Exhibit 99.1

Hewitt Associates, Inc. 100 Half Day Road Lincolnshire, IL 60069 Tel (847) 295-5000 Fax (847) 295-7634 www.hewitt.com Argentina Australia Austria Belgium Brazil Canada Channel Islands Chile China Czech Republic France Germany Greece Hong Kong Hungary India Ireland Italy Japan Malaysia Mauritius Mexico Netherlands Philippines Poland Puerto Rico Singapore South Africa South Korea Spain Sweden Switzerland Thailand United Kingdom United States Venezuela For Immediate Release May 4, 2005 Contact:    Investors: Jennifer Rice (847) 295-5000, investor.relations@hewitt.com                    Media: Jennifer Frighetto (847) 442-7663, jennifer.frighetto@hewitt.com Hewitt Associates Reports Second Quarter Results Company Awarded Three New HR BPO Clients LINCOLNSHIRE, Ill. - Hewitt Associates, Inc. (NYSE: HEW), a global human resources services firm, today reported results for its fiscal 2005 second quarter ended March 31, 2005. Results for the second quarter include the operations of Exult, Inc. For the second quarter, Hewitt’s reported net revenues (revenues before reimbursements) increased 28%, to $697.1 million, from $546.3 million in the prior-year quarter. Outsourcing revenues increased 41%, and Consulting revenues increased 4%. The net favorable effects of foreign currency translation were $7 million. Reported net income for the second quarter was $27.2 million, $0.23 per diluted share, versus $30.4 million, $0.31 per diluted share, in the prior-year quarter. Pro forma information is provided to assist in the comparability of current-period results as if Hewitt and Exult operations were combined in fiscal 2004. More detail is provided in the “Pro Forma Results” section below. •      Pro forma net revenues increased 7%. On this basis, Outsourcing revenues increased 8% and Consulting revenues increased 4%. •      Pro forma total Company operating income increased 2%, and pro forma operating margin was 7.0% compared to 7.3% in the pro forma prior-year period. •      Pro forma net income increased 6%. “We continued to make great progress in building our HR BPO business during the second quarter, winning an additional three clients since the last quarterly announcement. Our competitive position is very strong as our services provide the most compelling solution for clients,” said Dale L. Gifford, chairman and chief executive officer. “The market activity reinforces my belief that we have made the right strategic decisions over the last couple of years to significantly expand our HR services and capabilities, and we will be better positioned to deliver strong financial results and shareholder value in the future as a result,” he added. “Despite our confidence in our long-term success, our second quarter financial results were clearly disappointing. We lowered our guidance for the quarter in early March, citing the termination of an acquired client relationship, lower margins in benefits outsourcing and modestly lower Consulting revenues. Our actual core earnings for the quarter came in just under our revised guidance, due to the late-March termination of a

Hewitt Associates 1

second acquired client relationship (both as a result of merger activity), which resulted in an additional $2 million impairment charge; higher near-term client service delivery costs, which include the build-out of newer service offerings and our global sourcing capabilities; and lower-than-projected project work in Outsourcing. These factors were partially mitigated by lower incentive compensation expense in the quarter,” said Gifford.

Several actions have been taken recently to strengthen future performance, including the realignment of certain areas of the business, which will result in approximately $13 million of severance charges in the second half of the year (in addition to $2 million incurred in the second quarter). Due to these restructuring charges and the $10 million intangible asset impairment charge, which are offset in part by lower provisions for the annual management incentive compensation plan, the Company now expects fiscal 2005 core earnings to be at the low end of the previously provided $145 million to $150 million range. The Company continues to expect fiscal 2005 net revenue growth at the lower end of a 31% to 35% range.

Reported Earnings

Reported net income for the second quarter was $27.2 million, $0.23 per diluted share, and included a $4.2 million pretax charge for the fiscal 2002 Initial Public Offering (IPO)-related grant of restricted stock to employees, $5 million of expense related to the amortization of Exult acquisition-related intangible assets, $6 million of synergies realized in connection with the merger with Exult, and approximately $5 million of integration and retention costs related to the merger. Reported net income in the current year also includes a non-cash charge for the impairment of customer relationship intangible assets of approximately $10 million, and lower provisions for incentive compensation costs of $35 million. Reported net income in the comparable prior-year quarter was $30.4 million, $0.31 per diluted share, and included a $4.6 million pretax charge for the one-time, IPO-related grant of restricted stock to employees.

Pro Forma Results

In accordance with SEC regulations for the determination of pro forma results, the prior-year pro forma results have been prepared assuming that the Company’s merger with Exult had occurred on October 1, 2003, and exclude all related non-recurring items. Pro forma information is provided to assist in the comparability of current-period results as if Hewitt and Exult operations were combined in fiscal 2004. Pro forma results are non-GAAP financial measures.

