PwC Reports Overall Growth, Decline in Audit Fees

PRESS RELEASE

PricewaterhouseCoopers (PwC) has announced global revenues of $22.3 billion for the fiscal year-ended June 30, 2001, a 7.6% increase over the previous year's revenues of $20.7 billion, as expressed in underlying local currencies. Net revenues - which exclude all subcontractor and other pass-through expenses - were $19.8 billion.

"Economic conditions - and the global climate, in general - were nothing if not challenging last year," said PwC CEO Samuel A. DiPiazza Jr. "Nonetheless, we are especially encouraged by the nearly 10% growth registered by our assurance, tax and corporate finance and recovery practices, the core businesses that will remain with PwC following the planned separation of our consulting services."

"Today, we are working closely with our clients to help them constructively confront the challenges of a much weakened global economy and prepare for the recovery that will certainly come," Mr. DiPiazza added. "We at PricewaterhouseCoopers are focused on using this period to develop the new services and recruit the top talent that will enable our clients and ourselves to capitalize quickly on a strengthening global economy."

Assurance and Business Advisory Services generated global revenues of $8.7 billion, an increase of 7.4% in underlying local currencies. While economic downturns in several major territories had an impact on growth, expanding economies in many other territories, including China, Indonesia and Central and Eastern Europe, led to significant growth.

Tax registered double-digit growth for the third year in a row. Global revenues reached $4.4 billion, an increase of 14.7% over the previous year as expressed in underlying local currencies.

PwC Consulting generated revenues of $6.7 billion, an increase of 3.6% in underlying local currencies. Although significantly impacted by the economic downturn in the U.S.--particularly in the technology sector -- and regulatory constraints imposed by auditor independence rules, the business experienced strong market growth in several key areas. These include financial management solutions; customer relationship management, which grew to more than $1 billion in revenues; and business-to-extended-enterprise (B2E), which won major engagements with Hewlett-Packard and Palm.

Other significant new client assignments within PwC Consulting, totaling nearly $1 billion, included a systems integration contract with the Centers for Medicare & Medicaid Services division of the U.S. Department of Health and Human Services and a project for the U.S. Army to build a "cyberspace university" to provide distance learning opportunities for U.S. soldiers stationed around the world.

Global Human Resource Solutions (GHRS) reported revenue of $554 million, down 20% from the previous year. While demand for services remained high, PwC reports that growth was constrained by SEC independence rules limiting the service line's ability to establish strategic alliances and provide a wider breadth of HR outsourcing services. In addition, the firm feels that awareness in the marketplace of the U.S. practice's intention to separate from PwC left companies cautious about signing long-term outsourcing contracts.

Business Process Outsourcing (BPO) recorded a 166.2% gain over the previous year to $563 million on the strength of contracts with new clients and extensions and expansions of existing contracts.

On a geographic basis, revenue growth was 2.3% in North America, to $10.1 billion, and up 3.1% in South America to $821 million. In Asia-Pacific, it was up nearly 18% to $2.4 billion; and Europe/Middle East/Africa was up 12% to nearly $9 billion.

Approximately 60% of PwC' revenues are earned in currencies other than the U.S. dollar. Expressing growth in local currencies provides a more accurate measure of performance in the countries where revenues are earned and profits distributed.

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