Accenture Sca 10-Q 2007 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                                        TO

Commission File Number: 000-49713

ACCENTURE SCA

(Exact name of Registrant as specified in its charter)

Luxembourg
(State or other jurisdiction of
incorporation or organization) 98-0351796
(I.R.S. Employer
Identification No.)

46A, Avenue J.F. Kennedy
L-1855 Luxembourg
(Address of principal executive offices)

(352) 26 42 35 00
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ Noo

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filero     Accelerated filero     Non-accelerated filerþ

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noþ

     The number of shares of the registrant’s Class I common shares, par value €1.25 per share, outstanding as of March 22, 2007 was 218,568,621.

1

ACCENTURE SCA

INDEX

		Page
Part I.	Financial Information		3
Item 1.	Financial Statements		3
	Consolidated Balance Sheets as of February 28, 2007 (Unaudited) and August 31, 2006		3
	Consolidated Income Statements (Unaudited) for the three and six months ended February 28, 2007 and 2006		4
	Consolidated Shareholders’ Equity and Comprehensive Income Statements (Unaudited) for the six months ended February 28, 2007		5
	Consolidated Cash Flows Statements (Unaudited) for the six months ended February 28, 2007 and 2006		6
	Notes to Consolidated Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		31
Item 4.	Controls and Procedures		31
Part II.	Other Information		31
Item 1.	Legal Proceedings		31
Item 1A.	Risk Factors		31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds; Issuer Purchases of Equity Securities		31
Item 3.	Defaults upon Senior Securities		33
Item 4.	Submission of Matters to a Vote of Security Holders		33
Item 5.	Other Information		33
Item 6.	Exhibits		34
Signatures

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCENTURE SCA

CONSOLIDATED BALANCE SHEETS
February 28, 2007 and August 31, 2006
(In thousands of U.S. dollars, except share and per share amounts)

	February 28,			August 31,
	2007			2006
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,959,939		$	3,066,988
Short-term investments		182,007			352,951
Receivables from clients, net of allowances of $43,096 and $48,069, respectively		2,287,482			1,916,450
Unbilled services		1,448,924			1,350,211
Deferred income taxes, net		232,155			187,720
Other current assets		446,830			479,501
Total current assets		7,557,337			7,353,821
NON-CURRENT ASSETS:
Unbilled services		83,756			105,081
Investments		99,183			125,119
Property and equipment, net of accumulated depreciation of $1,523,201 and $1,359,978, respectively		714,469			727,692
Goodwill		504,543			527,648
Deferred income taxes, net		429,104			392,211
Other non-current assets		165,967			186,508
Total non-current assets		1,997,022			2,064,259
TOTAL ASSETS	$	9,554,359		$	9,418,080
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term bank borrowings	$	1,502		$	2,218
Current portion of long-term debt		23,507			22,574
Accounts payable		832,583			856,087
Deferred revenues		1,726,099			1,511,259
Accrued payroll and related benefits		1,840,763			1,693,796
Income taxes payable		843,678			722,096
Deferred income taxes, net		29,372			49,870
Other accrued liabilities		778,038			958,582
Total current liabilities		6,075,542			5,816,482
NON-CURRENT LIABILITIES:
Long-term debt		4,249			27,065
Retirement obligation		520,517			492,555
Deferred income taxes, net		20,781			16,880
Other non-current liabilities		238,046			302,965
Total non-current liabilities		783,593			839,465
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST		77,704			72,832
SHAREHOLDERS’ EQUITY:
Class I common shares, par value 1.25 euros per share, 10,000,000,000 shares authorized, 218,568,621 and 249,233,436 shares issued and outstanding as of February 28, 2007 and August 31, 2006, respectively		244,948			279,326
Class II common shares, par value 1.25 euros per share, 20,000,000,000 shares authorized, 481,106,329 and 476,273,864 shares issued as of February 28, 2007 and August 31, 2006, respectively		544,787			537,048
Class III, including Class III-A through -N lettered sub-series common shares, par value 1.25 euros per share, 10,000,000,000 shares authorized, 764,169,153 and 727,992,071 shares issued as of February 28, 2007 and August 31, 2006, respectively		863,168			819,962
Restricted share units (related to Accenture Ltd Class A common shares)		561,905			482,289
Additional paid-in capital		3,671,771			3,435,364
Treasury shares, at cost: Class II common, 10,148,021 and 5,315,556 shares at February 28, 2007 and August 31, 2006, respectively; Class III common, 215,348,284 and 194,117,186 shares at February 28, 2007 and August 31, 2006, respectively		(5,629,139	)		(4,809,618	)
Investment in Accenture Ltd shares, at cost, 2,633,045 and 342,359 shares at February 28, 2007 and August 31, 2006, respectively		(67,818	)		(9,054	)
Retained earnings		2,438,441			1,980,478
Accumulated other comprehensive loss		(10,543	)		(26,494	)
Total shareholders’ equity		2,617,520			2,689,301
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	9,554,359		$	9,418,080

The accompanying Notes are an integral part of these Consolidated Financial Statements.

3

ACCENTURE SCA

CONSOLIDATED INCOME STATEMENTS
For the Three and Six Months Ended February 28, 2007 and 2006
(In thousands of U.S. dollars, except per share amounts)
(Unaudited)

	Three Months Ended February 28,						Six Months Ended February 28,
	2007			2006			2007			2006
REVENUES:
Revenues before reimbursements	$	4,749,838		$	4,102,795		$	9,503,926		$	8,272,270
Reimbursements		419,515			388,317			831,786			761,858
Revenues		5,169,353			4,491,112			10,335,712			9,034,128
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses		3,344,772			3,234,139			6,666,616			6,083,306
Reimbursable expenses		419,515			388,317			831,786			761,858
Cost of services		3,764,287			3,622,456			7,498,402			6,845,164
Sales and marketing		434,293			393,412			871,223			802,014
General and administrative costs		405,065			345,347			784,708			739,113
Reorganization costs (benefits), net		6,316			(7,415	)		12,395			(2,031	)
Total operating expenses		4,609,961			4,353,800			9,166,728			8,384,260
OPERATING INCOME		559,392			137,312			1,168,984			649,868
Gain on investments, net		33			1,792			2,887			3,230
Interest income		34,948			24,581			71,255			54,934
Interest expense		(6,862	)		(4,558	)		(11,984	)		(9,243	)
Other (expense) income		(3,433	)		2,805			(5,899	)		(13,142	)
INCOME BEFORE INCOME TAXES		584,078			161,932			1,225,243			685,647
Provision for income taxes		171,542			57,820			406,850			253,689
INCOME BEFORE MINORITY INTEREST		412,536			104,112			818,393			431,958
Minority interest in Accenture Canada Holdings Inc.		(1,763	)		(504	)		(3,589	)		(2,097	)
Minority interest — other		(4,503	)		(1,778	)		(10,315	)		(4,548	)
NET INCOME	$	406,270		$	101,830		$	804,489		$	425,313
Cash dividends per share	$	—		$	—		$	0.35		$	0.30

The accompanying Notes are an integral part of these Consolidated Financial Statements.

4

ACCENTURE SCA

CONSOLIDATED SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME STATEMENTS
For the Six Months Ended February 28, 2007
(In thousands of U.S. dollars and in thousands of share amounts)
(Unaudited)

															Restricted
															Share Units
	Class I						Class II				Class III				(related to
	Common						Common				Common				Accenture Ltd												Investment in
	Shares						Shares				Shares				Class A			Additional			Treasury Shares						Accenture Ltd
				No.					No.				No.		Common			Paid-in						No.						No.			Retained			Accumulated Other
	$			Shares			$		Shares		$		Shares		Shares)			Capital			$			Shares			$			Shares			Earnings			Comprehensive Loss			Total
Balance as of August 31, 2006	$	279,326			249,233		$	537,048		476,274	$	819,962		727,992	$	482,289		$	3,435,364		$	(4,809,618	)		(199,433	)	$	(9,054	)		(342	)	$	1,980,478		$	(26,494	)		$	2,689,301
Comprehensive income:
Net income																																		804,489							804,489
Other comprehensive income:
Unrealized gains on marketable securities, net of reclassification adjustments																																					1,053				1,053
Foreign currency translation adjustments																																					14,898				14,898
Other comprehensive income																																					15,951
Comprehensive income																																									820,440
Income tax benefit on share-based compensation plans																			39,239																						39,239
Issuances and redemptions of Class II and Class III common shares								7,739		4,832		8,828		5,513					187,940			(204,507	)		(10,345	)								(204,452	)						(204,452	)
Purchases of Accenture Ltd Class A common shares																			(12,766	)								(58,764	)		(2,291	)									(71,530	)
Share-based compensation expense																113,131			32,127																						145,258
Purchases/redemptions of Accenture SCA Class I common shares		(34,378	)		(30,664	)						34,378		30,664								(984,834	)		(30,664	)															(984,834	)
Purchases/redemptions of Accenture SCA Class III common shares and Accenture Canada Holdings Inc. exchangeable shares																			(15,383	)																					(15,383	)
Issuances of Accenture SCA Class III common shares related to employee share programs																(49,718	)					369,820			14,946									(37,264	)						282,838
Dividends																16,203																		(104,810	)						(88,607	)
Minority interest																			5,250																						5,250
Balance as of February 28, 2007	$	244,948			218,569		$	544,787		481,106	$	863,168		764,169	$	561,905		$	3,671,771		$	(5,629,139	)		(225,496	)	$	(67,818	)		(2,633	)	$	2,438,441		$	(10,543	)		$	2,617,520

The accompanying Notes are an integral part of these Consolidated Financial Statements.