Total Company net revenues increased 7%, compared to prior-year second quarter pro forma revenues of $651.7 million. Adjusting for the net favorable effects of foreign currency translation of approximately $7 million, and the fiscal 2005 second quarter impacts of Exult’s ReloAction acquisition and the acquisition of the majority interest of the Company’s Puerto Rico operations (“2004 acquisitions”) of approximately $7 million, total Company pro forma revenues increased 5%.

Total Company net income increased 6%, compared to prior-year pro forma net income of $25.7 million, $0.21 per diluted share. The increase on a pro forma basis relative to a

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reported basis is due to the inclusion of higher losses for Exult in the pro forma 2004 quarter.

Core Earnings

Core earnings, a non-GAAP financial measure, include items noted in reported results, but exclude pretax charges of $4.2 million and $4.6 million for the 2005 and 2004 second quarters, respectively, related to the amortization of the one-time, IPO-related grant of restricted stock to employees. Core earnings per share include the shares issued in the IPO-related grant as if they had been outstanding from the beginning of fiscal 2002.

Core earnings for the second quarter of fiscal 2005 decreased 11%, to $29.6 million, $0.25 per diluted share, from $33.2 million, $0.33 per diluted share, in the prior year. Core earnings in the current year include a non-cash charge for the impairment of customer relationship intangibles of approximately $10 million, and a reduction of $35 million of incentive compensation costs versus the prior-year quarter.

Business Segment Results

Outsourcing

Outsourcing segment revenues increased 41%, to $494.3 million, from $351.0 million in the prior-year quarter, and increased 8% compared to pro forma revenues (including Exult) of $456.4 million in the prior-year quarter. Adjusting for the favorable effects of the 2004 acquisitions of approximately $7 million, and the net favorable effects of foreign currency translation of approximately $3 million, Outsourcing revenues increased 6% over the pro forma prior-year period. The growth was primarily due to increased services to new and existing clients in the HR BPO business and, to a lesser extent, to benefits outsourcing clients. The Company continues to see strong interest in expanded multi-process BPO services following the merger with Exult, and slower growth in stand-alone benefits revenues as more companies include decisions for benefits as part of broader multi-process BPO arrangements.

Outsourcing segment income (which excludes certain shared services costs not allocated to segments) was $48.2 million in the quarter, compared to $69.9 million in the prior-year quarter. Compared to pro forma income of $67.4 million in the prior-year quarter, Outsourcing segment income decreased 28%, and Outsourcing segment margin was 9.8%, compared to 14.8% in the pro forma comparable prior-year quarter. The decrease in margin is due to the recognition of impairments of customer relationship intangibles of approximately $10 million; a greater mix of early-staged HR BPO revenues; and lower margins in benefits outsourcing due to the planned repricing of some older contracts to current market prices, service mix and higher client service delivery costs, including the build-out of newer service offerings and our global sourcing capabilities. These factors were partially offset by lower incentive compensation expense of $10 million in the quarter.

As of March 31, 2005, the Company was serving 19.0 million end-user benefits participants, an increase of 6%, compared to the 18.0 million benefits participants served at the end of the prior-year quarter. Total benefits participants for the quarter consists of

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7.1 million health and welfare participants, 6.4 million defined benefit participants and 5.5 million defined contribution participants.

As of March 31, 2005, the Company was serving 801,000 client employees with HR BPO services. With the recent announcements of HR BPO relationships with PepsiCo and two undisclosed clients, the Company has won 10 new HR BPO clients since the closing of the merger with Exult on October 1, 2004.

Including these recent additions, the Company now has nearly $150 million of annualized Outsourcing revenue in backlog (defined as a signed contract or letter of intent), of which about 80% is related to HR BPO services and the remainder is for stand-alone benefits services. The Company has nearly $290 million of annualized Outsourcing revenue in the pipeline (defined as a formal proposal outstanding), of which 70% is related to HR BPO.

Consulting

Consulting segment revenues increased 4% in the second quarter, on both a reported and a pro forma basis, to $202.8 million, from $195.3 million in the prior year. Adjusting for the net favorable effects of foreign currency translation of approximately $4 million, and the favorable effects of the acquisition of the majority interest of the Company’s Puerto Rico operations of approximately $0.3 million, Consulting revenues increased 2%. The increase was driven by growth in retirement plan management consulting in Europe, offset in part by lower revenues in health benefit management consulting in North America and in other discretionary consulting services.

Consulting segment income (which excludes certain shared services costs not allocated to segments) increased 30% in the quarter, to $47.0 million, compared to $36.2 million in the prior-year quarter, and increased 28%, compared to pro forma income of $36.8 million in the prior-year quarter. Consulting segment margin was 23.2%, compared to 18.9% in the pro forma prior-year quarter. The increased margin was a result of lower incentive compensation expense of $14 million versus the prior-year quarter. Excluding the effects of incentive compensation expense, Consulting margins declined as a result of increased compensation expense without a corresponding increase in price or volume.

