Richard Clark – Managing Director, IR Bill Green – Chairman and CEO Pamela Craig – CFO

Adam Frisch – Morgan Stanley George Price – Stifel Nicolaus Karl Keirstead – Kaufman Bros. Rod Bourgeois – Bernstein Bryan Keane – Credit Suisse Julio Quinteros – Goldman Sachs Jason Kupferberg – UBS Joseph Foresi – Janney Montgomery Scott Tien-Tsin Huang – JPMorgan Tim Fox – Deutsche Bank Reik Read – Robert Baird & Company

Ladies and gentlemen, thank you for standing by and welcome to Accenture’s second quarter fiscal 2010 earnings call. At this time, all lines are in a listen-only mode. (Operator instructions) And as a reminder, this conference is being recorded. I’ll now turn the conference over to 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 2010 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, and Pamela Craig, our Chief Financial Officer. We hope you have had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today’s call. Bill will begin with an overview of our results. Pam will take you through the financial details, including the income statement and balance sheet along with some key operational metrics. Bill will then provide some insights on what we are seeing in the market and how we are positioning our business for the upturn and future growth. Pam will then provide our business outlook for the third quarter and full fiscal year 2010, and then we will take your questions. As a reminder, when we discuss revenues during today’s call, we are talking about revenues before reimbursements or net revenues. Some of the matters we will discuss in this call today are forward-looking, and you should keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, general economic conditions and those factors set forth in today’s news release and discussed under the Risk Factors section of our Annual Report on Form 10-K and other SEC filings. During our call, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of those measures to GAAP in our news release or on the Investor Relations section of our website at accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call. Now let me turn the call over to Bill.

Thank you, Richard, and thanks, everyone, for joining us today. We are very pleased with our results in Q2. We delivered a solid quarter, driving our business with discipline while positioning it for growth. And importantly, we are beginning to see positive signs and increasing demand for many of our services. Here are some highlights from the quarter. We generated revenues of $5.2 billion within our expected range of $5.1 billion to $5.3 billion. Operating margin was 12.6%. We delivered earnings per share of $0.60. We achieved very strong new bookings of $6.5 billion, with consulting and outsourcing each exceeding $3 billion. We generated $616 million in free cash flow, and we continue to have an exceptionally strong balance sheet with a cash balance of more than $4 billion. In short, a very good performance. In addition, we just announced a dividend of $0.375, which is our first semi-annual dividend in part of our ongoing commitment to return cash to shareholders. While there are still uncertainties and challenges in the global environment, we are seeing signs of positive momentum in the market, as our clients are once again looking to the future. We are very well positioned to benefit accordingly with the return to positive growth. We are staying close to our clients helping them with their most important initiatives. We have enhanced our offerings for today’s demands and we are recruiting high quality talent aggressively to ensure that we have the breadth and depth of capabilities to capitalize on future growth opportunities. With that, I will turn the call over to Pam who will provide some more detail on the numbers.

