Arbitrator's Decision Potentially Devastating to Arthur Andersen.

Business Editors

ATLANTA--(BUSINESS WIRE)--Aug. 10, 2000

Exclusive special review and analysis released

The arbitrator's decision in the Arthur Andersen-Andersen Consulting divorce amounts to a disastrous financial blow to Arthur Andersen. The extraordinarily low $1 billion price Andersen Consulting is required to pay Arthur Andersen for a business of Andersen Consulting's size and exceptional profitability saddles Arthur Andersen with the huge challenge of substantially growing its own consulting practice and funding its substantial infrastructure requirements without its anticipated capital windfall.

The arbitrator's decision strips Arthur Andersen of its largest, fastest-growing and most profitable unit.

Exclusive analysis by Public Accounting Report, published in a special edition issued August 10th, reveals that the price Arthur Andersen garnered for its interest in Andersen Consulting is only 1/24 the revenue multiple realized by competing big accounting firms in recent sales of their consulting practices. The full special edition, including exclusive data profiles, is available at (http://www.straffordpub.com/headlines/accounting.html).

Public Accounting Report (http://www.straffordpub.com/products/par/index.html), the preeminent publication covering the public accounting profession, also estimates that each Arthur Andersen partner will take a $100,000 compensation hit. The failure to generate a major capital infusion coupled with a direct adverse impact on annual partner compensation are expected to significantly erode partner morale, which could lead to partner defections.

The Public Accounting Report special edition also includes tables examining how Arthur Andersen now measures up against the other major accounting firms, how much it gives up with the loss of Andersen Consulting, and its sources of revenue and growth going forward. (http://www.straffordpub.com/headlines/accounting.html) Link requires Adobe Acrobat Reader.

The full text of the arbitrator's decision is also available from Public Accounting Report at (http://www.straffordpub.com/headlines/acassnsindex.pdf).

Public Accounting Report (http://www.straffordpub.com/products/par/index.html) is published by Strafford Publications, Inc. Strafford's Accounting Publications Group also publishes CPA Managing Partner Report, CPA Financial Services Advisor, CPA Personnel Report, CPA Marketing Report, and the exclusive Auditor-Trak database.

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