenue remained relatively flat during the nine months ended September
30, 2005, primarily as a function of the weakening of the U.S. dollar against local
currencies in Latin America (particularly the Brazilian Real). The combined impact of
these foreign currency fluctuations and modest revenue growth in Brazil offset
significant declines in revenue in most other countries in which we operate in the
region.
    
    Corporate/Other: Our Corporate/Other segment does not contribute significantly to our
revenue.
 Gross Profit .
 
    
    Professional compensation expense increased as a percentage of revenue to 49.9% for the
nine months ended September 30, 2005, compared to 43.9% for the nine months ended
September 30, 2004. We experienced a net increase in professional compensation expense of
$159.7 million, or 14.1%, to $1,295.2 million for the nine months ended September 30, 2005
from $1,135.5 million for the nine months ended September 30, 2004. The increase in
professional compensation expense is primarily the result of hiring additional billable
employees in response to overall market demand for our services and additional
compensation cost related to the loss accrual for the HT Contract. Additionally, $22.1
million of this amount was related to the vesting of Retention RSUs.
    
    Other direct contract expenses decreased as a percentage of revenue to 28.7% for the
nine months ended September 30, 2005 compared to 29.3% for the nine months ended September
30, 2004. We experienced a net decrease in other direct contract expenses of $12.1
million, or 1.6%, to $746.5 million for the nine months ended September 30, 2005 from
$758.6 million for the nine months ended September 30, 2004. The change was driven
primarily by reduced subcontractor expenses as a result of the increased use of internal
resources as well as
reduced hardware and software purchases made on behalf of our clients, partially offsetting
additional subcontractor expense accruals for the HT Contract.
    
    Other costs of service as a percentage of revenue increased to 7.6% for the nine
months ended September 30, 2005 from 7.1% for the nine months ended September 30, 2004.
We experienced a net increase in other costs of service of $12.6 million, or 6.8%, to
$197.5 million for the nine months ended September 30, 2005 from $184.9 million for the
nine months ended September 30, 2004, which was primarily due to additional outside
services and recruiting charges occurring throughout the first nine months of 2005.
    
    During the nine months ended September 30, 2005 we recorded, within the
Corporate/Other operating segment, a charge of $20.5 million for lease and facilities
restructuring costs, compared with a $11.7 million charge for lease and facilities
restructuring costs in the nine months ended September 30, 2004. These costs for the nine
months ended September 30, 2005 related to our previously announced reduction in office
space primarily within the North America, EMEA and Asia Pacific regions.
 Gross Profit by Segment.
 40




---



##### 



Nine Months EndedSeptember 30,2005
    
    
    2004
    
    
    $ Change
    
    
    % ChangeGross ProfitPublic Services
    
    $
    216,213
    
    
    $
    284,433
    
    
    $
    (68,220
    )
    
    
    (24.0
    %)Commercial Services
    
    
    (17,852
    )
    
    
    110,320
    
    
    
    (128,172
    )
    
    
    (116.2
    %)Financial Services
    
    
    90,927
    
    
    
    68,059
    
    
    
    22,868
    
    
    
    33.6
    %EMEA
    
    
    79,366
    
    
    
    68,092
    
    
    
    11,274
    
    
    
    16.6
    %Asia Pacific
    
    
    50,840
    
    
    
    34,510
    
    
    
    16,330
    
    
    
    47.3
    %Latin America
    
    
    12,854
    
    
    
    12,919
    
    
    
    (65
    )
    
    
    (0.5
    %)Corporate/Other
    
    
    (94,034
    )
    
    
    (81,348
    )
    
    
    (12,686
    )
    
    
    n/mTotal
    
    $
    338,314
    
    
    $
    496,985
    
    
    $
    (158,671
    )
    
    
    (31.9
    %)
 Nine Months EndedSeptember 30,2005
    
    
    2004Gross Profit as a % of revenuePublic Services
    
    
    21.7
    %
    
    
    27.0
    %Commercial Services
    
    
    (3.5
    %)
    
    
    21.5
    %Financial Services
    
    
    32.2
    %
    
    
    29.4
    %EMEA
    
    
    15.7
    %
    
    
    14.6
    %Asia Pacific
    
    
    21.0
    %
    
    
    13.5
    %Latin America
    
    
    20.2
    %
    
    
    20.4
    %Corporate/Other
    
    
    n/m
    
    
    
    n/mTotal
    
    
    13.0
    %
    
    
    19.2
    %
 
 n/m = not meaningful  
    
    Public Servicesgross profit decreased in the nine months ended September 30, 2005, in
large measure due to a $59.1 million increase in compensation expense (including non-cash
compensation expense of $6.7 million relating to the vesting of Retention RSUs) and a
$58.0 million reduction in gross revenue, which, on a combined basis, more than offset
significant reductions of $54.9 million in other direct contract expenses.
    