Thank you, Bill. And thanks to all of you for listening today. I’m pleased to tell you more about our second quarter results. Before I get into these results in detail, let me provide some perspective on how our business is trending right now. First, we were pleased with the trajectory of new bookings. Consulting bookings came in at a strong level, similar to Q1, and total bookings were up 19% in local currency over Q1. Second, net revenues on a year-over-year basis are now just about through the cycle of negative year-over-year comparisons. Our consulting business continued to strengthen during the second quarter and reflected sequential growth on a per net workday basis compared with the prior quarter. We believe that the outsourcing revenue comparison reflects the bottom of the impact of last year’s terminations and that outsourcing revenues will turn up next quarter. Lastly, we continued our strong cash flow delivery through the quarter. Now let’s get to the numbers. Unless I state otherwise, all figures are US GAAP, expect the items that are not part of the financial statements or that are calculations. New bookings for the quarter were $6.52 billion and reflect a positive 6% foreign exchange impact compared with new bookings in the second quarter of last year. Consulting bookings were $3.39 billion, and outsourcing bookings were $3.13 billion. This level of bookings was the highest in three quarters. On bookings, good, steady demand for our services and our consulting business continued. In management consulting, our bookings were broad based and strong around the world and across four of the five operating groups. Demand continues primarily in strategic sourcing and customer relationship management in addition to risk management and post merger integration. While cost take-out remains a priority, we did see an uptick in demand for projects focused on strategies for revenue growth. In technology consulting, bookings were driven by continued demand for projects in infrastructure consolidation and virtualization, security, and IT governance. This quarter was our strongest yet for bookings within technology consulting. In systems integration, our bookings reflect client interest and services for custom application development as well as for ERP add-ons and extensions with an increasing level of work with emerging technologies. We continue to work with our clients seeking cost relief to shift more of the mix of resources to our global delivery network to deliver more value for money. This results in work volume growing faster than revenue, a trend we expect to continue over the medium term. Turning to outsourcing, our solid bookings were driven by technology outsourcing, as our clients continue to seek improved costs and service levels. Included in these bookings were five contracts in excess of $100 million each. So in summary, we delivered a strong bookings quarter across the dimensions of our business for both consulting and outsourcing. And even after recording $6.5 billion in new bookings, our pipeline grew in Q2. Now, turning to revenue, net revenues for the second quarter were $5.18 billion, a decrease of 2% in US dollars and 8% in local currency from the same period last year. These revenues reflected a foreign exchange impact of positive 6% compared with Q2 last year. These net revenues were solidly in our guided range of $5.1 billion to $5.3 billion, a range that had assumed a higher foreign exchange lift of 7%. Consulting revenues were $2.93 billion, a decrease of 3% in US dollars and 9% in local currency. Outsourcing revenues were $2.24 billion, flat in US dollars and a decrease of 6% in local currency. The year-over-year consulting revenue decline continued in Communications & High Tech, Products, and Resources, but moderated when compared to Q1 and in fact turned positive on a sequential revenue per net workday basis. Health & Public Service operating results reflect a significant decline in consulting revenues due to delivery inefficiencies on a contract in public service, which negatively impacted both revenues and operating margin for the quarter. The results also reflect the growing uncertainty and challenges in the public sector around the world, and we expect this to continue for some time. The momentum we saw in Financial Services during Q1 continued to build into the second quarter, and the consulting revenue grew 6% year-over-year in local currency. This was driven primarily by demand for finance and performance management services, post-merger integration, and risk and regulatory work. Turning now to outsourcing, revenues declined 6% in local currency due largely to the terminations and restructurings we experienced in FY ’09. We continue to expect to be impacted by these terminations until the anniversary in the second half of fiscal 2010. Otherwise, outsourcing revenues had begun to trend positive, while at the same time continued to reflect patterns we have mentioned in recent quarters, as clients are focused on driving down costs through the use of lower cost resources and closely managing scope on new and existing projects. Moving down the income statement, gross margin was 32.7%, up from 30.8% in Q2 last year, a 190 basis point increase. The majority of the year-over-year increase can be attributed to the implementation of the new sales effectiveness model I mentioned after Q1. Sales and marketing costs were $623 million or 12.0% of net revenues compared with $519 million or 9.9% of net revenues for the second quarter last year. This increase in sales cost was primarily due to the implementation of our sales effectiveness model I just mentioned and our efforts to grow our pipeline. General and administrative costs were $413 million or 8.0% of net revenues compared with $439 million or 8.3% of net revenues for the second quarter last year. We continue to work our G&A cost down as a percent of net revenue. These results primarily reflect savings due to our consolidation of office space. Operating income for the quarter decreased 4% to $651 million resulting in a 12.6% operating margin. This compares with a 12.9% operating margin in Q2 last year, which included a 30 basis point benefit from a reduction in our re-organization liabilities in that quarter. Our effective tax rate for the quarter was 27.8% compared with 28.1% in the second quarter last year. This quarter included some final determinations resulting in a rate in the quarter below our guided annual range of 30% to 32%. Net income was $462 million for the second quarter compared with $502 million for the same quarter last year, a decrease of 8%. Diluted earnings per share were $0.60, a decrease of $0.03 compared with $0.63 in the second quarter last year. This difference reflects a $0.05 decrease from lower revenue and operating results in local currency, a $0.01 decrease from re-organization benefits that were included in last year’s operating income, and a $0.03 decrease from lower non-operating income, offset by a $0.02 increase from a lower share count and the $0.04 increase from favorable foreign exchange rates. Now let’s turn to some key parts of our cash flow and balance sheet. Free cash flow for the quarter was $616 million, resulting from cash generated by operating activities of $660 million, net of property and equipment additions of $44 million. This strong cash flow reflects the continued great performance managing our DSO. Turning to DSOs, our days services outstanding were 30 days, down from 32 days in the first quarter and up from 28 days at the end of last fiscal year. Our total cash balance at February 28 was $4.1 billion versus $4.5 billion at the end of August. Turning to some key operational metrics, we ended the quarter with global headcount of more than 181,000 people, and we now have more than 88,000 people in our global delivery network. In Q2, our utilization was 88%, in line with Q1 but still higher than our targeted level. Attrition, which excludes involuntary terminations, was 15%, up from 12% in Q1 and 9% in Q2 last year. Lastly, we now plan to hire more than 50,000 people around the world this year. Before I turn things back to Bill, I will comment on our ongoing objective to return cash to shareholders through share repurchases and dividends. In the second quarter, we repurchased or redeemed approximately 10 million shares for $434 million at an average price of $41.89 per share, including approximately 2 million shares repurchased in the open market. At February 28, we had $4.1 billion of share repurchase authority remaining. Earlier today, we announced that our Board of Directors has declared our first semi-annual cash dividend in the amount of $0.375 per share. This dividend will be paid on May 14. This is in line with our Board’s decision to move to semi-annual dividends beginning in fiscal 2010, as indicated on the Q4 earnings call. At that time, I noted that it was our intent to announce the Board’s declaration of the first semi-annual dividend when we announce Q2 earnings, and to assume that the first semi-annual dividend would be roughly equal to half of the previous year’s annual dividend of $0.75 per share. The Board’s decision today is right in line with that. You should think of this first semi-annual dividend as a bridge to our new semi-annual dividend program. Looking ahead, it is the Board’s intent to establish an annual dividend target once final fiscal year result turn on in the early fall. The Board would then declare and we would announce at our Q4 earnings call a semi-annual dividend that will be sized to half of this annual dividend target. The following spring when Q2 earnings are announced, we would follow with the Board’s declaration of the second part. In summary, our Q2 results reflect the hard work and focus that our people collectively demonstrated in working with our clients to meet their needs in what has been a challenging time for everyone. Demand for our services is broadening and strengthening, and we find Accenture well positioned for profitable growth in the future. Now let me turn the call back to Bill for some comments about how we are positioned for that future.

