Roxanne Taylor
New York
+1 (917) 452 5106

December 20, 2006

Accenture Reports Strong First-Quarter Fiscal 2007 Financial Results, With Record Quarterly Revenues and Double-Digit EPS Growth

- - Revenues increase 14%, to $4.75 billion; EPS up 28% and operating income up 19% - -

- - Company increases EPS outlook for fiscal 2007 to a range of $1.80 to $1.85 - -

NEW YORK; Dec. 20, 2006 — Accenture (NYSE: ACN) reported strong financial results for the first quarter of fiscal 2007, ended Nov. 30, with net revenues of $4.75 billion, an increase of 14 percent in U.S. dollars over the same period last year and above the high end of the company’s previously stated expectations. GAAP diluted earnings per share were $0.46, an increase of 28 percent over the first quarter of fiscal 2006.

The company achieved the highest quarterly net revenues in its history, driven by record net revenues across all three geographic regions and all five operating groups, with exceptional top-line performance from its Financial Services, Products and Resources operating groups. Consulting and outsourcing net revenues were also the highest in any quarter, with double-digit increases in both areas. New bookings were $5.5 billion, with a quarterly record in consulting bookings of $3 billion.

In addition, Accenture grew operating income by 19 percent and expanded its operating margin by 50 basis points, to 12.8 percent. The company also maintained its strong balance sheet, with $2.84 billion in cash and fixed-income securities classified as investments on its balance sheet at Nov. 30, 2006.

William D. Green, Accenture’s CEO, said, “We had a tremendous first quarter, with our outstanding top- and bottom-line performance demonstrating continued success in executing our strategy. We exceeded our overall revenue expectations, achieving solid growth across nearly every dimension of our business. With $5.5 billion in new bookings, we are seeing sustained demand for our services, particularly in consulting. Our success gives us confidence for the periods ahead. We paid a cash dividend in the first quarter and returned cash to shareholders through further share repurchases. We remain focused on differentiating Accenture in the marketplace and delivering value for both our clients and shareholders.”

Financial Review

Revenues before reimbursements (“net revenues”) for the first quarter of fiscal 2007 were $4.75 billion, compared with $4.17 billion for the first quarter of fiscal 2006, an increase of 14 percent in U.S. dollars and 11 percent in local currency.

GAAP diluted EPS for the first quarter of fiscal 2007 increased 28 percent, to $0.46, compared with $0.36 for the first quarter last year.

GAAP operating income for the first quarter of fiscal 2007 was $610 million, or 12.8 percent of net revenues, compared with $513 million, or 12.3 percent of net revenues, for the first quarter last year. This represents a 50 basis-point expansion in operating margin.

Gross margin (gross profit as a percentage of net revenues) for the first quarter of fiscal 2007 was 30.1 percent, compared with 31.7 percent for the first quarter of fiscal 2006.

Selling, general and administrative expenses in the first quarter of fiscal 2007 were $817 million, or 17.2 percent of net revenues, compared with $802 million, or 19.2 percent of net revenues, in the first quarter last year.

The company’s effective tax rate for the first quarter of fiscal 2007 was 36.7 percent.

GAAP income before minority interest was $406 million in the first quarter of fiscal 2007, compared with $328 million in the same period of fiscal 2006.

For the three months ended Nov. 30, 2006, operating cash flow was $166 million, and property and equipment additions were $67 million. Free cash flow, defined as operating cash flow net of property and equipment additions, for the first quarter of 2007 was $99 million.

Accenture’s total cash balance at Nov. 30, 2006 was $2.44 billion, compared with $3.07 billion at Aug. 31, 2006. Cash combined with $407 million of fixed-income securities classified as investments on the company’s balance sheet was $2.84 billion at Nov. 30, 2006, compared with $3.53 billion at Aug. 31, 2006. Total debt at Nov. 30, 2006 was $32 million.

New Bookings

New bookings for the first quarter of fiscal 2007 were $5.5 billion.

