LINCOLNSHIRE, Ill., May 05, 2008 (BUSINESS WIRE) ----Hewitt Associates, Inc. (NYSE:HEW), a global human resources services company, today reported results for its fiscal 2008 second quarter ended March 31, 2008.

-- Reported net revenues (revenues before reimbursements) increased 8% in the second quarter, to $773.1 million, from $716.2 million in the prior-year quarter. Benefits Outsourcing revenues increased 7%, Human Resources Business Process Outsourcing (HR BPO) revenues increased 7%, and Consulting revenues increased 11%.

-- Operating income for the second quarter increased to $68.5 million, compared with $18.8 million in the prior-year quarter. The increase reflects improved underlying business performance in addition to an $8.7 million pretax net gain in the current quarter and a $15.0 million pretax net charge in the prior-year period, both related to a number of unusual items. Adjusting for these items, operating income for the current quarter was $59.8 million, compared with $33.8 million in the prior-year quarter.(1)

-- Net income for the second quarter increased to $44.5 million, or $0.43 per diluted share, compared with $13.0 million, or $0.12 per diluted share in the prior-year quarter. Adjusting for the unusual items noted above, net income for the second quarter increased to $37.4 million, or $0.37 per diluted share, compared with $22.7 million, or $0.20 per diluted share in the prior year quarter.

-- Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(2), a non-GAAP measure, increased to $273.4 million in the current six-month period, compared to $179.4 million in the prior-year period.

-- During the second quarter the Company repurchased 6.1 million of its outstanding common shares for a total of $227.9 million.

Second Quarter Highlights

"This was another quarter of good top line growth and strong bottom line growth," said Russ Fradin, chairman and chief executive officer. "We also made some important investments this quarter in terms of acquisitions and additional Consulting initiatives. We made substantial progress with our HR BPO business, including the resolution of one sensitive contract situation and the anticipated resolution of another. Demand for services remains healthy and we are confident about our full year prospects."

Operating Performance

Reported net revenues of $773.1 million in the second quarter included a $14.5 million benefit from foreign currency translation, a $10.8 million benefit due to the resolution of an HR BPO contract restructuring announced in March, and a $3.8 million contribution from acquisitions. After adjusting for these items, and excluding third-party supplier revenues and the comparable prior-year contribution of the Cyborg business(3), net revenues increased 6%.

Operating income for the second quarter increased to $68.5 million, compared with $18.8 million in the prior-year quarter. Operating margin was 8.9% in the second quarter, compared to 2.6% in the prior-year quarter.

Second quarter operating results include a pretax net gain of $35.4(4) million related to the divestiture of the Cyborg business, and net pretax charges of $18.7 million related to the HR BPO contract restructuring announced in March and the anticipated termination of an additional contract. Current year results also include a pretax charge of $8.0 million related to the previously-announced review of the Company's real estate portfolio.

The prior-year period included pretax charges totaling $18.6 million related to the restructuring of an HR BPO contract, the resolution of a legal dispute, and asset impairments. The prior-year quarter also included favorable pretax contributions totaling $3.5 million related to comparable Cyborg operations and accrued severance adjustments.

Excluding these items, operating income grew 77%.

Reported results in the current quarter reflect an effective tax rate of 36.2%, compared to 41.6% in the prior-year quarter.

Business Segment Results

Benefits Outsourcing

Benefits Outsourcing segment revenues increased 7% in the second quarter, to $383.9 million, from $360.0 million in the prior-year quarter. Adjusting for increased revenue related to the HR BPO contract restructuring announced in March of $4.4 million, acquisitions of $2.7 million, and the favorable effects of foreign currency translation of $1.6 million, Benefits Outsourcing revenues increased 4%. The increase was principally due to project work and new client and organic revenue growth, partially offset by client losses.

Benefits Outsourcing segment income increased 24% in the second quarter, to $85.6 million, compared with $69.3 million in the prior-year quarter. Segment margin was 22.3%, compared to 19.2% in the prior-year quarter. Margin improvement was mainly due to increased project revenue, lower infrastructure costs, and savings from offshoring, partially offset by higher compensation and client service delivery expenses related to the several large, complex clients that went live with ongoing services.