    Commercial Servicesgross profit decreased in the nine months ended September 30,
2005, due to significant cost overruns and loss accruals, most notably $113.3 million on
the previously described HT Contract. These costs overruns drove the increase in
compensation expense along with increases in subcontractor expense accruals and hardware
and software purchases that collectively increased our other direct contract expenses by
$51.1 million,
which are substantially not recoverable. Additionally, compensation expense increased due
to non-cash compensation expense relating to the vesting of Retention RSUs of $3.2
million.
    
    Financial Servicesgross profit increased in the nine months ended September 30, 2005,
as higher revenue across all sectors more than offset significant incremental increases
in compensation expense related to a substantial increase in headcount along with
non-cash compensation expense of $1.9 million relating to the vesting of Retention RSUs.
    
    EMEAgross profit increased in the nine months ended September 30, 2005, as higher
revenue more than offset incremental increases in compensation expense due to a
substantial increase in headcount in both France and the United Kingdom and non-cash
compensation expense of $5.2 million relating to the vesting of Retention RSUs.
 41




---



##### 




    
    Asia Pacificgross profit increased in the nine months ended September 30, 2005
despite a decrease in revenue, due in large measure to significant demonstrated
improvements in cost management and realization of contract revenue.
    
    Latin Americagross profit decreased slightly in the nine months ended September 30,
2005, as increases in other direct contract expenses and non-cash compensation expense
related to the vesting of Retention RSUs offset flat revenue growth in the region.
    
    Corporate/Otherconsists primarily of rent expense and other facilities related
charges, which increased in the nine months ended September 30, 2005 primarily due to the
lease and facilities restructuring charges discussed above.
 Amortization of Purchased Intangible Assets .
 Selling, General and Administrative Expenses .
 Interest Income.
 Interest Expense.
 Other Expense, net.
 Income Tax Expense .
 Net Income (Loss) .
 42




---



##### 



Liquidity and Capital Resources
  Nine Months EndedSeptember 30,2005 to 20042005
    
    
    2004
    
    
    ChangeNet cash provided by (used in):Operating activities
    
    $
    (110,203
    )
    
    $
    (19,333
    )
    
    $
    (90,870
    )Investing activities
    
    
    (51,513
    )
    
    
    (60,436
    )
    
    
    8,923Financing activities
    
    
    288,417
    
    
    
    102,390
    
    
    
    186,027Effect of exchange rate changes on cash and cash equivalents
    
    
    (9,658
    )
    
    
    (812
    )
    
    
    (8,846
    )Net increase in cash and cash equivalents
    
    $
    117,043
    
    
    $
    21,809
    
    
    $
    95,234
 Operating Activities .
 Investing Activities.
 Financing Activities.
   Recently Issued Accounting Pronouncements
  43




---



##### 



44




---



##### 



PART I, ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  PART I, ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
     Remediation of Material Weaknesses in Internal Control over Financial Reporting
  45




---



##### 




 
 
 
 
 
 
 
 46




---



##### 




 
 
 
  Changes in Internal Control over Financial Reporting
  PART II. OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS
  ITEM 1A: RISK FACTORS
  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Sales of Securities Not Registered Under the Securities Act
  Issuer Purchases of Equity Securities
  47




---



##### 



ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  ITEM 5. OTHER INFORMATION
 a)
    
    None.b)
    
    None.
 ITEM 6. EXHIBITS
  Exhibit No.
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation, dated as of February 7, 2001,
which is incorporated herein by reference to Exhibit 3.1 from the Companys Form
10-Q for the quarter ending March 31, 2001.3.2
    
    Amended and Restated Bylaws, amended and restated as of May 5, 2004, which is
incorporated herein by reference to Exhibit 3.1 from the Companys Form 10-Q for
the quarter ending March 31, 2004.3.3
    
    Certificate of Ownership and Merger merging Bones Holding into the Company,
dated October 2, 2002, which is incorporated herein by reference to Exhibit 3.3
from the Companys Form 10-Q for the quarter ended September 30, 2002.4.1
    
    Rights Agreement, dated as of October 2, 2001, between the Company and EquiServe
Trust Company, N.A., which is incorporated herein by reference to Exhibit 1.1
from the Companys Registration Statement on Form 8-A dated October 3, 2001.4.2
    
    Certificate of Designation of Series A Junior Participating Preferred Stock,
which is incorporated herein by reference to Exhibit 1.2 from the Companys
Registration Statement on Form 8-A dated October 3, 2001.4.3
    