Net Revenues by Operating Group

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

Net Revenues by Geographic Region

All three geographic regions achieved record-high quarterly revenues. Net revenues by geographic region were as follows:

Share Repurchase Activity

During the first quarter of fiscal 2007, Accenture repurchased or redeemed a total of 24.4 million shares for a total of $723.7 million. At Nov. 30, 2006, Accenture had $1.4 billion of share repurchase authority remaining.

Dividend

On Nov. 15, 2006, a cash dividend of $0.35 per share was paid on Accenture Ltd’s Class A common shares to shareholders of record at the close of business on Oct. 13, 2006. On Nov. 15, 2006, a cash dividend of $0.35 per share was also paid on Accenture SCA Class I common shares to shareholders of record at the close of business on Oct. 5, 2006.

Business Outlook

Second Quarter Fiscal 2007

Accenture expects net revenues for the second quarter of fiscal 2007 to be in the range of $4.6 billion to $4.8 billion.

Fiscal Year 2007

For the full fiscal year 2007, Accenture continues to expect net revenue growth to be in the range of 9 percent to 12 percent in local currency. The Company has raised its outlook for GAAP diluted EPS by $.03 to a range of $1.80 to $1.85, up from its previously expected range of $1.77 to $1.82.

The company continues to expect operating cash flow to be $1.95 billion to $2.15 billion; property and equipment additions to be $335 million; and free cash flow to be in the range of $1.6 billion to $1.8 billion. The expected annual effective tax rate remains in the range of 34 percent to 37 percent. Accenture continues to target new bookings for fiscal 2007 in the range of $22 billion to $24 billion.

Conference Call and Webcast Details

Accenture will host a conference call at 4:30 p.m. EST today to discuss its first-quarter 2007 financial results. To participate, please dial +1 (888) 428-4480 [+1 (612) 234-9960 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 and podcast of the conference call will be available online at www.accenture.com for approximately two weeks beginning at 9:45 p.m. EST Wednesday, Dec. 20. The replay will also be available via telephone by dialing +1 (800) 475-6701 [+1 (320) 365-3844 outside the United States, Puerto Rico and Canada] and entering access code 852452 from 9:45 p.m. EST Wednesday, Dec. 20 through 11:59 p.m. EST Wednesday, Jan. 3, 2007.

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 145,000 people in 49 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. 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 and other documents filed with or furnished to 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’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.

ACCENTURE LTD
CONSOLIDATED INCOME STATEMENT

(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
  Three Months Ended November 30
                        
2006
% of Net Revenues
           
2005
% of Net Revenues
REVENUES:
Revenues before reimbursements (Net revenues) $4,754,088 100% $4,169,475 100%
Reimbursements 412,271
373,541
Revenues 5,166,359
4,543,016
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 3,321,844 69.9% 2,849,167 68.3%
Reimbursable expenses 412,271
373,541
Cost of services 3,734,115
3,222,708
Sales and marketing 436,930 9.2% 408,602 9.8%
General and administrative costs 379,643 8.0% 393,766 9.4%
Reorganization benefits, net 6,079
5,384
Total operating expenses 4,556,767
4,030,460
OPERATING INCOME 690,592 12.8% 512,556 12.3%
Gain on investments, net 2,854
1,438
Interest income 36,307
30,353
Interest expense (5,122)
(4,685)
Other expense (2,466)
(15,947)
INCOME BEFORE INCOME TAXES 641,165 13.5% 523,715 12.6%
Provision for income taxes 235,308
195,869
INCOME BEFORE MINORITY INTEREST 405,857 8.5% 327,846 7.9%
Minority interest in Accenture SCA and Accenture Canada Holdings Inc (115,813)
(110,136)
Minority interest – other (1) (5,812)
(2,770)
NET INCOME $284,232 6.0% $214,940 5.2%
CALCULATION OF EARNINGS PER SHARE:
Net income $284,232
$214,940
Minority interest in Accenture SCA and Accenture Canada Holdings Inc. (2) 155,813
110,136
Net income for diluted earnings per share calculation $400,045
$325,076
EARNINGS PER SHARE:
Basic $0.47
$0.37
Diluted $0.46
$0.36
WEIGHTED AVERAGE SHARES:
Basic 598,612,668
586,267,569
Diluted 875,332,780
914,057,273