Second quarter operating results include a pretax charge of $2.3 million related to the review of the real estate portfolio and a $2.1 million pretax benefit related to the HR BPO contract restructuring announced in March. The prior-year period included a $4.0 million pretax charge resulting from the resolution of a legal dispute with a vendor.

As of March 31, 2008, the Company was live with 19.6 million end-user benefits participants, compared with 18.6 million as of March 31, 2007.

Human Resources Business Process Outsourcing

HR BPO segment revenues increased 7% in the second quarter, to $140.4 million, from $131.1 million in the prior-year quarter. Adjusting for a benefit due to the contract restructuring announced in March of $6.4 million, favorable effects of foreign currency translation of $3.9 million, and excluding third-party supplier revenues and the impact of the Cyborg divestiture(5), HR BPO revenues increased 13%. The revenue growth was principally due to an increase in clients who went live with contract services over the last 12 months and higher revenue from existing clients, mostly related to project work.

The HR BPO segment loss was $18.2 million in the second quarter, compared with a loss of $60.6 million in the prior-year quarter. Segment loss improved principally due to the $35.4 million net pretax gain on the divestiture of Cyborg, staffing leverage, infrastructure cost management efforts, and increased revenue.

Second quarter operating results also include net pretax charges of $20.8 million related to the contract restructuring announced in March and the anticipated termination of an additional contract. Current year results also reflect a pretax charge of $0.6 million related to the review of the Company's real estate portfolio. The prior-year period included pretax charges totaling $14.6 million related to the restructuring of an HR BPO contract and asset impairments. The prior-year quarter also included favorable pretax contributions of $3.1 million related to comparable Cyborg operations and accrued severance adjustments.

Excluding these items, HR BPO operating loss improved to $32.2 million, compared to a loss of $49.1 million in the prior-year quarter.

As of March 31, 2008, the Company was live with approximately 946,000 client employees with HR BPO services, compared with approximately 765,000 as of March 31, 2007.

Consulting

Consulting segment revenues increased 11% in the second quarter, to $260.6 million, from $234.3 million in the prior-year quarter. Adjusting for the favorable effects of foreign currency translation of $9.0 million, and the effects of acquisitions of $1.0 million, Consulting revenues increased 7% over the prior-year quarter. Growth resulted principally from Retirement and Financial Management services in addition to Talent and Organization Consulting services.

Consulting segment income decreased 13% in the second quarter, to $24.7 million, compared with $28.3 million in the prior-year quarter. Segment margin was 9.5%, compared with 12.1% in the prior-year quarter. The margin decrease was primarily a result of higher compensation expenses related to accelerated recruiting efforts and knowledge development, and a pretax charge of $4.0 million related to the Company's real estate portfolio review that more than offset the increased revenue.

Unallocated Shared Service Costs

Unallocated shared service costs were $23.7 million, 3.1% of net revenues, in the second quarter, compared with $18.2 million, 2.5% of net revenues, in the prior-year quarter. The increase in expenses relative to revenues was primarily the result of one-time favorable adjustments in the prior-year period. Second quarter results also include a pretax charge of $1.2 million related to the Company's real estate portfolio review.

Year-to-Date Results

Consolidated net revenues for the six-month period ended March 31, 2008 increased 9%, to $1.57 billion, compared with $1.44 billion in the prior-year six-month period. The period was impacted by the favorable effects of net foreign currency translation of $31.8 million and the favorable resolution of previously announced HR BPO contract restructurings of $23.1 million. Acquisitions contributed $7.5 million of revenue. Adjusting for these items, and excluding third-party supplier revenues and the comparable prior-year contribution of the Cyborg business, net revenues increased 6%.

Consolidated operating income for the six-month period increased to $177.4 million, and operating margin was 11.3%, compared to $65.3 million and 4.5% in the prior-year six month period, respectively. The margin improvement was due to increased revenue across all segments that more than offset higher compensation expenses, principally in Consulting, in addition to the previously-mentioned gain on the sale of Cyborg.

