Welcome to Accenture’s second quarter fiscal year 2008 earnings conference call. (Operator Instructions) With that being said I would now like to introduce your opening speaker today, Richard Clark, Managing Director of Investor Relations. Please go ahead, sir.

Thank you, operator and thanks everyone for joining us today on our second quarter fiscal 2008 earnings announcement. As the operator just mentioned, I’m Richard Clark, Managing Director of Investor Relations. With me this afternoon are Bill Green, our Chairman and Chief Executive Officer; Pamela Craig, our Chief Financial Officer; and Steve Rohleder, our Chief Operating Officer. We hope you have had an opportunity to view the news release we issued a short time ago. Let me quickly outline the agenda for today’s call. Bill will begin with an overview of our results; Pam will take you through the financial details including the income statement and balance sheet; and Steve will add some operational perspective. Pam will then provide our business output for the remainder of fiscal year 2008 and Bill will close the presentation before we take your questions. As a reminder when we discuss revenues during today’s call we’re talking about revenues before reimbursements or net revenues. Some of the matters we’ll discuss on this call are forward-looking. You should keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, general economic conditions and those factors set forth in today’s news release and discussed under the risk factors section of our annual report on Form 10-K and other SEC filings. Accenture assumes no obligation to update the information presented on this conference call. During our call today we will reference certain non-GAAP financial measures which we believe provide useful information for investors. You can find reconciliation of those measures to GAAP on the investor relations section of our website at Accenture.com. Now let me turn the call over to Bill.

Thank you, Richard and good afternoon, everyone. We’re pleased that you could join us today as we discuss our strong second quarter financial results. Our continued focus on clients, on execution and on accountability serves us well. In today’s environment clients are looking for results, and this plays to our strength. We see a lot of opportunities for our services in the market, and we are laser focused on taking advantage of them. We are fortunate to have great clients and great people and that combination really drives our continued strong results and our confidence going forward. Here are some highlights from the quarter: First we grew revenues 18% in US dollars and 11% in local currency with double-digit growth in both consulting and outsourcing. We had strong earnings of $0.64 a share and we have again raised our outlook for EPS for the full fiscal year. We delivered outstanding new bookings of $6.4 billion and record consulting bookings of $3.8 billion. Our balance sheet continues to be strong with free cash flow this quarter of $645 million. Finally, we continue to return cash to shareholders through the repurchase of 16.3 million shares this quarter. With that, let me turn the call over to Pam for details on our financials.

Thank you, Bill and thanks to all of you for listening today. I am pleased to tell you more about our strong results in the second quarter of fiscal 2008. We had record consulting bookings, double-digit revenue growth in both consulting and outsourcing and strong quarterly earnings. Let me take you through some detail behind the numbers in our income statement, balance sheet and cash flow. Unless I state otherwise, all figures are GAAP except the items are not part of the financial statements or that are calculations. Net revenues for the second quarter were $5.6 billion, in line with our guided range of $5.5 billion to 5.7 billion. Net revenues increased 18% in US dollars and 11% in local currency over the second quarter of last year, solidly in line with our guided annual range of 9% to 12% in local currency. Consulting revenues were $3.35 billion, an increase of 18% in US dollars and 11% in local currency. Outsourcing revenues were a record high of $2.26 billion, also an increase of 18% in US dollars and 11% in local currency. Moving down the income statement, gross margin was 29.5% compared with 29.6% for the same period last year. SG&A costs for the quarter were $1 billion or 18% of net revenues compared with $839 million or 17.7% of net revenues for the second quarter last year. The change is comprised of a 40 basis point increase in sales and marketing costs, offset by a 10 basis point decrease in G&A costs. This represents higher sales costs related to the development of early stage opportunities in our pipeline, particularly in our public service operating group. Operating income for the quarter increased 14% to $638 million, reflecting an 11.4% operating margin. This compares with $559 million or 11.8% operating margin…

Thanks, Pam. Hi, everyone and thanks for joining us today. Q2 was another strong quarter. Let me take you through some of the highlights starting with the operating groups. We’re extremely pleased that four of our five operating groups achieved strong revenue growth and also delivered strong operating margin. I know there’s a lot of interest in financial services so I’ll provide a quick update on that operating group. We are seeing strong demand in financial services throughout Europe and increased demand in Asia Pacific, while North America is holding up well. Through long-term relationships with key clients, we are selling additional work and signing contract renewals and extensions. We’ve sharpened our offerings to target the C-suite issues of today including cost management and we are using outsourcing as a strategic tool to deliver improved business results. Another operating group I’d like to highlight is communications and high tech which continues to show strong momentum. This was the third straight quarter in which CHT had double-digit revenue growth in both US dollars and in local currency. In communications, we are seeing significant demand in the customer service area which has resulted in some recent big wins throughout Europe. The public service operating group had some challenges this quarter with 3% revenue growth in US dollars and a decrease of 1% in local currency. This was primarily due to lower outsourcing revenues in the Americas. Q2 operating margin in public service was affected by delivery inefficiencies on a few contracts as well as the investment we are making in building a strong pipeline of early stage opportunities. We are very focused on improving the growth and the operational performance in this business unit. From a geographic standpoint, all three geographic regions continued to deliver solid revenue growth in Q2. In the…