    Amendment No. 1 to the Rights Agreement between the Company and EquiServe Trust
Company, N.A., which is incorporated herein by reference to Exhibit 99.1 from
the Companys Form 8-K filed on September 6, 2002.10.1
    
    Amendment No. 3 to Amended and Restated 401(k) Plan dated August 22, 2005, which
is incorporated by reference to Exhibit 10.25 from the Companys Form 10-K for
the year ended December 31, 2004.10.2
    
    Amended and Restated Letter of Credit Cash Collateral Agreement, dated as of
July 19, 2005, by and among BearingPoint, Inc., the Administrative Agent and
each of Bank of America, N.A. and JPMorgan Chase Bank, N.A., which is
incorporated by reference to Exhibit 10.53 from the Companys Form 10-K for the
year ended December 31, 2004.10.3
    
    Credit Agreement, dated as of July 19, 2005, among the Company, BearingPoint,
LLC, UBS Securities LLC, as Lead Arranger, UBS AG, Stamford Branch, as Issuing
Bank and Administrative Agent and UBS Loan Finance LLC, as Swingline Lender, and
the Lenders and Guarantors party thereto, which is incorporated by reference to
Exhibit 10.54 from the Companys Form 10-K for the year ended December 31, 2004.10.4
    
    Security Agreement, dated as of July 19, 2005, among the Company and
BearingPoint, LLC, the guarantors party thereto and UBS AG, Stamford Branch, as
Administrative Agent, which is incorporated by reference to Exhibit 10.56 from
the Companys Form 10-K for the year ended December 31, 2004.10.5
    
    Form of Revolving Note under the Credit Agreement, dated as of July 19, 2005,
which is incorporated by reference to Exhibit 10.57 from the Companys Form 10-K
for the year ended December 31, 2004.
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##### 



Exhibit No.
    
    Description10.6
    
    Form of Swingline Note under the Credit Agreement, dated as of July 19, 2005,
which is incorporated by reference to Exhibit 10.58 from the Companys Form 10-K
for the year ended December 31, 2004.10.7
    
    Securities Purchase Agreement, dated July 15, 2005, among the Company and
certain affiliates of Friedman Fleischer & Lowe, LLC, which is incorporated by
reference to Exhibit 10.75 from the Companys Form 10-K for the year ended
December 31, 2004.10.8
    
    Form of 0.50% Convertible Senior Subordinated Debentures due July 2010, which is
incorporated by reference to Exhibit 10.76 from the Companys Form 10-K for the
year ended December 31, 2004.10.9
    
    Form of Warrant Certificate, dated July 15, 2005, which is incorporated by
reference to Exhibit 10.77 from the Companys Form 10-K for the year ended
December 31, 2004.10.10
    
    Registration Rights Agreement, dated July 15, 2005, between the Company and
Friedman Fleischer & Lowe, LLC, which is incorporated by reference to Exhibit
10.78 from the Companys Form 10-K for the year ended December 31, 2004.10.11
    
    Employment Letter, effective as of July 1, 2005, between the Company and Judy A.
Ethell, which is incorporated by reference to Exhibit 10.91 from the Companys
Form 10-K for the year ended December 31, 2004.10.12
    
    Restricted Stock Unit Agreement, dated July 1, 2005, between the Company and
Judy A. Ethell, which is incorporated by reference to Exhibit 10.92 from the
Companys Form 10-K for the year ended December 31, 2004.10.13
    
    Special Termination Agreement, dated as of July 1, 2005, between the Company and
Judy A. Ethell, which is incorporated by reference to Exhibit 10.93 from the Companys Form 10-K for the year ended December 31, 2004.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a).31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a).32.1
    
    Certification of Chief Executive Officer pursuant to Section 1350.32.2
    
    Certification of Chief Financial Officer pursuant to Section 1350.99.1
    
    Legal Proceedings section of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.99.2
    
    Risk Factors section of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.99.3
    
    Market for the Registrants Common Stock, Related Stockholder Matters and
Issuer Purchases of Equity SecuritiesSales of Securities Not Registered under
the Securities Act section of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.
 49




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##### 



SIGNATURES
  BearingPoint, Inc.DATE: January 17, 2007
    
    By:
    
    /s/ Judy A. EthellJudy A. EthellChief Financial Officer
 50




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##### 



Exhibit Index
 3.1
    
    Amended and Restated Certificate of Incorporation, dated as of February 7, 2001,
which is incorporated herein by reference to Exhibit 3.1 from the Companys Form
10-Q for the quarter ending March 31, 2001.3.2
    
    Amended and Restated Bylaws, amended and restated as of May 5, 2004, which is
incorporated herein by reference to Exhibit 3.1 from the Companys Form 10-Q for
the quarter ending March 31, 2004.3.3
    
