Accenture Reports First-Quarter Fiscal 2003 Results

NEW YORK; Jan. 9, 2003 – Accenture (NYSE: ACN) today reported results for the first quarter of fiscal 2003, ended Nov. 30, 2002, in line with the company’s announcement on Dec. 20, 2002, in which it said it would exceed analysts’ consensus projections at that time for net revenues and earnings per share.

Revenues before reimbursements ("net revenues") for the first quarter were $2.93 billion, a decrease of 2 percent in U.S. dollars and 4 percent in local currency from net revenues in the first quarter last fiscal year.

Diluted earnings per share for the first quarter were $0.27. This compares with $0.20 on a GAAP basis, and $0.25 excluding investment write-downs and the related tax effect, for the first quarter last fiscal year.

Operating income for the first quarter was $429 million, representing 14.6 percent of net revenues, compared with $414 million, or 13.9 percent of net revenues, for the first quarter last fiscal year.

Income before minority interest for the first quarter was $269 million, compared with $200 million on a GAAP basis, and $258 million excluding investment write-downs and the related tax effect, for the same quarter last fiscal year.

In order to provide an additional perspective to investors, Accenture is presenting core earnings using Standard & Poor’s Core Earnings methodology in addition to reporting earnings on a GAAP basis. Accenture’s S&P Core Earnings* calculation principally reflects adjustments to add back minority interest, includes stock option and related compensation expense and excludes non-operational items such as net losses on investments. Accenture’s core earnings were $224 million, or $0.22 per fully diluted share, for the three months ended Nov. 30, 2002, compared with $199 million, or $0.20 per fully diluted share, for the comparable period in the prior fiscal year. Accenture’s core earnings per share of $0.22 compare to reported fully diluted earnings per share of $0.27, primarily reflecting the impact of stock options and the company’s Employee Stock Purchase Plan. Accenture’s core earnings were calculated in consultation with Standard & Poor’s Corporate Value Consulting division to ensure consistency with the S&P Core Earnings* methodology. (A full reconciliation to GAAP earnings with notes is attached.)

Accenture’s balance sheet remains strong. The company ended the first quarter with nearly $1.5 billion in cash, up $157 million from the fourth quarter of fiscal 2002. Total debt at Nov. 30, 2002 was $62 million, down $5 million from the fourth quarter of fiscal 2002.

Operating cash flow was $198 million for the first quarter compared with a cash outflow of $197 million for the first quarter of last fiscal year.

Net revenues for Accenture’s Communications & High Tech and Government operating groups increased by 12 percent and 7 percent, respectively, over the first quarter last fiscal year, to $830 million and $359 million, respectively. The Financial Services operating group reported net revenues of $602 million, a decrease of 7 percent. The Products operating group reported net revenues of $650 million, a decline of 9 percent, and the Resources operating group reported net revenues of $487 million, a decline of 10 percent.

From a geographic perspective, net revenues in Accenture’s Europe, Middle East, and Africa (EMEA) region were $1.33 billion, flat in U.S. dollars and a decrease of 6 percent in local currency from the same quarter last year. Net revenues in the Americas region were $1.39 billion, a decrease of 3 percent in U.S. dollars and 1 percent in local currency. Net revenues in the Asia Pacific region were $207 million, a decrease of 6 percent in U.S. dollars and 8 percent in local currency.

"While we continue to be cautious about the outlook because the economic and geopolitical climate remains unstable, we are pleased with our first-quarter results," said Joe W. Forehand, Accenture chairman and CEO. "Our success is due to our more than 75,000 employees around the world, whose continued commitment to help us run an extremely efficient organization and stay focused on delivering value to our clients has enabled us to perform well and gain market share in this difficult business environment."

As it has previously stated, Accenture anticipates earnings per share for the second quarter, ending Feb. 28, 2003, to be in the range of $0.21 to $0.25 and net revenues for the second quarter to decline 1 to 6 percent from the same quarter of fiscal 2002.

For the full fiscal year 2003, Accenture continues to target earnings per share of $1.05 and net revenue growth of 0 to 2 percent over fiscal 2002 net revenues.