Thank you, Steve. As we’ve done in prior quarters, we provide an update on our annual outlook for the full fiscal year. We also provide for the next quarter for revenues. While there continues to be uncertainty in the global economy, we remain vigilant and focused on driving our business for continued growth and profitability. For the third quarter, we expect revenues to be in the range of $5.85 billion to $6.05 billion. Like last quarter, we are again assuming an FX lift of approximately 7%. Now, let’s turn to the full fiscal year. We continue to target new bookings in the range of $24 billion to $26 billion. We also continue to expect our revenue growth to be in the range of 9% to 12% in local currency. We also continue to expect operating margin for the full year to be in the range of 12.8% to 13.1%. As you have seen, fluctuations quarter to quarter are expected. We now expect our annual effective tax rate to be in the range of 28% to 30%. This includes the impact of the Q2 tax benefits plus some additional tax benefits we anticipate. We are raising our outlook for earnings per share for the fiscal year by $0.19 to a range of $2.55 to $2.60. This is the second time we have raised our EPS guidance during this fiscal year. This updated range for the year continues to reflect our strong operational performance and also reflects the impact of our revised annual effective tax rate and our updated estimate on share count. To complete the annual outlook for fiscal 2008, we now expect operating cash flow to be in the range of $2.42 billion to $2.62 billion, property and equipment additions to be $420 million, and free cash flow to be in the range of $2 billion to $2.2 billion. In summary, our second quarter results reflect those of a strong business. We are navigating for continued growth and profitability. I am pleased that we continue to deliver well on our commitments for new bookings, revenue growth in local currency, operating margin and free cash flow and that we’re on track to deliver higher earnings per share than we had previously expected. So here is Bill to close before we take your questions.

Thank you, Pam. Let me just recap quickly before we take your questions. First, we are very pleased with the performance in the second quarter and we continue to build upon and extend our leadership position in the market. We had double-digit revenue growth in both US dollars and local currency and we delivered EPS of $0.64. Our balance sheet is strong. We have demonstrated that we have a highly diversified and durable business and continue to see strong demand for our services despite economic uncertainty in some geographies or sectors. I also want to mention that in addition to delivering strong results, we are taking important steps to build for the future, strengthening our pipeline, expanding our skills and capabilities and creating new offerings that further differentiate Accenture in the marketplace. With that, let’s take your questions.

Thanks, Bill. Now we’ll go to your questions. Operator, would you provide the instructions for those on the call?

Absolutely. (Operator Instructions) Our first question is from the line of Julio Quinteros - Goldman Sachs.

I just want to go back through it, because I’m obviously excited about the bookings and everything that you’re saying about forward trajectory, et cetera, but this quarter appears pretty messy on the operating margin front so if you could just walk us back through the issues at the highest level, first on the income statement perspective? Secondly if, Steve, maybe you can give us the segment operating view again, because it looked like there were some moving parts at the segment level as well. I just want to make sure we understand what those parts were that led to a little bit of the weakness on the operating margin this quarter.

Julio, I’ll take the first part and then let Steve get into that as you suggest. First of all, the operating margin in the second quarter is typically lower. Last year it was 11.8%, this year it’s 11.4%. As I said, it was right in line with our expectations, actually. This year if you look at the underlying margins you saw the gross margins about flat, margins in parts of our business are up, some down, but on balance relatively flat. Also if you look at, we had higher salary increases this year that we’ve been absorbing and we’re on track to fully absorb those this year, and our utilization rate is 300 basis points lower; again something we planned given that we thought we were running a little hot last year. So on balance, I know you guys in your models were expecting higher operating margins this quarter, but we were not.

Just on the salaries component, can you just break that out between on-site and maybe the global delivery network salary increases, at least some ranges?

No, we don’t generally do that but they were higher this year.

Ok.

Let me just address the segment thing because I think that the one operating group I would point to, and I think I pointed to it in the discussion was public service and I think it’s important to note. As I pointed out we had what we call delivery inefficiencies which means there’s a few contracts that weren’t meeting their original deal economics. We’re in the process of restructuring those but more importantly, we’ve made a conscious decision a quarter ago to begin to invest in what we see is a higher volume of opportunities, primarily in the US but also in our organization and public service. So we’re going to continue to invest probably through the next two quarters in some early-stage opportunities that we think are going to help that organization grow very profitably next year.