Current-period results include an $8.7 million pretax net gain related to unusual second quarter items previously noted, and a $5.4 million pretax benefit due to the resolution of a previously announced HR BPO contract restructuring recorded in the first quarter. The prior-year period included $15.0 million in net pretax charges previously noted, and a $15.7 million pretax severance charge recorded in the first quarter related to ongoing productivity initiatives.

Adjusting for these items, operating income grew 70%.

Net income for the six-month period increased to $108.4 million, or $1.03 per diluted share, compared with $43.1 million, or $0.39 per diluted share in the prior-year six-month period. Adjusting for unusual items, net income for the six-month period increased to $103.3 million, or $0.98 per diluted share, compared with $62.1 million, or $0.56 per diluted share in the prior year six-month period.

Cash Flow

Reported cash flow from operations was $37.3 million in the six-month period, compared with $77.9 million in the prior six-month period. Free cash flow, defined as cash flow from operations less investments (capital expenditures and capitalized software costs), was negative $19.3 million, compared with $35.8 million in the prior-year six-month period. The decrease in free cash flow was driven primarily by higher performance-based compensation paid in the current year for fiscal 2007 performance, increased capital expenditures, and deferred compensation payments related to an acquisition, partially offset by higher net income driven by increased revenue.

Adjusted EBITDA, a non-GAAP measure reflecting operating income adjusted for the previously noted unusual items, depreciation and amortization, and certain other non-cash items (such as goodwill and asset impairment, revenue and compensation deferrals, stock-based compensation, deferred internal software development costs, and others), increased to $273.4 million in the current six-month period, compared to $179.4 million in the prior-year period. The adjusted EBITDA improvement was principally due to increased operating profits and lower cash outflows due to more live HR BPO clients.

Share Repurchase

During the second quarter, the Company repurchased 6.1 million of its outstanding common shares at an average price of $37.60 per share, for a total of $227.9 million. At May 2, 2008, the Company has approximately $168 million remaining under its current $750 million authorization.

Supplemental Information

The Company recently announced several transactions in connection with its strategic priorities. Specifically, these transactions will better enable the Company to streamline its HR BPO service offering, build its global Consulting capabilities and enhance its Benefits Outsourcing product offerings.

-- On January 31, 2008, the Company closed on the previously announced sale of assets related to its Cyborg business, a licensed payroll and HR software services organization acquired in 2003. The divestiture is part of the Company's continued efforts to streamline its HR BPO service offerings and focus on managed, end-to-end payroll services.

-- On March 18, 2008, the Company closed on the previously announced acquisition of New Bridge Street Consultants, one of the leading specialist executive compensation consultancies in the United Kingdom.

-- On April 23, 2008, the Company closed on the previously announced acquisition of CSi -- The Remuneration Specialists, a specialist compensation consultancy that provides data, analytics and compensation consulting solutions to organizations in Australia and New Zealand.

-- On April 29, 2008, the Company announced the acquisition of LCG, a recognized expert in employee absence management. LCG provides an array of integrated disability, leave and absence management solutions to help mid- to large-sized employers better manage costs and maintain compliance. The transaction is expected to close within the next several months.

Business Outlook

In addition to reporting results in accordance with U.S. GAAP, the Company assesses its performance once unusual items have been removed. The following revised guidance reflects expectations for fiscal 2008 on this underlying basis, excluding the impact of unusual items:

-- Mid- to high-single digit total Company net revenue growth;

-- Underlying operating income of approximately $315 million to $330 million; and

-- Underlying diluted earnings per share of $1.85 to $1.95.

The Company's fiscal 2008 guidance assumes a normalized effective tax rate of 39% and continued execution of its share repurchase program. Guidance excludes anticipated total fiscal 2008 real estate portfolio review related charges of approximately $35 million to $45 million.

Conference Call

At 7:30 a.m. (CT) today, management will host a conference call with investors to discuss fiscal 2008 second quarter results. 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.