Thank you, Pam. Before Pam takes you through our outlook for Q3 and the full year, I just wanted to take a moment to give you my view on where we are and how we are positioned for the future. The economic environment we’ve always gone through has of course been extremely challenging. But it’s also been an excellent opportunity for leading companies to demonstrate their management shops and, more importantly, to sharpen their ability to compete, win and grow in the future. Over the past year, we have done just that. We laid out a new human capital strategy. We refreshed our business strategy. And we invested to gain more depth and breadth in everything we do. In short, we positioned ourselves for the future – this future. Looking at our track record, thus far as a public company on every measure is something we are extremely proud of. But I believe our time for the next level of market leadership is squarely in front of us. When I look over the past 12 months, I see a time not of recovery, but of renewal. We are incredibly excited as we look to the future. Taking stock of where we are, let me share a few observations. Our people, 181,000 and counting are the best people on the planet in terms of skills and experience. And we continue to invest hundreds of millions of dollars a year in training them. Our clients, 96 of the Fortune Global 100, three quarters of the Fortune Global 500, and closing in on 100 diamond clients with relationships based on trust, confidence and delivery. Our brand, one of our top 50 brands in the world and synonymous with high performance and business outcomes. Our global footprint, providing global clients with consistent service anywhere in the world they operate in more than 120 countries and building leadership positions in the markets of the future. Our delivery model, which ranges from high touch and locally responsive to the global efficiency and industrialization of our global delivery network, supported by an incredible ability to leverage worldwide learning, knowledge and assets. Our breadth and depth of service, few, if any, can work with clients from envisioning solutions to designing and building them, to operating them on behalf of our clients, all with unparallel depth by function, industry and technology. Our 4,500 senior executives’ deep experience with their personal skin in the game tied to our results, and our commitment to shareholders, a durable company, pristine balance sheet, a shareholder focus, and on a daily basis running our company as a high performance business. We have great confidence in our position. It is one of leadership. It’s one of success. Our 2010 results are on track with our expectations. We expect to end the year on a trajectory that shows us back to altitude in driving our business. As we look forward, we feel very good. As the market for our types of services moves up, we outperform. Look at the track record in the history. We are of course focused on delivering 2010, but we will share some of the facts supporting what I’ve just covered at our investor and analyst conference on April 8th. Now Pam will provide our business outlook for the third quarter and the rest of the year.

Thank you, Bill. As a reminder, each quarter we provide an outlook for the next quarter’s revenue and an update on our annual outlook for the full fiscal year. As I mentioned in the last two quarters, we knew that the first half of fiscal 2010 will be challenging year-on-year, given the 6% local currency revenue growth in the first half of fiscal ‘09. With the first half of fiscal 2010 now behind us, we believe we have turned the corner, but remain cautious about the pace of the upturn, given continued economic uncertainty around the world. For the third quarter, we expect revenues to be in the range of $5.5 billion to $5.7 billion, which assumes the foreign exchange uplift of approximately 5% for the quarter. This range reflects the rates over the past two weeks. Turning to the full fiscal year, we are assuming a foreign exchange impact of positive 3% for the full fiscal year, which has trended down from the positive 5% assumption we provided last quarter. For revenue, we see improving demand for our services and good future business taking shape. Based on our year-to-date results and the outlook just provided for Q3, we now expect our fiscal year 2010 revenue to be at the low end of our guided range of a 3% decline to a 1% increase in local currency. We continue to expect new bookings for the fiscal year to land in the range of $23 billion to $26 billion, even with the additional 2% foreign exchange headwind. We continue to expect operating margin to be 13.4%. You should expect some fluctuations quarter-to-quarter, as we’ve seen in the past. We continue to expect our annual effective tax rate to be in a range of 30% to 32%. We are updating our outlook for earnings per share only to reflect the new foreign exchange assumption. We now therefore expect EPS for the full fiscal year to be in a range of $2.61 to $2.69, a decrease of $0.06. Finally, we continue to expect operating cash flow to be in the range of $2.4 billion to $2.6 billion, property and equipment additions to be $290 million, and free cash flow to be in the range of $2.1 billion to $2.3 billion. In closing, we see an improving demand environment. Demand patterns have changed a lot, we have responded, and our business is poised for growth. We remain fully focused on revenue growth, earnings, and the generation of strong cash flow with the objective of returning a substantial portion of that cash to shareholders. We look forward to sharing more with you at our investor and analyst day in two weeks. Richard, let’s take some questions.

Thanks, Pam. Operator, would you provide instructions for those on the call?

Certainly. (Operator instructions) Our first question comes from Adam Frisch with Morgan Stanley. Adam Frisch – Morgan Stanley: Hey, good afternoon, guys.

Hi, Adam.

Hi, Adam. Adam Frisch – Morgan Stanley: How are you? Just wanted to ask a couple of questions here. Obviously the quarter was okay, was pretty decent considering everything that was going on, but it just probably is really about looking forward and what’s going to happen in the next several quarters. So maybe I was wondering because booking, you had two consecutive good ones on the consulting side, how do you see year-to-date revenue guidance? But looking out maybe a little bit further, talk about the lag between the bookings rebound and the revenue rebound and ultimately when margins could tick up a little bit as well.

Okay, Adam, I’ll start here. I mean, as you know well, there is a lag in the sense of getting people on board and getting them going and trained and going. But nonetheless we have seen a good sequential progression in consulting in particular. And so consulting was actually up on a per workday basis 4% in Q2. So I think that it’s already starting to kick in and we are expecting that will continue over this year, that we will see something similar in the next two quarters in terms of some acceleration. Sorry, what was the second part of your question? Adam Frisch – Morgan Stanley: When do you think margins would tick up? How long will it take until you let a little bit out there?

You will never give up, neither will I. The – we have guided 13.4% for this year. We are sticking to that. That’s with the investments we are making in the business in terms of the training and the hiring on the investments in our offerings. And I think that given that when we originally put together our revenue plan and we provided that original guidance of negative three to positive one, we did expect that we would be hiring that. And I think the fact that we have maintained on that margins well and expect to continue to do so is a good statement. So that’s where we are with margins. Like you, I’ll never give up. But that’s where we are for this year. Adam Frisch – Morgan Stanley: Okay, cool. And then if I could just ask one for Bill, obviously the pickup in turnover at this stage of the cycle could actually be viewed as a positive data point in the sense that people do have places to go, other firms are hiring because there is more demand out there. So maybe, Bill, if you could just talk about the current trends and the relationship between turnover and hiring, waging and pricing, and how the four of those things are kind of jiving together at this point?