The last one, Steve, on the financial services, correct me if I’m wrong here but I’m looking at about it looks like a 10% operating margin in financial services versus 14% last quarter?

10%?

That’s what it looks like from here but I might be looking at the wrong line here. I’m sorry, that was actually 12% this year, sorry, so I take that back. Got it. Thanks guys.

Our next question is from Adam Frisch - UBS.

Thanks, guys, great job on the bookings. Just building on Julio’s question for a second, the operating margin definitely took us a little bit by surprise because last year you had some runoff with NHS in there, the tax rate was lower obviously too. Pam, I think you said that operating margins for the year, the goal was still 12.8% to 13 1%?

Correct.

So it’s just a matter of this quarter being a little bit lower but the full year being high and you guys are running the business for the year not the quarter, is that the way we should look at it? Free cash flow is still the same as well, correct?

Yes, to the first question. The free cash flow we actually raised it a little bit from last quarter and we’re back to where we started at the beginning of the year.

Finally, when I use different ranges for your tax rate -- let me backup a second. Maybe a better way to ask this is, of the $0.19 increase in your EPS, how much of that is coming from lower taxes and how much of that is coming from other sources whether it be operational improvement or share count, things like that?

Yes, of the $0.19, Adam, a substantial part is coming from the lower tax rate.

Is it all coming from or is there other stuff in there as well?

There’s other sort of ins and outs, you have the share repurchases, the share counts affecting it and then the interest income is a little lower so there’s a lot of ins and outs. The dominant part is the effective tax rate.

A final question maybe for Steve, are you seeing any kind of delays or changes in the timing between when you book a consulting deal and when it’s ultimately implemented? Or is that a typical pace as we’ve seen in the past?

Adam, it’s actually pretty typical. We looked at that and I thought you were going to ask the other question which was around delays too, and we look at that two different ways and we’re not seeing delays either in the startup of either consulting or outsourcing contracts.

Any big chunks in the 3.8 like related to outsourcing deals or was it all more of the same stuff?

It was pretty much the same. I look at the big wins that we’ve had over the quarter and $50 million and above there was about a dozen of them. I think we’re seeing the continued effect of smaller sized deals that we’ve talked about in prior quarters.

But no anomaly like the NHS from a few years ago where it was several hundred million or something like that?

No, none.

Our next question is from Rod Bourgeois - Bernstein.

So, overall it looks good. Let me try to focus on a few things here. The consulting bookings particularly looked very strong relative to the expectation and you actually had a fairly tough comparison there. Now looking forward though with the bookings outlook, should the consulting bookings mix drop in upcoming quarters? And if so, will that be due to the consulting bookings slowing or will that be due to the outsourcing bookings picture actually getting stronger? Can you give any specifics on that front?

This is Bill. I would say sitting here looking at the pipeline, it’s pretty rich on both dimensions. It’s hard to tell and as you know, a couple of big outsourcing things come in and can change the booking percentages pretty dramatically. I think on balance, we’re pretty consistent with where we’ve been and where we will continue to be. I would tell you that across the market there is some acceleration and people focusing on outsourcing; but of course, you know the outsourcing thing, it’s not like they get up this morning and say I want to do it and six months later you’re doing it. Some of them take a year to get through and so there’s tremendous activity around that, some of which is driven by people’s challenges around the cost management; but others just driven by the fact that that’s a part of the business that has some legs and it continues to. So we’re not really looking too much at the mix percent and what goes where because every operating group has a different mix and a different profile and when you put them together you get a composite and the thing can change a few percentage points quarter to quarter.

Bill, let me follow up on that. If you were to see a shift away from consulting and towards outsourcing, that could affect your margin profile. But it sounds like from your commentary if there is a shift it’s not a major one because it’s not really affecting your financial outlook. Is that the way to look at what’s happening right now?

Yes if you start at the end and back in, we started our financial outlook for the year and backup. We don’t see it having an impact on our financial outlook for the year. When you get into a particular operating group it could change the dynamics within one operating group or another, but the ones that have accelerated in consulting -- and if you look at the pipeline and the demand and the activity -- the consulting stuff remains strong. So we are pretty focused and we do a lot of modeling around the mix, but right now frankly we are pretty relaxed about where it is. I guess I’d also say that we go out there and make this stuff happen and in terms of what we’ve asked our teams to do, it’s to keep equal pressure on all three of our growth platforms so as not to be biased towards one or the other, because it’s important to us -- I guess the other thing I’d point out is inside some of those outsourcing deals are nice pieces of consulting work and you may not see that in the mix that much, but it’s an important element of the economics of the deal across the whole business.

