I would like to welcome everyone to the BearingPoint investor conference call. (Operator Instructions) Ms. Weaver, you may begin your conference.

Thank you, Teresa and good afternoon to everyone. As Teresa mentioned, I'm Connie Weaver, BearingPoint's Chief Marketing Officer and also Head of Investor Relations. With me here this afternoon are Harry You, our Chief Executive Officer; and Judy Ethell, our Chief Financial Officer. We hope that you've had a chance to review our Form 10-Q filed earlier this afternoon; since it just made the wire at 5:00, I'm sure you really haven't. We are going to take the time in this next hour or so to review the high points of our filing for the second quarter, the 10-Q, and also included in that you will find metrics for the third quarter which we will be discussing. At the end of our call, we will be opening the lines up, we will take a Q&A period and we will try to answer as many of your questions as possible. The operator will be providing us with instructions on how to do that at the end of our formal remarks. I would ask you at that time to try to keep your questions to about two per person, so that we can get through as many of you as possible. Before we get started, the information covered on today's call which is not historical in nature consists of forward-looking statements within the meaning of the Federal Securities law. Words such as may, will, could, would, should, anticipate, continue, expects, intends, plans, believes, in the company’s view, and similar expressions are used to identify forward-looking statements. These statements are only predictions; as such, they are not a guarantee of future performance and involve risks, uncertainties and assumptions that are difficult to predict and which could materially, adversely affect the company's financial condition and results of operations. Forward-looking statements are based on assumptions for future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in forward-looking statements. As a result, these statements speak only as of the date they were made. The company undertakes no obligation to publicly update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to 1(a) Risk Factors, contained in the company's annual report on Form 10-K for the fiscal year ending December 31, 2006; and the company's quarterly report on Form 10-Q for the second quarter of 2007; and subsequent filings with the SEC for additional information regarding the risk factors. With that, let me turn things over to Harry You for the formal part of the session.

Thank you, Connie. Thank you for joining us this afternoon to review our second quarter 2007 results. This filing marks yet another important step in becoming timely with our SEC reporting. We filed our second quarter 10-Q within a few weeks of publishing our first quarter financials; and more importantly, prior to the due date for our third quarter 10-Q.While we are not ready to declare victory just yet, I am pleased about our progress, and I'm excited about our future. Over the past two years, our people have not lost their focus on satisfying their clients, executing elements of our strategy and building a more solid future for our company. In fact, there are countless examples of progress being made across the firm, whether it is our growth in China, success in our emerging markets practice, the launch of our new brand, or a smarter go-to-market approach with our solutions, we are working hard to position ourselves for continued success in the marketplace. We have made this progress even in the face of greater market uncertainty, and the overhang of not having current financials. While 2007 has not been without its challenges, as you will see in some of our second quarter numbers, I believe we are at a turning point and I'm excited about what lies ahead. Our mission remains to be one of the preeminent consultancies in the world, and I believe we have the right people and the right solutions to achieve the results we aspire to. Our customers believe that this is true, and we need to persuade recruits and new shareholders that this is the case. Becoming a timely filer, I believe, will be a critical inflection point for the firm. While we are not there yet and there may be challenges ahead, we…

Thank you, Harry. With our Q2 filing, we have achieved another important milestone toward becoming a timely filer, and this represents another example of meeting the commitments we set at the beginning of the year. In fact, while we have said all year that our goal was to get current with our third quarter filing, we have exceeded that target by filing our second quarter ahead of schedule. As we previously stated, however, we do not expect to file our third quarter 10-Q on time by November 9th. With that said, we are on track to file before the year's end, when we will return again to current filer status. We will then focus on the ultimate goal of timely filing our 2007 10-K in February of 2008 and hopefully put this incredibly hard and costly part of our history behind us. Because we are technically current with this second quarter filing, we will again begin to gradually provide our people with the opportunity to acquire shares under our various employee share plans. As we discussed on our last call, our goal is to provide liquidity opportunities for our people, but at the same time to ensure a phased entrance of new shares into the market. With regard to this quarter, we will be settling shares due under our employee stock purchase plan only. We estimate that this will be approximately 6.5 million shares in total. Historically, we have experienced rates of rapid resale among our employees of around 30% of delivered shares; but since we have been unable to settle shares under this program for the last two years, we really cannot estimate what is likely to occur. With respect to restricted stock unit awards that are vested but unsettled, we intend to exercise our rights and discretion under…