About Hewitt Associates

For more than 65 years, Hewitt Associates (NYSE:HEW) has provided clients with best-in-class human resources consulting and outsourcing services. Hewitt consults with more than 3,000 large and mid-size companies around the globe to develop and implement HR business strategies covering retirement, financial and health management; compensation and total rewards; and performance, talent and change management. As a market leader in benefits administration, Hewitt delivers health care and retirement programs to millions of participants and retirees, on behalf of more than 300 organizations worldwide. In addition, more than 30 clients rely on Hewitt to provide a broader range of human resources business process outsourcing services to nearly a million client employees. Located in 33 countries, Hewitt employs approximately 23,000 associates. For more information, please visit www.hewitt.com.

Forward-Looking Information

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed under the "Risk Factors" heading in the Business section of the Company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission ("SEC") and available at the SEC's internet site (www.sec.gov). Hewitt disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or any other reason.

(1) In assessing operating performance, the Company also reviews its results once unusual adjustments have been removed. The Company believes that doing so provides a better understanding of underlying operating performance. A reconciliation of underlying operating income and earnings per share to GAAP for fiscal second quarters 2008 and 2007 is included in this press release.

(2) A reconciliation of Adjusted EBITDA to GAAP is included in this press release.

(3) On January 31, 2008, the Company closed on the sale of assets related to its Cyborg business, a licensed payroll and software services organization acquired in 2003. February and March 2007 Cyborg results have been excluded from "underlying" and "as adjusted" amounts for year-over-year comparative purposes.

(4) Amount reflects a $0.2 million reduction to the $35.7 million "gain on sale of business" reported in the Q2 FY08 Consolidated Statement of Operations. This reduction pertains to certain Cyborg employee-related expenses recorded in the quarter.

(5) February and March 2007 Cyborg results have been excluded from "underlying" and "as adjusted" amounts for year-over-year comparative purposes.

   HEWITT ASSOCIATES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands except for share and per share
   amounts) Three Months Ended March 31, ----------------------- 2008 2007 % Change ----------- ----------- -------- Revenues:
   Revenues before reimbursements (net revenues) $773,099 $716,203 7.9% Reimbursements 16,449 17,605 (6.6)% ----------- -----------
   Total revenues 789,548 733,808 7.6% ----------- ----------- Operating expenses: Compensation and related expenses 522,026
   482,686 8.2% Asset impairment 2,070 2,659 (22.2)% Reimbursable expenses 16,449 17,605 (6.6)% Other operating expenses 157,639
   152,056 3.7% Selling, general and administrative expenses 58,571 60,037 (2.4)% Gain on sale of business (35,667) - -----------
   ----------- Total operating expenses 721,088 715,043 0.8% ----------- ----------- Operating income 68,460 18,765 264.8% Other
   income, net: Interest expense (4,241) (5,263) (19.4)% Interest income 4,892 7,831 (37.5)% Other income, net 620 888 (30.2)%
   ----------- ----------- Total other income, net 1,271 3,456 (63.2)% ----------- ----------- Income before income taxes 69,731
   22,221 213.8% Provision for income taxes 25,238 9,235 173.3% ----------- ----------- Net income $44,493 $12,986 242.6% ===========
   =========== Earnings per share: Basic $0.45 $0.12 Diluted (1) $0.43 $0.12 Weighted average shares: Basic 98,662,326 109,190,547
   Diluted 103,662,906 111,936,801 Six Months Ended March 31, ----------------------- 2008 2007 % Change ----------- -----------
   -------- Revenues: Revenues before reimbursements (net revenues) $1,566,942 $1,442,834 8.6% Reimbursements 41,598 37,024 12.4%
   ----------- ----------- Total revenues 1,608,540 1,479,858 8.7% ----------- ----------- Operating expenses: Compensation and
   related expenses 1,016,152 969,487 4.8% Asset impairment 2,296 3,615 (36.5)% Reimbursable expenses 41,598 37,024 12.4% Other
   operating expenses 298,170 305,936 (2.5)% Selling, general and administrative expenses 108,598 98,498 10.3% Gain on sale of
   business (35,667) - ----------- ----------- Total operating expenses 1,431,147 1,414,560 1.2% ----------- ----------- Operating
   income 177,393 65,298 171.7% Other income, net: Interest expense (7,985) (10,639) (24.9)% Interest income 13,490 14,775 (8.7)%
   Other income, net 236 1,715 (86.2)% ----------- ----------- Total other income, net 5,741 5,851 (1.9)% ----------- -----------
   Income before income taxes 183,134 71,149 157.4% Provision for income taxes 74,694 28,098 165.8% ----------- ----------- Net
   income $108,440 $43,051 151.9% =========== =========== Earnings per share: Basic $1.07 $0.39 Diluted (1) $1.03 $0.39 Weighted
   average shares: Basic 101,736,572 109,112,904 Diluted 106,666,140 111,275,939 (1) Per FAS 128, the diluted EPS calculation
   includes an addback of $582 and $1,165 of interest expense on the convertible debt securities for the three and six months
   ended March 31, 2008, respectively. 