Bill on that, here’s the question I’m trying to get at on this: do we need to re-calibrate expectations a little bit? I mean you’re posting north of 20% consulting bookings growth. Is that as good as it gets right now and should we be expecting something that solid in upcoming quarters, but not north of 20%? I’m just trying to properly calibrate expectations for the next few quarters, given what is happening in the economy.

Well, I guess I would say this: we weren’t surprised at the consulting results this quarter, because we’ve been looking at them coming and we think were going to be pretty consistent. Now can go up or down a couple points? Sure it can, but on balance I think if you look at where the demands coming from, the nature of the work, some of the things that Steve went through, those sources of demand which is consulting demand, continue to be as good today as they were three months ago or six months ago or nine months ago. So, that’s kind of our data point. We keep asking the questions as you do, right? What would we look at to see if something was starting to slow down. Frankly, we just did a state of the business call yesterday across our entire organization and we feel fairly bullish about the environment we’re operating in.

Pam, last quarter the free cash flow guidance came down because of a one-time item and now you’re reinstating that back up. Where is the cash flow guidance improvement coming from? Is it related to DSOs or something else?

We thought the DSO performance this quarter was very strong, so we factor that in a bit as well as we’re forecasting lower cash tax payments.

Our next question is from Andrew Steinerman - Bear Stearns.

Pam, could you give us some color under the surface on gross margins? Obviously, they’re close to even; could you just call out some of the puts and takes under there?

As I mentioned earlier, Andrew, I think that gross margins are relatively flat and the underlying margins are as well. As we look at all of the different parts of our business in different parts of the world, there are some things that are up and there’s some things that are slightly down and really overall, they’re flat. As I said before also if you look absorbing the payroll increases this year that’s something that we do all year long and we’re on track to fully do that as well as handle the lower utilization.

That sounds good. Could you just give a little more color on sales and marketing? I know you went through it quickly. Are we going to stay at this sales and marketing level or is there something of a leveling off hereafter? What’s driving that and how long will it stay at this level?

Hi, Andrew. It’s Steve. I’ll give you a little color there. We’ve consciously decided not only in public service, but some of the others to spend a little bit more on the S part. On the G&A part, I can assure you we’re going to continue to focus on driving that cost down. As Pam mentioned, we were down 10 basis points for the quarter so we’ve still got programs underway. We’ve got some specific targets that we’re focused on and we’re going to continue to drive that down over the next two quarters.

And our next question is from Ed Caso - Wachovia.

I believe if I counted correctly you did five small acquisitions that closed in the second fiscal quarter. How much did that contribute and what’s that impact? What’s organic versus local currency growth?

Hi, Ed. We actually did four in the quarter and if you look at the handful that we’ve done over the past year like if you just look at what’s been the contribution in the last four quarters of the new acquisitions just in the comparison to last year, it’s still less than 1% of our revenue growth rate.

Any word on pricing? It seemed like you were more positive tone in pricing in recent quarters. Is that still holding?

Yes, Ed. It stabilized. This is Steve. There’s still pockets that we’re focused on, on trying to drive pricing, primarily in Europe. I’m really pleased with the North America progress that we’ve made in this quarter but I’d characterize it as stable right now.

Our next question is from Moshe Katri - Cowen and Company.

Thanks again. Congratulations for very strong bookings. I want to focus maybe for a minute on your consulting and SI business. Do you attribute the strong result that we’ve seen, whether it’s on the revenue growth side or the booking side -- I mean obviously could it be market share gains, increases in win rates, vendor consolidation that’s going on? Or maybe you’re actually able to sell a larger portion of what we call offshore-like services? Is there any way to give us and prioritize these different factors that’s helping you coming out with these strong numbers?

This is Bill. I’ll start. The prioritization I think would probably be impossible. I mean it’s something that I suppose we could root around and do. I think if you stand back and look at it; it’s in many cases, all of the above. Maybe the first and most important is making sure we are out there with offerings that are relevant to the market demand today. So in some of the sectors that are more challenged than others, we are bringing different capabilities to the market than we were six or 12 months ago. I think the second thing is there’s definitely a flight to quality. People are looking hard at whether your consolidation point on vendors, but people are looking at two things. One is the quality of the provider and the second is this thing that you guys are always focused on is, is this must-do? I think we play in the must-do space so for the money that’s available, the things that we’re involved with are continuing to go and we still sit here without cancellations or deferrals as we did last quarter. So that’s important. I think the other thing is because of the uncertainty and some of this is what shows up in our sales costs is because of the uncertainty, we don’t just sit here and see what happens. We dial it up. So, we’ve been out there pushing. We’ve been out there what we call catalyze and demand. We are creating our own demand. We know how to do that and it’s something we are focused on and if one of the by-products is that some of the operating groups are now saying they’re not going to have enough capability to deliver and so that’s what we all do to just keep the balance between supply and demand. But I think on balance we are selling the right stuff to the right clients and it’s relevant to what they’re trying to do to improve their business performance and all that works in our favor. Steve, do you want to pick up?