Unallocated Shared Services Costs

Reported unallocated shared services costs were $42.3 million, compared to $46.1 million in the prior-year quarter, and $51.9 million in the pro forma prior-year quarter. Unallocated shared services costs as a percentage of revenues were 6.1%, compared to 8.0% in the pro forma prior-year quarter. The decline reflects lower incentive compensation expense versus the 2004 quarter of $10 million, and increased leverage of overhead costs.

Operating Margin

Reported total Company operating income for the quarter was $48.8 million and included $4.2 million of pretax expenses for the one-time, IPO-related grant of restricted stock to employees, in addition to $5 million of amortization expense, $5 million of integration and retention costs and $6 million of synergy savings—all related to the merger with Exult. Total Company operating income for the prior-year quarter was $55.5 million and

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included $4.6 million of pretax expenses for the IPO-related grant of restricted stock to employees.

On a pro forma basis, total Company operating income increased 2%, compared to prior-year pro forma operating income of $47.8 million. On this basis, total Company operating margin was 7.0%, compared to 7.3% in the prior year. The decline in margins was due to lower Outsourcing and Consulting margins, before the effect of a lower provision for annual incentive compensation in the current year, partially mitigated by lower unallocated shared services costs relative to revenues. Margins benefited from lower total incentive compensation expense of $35 million.

Year-to-Date Results

Reported net revenues for the six-month period ended March 31, 2005 increased 31%, to $1.41 billion, compared to $1.08 billion in the prior-year six-month period, and increased 9% compared to prior-year pro forma revenues of $1.29 billion. Adjusting for the net favorable effects of foreign currency translation of approximately $19 million, and the fiscal 2005 second quarter impacts of the 2004 acquisitions of approximately $14 million, total Company pro forma revenues increased 6%.

Total Company operating income for the six-month period was $110.6 million and included $8.6 million of pretax expenses related to the one-time, IPO-related grant of restricted stock to employees, and $10 million of amortization expense, $11 million of operating synergies and $8 million of integration and retention costs—all related to the merger with Exult. Operating income increased 6% compared to prior-year pro forma operating income of $104.4 million, and operating margins declined to 7.9% from 8.1% in the prior-year pro forma period. The decline in margins was the result of lower Outsourcing margins, which were only partially offset by lower unallocated shared services costs relative to revenues. Margins benefited from lower total incentive compensation expense of $36 million.

Net income increased 2% for the six-month period to $61.2 million, $0.52 per diluted share, and included the items noted above, compared to reported net income for the prior-year six-month period of $59.8 million, $0.61 per diluted share, including the items noted above. Compared to pro forma prior-year net income of $55.0 million, $0.46 per diluted share, net income increased 11%. Core earnings increased 2%, to $66.3 million, $0.55 per diluted share, compared to $64.9 million, $0.65 per diluted share, in the prior-year six-month period.

Cash Flow and Investments

Reported cash flow from operations increased 17% in the six-month period, to $109.3 million, from $93.3 million in the prior-year six-month period. Free cash flow, defined as cash flow from operations less investments (which includes capital expenditures and capitalized software costs), decreased 15%, to $41.5 million, from $48.8 million in the prior-year six-month period. This decrease in free cash flow was driven primarily by a higher annual incentive payout in early fiscal 2005 for the 2004 fiscal year, compared to the payout made in 2004 for fiscal 2003, and increased capital expenditures, capitalized software costs and contract setup costs related to the growth of

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the HR BPO business. These drivers of decreased free cash flow were partially offset by increased cash collections during the period.

Share Repurchase

During the second quarter of fiscal 2005, the Company repurchased, in a modified “Dutch Auction” tender offer, 10.3 million shares at $29.00, for a total of $300 million, plus approximately $1 million of estimated tender-related professional expenses. This completed the Company’s $300 million share repurchase authorization. In addition, as part of a previous authorization, during the second quarter the Company purchased 0.7 million Class A shares, for $22 million.

Since the beginning of the fiscal year, the Company repurchased 12.7 million shares, reducing its share count going forward by more than 10%, to 108.1 million.