Well, I guess, Adam, first, there is nothing good about turnover in my book. But it is a fact of life in this business. Right? And our people are very attracted to our clients, and some of them choose to move along. I think us hiring 50,000 people says a lot about how we see the outlook and what we see going on out there. And I think leading companies are starting to look to the future, and companies are starting to invest in their businesses again, and we see it in a pipeline. I think we see it in the momentum we see in the business. We’ve responded with hiring as we have. And a lot of the relationships that we tend to very carefully through challenging times are going to start serving us very well. All of that is going to create more opportunities for people in this profession, and particularly Accenture pedigree people. But we feel really good about what we’ve been seeing in the last quarter, and we hope to be able to bring in some real talent in this market and combine it with the incredible folks that we have and drive the revenues and profits from that. Adam Frisch – Morgan Stanley: Is the uptick in the hiring because of the increase in turnover, or were you going to increase the number anyway from the – I think it was 42,000 on the last call? Will you increase that anyway to refine the demand?

No, I think it was 45 on the last call. We are comfortable with 50 now. We have brought over 20,000 people onboard already this year. Attracting and bringing onboard and training and deploying talent is one of the core competencies of the firm. So frankly, the hiring is just in response to the demand we see and the pipelines that we have in front of us. Adam Frisch – Morgan Stanley: Great. Thanks, guys. Good to be back with you. Thanks.

Thank you, Adam.

We will go next to George Price with Stifel Nicolaus.

Hi, George. George Price – Stifel Nicolaus: Hi, thanks very much for taking my couple questions. Wanted to start off just with the GDN shift, when does that start to anniversary, Pam? That is, the moderation of revenue with the GDN shift.

Well, I mean, it’s been going on for some time. I would say that we are further along in the outsourcing than we are in system integration. We do see more interest in the system integration area from our clients in being willing to do more work remotely, which is good. So we do expect that will continue for some more time, say, in medium term.

Yes. I think – you know, we’ve looked hard at that. We managed that. But in reflection, we’ve done that for five years.

Yes.

And so I think there was above acceleration this year. Whether that bump continues, flattens out, who knows? But I think it’s something that we manage and just bring in the whole thing together in terms of the operating margin we deliver in our revenue profile. So we are going to keep watching it closely and frankly get more efficient and better at how we manage it. George Price – Stifel Nicolaus: Okay. Just to kind of clarify, medium-term, Pam, I think you just said that’s going to be something that is going to be there more or less at least the next year or two?

Yes. George Price – Stifel Nicolaus: Okay, okay. Second question is on good bookings, by the way.

Thank you. George Price – Stifel Nicolaus: But wanted to just kind of follow up something you talked about how there was a higher mix of revenue in some of the past bookings numbers, even though they look pretty good that there was a higher amount of revenue that was out beyond fiscal ’11. And I was wondering if that trend, if that changed at all.

No. In fact, if you look – I mean, we look really hard at that. And the quality of the bookings this quarter were exceptional in terms of, if you combine the nature of the consulting stuff plus if you look at the outsourcing stuff in the shorter duration, a lot of it is more near-term revenue than our profile has been frankly historically. I know exactly what you are asking. We look real hard at that as well in terms of how quickly the bookings convert to revenue. George Price – Stifel Nicolaus: Okay. All right. So that’s actually reversible. But I guess the last question then I wanted to ask is on pricing. I’ve heard that pricing in the competitive environment is still going to be kind of aggressive out there giving resources away or discounting resources. Where do you guys stand on pricing, particularly on the consulting side? And how are you addressing the competitive dynamics out there?

In the high value consulting, management consulting, technology consulting, the pricing is really very stable. And we did take a hard look at that, as we were looking at the quarter. Meaning, the system integration business, as we just talked about, with the shift offshore, that means lower costs and therefore lower prices. And the key there, I think, is to be very proactive about how we are managing that, as Bill mentioned, and to maintain margins. George Price – Stifel Nicolaus: Okay. All right, great. Thanks very much.

Thank you. Our next question is from Karl Keirstead with Kaufman Bros. Karl Keirstead – Kaufman Bros.: Hi, thank you for taking my question. And at the risk of the laboring the point if I could just go back to bookings, I just want to make sure we all understand because bookings seemed to be coming in fairly strong for the February quarter and yet you lowered the top-line guidance to the low end of your range. I just want to understand if it’s not a bookings conversion issue, what was it that incented you to tilt to the low end of the top-line constant currency guidance? Thanks.

Hey, Karl. I don’t think it really is different from last quarter. I mean, last quarter, I saw a tilting there and really see it coming out at about the same place at this point above the bottom, but tilted towards the lower end. Karl Keirstead – Kaufman Bros.: Okay. And if I could ask a quick follow-up, on the outsourcing business that hasn’t rebounded or held up as well as, I think, some might think, I think you touched on the issue around some of the contract run-offs and terminations anniversarying in the second half, so things should get better. But perhaps you could touch on a little bit of the offshore apps outsourcing. I think that’s a pretty good component to Accenture‘s outsourcing revenue stream. A number of firms, the Indian vendors, IBM are exceedingly [ph] posting good numbers there. We’re not yet seeing it in Accenture’s outsourcing business. Is that because it’s being masked some of the pressures from fiscal ’09? Maybe a little color there would be helpful.

Yes, we did have to get that last year sort of terminations and restructurings behind us, which we’ve done. We get great momentum in the apps outsourcing business. I think it was interesting – apps outsourcing, you’re going to look also – what we look at is the quality of the business, not just the meat moving, if you will, of the business. And frankly, we feel good about the deals that we have. There are good deals that work with our economics. They average up our portfolio and, frankly, see good momentum in that space. It was interesting I think everyone thought outsourcing would be more robust in the last 12 months. But I think we had the very unique thing, and that was people aren’t making any decisions. And I think people are just starting to make those decisions now and we expect that the application side of the outsourcing is going to continue to get momentum. Karl Keirstead – Kaufman Bros.: Okay. Thank you both for the color.

Thanks.