Yes, the only thing I would add to what Bill said is that the relationships that we have are really contributing to the bookings growth. If I look at where our growth came from in terms of the bookings and the results, well over 80% of the bookings come from what we call foundation clients. That’s really important, because it means we have a relationship, a long-term relationship with that client. We are able to go in, shape an opportunity to drive business results and convince them to contract with us to deliver those results. I was in India about a month ago and I told the group there, Moshe, I said look, we’re not sitting by the phone waiting for the phone to ring, waiting for the opportunities. We’re out there creating them and the fact that we have this incredible client base with deep, deep relationships helps us to shape business opportunities and to drive them to results. So, I think it’s a major contributor as well.

Another very brief question regarding margins, Pam was there a greater bonus accrual during the quarter that impacted gross margin? Is there any way to quantify the impact of some of these contracts or small probable contracts that you spoke about in the public sector side? Maybe in basis points in terms of the impact on margins? Thanks.

Okay, I’ll take the bonus part of that. As you know we don’t comment on annual bonus. I will tell you that we did accrue some, but I’m not going to say anything more about that.

Can you comment on some of the contracts on the public sector side?

Again, we don’t talk specifically about any of the individual contracts, Moshe. Again I would just reiterate that the contracts that we have weren’t performing to their original deal economics, we’re in the process of restructuring them and we took that into account in our results and more importantly we’ve taken into account in our estimates going forward.

Yes I would just add to that if I could that three quarters ago CHT had a couple of rough quarters, right? We bared down on that and that thing is cranking right now and so public service had a rough quarter this quarter, we saw it coming, we’ve got a series of things underway but we also see great opportunities in the pipeline particularly in US Federal, big ones. Things that we know how to do; things we have great credentials for, so we’re investing in those. As with everything, particularly in an election year you’re not sure if it’s tomorrow or year from tomorrow but at the end of the day these are things that Accenture should be doing and that’s what we’re focused on.

Thanks Bill.

And we’ll go now to Bryan Keane - Credit Suisse.

Hi. Let me hit the margin question again. Margins were down – yes, I’m going to go after it again, a different angle. Margins were down 40 basis points year-over-year yet you’re still expecting this 10 to 40 basis points of margin increase for the fiscal year. So that means we’re going to have strong second half ‘08 but it sounds like the government margin or the public service margin will stay depressed so I guess to help us with the color where is that margin expansion going to come from and in what area?

Well, you’re right in doing the math we expect to have a higher operating margin in the last two quarters and we don’t necessarily expect that the public service operating group will stay depressed, in that on those contracts that Steve talked about we have adjusted those economics and that’s reflected already.

Okay. So going forward we’ll get back to more normalized in the government sector?

We’re going to continue to invest in the sales part. I would say we may see a slight depression but we’re not going to see anywhere near the level that we saw this quarter.

Then Steve, consulting bookings obviously beating our expectations. Does that comes as a surprise coming from management consulting, tech consulting or systems integration? Is there any area of extra strength?

Yes, the ERP area is still pretty strong for us. I mentioned a few areas of management consulting, I focused on supply chain we’re having a lot of activity and action in that area as clients begin to shift now towards more of a cost reduction agenda. I also think technology consulting area is still very strong specifically in data center consolidation and in the security area for us. So the SI space though, if I had to weigh it all is still very strong for us.

What about if we start to see some weakness in the ERP vendors like Oracle and SAP how do you think that will affect your business?

I’ll give you my personal opinion is the ERP work that we are doing is not discretionary, just full stop. If I could just describe the representative ERP project is a client trying to rationalize one version of either Oracle or SAP across multiple business units in multiple countries over multiple years. And whether Oracle or SAP are selling licenses doesn’t impact necessarily the work that we do because clients have a different agenda.

Finally Bill, just the health of your diamond clients, three months later from the last conference call, have you seen a lot of change?

I think on balance, we have diamonds that don’t know there’s any challenge out there, that these are just great businesses; in fact some of the world’s greatest businesses. And then we’ve got some from your sector that are having a rough ride. I think on balance, we continue to expand our presence in the diamonds as we have over the years and we have of very significant and specific program to do what we call bring the best of Accenture to these companies. What the economic challenges do really only is allow us to introduce different services than we might have been providing to them in the past. So we continue to add, I think we’re going to add three diamonds in the next quarter so we continue to add companies that are in there and we are just delighted with it. They are really important parts of how we keep doing what we’re doing and how we bring in new innovation to the table.

