Roxanne Taylor
New York
+1 (917) 452 5106

April 07, 2005

Accenture Reports Second-Quarter 2005 Financial Results

Revenues Increase 15%, to $3.81 Billion; EPS $0.35

NEW YORK; April 7, 2005 – Accenture (NYSE: ACN) today reported financial results for the second quarter of fiscal 2005, ended Feb. 28, 2005, with record net revenues of $3.81 billion and EPS of $0.35, a 59 percent increase over the same quarter last year.

Net revenues grew 15 percent overall, with consulting increasing 14 percent and outsourcing increasing 18 percent. The company achieved net revenue growth across all three of its geographic regions and all five of its operating groups, with exceptional top-line contributions from its Financial Services and Products operating groups.

Financial Highlights

William D. Green, Accenture’s CEO, said, “We had strong top- and bottom-line performance this quarter, with double-digit growth in both EPS and revenues, including 14 percent growth in consulting revenues and 18 percent growth in outsourcing revenues. We had solid quarterly new bookings of $4.88 billion, bringing new bookings for the first half of the year to $8.91 billion. In addition, we made great progress on the operational challenges that we identified in the first quarter, including our free cash flow, client balances and attrition.

“We remain focused on making further operational improvements and are confident in our ability to achieve our financial objectives for the fiscal year while continuing to deliver results for our clients.”

Financial Review

Gross margin (revenues less cost of services, as a percentage of net revenues) was 30.8 percent, compared with 33.0 percent for the second quarter of fiscal 2004.

Selling, general and administrative costs were $738 million, or 19.4 percent of net revenues, compared with $675 million, or 20.4 percent of net revenues, for the second quarter last year.

Accenture recorded net reorganization benefits of $36 million in the second quarter of fiscal 2005. In the second quarter last fiscal year, the company incurred a $107 million restructuring charge as a result of a global real estate consolidation.

Operating income was $472 million, or 12.4 percent of net revenues, for the second quarter of fiscal 2005, compared with $307 million, or 9.3 percent of net revenues, for the second quarter last year. Excluding reorganization benefits and restructuring costs, operating income for the second quarter of fiscal 2005 was $436 million, or 11.4 percent of net revenues, compared with $415 million, or 12.6 percent of net revenues, for the second quarter of fiscal 2004.

The decrease in operating margin was due primarily to three factors: (1) temporary delays in deploying systems under the company’s contracts with a large client; (2) incurred and expected cost-overruns associated with developing reusable assets, in connection with certain client engagements, that will be used to create offerings to support multiple clients; and, to a lesser extent, (3) delivery inefficiencies, including staffing issues that the company identified in the first quarter of fiscal 2005. The company did not accrue variable compensation expense in the second quarter, which partially offset this decline in operating margin.

The company’s effective tax rate for the second quarter of fiscal 2005 was 30.6 percent, compared with 34.8 percent for the same period last year. The 30.6 percent effective tax rate includes the effect of the reduction in the year-to-date tax rate from 34.0 percent to 32.3 percent as a result of changes in the company’s forecasted mix of geographic income and the reduction in reorganization liabilities.

Income before minority interest was $341 million, compared with $220 million for the same period last year.

Accenture’s total cash balance at Feb. 28, 2005 was $3.06 billion, compared with $2.55 billion at Aug. 31, 2004 and $2.27 billion at Nov. 30, 2004. Cash combined with $702 million of fixed-income securities classified as investments on the company’s balance sheet was $3.76 billion at Feb. 28, 2005, compared with $3.15 billion at Aug. 31, 2004 and $3.21 billion at Nov. 30, 2004. For the three months ended Feb. 28, 2005, operating cash flow was $787 million and property and equipment additions were $61 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $726 million. Total debt at Feb. 28, 2005 was $82 million.