Business Outlook

The Company continues to expect fiscal 2005 total Company net revenue growth at the low end of 31% to 35%, or 9% to 11% on a pro forma basis. As a result of lower results in the second quarter, less projected one-time project revenue in Outsourcing, and delayed timing of HR BPO revenues, the revenue growth forecast now comprises approximately 43% to 44% growth in Outsourcing (approximately 8% to 9% on a pro forma basis), and Consulting revenues at the high end of the 4% to 8% range, due to a projected stronger second half of the year. As a result of the above-noted factors, the second quarter impairment charge and the expected restructuring costs, which are offset partially by lower annual incentive costs, the Company expects core operating margins of about 9%, comprising Outsourcing segment margins of about 13%, Consulting segment margins greater than 20% and unallocated shared services costs of less than 6.5% of total revenue. The Company expects core earnings at the low end of a $145 million to $150 million range. As a result of lower earnings and higher investments, the Company now expects free cash flow of $125 million to $135 million. Should the rate of new HR BPO client acquisitions and implementations change, which would impact the amount of required setup costs, expectations for cash flow could differ.

For the third quarter of fiscal 2005, the Company expects total Company net revenue growth of about 30% to 33% (approximately 7% to 10% on a pro forma basis) and core earnings of about $32 million to $36 million, including approximately $10 million of severance costs.

Conference Call

At 7:30 a.m. (CT) today, management will host a conference call with investors to discuss second quarter results and the Company’s outlook for the remainder of fiscal 2005. The live presentation is accessible through the Investor Relations section of Hewitt’s Web site at www.hewitt.com. The Webcast will be archived on the site for approximately one month. During the call, management will discuss “core earnings” and, with the addition of Exult, Inc., “pro forma earnings,” both non-GAAP financial measures. A full reconciliation of core earnings to GAAP earnings, and the computation of pro forma earnings, is included in this press release and posted on our Web site. This release will be under the Investor Relations section of www.hewitt.com.

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About Hewitt Associates

With more than 60 years of experience, Hewitt Associates (NYSE: HEW) is the world’s foremost provider of human resources outsourcing and consulting services. The firm consults with more than 2,300 companies and administers human resources, health care, payroll and retirement programs on behalf of more than 300 companies to millions of employees and retirees worldwide. Located in 35 countries, Hewitt employs approximately 20,000 associates. For more information, please visit www.hewitt.com.

Forward-Looking and Pro Forma Information

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits of the merger between Hewitt and Exult, including future financial and operating results, Hewitt’s plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Hewitt’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the risk that the heritage Hewitt and Exult businesses will not be integrated successfully; the risk that the cost savings and any revenue synergies from merging Hewitt and Exult may not be fully realized or may take longer to realize than expected; disruption from the merger, making it more difficult to maintain relationships with clients, employees or suppliers; increased competition and its effect on pricing, spending, third-party relationships and revenues; and the risk of new and changing regulations in the U.S. and internationally. Additional factors that could cause Hewitt’s results to differ materially from those described in the forward-looking statements can be found in Hewitt’s most recent Form 10-K and most recent prospectus filed with the Securities and Exchange Commission (SEC) and available at the SEC’s Internet site (www.sec.gov).

The unaudited pro forma combined fiscal 2004 financial statements are presented for illustrative purposes only and are not indicative of the results of operations that might have occurred had the merger with Exult actually taken place as of the dates specified, or that may be expected to occur in the future. They do not assume any benefits from cost savings or synergies, and they do not reflect any integration costs that the combined Company realized or incurred after the merger. The unaudited pro forma combined financial statements do reflect the estimated effect of Exult’s adoption of Hewitt’s accounting policy of recognizing revenue based upon delivery of services. Hewitt’s ongoing service revenues are typically billed and recognized on a monthly basis as services are rendered. Exult’s policy was to recognize revenue for long-term multi-deliverable process management contracts for each reporting period based on the proportion of contract costs incurred to date to then-current estimates of total contract costs. The effect of changes to total estimated contract revenues or costs was recognized in the period in which the determination was made that facts and circumstances dictate a change of estimate. For a more detailed description of Hewitt’s and the former Exult, Inc.’s revenue recognition policies, please refer to Hewitt’s second quarter Form 10-Q.

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HEWITT ASSOCIATES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except for share and per-share amounts)