Congratulations, I think you guys continue to surprise everybody with a strong results.

And our next quarter is from Elizabeth Buckley - Arete Research.

We see a number of vendors speak of rising demand for offshore as a way for CIOs to cut IT costs and I’m wondering, what are you seeing in your business in terms of offshore demand perhaps by vertical or by geography? Could we see an acceleration of the ramp of the GDN? It looks like the sequential ramp between Q1 and Q2 was a bit slower than we’ve seen in the past?

I’ll comment on the demand there. We did see a shift frankly in the utilization if you will of our India resources specifically. We are seeing a slight shift in the demand for offshore resources. I would tell you that our headcount utilization numbers are up in India and they are up specifically because in the first quarter we made a conscience decision to build a bench to train more people. We are now soaking up that utilization but it doesn’t require us to necessarily go into the market and hire more heads. We’re basically getting the people that we have more productive. So I’m still comfortable with the growth trajectory that we have for the global delivery network. As I said in my comments I believed that this network is second to none in its footprint, in the capabilities that we have and in our ability to move work throughout the network regardless of where demand comes from.

I would just add to what Steve said, I think we believe we have the largest network; we also believe we have the most productive. I think we really turned the dials up on that this last quarter and we still have more room to go there in terms of how do you drive results out of x amount of dollars or x amount of people? I think back to your first question, all the companies out there are looking for value for money and having an offshore capability gets you to the table. But when you look at what the real value for money equation, it’s not a labor arbitrage thing. In fact it becomes sometimes less of a labor arbitrage thing, it becomes more of a transformation of IT challenge and that’s where our technology consulting and some of the acceleration you see in the consulting business is all from that, right? It is people trying to get better value for money through transformation of their IT environment. That’s a market that’s right in our sweet spot.

Well, that leads into my second question because obviously as you look in the pipeline of transformational projects or the must do projects that you’re talking about, could we even in some cases see the tighter spending or more difficult environment accelerating or shortening sales cycles for the transformational work? Perhaps if you could comment a bit about the transformational demand that you’re seeing sector by sector?

I think if you look broadly the theme is a horizontal one, it’s not a sector by sector because there are certainly sectors that have a lot more challenges than others but as we all know just from being consumers, that this thing gets in the water system, right? You’re always looking around the corner to see, is something going to sneak up on me? So all the companies out there are asking themselves, how can I be more effective? So the transformational agenda, whether it’s in financial services where you’d expected it and it’s obvious, but it’s the same in high tech and it’s the same in telecom and it’s the same in consumer products and in all of these places. At the end of the day the demand is consistent with how it’s been the last few years. I would say there’s an acceleration. People ask a lot about IT budgets. We haven’t seen an impact on IT budgets but what we have seen is people having a sharper focus on value for money and a lot of times that drives the transformation agenda. Our job is to make sure that we’re bringing the right offering and solutions to the table to do that; some of that we leverage the global delivery network but a lot of it is just about how you do what you do in right here at home base?

Our next question is from George Price - Stifel Nicolaus.

Thanks very much, a lot of good questions have been asked. If I could focus for one on EMEA, Europe constant currency was 9% versus America’s 10% I think last year really, I mean this is within the last year the first time that the Americas has outpaced EMEA and maybe you could talk about that a little bit more. When you mentioned France and Spain being strong I don’t think you really mentioned much about the UK which is roughly 15% or 16% of your revenue. If you could talk about that a little bit.

This is Steve. I did mention the major countries, there are two areas that we are focused on, the UK and Germany, that had a little bit slower growth this quarter. I don’t think it’s systemic, and I’ll just point that out because every month I’m doing reviews with the head of our UK business. In financial services in the UK, we had some financial adjustments that we made that impacted the quarter for that country, but at the end of the day I’m not worried about the business in the UK. We have demand and I would anchor back to something that Bill said. If you look at communications and high tech which is just going crazy across the globe, the UK and specifically EMEA is one of the real shining stars out of the results for Q2 here. There’s always areas that we can be improving in. This was one quarter that they were off a little bit but I expect them to be back.

Going along the geographic line there, in terms of your mix, particularly of consulting bookings, is that changing at all in terms of geographies or verticals and I guess financial services might be kind of obvious, but maybe along other lines?

Yes, George, I think that the two verticals I’d point to that are beginning to shift more toward the outsourcing area are both financial services we commented on and products where we’re also seeing some stronger demand there. Public service, resources and communications and high tech has been there for a little while but both public service and resources are still primarily focused on the consulting area. The financial services and products are both transitioning more towards outsourcing and specifically in the United States.