For the six months ended Feb. 28, 2005, operating cash flow was $726 million and property and equipment additions were $116 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $610 million. For the six months ended Feb. 29, 2004, operating cash flow was $993 million, property and equipment additions were $101 million and free cash flow was $892 million.

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:

Share Repurchase Activity

During the second quarter of fiscal 2005 Accenture repurchased $207 million of its shares, as planned. This included $121 million for purchases of 4.7 million Accenture Ltd Class A common shares and $86 million for 3.5 million Accenture SCA Class I common shares repurchased from partners, retired partners and their permitted transferees. At Feb. 28, 2005, Accenture had $3.05 billion of share repurchase authority remaining, of which $913 million 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.

On March 7, 2005, Accenture closed a tender offer initiated during the second quarter of the fiscal year and purchased 18.7 million Accenture SCA Class I common shares for $501 million. In addition, Accenture expects to purchase or redeem between $600 million and $1.1 billion worth of its shares during the remainder of fiscal year 2005, through both open-market share purchases and its ongoing Share Management Plan transactions.

Business Outlook

Third Quarter Fiscal 2005

For the third quarter of fiscal 2005, Accenture expects net revenues to be in the range of $4.0 billion to $4.2 billion and GAAP diluted earnings per share to be in the range of $0.48 to $0.50. GAAP diluted earnings per share for the third quarter will include a benefit of $0.06 per share from a $69 million reduction in reorganization liabilities that were established in connection with Accenture’s transition to corporate structure in 2001. This reduction was recognized in March 2005.

Full Fiscal Year 2005

For the full fiscal year 2005, Accenture continues to expect net revenue growth to be in the range of 13 percent to 16 percent in U.S. dollars and 9 percent to 12 percent in local currency. The company has revised its guidance for GAAP diluted earnings per share upward to the range of $1.49 to $1.53. For the full fiscal year, reductions in reorganization liabilities are expected to contribute $0.11 per share to diluted earnings per share.

Also for the full fiscal year 2005, Accenture continues to expect operating cash flow to be $1.85 billion to $2.05 billion; property and equipment additions to be $400 million; and free cash flow to be in the range of $1.45 billion to $1.65 billion, although the company currently expects to be at the low end of this range. The company now expects the annual effective tax rate to be in the range of 31 percent to 33 percent. The company reiterated that it is targeting 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. EDT today to discuss its second-quarter 2005 financial results. To participate, please dial +1 (888) 276-9998 [+1 (612) 332-0335 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 775402 from 9:45 p.m. EDT Thursday, April 7 through 11:59 p.m. EDT Thursday, April 21.

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 110,000 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.

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) as well as operating income excluding reorganization benefits and costs and restructuring costs because Accenture’s management believes doing so provides investors with additional information regarding 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.