5

ACCENTURE SCA

CONSOLIDATED CASH FLOWS STATEMENTS
For the Six Months Ended February 28, 2007 and 2006
(In thousands of U.S. dollars)
(Unaudited)

	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	804,489		$	425,313
Adjustments to reconcile Net income to Net cash provided by operating activities —
Depreciation, amortization and asset impairments		249,446			153,918
Reorganization costs (benefits), net		12,395			(2,031	)
Share-based compensation expense		146,624			127,398
Deferred income taxes, net		(72,940	)		(14,993	)
Minority interest		13,904			6,645
Other, net		1,956			(1,681	)
Change in assets and liabilities, net of acquisitions (1) —
Receivables from clients, net		(323,490	)		(221,739	)
Other current assets		35,707			11,250
Unbilled services, current and non-current		(119,840	)		404,854
Other non-current assets		(8,698	)		(11,304	)
Accounts payable		(57,498	)		(27,804	)
Deferred revenues		191,303			273,449
Accrued payroll and related benefits		119,751			(70,314	)
Income taxes payable		128,005			(12,823	)
Other accrued liabilities		(248,209	)		(5,643	)
Other non-current liabilities		3,101			17,560
Net cash provided by operating activities		876,006			1,052,055
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and sales of available-for-sale investments		545,222			394,470
Purchases of available-for-sale investments		(341,210	)		(171,192	)
Proceeds from sales of property and equipment		10,261			10,751
Purchases of property and equipment		(143,044	)		(149,833	)
Purchases of businesses and investments, net of cash acquired		(5,667	)		(37,442	)
Net cash provided by investing activities		65,562			46,754
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common shares		282,838			265,055
Purchases of common shares		(1,276,199	)		(1,708,569	)
Proceeds from long-term debt		1,968			8,654
Repayments of long-term debt		(23,147	)		(22,405	)
Proceeds from short-term borrowings		9,082			43,030
Repayments of short-term borrowings		(9,907	)		(26,821	)
Cash dividends paid		(88,607	)		(96,277	)
Excess tax benefits from share-based payment arrangements		24,921			28,540
Other, net		(14,202	)		(8,661	)
Net cash used in financing activities		(1,093,253	)		(1,517,454	)
Effect of exchange rate changes on cash and cash equivalents		44,636			(31,311	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(107,049	)		(449,956	)
CASH AND CASH EQUIVALENTS,beginning of period		3,066,988			2,483,990
CASH AND CASH EQUIVALENTS,end of period	$	2,959,939		$	2,034,034

(1) The change in the assets and liabilities, net of acquisitions for the six months ended February 28, 2006 includes the impact of a $450,000 loss provision recorded by the Company in the second quarter of fiscal 2006.

The accompanying Notes are an integral part of these Consolidated Financial Statements.

6

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

1. BASIS OF PRESENTATION

     The accompanying unaudited interim Consolidated Financial Statements of Accenture SCA, a Luxembourg partnership limited by shares, and its controlled subsidiary companies (together, the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles for complete financial statements. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2006 included in the Company’s Annual Report on Form 10-K filed with the SEC on October 19, 2006. The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles and reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results for these interim periods. The results of operations for the three and six months ended February 28, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2007. Certain prior-period amounts have been reclassified to conform to the current-period presentation.

     Accenture Ltd (“Accenture”) is a Bermuda holding company with no material assets other than Accenture SCA Class II and Class III common shares. Accenture acts as the sole general partner of the Company and owns a majority voting interest in the Company. Information regarding various aspects of the activities of Accenture are described in these Notes as they affect the financial results and conditions of the Company.

2. REORGANIZATION COSTS (BENEFITS)

     In fiscal 2001, the Company accrued reorganization liabilities in connection with its transition to a corporate structure. These liabilities included certain non-income tax liabilities, such as stamp taxes, as well as liabilities for certain individual income tax exposures related to the transfer of interests in certain entities to the Company as part of the reorganization. These primarily represent unusual and disproportionate individual income tax exposures assumed by certain, but not all, of the Company’s shareholders and partners in certain tax jurisdictions specifically related to the transfer of their partnership interests in certain entities to the Company as part of the reorganization. The Company has identified certain shareholders and partners who may incur such unusual and disproportionate financial damage in certain jurisdictions. These include shareholders and partners who were subject to tax in their jurisdiction on items of income arising from the reorganization transaction that were not taxable for most other shareholders and partners. In addition, certain other shareholders and partners were subject to different rates or amounts of tax than other shareholders or partners in the same jurisdiction. If additional taxes are assessed on these shareholders or partners in connection with these transfers, the Company intends to make payments to reimburse certain of the costs associated with the assessment either to the shareholder or partner, or to the taxing authority. The Company has recorded reorganization expense and a related liability for the amount it estimates it will reimburse in situations where assessments occur. Interest accruals are made to cover interest on this liability.

7

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

     The Company’s reorganization activity was as follows:

	Three Months Ended					Six Months Ended
	February 28,					February 28,
	2007		2006			2007		2006
Reorganization liability, beginning of period	$	365,603	$	378,118		$	350,864	$	381,440
Final determinations (1)		—		(13,540	)		—		(14,638	)
Changes in estimates		—		—			—		—
Benefit recorded		—		(13,540	)		—		(14,638	)
Interest expense accrued		6,316		6,125			12,395		12,607
Payments		—		—			—		—
Costs		6,316		(7,415	)		12,395		(2,031	)
Foreign currency translation		2,263		3,821			10,923		(4,885	)
Reorganization liability, end of period	$	374,182	$	374,524		$	374,182	$	374,524

(1) Includes final agreements with tax authorities and expirations of statutes of limitations.

     As of February 28, 2007, reorganization liabilities of $338,019 were included in Other accrued liabilities because expirations of statutes of limitations or other final determinations could occur within 12 months, and reorganization liabilities of $36,163 were included in Other non-current liabilities in the Consolidated Balance Sheet. The Company anticipates that reorganization liabilities will be substantially diminished by the end of fiscal 2008 because the Company expects final determinations will have occurred. However, resolution of current tax audits, initiation of additional audits or litigation may delay final settlements. Final settlement will result in a payment on a final settlement and/or recording a reorganization benefit or cost in the Company’s Consolidated Income Statement.

3. ACCUMULATED OTHER COMPREHENSIVE LOSS

     The components of Accumulated other comprehensive loss were as follows:

	February 28,			August 31,
	2007			2006
Unrealized losses on marketable securities, net of reclassification adjustments	$	(2,426	)	$	(3,479	)
Foreign currency translation adjustments		24,285			9,387
Minimum pension liability adjustments, net of tax of $22,863 and $22,863, respectively		(32,402	)		(32,402	)
Accumulated other comprehensive loss	$	(10,543	)	$	(26,494	)

     Comprehensive income was as follows:

	February 28,
	2007		2006
Three months ended	$	400,003	$	119,144
Six months ended	$	820,440	$	419,031

8

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

4. GOODWILL

     The changes in the carrying amount of goodwill by reportable operating segment were as follows:

						Foreign
	Balance as of					Currency		Balance as of
	August 31,		Additions/			Translation		February 28,
	2006		Adjustments			Adjustments		2007
Communications & High Tech	$	82,739	$	(4,377	)	$	2,669	$	81,031
Financial Services		123,592		(8,256	)		1,134		116,470
Government		33,253		(4,998	)		679		28,934
Products		258,390		(9,350	)		1,960		251,000
Resources		29,674		(3,387	)		821		27,108
Total	$	527,648	$	(30,368	)	$	7,263	$	504,543

     During the six months ended February 28, 2007, the Company recorded net reductions to goodwill, primarily resulting from reversals of valuation allowances related to pre-acquisition tax attributes recorded under purchase accounting for previous acquisitions and other adjustments related to purchase accounting for previous acquisitions.

5. RETIREMENT PLANS

     In the United States and certain other countries, the Company maintains and administers retirement plans and postretirement medical plans for certain current, retired and resigned Accenture employees. The components of net periodic pension and postretirement expense were as follows:

	Pension Benefits
	Three Months Ended February 28,
	2007						2006
Components of pension benefits expense	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Service cost	$	12,706		$	13,509		$	16,103		$	12,173
Interest cost		13,510			7,041			12,481			5,225
Expected return on plan assets		(14,946	)		(6,562	)		(13,080	)		(4,821	)
Amortization of loss		325			344			7,785			453
Amortization of prior service cost		182			155			287			379
Special termination benefits charge		—			—			—			501
Total	$	11,777		$	14,487		$	23,576		$	13,910

9

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

	Pension Benefits
	Six Months Ended February 28,
	2007						2006
Components of pension benefits expense	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Service cost	$	25,412		$	26,836		$	32,206		$	25,005
Interest cost		27,020			13,997			24,962			10,512
Expected return on plan assets		(29,892	)		(13,081	)		(26,160	)		(9,686	)
Amortization of transitional obligation		—			(20	)		—			—
Amortization of loss		650			694			15,570			919
Amortization of prior service cost		364			310			574			764
Special termination benefits charge		—			—			—			501
Total	$	23,554		$	28,736		$	47,152		$	28,015

	Postretirement Benefits
	Three Months Ended February 28,
	2007						2006
Components of postretirement benefits expense	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Service cost	$	1,668		$	319		$	2,524		$	525
Interest cost		1,520			401			1,538			442
Expected return on plan assets		(375	)		—			(355	)		—
Amortization of transitional obligation		20			—			20			—
Amortization of loss (gain)		—			17			630			(201	)
Amortization of prior service cost		(200	)		(199	)		(200	)		184
Total	$	2,633		$	538		$	4,157		$	950

	Postretirement Benefits
	Six Months Ended February 28,
	2007						2006
Components of postretirement benefits expense	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Service cost	$	3,334		$	623		$	5,048		$	1,043
Interest cost		3,040			783			3,076			877
Expected return on plan assets		(750	)		—			(710	)		—
Amortization of transitional obligation		40			—			40			—
Amortization of loss (gain)		—			33			1,260			(146	)
Amortization of prior service cost		(400	)		(389	)		(400	)		112
Total	$	5,264		$	1,050		$	8,314		$	1,886

6. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS’ EQUITY

Share Purchase Activity

     The Board of Directors of Accenture has authorized funding for redemptions and repurchases of shares of Accenture and the Company held by the Company’s current and former senior executives and their permitted transferees. In addition, during the six months ended February 28, 2007, the Board of Directors of Accenture separately authorized funding for a discounted tender offer for Accenture SCA Class I common shares that was completed on October 11, 2006.

