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Article by DailyStocks_admin    (01-01-09 04:03 AM)

The Daily Magic Formula Stock for 12/31/2008 is Accenture Ltd. According to the Magic Formula Investing Web Site, the ebit yield is 15% and the EBIT ROIC is >100%.

Dailystocks.com only deals with facts, not biased journalism. What is a better way than to go to the SEC Filings? It's not exciting reading, but it makes you money. We cut and paste the important information from SEC filings for you to get started on your research on a specific company.


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BUSINESS OVERVIEW

Disclosure Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that might not prove to be accurate. Actual outcomes and results could differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to, the factors discussed below under the section entitled “Risk Factors.”

Available Information

Our website address is www.accenture.com. We use our website as a channel of distribution for company information. We make available free of charge on the Investor Relations section of our website (http://investor.accenture.com) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed or furnished with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(a) or 15(d) of the Exchange Act. We also make available through our website other reports filed with or furnished to the SEC under the Exchange Act, including our proxy statements and reports filed by officers and directors under Section 16(a) of the Exchange Act, as well as our Code of Business Ethics. Financial and other material information regarding us is routinely posted on and accessible at http://investor.accenture.com. We do not intend for information contained in our website to be part of this Annual Report on Form 10-K.

Any materials we file with the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC, 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

In this Annual Report on Form 10-K, we use the terms “Accenture,” “we,” “our Company,” “our” and “us” to refer to Accenture Ltd and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31.


ITEM 1. BUSINESS

Overview

Accenture is one of the world’s leading management consulting, technology services and outsourcing organizations, with more than 186,000 employees; offices and operations in more than 200 cities in 52 countries; and revenues before reimbursements (“net revenues”) of $23.39 billion for fiscal 2008.

Our “high performance business” strategy builds on our expertise in consulting, technology and outsourcing to help clients perform at the highest levels so they can create sustainable value for their customers, stakeholders and shareholders. We use our industry and business-process knowledge, our service offering expertise and our insight into and deep understanding of emerging technologies to identify new business and technology trends and formulate and implement solutions for clients under demanding time constraints. We help clients identify and enter new markets, increase revenues in existing markets, improve operational performance and deliver their products and services more effectively and efficiently.

We operate globally with one common brand and business model designed to enable us to provide clients around the world with the same high level of service. Drawing on a combination of industry expertise, functional capabilities, alliances, global resources and technology, we deliver competitively priced, high-value services that help our clients measurably improve business performance. Our global delivery model enables us to provide a complete end-to-end delivery capability by drawing on Accenture’s global resources to deliver high-quality, cost-effective solutions to clients under demanding timeframes.

Consulting, Technology and Outsourcing Services and Solutions

Our business is structured around five operating groups, which together comprise 17 industry groups serving clients in major industries around the world. Our industry focus gives us an understanding of industry evolution, business issues and applicable technologies, enabling us to deliver innovative solutions tailored to each client or, as appropriate, more-standardized capabilities to multiple clients.

Our three growth platforms—management consulting, systems integration and technology, and outsourcing—are the innovation engines through which we develop our knowledge capital; build world-class skills and capabilities; and create, acquire and manage key assets central to the development of solutions for our clients. The subject matter experts within these areas work closely with the professionals in our operating groups to develop and deliver solutions to clients.

Client engagement teams—which typically consist of industry experts, capability specialists and professionals with local market knowledge—leverage the full capabilities of our global delivery model to deliver price-competitive solutions and services. In certain instances our client engagement teams include subcontractors, who supplement our professionals with additional resources in a specific skill, service or product area, as needed.

Operating Groups

The following table shows the organization of our five operating groups and their 17 industry groups. For financial reporting purposes, our operating groups are our reportable operating segments. We do not allocate total assets by operating group, although our operating groups do manage and control certain assets. For certain historical financial information regarding our operating groups (including certain asset information), as well as financial information by geography (including long-lived asset information), see Note 17 (Segment Reporting) to our Consolidated Financial Statements below under “Financial Statements and Supplementary Data.” Communications & High Tech

We are a leading provider of management consulting, technology, systems integration and outsourcing services and solutions to the communications, electronics, high technology, media and entertainment industries. Our Communications & High Tech professionals help clients enhance their business results through industry-specific solutions and by seizing the opportunities made possible by the convergence of communications, computing and content. Examples of our services and solutions include the application of mobile technology, advanced communications network optimization, broadband and Internet protocol solutions, product innovation and digital rights management as well as systems integration, customer care, supply chain and workforce transformation services. In support of these services, we selectively pursue strategic acquisitions and have developed an array of assets, repeatable solutions, methodologies and research facilities to demonstrate how new technologies and industry-leading practices can be applied in new and innovative ways to enhance our clients’ business performance. In fiscal 2008, as in the prior year, our net revenues from multiple contracts with a single client in Communications & High Tech were greater than 10% of the operating group’s net revenues, slightly exceeding that threshold. Our Communications & High Tech operating group comprises the following industry groups:


• Communications. Our Communications industry group serves many of the world’s leading wireline, wireless, cable and satellite communications network operators and service providers. We provide a wide range of services designed to help our communications clients increase margins, improve asset utilization, improve customer retention, increase revenues, reduce overall costs and accelerate sales cycles. We offer a suite of reusable solutions, called Accenture Communications Solutions, designed to address major business and operational issues related to broadband and Internet protocol-based networks and services, including business intelligence, billing transformation, customer contact transformation, sales force transformation, service fulfillment and next-generation network optimization. Our Communications industry group represented approximately 61% of our Communications & High Tech operating group’s net revenues in fiscal 2008.

• Electronics & High Tech. Our Electronics & High Tech industry group serves the communications technology, consumer technology, enterprise technology, semiconductor, software and aerospace/defense segments. This industry group provides services in areas such as strategy, enterprise resource management, customer relationship management, supply chain management, software development, human performance, and merger/acquisition activities, including post-merger integration. We also offer a suite of reusable solutions, called Accenture High Tech Solutions, designed to address the industry’s major business and operational challenges, such as new product innovation and development, customer service and support, sales and marketing, and globalization. Our Electronics & High Tech industry group represented approximately 30% of our Communications & High Tech operating group’s net revenues in fiscal 2008.

• Media & Entertainment. Our Media & Entertainment industry group serves the broadcast, entertainment (television, music and movie), print, publishing and portal industries. Professionals in this industry group provide a wide range of services, including digital content solutions designed to help companies effectively manage, distribute and protect content across numerous media channels. These include Accenture Digital Media Services, which provide a comprehensive solution set to leading content owners and distributors, helping them adapt their organizations’ business processes and systems to stay ahead of the demand for digital content and services. Financial Services

Our Financial Services operating group focuses on the opportunities created by our clients’ needs to adapt to changing market conditions, including increased cost pressures, industry consolidation, regulatory changes, the creation of common industry standards and protocols, and the move to a more integrated industry model. We help clients meet these challenges through a variety of assets, services and solutions, including consulting and outsourcing strategies to increase cost efficiency and transform businesses, and customer relationship management initiatives that enable them to acquire and retain profitable customers and improve their cross-selling capabilities. Our Financial Services operating group comprises the following industry groups:


• Banking. Our Banking industry group works with retail and commercial banks and diversified financial enterprises. We help these organizations develop and execute strategies to target, acquire and retain customers more effectively, expand product and service offerings, comply with new regulatory initiatives, and leverage new technologies and distribution channels. Our Banking industry group represented approximately 56% of our Financial Services operating group’s net revenues in fiscal 2008.

• Capital Markets. Our Capital Markets industry group helps investment banks, broker/dealers, asset-management firms, depositories, clearing organizations and exchanges improve operational efficiency and transform their businesses to increase competitiveness. For example, we help clients develop and implement innovative trading, asset-management and market-information-manage ment systems and solutions.