ACCENTURE LTD
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended February 28, 2005 and February 29, 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) $ 3,813,522 100% $ 3,302,209 100%
Reimbursements 402,862 11% 380,095 12%
Revenues 4,216,384 111% 3,682,304 112%
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 2,638,950 69% 2,212,547 67%
Reimbursable expenses 402,862 11% 380,095 12%
Cost of services 3,041,812 80% 2,592,642 79%
Sales and marketing 376,919 10% 358,662 11%
General and administrative costs 361,478 9% 316,133 10%
Reorganization (benefits) and restructuring costs (35,777) (1%) 107,438 3%
Total operating expenses 3,744,432 98% 3,374,875 102%
OPERATING INCOME 471,952 12% 307,429 9%
Gain on investments, net 93 0% 3,332 0%
Interest income 28,063 1% 15,187 0%
Interest expense (6,300) 0% (5,816) 0%
Other income (expense) (2,846) 0% 17,765 1%
Equity in losses of affiliates - 0% (516) 0%
INCOME BEFORE INCOME TAXES 490,962 13% 337,381 10%
Provision for income taxes 150,350 4% 117,408 5%
INCOME BEFORE MINORITY INTEREST 340,612 9% 219,973 7%
Minority interest – Accenture SCA and Accenture Canada Holdings Inc (128,688) (3%) (96,987) (3%)
Minority interest – other (1) (2,138) 0% 103 0%
NET INCOME $ 209,786 6% $ 123,089 4%
CALCULATION OF EARNINGS PER SHARE:
Net income $ 209,786
$ 123,089
Minority interest – Accenture SCA and Accenture Canada Holdings Inc. (2) $ 128,688
$ 96,987
Net income for diluted earnings per share calculation $ 338,474
$ 220,076
EARNINGS PER SHARE:
Basic $ 0.35 $ 0.23
Diluted $ 0.35 $ 0.22
WEIGHTED AVERAGE SHARES:
Basic 591,694,862 544,052,062
Diluted 979,750,161 998,003,396
(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
CONSOLIDATED INCOME STATEMENTS
For the Six Months Ended February 28, 2005 and February 29, 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) $ 7,543,877 100% $ 6,563,794 100%
Reimbursements 743,879 10% 692,998 11%
Revenues 8,287,756 110% 7,256,792 111%
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 5,154,389 68% 4,363,437 66%
Reimbursable expenses 743,879 10% 692,998 11%
Cost of services 5,898,268 78% 5,056,435 77%
Sales and marketing 735,862 10% 709,259 11%
General and administrative costs 752,293 10% 655,489 10%
Reorganization (benefits) and restructuring costs (28,769) 0% 21,040 0%
Total operating expenses 7,357,654 98% 6,442,223 98%
OPERATING INCOME 930,102 12% 814,569 12%
Gain on investments, net 14,633 0% 3,830 0%
Interest income 48,184 1% 25,610 0%
Interest expense (12,616) 0% (11,567) 0%
Other income (expense) (5,173) 0% 19,291 0%
Equity in losses of affiliates - 0% (1,202) 0%
INCOME BEFORE INCOME TAXES 975,130 13% 850,531 13%
Provision for income taxes 314,967 4% 295,984 5%
INCOME BEFORE MINORITY INTEREST 660,163 9% 554,547 8%
Minority interest – Accenture SCA and Accenture Canada Holdings Inc (250,369) (3%) (257,145) (4%)
Minority interest – other (1) (3,735) 0% 27 0%
NET INCOME $ 406,059 5% $ 297,429 5%
CALCULATION OF EARNINGS PER SHARE:
Net income $ 406,059
$ 297,429
Minority interest – Accenture SCA and Accenture Canada Holdings Inc. (2) $ 250,369
$ 257,145
Net income for diluted earnings per share calculation $ 656,428
$ 554,574
EARNINGS PER SHARE:
Basic $ 0.69 $ 0.56
Diluted $ 0.67 $ 0.55
WEIGHTED AVERAGE SHARES:
Basic 590,746,753 531,738,351
Diluted 979,880,579 1,009,403,593
(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
SUMMARY OF REVENUES
For the Three and Six Months Ended February 28, 2005 and February 29, 2004
(In thousands of U.S. dollars)
(Unaudited)

Three Months Ended
February 28, February 29,
2004                            2003
Percent Increase
US $
Percent Increase/
(Decrease) Local
Currency
Percent of Total
2005 Net
Revenues
OPERATING GROUPS
Communication & High Tech $ 982,088 $ 930,812 6% 1% 26%
Financial Services 859,336 647,531 33% 25% 22%
Government 521,111 467,926 11% 7% 14%
Products 851,394 715,386 19% 14% 22%
Resources 596,493 538,268 11% 5% 16%
Other 3,100 2,286 n/m n/m 0%
TOTAL Net Revenues 3,813,522 3,302,209 15% 10% 100%
Reimbursements 402,862 380,095 6% - -
TOTAL REVENUES $ 4,216,384 $ 3,682,304 15% - -
GEOGRAPHY
Americas $ 1,542,031 $ 1,501,120 3% 2% 41%
EMEA 1,996,181 1,575,653 27% 17% 52%
Asia Pacific 275,310 225,436 22% 15% 7%
TOTAL Net Revenues 3,813,522 3,302,209 15% 10% 100%
Reimbursements 402,862 380,095 6% - -
TOTAL REVENUES $ 4,216,384 $ 3,682,304 15% - -