10

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

     The Company’s share purchase activity during the six months ended February 28, 2007 was as follows:

					Accenture SCA Class I
					Common Shares and
	Accenture Ltd Class A Common Shares				Accenture Canada Holdings Inc. Exchangeable Shares				Total
	Shares		Amount		Shares		Amount		Shares		Amount
Discounted Tender Offer (1)		—	$	—		7,538,172	$	187,195		7,538,172	$	187,195
Other Share Purchase Programs:
Accenture SCA Class I common shares		—		—		23,126,643		797,639		23,126,643		797,639
Accenture Canada Holdings Inc. exchangeable shares		—		—		442,284		15,383		442,284		15,383
Accenture Ltd Class A common shares (2)		1,979,450		48,991		—		—		1,979,450		48,991
Other purchases (3)		703,821		22,539		—		—		703,821		22,539
Inter-company redemptions of SCA
Class II common shares and SCA
Class III common shares (4)		—		—		10,344,732		204,452		10,344,732		204,452
Total		2,683,271	$	71,530		41,451,831	$	1,204,669		44,135,102	$	1,276,199

(1)	On September 11, 2006, the Company and one of its subsidiaries made a tender offer to Accenture SCA Class I common shareholders that resulted in share redemptions and purchases, effective October 11, 2006, at a price of $24.75 per share.
(2)	On November 13, 2006, Accenture Finance (Gibraltar) Ltd, an indirect subsidiary of Accenture SCA, purchased Accenture Ltd Class A common shares at a price of $24.75 per share from certain former senior executives residing outside the United States.
(3)	During the six months ended February 28, 2007, as authorized under Accenture’s various employee equity share plans, Accenture and the Company acquired Accenture Ltd Class A common shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture Ltd Class A common shares under those plans.
(4)	On November 15, 2006, the Company redeemed 4,832,465 Accenture SCA Class II common shares and 5,512,267 Accenture SCA Class III common shares from Accenture. These redemptions were made in transactions unrelated to publicly announced share plans or programs. Transactions involving Accenture SCA Class II and Class III common shares consist exclusively of inter-company transactions undertaken to facilitate other corporate purposes.

     As of February 28, 2007, Accenture’s available authorization was $79,883 for the other share purchase programs.

Subsequent Events Related to Share Purchase Activity

     On March 2, 2007, an additional $1,500,000 was authorized for purchases under Accenture’s other share purchase programs.

     On March 8, 2007, the Company and one of its subsidiaries offered to redeem or purchase up to an aggregate of 19,696,969 Accenture SCA Class I common shares at a price per share that is not greater than $33.00 or less than $30.50. The Board of Directors of Accenture approved the use of $650,000 to fund this discounted tender offer (the “Offer”), as well as the use of up to an additional $144,000 should the Company choose to increase the size of the Offer in response to shareholder demand. The final number of Accenture SCA Class I common shares redeemed or purchased and the final offer price will be determined upon the expiration of the Offer, expected to occur on April 4, 2007 unless withdrawn or extended.

11

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

Dividend

     In connection with a cash dividend paid by Accenture Ltd on Accenture Ltd’s Class A common shares, on November 15, 2006, the Company paid a cash dividend of $0.35 per share on Accenture SCA’s Class I common shares to shareholders of record at the close of business on October 5, 2006 and on Accenture Canada Holdings Inc. exchangeable shares to shareholders of record at the close of business on October 13, 2006, resulting in cash outlays of $87,232 and $1,375, respectively. The payment of cash dividends on Accenture Ltd’s Class A common shares also resulted in the issuance of an immaterial number of additional restricted share units to holders of restricted share units.

Class III Common Shares

     Accenture SCA Class III common shares, including the lettered sub-series of this class, have a par value of 1.25 euros per share. Information related to all Class III common shares is as follows:

			February 28, 2007				August 31, 2006
Title of Issuance	Authorized		Issued Shares		Amount		Issued Shares		Amount
Class III		9,782,549,738		546,718,891	$	617,854		510,541,809	$	574,648
Class III-A		5,000,000		5,000,000		5,435		5,000,000		5,435
Class III-B		5,000,000		5,000,000		5,435		5,000,000		5,435
Class III-C		10,000,000		10,000,000		10,870		10,000,000		10,870
Class III-D		10,000,000		10,000,000		10,870		10,000,000		10,870
Class III-E		15,000,000		15,000,000		16,304		15,000,000		16,304
Class III-F		15,000,000		15,000,000		16,304		15,000,000		16,304
Class III-G		20,000,000		20,000,000		21,739		20,000,000		21,739
Class III-H		25,000,000		25,000,000		27,174		25,000,000		27,174
Class III-I		5,000,000		5,000,000		5,435		5,000,000		5,435
Class III-J		5,000,000		5,000,000		5,435		5,000,000		5,435
Class III-K		16,050,000		16,050,000		18,074		16,050,000		18,074
Class III-L		5,025,720		5,025,720		5,540		5,025,720		5,540
Class III-M		68,626,707		68,626,707		78,398		68,626,707		78,398
Class III-N		12,747,835		12,747,835		18,301		12,747,835		18,301
Total		10,000,000,000		764,169,153	$	863,168		727,992,071	$	819,962

7. COMMITMENTS AND CONTINGENCIES

Commitments and Guarantees

     As a result of its increase in ownership percentage of Accenture HR Services from 50 percent to 100 percent in February 2002, the Company may be required to make up to $177,500 of additional purchase price payments through September 30, 2008, conditional on Accenture HR Services achieving certain levels of qualifying revenues. The remaining potential liability as of February 28, 2007 was $157,519.

     In February 2005, the Company signed an amendment to the stockholders agreement of Avanade Inc. (a consolidated subsidiary of Accenture SCA). As a result of the amendment, there is no longer a fixed purchase price minimum or maximum payable by the Company for the Avanade Inc. shares not already owned by the Company. The Company now has the right to purchase substantially all of the remaining outstanding shares of Avanade Inc. not owned by the Company at fair value if certain events occur. The Company may also be required to purchase substantially all of the remaining outstanding shares of Avanade Inc. at fair value if certain events occur.

     The Company has various agreements in which it may be obligated to indemnify other parties with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business under which the Company customarily agrees to hold the indemnified party harmless against losses arising from a breach of representations related to

12

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

such matters as title to assets sold, licensed or certain intellectual property rights and other matters. Payments by the Company under such indemnification clauses are generally conditioned on the other party making a claim. Such claims are typically subject to challenge by the Company and to dispute resolution procedures specified in the particular contract. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount and, in some instances, the Company may have recourse against third parties for certain payments made by the Company. It is not possible to predict the maximum potential amount of future payments under these indemnification agreements due to the conditional nature of the Company’s obligations and the unique facts of each particular agreement. Historically, the Company has not made any payments under these agreements that have been material individually or in the aggregate. As of February 28, 2007, management was not aware of any obligations arising under indemnification contracts that would require material payments.

     From time to time, the Company enters into contracts with clients whereby it has joint and several liability with other participants and/or third parties providing related services and products to clients. Under these arrangements, the Company and other parties may assume some responsibility to the client or a third party for the performance of others under the terms and conditions of the contract with or for the benefit of the client or in relation to the performance of certain contractual obligations. In some arrangements, the extent of the Company’s obligations for the performance of others is not expressly specified. The Company estimates that, as of February 28, 2007, it had assumed an aggregate potential liability of approximately $875,371 to its clients for the performance of others under arrangements described in this paragraph. These contracts typically provide recourse provisions that would allow the Company to recover from the other parties all but approximately $143,785 if the Company is obligated to make payments to the clients that are the consequence of a performance default by the other parties. To date, the Company has not been required to make any payments under any of the contracts described in this paragraph.

Legal Contingencies

     As of February 28, 2007, the Company or its present personnel had been named as a defendant in various litigation matters. Based on the present status of these litigation matters, the management of the Company believes these matters will not ultimately have a material effect on the results of operations, financial position or cash flows of the Company.

8. SEGMENT REPORTING

     Operating segments are defined by SFAS No. 131,“Disclosures about Segments of an Enterprise and Related Information”(“SFAS No. 131”), as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

     The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s operating segments are managed separately because each operating segment represents a strategic business unit providing management consulting, technology and outsourcing services to clients in different industries.

     The Company’s reportable operating segments are the five operating groups, which are Communications & High Tech, Financial Services, Government, Products and Resources. Information regarding the Company’s reportable operating segments was as follows:

	Three Months Ended February 28,
	2007				2006
	Revenues Before		Operating		Revenues Before		Operating
	Reimbursements		Income		Reimbursements		Income (Loss)
Communications & High Tech	$	1,086,164	$	113,600	$	1,026,092	$	177,488
Financial Services		1,050,667		103,809		833,362		102,332
Government		655,064		92,629		597,687		(136,584	)
Products		1,165,094		140,331		1,004,205		(82,678	)
Resources		787,420		109,023		639,066		76,754
Other		5,429		—		2,383		—
Total	$	4,749,838	$	559,392	$	4,102,795	$	137,312

13

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

	Six Months Ended February 28,
	2007				2006
	Revenues Before		Operating		Revenues Before		Operating
	Reimbursements		Income		Reimbursements		Income (Loss)
Communications & High Tech	$	2,182,554	$	248,001	$	2,073,633	$	349,794
Financial Services		2,117,914		237,701		1,688,234		183,935
Government		1,282,892		120,991		1,195,806		(74,962	)
Products		2,359,762		347,410		2,021,240		35,055
Resources		1,550,410		214,881		1,289,352		156,046
Other		10,394		—		4,005		—
Total	$	9,503,926	$	1,168,984	$	8,272,270	$	649,868

9. NEWLY ISSUED ACCOUNTING STANDARDS

     In July 2006, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation No. 48,“Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN 48”), which is a change in accounting for income taxes. FIN 48 specifies how tax benefits for uncertain tax positions are to be recognized, measured, and derecognized in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified in the balance sheet; and provides transition and interim-period guidance, among other provisions. FIN 48 is effective for fiscal years beginning after December 15, 2006 and, as a result, is effective for the Company beginning September 1, 2007. The Company is currently evaluating the impact of FIN 48 on its Consolidated Financial Statements.