Last question if I could, I realize that this is a little narrow, but given some of the fairly extreme headlines recently particularly in financial services with a couple of notable names, have you noticed anything going on thus far post-quarter close in March specifically with respect to consulting demand? Is the pipeline, is there elements shifting or bouncing around in the pipeline? Thank you.

I talk to all these guys in these companies and I think that it’s interesting that if you look at sort of the mental look, people recognize that they’ve got a part of their business that has challenges, they’ve got parts of their businesses that are [inaudible] and people get up every day and still say they got to operate the thing and people are spending money. People are making investments. They’re trying to do smart things, they’re trying to do thoughtful things, and I think in a few levels down in these companies the decision-makers are trying to do stuff that really matters for their company. There are lots of opportunities because the challenges create opportunities. The question is, Can you shift your offerings and do you have the right people and the right talent available at the right time? I would say particularly in financial services, they say bring the guys in here that are going to do this, I want to see them, I want to talk to them, I want to touch them and feel them. If you can do that, you start tomorrow on some of the things that can really help these guys. I’d also just like to mention the EMEA point because we feel great about the momentum over there. For instance, in this last quarter there’s a thing in the industry called win-backs and win-backs are when something we lost three months or six months ago because we walked, because we weren’t going to meet economics, or we weren’t going to meet some terms, so they’ve gone into the contracting process with one of our competitors and we’ve had three or four of these things, fairly significant size, come back to us this quarter. That stuff will turn into revenue over the next couple of quarters and so we feel great about EMEA and our market position there and I think if that economy gets more challenged I think it will bring more business our way, not less.

Great, I appreciate the commentary.

And we’ll go next to the line of Tim Fox - Deutsche Bank.

Steve, you talked a little bit earlier about deal sizes and overall deal size may be shrinking a bit, but the question I have is around the outlook for bookings. You’ve maintained that outlook. I just wonder if you could comment on overall duration of contracts? We’ve heard there’s been some slight narrowing of scope, not necessarily with Accenture’s business but generally in the overall outsourcing space in particular. Do you see any risk at all to the bookings form a shrinking of deal sizes, a shortening of durations or have we sort of bottomed there in your view?

I think we’ve stabilized, Tim. I would characterize it that way because just to be real clear here, we’ve not seen any further reduction of the contract duration. So I would characterize it as stabilizing from Q1 to Q2 as well. So I look at that but I also look at the conversion rate and I look at the time that it takes us to get the contract and that last metric is really important because that gives you a sense of whether or not we’re seeing delays or cancellations in potential work and we’re just not seeing that right now.

That delay to cancellation, that’s spread across all verticals equally?

Correct.

Okay. That’s helpful. And secondly just com and high tech, CHT, has been as you said, on fire. I’m just wondering if you could talk a little bit about what specific changes did you make to the business given the weakness it had a few quarters back and notable high tech companies are softening a bit now, but can you comment a little bit just on the pipeline there? It sounds like it still remains fairly strong in EMEA.

If you look at our CHT operating group, the telecom piece is the star. I would say electronics and high-tech, semiconductors, consumer electronics, all the gizmo guys, that’s pretty stable. It’s good business and it’s stable. But in the telecom thing, or cable broadly and telecom, there’s lots of opportunities. I think number one is the big customer service stuff that Steve mentioned. We’ve gotten tons of new engagements on how do you serve, how do you provide the bundle and how do you serve customers and bill and collect for the bundle? So that’s an important thing. In the cable space they’re all looking to expand their content and their offerings, there’s a lot of work in that space. Then frankly, there is still particularly in Europe, new companies coming online either in mobile or online communications that have really nothing, that are doing cold starts in central Europe and across Europe, are trying to move to a more pan-European strategy and as a result there’s a lot of activity around the ability to go in and do the BSS and OSS kind of industrial-strength, bulletproof systems that allow telecom companies to not only operate their networks but serve their customers and bill and collect for it. So it’s really the bread and butter kind of work of telecommunications. You know, there’s the sexy and sizzle stuff which is all about content but as a percentage of the volume it’s probably 20%. The 80% is around very traditional billing, collections and service management stuff.

Our next question is from Tien-Tsin Huang - JP Morgan.

Just a couple quick questions. First in government, the weakness there, was that related to a particular type of outsourcing engagement? I’m just curious if there’s any commonality there.

No, there wasn’t, Tien-Tsin.

How quick can this be resolved?

We’ve resolved the three contracts, basically.

Okay, so it’s mostly behind you then. Then on the variable comp, I’m not looking for any particular numbers here, just curious how is the variable comp typically split between SG&A in the cost of services?