Thanks, Judy. In addition to these efforts, we also continue to explore potential strategic initiatives. I am pleased to report that we are making progress as scheduled in our exploration of the potential sale of our EMEA units to our managing directors in EMEA. We have undertaken some plans to provide debt financing for this transaction, and are now beginning to reach out to potential third-party mezzanine equity sources to test their interest in participating. As we discussed with you in February, we continue to believe that taking this path with our EMEA business will help drive shareholder value, reduce cyclicality of our business, further strengthen our balance sheet and lower costs, while retaining the benefits of a federated global business model. We are on schedule and still expect to reach final decision by year end as to whether to proceed with the EMEA transaction. I'm pleased that we continue to move in the right direction on this front. As we look ahead, 2008 will be a critical year for BearingPoint, as we stand at the crossroads of becoming a timely filer and pivoting to a new phase of our transformation. As you well know, the last three years have been extremely challenging, as we had to focus all of our energies on addressing a wide range of historical issues, whether it be reducing our litigation docket, which is now largely fixed; fixing our financial systems; investing significant amounts to get current financials and position ourselves for SOX compliance as Judy just detailed; restructuring our real estate portfolio; resolving contract disputes and cleaning up our engagement portfolio, as well as implementing stock and bonus retention programs. These charges and cash outflows amounted to a staggering $1 billion, resulting in cumulative net losses of $1.5 billion from 2004 to 2006. These…

(Operator Instructions) Our first question comes from Pat Burton - Citigroup.

In the financial services segment, Harry, what do you think it will take to get the bookings back up in that specific business? I realize you've downsized it, but what will it take to improve profitability? Thanks.

Pat, I think we need to turn the corner on bookings. I think with all candor and a sober assessment of the situation, I think we are going to have to look past the end of this year. I think we have to see how banks like yourselves and other brethren you have in the capital markets business, how they fare at year end and what is the fate for IT spending plans in the New Year? So I think we're getting a grip on costs and putting our business in the right size context, but obviously the best tonic will be to have bookings bottom out and turn upward. I think realistically that's an '08 phenomenon, not something that we'll see anytime in the near future. The good thing is that we have a very high quality practice. It's had before, when you look on a stand alone basis, EBIT margins in the mid-teens; those obviously have dramatically come down with the large revenue declines. But the quality of the people and the esprit de corps of the teams, as well as their reputation with clients is still there. I think we just need clarity on the overall stock market and capital markets environment before calling that turn.

In terms of the stock comp level for the whole company, would you look for that number to keep increasing as we move forward, or should that begin to plateau? Thanks.

I think it's plateaued, Pat, and I think relative to the performance share units, we need to deliver on shareholder value. The shareholders will not be diluted. Clearly, if we have a prolonged period of depressed stock prices, I think there are very interesting opportunities for us to decrease the share count in terms of either restructuring or repositioning these plans, as well as what I would hope, I think, one needs to look conservatively into '08 after we file the '07 10-K. Obviously with the publicly disclosed constraints on the bank term loan, which has given us some nice balance sheet cushion, looking at those constraints, and looking at the '07 K getting filed on a timely basis as Judy described, I think then we also bring into play repurchase of shares as well as repurchase of convertibles. I think we're at a very interesting point. I'm digressing a little bit just in terms of where the share count may be, and there I think you need to factor in the stock comp expense. But what I say as a final close, Pat, is as I arrived at BearingPoint, we got down to less than one-half of 1% of employee ownership. We are now in the mid to high teens, and so we have to do a lot of catch up. I would expect not only would you see plateauing in the near term, but you'll see decreases. We just had to catch up from levels that were for lack of a better expression, abysmally low.

Your next question comes from Julio Quinteros - Goldman Sachs

On the headcount and the attrition metrics, looking at where we are from a headcount perspective today versus where we were at the beginning of the year, what is the headcount ramp plan as we go forward from here?

