Annual Report
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LEADING
IN THE NEW
strategy | consulting | digital | technology | operations
0 DELIVERING
IN FISCAL 2016
Accenture delivered outstanding financial results in fiscal 2016,
demonstrating that our growth strategy is resonating with our clients
and that we continue to execute very well.
We met or exceeded all of the objectives in our initial business outlook
for the year. I am particularly pleased that we delivered double-digit
revenue growth in local currency for the second year in a row, gaining
significant market share. We also generated strong new bookings and
delivered excellent earnings per share and free cash flow—enabling
us to return substantial cash to shareholders while making significant
investments in our business.
FROM OUR
CHAIRMAN & CEO
PIERRE NANTERME
Here are some highlights:
• We delivered strong new bookings of $35.4
billion, a 7 percent increase in local currency.
• We grew net revenues 10.5 percent in local
currency to a record $32.9 billion.
• We delivered diluted earnings per share of
$6.45, compared with $4.76 in fiscal 2015.
After excluding $1.11 per share in gains on
the sale of businesses in fiscal 2016 and a
$0.06 per share pension settlement charge
in fiscal 2015, adjusted EPS of $5.34 in fiscal
2016 increased 11 percent.
• Our operating margin was 14.6 percent,
a 10 basis-point expansion from our adjusted
fiscal 2015 operating margin of 14.5 percent,
which excludes the 20 basis-point impact
of the pension settlement charge.
• We generated free cash flow of $4.1 billion
and returned $4.0 billion in cash to
shareholders through dividends and
share repurchases.
• We announced a 10 percent increase in
our semi-annual dividend shortly after
fiscal year-end.
Our durable and balanced performance—
across industries, businesses and geographic
regions—is particularly impressive in the
context of a global economic environment that
remains volatile and uncertain. We achieved
double-digit revenue growth in local currency
for the year in three of our five operating
groups and in both North America and Europe,
our two largest geographic regions. In the
United States—our largest market—we have
now delivered double-digit growth in five of
the last six years.
“ Accenture delivered outstanding financial
results in fiscal 2016, demonstrating that our
growth strategy is resonating with our clients
and that we continue to execute very well.”
Our continued strong financial results,
together with our focus on returning cash to
shareholders, enabled us to deliver significant
shareholder value in fiscal 2016. Accenture
shares provided a 24 percent total return
(including dividends) for the year ended
August 31—11 percentage points above
the S&P 500 Index. For the last five fiscal
years, our compound annual total return
to shareholders has been 19 percent,
compared with 15 percent for the S&P 500.
DRIVING DIFFERENTIATION
We have taken bold strategic actions over
the last few years to drive differentiation and
make Accenture the leading professional
services company in the new digital world. We
have aligned Accenture around five distinct
businesses, transformed the services we offer
and increased our investment in new and high-
growth areas.
Our five businesses—Accenture Strategy,
Accenture Consulting, Accenture Digital,
Accenture Technology and Accenture
Operations—all operate at scale and are highly
competitive, while also working together
synergistically to deliver value for our clients.
operate services on behalf of clients to drive
tangible outcomes.
At the same time, we have transformed our
services, rotating our business rapidly to
what we call “the New”—digital-, cloud- and
security-related services—which together
accounted for about $13.5 billion or 40 percent
of our total revenues in fiscal 2016. That is
a substantial increase from approximately
30 percent of revenues just one year ago.
In digital, we bring together our market-
leading capabilities in Accenture Interactive,
Accenture Analytics and Accenture Mobility:
• Accenture Interactive, which was
recognized by Ad Age as the largest and
fastest-growing provider of digital
marketing services, helps clients ranging
from BMW to ENGIE, the global energy
company, to transform their digital
customer experiences.
• In Accenture Analytics, we are using
the Accenture Insights Platform to help
clients such as Thames Water in the
United Kingdom analyze thousands of
sensors and embrace the Internet of
Things to transform their decision-making.
• And Accenture Mobility has become
one of the world’s leading developers of
mobile apps, leveraging the capabilities
of our Global Delivery Network to develop
more than 2,800 apps releases across iOS,
Android and Windows for clients from many
different industries.
In cloud, we are focused on building strong
platforms for key industries, such as our
Accenture Life Sciences Cloud for R&D
platform. This truly innovative solution to
collect, share and analyze clinical data is
now being used by seven top pharmaceutical
companies—including Pfizer, Merck, GSK
and Lilly—to accelerate drug development
and improve patient outcomes.