     In September 2006, FASB issued Statement of Financial Accounting Standards No. 158,“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 106, and 132(R)”(“SFAS No. 158”). SFAS No. 158 requires companies to recognize a net liability or asset and an offsetting adjustment to accumulated other comprehensive income to report the funded status of defined benefit pension and other postretirement benefit plans. SFAS No. 158 requires prospective application, recognition and disclosure requirements effective for the Company’s fiscal year ending August 31, 2007. Additionally, SFAS No. 158 requires companies to measure plan assets and obligations at their year-end balance sheet date. This requirement is effective for the Company’s fiscal year ending August 31, 2009. The Company is currently evaluating the impact of SFAS No. 158 on its Consolidated Financial Statements.

     In September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,“Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”(“SAB No. 108”). SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB No. 108 is effective for fiscal years ending after November 15, 2006 and, as a result, is effective for the Company’s fiscal year ending August 31, 2007. The Company is currently evaluating the impact of SAB No. 108 on its Consolidated Financial Statements.

14

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 onForm 10-Q and in our Annual Report onForm 10-K for the year ended August 31, 2006, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report onForm 10-K for the year ended August 31, 2006.

     We use the terms “we,” “our Company,” “our” and “us” in this report to refer to Accenture SCA 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 2006” means the 12-month period that ended on August 31, 2006. 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 (the “Securities Act”) 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 and projections. Words such as “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. The reasons for these differences include changes in general economic and political conditions, including fluctuations in currency exchange rates, and the following factors:

• 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 results of operations could be affected by economic and political conditions and the effects of these conditions on our clients’ businesses and levels of business activity.

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

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

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

• 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.

• 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 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.

• If our pricing structures do not accurately anticipate the cost and complexity of performing our work, then our contracts could be unprofitable.

15

• 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 amounts extended to our clients as financing, our results of operations could be adversely affected.

• Tax legislation and negative publicity related to Bermuda companies such as our general partner, Accenture Ltd (“Accenture”), could lead to an increase in our tax burden or affect our relationships with our clients.

• 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.

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

• We might acquire other businesses or technologies, and there is a risk that we might not successfully integrate them with our business or might otherwise fail to achieve our strategic objectives.

• The share price of Accenture Ltd Class A common shares and, consequently, the market value of Accenture SCA Class I common shares, could be adversely affected from time to time by sales, or the anticipation of future sales, of Accenture Ltd Class A common shares held by our employees and former employees or received upon the redemption of Accenture SCA Class I common shares.

• The share price of Accenture Ltd Class A common shares 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 Luxembourg 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.

• Luxembourg 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, 2006. We undertake no obligation to update or revise any forward-looking statements.

Overview

     Revenues are driven by the ability of our executives to secure new contracts and to deliver solutions and services that add value to

16

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.

     Our results of operations are also affected by the economic conditions, 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. The current economic environment continues to stimulate the technology spending of many companies. We are also continuing to see strong demand for our services. We continue to expect that revenue growth rates across our segments may vary from quarter to quarter during fiscal 2007 as economic conditions vary in different industries and geographic markets.

     Revenues before reimbursements for the three and six months ended February 28, 2007 were $4.75 billion and $9.50 billion, respectively, compared with $4.10 billion and $8.27 billion, respectively, for the three and six months ended February 28, 2006, increases of 16% and 15%, respectively, in U.S. dollars and 10% and 11%, respectively, in local currency terms.

     Consulting revenues before reimbursements for the three and six months ended February 28, 2007 were $2.83 billion and $5.74 billion, respectively, compared with $2.47 billion and $5.04 billion, respectively, for the three and six months ended February 28, 2006, increases of 15% and 14%, respectively, in U.S. dollars and 9% and 10%, respectively, in local currency terms.

     Outsourcing revenues before reimbursements for the three and six months ended February 28, 2007 were $1.92 billion and $3.76 billion, respectively, compared with $1.64 billion and $3.23 billion, respectively, for the three and six months ended February 28, 2006, increases of 17% and 16%, respectively, in U.S. dollars and 12% for both periods in local currency terms. 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. Consistent with broader market trends, our recently signed outsourcing contracts are of shorter duration. Although the average contract size is smaller, our average annualized revenue per contract is steady. 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 2006, the weakening of various currencies versus the U.S. dollar resulted in an unfavorable currency translation and decreased our reported revenues, operating expenses and operating income. In the first and second quarters of fiscal 2007, the U.S. dollar weakened against other currencies, resulting in favorable currency translation and greater reported U.S. dollar revenues, operating expenses and operating income compared to the same period in the prior year. If this trend continues in the remainder of fiscal 2007, our U.S. dollar revenue growth will be higher than our growth in local currency terms. If the U.S. dollar strengthens against other currencies in the remainder of fiscal 2007, our U.S. dollar revenue growth may be lower than our growth in local currency terms.

     The primary categories of operating expenses are 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. Sales and marketing expense is driven primarily by 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 (revenues before reimbursements less cost of services before reimbursements as a percentage of revenues before reimbursements) for the three and six months ended February 28, 2007 was 29.6% and 29.9%, respectively, compared with 21.2% and 26.5%, respectively, for the three and six months ended February 28, 2006. In the second quarter of fiscal 2006, we recorded a $450 million loss provision as a result of adverse developments associated with the NHS Contracts (as defined below). The increases in gross margin for the three and six months ended February 28, 2007 were principally due to this loss provision, partially offset by higher annual bonus accruals in fiscal 2007.

17

     Our cost-management strategy is to anticipate changes in demand for our services and to identify cost-management initiatives. A primary element of this strategy 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.

     Annualized attrition in the second quarter of fiscal 2007 was 17%, excluding involuntary terminations, down from the first quarter of fiscal 2007 and consistent with quarterly trends we historically experience in the second quarter. We continue to add substantial numbers of new employees and will continue to actively recruit new employees to balance our mix of skills and resources to meet current and projected future demands, replace departing employees and expand our global sourcing approach, which includes our Global Delivery Network and other capabilities around the world. We have adjusted compensation in fiscal 2007 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. As in previous 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 attrition, recover increases in compensation and effectively assimilate and utilize large numbers of new employees into our workforces.

     Sales and marketing and general and administrative costs as a percentage of revenues before reimbursements were 17.7% and 17.4% for the three and six months ended February 28, 2007, respectively, compared with 18.0% and 18.6%, respectively, for the three and six months ended February 28, 2006. The decrease in these costs as a percentage of revenues before reimbursements for the six months ended February 28, 2007 was primarily due to higher utilization of our client-service personnel on contracts and lower spending on facilities and technology costs on a percentage basis compared with the prior year.

     Operating income as a percentage of revenues before reimbursements increased to 11.8% and 12.3%, respectively, for the three and six months ended February 28, 2007, from 3.3% and 7.9%, respectively, for the three and six months ended February 28, 2006. The increase in operating income as a percentage of revenues before reimbursements for the three and six months ended February 28, 2007 was principally due to a $450 million loss provision associated with the NHS Contracts recorded during the second quarter of fiscal 2006, partially offset by higher annual bonus accruals in fiscal 2007.

The NHS Contracts

     We previously entered into certain large, long-term contracts (the “NHS Contracts”) to provide systems and services to the National Health Service in England (the “NHS”). On September 28, 2006, we entered into an agreement (the “NHS Transfer Agreement”) to transfer to a third party all of our rights and obligations under the NHS Contracts, except those relating to the Picture Archiving Communication System. The transfer and substantially all related activities were completed in the second quarter of fiscal 2007 for less than the maximum $125 million loss we previously estimated we would incur this fiscal year, and no material obligations remain.

Bookings and Backlog

     New contract bookings for the three months ended February 28, 2007 were $5,329 million, an increase of $1,003 million, or 23%, over the three months ended February 28, 2006, with consulting bookings increasing 21%, to $3,075 million, and outsourcing bookings increasing 26%, to $2,254 million. New contract bookings for the six months ended February 28, 2007 were $10,808 million, an increase of $941 million, or 10%, over the six months ended February 28, 2006, with consulting bookings increasing 13%, to $6,030 million, and outsourcing bookings increasing 5%, to $4,778 million. The increase in new contract bookings for the first six months of fiscal 2007 was attributable to strong contract signings in our Americas and Asia Pacific regions.

     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

18

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

     For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the year ended August 31, 2006.

Revenues by Segment/Operating Group

     Our five reportable operating segments are our operating groups, which are Communications & High Tech, Financial Services, Government, Products and Resources. Operating groups are managed on the basis of revenues before reimbursements because our management believes revenues before reimbursements are a better indicator of operating group performance than revenues. From time to time, our operating groups work together to sell and implement certain contracts. The resulting revenues and costs from these contracts may be apportioned among the participating operating groups. Generally, operating expenses for each operating group have similar characteristics and are subject to the same factors, pressures and challenges. However, the economic environment and its effects on the industries served by our operating groups affect revenues and operating expenses within our operating groups to differing degrees. Decisions relating to staffing levels are not made uniformly across our operating segments, due in part to the needs of our operating groups to tailor their workforces to meet the specific needs of their businesses. The mix between consulting and outsourcing is not uniform among our operating groups. Local currency fluctuations also tend to affect our operating groups differently, depending on the geographic concentrations and locations of their businesses.

