This summary is based on the third quarter fiscal 2008 earnings call conducted by Accenture Ltd. (ACN: chart) on June 26, 2008.

Management:

CEO: William Green
CFO: Pamela Craig
COO: Steve Rohleder
IR: Richard Clark

Key Investors Issues

- Operating income increased 27% to $862 million or 74 cents a share.
- Net revenues were up 20% to $6.1 billion.
- Net new bookings of $6.77 billion include record consulting bookings of $3.98 billion.

Year to Date Highlights:

- Revenues increased from $15.9 billion in 2007 to $18.8 billion.
- Net income was $1.26 billion or $2.06 a share, up 36%.

Third Quarter Highlights

Net revenues were $6.1 billion, an increase of 20% in US dollars and 12% in local currency from $5.08 billion in the prior year due to increases in both outsourcing and consulting revenues.

- Consulting revenues were $3.7 billion, an increase of 20% in US dollars and 12% in local currency.
- Outsourcing revenues were $2.4 billion, also an increase of 20% in US dollars and 12% in local currency.
- Gross margin was 31.5% compared with 31.7% for the same period last year in line with expectations.
- SG&A costs were $1 billion or 17.3% of net revenues compared with $921 million or 18.1% of net revenues in 2007 due to a decrease in G&A costs offset by a slight increase in sales and marketing costs as percentage of net revenues.

Operating income increased 27% to $862 million or 74 cents a share reflecting a 14.1% operating margin, from $682 million or 54 cents a share or 13.4% operating margin last year, reflecting the continued improvement in G&A.

- The biggest reason for this increase was growth in revenue, favorable foreign exchange rates, a lower share count, and a slightly lower tax rate.
- Free cash flow was $1.01 billion resulting from cash from operating activities of $1.08 billion and property and equipment additions of $66 million.
- The DSO’s, or day’s services outstanding, continued to drive strong free cash flow.
- DSO’s were 35 days consistent with 35 days in the second quarter.

The total cash balance was $3.33 billion compared with $3.31 billion in the prior year as the firm continued to return cash to shareholders through share repurchases.

- Total debt was $7 million compared with $26 million in the prior year.
- The firm repurchased or redeemed 13.1 million shares for $484 million and facilitated the redemption of 4.1 million more shares through the use of the redemption shelf.
- Last quarter, the firm announced the acceleration of the release of certain founder shares held by former senior executives and this program continues.
- There now remain only 61 million founder shares held by former senior executives that are restricted until July, 2009.

Operational Details:

- All five operating groups achieved double-digit revenue growth in US dollars and products, resources, and public service also had double-digit growth in local currency.
- Products, which is the largest operating group, turned in a very strong quarter with revenue growth of 19% in local currency.
- Products has built a base of very strong client relationships leading to consulting and outsourcing growth across all geographic regions and there was also strong demand for ERP and consumer goods and services as well as in retail.
- The resources operating group recorded its first $1 billion revenue and a lot of the activity in resources is related to globalization and a demand for natural resources which are generating increased demand for ERP and supply chain services.

Demand in utilities is very strong and the mining industry is emerging as a major growth opportunity.

- The public service operating group had a strong quarter growing revenues 19% in US dollars and 13% in local currency and expanding operating margin.
- The revenue increase was driven primarily by consulting growth in all regions especially in EMEA, and also by the continued demand in the US federal space for classified and defense work.
- The firm posted 8% local currency growth in financial services as banking clients are coming to Accenture for cost improvement initiatives and to improve customer interaction.

In insurance, the asset based strategy is paying off with sales related to claims processing and policy management and demand continues to be solid throughout Europe and North America.

- In the geographic regions in the Americas, revenues grew 17% in US dollars and 14% in local currency driven by solid growth in the US, Brazil and Canada.
- In EMEA revenues increased 23% in US dollars and 11% in local currency driven by strong results in Italy, France and Spain.
- Revenues in Asia Pacific grew 19% in US dollars and 6% in local currency reflecting business expansion in Japan, China and Singapore with growth in Asia Pacific partially offset by a decline in revenues in Australia.

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