• Insurance. Our Insurance industry group helps property and casualty insurers, life insurers, reinsurance firms and insurance brokers improve business processes, modernize their technologies and improve the quality and consistency of risk selection decisions. Our Insurance industry group offers a claims management capability that enables insurers to provide better customer service while optimizing claims costs, as well as industry-leading insurance policy administration technology solutions that enable insurers to bring products to market more quickly and reduce costs. We also provide a variety of outsourced solutions to help insurers improve working capital and cash flow, deliver permanent cost savings and enhance long-term growth.

Products

Our Products operating group comprises the following industry groups:


• Automotive. Our Automotive industry group works with auto manufacturers, suppliers, dealers, retailers and service providers. Professionals in this industry group help clients develop and implement innovative solutions focused on product development and commercialization, customer service and retention, channel strategy and management, branding, buyer-driven business models, cost reduction, customer relationship management and integrated supplier partnerships.

• Consumer Goods & Services. Our Consumer Goods & Services industry group serves food, beverage, household goods and personal care, tobacco and footwear/apparel manufacturers around the world. We add value to these companies through service offerings designed to enhance performance by addressing critical elements of success, including large-scale enterprise resource planning (ERP) strategy and implementation, sales and marketing transformation, working-capital productivity improvement, supply chain collaboration and post-merger integration.
• Health & Life Sciences. Our Health & Life Sciences industry group works with healthcare providers, government health departments, policy-making authorities/regulators, managed care organizations, health insurers and pharmaceutical, biotechnology, medical products and other industry-related companies to improve the quality, accessibility and affordability of healthcare. Our key offerings include health clinical transformation, electronic health records and hospital back-office services in the provider/government segment; research and development transformation, commercial effectiveness and customer interaction, and integrated electronic compliance (manufacturing and supply chain) in the pharmaceuticals and medical products segment; and health information and data management, claims excellence/cost containment and health plan back-office services in the payer segment.

• Industrial Equipment. Our Industrial Equipment industry group serves the industrial and electrical equipment, construction, consumer durable and heavy equipment industries. We help our clients increase operating and supply chain efficiencies by improving processes and leveraging technology. We also help clients generate value from strategic mergers and acquisitions. In addition, our Industrial Equipment industry group develops and deploys innovative solutions in the areas of channel management, collaborative product design, remote field maintenance, enterprise application integration and outsourcing.

• Retail. Our Retail industry group serves a wide spectrum of retailers and distributors, including supermarkets, specialty premium retailers and large mass-merchandise discounters. We provide service offerings that help clients address new ways of reaching the retail trade and consumers through precision marketing; maximize brand synergies and cost reductions in mergers and acquisitions; improve supply chain efficiencies through collaborative commerce business models; and enhance the efficiency of internal operations.

• Transportation & Travel Services. Our Transportation & Travel Services industry group serves companies in the airline, freight transportation, third-party logistics, hospitality, gaming, car rental, passenger rail and travel distribution industries. We help clients develop and implement strategies and solutions to improve customer relationship management capabilities, operate more-efficient networks, integrate supply chains, develop procurement and electronic business marketplace strategies, and more effectively manage maintenance, repair and overhaul processes and expenses. Through our Navitaire subsidiary, we offer airlines a range of transaction-processing services on an outsourced basis, including distribution, Internet reservations, airport check-in, revenue management and accounting, crew scheduling and management, and disruption recovery.

Public Service

Our Public Service operating group helps public-service entities around the world improve the social and economic conditions of their citizens. The public-service marketplace is transforming, and traditional governmental entities are working increasingly with the “third sector”—non-governmental organizations, community-based organizations, educational institutions, charities and non-profit organizations—to deliver services and benefits to citizens.

We typically work with defense, revenue, human services, health, postal, and justice and public-safety authorities or agencies, and our clients are generally national, state or local-level government organizations, as well as pan-geographic organizations. Our work with clients in the U.S. federal government represented approximately 33% of our Public Service operating group’s net revenues in fiscal 2008.

Our offerings help public-sector clients address some of their most pressing needs, including developing fair and equitable tax systems that help enhance revenues; ensuring the security of citizens and businesses; improving service delivery; and increasing operational efficiency. We work with clients to transform their customer-facing and back-office operations and enable services to be delivered through appropriate technologies that make government more accessible, in a manner consistent with expectations established in the private sector.

The Accenture Institute for Public Service Value is our research organization that helps our public-sector clients assess the value they add to the sector in much the same way shareholder value models measure the value of publicly traded entities. We have pioneered this work through our patent-pending public service value model. The Institute also focuses on understanding the expectations, desires and disappointments of citizens around the world in order to inform our solutions, and our clients, as public-service transformations continue globally.

Resources

Our Resources operating group serves the chemicals, energy, forest products, metals and mining, utilities and related industries. With market conditions driving energy companies to seek new ways of creating value for shareholders, deregulation fundamentally reforming the utilities industry and yielding cross-border opportunities, and an intensive focus on productivity and portfolio management in the chemicals industry, we are working with clients to create innovative solutions that are designed to help them differentiate themselves in the marketplace and gain competitive advantage. These include helping global energy companies optimize existing upstream and downstream operations while securing their upstream positions; helping utilities clients deal with deregulation; helping metals and mining clients globalize their business models; helping chemicals clients decrease operations costs; and working with clients across all industry segments on the “green agenda” to enable them to meet emission targets and increase energy efficiency. Our Resources operating group comprises the following industry groups:


• Chemicals. Our Chemicals industry group works with a wide cross-section of industry segments, including petrochemicals, specialty chemicals, polymers and plastics, gases and life science companies. We also have long-term outsourcing contracts with many industry leaders.

• Energy. Our Energy industry group serves a wide range of companies in the oil and gas industry, including upstream, downstream and oil services companies. Our key areas of focus include helping clients optimize production, manage the hydrocarbon supply chain, streamline retail operations and realize the full potential of third-party enterprise-wide technology solutions. In addition, our multi-client outsourcing centers enable clients to increase operational efficiencies and exploit cross-industry synergies. Our Energy industry group represented approximately 30% of our Resources operating group’s net revenues in fiscal 2008.

• Natural Resources. Our Natural Resources industry group serves the forest products and metals and mining industries. We help lumber, pulp, papermaking, converting and packaging companies, as well as iron, steel, aluminum, coal, copper and precious metals companies, develop and implement new business strategies, redesign business processes, manage complex change initiatives, and integrate processes and technologies to achieve higher levels of performance.

• Utilities. Our Utilities industry group works with electric, gas and water utilities around the world to respond to an evolving and highly competitive marketplace. The group’s work includes helping utilities transform themselves from regulated, and sometimes state-owned, local entities to international deregulated corporations, as well as developing diverse products and service offerings to help our clients deliver higher levels of service to their customers. These offerings include customer relationship management, workforce enablement, supply chain optimization, and trading and risk management. We also provide a range of outsourced customer-care services to utilities and retail energy companies in North America. Our Utilities industry group represented approximately 41% of our Resources operating group’s net revenues in fiscal 2008.

Growth Platforms

Our management consulting, systems integration and technology, and outsourcing growth platforms are the skill-based “innovation engines” through which we develop our knowledge capital; build world-class skills and capabilities; and create, acquire and manage key assets central to the development of solutions for our clients. The professionals within these areas work closely with our operating groups to deliver integrated services and solutions to clients.

Management Consulting

Our management consulting growth platform is responsible for the development and delivery of our strategic, functional, industry, process and change consulting capabilities, working closely with the professionals in our operating groups. This growth platform comprises six service lines:


• Customer Relationship Management. The professionals in our Customer Relationship Management (“CRM”) service line help companies acquire, develop and retain more profitable customer relationships. We offer a full range of innovative capabilities that address every aspect of CRM, including marketing, direct and indirect sales, customer service, field support and customer contact operations. These capabilities include rigorous approaches to improving the return on marketing investment, methods for building insight into customers’ purchase habits and service preferences, tailoring offers and service treatment based upon that insight, and unique methods of optimizing the quality, cost and revenue impact of sales and service operations. We use these skills to help our clients accelerate growth, improve marketing and sales productivity and reduce customer-care costs—thus increasing the value of their customer relationships and enhancing the economic value of their brands.