I think we're going to be conservative on the headcount. I couldn't be more pleased or delighted, Julio, that we are at 80% utilization. It's higher than the company's ever been. I feel like we still have room to go, as I mentioned, in terms of where we go in getting out of unprofitable businesses or segments that we shouldn't focus on where the account size is small, where the corresponding G&A cost to support it is disproportionately high. So I think when you look at our headcount, you have to take those perspectives in mind. Our MD to staff pyramid has improved from 18:1 to 20:1. Generally, we are getting significantly higher billing rates across all of our segments. So I think it just shows we are getting better profitability. It is a long-winded way of saying our headcount has generally been flattish, but we are driving significant productivity, whether it's in the pyramid, whether it's in utilization, or whether it's in bill rate. I'm also excited because I think one of the other hidden benefits as well as hidden struggles of not being current was all the fight relative to keeping our best talent. That's just going to get disproportionately easier, post-November. I think sometime in '08, we will probably have a better, more formulaic discussion with you of how headcount translates into better profits and profit margin. But right now, we've just been squeezing out big efficiencies that are laying for the taking.

I just want to double-check this, but for March, I have attrition at 23.9% and I believe the current quarter number you gave is 25.8%. Is that correct for the employee attrition?

Yes, it is correct. Our attrition, just like attrition at Goldman Sachs, is largely seasonal, so you need to really look year over year in terms of when we are hiring people, when people receive bonuses, how some people may respond to that. We also, I think, unlike perhaps some others in our industry, Julio, are very conservative. We don't tend to separate out people who have been gently cajoled out of the firm. We don't squeeze those out of the attrition numbers, but I'm comfortable here that once we get current and timely as Judy detailed, I think we'll be at normalized levels. I think now that we're reinvesting in training with our people, I think our people are generally feeling better about the future and not having to spend their extra time doing mundane but previously essential stuff like audit binders.

Your next question comes from Adam Frisch - UBS.

Two things on liquidity, Harry. I think that's the key with where the stock is. First, I'm assuming that the cash balance forecast for year end do not include any proceeds from EMEA, is that correct?

That's correct.

Why should we be confident that the cash balance is going to continue to improve? Do you anticipate the company needing to raise any more capital in the near term?

We don't anticipate any need for capital. I think when we raised capital this summer, we wanted to make sure we had some extra cushion because ultimately, my first priority as well as Judy's and the management team's and the board’s was to make sure, and I think everyone needs to remember this, we wanted to make sure we got the numbers fixed and fixed correctly. Judy and I always look at each other and say our number one goal, although it's something we obviously can't control all within our power or our group's powers is to try not to have any restatement. I think we feel very good that we've cleaned up so many mistakes from the past. I think as you've heard me describe before, Adam, it was like 35,000 mistakes in the ledger, and we've gotten the numbers cleaned up and stabilized, we've remediated the financial system, so now it operates. I think everybody has to realize in the end our biggest priority was to get that done, to get current; that's now within sight, within literally a handful of weeks. And I think to give everyone confidence on the cash projections, we've had a robust syndicated lender group. We have been above their projections for the year in general. I think the banks have good confidence in terms of how we are managing cash, we've very consciously spent money on certain critical issues, but people have also seen the uptick in cash and what we signalled to you at the beginning of the year, very close to what we had planned. We have had a little bit of upside as well here. once again as I mentioned, I am looking forward to '08 being free cash flow positive. We're obviously not going to be all the way there in terms of driving down SG&A. We have one more year of that, and we have to get the public sector system fixed. The level of these one-time costs is just at a much more manageable level than what it's been in '05 and '06. As I mentioned, I think we proved in '07 we could start the cuts on SG&A. But when you think of it, the end of November/early December timeframe, that's really the key inflection point on all these costs and hopefully what the free cash flow for the business is. I think we do have uncertainty in terms of the overall business environment, but the general cash trajectory is in our hands and in our control.

On EMEA, I think the progress that you cited in your comments getting done maybe in the next month or two will likely increase speculation about the sum of the parts. Our own suggests public services as a standalone is probably worth $6 exclusive of net cash. Is this way of thinking totally off base in your view, the values that are out there on The Street?

