Roxanne Taylor
New York
+1 (917) 452 5106

January 06, 2005

Accenture Reports Financial Results for First-Quarter Fiscal 2005

Revenues Increase 14%; EPS of $0.32 is Ahead of Company’s Expectations

NEW YORK; Jan. 6, 2005 – Accenture (NYSE: ACN) today reported net revenues of $3.73 billion and earnings per share of $0.32 for the first quarter of fiscal 2005, ended Nov. 30, 2004.

Net revenues grew 14 percent overall, with outsourcing increasing 15 percent and consulting increasing 14 percent. The company achieved net revenue growth across all three of its geographic regions, and net revenue growth in U.S. dollars across all five of its operating groups, with exceptional top-line contributions from its Financial Services and Products operating groups. In addition, the company revised its expectations upward for both net revenues and earnings per share for the full fiscal year.

Financial Highlights

William D. Green, Accenture’s CEO, said: “We’re pleased with our strong top- and bottom-line performance in the first quarter, which reflects our ability to execute our strategy of helping clients become high-performance businesses. Our net revenues were the highest of any quarter in Accenture’s history, with growth in all three geographic regions and U.S. dollar growth in all five operating groups. We are particularly pleased with the growth in our consulting revenues, the strongest we’ve seen since we became a public company.

“Looking ahead, we are encouraged by the high level of activity in the marketplace, the momentum we are seeing in demand for our services, particularly in consulting, and our strong pipeline. At the same time, we have several operational areas that we will improve upon in the second quarter and beyond. We are confident that we will achieve our financial objectives for the full fiscal year.”

Financial Review

Gross margin (gross profit as a percentage of net revenues) was 33.0 percent, compared with 34.1 percent for the first quarter of fiscal 2004 and 32.4 percent for the fourth quarter of fiscal 2004. The year-over-year decline was primarily due to higher labor costs in the quarter, reflecting an increase in compensation effective September 1 and short-term staffing inefficiencies due to growth in demand for the company’s services and increased resource utilization.

Selling, general and administrative costs were $765 million, or 20.5 percent of net revenues, compared with $690 million, or 21.2 percent of net revenues, for the first quarter last year. The improvement was due to continued cost-management efforts and the ability to grow revenues without a corresponding increase in SG&A costs.

Accenture accrued variable compensation expense of $47 million in the first quarter of fiscal 2005. In the first quarter last year, the company did not accrue variable compensation and reversed $4 million of previously accrued variable compensation.

The company’s effective tax rate for the first quarter of fiscal 2005 was 34.0 percent, compared with 34.8 percent for the same period last year.

Income before minority interest was $320 million, compared with $335 million for the same period last year. Income before minority interest in the first quarter last fiscal year was $271 million excluding the $64 million after-tax benefit from the $86 million reduction in reorganization liabilities.

Accenture’s total cash balance at Nov. 30, 2004 was $2.27 billion, compared with $2.33 billion for the year-ago period and $2.55 billion at Aug. 31, 2004. Cash combined with $939 million of fixed-income securities classified as investments on the company’s balance sheet was $3.21 billion at Nov. 30, 2004, compared with $2.33 billion for same period last year and $3.15 billion at Aug. 31, 2004. Total debt at Nov. 30, 2004 was $40 million.

For the first quarter of fiscal 2005, free cash flow, defined as operating cash flow net of property and equipment additions, was negative $116 million, operating cash flow was negative $61 million, and property and equipment additions were $55 million. Free cash flow was reduced by the planned payout of $216 million of accrued variable compensation and an increase in client balances. The increase in client balances was due to growth in revenues, increases in client financing, the amortization of prepayments from clients, and some temporary delays in billings.

Consulting and Outsourcing Net Revenues

Net Revenues by Operating Group

Net revenues for Accenture’s five operating groups were as follows:

Net Revenues by Geographic Region

Net revenues by geographic region were as follows:

New Bookings

New bookings for the first quarter totaled $4.03 billion, with consulting accounting for $1.96 billion and outsourcing accounting for $2.07 billion.

Share Repurchase Activity

During the first quarter of fiscal 2005, Accenture repurchased approximately 1.6 million of its Class A common shares with a total value of $39 million. At Nov. 30, 2004, Accenture had $3.25 billion of share repurchase authority remaining, of which approximately $1 billion remained for use in connection with the Company’s open-market share purchase program. The balance was available for redemptions and purchases from Accenture’s partners, former partners, their permitted transferees and employees. Accenture expects to purchase or redeem $1.25 billion to $1.75 billion of its shares during the balance of the fiscal year, through both open-market share purchases and its ongoing Share Management Plan transactions.

Business Outlook

Second Quarter Fiscal 2005

For the second quarter of fiscal 2005, Accenture expects net revenues in the range of $3.60 billion to $3.75 billion and GAAP diluted earnings per share in the range of $0.33 to $0.35. GAAP diluted earnings per share for the second quarter will include a benefit of $0.03 per share from a $41 million reduction in reorganization liabilities that were established in connection with Accenture’s transition to corporate structure in 2001. This reduction was recognized in December 2004.