19

     Revenues for each of our operating groups, geographic regions and types of work were as follows:

											Percent of Total
											Revenues Before
								Percent			Reimbursements for the
	Three Months Ended				Percent			Increase			Three Months Ended
	February 28,				Increase			Local			February 28,
	2007		2006		US$			Currency			2007			2006
	(in millions)
OPERATING GROUPS
Communications & High Tech	$	1,086	$	1,026		6	%		1	%		23	%		25	%
Financial Services		1,051		833		26			18			22			20
Government		655		598		10			6			14			15
Products		1,165		1,004		16			11			24			24
Resources		787		639		23			18			17			16
Other		6		3		n/m			n/m			—			—
TOTAL Revenues Before Reimbursements		4,750		4,103		16	%		10	%		100	%		100	%
Reimbursements		419		388		8
TOTAL REVENUES	$	5,169	$	4,491		15	%
GEOGRAPHY
Americas	$	2,043	$	1,898		8	%		7	%		43	%		46	%
EMEA (1)		2,334		1,914		22			11			49			47
Asia Pacific		373		291		28			24			8			7
TOTAL Revenues Before Reimbursements	$	4,750	$	4,103		16	%		10	%		100	%		100	%
TYPE OF WORK
Consulting	$	2,834	$	2,466		15	%		9	%		60	%		60	%
Outsourcing		1,916		1,637		17			12			40			40
TOTAL Revenues Before Reimbursements	$	4,750	$	4,103		16	%		10	%		100	%		100	%

n/m = not meaningful
(1)	EMEA includes Europe, the Middle East and Africa.

Three Months Ended February 28, 2007 Compared to Three Months Ended February 28, 2006

  Revenues

     Our Communications & High Tech operating group achieved revenues before reimbursements of $1,086 million for the three months ended February 28, 2007, compared with $1,026 million for the three months ended February 28, 2006, an increase of 6% in U.S. dollars and 1% in local currency terms, with outsourcing growth across all industry groups and geographic regions. Consulting revenues grew in our Asia Pacific and EMEA regions, partially offset by a consulting revenue decline in our Communications industry group in our Americas region.

     Our Financial Services operating group achieved revenues before reimbursements of $1,051 million for the three months ended February 28, 2007, compared with $833 million for the three months ended February 28, 2006, an increase of 26% in U.S. dollars and 18% in local currency terms, with both consulting and outsourcing contributing to the growth. The increase was principally driven by strong growth in our Banking industry group in our EMEA region, our Capital Markets industry group in our Americas and EMEA regions and our Insurance industry group in our EMEA and Americas regions.

     Our Government operating group achieved revenues before reimbursements of $655 million for the three months ended February 28, 2007, compared with $598 million for the three months ended February 28, 2006, an increase of 10% in U.S. dollars and 6% in local currency terms. The increase was primarily driven by outsourcing growth across all geographic regions and consulting growth in our Americas and EMEA regions.

20

     Our Products operating group achieved revenues before reimbursements of $1,165 million for the three months ended February 28, 2007, compared with $1,004 million for the three months ended February 28, 2006, an increase of 16% in U.S. dollars and 11% in local currency terms, with both consulting and outsourcing contributing to the growth. The increase was primarily driven by strong growth in our EMEA region, principally in our Consumer Goods & Services, Health & Life Sciences, Industrial Equipment and Automotive industry groups, and in our Americas region, principally in our Health & Life Sciences, Retail and Transportation & Travel Services industry groups. These increases more than offset an expected revenue decline in our Retail industry group in our EMEA region.

     Our Resources operating group achieved revenues before reimbursements of $787 million for the three months ended February 28, 2007, compared with $639 million for the three months ended February 28, 2006, an increase of 23% in U.S. dollars and 18% in local currency terms, with strong consulting growth across all geographic regions and strong outsourcing growth in our EMEA region. We experienced strong growth across all four industry groups: Energy, Utilities, Chemicals and Natural Resources.

     In our Americas region, we achieved revenues before reimbursements for the three months ended February 28, 2007 of $2,043 million, compared with $1,898 million for the three months ended February 28, 2006, an increase of 8% in U.S. dollars and 7% in local currency terms. Growth was principally driven by our business in the United States, Brazil and Canada.

     In our EMEA region, we achieved revenues before reimbursements for the three months ended February 28, 2007 of $2,334 million, compared with $1,914 million for the three months ended February 28, 2006, an increase of 22% in U.S. dollars and 11% in local currency terms. Growth was principally driven by our business in the United Kingdom, the Netherlands, Italy, Spain, Germany and France.

     In our Asia Pacific region, we achieved revenues before reimbursements for the three months ended February 28, 2007 of $373 million, compared with $291 million for the three months ended February 28, 2006, an increase of 28% in U.S. dollars and 24% in local currency terms. Growth was principally driven by our business in Australia and Japan.

  Operating Expenses

     Operating expenses for the three months ended February 28, 2007 were $4,610 million, an increase of $256 million, or 6%, over the three months ended February 28, 2006, and decreased as a percentage of revenues to 89.2% from 96.9% during this period. Operating expenses before reimbursable expenses for the three months ended February 28, 2007 were $4,190 million, an increase of $225 million, or 6%, over the three months ended February 28, 2006, and decreased as a percentage of revenues before reimbursements to 88.2% from 96.7% over this period.

  Cost of Services

     Cost of services for the three months ended February 28, 2007 was $3,764 million, an increase of $142 million, or 4%, over the three months ended February 28, 2006, and decreased as a percentage of revenues to 72.8% from 80.7% over this period. Cost of services before reimbursable expenses for the three months ended February 28, 2007 was $3,345 million, an increase of $111 million, or 3%, over the three months ended February 28, 2006, and decreased as a percentage of revenues before reimbursements to 70.4% from 78.8% over this period. Gross margin (revenues before reimbursements less cost of services before reimbursements as a percentage of revenues before reimbursements) increased to 29.6% from 21.2% during this period. In the second quarter of fiscal 2006, we recorded a $450 million loss provision reflected in cost of services of our Government and Products operating groups as a result of adverse developments associated with the NHS Contracts. The decrease in costs of services as a percentage of revenues before reimbursements and increase in gross margin were principally due to this loss provision, partially offset by higher annual bonus accruals in fiscal 2007.

  Sales and Marketing

     Sales and marketing expense for the three months ended February 28, 2007 was $434 million, an increase of $41 million, or 10%, over the three months ended February 28, 2006, and decreased as a percentage of revenues before reimbursements to 9.2% from 9.6% over this period. This decrease was primarily due to lower costs resulting from higher utilization of our client-service personnel on contracts when compared to the same period in fiscal 2006.

21

  General and Administrative Costs

     General and administrative costs for the three months ended February 28, 2007 were $405 million, an increase of $60 million, or 17%, over the three months ended February 28, 2006, and increased as a percentage of revenues before reimbursements to 8.5% from 8.4% during this period.

  Operating Income

     Operating income for the three months ended February 28, 2007 was $559 million, an increase of $422 million, or 307%, over the three months ended February 28, 2006, and increased as a percentage of revenues before reimbursements to 11.8% from 3.3% over this period. Operating income (loss) for each of the operating groups was as follows:

									Effect of		Net
	Three Months Ended February 28,					Increase			Reorganization		Increase
	2007		2006			(Decrease)			Benefits (1)(2)		(Decrease)(1)
	(in millions)
Communications & High Tech	$	113	$	177		$	(64	)	$	3	$	(61	)
Financial Services		104		102			2			3		5
Government		93		(136	)		229			2		231
Products		140		(83	)		223			3		226
Resources		109		77			32			2		34
Total	$	559	$	137		$	422		$	14	$	435

(1)	May not total due to rounding.
(2)	Represents the effect of reorganization benefits recorded during the three months ended February 28, 2006.

     The following Operating income commentary by operating group excludes the effect of reorganization benefits recorded in fiscal 2006:

• Communications & High Tech operating income decreased due to higher compensation costs, a decline in contract margins due to a lower proportion of high margin consulting contracts and higher general and administrative costs as a percentage of revenues before reimbursements.

• Financial Services operating income increased due to strong revenue growth, higher utilization and lower combined sales and marketing and general and administrative costs as a percentage of revenues before reimbursements, offset by higher compensation costs and delivery inefficiencies on a small number of contracts.

• Government recorded operating income for the three months ended February 28, 2007, compared to an operating loss for the three months ended February 28, 2006 due to the impact of a $225 million loss provision associated with the NHS Contracts recorded in fiscal 2006. The operating income for the three months ended February 28, 2007 also reflects outsourcing revenue growth across all geographic regions, consulting revenue growth in our Americas and EMEA regions and improved contract margins, offset by higher compensation costs.

• Products recorded operating income for the three months ended February 28, 2007, compared to an operating loss for the three months ended February 28, 2006 due to the impact of a $225 million loss provision associated with the NHS Contracts recorded in fiscal 2006. The operating income for the three months ended February 28, 2007 also reflects strong revenue growth in our EMEA and Americas regions, offset by higher compensation costs and delivery inefficiencies on a small number of contracts.

• Resources operating income increased due to strong revenue growth, improved contract margins and lower combined sales and marketing and general and administrative costs as a percentage of revenues before reimbursements, partially offset by higher compensation costs.

22

     Higher compensation costs for the three months ended February 28, 2007 resulted from higher annual bonus accruals and market compensation adjustments in certain skill sets and geographies.

  Interest Income

     Interest income for the three months ended February 28, 2007 was $35 million, an increase of $10 million, or 42%, over the three months ended February 28, 2006. The increase resulted primarily from an increase in interest rates and higher average cash balances.

  Other (Expense) Income

     Other expense for the three months ended February 28, 2007 was $3 million, compared with other income of $3 million for the three months ended February 28, 2006. The increase in other expense resulted primarily from an increase in net foreign currency exchange losses.

  Provision for Income Taxes

     The effective tax rates for the three months ended February 28, 2007 and 2006 were 29.4% and 35.7%, respectively. Our effective tax rate declined in the second quarter of fiscal 2007 from 36.7% in the first quarter of fiscal 2007 as a result of changes in our geographic mix of income, final determinations of prior-year tax liabilities that occurred during the quarter and a reduction in the valuation allowance on our deferred tax assets.

     The reduction in the valuation allowance is reported as a discrete item in the quarter ended February 28, 2007, reducing the effective tax rate for the quarter by 3.5 percentage points. Excluding the impact of this discrete item, our forecasted fiscal 2007 annual effective tax rate and the forecasted effective tax rate for the remainder of the year are 34.9%. The effective tax rate of 29.4% for the three months ended February 28, 2007 is lower than the annual forecasted effective tax rate because it also reflects an adjustment to the Provision for Income Taxes for the first quarter as a result of the decrease in the forecasted fiscal 2007 annual effective tax rate.