We have Rod Bourgeois with Bernstein. Rod Bourgeois – Bernstein: Hey, guys. Just wanted to talk a little bit about how the demand environment has changed since the last time you guys spoke to us about three months ago. I mean, it looks like on the positive side, I mean, excluding the impact of current, at least the move in currency in the last three months, your revenues for the February quarter were at the very top end of your range. You’re taking your headcount hiring plan up about 5,000 people, which is at least 10%. And in the bookings, particularly being short cycle deals, that also seems fairly positive. Yet the guidance is at the low end of the range, which is probably what you guys were signaling [ph] three months ago. So I see a handful of positive and I see guidance kind of at the low end of the range, which is probably a fairly unchanged outlook. Are you seeing an obstacle that’s still holding you back or that that might be something that could offset some of the recent positives, or are you kind of just keeping the bar low? How do we gauge that?

Well, I think it’s fair to say, Rod, at least for me being a sort of conservative one on the phone here is that I do still have some caution about pace. And that is reflected in there. And – because you’re right. The February bookings, when you took into account – sorry, revenue, when you took into account foreign exchange, it was near the top end of the range. And I think our people still have a little caution in there. Right? There is still uncertainty out there. It is moderating, I would say. But it’s still out there. But I think that is in the mix, but we looked at this six ways to Sunday, and we really tried to just call it as we see it in terms of where we believe it will come out this year. Rod Bourgeois – Bernstein: Are the deal sizes in the pipeline starting to get larger. And at the same time, are you seeing some of the short-term – or the smaller deals lead into a healthy flow of follow-on work as an encouraging sign of some of the momentum that might be building?

Yes, I think that’s true. As we mentioned, people were taking more bite-sized pieces, and once they do that and that’s successfully delivered, they expand that. So some of it comes from that. I think the deal size is modestly larger, but what it is in – are those big deals or those big transformational things that we might have known from a few years back. But frankly, this is better business. It’s near-term business, and it’s stuff you can get started on and get delivered and then expand as you go.

One of the things we did see this quarter, Rod, is that transformation as a concept has not gone, and we just see that it is being ranged in smaller chunks and we did see sort of an uptick in transformational components of the strategy work that returned in management consulting. And those management consulting, technology consulting, the higher value consulting area, the average contract sizes were up a bit this quarter, outsourcing more steady. Rod Bourgeois – Bernstein: That’s good to hear. And then in the outsourcing pipeline and the win rate, it sounds like the pipeline is building. Can you gauge the pace of the build in the outsourcing pipeline and then has the win rate improved, Bill, to your liking on the outsourcing front?

It will never be at my liking. Don’t let Salvino off the hook. You know, what’s important in the outsourcing pipeline is the economics of the deals there. There is billions of dollars of profitless deals out there. I mean billions. And there is billions of dealers of single-digit economic deals. And so the key thing is the ones you get. I mean, we are just delighted with the profitability and the execution capability of our outsourcing stuff. And we’ve been trying to make sure we average up our portfolio and not just tell about. And so I think that’s a distinction that we make. We are grateful that we have a chance to make some of those choices.

One notable thing about the outsourcing pipeline is the infrastructure outsourcing, which is part of technology outsourcing, of course, that part of our pipeline is up the most. It’s up quite significantly. Rod Bourgeois – Bernstein: And are volumes on the outsourcing deals starting to terminate and become a little more positive. You saw downward scoping last year, Are the volumes on existing deals starting to get better?

I guess I would – it's marginal, really. I mean, there is still a lot of small beachhead foot in the water up to the knee kind of deals as opposed to sort of the big – take all there, there are also deals were people are splitting the work between two suppliers. And so all of those things have some impact on the dynamic of the size. Rod Bourgeois – Bernstein: Thank you, guys.

Thanks.

Thanks, Rod.

We have a question from Bryan Keane with Credit Suisse. Bryan Keane – Credit Suisse: Hi, good afternoon.

Hey, Bryan. Bryan Keane – Credit Suisse: Hi. It’s just backing into the constant currency revenue guidance for 3Q ’10. I’m getting positive to 6% constant currency. I guess if my math correct and then a little help on its outsourcing or consulting will be stronger than the other or about the same?

Positive 2% to 6% in Q3, as you just calculated. That’s right. And the control thing will be – we believe will be higher than the outsourcing in that mix. Bryan Keane – Credit Suisse: Okay.

The consulting more in low-to-high positive single digits and outsourcing more flat to mid positive single digits. Bryan Keane – Credit Suisse: Okay. And then how about the fourth quarter? Will it be about the same constant currency if we back into it or it should be a little stronger than 3Q?

Stronger. Bryan Keane – Credit Suisse: Stronger.

Yes, more like mid positive single to low-double. Bryan Keane – Credit Suisse: Okay, great. And then last question from me, we get the question a lot just about operating margins. I guess instead of asking when will it take, I guess what would be the key to get back to an environment where we can see the operating leverage going to the bottom line. Thanks a lot.

Yes, you know – I mean, last year, as you know, we brought 50 basis points in – after you took out the restructuring charge. And of course that’s the level that we said we maintained this year. And I think from where I sit, I just want them to be sustainable. I want what we delivered there to be something that we can sustain and deliver and build from over time. And this is a time of renewal, and rebuilding of our business. We do need to invest in our business. And there is still uncertainty out there in some of these dynamics. And so we just thought this is the responsible level to do for this year. Now in terms of next year, we will update you in September, I guess, when we do our guidance for next year. I mean, it’s obviously always a mix, right? Because we know it’s important, but we are just trying to balance everything and really just get to all the levers that we have for operating margin and continue to push on them and see what we can do. Bryan Keane – Credit Suisse: Good seeing the momentum change to the positive. So congratulations on that.

Thank you.

Thank you, Bryan.

We will go next to Julio Quinteros with Goldman Sachs.

Julio, hi. Julio Quinteros – Goldman Sachs: Hey, Pam. Hey, Bill.