    Certificate of Ownership and Merger merging Bones Holding into the Company,
dated October 2, 2002, which is incorporated herein by reference to Exhibit 3.3
from the Companys Form 10-Q for the quarter ended September 30, 2002.4.1
    
    Rights Agreement, dated as of October 2, 2001, between the Company and EquiServe
Trust Company, N.A., which is incorporated herein by reference to Exhibit 1.1
from the Companys Registration Statement on Form 8-A dated October 3, 2001.4.2
    
    Certificate of Designation of Series A Junior Participating Preferred Stock,
which is incorporated herein by reference to Exhibit 1.2 from the Companys
Registration Statement on Form 8-A dated October 3, 2001.4.3
    
    Amendment No. 1 to the Rights Agreement between the Company and EquiServe Trust
Company, N.A., which is incorporated herein by reference to Exhibit 99.1 from
the Companys Form 8-K filed on September 6, 2002.10.1
    
    Amendment No. 3 to Amended and Restated 401(k) Plan dated August 22, 2005, which
is incorporated by reference to Exhibit 10.25 from the Companys Form 10-K for
the year ended December 31, 2004.10.2
    
    Amended and Restated Letter of Credit Cash Collateral Agreement, dated as of
July 19, 2005, by and among BearingPoint, Inc., the Administrative Agent and
each of Bank of America, N.A. and JPMorgan Chase Bank, N.A., which is
incorporated by reference to Exhibit 10.53 from the Companys Form 10-K for the
year ended December 31, 2004.10.3
    
    Credit Agreement, dated as of July 19, 2005, among the Company, BearingPoint,
LLC, UBS Securities LLC, as Lead Arranger, UBS AG, Stamford Branch, as Issuing
Bank and Administrative Agent and UBS Loan Finance LLC, as Swingline Lender, and
the Lenders and Guarantors party thereto, which is incorporated by reference to
Exhibit 10.54 from the Companys Form 10-K for the year ended December 31, 2004.10.4
    
    Security Agreement, dated as of July 19, 2005, among the Company and
BearingPoint, LLC, the guarantors party thereto and UBS AG, Stamford Branch, as
Administrative Agent, which is incorporated by reference to Exhibit 10.56 from
the Companys Form 10-K for the year ended December 31, 2004.10.5
    
    Form of Revolving Note under the Credit Agreement, dated as of July 19, 2005,
which is incorporated by reference to Exhibit 10.57 from the Companys Form 10-K
for the year ended December 31, 2004.10.6
    
    Form of Swingline Note under the Credit Agreement, dated as of July 19, 2005,
which is incorporated by reference to Exhibit 10.58 from the Companys Form 10-K
for the year ended December 31, 2004.10.7
    
    Securities Purchase Agreement, dated July 15, 2005, among the Company and
certain affiliates of Friedman Fleischer & Lowe, LLC, which is incorporated by
reference to Exhibit 10.75 from the Companys Form 10-K for the year ended
December 31, 2004.10.8
    
    Form of 0.50% Convertible Senior Subordinated Debentures due July 2010, which is
incorporated by reference to Exhibit 10.76 from the Companys Form 10-K for the
year ended December 31, 2004.10.9
    
    Form of Warrant Certificate, dated July 15, 2005, which is incorporated by
reference to Exhibit 10.77 from the Companys Form 10-K for the year ended
December 31, 2004.10.10
    
    Registration Rights Agreement, dated July 15, 2005, between the Company and
Friedman Fleischer & Lowe, LLC, which is incorporated by reference to Exhibit
10.78 from the Companys Form 10-K for the year ended December 31, 2004.10.11
    
    Employment Letter, effective as of July 1, 2005, between the Company and Judy A.
Ethell, which is incorporated by reference to Exhibit 10.91 from the Companys
Form 10-K for the year ended December 31, 2004.
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##### 



10.12
    
    Restricted Stock Unit Agreement, dated July 1, 2005, between the Company and
Judy A. Ethell, which is incorporated by reference to Exhibit 10.92 from the
Companys Form 10-K for the year ended December 31, 2004.10.13
    
    Special Termination Agreement, dated as of July 1, 2005, between the Company and
Judy A. Ethell, which is incorporated by reference to Exhibit 10.93 from the
Companys Form 10-K for the year ended December 31, 2004.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a).31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a).32.1
    
    Certification of Chief Executive Officer pursuant to Section 1350.32.2
    
    Certification of Chief Financial Officer pursuant to Section 1350.99.1
    
    Legal Proceedings section of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.99.2
    
    Risk Factors section of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.99.3
    
    Market for the Registrants Common Stock, Related Stockholder Matters and
Issuer Purchases of Equity SecuritiesSales of Securities Not Registered under
the Securities Act section of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.
 52