Today, the breadth of capabilities we provide—
end-to-end—is truly unique in the marketplace.
We are highly relevant in the C-suite; we
deliver cutting-edge technologies, digital
solutions and innovative platforms; and we
And in security, our cybersecurity experts
are working with many leading companies,
providing them with comprehensive next-
generation solutions spanning strategy
development, risk management, cyber
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defense, digital identity, application security
and managed security services.
We continue to make substantial investments
across our business, particularly in
acquisitions. In fiscal 2016, we invested more
than $930 million of capital in acquisitions—
in addition to about $800 million the prior
year—and approximately 70 percent of these
investments were in “the New.” Key examples
in fiscal 2016 included Cloud Sherpas, a
leading cloud advisory and services provider;
IMJ Corporation, one of Japan’s largest digital
marketing agencies; and several European
digital services companies, including MOBGEN
in the Netherlands, Tecnilógica in Spain and
dgroup in Germany.
We are also investing to enhance our expertise
in key industries through acquisitions such
as Sagacious Consultants in Health, Beacon
Consulting and Formicary in Capital Markets,
and Schlumberger Business Consulting and
Cimation in Energy.
With our broad range of services and deep
industry expertise, Accenture remains the
partner of choice for many of the world’s
leading companies and largest government
agencies on mission-critical transformation
programs. We serve more than three-quarters
of the FORTUNE Global 500 and 94 of the
top 100. We also continue to build strong,
long-term relationships with our clients.
All of our top 100 clients have been clients
for at least five years, and 98 have been
clients for 10 years or more.
LEADING WITH INNOVATION
In today’s fast-changing business environment,
where companies need to continually reinvent
themselves, we are increasingly leading
with innovation to help clients—and Accenture
itself—“imagine and invent” the future. Our
unique approach, through the Accenture
Innovation Architecture, enables us to
combine our capabilities across the company
to develop and deliver disruptive innovations—
and to scale them faster. Our innovation
capabilities include:
• Accenture Research identifies and
anticipates game-changing business,
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market and technology trends through
provocative thought leadership. To do
this, our researchers leverage techniques
such as economic modeling, data
science, crowdsourcing, expert networks,
online surveys, design thinking and
data visualization.
• Accenture Ventures identifies and partners
with early-stage companies to capitalize on
emerging trends using an open innovation
approach. We also selectively invest in
growth-stage companies with innovative
enterprise technologies that can be a
catalyst for our growth. In fiscal 2016, we
invested in Digital Asset Holdings, a leading
developer of blockchain technology, which
is expected to drive significant efficiency
gains for financial institutions.
• Accenture Labs incubate and prototype
new concepts through applied R&D projects
that are expected to have a significant
near-term impact on clients’ businesses.
We opened two new Labs during the
year in Ireland and Israel—focused on
artificial intelligence and cybersecurity,
respectively—and now have seven
Accenture Labs around the world.
• Accenture Studios co-create innovative
solutions for clients with speed and agility.
We opened several new studios in
fiscal 2016, including a Liquid Studio in
Silicon Valley —to help clients dramatically
accelerate application development—
and a Digital Studio for US government
clients in Washington, DC.
• Accenture Innovation Centers bring our
solutions to scale and demonstrate their
impact for clients. Our new Innovation
Center in Paris is leveraging our proven
ideation methodology, digital technology
expertise and deep industry knowledge in
an immersive environment to help clients
rapidly achieve business results.
• Accenture Delivery Centers industrialize
the delivery of our innovations through
our unparalleled network of more than 50
delivery centers around the world.
A key indicator of our innovation capabilities
is our extensive intellectual property portfolio,
which today includes more than 5,500
patents and pending patent applications in
44 countries, in addition to our many trade
secrets. We have patented innovations in
the most disruptive emerging technologies,
including artificial intelligence, cybersecurity,
drones, virtual agents, Internet of Things,
platforms and many more. Our intellectual
property is an important asset for Accenture,
differentiating our services and driving value
in the marketplace.
OUR PEOPLE AND OUR COMMUNITIES
One of Accenture’s highest priorities—as
a talent-led organization—is attracting,
developing and inspiring the very best people
in our industry. Each of our five businesses
has a unique talent strategy focused on the
highly specialized and differentiated skills
needed to serve our clients. In fiscal 2016,
we invested $941 million in training and
professional development for our people,
using digital learning technologies to help
deepen skills and drive innovation.