The annual bonus and it’s based on where the people are so most of it goes to cost of services.

Most is on the cost of services line which means gross margin relatively flat. Okay. That’s all I had. Thanks.

Our next question is from Karl Keirstead - Kaufman Brothers.

I had a question for Steve. I think in your prepared comments you mentioned that the outsourcing revenue growth rate may slow in the next couple of quarters so first of all, could you give some parameters around how quickly it might slow? Secondly, if you could explain that a little bit more, I think the story so far is that the annualized revenues on the outsourcing contract have gone up of late. Is that story changing? Did you see fewer extensions? If you could give a little color. Thank you.

Yes. Just to give you some context, Karl, I think it’s important that you understand the outsourcing business. About two or three quarters ago we really undertook some very specific actions to look at the pipeline and be a little more selective, focusing on deal shapes that delivered not only results but were also profitable. We were much more selective specifically in the HRS area, but we’ve been selective across the portfolio. I think we are now at a point where we’ve reshaped some of those deals, we’re seeing an increase in the pipeline and frankly, I just wanted to highlight the fact that that dip in bookings and sales two or three quarters ago is going to play out over the next quarter or so in terms of revenue. I also wanted to make sure that I was very clear that we’re still upbeat and positive on the pipeline and the level of opportunities that we have in the outsourcing portfolio, specifically in application outsourcing and in the BPO area.

Pam, just given that the taxes came in so much lower and you’ve given us some guidance for the full fiscal year ‘08, this might be an occasion as we get later in the fiscal year to be thinking about fiscal ‘09. Can you give us some help in terms of what an appropriate tax assumption might be?

Well, we are just starting our planning for ‘09 now and so I will be in a position probably after the fourth quarter to provide that for you.

We’ll go next to the line of Ashwin Shirvaikar - Citi.

Congrats on the nice demand metrics. The question I have is just going back one more time to the delivery inefficiencies. The question is, why do you have these in spite of the contract oversight changes that you put in after NHS? I know the impact is sort of behind us but from a profit standpoint did the changes you put in not work?

Let me answer that because I sort of live and breathe this stuff. I’m just sort of chuckling to myself because we aren’t having any more things that look like NHS. I mean, we do thousands of projects and we do really hard, complex stuff. Some of it is pioneering in nature, things that people have never done before. To have out of thousands of projects two or three of them that go tilt, is not out of the ordinary. The fact is, they intersected in public service, they intersected at the same time and so we needed to go in, get them restructured, intervene on them, get them right and get behind it. Frankly we do it routinely and I think what you saw is just the intersection of timing and in one operating group. So needless to say, public service has been getting a little help from us around the place. But it isn’t any bigger than that. These are things that some of them wouldn’t have even made it to our capital committee, but they’re just about really hard, complex things that you estimate to the best of your ability. They’re fixed price in nature and as you start executing something doesn’t go the way you want it and that’s just sort of life and the nature of the work we do everyday. These things are no different than anything we tackle anywhere around the world.

So cumulatively it was big enough to call out. But if it had been just one, maybe it wouldn’t have been.

There’s always something that you’re intervening on to make sure you’re getting it right. They just happen to all intersect at the same time and the same place and unfortunately it hit our smallest operating group. If they had been in a different operating group, they might have been a rounding error. But, they intersected with public service and as a result, you can’t help but not see them on the results.

One quick question on the full year share count? I’m assuming, you might have said it, but I might have missed it.

We don’t generally provide that. You can expect that it will go down modestly.

Okay, so going back to this $0.19. Would it be fair to say about $0.15, $0.16 is from lower taxes and the rest buy back?

Again, I didn’t quantify it. I said the predominate amount was from the taxes.

Okay, thanks.

Let me just wrap up. I appreciate you guys sticking with us. I’m glad we got a chance to get to a lot of questions today. Just in closing I’d first say that we are particularly pleased with the momentum in our business as we enter the second half of the year. While we continue to keep a very close eye on global economic trends -- a very close eye -- demand for our services remain strong and we see tremendous opportunities to serve our clients. In short, we have built a global company that is durable, differentiated and diverse and we are focused on maintaining strong operating discipline and running it. We continue to benefit from our long-term client relationships and from our highly skilled and dedicated team. Our people are committed to winning and to raising the bar in terms of helping our clients achieve and sustain high performance. Let me make one final comment. I understand that it is difficult to see the real strength and potential of an enterprise in these times. if you step back and look at us, you can see not only that we are operating extremely well, but that we are focused on building an even stronger and more successful Accenture for the future and on delivering exceptional long-term value on behalf of our shareholders. So thank you very much for joining us today. We, as always, appreciate your continued support.