 HEWITT ASSOCIATES, INC. UNDERLYING OPERATING INCOME AND EARNINGS PER SHARE
   (Unaudited) (Dollars in thousands except for share and per share amounts) In assessing operating performance, the Company
   also reviews its results once unusual adjustments have been removed. The Company believes that doing so provides a better
   understanding of underlying operating performance. For the three months and six months ended March 31, 2008 and March 31,
   2007, underlying operating income and earnings per share were: Three Months Ended Six Months Ended March 31, March 31, ---------------------------
   --------------------------- 2008 2007 2008 2007 ------------- ------------- ------------- ------------- Operating income,
   as reported $ 68,460 $ 18,765 $ 177,393 $ 65,298 Adjustments: Cyborg - FY08 gain (1)/FY07 operations (2) (35,446) (2,210)
   (35,446) (2,210) Asset impairment - 2,574 - 2,574 Severance - (1,324) - 14,356 Real estate 8,048 - 8,048 - HR BPO contract
   restruc- turings 18,706 12,000 13,323 12,000 Legal settlement - 4,000 - 4,000 ------------- ------------- ------------- -------------
   Total adjustments (8,692) 15,040 (14,075) 30,720 Underlying operating income 59,768 33,805 163,318 96,018 Other income, net
   1,271 3,456 5,741 5,851 Add A/R interest write-off (3) 273 - 273 - ------------- ------------- ------------- -------------
   Underlying other income, net 1,544 3,456 6,014 5,851 Underlying pretax income 61,312 37,261 169,331 101,869 Provision for
   income taxes (normalized at 39% for the three and six months ended March 31, 2008 and 2007) (4) 23,912 14,532 66,039 39,729
   ------------- ------------- ------------- ------------- Underlying net income $ 37,400 $ 22,729 $ 103,292 $ 62,140 =============
   ============= ============= ============= Underlying earnings per share: Basic $ 0.38 $ 0.21 $ 1.02 $ 0.57 Diluted (5) $ 0.37
   $ 0.20 $ 0.98 $ 0.56 Adjusted shares outstanding (6): Basic 98,662,326 109,190,547 101,736,572 109,112,904 Diluted (7) 103,662,906
   111,936,801 106,666,140 111,275,939 (1) Amount reflects a $221 reduction to the $35,667 "gain on sale of business" reported
   in the Q2 FY08 Consolidated Statement of Operations. This reduction pertains to certain Cyborg employee- related expenses
   recorded in the quarter. (2) Cyborg results have been excluded for February and March 2007 to enable year-over-year comparisons.
   (3) Related to HR BPO contract restructurings. (4) The Company used an effective tax rate of 39% for the three and six months
   ended March 31, 2008 and 2007 for its underlying net income calculation. The Company believes this approximates the normalized
   effective tax rate for both years. (5) Per FAS 128, the diluted EPS calculation includes an addback of $582 and $1,165 of
   interest expense on the convertible debt securities for the three and six months ended March 31, 2008, respectively. (6) Three
   Months Ended Six Months Ended March 31, March 31, --------------------------- --------------------------- 2008 2007 2008 2007
   ------------- ------------- ------------- ------------- Weighted average basic shares outstanding 98,662,326 109,190,547 101,736,572
   109,112,904 Number of shares added to outstanding: Stock options and warrants 1,849,867 1,641,300 1,916,774 1,349,066 Restricted
   stock 1,279,965 1,104,954 1,142,046 813,969 Convertible debentures 1,870,748 - 1,870,748 - ------------- ------------- -------------
   ------------- Total adjusted diluted shares 103,662,906 111,936,801 106,666,140 111,275,939 Diluted shares outstanding reflect
   the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised
   or could result in the issuance of common stock. Potentially dilutive common stock equivalents include unvested restricted
   stock and restricted stock units, unexercised stock options and warrants that are "in-the-money", and outstanding convertible
   debt securities which would have a dilutive effect if converted from debt to common stock. (7) Debt securities convertible
   into 1,870,748 shares of Class A common stock were outstanding in the three and six months ended March 31, 2008 and March
   31, 2007, but the weighted average shares were not included in the computation of underlying diluted earnings per share for
   the three and six months ended March 31, 2007 because the effect of including the convertible debt securities would have been
   antidilutive. 