	Three Months Ended March 31,						% Change		Six Months Ended March 31,						% Change
	2005(1)			2004					2005(1)			2004
Revenues:
Revenues before reimbursements (net revenues)	$	697,086		$	546,335		27.6	%	$	1,407,484		$	1,078,299		30.5	%
Reimbursements		15,494			13,145		17.9	%		30,384			31,870		(4.7	)%
Total revenues		712,580			559,480		27.4	%		1,437,868			1,110,169		29.5	%
Operating expenses:
Compensation and related expenses, excluding initial public offering restricted stock awards		405,809			347,806		16.7	%		826,154			688,010		20.1	%
Initial public offering restricted stock awards		4,165			4,561		(8.7	)%		8,591			8,680		(1.0	)%
Reimbursable expenses		15,494			13,145		17.9	%		30,384			31,870		(4.7	)%
Other operating expenses		193,599			110,782		74.8	%		379,242			215,509		76.0	%
Selling, general and administrative expenses		44,679			27,720		61.2	%		82,930			54,705		51.6	%
Total operating expenses		663,746			504,014		31.7	%		1,327,301			998,774		32.9	%
Operating income		48,834			55,466		(12.0	)%		110,567			111,395		(0.7	)%
Other expenses, net:
Interest expense		(6,167	)		(4,964	)	24.2	%		(11,626	)		(9,800	)	18.6	%
Interest income		2,495			720		n/	m		4,784			1,049		n/	m
Other income (expense), net		888			554		60.3	%		(7	)		(1,317	)	(99.5	)%
Total other expenses, net		(2,784	)		(3,690	)	(24.6	)%		(6,849	)		(10,068	)	(32.0	)%
Income before income taxes		46,050			51,776		(11.1	)%		103,718			101,327		2.4	%
Provision for income taxes		18,887			21,356		(11.6	)%		42,531			41,544		2.4	%
Net income	$	27,163		$	30,420		(10.7	)%	$	61,187		$	59,783		2.3	%
Earnings per share:
Basic	$	0.24		$	0.32		(25.5	)%	$	0.53		$	0.62		(15.6	)%
Diluted	$	0.23		$	0.31		(25.1	)%	$	0.52		$	0.61		(15.3	)%
Weighted average shares:
Basic		114,850,491			95,871,216		19.8	%		116,230,426			95,833,724		21.3	%
Diluted		117,156,938			98,329,673		19.1	%		118,392,947			97,937,705		20.9	%

n/m = not meaningful

(1) The results of Exult, Inc. are included in the Company’s results from the acquisition date of October 1, 2004.

Hewitt Associates 8

HEWITT ASSOCIATES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

PRO FORMA COMPARISON

(Unaudited)

(Dollars in thousands, except for share and per-share amounts)

	Three Months Ended March 31,						% Change		Six Months Ended March 31,						% Change
	2005			2004(1)					2005			2004(1)
				Pro Forma								Pro Forma
Revenues:
Revenues before reimbursements (net revenues)	$	697,086		$	651,725		7.0	%	$	1,407,484		$	1,293,572		8.8	%
Reimbursements		15,494			13,145		17.9	%		30,384			31,870		(4.7	)%
Total revenues		712,580			664,870		7.2	%		1,437,868			1,325,442		8.5	%
Operating expenses:
Compensation and related expenses, excluding initial public offering restricted stock awards		405,809			389,552		4.2	%		826,154			769,506		7.4	%
Initial public offering restricted stock awards		4,165			4,561		(8.7	)%		8,591			8,680		(1.0	)%
Reimbursable expenses		15,494			13,145		17.9	%		30,384			31,870		(4.7	)%
Other operating expenses		193,599			172,217		12.4	%		379,242			337,594		12.3	%
Selling, general and administrative expenses		44,679			37,618		18.8	%		82,930			73,442		12.9	%
Total operating expenses		663,746			617,093		7.6	%		1,327,301			1,221,092		8.7	%
Operating income		48,834			47,777		2.2	%		110,567			104,350		6.0	%
Other expenses, net		(2,784	)		(4,242	)	(34.4	)%		(6,849	)		(11,112	)	(38.4	)%
Income before income taxes		46,050			43,535		5.8	%		103,718			93,238		11.2	%
Provision for income taxes		18,887			17,849		5.8	%		42,531			38,227		11.3	%
Net income	$	27,163		$	25,686		5.8	%	$	61,187		$	55,011		11.2	%
Earnings per share:
Basic	$	0.24		$	0.22		8.6	%	$	0.53		$	0.47		12.8	%
Diluted	$	0.23		$	0.21		8.9	%	$	0.52		$	0.46		13.0	%
Weighted average shares:
Basic		114,850,491			117,964,042		(2.6	)%		116,230,426			117,926,550		(1.4	)%
Diluted		117,156,938			120,657,200		(2.9	)%		118,392,947			120,262,939		(1.6	)%

(1) In accordance with SEC regulations for the determination of pro forma results, the prior-year pro forma results assume that the Company’s merger with Exult had occurred on October 1, 2003, and exclude all related non-recurring adjustments to allow for comparability. A reconciliation of GAAP results to pro forma results can be found on our Web site at www.hewitt.com.

Hewitt Associates 9

HEWITT ASSOCIATES, INC.