Accenture will host a conference call at 8:00 a.m. EST today to discuss its first-quarter fiscal 2003 financial results. To participate, please dial +1 (877) 531-2986 [+1 (651) 291-0344 outside the United States, Puerto Rico and Canada] approximately 15 minutes before the scheduled start of the call. The conference call will also be accessible live on the Investor Relations section of the Accenture Web site atis www.accenture.com.

A replay of the conference call will be available online at www.accenture.com and via telephone by dialing +1 (800) 475-6701 [+1 (320) 365-3844 outside the United States, Puerto Rico and Canada] and entering the passcode 665329 from 1:15 p.m. EST Thursday, Jan. 9 through 11:59 p.m. EST Thursday, Jan. 23.

About Accenture
Accenture is the world’s leading management consulting and technology services company. Committed to delivering innovation, Accenture collaborates with its clients to help them realize their visions and create tangible value. With deep industry expertise, broad global resources and proven experience in consulting and outsourcing, Accenture can mobilize the right people, skills, alliances and technologies. With more than 75,000 people in 47 countries, the company generated net revenues of $11.6 billion for the fiscal year ended August 31, 2002. Its home page is www.accenture.com.

This press release contains forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed under the "Risk Factors" heading in the Business section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission.

+-----------------------------------------------------------------------------------------------------------------------------+ | ACCENTURE LTD\ | | CONSOLIDATED INCOME STATEMENT\ | | For the Three Months Ended November 30, 2002 and 2001\ | | (In thousands of U.S. dollars, except share and per share data)\ | | (Unaudited) | +-------------------------+++ | | 2002 | 2001 | +-------------------------+------------------+-----------------------------:+------------------+-----------------------------:+ | | | % of Net Revenues | | % of Net Revenues | +:-------------------------------------------------------------^--------------------------------------------------------------+ | REVENUES: | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Revenues before | $ 2,929,958 | 100% | $ 2,988,630 | 100% | | reimbursements (Net | | | | | | revenues) | | | | | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Reimbursements | 397,489 | 14 | 352,692 | 12 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Revenues | 3,327,447 | 114 | 3,341,322 | 112 | +--------------------------------------------------------------^--------------------------------------------------------------+ | | +:-------------------------------------------------------------^--------------------------------------------------------------+ | OPERATING EXPENSES: | +:-------------------------------------------------------------^--------------------------------------------------------------+ | Cost of services: | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Cost of services before | 1,774,197 | 61 | 1,806,181 | 60 | | reimbursable expenses | | | | | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Reimbursable expenses | 397,489 | 14 | 352,692 | 12 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Cost of services | 2,171,686 | 74 | 2,158,873 | 72 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Sales and marketing | 355,833 | 12 | 360,235 | 12 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | General and | 370,731 | 13 | 407,957 | 14 | | administrative costs | | | | | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Total operating | 2,898,250 | 99 | 2,927,065 | 98 | | expenses | | | | | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | OPERATING INCOME | 429,197 | 15 | 414,257 | 14 | +:-----------^------------+--------^--------:+--------------^--------------:+-----------------:+-----------------------------:+ | Gain (loss) on | 3,805 | 0 | (94,737) | (3) | | investments, net | | | | | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Interest income | 9,093 | 0 | 14,785 | 0 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Interest expense | (6,536) | 0 | (9,770) | 0 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Other income (expense) | (1,775) | 0 | (7,933) | 0 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Equity in (losses) | (530) | 0 | 6,201 | (0) | | gains of affiliates | | | | | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | INCOME BEFORE TAXES | 433,254 | 15 | 322,803 | 11 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Provision for taxes | 164,637 | 6 | 122,665 | 4 | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | INCOME BEFORE | 268,617 | 9 | 200,138 | 7 | | MINORITY INTEREST | | | | | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | Minority interest | (141,746) | (5) | (118,462) | (4) | +:-----------^------------+--------^--------:+--------------^--------------:+--------^--------:+--------------^--------------:+ | NET INCOME | $ 126,871 | 4 | $ 81,676 | 3 | +:-------------------------------------------------------------^--------------------------------------------------------------+ | EARNINGS PER SHARE: | +:-----------^------------+-----------------------^------------------------:+-----------------------^------------------------:+ | Basic | 0.27 | 0.20 | +:-----------^------------+-----------------------^------------------------:+-----------------------^------------------------:+ | Diluted | 0.27 | 0.20 | +^+ | ADJUSTED TO EXCLUDE LOSS ON INVESTMENTS, NET |