I know, Adam, you and others have written reports on the sum of the parts. I think we have a complex tax situation. Obviously we need to do what makes sense strategically to optimize the business, but also 100% prosecute our fiduciary duty to shareholders in the best manner possible. So as for those of you who know me, you can appreciate my statement here that we have looked at all options, we continue to look at all options. Clearly we need to decide whether we do EMEA in the first place. As we described before, potentially doing EMEA also has some interesting tax benefits and ramifications, which I think generally people haven't factored into their model. But I think as you are indicating, the bulwark of any sum of the parts analysis, which I think is apropos when you look at strategic alternatives, is as you mentioned, our public sector business. I think here you have a business that was a $10 million revenue business in '89 and is now over $1 billion less than 20 years later. Standalone it's almost a mid-teens 14% to 15% EBITDA margin business that if you do the math, would on its own produce over $100 million in net income. You guys know the values better than me, but that's obviously a very valuable business as are our other businesses. We are certainly cognizant as we weigh all the different alternatives of how the math works. But at the same time, I think what people have to appreciate is there are some business realities we need to balance, and we need to balance all the different alternatives on whether they make sense from a fiduciary sense for our shareholders or not. Does that help?

Harry, at the end after you talked about strategic initiatives, you said the margins would be down in '07 versus '06, correct? You did not give any view on '08 yet?

That's correct. Adam, hopefully one of the things that will attract a good healthy crowd or maybe a bigger crowd for the analyst meeting I described is Judy and I will walk through what we are looking for in terms of '08 here. I think I'd have to say though it will be very important to see how the next couple of months in the stock market and the global business environment unfold. I think our business tends to have a lag factor relative to the S&P, so the business environment looks good. I think there's a lot of potential volatility in certain sectors, especially the financial services sector. We are mindful on making sure that we are conservatively budgeting as we look to next year. In the PS business, obviously we feel great about having a record quarter in the third quarter, but there potentially may be a change of administration in the White House, there may be a change in spending priorities, if there's a further party shift on Capitol Hill, so we will wait a little bit longer before we make an '08 call here.

Our next question comes from Andrew Steinerman - Bear Stearns.

Harry, you were kind enough to give us an SG&A efficiency goal. Do you think maybe you could also lay out a gross margin goal, even if it's end of '09 or further out?

I think for us to be worth our salt, we need to consistently be a double-digit EBIT margin company. We're clearly dealing with the business cycle now, and I think when you look at '06, I think you'd say but for some one-time costs, we were more than there. I think how we track out in '08 and beyond we'll have to see how the next handful of months go. So that is clearly my target, because it puts you in the top quintile of our industry, it just means you're doing value-added work, it means you can pay your people better, and so that's how I net it all out.

That includes stock comp, right?

Yes.

Your goal for SG&A by the end of '09, is that assuming that 2009 is not a recession, or do you think you could do that in any scenario?

I think we are determined. I say this not only at the senior management level, but also at the board level, Andrew. We have to get SG&A to normalized levels. While I can talk about the issues that were laid upon us from the past, Judy and I and others in the management team increased the SG&A to fix these problems, and now we have to reduce the SG&A now that the problems are going to be largely behind us. I think when you look at the scope of what SG&A needs to be reduced, Andrew, I've put it in a handful of different buckets. I think it's past inefficiencies like real estate and IT which we're still chipping away at; and then it's big chunks of one-time costs that should more rapidly roll off in areas like finance and accounting; then there are longer-term areas of productivity in finance or accounting or legal where I think by doing our business more effectively and with better systems we can run at lower SG&A levels. Clearly, I think one of the interesting issues to see, depending how the board looks at EMEA, is that we have what I would call inefficiencies in scale and scope on some SG&A because of our global footprint. I think we're doing a lot of work to see how we might more rapidly accelerate SG&A decline if we decide that it is appropriate to reduce the consolidated country footprint of BearingPoint.

Our next question comes from George Price - Stifel Nicolaus.

Harry, going back to EMEA, we have improving fundamentals, what would now seem to be the benefits of geographic diversity, given the macro environment and what is happening in commercial, particularly financial services in the U.S.; BearingPoint's lack of an offshore capability, which I think is at least for the time being less of an issue in Europe; so why sell it? Part of that you hinted at was the tax benefit. I wonder if you can give us any more color as to the magnitude you may preliminarily be thinking about there.