Are you going to ask me about the dividend? Julio Quinteros – Goldman Sachs: No, no. I’m happy. If there is not (inaudible) direction. A couple of quick things. So you’re sort of playing through the numbers. I think the plus exactly where we were coming after the constant currency. And then it sounds like you are pretty clear in terms of what you think. So the trajectory has definitely gone from negative first half to a positive second half. But it seems like some of the parts are kind of moving in the wrong direction. Asia-Pacific definitely took – looks like it took a turn for the worse while Europe looks like it improved. I guess if you were to look at the last two quarters of this year and taking into account your cautious – some of the cautious that you still want to factor in. Are you more worried about Europe or are you more worried about Asia-Pacific at this point?

I’m not worried about Asia-Pacific. I mean, it’s still a little bit of a frontier out there. And frankly, two or three deals can really swing this thing one way or another. If you look at the pipelines and the activity, we made some leadership changes this year. We get some great new people in place. And so I’m not worried about that all. Just on the geographies, what matters a lot is North America. And I’m delighted with some of the momentum we are seeing in North America. The other thing we have to do is we’ve got to get people in the road. Right? I mean, if you look at our utilization, if you look at the demand, one of the things we’re very focused on was making sure we have a great opportunity in this market to get some real talent. And we got to get them in the door and get them underway. I mean, that’s a big part of this. And so we’ve dialed up the recruiting machine a lot and our training engines and things like that. But you know, we got to just make sure we get them through and deployed. And that’s an important element. In Europe, I think there is a mixed bag. If you just go through the countries, we are not worried about it, but we are cautious because they are cautious and there is a lot of uncertainty over there. And frankly, when I look at Europe, it’s more on a client-by-client consideration than it is on a country-by-country by consideration. And that’s kind how we are managing the business over there.

Just one other comment on Asia-Pac, Julio, I mean, with the (inaudible) sort of going into the decline, it was maybe the countries you would expect; Japan, Australia. But we do expect that they will prop up faster, and there is good growth in the more emerging kind of countries in Asia-Pacific. Julio Quinteros – Goldman Sachs: Okay. And then just lastly, because there has been a lot of controversy around this target of negative three to plus one, what would have to go wrong from here in order for you guys to come in below the negative three? Is it a geographic thing or is it an operating group of sorts that could actually result in and you guys missing the negative three to plus one guidance at this point.

They don’t let me answer that question. So Pam, I’ll let you answer.

Well, needless to say, Julio, I mean, it’s always a little easier halfway through than when you start just in terms of visibility. And the visibility has improved a little, which – and certainly in terms of near-term visibility, it’s better than it has been. So I mean, we are more confident about it. And again, the pipeline is up, the bookings are up, so the pieces that we look at to project that or indicating that we are confident about the range.

Yes. Julio, I think we’ve just – we're just trying to be thoughtful. Right? We get surprised a year ago. We don’t want to be back to that. As Pam mentioned in our comments, there is still lot of uncertainty out there around the world. But if you just sort of triangulate the hiring and the pipelines and all that stuff, we believe around the right trajectory. We’re just having a little in a world it seems like anything can happen. So we are just going to be thoughtful about it. Julio Quinteros – Goldman Sachs: A minute ago hard ball [ph] with the numbers, but we are not there yet. So – I haven’t commented – all right, guys. Thanks.

Thanks, Julio.

Thanks, Julio.

We have a question from Jason Kupferberg with UBS. Jason Kupferberg – UBS: Hey, thanks. Good afternoon, guys.

Hi, Jason.

Hey, Jason. Jason Kupferberg – UBS: I had a question on utilization to start in 88%, obviously running pretty high. What’s kind of surprising you guys were able to keep it flat quarter-or-quarter despite the fewer workdays over the holiday season. Can you talk about some of the drivers? I think in the past you suggested these levels really aren’t sustainable, but has anything changed in your thinking there?

No. I mean, it’s too high in my opinion. The people we brought in and we have brought in over 20,000 people so far this year. We’ve put them to work and the utilization continues there. As Pam mentioned, our plan is 50,000 across the year. We expect we will get all of them busy and hopefully that will give us some room on the bench, if you will, to have a little few points off of that market just as we do more training and investments and things like that in our talent. But it’s just something we are balances but the business continues to charge away and we are bringing them people. It’s fast as we can in order to make sure we are getting the highest quality talent. And so we haven’t caught up with the utilization rate. So just a follow-up on that, if utilization rate was perhaps a little bit of an upside surprise in the quarter, where there any margin factors that went against you, more than you would anticipate it, because the margins overall at least relative to what we were expecting or a little bit lighter. Well, I mentioned that one delivery inefficiency we had. So that was one thing that went against the margin. And the 88%, I mean we knew it was going to take a little bit of time for that to come down. I mean, it doesn’t just instantly come down. So we were actually expecting at that level. Jason Kupferberg – UBS: Okay, okay. And then have you guys taken a look at – just coming back to the attrition questions, the reasons that people are leaving, I mean, obviously the economy is better than it was a year ago, but the attrition is up 9.15, may be a little more than people would have expected. Is there anything concerning if you guys analyze the reasons why people are leaving, whether it’s competitors or the clients or they are going back to graduate school, any changes that are discernible are noteworthy there. I mean, 9 is a fluke. We live, and we always used to see we wanted it in the 12 to 15 range, as we look back over the last six to seven years. That was kind of the range. We are a little surprised that the fewer points up in that range. But it is a market where talent is the premium. I mean, there is just no question and frankly the Accenture pedigree, our clients (inaudible) with some of our folks. And people want a different lifestyle and all that. So it’s something that we are used to dealing with. We have incredible insights on all of this. And I think that we probably had a time last year where people didn’t move but might have moved. And so I there is a little – probably a little catch up going on in there.