• Finance & Performance Management. The professionals in our Finance & Performance Management service line work with our clients’ finance and business-unit executives to develop financial transaction processing, risk management and business performance reporting capabilities. Among the services we provide are strategic consulting on the design and structure of the finance function; the establishment of shared service centers; and the configuration of enterprise resource planning platforms for streamlining transaction processing. Our finance capability services also address revenue cycle management, billing, credit risk and collection effectiveness, electronic invoicing and settlement, tax processing, lending and debt recovery. Our performance management services address shareholder value targeting, scorecard and performance metrics development, performance reporting solutions and applied business analytics to improve profitability. Our professionals often utilize the resources of Accenture Finance Solutions, one of our business process outsourcing (“BPO”) businesses, and work with finance executives to develop and implement solutions that help them align their companies’ investments with their business objectives and establish security relating to the exchange of information to reporting institutions.

• Talent & Organization Performance. The professionals in our Talent & Organization Performance (formerly known as “Human Performance”) service line work with clients on a wide range of talent management, workforce and organizational issues to deliver improved business and operational results. Our integrated approach and end-to-end capabilities include services and solutions in organization and change management, human resources (“HR”) administration, learning, knowledge management, organizational performance management, talent management, HR information technology (“IT”) systems implementation and overall transformation of key workforces. We help companies and governments improve the efficiency and effectiveness of their HR services while lowering associated costs; deliver improvements in employee and workforce performance; and transform organizations through project-, program- and enterprise-level change management.


• Process & Innovation Performance. The Process & Innovation Performance service line, established in September 2008, helps clients achieve measurable, lasting improvements in operational performance, innovation performance and growth. Taking an end-to-end, process-based approach, professionals in this service line help clients address key business challenges such as complexity management, lean manufacturing and operations, process innovation, strategic cost reduction and growth through innovation. The service line is based on the capabilities and offerings that we gained with our 2007 acquisition of George Group, which specializes in process, operational and business transformation (including Lean Six Sigma) and innovation strategy.

• Strategy. Our Strategy professionals combine their strategy and operations experience to help our clients turn insights into results at both the enterprise and business-unit level. With deep skills and capabilities in corporate strategy, corporate restructuring, growth and innovation strategies, mergers and acquisitions, merger integration, organization strategy, pricing strategy and profitability assessment, we help clients develop—and execute—pragmatic solutions that transform organizations and drive sustained high performance.

• Supply Chain Management. The professionals in our Supply Chain Management service line work with clients across a broad range of industries to develop and implement supply chain and operations strategies that enable profitable growth in new and existing markets. Our professionals combine global industry expertise and skills in supply chain strategy, sourcing and procurement, supply chain planning, manufacturing and design, fulfillment and service management to help organizations achieve high performance. We work with clients to implement innovative consulting and outsourcing solutions that align operating models to support business strategies; optimize global operations; support profitable product launches; and enhance the skills and capabilities of the supply chain workforce.

Systems Integration and Technology

Our systems integration and technology growth platform comprises two service areas: systems integration and technology consulting.

Systems Integration

Our key systems integration consulting services and solutions include:


• Enterprise Solutions and Enterprise Resource Planning. We implement a variety of application software—including SAP and Oracle, among others—to streamline business processes, systems and information and help organizations access, manage and exploit data to make more-informed business decisions. Our skilled professionals provide planning, implementation, change management and upgrade solutions across the primary application software product suites that underpin all major business functions.

• Industry and Functional Solutions. Accenture provides clients with robust, large-scale industry and functional solutions based on proprietary reusable assets, aggregated into industry

CEO BACKGROUND

Director Biographies

Set forth below are the biographies of our director nominees and our directors.


Class I Director Nominee


Charles H. Giancarlo
51 years old
Class I Director Nominee
Member, Finance Committee
Member, Nominating &
Governance Committee Charles H. Giancarlo has been a director since December 2008. Mr. Giancarlo is currently the interim president and chief executive officer of Avaya, Inc., and he has also been a managing director of the private investment firm Silver Lake since 2007. Previously, Mr. Giancarlo had a variety of roles at Cisco Systems, Inc. Most recently, he was Cisco’s executive vice president and chief development officer, a position he held starting in July 2005. In this position, he was responsible for all Cisco business units and divisions and over 30,000 employees. Mr. Giancarlo was also president of Cisco-Linksys, LLC starting in June 2004. From July 2004 to July 2005, he was chief technology officer. Prior to that, Mr. Giancarlo was senior vice president and general manager of product development from July 2001 to July 2004. He is a director of NetFlix, Inc.

Class II Director Nominees

Dina Dublon
55 years old
Class II Director Nominee
Chair, Finance Committee
Dina Dublon has been a director since October 2001. From December 1998 until December 2004, she was chief financial officer of JPMorgan Chase & Co. and its predecessor company. Prior to being named its chief financial officer, she held numerous other positions with that company, including corporate treasurer, managing director of the Financial Institutions Division and head of asset liability management. She is a director of Microsoft Corp. and PepsiCo, Inc.

William D. Green
55 years old
Class II Director Nominee William D. Green became chairman of the Board of Directors on August 31, 2006, and has been our chief executive officer since September 2004 and a director since June 2001. From March 2003 to August 2004 he was our chief operating officer—Client Services, and from August 2000 to August 2004 he was our country managing director, United States. Mr. Green has been with Accenture for 29 years.

MANAGEMENT DISCUSSION FROM LATEST 10K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis also contains forward-looking statements and should also be read in conjunction with the disclosures and information contained in “Disclosure Regarding Forward-Looking Statements” and “Risk Factors” in this Annual Report on Form 10-K.

We use the terms “Accenture,” “we,” “our Company,” “our” and “us” in this report to refer to Accenture Ltd and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to “fiscal 2008” means the 12-month period that ended on August 31, 2008. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.

Overview

Our results of operations are affected by economic conditions generally, including macroeconomic conditions. We are monitoring current macroeconomic and credit market conditions and levels of business confidence and their potential effect on our clients and on us. A severe and/or prolonged economic downturn could adversely affect our clients’ financial condition and the levels of business activities in the industries and geographies where we operate. This may reduce demand for our services or depress pricing of those services and have a material adverse effect on our new contract bookings and results of operations. Particularly in light of recent economic uncertainty, we continue to monitor our costs closely in order to respond to changing conditions and to manage any impact to our results of operations.

Our results of operations are also affected by levels of business activity and rates of change in the industries we serve, as well as by the pace of technological change and the type and level of technology spending by our clients. The ability to identify and capitalize on these market and technological changes early in their cycles is a key driver of our performance.

Revenues are driven by the ability of our executives to secure new contracts and to deliver solutions and services that add value to our clients. Our ability to add value to clients and therefore drive revenues depends in part on our ability to deliver market-leading service offerings and to deploy skilled teams of professionals quickly and on a global basis.

Revenues before reimbursements (“Net revenues”) for fiscal 2008 were $23.39 billion, compared with $19.70 billion for fiscal 2007, an increase of 19% in U.S. dollars and 11% in local currency. Net revenues for the fourth quarter of fiscal 2008 were $6.00 billion, compared with $5.11 billion for the fourth quarter of fiscal 2007, an increase of 17% in U.S. dollars and 10% in local currency.

Consulting net revenues for fiscal 2008 were $14.12 billion, compared with $11.86 billion for fiscal 2007, an increase of 19% in U.S. dollars and 11% in local currency. For the fourth quarter of fiscal 2008, consulting net revenues were $3.61 billion, compared with $3.04 billion for the fourth quarter of fiscal 2007, an increase of 19% in U.S. dollars and 11% in local currency.