I think this is for our board to decide, and I say, George, all your comments are valid comments and ultimately, each person on the board -- and certainly there will be a recommendation from management – will have a price that encapsulates what makes sense or not. I think we'll look at all these factors, and I think there's nothing deterministic. If the price were too low, it would be better to keep the EBITDA and the tailwind from the dollar continuing to decline over the near term. But if the price is a sufficient or fair one, we will look at the other financial benefits and other business benefits and potentially go ahead.

Do you have any way to quantify what kind of tax benefit we could be talking about from that?

I think we mentioned on an earlier call, George, I think the accumulated NOLs and tax loss carryforwards are $863 million. Obviously this changes as we go quarter to quarter; it's not to say that all of those benefits might be usable in the context of certain future transactions or a certain operating profile, but it's a big chunk of tax benefits.

If I could then on offshore, we didn't really hear much about that but for a comment at the end. Can you maybe just step back and review what your current thoughts are and what BearingPoint's current strategy is with respect to global deliver? Maybe give us an update in terms of global delivery headcount footprint in China and India?

George, when I arrived on the scene I think we had 38 people in India, and I think they were in Chennai. Now we're well over 300. We have several hundred people in China. We are just establishing a footprint for our EMEA business in Romania, and we have about 150 people in Hattiesburg, Mississippi. I continue to believe that we have an interesting business positioning in the sense that yes we do need offshore, these global delivery centers, but it's not as important for us as our large competitors to make the numbers and to make growth. Our public sector business is 41% of our business, traditional offshore is not going to affect it, I think the state and local government and municipalities and the federal government are pleased that we are establishing presences and places like Hattiesburg, Mississippi. So I feel like we are addressing that need. George, I feel it's just more important for us ultimately to make sure we're reinvesting in high value added solutions. We don't have to slug it out with people punching at the belt line. Obviously there are some offerings that we need to have to be competitive, but our scale of businesses is very different from some of our competitors. We can grow revenue by not necessarily having to have thousands of people offshore. But at the same time, I would be the first to admit I would like to keep improving that capability. We are not at critical mass yet, but it's not something that I fret about late at night.

Real quick, MD attrition, do you have a number for that in the second and third quarter?

Yes, I gave the number, it's at 9%. Once again, before I arrived on the scene it was 23%. It's been pretty consistently in the mid to high single-digits. I couldn't be more proud of our team, George, to go through what people have gone through, to think of all the errors people have had to clean up, the losses, the cash losses I described well over $1 billion. I was telling one of our shareholders the other day it would be as if the General Electric team had to dig out of $150 billion of mistakes and sins of the past. We're now largely through that. The team has held together, they have been able to grow the business despite some of our competitors being aggressive in detailing some of our issues, or just grossly inaccurate, and we're actually coming after some of them, which Ed and I are delighted to do. So I couldn't feel better about the team we have. I think really the big challenge is we have an uncertain economic environment and all of us will have to dig in hard and work through that, but I'm confident that a team like we have that's gone through the last three years, that team can surmount just about anything.

The next question come from David Cohen – JP Morgan.

I was hoping that you would share your view of the one-time charges in both the quarter and year-to-date, if you can quantify them?

We'll have Francesca and Denise follow up with you and go through the issues. I think how I look at them, David, is they have decreased significantly from 2006. I think what I've signaled and I hope everybody understands is it will decrease again in 2008, but we won't be entirely rid of them either. Ultimately, I think as we get together at an analyst meeting, as soon as we practically can pull one together as a current and timely company, we'll walk people through the business model and what the residual, one-time charges are. But they are obviously a lot less than what they were in '05 and '06.

I haven't had a chance to get through the 10-Q just yet. I was wondering if you have given the headcount by segment there or if you could share it with us now?

We will follow up with you. David, you would be the most incredible speed reader if you got through the 10-Q, because I think we got it out like two minutes before the call started. So if you did get through it, you should be one of the most hirable people in equity research in our sector. Anyway, I'm sorry to be so glib there, but we will follow up and walk you through the numbers.

That's fine. I'm happy with the job I've got right now. How much cash do you need to run the business intra-quarter?

Judy can give her view. We generally have fluctuations where it's nice to have a couple hundred million of cash on the balance sheet and I think you guys have seen some of the seasonal fluctuation. But in the end, what I've always felt is attractive about running a business in our particular area as a sector is that it should be a strong free cash flow business and a high return on invested capital business. We are shrinking our CapEx, it's not like we have a huge portfolio of outsourcing or managed services contracts. It should be a pretty cash lean business. We just have to write some big checks to temporary accounting firms and other people that will very soon be a thing of the past.

