Roxanne Taylor
New York
+1 (917) 452 5106

January 05, 2006

Accenture Reports Double-Digit Increases in First-Quarter Revenues and EPS

Revenues increase 12% to $4.17 billion; EPS and operating income up 20% on options-adjusted basis

NEW YORK; Jan. 5, 2006 – Accenture (NYSE: ACN) today reported that net revenues for the first quarter of fiscal 2006, ended Nov. 30, 2005, were $4.17 billion, a 12 percent increase over the same period last year. Diluted earnings per share were $0.36, an increase of 20 percent on an options-adjusted basis. In addition to achieving double-digit increases in both its top and bottom lines, the company maintained its strong balance sheet and cash flow. Due to discounted share repurchases and redemptions in the first quarter, Accenture revised upward its expectations for EPS for the full fiscal year to the range of $1.52 to $1.57.

William D. Green, Accenture’s CEO, said, “We turned in another strong performance in the first quarter, achieving our highest quarterly net revenues ever, with growth in both U.S. dollars and local currency across all five operating groups and all three geographic regions. Given that we recorded $5.54 billion in new bookings, our highest in seven quarters, we feel confident that we are on the right trajectory to achieve our revenue goal for the year.

“We grew revenues while keeping our costs in line, resulting in a 90-basis-point expansion of our operating margin on an options-adjusted basis. We paid our first cash dividend and continued to return cash to shareholders through share repurchases. Our balance sheet continues to be strong, and we generated $290 million in free cash flow. We continue to build momentum and are well-positioned to meet our business and financial objectives for the full fiscal year.”

Financial Highlights

As of Sept. 1, 2005, Accenture began expensing stock options and employee stock purchase plans in accordance with SFAS 123R. Therefore, in addition to providing year-over-year GAAP comparisons, the company is presenting results for the first quarter of fiscal 2005 on an options-adjusted basis to provide meaningful comparisons on relevant metrics.

Financial Review

GAAP diluted EPS for the first quarter of fiscal 2006 were $0.36, compared with GAAP diluted EPS of $0.32 for the first quarter of fiscal 2005. EPS of $0.36 for the first quarter of fiscal 2006 represents a 20 percent year-over-year increase compared with options-adjusted EPS of $0.30 for the first quarter of fiscal 2005. The adjusted EPS for the first quarter of fiscal 2005 reflects an incremental options and employee stock purchase plan expense of $32 million, or $0.02 in EPS.

GAAP operating income for the first quarter of fiscal 2006 was $513 million, or 12.3 percent of net revenues, an increase of 12 percent over GAAP operating income of $458 million, or 12.3 percent of net revenues, in the first quarter of fiscal 2005. On an options-adjusted basis, operating income for the first quarter of fiscal 2005 was $427 million, or 11.4 percent of net revenues.

GAAP operating margin of 12.3 percent for the first quarter of fiscal 2006 represents a 90 basis-point increase over the options-adjusted operating margin of 11.4 percent for the first quarter of fiscal 2005.

Gross margin (gross profit as a percentage of net revenues) was 31.7 percent, compared with 32.6 percent for the first quarter of fiscal 2005 on a GAAP basis and 31.8 percent for the first quarter of 2005 on an options-adjusted basis.

Selling, general and administrative (“SG&A”) costs were $802 million, or 19.2 percent of net revenues, compared with $750 million, or 20.1 percent of net revenues, for the first quarter last year. As a percentage of net revenues, SG&A costs for the first quarter of fiscal 2006 decreased 100 basis points from options-adjusted SG&A costs of $752 million, or 20.2 percent of net revenues, for the same period last year.

The company’s effective tax rate for the first quarter of fiscal 2006 was 37.4 percent.

Income before minority interest for the first quarter was $328 million, compared with $320 million for the same period in fiscal 2005 on a GAAP basis and $297 million on an options-adjusted basis.

For the three months ended Nov. 30, 2005, operating cash flow was $368 million, and property and equipment additions were $78 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $290 million.

Accenture’s total cash balance at Nov. 30, 2005 was $1.69 billion, compared with $2.27 billion at Nov. 30, 2004 and $2.48 billion at Aug. 31, 2005. The decrease in the company’s cash balance since Aug. 31 is due principally to its share repurchases and payment of its first-ever cash dividend in the first quarter. Cash combined with $462 million of fixed-income securities classified as investments on the company’s balance sheet was $2.15 billion at Nov. 30, 2005, compared with $3.21 billion at Nov. 30, 2004 and $3.18 billion at Aug. 31, 2005. Total debt at Nov. 30, 2005 was $54 million.