CORE EARNINGS AND CORE EARNINGS PER SHARE

(Unaudited)

(Dollars in thousands, except for share and per-share amounts)

Core Earnings and Core Earnings Per Share – a non-GAAP financial measure

The Company reported net income of $27 million and $61 million, and diluted earnings per share of $0.23 and $0.52 for the three and six months ended March 31, 2005, in accordance with accounting principles generally accepted in the United States of America. In assessing operating performance, the Company also reviews its results once all non-recurring or offering-related adjustments made in connection with the Company’s initial public offering have been removed. We call this measure of earnings “core earnings,” a non-GAAP financial measure. We believe this measure provides a better understanding of our underlying operating performance. For the three and six months ended March 31, 2005 and 2004, our core earnings and core EPS were:

	Three Months Ended March 31,				% Change		Six Months Ended March 31,				% Change
Core Earnings and Core Earnings Per Share	2005		2004				2005		2004
Income before income taxes as reported	$	46,050	$	51,776	(11.1	)%	$	103,718	$	101,327	2.4	%
Add back amortization of one-time initial public offering restricted stock awards		4,165		4,561	(8.7	)%		8,591		8,680	(1.0	)%
Core pretax income	$	50,215	$	56,337	(10.9	)%	$	112,309	$	110,007	2.1	%
Adjusted income tax expense (1)		20,588		23,098	(10.9	)%		46,047		45,103	2.1	%
Core net income	$	29,627	$	33,239	(10.9	)%	$	66,262	$	64,904	2.1	%
Core earnings per share:
Basic	$	0.25	$	0.34	(24.7	)%	$	0.56	$	0.66	(14.8	)%
Diluted	$	0.25	$	0.33	(24.6	)%	$	0.55	$	0.65	(14.8	)%
Core shares outstanding:
Basic (2)		116,444,697		98,385,913	18.4	%		117,823,512		98,374,135	19.8	%
Diluted (3)		118,108,121		99,910,779	18.2	%		119,404,230		99,663,289	19.8	%

(1) Assumes an effective tax rate of 41.0%.

(2) Shares are weighted for the time that they are outstanding as noted below. Core shares outstanding assumes that the following shares of common stock are outstanding—

For the entire period:

• 70,819,520 shares of common stock issued to FORE Holdings LLC for the benefit of our owners in connection with the transition to a corporate structure;

• 5,789,908 shares underlying the one-time, initial public offering restricted stock award less net forfeitures of 442,367 and 333,738 at March 31, 2005 and 2004, respectively, and 13,275,839 and 273,249 of treasury stock at March 31, 2005 and 2004, respectively.

Since the acquisition date, June 5, 2002:

• 9,417,526 shares issued in connection with the June 5, 2002, acquisition of the actuarial and benefits consulting business of Bacon & Woodrow.

Since the offering date, June 27, 2002:

• 11,150,000 shares of common stock issued in connection with the initial public offering weighted as of June 27, 2002;

• 1,672,500 shares of common stock issued in connection with the exercise of the over-allotment option for the initial public offering weighted as of July 9, 2002.

Since the Exult acquisition date, October 1, 2004:

• 22,092,826 shares of common stock issued in connection with the acquisition weighted as of October 1, 2004.

Throughout the periods presented:

• 27,577 and 12,195 shares of common stock, restricted stock and restricted stock units issued for Director compensation at March 31, 2005 and 2004, respectively.

• 373,258 and 152,667 shares of common stock issued to fulfill the exercise of stock options at March 31, 2005 and 2004, respectively.

(3) In addition to the shares outstanding for core basic EPS, the dilutive effect of stock options and restricted stock and restricted stock units issued outside of the initial public offering restricted stock award calculated using the Treasury Stock Method as outlined in SFAS No. 128, Earnings Per Share, was 1,663,424 shares and 1,580,718 shares for the three- and six-month periods ended March 31, 2005, respectively, and was 1,524,866 shares and 1,289,154 shares for the three- and six-month periods ended March 31, 2004, respectively.

Hewitt Associates 10

HEWITT ASSOCIATES, INC.

BUSINESS SEGMENT RESULTS

(Unaudited)

(Dollars in thousands)

	Three Months Ended March 31,						% Change		Six Months Ended March 31,						% Change
Business Segments	2005			2004					2005			2004
Outsourcing (1)
Revenues before reimbursements (net revenues)	$	494,306		$	350,991		40.8	%	$	1,014,669		$	706,074		43.7	%
Segment income		48,230			69,904		(31.0	)%		134,015			149,585		(10.4	)%
Segment income as a percentage of segment net revenues		9.8	%		19.9	%				13.2	%		21.2	%
Consulting
Revenues before reimbursements (net revenues)	$	202,780		$	195,344		3.8	%	$	392,815		$	372,225		5.5	%
Segment income		47,038			36,195		30.0	%		73,083			58,628		24.7	%
Segment income as a percentage of segment net revenues		23.2	%		18.5	%				18.6	%		15.8	%
Total Company (1)
Revenues before reimbursements (net revenues)	$	697,086		$	546,335		27.6	%	$	1,407,484		$	1,078,299		30.5	%
Reimbursements		15,494			13,145		17.9	%		30,384			31,870		(4.7	)%
Total revenues	$	712,580		$	559,480		27.4	%	$	1,437,868		$	1,110,169		29.5	%
Segment income	$	95,268		$	106,099		(10.2	)%	$	207,098		$	208,213		(0.5	)%
Charges not recorded at the segment level:
Initial public offering restricted stock awards (2)		4,165			4,561		(8.7	)%		8,591			8,680		(1.0	)%
Unallocated shared services costs		42,269			46,072		(8.3	)%		87,940			88,138		(0.2	)%
Operating income	$	48,834		$	55,466		(12.0	)%	$	110,567		$	111,395		(0.7	)%