Outsourcing net revenues for fiscal 2008 were $9.27 billion, compared with $7.84 billion for fiscal 2007, an increase of 18% in U.S. dollars and 11% in local currency. Outsourcing net revenues for the fourth quarter of fiscal 2008 were $2.39 billion, compared with $2.07 billion for the fourth quarter of fiscal 2007, an increase of 15% in U.S. dollars and 9% in local currency. Outsourcing contracts typically have longer terms than consulting contracts and generally have lower gross margins than consulting contracts, particularly in the first year. Long-term relationships with many of our clients continue to contribute to our success in growing our outsourcing business. Long-term, complex outsourcing contracts, including their consulting components, require ongoing review of their terms and scope of work, in light of our clients’ evolving business needs and our performance expectations. Should the size or number of modifications to these arrangements increase, as our business continues to grow and these contracts evolve, we may experience increased variability in expected cash flows, revenues and profitability.

As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange-rate fluctuations. During the majority of fiscal 2007 and fiscal 2008, the U.S. dollar weakened against many currencies, resulting in favorable currency translation and greater reported U.S. dollar revenues, operating expenses and operating income. However, in the fourth quarter of fiscal 2008, the U.S. dollar began to strengthen against many currencies. In the future, if the U.S. dollar continues to strengthen against other currencies, our revenue growth in U.S. dollars may be lower than our growth in local currency. In the future, if the U.S. dollar weakens against other currencies, our revenue growth in U.S. dollars may be higher than our growth in local currency.

The primary categories of operating expenses include cost of services, sales and marketing and general and administrative costs. Cost of services is primarily driven by the cost of client-service personnel, which consists mainly of compensation, sub-contractor and other personnel costs, and non-payroll outsourcing costs. Cost of services as a percentage of revenues is driven by the prices we obtain for our solutions and services, the utilization of our client-service personnel and the level of non-payroll costs associated with the growth of new outsourcing contracts. Utilization represents the percentage of our professionals’ time spent on billable work. Utilization for the fourth quarter of fiscal 2008 was approximately 84%, down slightly from the third quarter of fiscal 2008 and in the range we expect. Utilization for the fourth quarter of fiscal 2007 was also approximately 84%. Sales and marketing expense is driven primarily by compensation costs for business-development activities, the development of new service offerings and client-targeting, image-development and brand-recognition activities. General and administrative costs primarily include costs for non-client-facing personnel, information systems and office space, which we seek to manage, as a percentage of revenues, at levels consistent with or lower than levels in prior-year periods. Operating expenses also include reorganization costs and benefits, which may vary substantially from year to year.

Gross margin (Net revenues less Cost of services before reimbursable expenses as a percentage of net revenues) for the three months and year ended August 31, 2008 were 31.7% and 30.7%, respectively, compared with 31.2% and 30.7%, respectively, for the same periods in fiscal 2007.

Our cost-management strategies include anticipating changes in demand for our services and identifying cost-management initiatives. A primary element of these strategies is to aggressively plan and manage our payroll costs to meet the anticipated demand for our services, given that payroll costs are the most significant portion of our operating expenses.

Our headcount increased to more than 186,000 as of August 31, 2008, compared with approximately 170,000 as of August 31, 2007. Annualized attrition, excluding involuntary terminations, for the three months and year ended August 31, 2008 was 15% and 16%, respectively, compared with 18% for the three months and year ended August 31, 2007. We monitor our current and projected future demands and recruit new employees as needed to balance our mix of skills and resources to meet that demand, to replace departing employees, and to expand our global sourcing approach, which includes our Global Delivery Network and other capabilities around the world. From time to time, we adjust compensation in certain skill sets and geographies in order to attract and retain appropriate numbers of qualified employees, and we may need to continue to adjust compensation in the future. We also use managed attrition as a means to keep our supply of skills and resources in balance with client demand. In addition, compensation increases for fiscal 2008, which for the majority of our personnel were effective September 1, 2007, were higher than in prior fiscal years. As in prior fiscal years, we have adjusted and expect to continue to adjust pricing with the objective of recovering these increases. Our margins and ability to grow our business could be adversely affected if we do not continue to manage headcount and attrition, recover increases in compensation and/or effectively assimilate and utilize large numbers of new employees.

Sales and marketing and general and administrative costs as a percentage of net revenues were 17.7% for fiscal 2008, compared with 17.9% for fiscal 2007. The decrease as a percentage of net revenues was primarily due to strong revenue growth and our management of general and administrative costs at a growth rate lower than that of our Net revenues.

Operating income was $785 million, or 13.1% as a percentage of net revenues, for the three months ended August 31, 2008 compared with $642 million, or 12.6%, for the three months ended August 31, 2007. Operating income was $3,012 million, or 12.9% as a percentage of net revenues, for the year ended August 31, 2008 compared with $2,493, or 12.7%, for the year ended August 31, 2007.

Our Operating income and Earnings per share are also affected by currency exchange-rate fluctuations on revenues and costs, which have been favorable in fiscal 2008 and 2007. Most of our costs are incurred in the same currency as the related revenues. Where practical, we also seek to manage foreign currency exposure for costs not incurred in the same currency as the related revenues, by using currency protection provisions in our customer contracts and our hedging programs. We estimate that the aggregate percentage impact of foreign exchange rates on our operating expenses is similar to that disclosed for revenues. For more information on our hedging programs, see Item 7A, “Quantitative and Qualitative Disclosure About Market Risk.”

From time to time we purchase Accenture shares through our open-market purchase program and also purchase and redeem Accenture shares held by our current and former senior executives and their permitted transferees. During the year ended August 31, 2008, we purchased 60.8 million of our shares for $2,261 million. This included $668 million for purchases of 19.0 million Accenture Ltd Class A common shares and $1,593 million for redemptions and purchases of 41.8 million Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares held by our current and former senior executives and their permitted transferees.

Bookings and Backlog

New contract bookings for the three months ended August 31, 2008 were $7.67 billion, with consulting bookings of $3.63 billion and outsourcing bookings of $4.04 billion. New contract bookings for the year ended August 31, 2008 were $26.79 billion, with consulting bookings of $14.77 billion and outsourcing bookings of $12.02 billion.

We provide information regarding our new contract bookings because we believe doing so provides useful trend information regarding changes in the volume of our new business over time. However, new bookings can vary significantly quarter to quarter depending on the timing of the signing of a small number of large contracts. Information regarding our new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. There are no third-party standards or requirements governing the calculation of bookings. New contract bookings involve estimates and judgments regarding new contracts as well as renewals, extensions and additions to existing contracts. Subsequent cancellations, extensions and other matters may affect the amount of bookings previously reported. New contract bookings are recorded using then existing currency exchange rates and are not subsequently adjusted for currency fluctuations.

The majority of our contracts are terminable by the client on short notice or without notice. Accordingly, we do not believe it is appropriate to characterize bookings attributable to these contracts as backlog. Normally, if a client terminates a project, the client remains obligated to pay for commitments we have made to third parties in connection with the project, services performed and reimbursable expenses incurred by us through the date of termination.

Critical Accounting Policies and Estimates

The preparation of our Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses. We continually evaluate our estimates, judgments and assumptions based on available information and experience. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates. Certain of our accounting policies require higher degrees of judgment than others in their application. These include certain aspects of accounting for revenue recognition, income taxes and defined benefit pension plans.

Revenue Recognition

Our contracts have different terms based on the scope, deliverables and complexity of the engagement, the terms of which frequently require Accenture to make judgments and estimates in recognizing revenues. We have many types of contracts, including time-and-materials contracts, fixed-price contracts and contracts with features of both of these contract types. In addition, some contracts include incentives related to costs incurred, benefits produced or adherence to schedule that may increase the variability in revenues and margins earned on such contracts. We conduct rigorous reviews prior to signing such contracts to evaluate whether these incentives are reasonably achievable.