Net Revenues by Operating Group

All five operating groups achieved revenue growth in both U.S. dollars and local currency. Net revenues were as follows:

Net Revenues by Geographic Region

Accenture grew net revenues in all three geographic regions in both U.S. dollars and local currency. Net revenues were as follows:

Share Repurchase Activity

During the first quarter of fiscal 2006, Accenture repurchased or redeemed a total of 52.2 million shares for a total of $1.15 billion, which included $1.00 billion for 46.4 million shares repurchased or redeemed at a discount.

At Nov. 30, 2005, Accenture had $1.3 billion of share repurchase authority remaining.

Business Outlook

Second Quarter Fiscal 2006

For the second quarter of fiscal 2006, ending Feb. 28, 2006, Accenture expects net revenues to be in the range of $4.00 billion to $4.15 billion and GAAP diluted EPS to be in the range of $0.33 to $0.35.

Full Fiscal Year 2006

For the full fiscal year 2006, Accenture continues to expect net revenue growth of 9 percent to 12 percent in local currency.

Adjusting for an aggregate $0.07 benefit from the discounted repurchase or redemption of 46.4 million shares in the first quarter, the company now expects GAAP diluted EPS for the full fiscal year to be in the range of $1.52 to $1.57. This represents 19 percent to 23 percent EPS growth over the comparable 2005 options-adjusted baseline of $1.28.

Accenture continues to expect operating cash flow for the full fiscal year to be in the range of $2.00 billion to $2.20 billion; property and equipment additions to be $450 million; and free cash flow to be in the range of $1.55 billion to $1.75 billion. The company also continues to expect the annual effective tax rate to be in the range of 35 percent to 38 percent. Accenture continues to target new bookings in the range of $19 billion to $21 billion for the full fiscal year.

Conference Call and Webcast Details

Accenture will host a conference call at 4:30 p.m. EST today to discuss its first-quarter fiscal 2006 financial results. To participate, please dial +1 (800) 230-1092 [+1 (612) 288-0329 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 website at 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 access code 807195 from 9:45 p.m. EST Thursday, Jan. 5 through 11:59 p.m. EST Thursday, Jan. 19.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance. With more than 126,000 people in 48 countries, the company generated net revenues of US$15.55 billion for the fiscal year ended Aug. 31, 2005. Its home page is www.accenture.com.

Forward-Looking Statements

This news release contains forward-looking statements relating to our operations and results of operations, 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 undertakes no duty to update any forward-looking statements made in this news release or to conform such statements to actual results or changes in Accenture’s expectations.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to Accenture’s financial statements as prepared under generally accepted accounting principles (GAAP) are included in this press release. Accenture discloses free cash flow (defined as operating cash flow net of property and equipment additions) and certain additional information regarding operating income and earnings per share for fiscal 2005. Accenture’s management believes providing investors with this information gives additional insights into Accenture’s results of operations. While Accenture’s management believes that these non-GAAP financial measures are useful in evaluating Accenture’s operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

To view the the full release, including financial tables, download the PDF.To view the the full release, including financial tables, download the PDF.

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ACCENTURE LTD
CONSOLIDATED INCOME STATEMENT
For the Three Months Ended November 30, 2005 and 2004
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
  2005 2004
                          % of Net Revenues                         % of Net Revenues
REVENUES:
Revenues before reimbursements (Net revenues) $4,169,475 100% $3,730,355 100%
Reimbursements 373,541
341,017
Revenues 4,543,016
4,071,372
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 2,849,167 68.3% 2,515,439 67.4%
Reimbursable expenses 373,541
341,017
Cost of services 3,222,708
2,856,456
Sales and marketing 408,602 9.8% 358,943 9.6%
General and administrative costs 393,766 9.4% 390,815 10.5%
Reorganization costs 5,384
7,008
Total operating expenses 4,030,460
3,613,222
OPERATING INCOME 512,556 12.3% 458,150 12.3%
Gain on investments, net 1,438
14,540
Interest income 30,353
20,121
Interest expense (4,685)
(6,316)
Other expense (15,947)
(2,327)
INCOME BEFORE INCOME TAXES 523,715 12.6% 484,168 13.0%
Provision for income taxes 195,869
164,617
INCOME BEFORE MINORITY INTEREST 327,846 7.9% 319,551 8.6%
Minority interest in Accenture SCA and Accenture Canada Holdings Inc (110,136)
(121,681)
Minority interest – other (1) (2,770)
(1,597)
NET INCOME $ 214,940 5.2% $ 196,273 5.3%
CALCULATION OF EARNINGS PER SHARE:
Net income $214,940
$196,273
Minority interest in Accenture SCA and Accenture Canada Holdings Inc. (2) 110,136
121,681
Net income for diluted earnings per share calculation 325,076
317,954
EARNINGS PER SHARE:
Basic $ 0.37
$ 0.33
Diluted $ 0.36
$ 0.32
WEIGHTED AVERAGE SHARES:
Basic 586,267,569
590,029,649
Diluted 913,640,289
980,623,940