Full Fiscal Year 2005

For the full fiscal year 2005, Accenture now expects net revenue growth in the range of 13 percent to 16 percent in U.S. dollars and continues to expect net revenue growth in the range of 9 percent to 12 percent in local currency. Accenture has revised its guidance for GAAP diluted earnings per share upward to the range of $1.41 to $1.46. Diluted earnings per share for the full fiscal year will include a benefit of $0.04 per share from the $41 million reduction in reorganization liabilities that was recognized in December 2004. Diluted earnings per share for the full fiscal year will also include a $0.02 benefit in the second half of the fiscal year associated with Accenture’s expected share repurchases.

As previously stated, the company expects operating cash flow to be $1.85 billion to $2.05 billion, property and equipment additions to be $400 million, free cash flow to be in the range of $1.45 billion to $1.65 billion, and the annual effective tax rate to be in the range of 32 percent to 34 percent. Accenture continues to target new bookings for fiscal year 2005 in the range of $18 billion to $20 billion.

Conference Call and Webcast Details

Accenture will host a conference call at 4:30 p.m. EST today to discuss its first-quarter fiscal 2005 financial results. To participate, please dial +1 (800) 230-1074 [+1 (612) 288-0318 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 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 762547 from 9:45 p.m. EST Thursday, Jan. 6 through 11:59 p.m. EST Thursday, Jan. 20.

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 100,000 people in 48 countries, the company generated net revenues of US$13.67 billion for the fiscal year ended Aug. 31, 2004. Its home page is www.accenture.com.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 operating income and fully diluted earnings per share growth excluding reorganization costs and benefits because Accenture’s management believes this information provides investors with additional information regarding Accenture’s results of operations. Accenture also excludes reorganization and restructuring charges as well as certain other items from diluted earnings per share for purposes of determining the amount, if any, of variable compensation to be accrued. Accenture also discloses free cash flow, defined as operating cash flow net of property and equipment additions. Accenture’s management believes that by providing more visibility on free cash flow and reconciling it to operating cash flow, Accenture provides another consistent metric from which the quality of its business may be monitored. 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.

ACCENTURE LTD
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended November 30, 2004 and 2003
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
  2004 2003
    % of Net Revenues   % of Net Revenues
REVENUES:
Revenues before reimbursements (Net revenues) $ 3,730,355 100% $ 3,261,585 100%
Reimbursements 341,017 9 312,903 10
Revenues 4,071,372 109 3,574,488 110
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 2,500,439 67 2,150,890 66
Reimbursable expenses 341,017 9 312,903 10
Cost of services 2,841,456 76 2,463,793 76
Sales and marketing 360,943 10 350,597 11
General and administrative costs 403,815 11 339,356 10
Reorganization costs (benefits) 7,008 0 (86,398) (3)
Total operating expenses 3,613,222 97 3,067,348 94
OPERATING INCOME 458,150 12 507,140 16
Gain on investments, net 14,540 0 498 0
Interest income 20,121 1 10,423 0
Interest expense (6,316) 0 (5,751) 0
Other income (expense) (2,327) 0 1,526 0
Equity in losses of affiliates - 0 (686) 0
INCOME BEFORE INCOME TAXES 484,168 13 513,150 16
Provision for income taxes 164,617 4 178,576 5
INCOME BEFORE MINORITY INTEREST 319,551 9 334,574 10
Minority interest (123,278) (3) (160,234) (5)
NET INCOME $ 196,273 5 $ 174,340 5
EARNINGS PER SHARE:
Basic $ 0.33 $ 0.34
Diluted $ 0.32 $ 0.33
WEIGHTED AVERAGE SHARES:
Basic 590,029,649 519,417,011
Diluted 980,298,997 1,019,952,588

ACCENTURE LTD
SUMMARY OF REVENUES
For the Three Months Ended November 30, 2004 and 2003
(In thousands of U.S. dollars)
(Unaudited)

Three Months Ended
November 30,
2004                            2003
% Increase/
US$
% Increase/
(Decrease) Local
Currency
% of Total
2005 Net
Revenues
OPERATING GROUPS
Communication & High Tech $ 972,931 $ 879,010 11% 6% 26%
Financial Services 806,693 646,049 25 17 22
Government 523,803 478,219 10 5 14
Products 862,198 701,141 23 17 23
Resources 564,392 554,627 2 (4) 15
Other 338 2,539 n/m n/m 0
TOTAL Net Revenues 3,730,355 3,261,585 14 9 100
Reimbursements 341,017 312,903 9 - -
TOTAL REVENUES $ 4,071,372 $ 3,574,488 14 - -
GEOGRAPHY
Americas $ 1,542,204 $ 1,491,569 3 3 41
EMEA 1,918,187 1,550,130 24 12 52
Asia Pacific 269,964 219,886 23 19 7
TOTAL Net Revenues 3,730,355 3,261,585 14 9 100
Reimbursements 341,017 312,903 9 - -
TOTAL REVENUES $ 4,071,372 $ 3,574,488 14 - -
n/m = not meaningful