We recognize revenues from technology integration consulting contracts using the percentage-of-completion method pursuant to the American Institute of Certified Public Accountants Statement of Position 81-1, “Accounting for Performance of Construction Type and Certain Production-Type Contracts” (“SOP 81-1”). Percentage-of-completion accounting involves calculating the percentage of services provided during the reporting period compared with the total estimated services to be provided over the duration of the contract. Estimated revenues for applying the percentage-of-completion method include estimated incentives for which achievement of defined goals is deemed probable. This method is followed where reasonably dependable estimates of revenues and costs can be made. Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to revision as the contract progresses. Such revisions may result in increases or decreases to revenues and income and are reflected in the Consolidated Financial Statements in the periods in which they are first identified. If our estimates indicate that a contract loss will occur, a loss provision is recorded in the period in which the loss first becomes probable and reasonably estimable. Contract losses are determined to be the amount by which the estimated direct and indirect costs of the contract exceed the estimated total revenues that will be generated by the contract and are included in Cost of services and classified in Other accrued liabilities. Contract loss provisions recorded as of August, 31, 2008 and 2007 are immaterial.

Revenues from contracts for non-technology integration consulting services with fees based on time and materials or cost-plus are recognized as the services are performed and amounts are earned in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements” (“SAB 101”), as amended by SAB No. 104, “Revenue Recognition” (“SAB 104”). We consider amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectibility is reasonably assured. In such contracts, our efforts, measured by time incurred, typically represent the contractual milestones or output measure, which is the contractual earnings pattern. For non-technology integration consulting contracts with fixed fees, we recognize revenues as amounts become billable in accordance with contract terms, provided the billable amounts are not contingent, are consistent with the services delivered, and are earned. Contingent or incentive revenues relating to non-technology integration consulting contracts are recognized when the contingency is satisfied and we conclude the amounts are earned.

Outsourcing contracts typically span several years and involve complex delivery, often through multiple workforces in different countries. In a number of these arrangements, we hire client employees and become responsible for certain client obligations. Revenues are recognized on outsourcing contracts as amounts become billable in accordance with contract terms, unless the amounts are billed in advance of performance of services in which case revenues are recognized when the services are performed and amounts are earned in accordance with SAB 101, as amended by SAB 104. Revenues from time-and-materials or cost-plus contracts are recognized as the services are performed. In such contracts, our effort, measured by time incurred, represents the contractual milestones or output measure, which is the contractual earnings pattern. Revenues from unit-priced contracts are recognized as transactions are processed based on objective measures of output. Revenues from fixed-price contracts are recognized on a straight-line basis, unless revenues are earned and obligations are fulfilled in a different pattern. Outsourcing contracts can also include incentive payments for benefits delivered to clients. Revenues relating to such incentive payments are recorded when the contingency is satisfied and we conclude the amounts are earned. We continuously review and reassess our estimates of contract profitability. Circumstances that potentially affect profitability over the life of the contract include decreases in volumes of transactions or other inputs/outputs on which we are paid, failure to deliver agreed benefits, variances from planned internal/external costs to deliver our services, and other factors affecting revenues and costs.

Costs related to delivering outsourcing services are expensed as incurred, with the exception of certain transition costs related to the set-up of processes, personnel and systems, which are deferred during the transition period and expensed evenly over the period outsourcing services are provided. The deferred costs are specific internal costs or incremental external costs directly related to transition or set-up activities necessary to enable the outsourced services. Generally, deferred amounts are protected in the event of early termination of the contract and are monitored regularly for impairment. Impairment losses are recorded when projected undiscounted operating cash flows of the related contract are not sufficient to recover the carrying amount of contract assets. Amounts billable to the client for transition or set-up activities are deferred and recognized as revenue evenly over the period outsourcing services are provided.

Revenues for contracts with multiple elements are allocated pursuant to Emerging Issues Task Force Issue 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables,” based on the lesser of the element’s relative fair value or the amount that is not contingent on future delivery of another element. If the amount of non-contingent revenues allocated to a delivered element is less than the costs to deliver such services, then such costs are deferred and recognized in future periods when the revenues become non-contingent. Fair value is determined based on the prices charged when each element is sold separately. Revenues are recognized in accordance with our accounting policies for the separate elements when the services have value on a stand-alone basis, fair value of the separate elements exists and, in arrangements that include a general right of refund relative to the delivered element, performance of the undelivered element is considered probable and substantially in our control. While determining fair value

MANAGEMENT DISCUSSION FOR LATEST QUARTER
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2008, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 31, 2008.
We use the terms “Accenture,” “we,” “our Company,” “our” and “us” in this report to refer to Accenture Ltd and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to “fiscal 2008” means the 12-month period that ended on August 31, 2008. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.
Disclosure Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to:
• Our results of operations could be adversely affected by economic and political conditions and the effects of these conditions on our clients’ businesses and levels of business activity.

• Our results of operations could be negatively affected if we cannot expand and develop our services and solutions in response to changes in technology and client demand.

• The consulting, systems integration and technology, and outsourcing markets are highly competitive, and we might not be able to compete effectively.

• Our work with government clients exposes us to additional risks inherent in the government contracting environment.

• Our business could be adversely affected if our clients are not satisfied with our services.

• We could be subject to liabilities if our subcontractors or the third parties with whom we partner cannot deliver their project contributions on time or at all.

• Our results of operations could be adversely affected if our clients terminate their contracts with us on short notice.

• Outsourcing services are a significant part of our business and subject us to operational and financial risk.

• Our results of operations may be affected by the rate of growth in the use of technology in business and the type and level of technology spending by our clients.

• Our profitability could suffer if we are not able to maintain favorable pricing rates.

• Our profitability could suffer if we are not able to maintain favorable utilization rates.

• Our business could be negatively affected if we incur legal liability in connection with providing our solutions and services.

• If our pricing structures do not accurately anticipate the cost and complexity of performing our work, then our contracts could be unprofitable. • Many of our contracts utilize performance pricing that links some of our fees to the attainment of various performance or business targets. This could increase the variability of our revenues and margins.

• Our alliance relationships may not be successful.

• Our global operations are subject to complex risks, some of which might be beyond our control.

• Our profitability could suffer if we are not able to control our costs.

• If we are unable to attract, retain and motivate employees or efficiently utilize their skills, we might not be able to compete effectively and will not be able to grow our business.

• If we are unable to collect our receivables or unbilled services, our results of operations and cash flows could be adversely affected.

• Our services or solutions could infringe upon the intellectual property rights of others or we might lose our ability to utilize the intellectual property of others.

• We have only a limited ability to protect our intellectual property rights, which are important to our success.

• New tax legislation or interpretations could lead to an increase in our tax burden.

• Negative publicity related to Bermuda companies could affect our relationships with our clients.

• If we are unable to manage the organizational challenges associated with our size and expansion, we might be unable to achieve our business objectives.

• We may not be successful at identifying, acquiring or integrating other businesses or technologies.

• Consolidation in the industries that we serve could adversely affect our business.

• Our ability to attract and retain business may depend on our reputation in the marketplace.

• The share price of Accenture Ltd Class A common shares could be adversely affected from time to time by sales, or the anticipation of future sales, of Class A common shares held by our employees and former employees.

• Our share price has fluctuated in the past and could continue to fluctuate, including in response to variability in revenues, operating results and profitability, and as a result our share price could be difficult to predict.

• Our share price could be adversely affected if we are unable to maintain effective internal controls.

• We are registered in Bermuda and a significant portion of our assets are located outside the United States. As a result, it might not be possible for shareholders to enforce civil liability provisions of the federal or state securities laws of the United States.

• Bermuda law differs from the laws in effect in the United States and might afford less protection to shareholders.