     The fiscal 2006 annual effective tax rate was 25.5%. The projected fiscal 2007 annual effective tax rate is higher than the fiscal 2006 annual effective tax rate primarily due to benefits recorded in fiscal 2006 related to final determinations of prior-year tax liabilities, which reduced the fiscal 2006 annual effective tax rate by 10.8 percentage points.

23

Six Months Ended February 28, 2007 Compared to Six Months Ended February 28, 2006

     Revenues for each of our operating groups, geographic regions and types of work were as follows:

											Percent of Total
											Revenues Before
								Percent			Reimbursements for the
	Six Months Ended				Percent			Increase			Six Months Ended
	February 28,				Increase			Local			February 28,
	2007		2006		US$			Currency			2007			2006
	(in millions)
OPERATING GROUPS
Communications & High Tech	$	2,183	$	2,074		5	%		1	%		23	%		25	%
Financial Services		2,118		1,688		25			20			22			20
Government		1,283		1,196		7			5			14			15
Products		2,360		2,021		17			13			25			24
Resources		1,550		1,289		20			16			16			16
Other		10		4		n/m			n/m			—			—
TOTAL Revenues Before Reimbursements		9,504		8,272		15	%		11	%		100	%		100	%
Reimbursements		832		762		9
TOTAL REVENUES	$	10,336	$	9,034		14	%
GEOGRAPHY
Americas	$	4,133	$	3,753		10	%		10	%		43	%		45	%
EMEA		4,636		3,925		18			10			49			48
Asia Pacific		735		594		24			21			8			7
TOTAL Revenues Before Reimbursements	$	9,504	$	8,272		15	%		11	%		100	%		100	%
TYPE OF WORK
Consulting	$	5,743	$	5,042		14	%		10	%		60	%		61	%
Outsourcing		3,761		3,230		16			12			40			39
TOTAL Revenues Before Reimbursements	$	9,504	$	8,272		15	%		11	%		100	%		100	%

  Revenues

     Our Communications & High Tech operating group achieved revenues before reimbursements of $2,183 million for the six months ended February 28, 2007, compared with $2,074 million for the six months ended February 28, 2006, an increase of 5% in U.S. dollars and 1% in local currency terms, with outsourcing growth across all geographic regions. Consulting revenues grew in our Asia Pacific region, offset by a consulting revenue decline in our Communications industry group in our Americas region.

     Our Financial Services operating group achieved revenues before reimbursements of $2,118 million for the six months ended February 28, 2007, compared with $1,688 million for the six months ended February 28, 2006, an increase of 25% in U.S. dollars and 20% in local currency terms, with both consulting and outsourcing contributing to the growth. The increase was principally driven by strong growth in our Banking industry group in our EMEA region, our Insurance industry group in our EMEA and Americas regions and our Capital Markets industry group in our Americas and EMEA regions.

     Our Government operating group achieved revenues before reimbursements of $1,283 million for the six months ended February 28, 2007, compared with $1,196 million for the six months ended February 28, 2006, an increase of 7% in U.S. dollars and 5% in local currency terms. The increase was primarily driven by consulting growth in our Americas and EMEA regions and outsourcing growth in our Asia Pacific and EMEA regions.

     Our Products operating group achieved revenues before reimbursements of $2,360 million for the six months ended February 28, 2007, compared with $2,021 million for the six months ended February 28, 2006, an increase of 17% in U.S. dollars and 13% in local currency terms, with both consulting and outsourcing contributing to the growth. The increase was primarily driven by strong revenue growth in our Americas region, principally in our Retail, Health & Life Sciences, Transportation & Travel Services and Industrial Equipment industry groups, and in our EMEA region, principally in our Consumer Goods & Services, Health & Life Sciences,

24

Industrial Equipment and Automotive industry groups. These increases more than offset an expected revenue decline in our Retail industry group in our EMEA region.

     Our Resources operating group achieved revenues before reimbursements of $1,550 million for the six months ended February 28, 2007, compared with $1,289 million for the six months ended February 28, 2006, an increase of 20% in U.S. dollars and 16% in local currency terms, with strong consulting growth across all geographic regions and strong outsourcing growth in our EMEA region. We experienced strong growth across all four industry groups: Energy, Utilities, Chemicals and Natural Resources.

     In our Americas region, we achieved revenues before reimbursements for the six months ended February 28, 2007 of $4,133 million, compared with $3,753 million for the six months ended February 28, 2006, an increase of 10% in both U.S. dollars and local currency terms. Growth was principally driven by our business in the United States, Canada and Brazil.

     In our EMEA region, we achieved revenues before reimbursements for the six months ended February 28, 2007 of $4,636 million, compared with $3,925 million for the six months ended February 28, 2006, an increase of 18% in U.S. dollars and 10% in local currency terms. Growth was principally driven by our business in the United Kingdom, the Netherlands, Spain, Italy, Germany, Ireland and France.

     In our Asia Pacific region, we achieved revenues before reimbursements for the six months ended February 28, 2007 of $735 million, compared with $594 million for the six months ended February 28, 2006, an increase of 24% in U.S. dollars and 21% in local currency terms. Growth was principally driven by our business in Australia and Japan.

  Operating Expenses

     Operating expenses for the six months ended February 28, 2007 were $9,167 million, an increase of $782 million, or 9%, over the six months ended February 28, 2006, and decreased as a percentage of revenues to 88.7% from 92.8% during this period. Operating expenses before reimbursable expenses for the six months ended February 28, 2007 were $8,335 million, an increase of $713 million, or 9%, over the six months ended February 28, 2006, and decreased as a percentage of revenues before reimbursements to 87.7% from 92.1% over this period.

  Cost of Services

     Cost of services for the six months ended February 28, 2007 was $7,498 million, an increase of $653 million, or 10%, over the six months ended February 28, 2006, and decreased as a percentage of revenues to 72.6% from 75.8% over this period. Cost of services before reimbursable expenses for the six months ended February 28, 2007 was $6,667 million, an increase of $583 million, or 10%, over the six months ended February 28, 2006, and decreased as a percentage of revenues before reimbursements to 70.1% from 73.5% over this period. Gross margin (revenues before reimbursements less cost of services before reimbursements as a percentage of revenues before reimbursements) increased to 29.9% from 26.5% during this period. In the second quarter of fiscal 2006, we recorded a $450 million loss provision reflected in cost of services of our Government and Products operating groups as a result of adverse developments associated with the NHS Contracts. The decrease in costs of services as a percentage of revenues before reimbursements and increase in gross margin were principally due to this loss provision, partially offset by higher annual bonus accruals in fiscal 2007.

  Sales and Marketing

     Sales and marketing expense for the six months ended February 28, 2007 was $871 million, an increase of $69 million, or 9%, over the six months ended February 28, 2006, and decreased as a percentage of revenues before reimbursements to 9.2% from 9.7% over this period. This decrease was primarily due to lower costs resulting from higher utilization of our client-service personnel on contracts when compared to the same period in fiscal 2006.

General and Administrative Costs

     General and administrative costs for the six months ended February 28, 2007 were $785 million, an increase of $46 million, or 6%, over the six months ended February 28, 2006, and decreased as a percentage of revenues before reimbursements to 8.2% from 8.9% during this period. The decrease was primarily due to lower spending on facilities and technology costs on a percentage basis compared with the prior year.

25

  Operating Income

     Operating income for the six months ended February 28, 2007 was $1,169 million, an increase of $519 million, or 80%, over the six months ended February 28, 2006, and increased as a percentage of revenues before reimbursements to 12.3% from 7.9% over this period. Operating income (loss) for each of the operating groups was as follows:

									Effect of
	Six Months Ended February 28,					Increase			Reorganization		Net Increase
	2007		2006			(Decrease)			Benefits (1)		(Decrease)
	(in millions)
Communications & High Tech	$	248	$	350		$	(102	)	$	4	$	(98	)
Financial Services		238		184			54			3		57
Government		121		(75	)		196			2		198
Products		347		35			312			4		316
Resources		215		156			59			2		61
Total	$	1,169	$	650		$	519		$	15	$	534

(1) Represents the effect of reorganization benefits recorded during the six months ended February 28, 2006.

     The following Operating income commentary by operating group excludes the effect of reorganization benefits recorded in fiscal 2006:

• Communications & High Tech operating income decreased due to higher compensation costs, a decline in contract margins due to a lower proportion of high margin consulting contracts and higher combined sales and marketing and general and administrative costs as a percentage of revenues before reimbursements.

• Financial Services operating income increased due to strong revenue growth, higher utilization and lower combined sales and marketing and general and administrative costs as a percentage of revenues before reimbursements, partially offset by higher compensation costs.

• Government recorded operating income for the six months ended February 28, 2007, compared to an operating loss for the six months ended February 28, 2006 due to the impact of a $225 million loss provision associated with the NHS Contracts recorded during the three months ended February 28, 2006. The operating income for the six months ended February 28, 2007 also reflects consulting revenue growth in our Americas and EMEA regions, outsourcing revenue growth in our Asia Pacific and EMEA regions and improved consulting contract margins, offset by higher compensation costs and asset impairments associated with an outsourcing contract recorded during the first quarter of fiscal 2007.

• Products operating income increased due to the impact of a $225 million loss provision associated with the NHS Contracts recorded during the three months ended February 28, 2006. The operating income increase also reflects strong revenue growth in our Americas and EMEA regions, partially offset by higher compensation costs.

• Resources operating income increased due to strong revenue growth, improved contract margins and lower combined sales and marketing and general and administrative costs as a percentage of revenues before reimbursements, partially offset by higher compensation costs.

     Higher compensation costs for the six months ended February 28, 2007 resulted from higher annual bonus accruals and market compensation adjustments in certain skill sets and geographies.

  Interest Income

     Interest income for the six months ended February 28, 2007 was $71 million, an increase of $16 million, or 30%, over the six

26

months ended February 28, 2006. The increase resulted primarily from an increase in interest rates and higher average cash balances.