(1) On October 1, 2004, the Company acquired Exult. As such, Exult’s results are included in the Company’s Outsourcing segment results from the acquisition date.

(2) In connection with the Company’s initial public offering, the Company made a one-time restricted stock grant to associates, which vests over time. As such, related expenses of approximately $4 million and $5 million were incurred in each of the three-month periods ended March 31, 2005 and 2004, respectively, and $9 million in each of the six-month periods ended March 31, 2005 and 2004, respectively.

Hewitt Associates 11

HEWITT ASSOCIATES, INC.

BUSINESS SEGMENT RESULTS

PRO FORMA COMPARISON

(Unaudited)

(Dollars in thousands)

	Three Months Ended March 31,								Six Months Ended March 31,
Business Segments	2005			2004			% Change		2005			2004			% Change
				Pro Forma								Pro Forma
Outsourcing (1)
Revenues before reimbursements (net revenues)	$	494,306		$	456,381		8.3	%	$	1,014,669		$	921,347		10.1	%
Segment income		48,230			67,429		(28.5	)%		134,015			150,712		(11.1	)%
Segment income as a percentage of segment net revenues		9.8	%		14.8	%				13.2	%		16.4	%
Consulting
Revenues before reimbursements (net revenues)	$	202,780		$	195,344		3.8	%	$	392,815		$	372,225		5.5	%
Segment income		47,038			36,841		27.7	%		73,083			59,829		22.2	%
Segment income as a percentage of segment net revenues		23.2	%		18.9	%				18.6	%		16.1	%
Total Company (1)
Revenues before reimbursements (net revenues)	$	697,086		$	651,725		7.0	%	$	1,407,484		$	1,293,572		8.8	%
Reimbursements		15,494			13,145		17.9	%		30,384			31,870		(4.7	)%
Total revenues	$	712,580		$	664,870		7.2	%	$	1,437,868		$	1,325,442		8.5	%
Segment income	$	95,268		$	104,270		(8.6	)%	$	207,098		$	210,541		(1.6	)%
Charges not recorded at the segment level:
Initial public offering restricted stock awards (2)		4,165			4,561		(8.7	)%		8,591			8,680		(1.0	)%
Unallocated shared services costs		42,269			51,932		(18.6	)%		87,940			97,511		(9.8	)%
Operating income	$	48,834		$	47,777		2.2	%	$	110,567			104,350		6.0	%

(1) In accordance with SEC regulations for the determination of pro forma results, the prior-year pro forma results assume that the Company’s merger with Exult had occurred on October 1, 2003, and exclude all related non-recurring adjustments to allow for comparability.

(2) In connection with the Company’s initial public offering, the Company made a one-time restricted stock grant to associates, which vests over time. As such, related expenses of approximately $4 million and $5 million were incurred in each of the three-month periods ended March 31, 2005 and 2004, respectively, and $9 million in each of the six-month periods ended March 31, 2005 and 2004, respectively.

Hewitt Associates 12

HEWITT ASSOCIATES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except for share amounts)

	March 31, 2005		September 30, 2004
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	80,263	$	129,481
Short-term investments		54,040		183,205
Client receivables and unbilled work in process, less allowances of $21,823 and $21,732 at March 31, 2005 and September 30, 2004, respectively		549,556		522,882
Prepaid expenses and other current assets		89,889		50,546
Funds held for clients		39,056		14,693
Deferred income taxes, net		—		246
Total current assets		812,804		901,053
Non-Current Assets
Deferred contract costs		188,814		162,602
Property and equipment, net		254,279		236,480
Capitalized software, net		97,862		84,969
Other intangible assets, net		279,940		107,322
Goodwill, net		668,996		285,743
Other assets, net		27,651		29,805
Total non-current assets		1,517,542		906,921
Total Assets	$	2,330,346	$	1,807,974
LIABILITIES
Current Liabilities
Accounts payable	$	42,443	$	20,909
Accrued expenses		127,915		83,226
Funds held for clients		39,056		14,693
Advanced billings to clients		119,361		106,934
Accrued compensation and benefits		113,840		181,812
Deferred income taxes, net		11,770		—
Short-term debt and current portion of long-term debt		56,342		13,445
Current portion of capital lease obligations		4,873		5,373
Employee deferred compensation and accrued profit sharing		29,441		49,450
Total current liabilities		545,041		475,842
Long-Term Liabilities
Deferred contract revenues		114,628		118,025
Debt , less current portion		221,599		121,253
Capital lease obligations, less current portion		78,501		79,982
Other long-term liabilities		102,415		83,063
Deferred income taxes, net		21,435		70,456
Total long-term liabilities		538,578		472,779
Total Liabilities	$	1,083,619	$	948,621

Hewitt Associates 13

HEWITT ASSOCIATES, INC.