ACCENTURE LTD
OPERATING INCOME BY OPERATING GROUP (OG)
For the Three Months Ended November 30, 2004 and 2003
(In thousands of U.S. dollars)
(Unaudited)
  Operating Income as Reported    
  November 30, 2004 November 30, 2003    
Operating Groups Operating Income % of OG Net Revenues Operating Income % of OG Net Revenues Increase (Decrease)
US$ Percent
Communications & High Tech $ 149,329 15% $ 75,032 9% $ 74,297 99%
Financial Services 95,426 12 103,680 16 (8,254) (8)
Government 46,267 9 93,903 20 (47,636) (51)
Products 85,868 10 133,837 19 (47,969) (36)
Resources 81,260 14 100,421 18 (19,161) (19)
Other - n/m 267 11 (267) (100)
Total Operating Income 458,150 12 507,140 16 (48,990) (10)
  Operating Income Excluding Reorganization Costs/Benefit (1)    
  November 30, 2004 November 30, 2003    
Operating Groups Operating Income % of OG Net Revenues Operating Income % of OG Net Revenues Increase (Decrease)
US$ Percent
Communications & High Tech $ 151,071 16% $ 53,322 6% $ 97,749 183%
Financial Services 96,960 12 84,729 13 12,231 14
Government 47,383 9 81,194 17 (33,811) (42)
Products 87,491 10 114,903 16 (27,412) (24)
Resources 82,253 15 86,327 16 (4,074) (5)
Other - n/m 267 11 (267) (100)
Total Operating Income 465,158 12 420,742 13 44,416 11
n/m = not meaningful
(1) For the three months ended November 30, 2004, Accenture recorded reorganization costs of $7,008 relating to Accenture’s transition to a corporate structure in 2001, allocated to the operating groups in the following amounts: Communications & High Tech $1,742; Financial Services $1,534; Government $1,116; Products $1,623; and Resources $993. For the three months ended November 30, 2003, Accenture recorded a benefit of $86,398 relating to a decrease in reorganization liabilities established in connection with Accenture’s transition to a corporate structure in 2001, allocated to the operating groups in the following amounts: Communications & High Tech $21,710; Financial Services $18,951; Government $12,709; Products $18,934; and Resources $14,094. These amounts are excluded from the table.

ACCENTURE LTD
CONSOLIDATED BALANCE SHEETS
November 30, 2004 and August 31, 2004
(In thousands of U.S. dollars)

November 30, 2004
(Unaudited)
August 31, 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,273,522 $ 2,552,958
Short-term investments 591,714 285,288
Receivables from clients, net 1,825,284 1,662,211
Unbilled services 1,489,075 1,049,870
Other current assets 733,893 661,689
Total current assets 6,913,488 6,212,016
NON-CURRENT ASSETS:
Investments 392,595 340,121
Property and equipment, net 656,526 643,946
Other non-current assets 949,612 872,223
Total non-current assets 1,998,733 1,856,290
TOTAL ASSETS $ 8,912,221 $ 8,068,306
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term debt $ 38,490 $ 31,715
Accounts payable 733,112 523,931
Deferred revenues 982,407 980,461
Accrued payroll and related benefits 1,412,645 1,508,126
Other accrued liabilities 1,600,051 1,449,378
Total current liabilities 4,766,705 4,493,611
NON-CURRENT LIABILITIES:
Long-term debt 1,508 2,161
Other non-current liabilities
1,279,456 1,159,765
Total non-current liabilities 1,280,964 1,161,926
MINORITY INTEREST 1,109,859 940,963
EQUITY:
Shareholders’ equity 1,754,693 1,471,806
Total equity 1,754,693 1,471,806
TOTAL LIABILITIES AND EQUITY $ 8,912,221 $ 8,068,306

ACCENTURE LTD
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP ADJUSTED DILUTED EARNINGS PER SHARE
For the Three Months Ended November 30, 2004 and 2003
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
  2004 2003
  As Reported As Adjusted As Reported As Adjusted
Net income $ 196,273 $ 196,273 $ 174,340 $ 174,340
Minority interest (1) 121,681 121,681 160,158 160,158
Net income for per share calculation 317,954 317,954 334,498 334,498
Adjustments
Reorganization Cost / (Benefit) - - - 7,008 - - - (86,398)
Reorganization Cost / (Benefit), tax effect (2) (3) - - - (2,383) - - - 22,668
Net income for per share calculation 317,954 322,579 334,498 270,768
Weighted average diluted shares 980,298,997 980,298,997 1,019,952,588 1,019,952,588
Earnings per Share 0.32 0.33 0.33 0.27
Year-over-Year (Decrease) Increase (3)% 22%
(1) This represents minority interest attributable to Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares not held by Accenture.
(2) The $2,383 tax amount for fiscal 2005 is based upon an annual effective tax rate of 34% for fiscal 2005.
(3) The fiscal 2004 reorganization benefit of $86,398 reduced the 2004 annual effective tax rate from 36.6% to 34.8% but increased income tax expense in the first quarter by $22,668 because the annual tax rate reduction was allocated over all four fiscal 2004 quarters.

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