Yes. That’s what I was just going to mention is that it’s not unusual when things turn out to have it pop alone. Jason Kupferberg – UBS: Okay. And if I can just sneak in one last one, I think last year in the IP services industry, one of the key themes was vendor consolidation and you guys seem to benefit from expense management, as well as maybe up or other competitors. But are you guys seeing that trend continue at a similar pace so far in 2010 or do you think that most of that glory of vendor consolidation is kind of behind us now that the economy has stabilized somewhat. I think we still see it, but it’s not as – it became very, very compact in terms of timeframe last year, and now it’s sort of back to where it always was. And so it just various, still a lot of that going on, but it’s not sort of the feverish level almost that it was last year. Jason Kupferberg – UBS: Okay. Thanks, guys.

Thank you, Jason.

We will go to next to Joseph Foresi with Janney Montgomery Scott. Joseph Foresi – Janney Montgomery Scott: Hello. I just wanted to ask, where specifically have you seen the uptick in consulting and maybe you could talk about what has changed in the last couple of weeks.

Well, I mean – actually the (inaudible) fair term. When we closed the quarter for (inaudible) doing the state of the business call, as we delivery two weeks, which we’d get on Monday morning. We just feel great about the consulting business, because what’s happened is we’ve moved from an environment where we are doing a lot of work focused on operational improvements and cost efficiencies. And now people are starting to raise their sites and look at growth, revenue enhancement, customer service, sort of next generation marketing. A lot of things to work on the revenue line and as opposed to working on the costs. And so some of that is even new supply chain things, front end, CRM, look, seize and strategies, different ways to market, channel strategies. And so what’s come back is sort of people have raised their sites and said, you know, “Growth is going to come back. We have opportunities in the market. The market is coming back and it doesn’t look exactly like the one that we left. And we need to refresh and renew how we do some things.” And so it’s very straightforward stuff around supply chain, customer service and things like that. And then of course, we continue to benefit from the merger integration things that we do in a lot of places. And the technology consulting businesses doing gain busters, as people try to sort out where they are infrastructure-wise, where they are as it relates to ultimately moving to the cloud, and where they are as it relates to security. And so that element of consulting on the technology side is a big thing as well. Joseph Foresi – Janney Montgomery Scott: Have you completed sort of the budgeting process with most of your clients at this point for 2010?

Probably.

Yes, I – I mean, I guess I’d say everyone went into the year with a plan, and I think the clients by and large were cautious about their spend profile, as they saw how their own business came to be. And I don’t know if the healthcare thing will send any of them back in the United States, but there is still some uncertainty out there. But I think by and large, people have selected the things they are going to make investments in and have started or just beginning to start making the investments in those. And I think some of what you see in our consulting business is exactly the result of that. Joseph Foresi – Janney Montgomery Scott: And just one last question, I think maybe you could just talk about what you are seeing this year, as you go to that process versus what you saw last year. I think a lot of what we are hearing is that maybe the budgets are a little bit more fixed and that might lead to maybe some upside in spending going forward, and maybe you could just talk about sort of the comparison of the two years.

Well, I guess the only way I compared is this. Last year, if you hadn’t already started spending it, you aren’t going to start spending it. And what we have now, I think, is a budget that people are operating to, but also companies aren’t afraid to initiate things that aren’t in the budget. And very often some of the strategic programs and the some of the front end consulting work, which will ultimately involve the IT expense and other expenses, are in the budgets that people are initiating those projects. And last year, none of those things got initiated. If it wasn’t in the budget and you hadn’t started spending money on it, for the most part, people didn’t initiate anything. And so we’ve seen a lot of initiation in the last quarter. And if you just look at the nature of the pipeline, the conversations around the world right now, a lot of thing is around initiation of new initiatives.

That’s currently happening in the higher value consulting really across the whole commercial client base around the world. And also interestingly, in system integration, I mean, there is very good demand for custom, as I mentioned, ERP and SAP as well. So even though the FI [ph] projects maybe are a little smaller now, there is a lot of them, and we’re responding to that. Joseph Foresi – Janney Montgomery Scott: Okay. Thank you.

We’ll go to Tien-Tsin Huang with JPMorgan.

Hi, Tien-Tsin. Tien-Tsin Huang – JPMorgan: Hey, Pam, thanks. Just a few quick follow-ups. Just on the SG&A, it’s at 20% now. Do you expect that to stay at this rate for a bit or – and when can we get back to the old 18% level that we’ve seen?

Yes. I mean, I would be glad to see the G&A coming down, so of course that’s the one that you most want to continue to try to manage down. I mean, I think in the sales and marketing side, we’ve put some emphasis on selling and spending money there, investing money there. And at least at this point, we are going to keep doing that. Tien-Tsin Huang – JPMorgan: Okay. That’s (inaudible) where we have. The other question I have which is EPS is pretty much in line where we had although the penny difference is really in the other expense line. It’s about $14 billion below the line. What’s driving the volatility there? Is it the hedge, Pam?

Yes, it’s foreign exchange clearly. I mean, basically last year we had foreign exchange gains and this year we have 14.65 losses, and it’s driving the swing there this year. Tien-Tsin Huang – JPMorgan: Any suggestions on what it could look like in the back half of the year that other others jump on [ph]?

That’s a big question. Does foreign exchange is a difficult thing to predict. I guess giving what your – given the implied guidance as you’ve sent up, Yes. We decided not to change that really, just in terms of what had had. We thought about because it did swing a little negative this quarter, we decided not to. Tien-Tsin Huang – JPMorgan: Okay, okay. And then just two more quick ones. Will you be giving us your fiscal ’11 outlook or answer that in your third quarter earnings. I know you’ve done that in the distance past but not recently.

At this point, no plans to do that, Tien-Tsin. Tien-Tsin Huang – JPMorgan: Okay. Last one, sort of more of a high level question for Bill. Just I get a lot of questions about cloud and virtualization, sort of what’s the latest thinking around that and implications for Accenture (inaudible) if you can hear me.