Six Months Ended
February 28, February 29,
2004                            2003
Percent Increase
US $
Percent Increase/
(Decrease) Local
Currency
Percent of Total
2005 Net
Revenues
OPERATING GROUPS
Communication & High Tech $ 1,955,019 $ 1,809,822 8% 4% 26%
Financial Services 1,666,029 1,293,580 29% 21% 22%
Government 1,044,914 946,145 10% 6% 14%
Products 1,713,592 1,416,527 21% 15% 23%
Resources 1,160,885 1,092,895 6% 0% 15%
Other 3,438 4,825 n/m n/m 0%
TOTAL Net Revenues 7,543,877 6,563,794 15% 9% 100%
Reimbursements 743,879 692,998 7% - -
TOTAL REVENUES $ 8,287,756 $ 7,256,792 14% - -
GEOGRAPHY
Americas $ 3,084,236 $ 2,992,689 3% 2% 41%
EMEA 3,914,367 3,125,783 25% 15% 52%
Asia Pacific 545,274 445,322 22% 17% 7%
TOTAL Net Revenues 7,543,877 6,563,794 15% 9% 100%
Reimbursements 743,879 692,998 7% - -
TOTAL REVENUES $ 8,287,756 $ 7,256,792 14% - -
n/m = not meaningful

ACCENTURE LTD
OPERATING INCOME BY OPERATING GROUP (OG)
For the Three Months Ended February 28, 2005 and February 29, 2004
(In thousands of U.S. dollars)
(Unaudited)
  Operating Income as Reported    
  February 28, 2005 February 29, 2004    
Operating Groups Operating Income Percent of OG Net Revenues Operating Income Percent of OG Net Revenues Increase (Decrease)
US$ Percent
Communications & High Tech $ 138,496 14% $ 59,488 6% $ 79,008 133%
Financial Services 127,053 15% 62,139 10% 64,914 104%
Government 13,343 3% 43,271 9% (29,928) (69%)
Products 97,991 12% 96,015 13% 1,976 2%
Resources 95,069 16% 46,783 9% 48,286 103%
Other - n/m (267) n/m 267 100%
Total Operating Income $ 471,952 12% $ 307,429 9% $ 164,523 54%
  Non-GAAP Operating Income
(Operating Income Excluding Reorganization Benefits and Costs and Restructuring Costs) (1)
   
  February 28, 2005 February 29, 2004    
Operating Groups Non-GAAP Operating Income Percent of OG Net Revenues Non-GAAP Operating Income Percent of OG Net Revenues Increase (Decrease)
US$ Percent
Communications & High Tech $ 129,598 13% $ 86,486 9% $ 43,112 50%
Financial Services 118,971 14% 85,758 13% 33,213 39%
Government 7,682 1% 59,072 13% (51,390) (87%)
Products 89,921 11% 119,546 17% (29,625) (25%)
Resources 90,003 15% 64,272 12% 25,731 40%
Other - n/m (267) n/m 267 100%
Total Operating Income $ 436,175 11% $ 414,867 13% $ 21,308 5%
n/m = not meaningful
(1) For the three months ended February 28, 2005, Accenture recorded net reorganization benefits of $35,777 primarily resulting from final determinations of certain 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 $8,898; Financial Services $8,082; Government $5,661; Products $8,070; and Resources $5,066. For the three months ended February 29, 2004, Accenture recorded restructuring costs of $107,256 relating to the Company’s global consolidation of office space and net reorganization costs of $182 related to certain 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 $26,998; Financial Services $23,619; Government $15,801; Products $23,531; and Resources $17,489. These amounts are excluded from the table.