• We might be unable to access additional capital on favorable terms or at all. If we raise equity capital, it may dilute our shareholders’ ownership interest in us.
For a more detailed discussion of these factors, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2008 and Item 1A, “Risk Factors” in this Form 10-Q. We undertake no obligation to update or revise any forward-looking statements. Overview
Our results of operations are driven by levels of business activity and the needs for change in the industries we serve. The ability to identify and capitalize on these client needs early in their cycles is a key driver of our performance. Significantly, our results of operations are also affected by economic conditions generally, including macroeconomic conditions. We are monitoring current macroeconomic and credit market conditions and levels of business confidence and their potential effect on our clients and on us. The current economic downturn, especially if severe, widespread or prolonged, could adversely affect our clients’ financial condition and the levels of business activities in the industries and geographies where we operate. This impacts the types of services our clients are demanding, for example, with a greater emphasis on cost performance, and may reduce demand for our services or depress pricing of those services. This in turn could have a material adverse effect on our new contract bookings and results of operations. Particularly in light of current economic uncertainty, we continue to monitor our costs closely in order to respond to changing conditions and to manage any impact to our results of operations.
Revenues are driven by the ability of our executives to secure new contracts and to deliver solutions and services that add value relevant to our clients’ current needs and challenges. Our ability to add value to clients and therefore drive revenues depends in part on our ability to deliver market-leading service offerings and to deploy skilled teams of professionals quickly and on a global basis.
Revenues before reimbursements (“net revenues”) for the three months ended November 30, 2008 were $6.02 billion, compared with $5.67 billion for the three months ended November 30, 2007, an increase of 6% in U.S. dollars and 9% in local currency.
Consulting net revenues for the three months ended November 30, 2008 were $3.66 billion, compared with $3.46 billion for the three months ended November 30, 2007, an increase of 6% in U.S. dollars and 9% in local currency.
Outsourcing net revenues for the three months ended November 30, 2008 were $2.36 billion, compared with $2.22 billion for the three months ended November 30, 2007, an increase of 7% in U.S. dollars and 9% in local currency. Outsourcing contracts typically have longer terms than consulting contracts and generally have lower gross margins than consulting contracts, particularly in the first year. Long-term relationships with many of our clients continue to contribute to our success in growing our outsourcing business. Long-term, complex outsourcing contracts, including their consulting components, require ongoing review of their terms and scope of work, in light of our clients’ evolving business needs and our performance expectations. Should the size or number of modifications to these arrangements increase, as our business continues to grow and these contracts evolve, we may experience increased variability in expected cash flows, revenues and profitability.
As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange-rate fluctuations. During the majority of fiscal 2008, the U.S. dollar weakened against many currencies, resulting in favorable currency translation and greater reported U.S. dollar revenues. However, beginning in the fourth quarter of fiscal 2008, the U.S. dollar began to strengthen against many currencies. This continued during the first quarter of fiscal 2009 and resulted in an unfavorable currency translation and reported growth in U.S. dollar revenues which was approximately 3% lower than our growth in local currency. Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2009, we estimate the foreign-exchange impact on our fiscal 2009 revenue growth will be in the range of negative 8% to 10% lower growth in U.S. dollars compared to our growth in local currency. In the future, if the U.S. dollar weakens against other currencies, our revenue growth in U.S. dollars may be higher than our growth in local currency.
The primary categories of operating expenses include cost of services, sales and marketing and general and administrative costs. Cost of services is primarily driven by the cost of client-service personnel, which consists mainly of compensation, sub-contractor and other personnel costs, and non-payroll outsourcing costs. Cost of services as a percentage of revenues is driven by the prices we obtain for our solutions and services, the utilization of our client-service personnel and the level of non-payroll costs associated with the growth of new outsourcing contracts. Utilization represents the percentage of our consulting professionals’ time spent on billable work. Utilization for the first quarter of fiscal 2009 was approximately 83%, down slightly from 84% for the fourth quarter of fiscal 2008 and in the range we expect. Utilization for the first quarter of fiscal 2008 was also approximately 83%. Sales and marketing expense is driven primarily by compensation costs for business-development activities, the development of new service offerings and client-targeting, image-development and brand-recognition activities. General and administrative costs primarily include costs for non-client-facing personnel, information systems and office space, which we seek to manage, as a percentage of revenues, at levels consistent with or lower than levels in prior-year periods. Operating expenses also include reorganization costs and benefits, which may vary substantially from year to year. Gross margin (Net revenues less Cost of services before reimbursable expenses as a percentage of net revenues) for the three months ended November 30, 2008 was 31.4%, compared with 30.1% for the three months ended November 30, 2007. The increase was driven by improved contract profitability, particularly in outsourcing, including absorption of annual compensation increases that were effective September 1, 2008.
Our cost-management strategies include anticipating changes in demand for our services and executing cost-management initiatives. We aggressively plan and manage our payroll costs, taking actions as needed to address changes in the anticipated demand for our services, given that payroll costs are the most significant portion of our operating expenses.
Our headcount increased to more than 187,000 as of November 30, 2008, compared with more than 186,000 as of August 31, 2008. Annualized attrition, excluding involuntary terminations, for the first quarter of fiscal 2009 was 13%, compared to 17% in the first quarter of fiscal 2008. We monitor our current and projected future demands and recruit new employees as needed to balance our mix of skills and resources to meet that demand, to replace departing employees, and to expand our global sourcing approach, which includes our Global Delivery Network and other capabilities around the world. We also use involuntary terminations as a means to keep our supply of skills and resources in balance with client demand. Compensation increases for fiscal 2009 were effective September 1, 2008 for the majority of our personnel. As in prior fiscal years, we have adjusted and expect to continue to adjust pricing with the objective of recovering these increases. Our margins could be adversely affected if we are unable to manage headcount, attrition and severance costs, recover increases in compensation and effectively assimilate and utilize large numbers of new employees.
Sales and marketing and general and administrative costs as a percentage of net revenues were 17.8% for the three months ended November 30, 2008, compared with 17.1% for the three months ended November 30, 2007. The increase as a percentage of net revenues was primarily due to an increase in the bad debt provision of $72 million, or 1.2% of net revenues, reflecting our best estimate of collectibility risks on outstanding receivables, in light of the current economic downturn, particularly from clients in high risk industries or with potential liquidity issues. This increase was partially offset by our management of these costs at a growth rate lower than that of our net revenues.
Operating income for the three months ended November 30, 2008 and 2007 was $815 million and $726 million, respectively. Operating margin (Operating income as a percentage of net revenues) for the three months ended November 30, 2008 and 2007 was 13.5% and 12.8%, respectively.
Our Operating income and Earnings per share are also affected by currency exchange-rate fluctuations on revenues and costs. Due to the significant strengthening of the U.S. dollar against many other currencies, this impact was unfavorable during the three months ended November 30, 2008. Most of our costs are incurred in the same currency as the related revenues. Where practical, we also seek to manage foreign currency exposure for costs not incurred in the same currency as the related net revenues, by using currency protection provisions in our customer contracts and our hedging programs. We estimate that the aggregate percentage impact of foreign exchange rates on our operating expenses is similar to that disclosed for revenues. For more information on our hedging programs, see Note 9 (Derivative Financial Instruments) to our Consolidated Financial Statements under Item 1, “Financial Statements.”
Bookings and Backlog
New contract bookings for the three months ended November 30, 2008 were $5.80 billion, with consulting bookings of $3.56 billion and outsourcing bookings of $2.24 billion.
We provide information regarding our new contract bookings because we believe doing so provides useful trend information regarding changes in the volume of our new business over time. However, new bookings can vary significantly quarter to quarter depending on the timing of the signing of a small number of large contracts. Information regarding our new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. There are no third-party standards or requirements governing the calculation of bookings. New contract bookings involve estimates and judgments regarding new contracts as well as renewals, extensions and additions to existing contracts. Subsequent cancellations, extensions and other matters may affect the amount of bookings previously reported. New contract bookings are recorded using then existing currency exchange rates and are not subsequently adjusted for currency fluctuations.
The majority of our contracts are terminable by the client on short notice or without notice. Accordingly, we do not believe it is appropriate to characterize bookings attributable to these contracts as backlog. Normally, if a client terminates a project, the client remains obligated to pay for commitments we have made to third parties in connection with the project, services performed and reimbursable expenses incurred by us through the date of termination.

CONF CALL

Richard Clark

Thank you operator and thanks everyone for joining us today on our first quarter fiscal 2009 earnings announcement. As the operator just mentioned I’m Richard Clark, Managing Director of Investor Relations. With me this afternoon are Bill Green, our Chairman, and Chief Executive Officer; Pamela Craig, our Chief Financial Officer; and Steve Rohleder, our Chief Operating Officer.