 HEWITT ASSOCIATES, INC. BUSINESS SEGMENT RESULTS (Unaudited) (Dollars in thousands) Business Segments
   Three Months Ended March 31, ------------------------ 2008 2007 % Change ------------ ----------- ---------- Benefits Outsourcing
   Segment revenues before reimbursements $ 383,867 $ 360,033 6.6% Segment income 85,608 69,274 23.6% Segment income as a percentage
   of segment revenues 22.3% 19.2% HR BPO Segment revenues before reimbursements (1) $ 140,445 $ 131,142 7.1% Segment loss (18,159)
   (60,589) 70.0% Segment loss as a percentage of segment revenues (12.9)% (46.2)% Consulting Segment revenues before reimbursements
   $ 260,620 $ 234,342 11.2% Segment income 24,731 28,305 (12.6)% Segment income as a percentage of segment revenues 9.5% 12.1%
   Total Company Segment revenues before reimbursements (1) $ 784,932 $ 725,517 8.2% Intersegment revenues (11,833) (9,314) 27.0%
   ------------ ----------- Revenues before reimbursements (net revenues) 773,099 716,203 7.9% Reimbursements 16,449 17,605 (6.6)%
   ------------ ----------- Total revenues $ 789,548 $ 733,808 7.6% ============ =========== Segment income $ 92,180 $ 36,990
   149.2% Unallocated shared services costs 23,720 18,225 30.2% ------------ ----------- Operating income $ 68,460 $ 18,765 264.8%
   ============ =========== Business Segments Six Months Ended March 31, ------------------------- 2008 2007 % Change ------------
   ------------ --------- Benefits Outsourcing Segment revenues before reimbursements $ 787,205 $ 747,412 5.3% Segment income
   205,789 148,102 39.0% Segment income as a percentage of segment revenues 26.1% 19.8% HR BPO Segment revenues before reimbursements
   (1) $ 288,716 $ 264,617 9.1% Segment loss (45,423) (102,800) 55.8% Segment loss as a percentage of segment revenues (15.7)%
   (38.8)% Consulting Segment revenues before reimbursements $ 514,994 $ 449,242 14.6% Segment income 61,167 59,431 2.9% Segment
   income as a percentage of segment revenues 11.9% 13.2% Total Company Segment revenues before reimbursements (1) $1,590,915
   $1,461,271 8.9% Intersegment revenues (23,973) (18,437) 30.0% ------------ ------------ Revenues before reimbursements (net
   revenues) 1,566,942 1,442,834 8.6% Reimbursements 41,598 37,024 12.4% ------------ ------------ Total revenues $1,608,540
   $1,479,858 8.7% ============ ============ Segment income $ 221,533 $ 104,733 111.5% Unallocated shared services costs 44,140
   39,435 11.9% ------------ ------------ Operating income $ 177,393 $ 65,298 171.7% ============ ============ (1) HR BPO net
   revenues include $9,157 and $18,603 of third-party supplier revenues for the three months ended March 31, 2008 and 2007, respectively,
   and $22,337 and $39,675 for the six months ended March 31, 2008 and 2007, respectively. The third-party supplier arrangements
   are generally marginally profitable. The related third- party supplier expenses are included in other operating expenses.
   