ACCENTURE LTD
OPERATING INCOME BY OPERATING GROUP (OG)
For the Six Months Ended February 28, 2005 and February 29, 2004
(In thousands of U.S. dollars)
(Unaudited)
  Operating Income as Reported    
  February 28, 2005 February 29, 2004    
Operating Groups Operating Income Percent of OG Net Revenues Operating Income Percent of OG Net Revenues Increase (Decrease)
US$ Percent
Communications & High Tech $ 287,825 15% $ 134,520 7% $ 153,305 114%
Financial Services 222,479 13% 165,819 13% 56,660 34%
Government 59,610 6% 137,174 14% (77,564) (57%)
Products 183,859 11% 229,852 16% (45,993) (20%)
Resources 176,329 15% 147,204 13% 29,125 20%
Other - n/m - n/m - n/m
Total Operating Income $ 930,102 12% $ 814,569 12% $ 115,533 14%
  Non-GAAP Operating Income
(Operating Income Excluding Reorganization Benefits and Costs and Restructuring Costs) (1)
   
  February 28, 2005 February 29, 2004    
Operating Groups Non-GAAP Operating Income Percent of OG Net Revenues Non-GAAP Operating Income Percent of OG Net Revenues Increase (Decrease)
US$ Percent
Communications & High Tech $ 280,669 14% $ 139,808 8% $ 140,861 101%
Financial Services 215,931 13% 170,487 13% 45,444 27%
Government 55,065 5% 140,266 15% (85,201) (61%)
Products 177,412 10% 234,449 17% (57,037) (24%)
Resources 172,256 15% 150,599 14% 21,657 14%
Other - n/m - n/m - n/m
Total Operating Income $ 901,333 12% $ 835,609 13% $ 65,724 8%
n/m = not meaningful
(1) For the three months ended February 28, 2005, Accenture recorded net reorganization benefits of $35,777 primarily resulting from final determinations of certain 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 $8,898; Financial Services $8,082; Government $5,661; Products $8,070; and Resources $5,066. For the three months ended February 29, 2004, Accenture recorded restructuring costs of $107,256 relating to the Company’s global consolidation of office space and net reorganization costs of $182 related to certain 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 $26,998; Financial Services $23,619; Government $15,801; Products $23,531; and Resources $17,489. These amounts are excluded from the table.

ACCENTURE LTD
CONSOLIDATED BALANCE SHEETS
February 28, 2005 and August 31, 2004
(In thousands of U.S. dollars)

February 28, 2005
(Unaudited)
August 31, 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,060,203 $ 2,552,958
Short-term investments 406,456 285,288
Receivables from clients, net 1,816,354 1,662,211
Unbilled services 1,459,331 1,049,870
Other current assets 603,704 606,867
Total current assets 7,346,048 6,157,194
NON-CURRENT ASSETS:
Investments 321,823 340,121
Property and equipment, net 657,444 643,946
Other non-current assets 1,017,524 872,223
Total non-current assets 1,996,791 1,856,290
TOTAL ASSETS $ 9,342,839 $ 8,013,484
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term debt $ 45,605 $ 36,715
Accounts payable 734,995 523,931
Deferred revenues 1,321,505 980,461
Accrued payroll and related benefits 1,429,326 1,508,126
Other accrued liabilities 1,423,138 1,389,556
Total current liabilities 4,954,569 4,438,789
NON-CURRENT LIABILITIES:
Long-term debt 36,736 32,161
Other non-current liabilities
1,264,426 1,129,765
Total non-current liabilities 1,301,162 1,161,926
MINORITY INTEREST 1,200,007 940,963
EQUITY:
Shareholders’ equity 1,887,101 1,471,806
Total equity 1,887,101 1,471,806
TOTAL LIABILITIES AND EQUITY $ 9,342,839 $ 8,013,484

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