Cash Dividends Per Share $ 0.30
$ —

[1] Minority interest – other is comprised primarily of minority interest attributable to the minority shareholders of Avanade, Inc.
[2] Diluted earnings per share assumes the redemption and exchange of all Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares, respectively, for Accenture Ltd Class A common shares, on a one-for-one basis.

ACCENTURE LTD
RECONCILIATION OF CONSOLIDATED INCOME STATEMENT, AS REPORTED (GAAP),
TO CONSOLIDATED INCOME STATEMENT ON AN OPTIONS-ADJUSTED BASIS
For the Three Months Ended November 30, 2004
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
 
  As Reported
(GAAP)
Adjustments(3) Options-Adjusted % of Net Revenues
REVENUES:
Revenues before reimbursements (Net revenues) $3,730,355 - $3,730,355 100%
Reimbursements 341,017 - 341,017
Revenues 4,071,372 - 4,071,372
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 2,515,439 29,483 2,544,922 68.2%
Reimbursable expenses 341,017 - 341,017
Cost of services 2,856,456 29,483 2,885,939
Sales and marketing 358,943 788 359,731 9.7%
General and administrative costs 390,815 1,261 392,076 10.5%
Reorganization costs 7,008 - 7,008
Total operating expenses 3,613,222 31,532 3,644,754
OPERATING INCOME 458,150 (31,532) 426,618 11.4%
Gain on investments, net 14,540 - 14,540
Interest income 20,121 - 20,121
Interest expense (6,316) - (6,316)
Other expense (2,327) - (2,327)
INCOME BEFORE INCOME TAXES 484,168 (31,532) 452,636 12.1%
Provision for income taxes 164,617 (9,460) 155,157
INCOME BEFORE MINORITY INTEREST 319,551 (22,072) 297,479 8.0%
Minority interest in Accenture SCA and Accenture Canada Holdings Inc (121,681) 8,447 (113,234)
Minority interest – other (1) (1,597) - (1,597)
NET INCOME $ 196,273 (13,625) $ 182,648 4.9%
CALCULATION OF EARNINGS PER SHARE:
Net income $196,273
$182,648
Minority interest in Accenture SCA and Accenture Canada Holdings Inc. (2) 121,681
113,234
Net income for diluted earnings per share calculation 317,954
295,882
EARNINGS PER SHARE:
Basic $ 0.33
$ 0.31
Diluted $ 0.32
$ 0.30
WEIGHTED AVERAGE SHARES:
Basic 590,029,649
590,029,649
Diluted 980,623,940
980,623,940

[1] Minority interest – other is comprised primarily of minority interest attributable to the minority shareholders of Avanade, Inc.
[2] Diluted earnings per share assumes the redemption and exchange of all Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares, respectively, for Accenture Ltd Class A common shares, on a one-for-one basis.
[3] Adjustments represent the estimated amounts that Accenture would have incurred if it had expensed employee stock options and employee share purchase plans for the three months ended November 30, 2004.

ACCENTURE LTD
SUMMARY OF REVENUES
For the Three Months Ended November 30, 2005 and 2004
(In thousands of U.S. dollars)
(Unaudited)

2005 2004 Percent
Increase US$
Percent Increase
Local
Currency
Percent of
Total Fiscal 2006
Net Revenues
OPERATING GROUPS
Communication & High Tech $1,047,541 $972,931 8% 8% 25%
Financial Services 854,872 806,693 6% 7% 21%
Government 598,119 523,803 14% 15% 14%
Products 1,017,035 862,198 18% 19% 24%
Resources 650,286 564,392 15% 14% 16%
Other 1,622 338 n/m n/m
TOTAL Net Revenues 4,169,475 3,730,355 12% 12% 100%
Reimbursements 373,541 341,017 10%