Your next question comes from Susan Chen - Merrill Lynch.

Thank you. Harry, you mentioned the international bookings decelerated year over year. What areas or industry verticals are you seeing some weakness in? What's your outlook for 2008?

Susan, I don't want to make any broad inferences, because I think year over year for our quarters it can be lumpy in terms of some individual countries. I think obviously we've seen some general weakness in financial services; manufacturing has been a little weak, but as I mentioned some of the other sectors, life sciences, and telecom and the technology business have been strong. I generally say, because I was talking with a shareholder last week, I mean who would have thought that you would say that tech companies would be a more defensive sector? But as I've said many times in the past, what you tend to see in the stock market you also see in our bookings, and the technology companies have done very well and they have lots of pent-up IT systems spending. I wouldn't draw a huge conclusion when you look overseas. Our businesses are relatively small, so one big booking here or there in a country tends to swing the growth numbers pretty significantly.

Your final question comes from Rod Bourgeois – Sanford Bernstein.

Harry, you started your presentation out talking about the business being at a turning point. I wanted to inquire about that, because it seems like a lot is hinging on getting these financials current, and that is helping with the turning point in the business. My specific question on that is, it seems that some of your margin issues are related to not being current with financials. That is, the external F&A costs. But there's also a number of margin issues like real estate and other things that don't seem to be directly a function of being current with financials, or being not current with financials. Can you help investors understand how the margin pressures will be alleviated when you get current with financials? Or how the turning point is coming across the broad range of margin challenges that you are currently facing?

I think the first thing, Rod -- and thanks for your question, and congratulations, by the way -- I think the real issue is you have to just understand the pressure in terms of all the catch up. I mean we have some MDs that have had a particular project or contract audited and re-audited seven or eight times. Just the opportunity cost of people collecting historical information has taken away from utilization, it's taken away from spending time out with your customers and getting new bookings. There's also been the issue with junior folks on retention. And in general, just generally reinvesting in the business. So I don't know and I am certainly not smart enough to quantify the negative impact, but in my gut, I know that having that relieved from people will be just a wonderful feeling for all of us, including myself. So I don't want to overstate how good it will be, but my gut feeling is boy, you can't imagine how painful it's been. So I think it's going to be pretty darn good once we get back to being a normal company in terms of how people have been able to focus. There are a number of issues that I would call sort of marginally related. Clearly, when you have more retention challenge, you have to probably pay a little bit extra on the margin on comp. We obviously had catch up on stuff like stock comp expense which depressed margins more than normal. Certainly when the banks looked at BearingPoint's credit capacity, I think very interestingly, the vast majority of potential lenders in the syndicate have viewed 80% to 100% of this stock comp expense as one-time expense, just because how many companies in our industry would ever get to a point…

So it sounds like there are a number of indirect benefits to getting current with financials and that's helpful to get perspective on. One other quick question, and thanks for the congratulatory comment there, but on the cash flow you had really strange cash flow in the first half, but it looks like the cash balance went from $349 million in Q2 to $430 million in Q3, so it's up $81 million sequentially. Can you give some more specifics on the puts and takes on the Q3 cash flow? Clearly DSOs was positive, but can you give us more specifics on how the cash flow improved in Q3?

I'll simplify, Rod. It was very largely DSOs and I think if you look at what the business produced, instead of the business producing losses which it did in the first half, in Q3 call it breakeven or making a buck or two, right? Now we just have to keep driving forward from that. But once again, think of the challenge where you have everyone worried about getting current, and how we remediate our SOX issues which we made huge progress on, remediating systems, trying to hold on to the ten people who work with you who are worried about things. I mean, those sorts of issues are going to recede and I think that my prediction is the benefit will be better than one might think because the hurt has been worse and taken longer than one would have thought.

There are no further questions at this time.

Thank you all very much for joining us here this evening. We appreciate your time and your attention. As always, please feel free to call Francesca Luthi or Denise Stone or myself for follow-up questions. That number is 908.607.2100. With that, have a wonderful evening. Thank you.