 HEWITT ASSOCIATES, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands except for share and per share amounts)
   March 31, September 30, 2008 2007 ------------- ------------- (Unaudited) ASSETS Current Assets: Cash and cash equivalents
   $ 189,626 $ 378,743 Short-term investments - 216,726 Client receivables and unbilled work in process, less allowances of $21,391
   and $18,933 at March 31, 2008 and September 30, 2007, respectively 653,672 632,011 Prepaid expenses and other current assets
   90,667 86,683 Funds held for clients 103,903 133,163 Deferred income taxes, net 40,366 32,533 ------------- -------------
   Total current assets 1,078,234 1,479,859 ------------- ------------- Non-Current Assets: Deferred contract costs, net 365,215
   372,363 Property and equipment, net 377,934 355,907 Other intangible assets, net 187,817 196,133 Goodwill 341,242 319,314
   Long-term investments 135,272 - Other non-current assets, net 66,976 31,962 ------------- ------------- Total non-current
   assets 1,474,456 1,275,679 ------------- ------------- Total Assets $ 2,552,690 $ 2,755,538 ============= ============= LIABILITIES
   Current Liabilities: Accounts payable $ 32,283 $ 21,304 Accrued expenses 175,288 212,097 Funds held for clients 103,903 133,163
   Advanced billings to clients 177,404 170,131 Accrued compensation and benefits 262,549 353,265 Short-term debt 125,743 30,369
   Current portion of long-term debt and capital lease obligations 31,972 24,222 ------------- ------------- Total current liabilities
   909,142 944,551 ------------- ------------- Non-Current Liabilities: Deferred contract revenues 288,342 271,359 Debt and capital
   lease obligations, less current portion 269,145 233,465 Other non-current liabilities 204,382 165,264 Deferred income taxes,
   net 104,938 102,887 ------------- ------------- Total non-current liabilities 866,807 772,975 ------------- -------------
   Total Liabilities $ 1,775,949 $ 1,717,526 ------------- ------------- 

 HEWITT ASSOCIATES, INC. CONSOLIDATED BALANCE
   SHEETS (continued) (Dollars in thousands except for share and per share amounts) March 31, September 30, 2008 2007 -----------
   ------------- (Unaudited) STOCKHOLDERS' EQUITY Stockholders' Equity: Class A common stock, par value $0.01 per share, 750,000,000
   shares authorized, 128,623,142 and 127,672,253 shares issued, 97,397,198 and 107,126,309 shares outstanding, as of March 31,
   2008 and September 30, 2007, respectively $ 1,286 $ 1,277 Additional paid-in capital 1,522,719 1,472,409 Cost of common stock
   in treasury, 31,225,944 and 20,545,944 shares of Class A common stock as of March 31, 2008 and September 30, 2007, respectively
   (996,228) (597,200) Retained earnings 126,856 38,144 Accumulated other comprehensive income, net 122,108 123,382 -----------
   ------------- Total stockholders' equity 776,741 1,038,012 ----------- ------------- Total Liabilities and Stockholders' Equity
   $2,552,690 $ 2,755,538 =========== ============= 