We hope you’ve had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today’s call. Bill will begin with an overview of our results, Pam will take you through the financial details including the income statement and balance sheet, and Steve will add some operational perspective. Pam will then provide our business outlook for the second quarter and full fiscal year 2009 and Bill will close the presentation before we take your questions.

As a reminder, when we discuss revenues during today’s call, we’re talking about revenues before reimbursements or net revenues. Some of the matters we’ll discuss in this call are forward-looking and you should keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Such risks and uncertainties include, but are not limited to general economic conditions and those factors set forth in today’s news release and discussed under the Risk Factors section of our Annual Report on Form 10-K and other SEC filings.

During our call today we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. You can find reconciliation of those measures to GAAP on the Investor Relations section of our website at www.accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call.

Now, let me turn the call over to Bill.

Bill Green

Thank you Richard and thanks everyone for joining us today. We had a strong first quarter and are off to a good start for our fiscal year 2009. In the face of a very uncertain market for everyone, we not only delivered strong revenue growth, but we brought it right to the bottom line.

We are seeing changing demand patterns, but overall the market for Accenture services is a very active and we are very positive about the business broadly. From the way we’re managing and executing to the game changing opportunities that we are engaged in right now.

Here are some highlights from the quarter. We delivered strong revenues of $6 billion, an increase of 9% in local currency, which is a considerable accomplishment in this market. We grew EPS by 24%. We expanded operating margin by 70 basis points, reflecting our focus on operating discipline and strict cost management. We delivered bookings of $5.8 billion with consulting bookings, a strong $3.6 billion.

In addition throughout the quarter, we continue to invest in our business, skills, assets, and offerings and we continue to attract new clients and gain market share. We have shown the flexibility to respond quickly in this market. Our operating model makes us nimble, so we can focus our resources where they’re needed and efficiently manage supply and demand.

We are working with clients across a wide spectrum of assignments; from improvements in quality, cost, suite, and customer service to in that strategic direction; from begin at the core of the transformation of our clients operating models to being at the core of the reinvention of entire industries. We are executing well, we are focused on results, and we’re determined to win.

Now, I’ll turn the call over to Pam, who will provide more detail on our financials.

Pamela Craig

Thank you, Bill. Happy Holiday’s to you all and thanks for listening today. I’m pleased to tell you more about our excellent results in the first quarter of fiscal 2009. Despite the challenging macro environment, we produced strong revenues, operating margin, cash flow, and earnings.

Let me take you through some detail behind the numbers in our income statement, balance sheet, and cash flow. Unless I state otherwise, all figures are US GAAP, except the items that are not part of the financial statements or that are calculations.

Net revenues for the first quarter were $6 billion, an increase of 6% in US dollars and 9% in local currency over the period last year. We had solid revenue generation for the quarter coming in at the low end of our previous guided full year range of 9% to 12%. I should note that Q1 net revenues reflected a foreign exchange impact of negative 3%.

Our previously guided range of $6.15 billion to $6.35 billion assumed an FX impact of negative 1% to positive 1%. If we adjust for the actual FX impact, our guided range for the quarter would have been $5.9 billion to $6.2 billion. Our revenues of $6.0 billion were solidly in this range. Consulting revenues were $3.7 billion, an increase of 6% in US dollars and 9% in local currency. Outsourcing revenues were $2.4 billion, an increase of 7% in US dollars and 9% in local currency.

Moving down the income statement, gross margin was 31.4% up from 30.1%, a 130 basis point improvement over last year’s first quarter. SG&A cost for the first quarter were $1.1 billion or 17.8% of net revenues, compared with $970 million or 17.1% of net revenues for the first quarter last year. Operating income for the quarter increased 12% to $815 million, reflecting a 13.5% operating margin. That is a 70 basis point improvement over last year’s first quarter.

I am very pleased with how we delivered operating margin this quarter compared to last year, so let me provide some detail. First, we droved a 130 basis point expansion in gross margin by improving contract’s profitability and at the same time absorbing the annual salary increases we put in place September 1; this was an outstanding result.

Second, sales and marketing costs increased approximately 20 basis points compared to Q1 of last year. We were also pleased with this result as we continued to drive new bookings and qualify new opportunities coming into the pipeline.

Lastly, general and administrative expenses for the quarter were 8.4% of net revenues. Included in G&A costs for this quarter was a provision we made for bad debt of $72 million, a 120 basis point impact. We booked this provision because we felt it was prudent, given the uncertainty in the current environment. Without it, G&A expenses for the quarter would have been 7.2% of net revenues.

Absent to bad debt provision, SG&A would have improved by 50 basis points. G&A would have improved by 70 basis points and operating margins would have improved by 190 basis points over last year’s first quarter. This is a clear indication that we are showing discipline in managing our costs in both local currency and US dollars to drive profitability in our business.

Our effective tax rate for the quarter was 26.6%, below our previously guided annual range of 30% to 32%. Final determinations reduced our tax rate in the quarter by approximately 4% and provided a benefit of $0.04 to earning per share. Income before minority interest for the quarter was $593 million, compared with $506 million for the first quarter last year, an increase of 17%. Diluted earning per share was $0.74, an increase of 24% over diluted EPS of $0.60 in the first quarter of last year.

We delivered an increase of $0.20 or 33% growth from strong operating performance, including $0.08 from revenue and operating income growth in local currency; $0.08 from a lower tax rate, including the $0.04 I just mentioned; and $0.04 from a lower share account. This was partially offset by a total of $0.06 comprising $0.04 due to lower non-operating items including lower interest income and $0.02 unfavorable FX impact in our Q1 operating results compared to last year. So, the earnings performance is quite outstanding, given that EPS rose $0.14 or 24% despite the headwinds in non-operating type items.

Now, let’s turn to some key parts of our cash flow and balance sheet. Free cash flow for the quarter was very strong, $396 million, resulting from cash generated by operating activities of $468 million, net of property and equipment additions of $72 million. First quarter free cash flow was driven by our strong net income performance and holding the line on DSOs.

Turning to DSOs, our Days services outstanding were 36 days, down one day from the last quarter in fiscal 2008. The bad debt reserve I previously mentioned reduced DSOs by about a day. So, with flat DSOs in this environment, we continue to believe that are DSO levels are strong in the industry leading.

Our total cash balance in November 30 of $2.78 billion versus $3.60 billion at the end of August, reflects a $300 million reduction due to foreign exchange translation on the cash balances we hold around the world. In addition, our strong free cash flow I just mentioned was more than offset this quarter by the cash we returned to shareholders through repurchases and dividends. We continue to invest our cash conservatively in liquid overnight time deposits and US Treasury repurchase agreements.

Total debt at November 30 was $2 million, compared to $8 million at August 31. Our balance sheet metrics remain strong. For the first quarter, our return on invested capital was 84%, our return on equity was 85%, and our return on assets was 21%.

Before I turn things over to Steve, I will comment on our ongoing objective to return cash to shareholders through share repurchases and dividends. During the quarter, we repurchased or redeemed $21.8 million shares for $690 million, including $431 million for approximately $14 million share repurchase in the open market.

The average price of shares repurchased and redeemed in the quarter was $31.62 a shares. We increased the level of open market repurchases as there with lower selling demand by our founders and we found the market prices to be attractive. At November 30, we had $1.9 billion of share repurchases authority remaining.

Also in November, we paid our fourth annual cash dividend to Accenture Limited Class A and Accenture SCA Class I common shareholders. The dividend payment of $0.50 per share was $0.08 more than the dividend we paid last year, representing an increase of 19% for a total of $378 million.

Finally, let me comment on the size of our public float. Using what we believe to be the most conservative method of calculation, our public float at the end of quarter was approximately 75%, which excludes all outstanding founder shares. In sum, it was a well-executed quarter, I’m very pleased with the hard work and focus that our people collectively demonstrated in driving such strong results.

Now, Steve will give you some more detail on our operations.