TOTAL REVENUES $4,543,016 $4,071,372 12%

GEOGRAPHY
Americas $1,855,490 $1,554,334 19% 18% 45%
EMEA 2,010,669 1,909,113 5% 7% 48%
Asia Pacific 303,316 266,908 14% 13% 7%
TOTAL Net Revenues 4,169,475 3,730,355 12% 12% 100%
Reimbursements 373,541 341,017 10%

TOTAL REVENUES $4,543,016 $4,071,372 12%

TYPE OF WORK
Consulting $2,576,639 $2,384,932 8% 9% 62%
Outsourcing 1,592,836 1,345,423 18% 18% 38%
TOTAL Net Revenues 4,169,475 3,730,355 12% 12% 100%
Reimbursements 373,541 341,017 10%

TOTAL REVENUES $4,543,016 $4,071,372 12%

n/m = not meaningful

ACCENTURE LTD
OPERATING INCOME BY OPERATING GROUP (OG)
For the Three Months Ended November 30, 2005 and 2004
(In thousands of U.S. dollars)
(Unaudited)
Operating Income as Reported

2005 2004
Operating Groups Operating Income Percent of OG
Net Revenues
Operating Income Percent of OG Net Revenues Increase (Decrease)
US$ —— Percent
Communications & High Tech $ 172,306 16% $ 149,329 15% $ 22,977 15%
Financial Services 81,603 10% 95,426 12% (13,823) (14%)
Government 61,622 10% 46,267 9% 15,355 33%
Products 117,733 12% 85,868 10% 31,865 37%
Resources 79,292 12% 81,260 14% (1,968) (2%)
Total 512,556 12.3% 458,150 12.3% 54,406 11.9%


Operating Income on an Options-Adjusted Basis (1)

2005 2004
Operating Groups Operating Income Percentof OG Net Revenues Options-Adjusted Operating Income Percent of OG Net Revenues Increase (Decrease)
US$ —— Percent
Communications & High Tech $ 172,306 16% $ 141,868 15% $ 30,438 21%
Financial Services 81,603 10% 88,085 11% (6,482) (7%)
Government 61,622 10% 41,832 8% 19,790 47%
Products 117,733 12% 78,488 9% 39,245 50%
Resources 79,292 12% 76,345 14% 2,947 4%
Total 512,556 12.3% 426,618 11.4% 85,938 20.1%
n/m = not meaningful

[1] Accenture estimates that if it had expensed employee stock options and employee share purchase plans for the three months ended November 30, 2004, the related pre-tax expense would have been $31,532, allocated to the operating groups in the following amounts: $7,461 to Communications & High Tech; $7,341 to Financial Services; $4,435 to Government; $7,380 to Products; and $4,915 to Resources. Operating income for the three months ended November 30, 2005 already includes the expense related to employee stock options and employee share purchase plans.

ACCENTURE LTD
CONSOLIDATED BALANCE SHEETS
November 30, 2005 and August 31, 2005
(In thousands of U.S. dollars)

November 30, 2005 August 31, 2005

(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,685,997 $ 2,483,990
Short-term investments 280,647 463,460
Receivables from clients, net 1,878,071 1,752,937
Unbilled services 1,408,368 1,353,676
Other current assets 594,776 631,204
Total current assets 5,847,859 6,685,267
NON-CURRENT ASSETS:
Unbilled services 484,922 472,430
Investments 209,417 262,873
Property and equipment, net 694,452 693,710
Other non-current assets 886,530 843,072
Total non-current assets 2,275,321 2,272,085
TOTAL ASSETS $ 8,123,180 $ 8,957,352
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term debt $ 22,514 $ 31,072
Accounts payable 774,376 807,317
Deferred revenues 1,295,793 1,284,303
Accrued payroll and related benefits 1,315,420 1,430,998
Other accrued liabilities 1,513,458 1,308,699
Total current liabilities 4,921,561 4,862,389
NON-CURRENT LIABILITIES:
Long-term debt 31,202 44,116
Other non-current liabilities
1,391,993 1,372,974
Total non-current liabilities 1,423,195 1,417,090
MINORITY INTEREST 612,959 980,959
EQUITY:
Total Shareholders’ equity 1,165,465 1,696,914
TOTAL LIABILITIES AND EQUITY $ 8,123,180 $ 8,957,352

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