  Other Expense

     Other expense for the six months ended February 28, 2007 was $6 million, a decrease of $7 million from the six months ended February 28, 2006. The decrease resulted primarily from a decrease in net foreign currency exchange losses.

  Provision for Income Taxes

     The effective tax rates for the six months ended February 28, 2007 and 2006 were 33.2% and 37.0%, respectively. Our effective tax rate declined in the second quarter of fiscal 2007 from 36.7% in the first quarter of fiscal 2007 as a result of changes in our geographic mix of income, final determinations of prior-year tax liabilities that occurred during the quarter and a reduction in the valuation allowance on our deferred tax assets.

     The reduction in the valuation allowance is reported as a discrete item in the quarter ended February 28, 2007, reducing the effective tax rate for the six months ended February 28, 2007 by 1.7 percentage points. Excluding the impact of this discrete item, our forecasted fiscal 2007 annual effective tax rate and the forecasted effective tax rate for the remainder of the year are 34.9%.

     The fiscal 2006 annual effective tax rate was 25.5%. The projected fiscal 2007 annual effective tax rate is higher than the fiscal 2006 annual effective tax rate primarily due to benefits recorded in fiscal 2006 related to final determinations of prior-year tax liabilities, which reduced the fiscal 2006 annual effective tax rate by 10.8 percentage points.

Liquidity and Capital Resources

     Our primary sources of liquidity are cash flows from operations, debt capacity available under various credit facilities and available cash reserves. We may also be able to raise additional funds through public or private debt or equity financings in order to:

• take advantage of opportunities, including more rapid expansion;

• acquire complementary businesses or technologies;

• develop new services and solutions;

• respond to competitive pressures; or

• facilitate purchases, redemptions and exchanges of Accenture shares.

     As of February 28, 2007, cash and cash equivalents of $2,960 million combined with $267 million of liquid fixed-income securities that are classified as investments on our Consolidated Balance Sheet totaled $3,227 million, compared with $3,530 million as of August 31, 2006, a decrease of $303 million.

     Cash flows from operating, investing and financing activities, as reflected in the Consolidated Cash Flows Statements, are summarized in the following table:

	Six Months Ended February 28,
	2007			2006			Change
	(in millions)
Net cash provided by (used in):
Operating activities	$	876		$	1,052		$	(176	)
Investing activities		66			47			19
Financing activities		(1,093	)		(1,517	)		424
Effect of exchange rate changes on cash and cash equivalents		44			(32	)		76
Net decrease in cash and cash equivalents	$	(107	)	$	(450	)	$	343

27

     Operating Activities.The $176 million decrease in cash provided was primarily due to increases in net client balances during the first six months of fiscal 2007 compared to the first six months of fiscal 2006 and payments of approximately $176 million to the NHS in connection with the NHS Transfer Agreement, partially offset by an increase in net income.

     Investing Activities.The $19 million increase in cash provided was primarily due to an increase in proceeds from marketable securities and lower spending on business acquisitions in the first six months of fiscal 2007 compared to the first six months of fiscal 2006, partially offset by an increase in purchases of marketable securities.

     Financing Activities.The $424 million decrease in cash used was primarily driven by a decrease in purchases of common shares in the first six months of fiscal 2007 compared to the first six months of fiscal 2006, partially offset by an increase in cash dividends paid. For additional information, see Footnote 6 (Material Transactions Affecting Shareholders’ Equity) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

     We believe that our available cash balances and the cash flows expected to be generated from operations will be sufficient to satisfy our current and planned working capital and investment needs for the next twelve months. We also believe that our longer-term working capital and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial market activities.

Borrowing Facilities

     As of February 28, 2007, we had the following borrowing facilities and related borrowings, including the issuance of letters of credit, for general working capital purposes:

			Borrowings
			Under
	Facility Amount		Facilities
	(in millions)
Syndicated loan facility	$	1,200	$	—
Separate bilateral, uncommitted, unsecured multicurrency revolving credit facilities		350		1
Local guaranteed and non-guaranteed lines of credit		136		—
Total	$	1,686	$	1

     Under the borrowing facilities described above, we had an aggregate of $163 million of letters of credit outstanding as of February 28, 2007. In addition, as of February 28, 2007, we had no other short-term borrowings and total outstanding debt of $28 million, which was primarily incurred in conjunction with the purchase of Accenture HR Services.

Client Financing

     In limited circumstances, we agree to extend financing to clients. The terms vary by contract, but generally we contractually link payment for services to the achievement of specified performance milestones. We finance these client obligations primarily with existing working capital and bank financing in the country of origin. Imputed interest is recorded at market rates in Interest income in the Consolidated Income Statement. Information pertaining to client financing was as follows:

	February 28,		August 31,
	2007		2006
	(in millions, except number of clients)
Number of clients		21		25
Client financing included in Current unbilled services	$	109	$	158
Client financing included in Non-current unbilled services		84		105
Total client financing, current and non-current	$	193	$	263

     The decrease in client financing from August 31, 2006 was primarily due to reductions in client financing balances related to the impact of the NHS Transfer Agreement.

28

Share Purchases and Redemptions

     The Board of Directors of Accenture has authorized funding for redemptions and repurchases of shares of Accenture and the Company held by our current and former senior executives and their permitted transferees. In addition, during the six months ended February 28, 2007, the Board of Directors of Accenture separately authorized funding for a discounted tender offer for Accenture SCA Class I common shares that was completed on October 11, 2006.

     Our share purchase activity during the six months ended February 28, 2007 was as follows:

					Accenture SCA Class I
					Common Shares and
	Accenture Ltd Class A Common Shares				Accenture Canada Holdings Inc. Exchangeable Shares				Total
	Shares		Amount		Shares		Amount		Shares		Amount
	(in millions, except share amounts)
Discounted Tender Offer (1)		—	$	—		7,538,172	$	187		7,538,172	$	187
Other Share Purchase Programs:
Accenture SCA Class I common shares		—		—		23,126,643		798		23,126,643		798
Accenture Canada Holdings Inc. exchangeable shares		—		—		442,284		15		442,284		15
Accenture Ltd Class A common shares (2)		1,979,450		49		—		—		1,979,450		49
Other purchases (3)		703,821		23		—		—		703,821		23
Inter-company redemptions of SCA
Class II common shares and SCA
Class II common shares (4)		—		—		10,344,732		204		10,344,732		204
Total		2,683,271	$	72		41,451,831	$	1,204		44,135,102	$	1,276

(1)	On September 11, 2006, we made a tender offer to Accenture SCA Class I common shareholders that resulted in share redemptions and purchases, effective October 11, 2006, at a price of $24.75 per share.
(2)	On November 13, 2006, Accenture Finance (Gibraltar) Ltd, an indirect subsidiary of Accenture SCA, purchased Accenture Ltd Class A common shares at a price of $24.75 per share from certain former senior executives residing outside the United States.
(3)	During the six months ended February 28, 2007, as authorized under Accenture’s various employee equity share plans, Accenture and we acquired Accenture Ltd Class A common shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture Ltd Class A common shares under those plans.
(4)	On November 15, 2006, we redeemed 4,832,465 Accenture SCA Class II common shares and 5,512,267 Accenture SCA Class III common shares from Accenture. These redemptions were made in transactions unrelated to publicly announced share plans or programs. Transactions involving Accenture SCA Class II and Class III common shares consist exclusively of inter-company transactions undertaken to facilitate other corporate purposes.

     As of February 28, 2007, Accenture’s available authorization was $80 million for other share purchase programs.

Subsequent Developments Related to Share Purchase Activity

     On March 2, 2007, an additional $1,500 million was authorized for purchases under Accenture’s other share purchase programs.

     On March 8, 2007, we offered to redeem or purchase up to an aggregate of 19,696,969 Accenture SCA Class I common shares at a price per share that is not greater than $33.00 or less than $30.50. The Board of Directors of Accenture approved the use of $650 million to fund this discounted tender offer (the “Offer”), as well as the use of up to an additional $144 million should we choose to

29

increase the size of the Offer in response to shareholder demand. The final number of Accenture SCA Class I common shares redeemed or purchased and the final offer price will be determined upon the expiration of the Offer, expected to occur on April 4, 2007 unless withdrawn or extended.

     For a complete description of all share purchase and redemption activity for the second quarter of fiscal 2007, see Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds; Issuer Purchases of Equity Securities.”

Off-Balance Sheet Arrangements

     We have various agreements by which we may be obligated to indemnify the other party with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business under which we customarily agree to hold the indemnified party harmless against losses arising from a breach of representations related to such matters as title to assets sold, licensed or certain intellectual property rights and other matters. Payments by us under such indemnification clauses are generally conditioned on the other party making a claim. Such claims are generally subject to challenge by us and dispute resolution procedures specified in the particular contract. Furthermore, our obligations under these arrangements may be limited in terms of time and/or amount and, in some instances, we may have recourse against third parties for certain payments made by us. It is not possible to predict the maximum potential amount of future payments under these indemnification agreements due to the conditional nature of our obligations and the unique facts of each particular agreement. Historically, we have not made any payments under these agreements that have been material individually or in the aggregate. As of February 28, 2007, we were not aware of any obligations under such indemnification agreements that would require material payments.

     From time to time, we enter into contracts with clients whereby we have joint and several liability with other participants and/or third parties providing related services and products to clients. Under these arrangements, we and other parties may assume some responsibility to the client or a third party for the performance of others under the terms and conditions of the contract with or for the benefit of the client or in relation to the performance of certain contractual obligations. To date, we have not been required to make any payments under any of the contracts described in this paragraph. For further discussion of these transactions, see Footnote 7 (Commitments and Contingencies) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Newly Issued Accounting Standards

     In July 2006, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation No. 48,“Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN 48”), which is a change in accounting for income taxes. FIN 48 specifies how tax benefits for uncertain tax positions are to be recognized, measured and derecognized in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified in the balance sheet; and provides transition and interim-period guidance, among other provisions. FIN 48 is effective for fiscal years beginning after December 15, 2006 and, as a result, is effective for us beginning September 1, 2007. We are currently evaluating the impact of FIN 48 on our Consolidated Financial Statements.