Steve Rohleder

Thanks Pam. Hi everyone and thanks for joining us today. We delivered strong first quarter results reflecting our continued ability to drive demand for our business, as well as strong operating discipline. Let me first take you through some of the highlights for the operating groups in geographic regions, then I’ll cover some of the trends we’re seeing in our growth platforms and update a few of our operational metrics.

All five operating groups achieved revenue growth in local currency. Resources had the highest overall growth, 16% in US dollar, and 20% in local currency, driven by strong consulting growth across all geographic regions in natural resources, utilities, and energy. We also saw solid outsourcing growth in the Americas in utilities, chemicals, and natural resources.

Our public service operating group grew revenues by 7% in US dollar and 11% in local currency. Last quarter I mentioned that we were focusing on improving profitability in Public Service and I’m pleased to report that we saw sequential up-tick in Q1 with growth in both operating income and improved operating margin. I know there is a continued interest in our financial services business and in Q1 financial services revenues were flat in US dollars, but increased 2% in local currency.

We delivered solid growth in both Insurance and Banking in the Americas and Asia Pacific. While we did experienced slower overall growth in past quarters, we’re fortunate that many of our key clients are playing a major role and reshaping the industry. This in turn is driving continued demand for our services around mergers and acquisitions, cost reduction and finance transformation.

Looking at the quarter from a geographic perspective, Q1 revenues in the Americas grew 11% in US dollars and 12% in local currency, with strong growth in the U.S. and Brazil. In EMEA, revenues were flat in US dollars, but grew 4% in local currency. We had strong growth in the Netherlands with growth moderating in France, Germany, Italy, and Spain.

Growth in EMEA was negatively affected by decline in the U.K. We have a number of initiatives in place to improve our U.K. performance, but expect it will take the remainder of the fiscal year to see the full effect of these initiatives. Once again, Asia Pacific turned in outstanding results, with revenue growth of 22% in US dollars and 25% in local currency, led by Japan, Singapore, and China.

Turning to our growth platforms, we’re seeing demand in a number of areas, but I’d like to highlight three that are particularly relevant in today’s business environment: operational excellence, rapid and sustained cost management, and M&A execution. Let me tell you how these three trends are driving demand in our growth platforms.

In management consulting, we’re helping clients develop and execute their strategies in order to drive new sources of growth, optimize processes and balance costs. The broad operational excellence trend is driving demand for finance and performance management and supply chain optimization, as well as for a new process and innovation performance service line.

Clients are turning to outsourcing to meet the demand for rapid cost savings. I’m excited by the increased interest in BPO with an emphasis on back office cost improvement opportunities. In addition, demand for application outsourcing remained strong. In systems integration and technology, we’re seeing increased demand around services to improve IT effectiveness, as well as momentum in post merger integration across all operating groups and geographies.

Finally, let me touch on a few operational metrics. We continue to expand the capabilities of our global delivery network, ending the quarter with 83,000 people, up 10% from the first quarter in 2008.

Bookings for the quarter were $5.8 billion and our investment in industry skills, assets, and differentiation continues to payoff as we achieved consulting bookings of $3.6 billion. This made Q1 our eight straight quarters of consulting bookings in excess of $3 billion. Outsourcing bookings were $2.2 billion, as you know our bookings vary from quarter-to-quarter and I’m exited by the increased interest and activity levels in outsourcing, as clients focus on immediate cost and service improvement opportunities.

Now, let me turn to people management. We ended the quarter with more than 187,000 employees, an increase of 7% over Q1 last year. Utilization for the quarter was 83% and attrition was down significantly to 13%.

Finally, I’d like to comment on three of our most important operational priorities. In this uncertain environment, managing supply and demand of our resources remains a top priority and we’ll continue to take steps to ensure that we have the proper balance of skills in each market.

Second, we continue our focus on improving SG&A. Prior to Q1 we took a number of steps to ensure that our G&A cost did not out pace our revenue growth. I was extremely pleased that absent the provision for bad debt we saw a 50 basis point improvement in SG&A for the quarter.

Third, we’re on a multi-year journey to improve our cost structure, including both labor and non-labor costs. We’re optimizing our mix of resources including subcontractors and continuing to consolidate major purchases through our procurement function. These actions will drive profitability regardless of the business environment.

So, just to summarize we are off to a great start in fiscal ’09. We delivered strong revenue growth and outstanding bottom line results this quarter in a challenging economic environment. We have our hands on all of the operating levers of our business giving us the flexibility to adjust quickly to changing conditions and we continue to drive demand and see plenty of opportunity in the market.

With that let me turn it back to Pam, for our business outlook.

Pamela Craig

Thank you, Steve. As a reminder, each quarter we provide an outlook for the next quarters revenues and an update on our annual outlook for the full fiscal year and we will continue to do so. For the second quarter, we expect revenues to be in the range of $5.45 to $5.65 billion, which assumes a foreign exchange drag of approximately 8% to 10%.

As you all are well aware, currency movements recently have been quite volatile. This range reflects December’s assumed rate of approximately negative 11% and our latest assumption for currency movement given that the US dollar is currently weakening.

Now, turning to the full fiscal year, let me first give you the context of how we are thinking about the impact of FX on our full fiscal year results. When I spoke last quarter, about the impact foreign exchange would have on our fiscal 2009 outlook, we assumed a negative 2% to negative 4% headwind based on exchange rates experienced during the month of September.

At this time, we have reset our annual outlook given the actual Q1 results and our new assumption based on exchange rates experienced during the month of December so far. So, we therefore now assume the FX impact for the remaining three quarters of fiscal year ’09 to be in the range of negative 8% to negative 10%, which as I just mentioned is also the range we are assuming for the second quarter. This current foreign exchange assumption has been factored into our outlook for bookings, earnings per share and cash flow.

For some time now, we’ve communicated that our business can grow at 9% to 12% in local currency. We stated this last quarter and our management team continues to believe this and remains committed to driving the business to this goal. We continue to see strong demand for our services and feel good about the future business we see; however, given the uncertainty, our assessment of what is going on and the 9% local currency growth in the first quarter, we feel it is prudent to modestly adjust our fiscal year 2009 revenue outlook to 6% to 10% in local currency.

Let me next cover operating margin. We now expect a further expansion of operating margin this fiscal year to a range of 13.4% to 13.7%, a 50 to 80 basis point expansion over the last year. We have done based on the strength of our Q1 results and our expectation that we will continue to effectively manage costs and contract profitability. You should expect some fluctuations quarter-to-quarter as we have seen in the past.

So, taking into account the different foreign exchange assumptions and the expected revenue growth for the fiscal year, we now expect new bookings to be in the range of $24 billion to $27 billion; we now expect earnings per share to be in a range of $2.78 to $2.85 and we now expect operating cash flow to be in the range of $2.8 billion to $3.0 billion; property and equipment additions to be $370 million and free cash flow to be in the range of $2.4 billion to $2.6 billion. Finally, we now expect our annual effective tax rate to be in a range of 29% to 31%, a decrease of one percentage point from our previously communicated range.

Our first quarter results reflect those of a well-managed business in a highly dynamic environment. Our clients are facing challenges they have never seen before and I believe we are well positioned to help them successfully take on some of those challenges. We continue to focus on profitable growth and positioning for the future across our portfolio of businesses.

So here is Bill to close, before we take your questions.

Bill Green

Thank you Pam and let me recap quickly before we go to your questions. First of all, we’re very pleased with our strong performance in the first quarter. We are closely managing the business as we said we would and we are executing well against our plans.


Despite economic in FX headwinds, our consistent operating discipline, and our ability to adjust quickly to the market conditions enabled us to significantly improve operating margin and deliver a 24% increase in EPS. We generated strong cash flow and our balance sheet remains rock solid.
We continue to win new clients and to expand our relationship with existing clients. While we are closely monitoring the current environment, we continue to invest in the business and takes steps to put more distance between ourselves and our competitors.


Our first quarter results clearly demonstrate both, our relative resistances to the economic turmoil and our tremendous operational discipline, which is not only helping us to navigate the downturn, but will also make as even stronger when market conditions improve.

Now, let’s go ahead and open it up to your questions.

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