INCOME BEFORE MINORITY INTEREST AS REPORTED	$ 268,617	$ 200,138
Add Back: Loss on investments, net of tax	-	58,037
ADJUSTED INCOME BEFORE MINORITY INTEREST	$ 268,617	$ 258,175
ADJUSTED EARNINGS PER SHARE:
Basic	0.27	0.26
Diluted	0.27	0.25
WEIGHTED AVERAGE SHARES:
Basic	468,119,491	410,488,771
Diluted	1,000,572,365	1,014,448,500

OPERATING GROUPS
Communication & High Tech	$830,007	$743,215	12%	-	28%
Financial Services (A)	601,922	649,367	(7)	-	21
Government	358,938	336,519	7	-	12
Products (A)	649,618	717,169	(9)	-	22
Resources	487,268	540,908	(10)	-	17
Other	2,205	1,452	52	-	0
TOTAL Net Revenues	2,929,958	2,988,630	(2)	-	100
Reimbursements	397,489	352,692	13	-	-
TOTAL REVENUES	$3,327,447	3,341,322	(0)	-	-

GEOGRAPHY
Americas	$1,392,295	$ 1,441,338	(3)	(1)	48
EMEA	1,330,627	1,326,446	0	(6)	45
Asia Pacific	207,036	220,846	(6)	(8)	7
TOTAL Net Revenues	2,929,958	2,988,630	(2)	(4)	100
Reimbursements	397,489	352,692	13	-	-
TOTAL REVENUES	$ 3,327,447	$ 3,341,322	(0)	-	-

(A) Accenture transitioned the Health Services industry group from the Financial Services operating group to the Products operating group as of September 1, 2002. Numbers shown above reflect this transition.

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$1,473,643	$1,316,976
Restricted cash	14,656	79,445
Receivables from clients, net	1,377,302	1,330,642
Unbilled services	905,921	774,214
Other current assets	503,629	559,811
Total current assets	4,275,151	4,061,088
NON-CURRENT ASSETS:
Investments	46,874	76,017
Property and equipment, net	658,122	716,504
Other non-current assets	667,869	625,339
Total non-current assets	1,372,865	1,417,860
TOTAL ASSETS	$ 5,648,016	$ 5,478,948
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term debt	$ 57,467	$ 63,099
Accounts payable	378,815	450,208
Deferred revenues	538,634	543,917
Accrued payroll and related benefits	1,072,633	1,139,887
Other accrued liabilities	1,150,972	1,129,951
Total current liabilities	3,198,521	3,327,062
NON-CURRENT LIABILITIES:
Long-term debt	4,215	3,428
Other non-current liabilities	1,188,722	1,190,436
Total non-current liabilities	1,192,937	1,193,864
MINORITY INTEREST	673,998	519,396
EQUITY:
Shareholders’ equity	582,560	438,626
Total equity	582,560	438,626
TOTAL LIABILITIES AND EQUITY	$5,648,016	$5,478,948

Net Income	$126,871	$81,676
*S&P Core Earnings Adjustments**
Minority interest relating to Accenture SCA and Accenture Canada Holdings, Inc. (net of tax)	142,266	118,462	[A]
	269,137	200,138
Include:
Employee stock option and share purchase plan expense	(59,784)	(84,788)	[B]
Pension adjustments	(5,441)	(5,923)	[C]
Exclude:
(Gain) loss on investments, net, excluding SFAS 133	(3,771)	86,485	[D]
Losses on disposal of property and equipment	4,237	8,582	[E]
S&P Core Earnings* Adjustments before taxes	(64,759)	4,356
Tax effect	19,676	(5,764)	[F]
S&P Core Earnings* Adjustments, net	(45,083)	(1,408)
S&P Core Earnings*	$224,054	$198,730
EPS, S&P Core Earnings* (Diluted)	$0.22	$0.20
EPS, GAAP (Diluted)	$0.27	$0.20
Weighted Average Diluted Shares Outstanding	1,000,572,365	1,014,448,500	[G]