 HEWITT ASSOCIATES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
   (Unaudited) (Dollars in thousands) Six Months Ended March 31, --------------------- 2008 2007 ---------- ---------- Cash flows
   from operating activities: Net income $ 108,440 $ 43,051 Adjustments to reconcile net income to net cash provided by operating
   activities: Depreciation and amortization, including amortization of deferred contract revenues and costs 85,159 91,593 Gain
   on sale of business (35,667) - Asset impairment 2,296 3,615 Share-based compensation 22,629 22,697 Deferred income taxes (5,455)
   (10,096) Changes in operating assets and liabilities, net of effect of acquisitions and dispositions: Client receivables and
   unbilled work in process (18,339) (1,592) Prepaid expenses and other current assets (1,589) (15,352) Deferred contract costs
   (52,861) (67,964) Other assets (37,166) 2,269 Accounts payable 10,979 (14,277) Accrued compensation and benefits (111,170)
   (30,272) Accrued expenses (51,783) (11,135) Advanced billings to clients 17,392 37,660 Deferred contract revenues 65,534 38,325
   Other long-term liabilities 38,948 (10,614) ---------- ---------- Net cash provided by operating activities 37,347 77,908
   Cash flows from investing activities: Purchases of investments (426,675) (158,140) Proceeds from sales of investments 504,000
   152,838 Additions to property and equipment (56,657) (42,125) Cash paid for acquisitions and transaction costs, net of cash
   acquired (40,431) - Cash received for divestiture 42,420 - ---------- ---------- Net cash provided by (used in) investing
   activities 22,657 (47,427) Cash flows from financing activities: Proceeds from the exercise of stock options 23,068 19,133
   Excess tax benefits from the exercise of share-based awards 2,482 444 Proceeds from short-term borrowings 121,583 52,232 Proceeds
   from long-term borrowings 39,751 - Repayments of short-term borrowings, capital leases and long-term debt (37,868) (60,959)
   Purchase of Class A common shares for treasury (399,028) (38,658) ---------- ---------- Net cash used in financing activities
   (250,012) (27,808) Effect of exchange rate changes on cash and cash equivalents 891 4,385 ---------- ---------- Net (decrease)
   increase in cash and cash equivalents (189,117) 7,058 Cash and cash equivalents, beginning of period 378,743 138,928 ----------
   ---------- Cash and cash equivalents, end of period $ 189,626 $ 145,986 ========== ========== Supplementary disclosure of
   cash paid during the period: Interest paid $ 7,076 $ 11,705 Income taxes paid $ 75,405 $ 66,750 

 HEWITT ASSOCIATES,
   INC. ADJUSTED EBITDA RECONCILIATION (Unaudited) (Dollars in thousands) Six Months Ended March 31, ------------------- 2008
   2007 --------- --------- Reported operating income $177,393 $ 65,298 Adjustments: Cyborg - FY08 gain (1) / FY07 operations
   (2) (35,446) (2,210) Asset impairment - 2,574 Severance - 14,356 Real estate 8,048 - HR BPO contract restructurings 13,323
   12,000 Legal settlement - 4,000 --------- --------- Total adjustments (14,075) 30,720 Underlying operating income 163,318
   96,018 Depreciation / amortization (3) 87,419 94,325 --------- --------- Adjusted EBITDA before certain non-cash addbacks
   250,737 190,343 Certain non-cash addbacks: Adjustments to asset impairments 1,106 1,041 Net deferrals (4) 12,968 (21,051)
   Deferred internal software development costs (10,311) (7,931) Stock-based compensation 22,796 22,769 Other (3,938) (5,816)
   --------- --------- Total certain non-cash addbacks 22,621 (10,988) Adjusted EBITDA $273,358 $179,355 ========= =========
   (1) Amount reflects a $221 reduction to the $35,667 "gain on sale of business" reported in the Q2 FY08 Consolidated Statement
   of Operations. This reduction pertains to certain Cyborg employee- related expenses recorded in the quarter. (2) Cyborg results
   have been excluded for February and March 2007 to enable year-over-year comparisons. (3) FY08 depreciation and amortization
   includes $2,904 of adjustments related to HR BPO contract restructurings. Additionally, discount accretion on the Exult convertible
   debt of $644 and $636 are excluded from amounts in FY08 and in FY07, respectively. (4) Net deferrals (the net impact of the
   Company's revenue and cost deferrals), as presented and the "net" of Revenue and Cost Deferrals in the Statement of Cash Flows
   varies by $295 and $8,588 for year-to- date FY08 and FY07, respectively, relating to Balance Sheet and Statement of Operations
   reclassifications and the inclusion of net deferral amounts within the HR BPO restructuring adjustment above. 

SOURCE: Hewitt Associates, Inc.

Hewitt Associates, Inc. Sean McHugh, 847-442-8176 (Investors) sean.mchugh@hewitt.com Julie
   Macdonald, 847-442-6718 (Media) julie.macdonald@hewitt.com 

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