Yes. No, I can. I get the same disease. I mean, we feel great about – you go through the high phases on a lot of this stuff, but this cloud stuff is real. Right? The serious of which the providers are looking at it, the seriousness of which the clients are looking at it, the virtualization as a science, if you will, let alone the technology in the total cost of ownership profiles are real. Addition I think you see some leading companies. Obviously the VMWare, VMC connection, you see what Microsoft is doing. We have lots of engagements underway. But as I always say, it’s not like you put your stuff in the pickup and drive it to the cloud. I mean, this is complex stuff. There is a lot of work to do getting repositioned in that environment. But we’ve got dozens and dozens of early stage things going on. And I think that as the technology gets betters and if the cost profiles get understood, and as a few pioneers get out there, this thing is going to be a bona fide technology wave. And we are excited about how we are positioned really with all the providers as it relates to that. Tien-Tsin Huang – JPMorgan: Okay. So it sounds like its additive. We talk more about at the analyst day?

Yes, actually we are – Kevin will be in. Don Rippert, our Chief Technology Officer, those guys have been immersed in there, and that will be their analyst day to give you some color on that. Tien-Tsin Huang – JPMorgan: Very good. Thanks to you then.

Great. Thank you, Tien-Tsin.

We have Tim Fox with Deutsche Bank. Tim Fox – Deutsche Bank: Hi, thank you. Just one quick question. You mentioned, Pam, the health and public service line was seeing some uncertainty. Could you give a little bit more color around that commentary. And it’s been obviously a strong sector for you over the past 18 months or so. What’s driving some of the uncertainty you are seeing in that line.

Well, I mean, buying patterns have changed due to growing uncertainty and challenges in the public sector around the world. And so we do expect that to continue sort of as we work through it. Now there is continued demand for health and human services type work, and also in our health segment, it’s different. We are expecting sequential growth to start. But in the public sector, there has definitely just been a change given all that’s happening with these kinds of organizations around the world.

I think – it's no secret the public finance is already where you look. One day after the next, there is challenges at the state and local level. There are challenges in the reimbursement of federal, out of the state, and local things. And if you are obviously looking through Europe, you’ll see some huge challenges and public finances over there. And so I think we think the environment is going to be a tad cautious, as people are trying to decide do they have the funding for some of the bigger initiatives, not the garden variety stuff, but the bigger and more important things. On the other side, the health – the health business, the activity levels picked up. The pipelines have picked up. And the question everyone asked in (inaudible) so it just in case is, what is the impact of the recent legislation? And regardless of what you think of the legislation, the impact on the health insurance exchanges helping attract members into the individual markets working to improve the Medicare advantage business improvement stuff that will need to be done in there. And just frankly, we ensure cost improvement work. I think it’s going to be significant, and those companies have already turned their sites to living in what, for them, I guess is their new normal. Tim Fox – Deutsche Bank: Thank you. That’s all I had.

Operator, we have time for one more question.

Thank you. That will come from Reik Read with Robert Baird & Company. Reik Read – Robert Baird & Company: Hi, good afternoon. Just a follow-up on the health side that the profitability there was below, I think that probably has to be Pam with the inefficiency of the delivery you were talking about. Is that something that you get fixed in short order or do some of these weaknesses caused that to persist?

Yes. The type of contract that is it’s a consulting contract. So it’s a matter of going in, re-estimating, which we’ve done, and then you take the full brunt of it in the quarter. Reik Read – Robert Baird & Company: Okay. So that should rebound in the next couple of quarters?

Yes, that should rebound from that. And then what we are just – we are just trying to be cautious on is, given the state of public finances, there is – not the sales cycles, it’s the contracting process of getting people to say yes and no that they have the funding with some of the big things that are out there. It has been a little challenge in the last three to four months for obvious reasons. We read it in the paper every day I guess. Reik Read – Robert Baird & Company: Okay, great. Thanks. And then just one other question on the tech consulting side, you guys have talked about these record bookings and you talked about virtualization, consolidation and things like that driving that. Is that – is the growth that you are seeing there a function of those specific areas growing further or are you starting to add more with what you were talking about before, Bill, the architecture strategic stuff like cloud?

In that area, in technology consulting, it’s more companies initiating projects to evaluate their technology infrastructure and do consolidation and experiment with virtualization in some area of it. Right? So that’s just sort of core consulting things people trying to get a more efficient, better value for money, IT environment. Those early stage things, which is more rationalization, will lead to hopefully series of cloud services that lasts three to five years, as you move someone to application to a private club for the most part is a lot of what we are looking at. In creating – the companies creating their own private cloud is just a big deal. Reik Read – Robert Baird & Company: But I guess that what you are saying is that more companies are still focused on that area to drive costs out and a little bit is more on the strategic side.

Yes, I know. I think it’s like people getting their minds around us. Right? And so they are getting started, and they are starting by evaluating what they have, and they are looking at the near-term improvements. Right? The short-term quick-hit things, virtualization is something that many companies could be taken more advantage of them than they are. And so we are helping a lot of them with that. From that work we’ll lead people to a strategy that says, “What is my go-forward platform environment look like?” and that comes with having to call all the applications move here, which is a bigger bite and obviously something that you got to go to the big table to get the money. Reik Read – Robert Baird & Company: Great. Thank you, guys. Have a great day.

Okay, thanks. Let me just say a couple of things in closing, if I might. I am incredibly pleased with our performance in the second quarter. Just as important, I’m excited about the science, a positive momentum we are seeing in the market, and in our business. I do want to thank that more than 181,000 men and women of Accenture whose hard work and dedication is what enables us to deliver value, both to our clients and our shareholders alike, I appreciate all of you joining the call. We appreciate your continued support and very much look forward to talking with many of you in person that our investor and analyst conference. And of course, we will speak again in June with our Q3 earnings call. All the best. Thank you.

Thank you.

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