NOTES TO STANDARD & POOR’S CORE EARNINGS* ADJUSTMENTS
(Unaudited)

[A]

Some of our partners and former partners and their permitted transferees own shares in our subsidiary Accenture SCA and in our subsidiary Accenture Canada Holdings, Inc., which are non transferable except by exchange for shares in Accenture Ltd (or for cash at the Company’s option). The shareholders of Accenture SCA and Accenture Canada Holdings, Inc. have substantially the same rights and economic interests as Accenture Ltd shareholders and are subject to the same restrictions. In addition, we view and operate the business as a single enterprise. We similarly focus on the results of Accenture as a whole as we believe that this better reflects the substance of the overall Accenture corporate structure. Therefore, the minority interest related to these shareholders is added back. Net income before Minority interest is also consistent with diluted shares, which assume the conversion of all minority Accenture SCA and Accenture Canada Holdings Inc. shares on a one for one basis.

[B]

As we elect to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for employee share options and purchase plans rather than the alternative fair value accounting provided for under SFAS 123, "Accounting for Stock-Based Compensation," in which stock options and purchase plans are expensed, we have deducted the amount as computed under SFAS 123 in accordance with the S&P Core Earnings* methodology. The impact of income taxes and minority interests is shown in the following table:

	2002	2001
Employee stock option and purchase plan expense before tax and minority interest	$59,784	$84,788
Income tax benefit	(17,935)	(25,436)
Minority interest	(22,121)	(35,131)
Employee stock option and purchase plan expense net of tax and minority interest	$19,728	$24,221

[C]

Under the S&P Core Earnings* methodology, pension service costs and interest costs (to the extent that interest cost exceeds actual returns on assets) are included in the Company’s core earnings. Other items like expected returns on plan assets and amortization of prior service costs are not included in the S&P Core Earnings* methodology. Actual returns were not positive and the pension expense computed under generally accepted accounting principles has been adjusted to reflect service and interest costs.

[D]

Under the S&P Core Earnings* methodology, investment gains and losses are not considered a part of the Company’s normal, or core, business. As such, these items are excluded from S&P Core Earnings*. No adjustment is required for SFAS 133 items for purposes of calculating S&P Core Earnings*. The adjustment represents Gain (loss) on investments, net as reported under generally accepted accounting principles adjusted for a SFAS No. 133 gain of $34 for the three months ended November 30, 2002 and a SFAS No. 133 loss of $8,252 for the same period last year.

[E]

Under the S&P Core Earnings* methodology, gains and losses on disposal of property, plant and equipment are excluded from core earnings.

[F]

Under the S&P Core Earnings* methodology, we have applied the statutory federal tax rate of 35% to the S&P Core Earnings* adjustments with the exception of stock options and purchase plans. Stock options and purchase plans are tax affected using a 30% tax rate, which is consistent with the rate used in our financial statement disclosures and represents our best estimate of the tax benefit related to stock options and purchase plans.

[G]

Diluted shares outstanding represent average shares outstanding for purposes of computing Diluted Earnings Per Share under generally accepted accounting standards, as well as Diluted Earnings Per Share under S&P Core Earnings* methodology.

* Standard & Poor’s Corporate Value Consulting ("S&P CVC") has reviewed Accenture’s calculation of Core Earnings for consistency with Standard & Poor’s Core Earnings methodology. This review was based solely on financial information generated by Accenture; Standard & Poor’s has not conducted any review or undertaken to investigate or verify, and is not responsible for, the basis, adequacy, accuracy or completeness of the information used in Accenture’s calculation of Core Earnings. Standard & Poor’s review has been limited solely to the application of the Standard & Poor’s Core Earnings methodology to the specific financial information generated, prepared and provided by Accenture; Standard & Poor’s makes no representation as to the adequacy or accuracy of Accenture’s financial information used in the calculation. Standard & Poor’s has no duty to update its review of Accenture’s calculation of Core Earnings. Standard & Poor’s Core Earnings methodology is published on Standard & Poor’s web site at

www.standardandpoors.com

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