     In September 2006, FASB issued Statement of Financial Accounting Standards No. 158,“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 106, and 132(R)”(“SFAS No. 158”). SFAS No. 158 requires companies to recognize a net liability or asset and an offsetting adjustment to accumulated other comprehensive income to report the funded status of defined benefit pension and other postretirement benefit plans. SFAS No. 158 requires prospective application, recognition and disclosure requirements effective for our fiscal year ending August 31, 2007. Additionally, SFAS No. 158 requires companies to measure plan assets and obligations at their year-end balance sheet date. This requirement is effective for our fiscal year ending August 31, 2009. We are currently evaluating the impact of SFAS No. 158 on our Consolidated Financial Statements.

     In September 2006, the Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin (“SAB”) No. 108,“Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”(“SAB No. 108”). SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB No. 108 is effective for fiscal years ending after November 15, 2006 and, as a result, is effective for our fiscal year ending August 31, 2007. We are currently evaluating the impact of SAB No. 108 on our Consolidated Financial Statements.

30

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     During the six months ended February 28, 2007, there were no material changes in our market risk exposure. For a discussion of our market risk associated with foreign currency risk, interest rate risk and equity price risk as of August 31, 2006, see “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended August 31, 2006.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     Based on their evaluation for the period covered by this Quarterly Report on Form 10-Q, the Chief Executive Officer and the Chief Financial Officer of Accenture Ltd, the general partner of Accenture SCA, have concluded that, as of the end of such period, our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control Over Financial Reporting

     There has been no change in our internal control over financial reporting that occurred during the second quarter of fiscal 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     We are involved in a number of judicial and arbitration proceedings concerning matters arising in the ordinary course of our business. We do not expect that any of these matters, individually or in the aggregate, will have a material impact on our results of operations or financial condition.

     As previously reported in July 2003, we became aware of an incident of possible noncompliance with the Foreign Corrupt Practices Act and/or with Accenture’s internal controls in connection with certain of our operations in the Middle East. In 2003, we voluntarily reported the incident to the appropriate authorities in the United States promptly after its discovery. Shortly thereafter, the SEC advised us it would be undertaking an informal investigation of this incident, and the U.S. Department of Justice indicated it would also conduct a review. Since that time, there have been no further developments. We do not believe that this incident will have any material impact on our results of operations or financial condition.

     We currently maintain the types and amounts of insurance customary in the industries and countries in which we operate, including coverage for professional liability, general liability and management liability. We consider our insurance coverage to be adequate both as to the risks and amounts for the businesses we conduct.

ITEM 1A. RISK FACTORS

     For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2006. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended August 31, 2006.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS; ISSUER PURCHASES OF EQUITY SECURITIES

Purchases and redemptions of Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares

     The following table provides information relating to purchases and redemptions by the Company of Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares during the second quarter of fiscal 2007.

31

							Approximate Dollar
					Total Number of Shares		Value of Shares that May
					Purchased as Part of		Yet Be Purchased Under
	Total Number of Shares		Average Price		Publicly Announced		Publicly Announced
Period	Purchased (1)		Paid per Share		Plans or Programs		Plans or Programs
Accenture SCA
December 1, 2006 — December 31, 2006
Class I common shares		1,801,778	$	36.65		—		—
January 1, 2007 — January 31, 2007
Class I common shares		4,893,182	$	36.90		—		—
February 1, 2007 — February 28, 2007
Class I common shares		2,268,533	$	38.51		—		—
Total
Class I common shares (2)		8,963,493	$	37.26		—		—
Accenture Canada Holdings Inc.
December 1, 2006 — December 31, 2006
Exchangeable shares		77,374	$	36.32		—		—
January 1, 2007 — January 31, 2007
Exchangeable shares		101,275	$	37.00		—		—
February 1, 2007 — February 28, 2007
Exchangeable shares		45,316	$	38.35		—		—
Total
Exchangeable shares (2)		223,965	$	37.04		—		—

(1)

As of February 28, 2007, the Board of Directors of Accenture had authorized an aggregate of $4.2 billion for purchases and redemptions of shares from our current and former senior executives and their permitted transferees under Accenture’s Senior Executive Trading Policy and Accenture’s prior Share Management Plan. As of February 28, 2007, an aggregate of $80 million remained available for these purchases and redemptions.

(2)

During the second quarter of fiscal 2007, we redeemed and purchased a total of 8,963,493 Accenture SCA Class I common shares and 223,965 Accenture Canada Holdings Inc. exchangeable shares from current and former senior executives and their permitted transferees.

Purchases and redemptions of Accenture SCA Class II and Class III common shares

     Transactions involving Accenture SCA Class II and Class III common shares consist exclusively of inter-company transactions undertaken to facilitate other corporate purposes.

     On three occasions during the second quarter of fiscal 2007 (December 29, 2006, January 31, 2007 and February 28, 2007), we transferred an aggregate of 4,744,573 Accenture SCA Class III common shares to Accenture in connection with transactions related to Accenture’s issuance of Accenture Ltd Class A common shares delivered pursuant to outstanding options awards, grants of restricted share units and other issuances under Accenture’s equity compensation plans. In each case, the Accenture SCA Class III common shares were transferred in reliance on the exemption from registration contained in Section 4(2) of the Securities Act on the basis that the transaction did not involve any public offering.

     Accenture SCA Class III common shares are convertible into Accenture SCA Class II common shares by a resolution of an extraordinary meeting of our shareholders, passed in the manner provided by our Articles of Association, at a conversion ratio of 1 Accenture SCA Class III common share for 10 Accenture SCA Class II common shares.

Purchases and redemptions of Accenture Ltd Class A common shares and Class X common shares

     The following table provides information relating to purchases by Accenture of Accenture Ltd Class A common shares and redemptions of Accenture Ltd Class X common shares for the second quarter of fiscal 2007. Our management believes that the following table and footnotes provide useful information because the market value of Accenture SCA Class I common shares is based

32

on the share price of Accenture Ltd Class A common shares, and purchases of these shares may affect the share price of Accenture Ltd Class A common shares.

							Approximate Dollar
					Total Number of Shares		Value of Shares that May
					Purchased as Part of		Yet Be Purchased Under
	Total Number of Shares		Average Price		Publicly Announced		Publicly Announced Plans
Period	Purchased		Paid per Share		Plans or Programs (1)		or Programs
							(in millions)
December 1, 2006 — December 31, 2006
Class A common shares		85,250	$	33.84		—	$	978
Class X common shares		33,765,823	$	0.0000225		—		—
January 1, 2007 — January 31, 2007
Class A common shares		21,872	$	36.77		—	$	978
Class X common shares		5,488,232	$	0.0000225		—		—
February 1, 2007 — February 28, 2007
Class A common shares		55,412	$	37.91		—	$	978
Class X common shares		2,011,597	$	0.0000225		—		—
Total
Class A common shares (1)(2)		162,534	$	35.62		—
Class X common shares (3)		41,265,652	$	0.0000225		—

(1)	Since August 2001, the Board of Directors of Accenture has authorized and periodically confirmed a publicly announced open-market share purchase program for acquiring Accenture Ltd Class A common shares. During the second quarter of fiscal 2007, Accenture did not purchase any Accenture Ltd Class A common shares under this program. To date, the Board of Directors of Accenture has authorized an aggregate of $2.4 billion for use in these open-market share purchases. As of February 28, 2007, an aggregate of $978 million remained available for these open-market share purchases. The open-market purchase program does not have an expiration date.
(2)	During the second quarter of fiscal 2007, Accenture and the Company purchased 162,534 Accenture Ltd Class A common shares in transactions unrelated to publicly announced share plans or programs. These transactions consisted of acquisitions of Accenture Ltd Class A common shares via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture Ltd Class A common shares under our various employee equity share plans.
(3)	During the second quarter of fiscal 2007, Accenture redeemed 41,265,652 Accenture Ltd Class X common shares pursuant to its bye-laws. Accenture Ltd Class X common shares are redeemable at their par value of $0.0000225 per share.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5. OTHER INFORMATION

     (a) None.

     (b) None.

33

ITEM 6. EXHIBITS

     Exhibit Index:

Exhibit
Number	Exhibit
3.1	Form of Articles of Association of Accenture SCA, consolidated and updated as of June 28, 2005 (incorporated by reference to Exhibit 10.1 to the May 31, 2005 Accenture Ltd 10-Q)
3.2	Form of Bye-laws of Accenture Ltd, effective as of February 2, 2005 (incorporated by reference to Exhibit 3.1 to the February 28, 2005 Accenture Ltd 10-Q)
10.1	Form of Key Executive Performance-Based Award Restricted Share Unit Agreement pursuant to the Accenture Ltd 2001 Share Incentive Plan (incorporated by reference to Exhibit 10.1 to the February 28, 2007 Accenture Ltd 10-Q)
10.2	Form of Senior Officer Performance Equity Award Restricted Share Unit Agreement pursuant to the Accenture Ltd 2001 Share Incentive Plan (incorporated by reference to Exhibit 10.2 to the February 28, 2007 Accenture Ltd 10-Q)
10.3	Form of Senior Leadership Equity Award Restricted Share Unit Agreement pursuant to the Accenture Ltd 2001 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the February 28, 2007 Accenture Ltd 10-Q)
10.4	Form of Voluntary Equity Investment Program Matching Grant Restricted Share Unit Agreement pursuant to the Accenture Ltd 2001 Share Incentive Plan (incorporated by reference to Exhibit 10.4 to the February 28, 2007 Accenture Ltd 10-Q)
10.5	Form of Employment Agreement of Ms. Craig (incorporated by reference to Exhibit 10.10 to the Accenture Ltd Registration Statement on Form S-1/A filed on June 8, 2001)
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

34

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: March 29, 2007

ACCENTURE SCA
By:	/s/ Pamela J. Craig
	Name:	Pamela J. Craig
	Title:	Chief Financial Officer of Accenture Ltd, general partner of Accenture SCA

35