Cash Dividends Per Share $ 0.35
$ 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
SUMMARY OF REVENUES
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended November 30,

2006 2005 Percent
Increase
US$
Percent Increase
Local
Currency
Percent of
Total Fiscal 2007
Net Revenues
OPERATING GROUPS
Communication & High Tech $1,096,390 $1,047,541 5% 2% 23%
Financial Services 1,067,247 854,872 25% 21% 23%
Government 627,828 598,119 5% 4% 13%
Products 1,194,668 1,017,035 17% 14% 25%
Resources 762,990 650,286 17% 14% 16%
Other 4,965 1,622 n/m n/m
TOTAL Net Revenues 4,754,088 4,169,475 14% 11% 100%
Reimbursements 412,271 373,541 10%

TOTAL REVENUES $5,166,359 $4,543,016 14%

GEOGRAPHY
Americas $2,090,105 $1,855,490 13% 12% 44%
EMEA 2,302,680 2,010,669 15% 9% 48%
Asia Pacific 361,303 303,316 19% 19% 8%
TOTAL Net Revenues $4,754,088 $4,169,475 14% 11% 100%
TYPE OF WORK
Consulting $2,909,453 $2,576,639 13% 10% 61%
Outsourcing 1,844,635 1,592,836 16% 13% 39%
TOTAL Net Revenues $4,754,088 $4,169,475 14% 11% 100%

n/m = not meaningful

ACCENTURE LTD
OPERATING INCOME BY OPERATING GROUP (OG)
Three Months Ended November 30,

2006 2005
Operating Groups Operating Income Percent of OG
Net Revenues
Operating Income Percent of OG Net Revenues Percent Increase (Decrease)
Communications & High Tech $134,401 12% $172,306 16% (22%)
Financial Services 133,892 13% 81,603 10% 64%
Government 28,362 5% 61,622 10% (54%)
Products 207,079 17% 117,733 12% 76%
Resources 105,858 14% 79,292 12% 34%
Total $609,592 12.8% $512,556 12.3% 19%




ACCENTURE LTD
CONSOLIDATED BALANCE SHEETS
November 30 , 2006 and August 31, 2006
(In thousands of U.S. dollars)

November 30, 2006
(Unaudited)
August 31, 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $2,437,530 $3,066,988
Short-term investments 298,851 352,951
Receivables from clients, net 2,257,954 1,916,450
Unbilled services 1,549,652 1,350,211
Other current assets 658,934 667,221
Total current assets 7,202,921 7,353,821
NON-CURRENT ASSETS:
Unbilled services, net 77,904 105,081
Investments 123,049 125,119
Property and equipment, net 715,881 727,692
Other non-current assets 1,094,818 1,106,367
Total non-current assets 2,011,652 2,064,259
TOTAL ASSETS $9,214,573 $9,418,080
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt $26,468 $24,792
Accounts payable 829,302 856,087
Deferred revenues 1,478,007 1,511,259
Accrued payroll and related benefits 1,767,803 1,693,796
Other accrued liabilities 1,820,386 1,730,548
Total current liabilities 5,921,966 5,816,482
NON-CURRENT LIABILITIES:
Long-term debt 5,109 27,065
Other non-current liabilities
832,990 812,400
Total non-current liabilities 838,099 839,465
MINORITY INTEREST 730,483 867,878
SHAREHOLDERS’ EQUITY 1,724,025 1,894,255
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $9,214,573 $9,418,080

To view the the full release, including financial tables, download the PDF.To view the the full release, including financial tables, download the PDF. [PDF, 45K]

PDF Help

###