CONSOLIDATED BALANCE SHEETS (continued)

(Dollars in thousands, except for share amounts)

	March 31, 2005			September 30, 2004
	(Unaudited)
STOCKHOLDERS’ EQUITY
Stockholders’ Equity
Class A common stock, par value $0.01 per share, 750,000,000 shares authorized, 64,588,784 and 32,480,669 shares issued, 51,312,945 and 31,954,151 shares outstanding as of March 31, 2005 and September 30, 2004, respectively	$	646		$	325
Class B common stock, par value $0.01 per share, 200,000,000 shares authorized, 52,509,466 and 61,707,114 shares issued and outstanding as of March 31, 2005 and September 30, 2004, respectively		525			617
Class C common stock, par value $0.01 per share, 50,000,000 shares authorized, 4,307,764 and 4,391,862 shares issued and outstanding as of March 31, 2005 and September 30, 2004, respectively		43			44
Restricted stock units, 143,766 and 118,363 units issued and outstanding as of March 31, 2005 and September 30, 2004, respectively		2,890			2,166
Additional paid-in capital		1,305,921			633,934
Cost of common stock in treasury, 13,275,839 and 526,518 shares of Class A common stock as of March 31, 2005 and September 30, 2004, respectively		(382,434	)		(13,414	)
Retained earnings		255,617			194,430
Unearned compensation		(30,955	)		(27,799	)
Accumulated other comprehensive income		94,474			69,050
Total stockholders’ equity		1,246,727			859,353
Total Liabilities and Stockholders’ Equity	$	2,330,346		$	1,807,974

Hewitt Associates 14

HEWITT ASSOCIATES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Six Months Ended March 31,
	2005			2004
Cash flows from operating activities:
Net income	$	61,187		$	59,783
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		42,628			38,256
Amortization		31,728			21,465
Amortization of premiums and discounts on available-for-sale securities		286			—
Impairment of customer relationship intangible assets		9,569			—
Initial public offering restricted stock awards		7,606			7,477
Restricted stock awards		5,747			—
Director stock remuneration		304			140
Deferred income taxes		25,337			(450	)
Realized losses on short-term investments, net		236			—
Changes in operating assets and liabilities, net of effect of acquisition:
Client receivables and unbilled work in process		63,534			11,944
Prepaid expenses and other current assets		4,659			(1,705	)
Funds held for clients		276			(12,773	)
Deferred contract costs		(25,842	)		(7,228	)
Accounts payable		(1,167	)		(989	)
Accrued compensation and benefits		(84,350	)		(26,937	)
Accrued expenses		(19,355	)		8,865
Funds held for clients’ liability		(276	)		12,773
Advanced billings to clients		6,695			3,091
Deferred contract revenues		(3,661	)		621
Employee deferred compensation and accrued profit sharing		(20,138	)		(19,993	)
Other long-term liabilities		4,321			(1,036	)
Net cash provided by operating activities		109,324			93,304
Cash flows from investing activities:
Sales (purchases) of short-term investments, net		238,810			(24,180	)
Additions to property and equipment		(41,979	)		(29,529	)
Cash received from acquisitions, net of cash paid for transaction costs		4,683			(437	)
Increase in other assets		(25,846	)		(14,988	)
Net cash provided by (used in) investing activities		175,668			(69,134	)
Cash flows from financing activities:
Proceeds from the exercise of stock options		3,187			2,240
Short-term borrowings		63,593			14,619
Repayments of short-term borrowings		(27,754	)		(18,655	)
Repayments of long-term debt		(3,000	)		(3,000	)
Repayments of capital lease obligations		(2,895	)		(4,456	)
Purchase of Class A common shares into treasury		(369,020	)		(70	)
Net cash provided by (used in) financing activities		(335,889	)		(9,322	)
Effect of exchange rate changes on cash and cash equivalents		1,679			1,115
Net increase (decrease) in cash and cash equivalents		(49,218	)		15,963
Cash and cash equivalents, beginning of period		129,481			67,785
Cash and cash equivalents, end of period	$	80,263		$	83,748
Supplementary disclosure of cash paid during the period:
Interest paid	$	10,813		$	9,837
Income taxes paid		28,126			37,533

Hewitt Associates 15