We also pioneered Performance Achievement,
our new approach to performance
management, which is enabling us to better
understand our people’s skills and aspirations,
and provide real-time feedback to accelerate
their career development. By moving from
annual performance reviews to a digitally
enabled process featuring ongoing, forward-
looking conversations, we are empowering
and inspiring our people to succeed
professionally as well as personally.
We were very pleased to be recognized
once again as one of FORTUNE’s “100 Best
Companies to Work For,” as well as one
of the “World’s Most Ethical Companies”
by the Ethisphere Institute. And we were
proud that our work with the United Nations
High Commissioner for Refugees to deliver
a biometric identity management system
earned us a place on FORTUNE’s “Change
the World” list of the 50 best companies
putting purpose at the center of their
business strategies.
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We are committed to making a difference in
the communities where we work and live—
from closing employment gaps, to advancing
client sustainability, to accelerating gender
equality in the workforce.
Through Skills to Succeed, Accenture and
our partners have now equipped more than
1.2 million people around the world with
the skills to get a job or build a business
since 2010. We are increasingly leveraging
technology and digital solutions to scale
our impact as we strive to meet our goal of
equipping more than 3 million people with
workplace or entrepreneurial skills by 2020.
We also remain focused on reducing our
environmental impact and have made further
progress toward our goal of decreasing our
per-employee carbon emissions by more than
50 percent by 2020 from our 2007 baseline.
We are using collaborative technologies
to connect our people and clients while
reducing travel.
Accenture’s commitment to diversity,
which starts at the top, makes us stronger
smarter and more innovative. We offer an
inclusive environment regardless of ethnicity,
religion, gender, sexual orientation, age or
disability. Our more than 145,000 women
make up more than one-third of our global
workforce, and we were very pleased to
surpass our goal of reaching 40 percent
women new hires by 2017.
In closing, I want to thank all Accenture
people around the world for their continued
hard work and dedication to our clients and
our business, which enabled us to deliver
another excellent year. We have strong,
ongoing momentum in our business and
are very well-positioned in the marketplace.
With the highly differentiated capabilities
we are building, our continued rotation to
“the New” and our disciplined management
of the business, I am very confident in our
ability to continue gaining market share and
driving sustainable, profitable growth.
Pierre Nanterme
Chairman & CEO
October 28, 2016
We delivered a strong, broad-based financial
performance in fiscal 2016, driving superior
shareholder value.
Twelve months ended August 31, 2016
Net Revenues
New Bookings
$32.9B
An increase of 10.5 percent
in local currency and 6 percent
in US dollars from fiscal 2015
$35.4B
An increase of 7 percent in
local currency and 3 percent
in US dollars from fiscal 2015
Diluted Earnings Per Share
Operating Margin
$6.45
14.6%
After excluding $1.11 in gains on the sale of businesses
in fiscal 2016 and a $0.06 pension settlement charge
in fiscal 2015, adjusted EPS of $5.34 increased
11 percent from $4.82 in fiscal 2015
An expansion of 10 basis points from the
adjusted 2015 operating margin of 14.5 percent,
which excludes a 20 basis-point impact from
a pension settlement charge
Free Cash Flow
Cash Returned to Shareholders
$4.1B
$4.0B
Defined as operating cash flow of
$4.6 billion net of property and equipment
additions of $497 million
Defined as cash dividends of
$1.4 billion plus share
repurchases of $2.6 billion
Comparison of Cumulative
Total Return
August 31, 2011–August 31, 2016
Accenture vs. S&P 500 Stock
Index and S&P 500 Information
Technology Sector Index
The performance graph to the right shows
the cumulative total shareholder return
on our Class A shares for the period
starting on August 31, 2011, and ending
on August 31, 2016, which was the end
of fiscal 2016. This is compared with the
cumulative total returns over the same
period of the S&P 500 Stock Index and the
S&P 500 Information Technology Sector
Index. The graph assumes that, on August
31, 2011, $100 was invested in our Class A
shares and $100 was invested in each of the
other two indices, with dividends reinvested
on the ex-dividend date without payment of
any commissions. The performance shown in
the graph represents past performance and
should not be considered an indication of
future performance.
$300
$250
$200
$150
$100
$50
$0
2011
2012
2013
2014
2015
2016
Accenture
S&P 500 Stock Index
S&P 500 Information Technology Sector Index
Index Prices
as of August 31
2011
2012
2013
2014
2015
2016
Accenture
$100
$118
$141
$162
$193
$241
S&P 500 Stock Index
$100
$118
$140
$175
$176
$198
S&P 500 Information
Technology Sector Index
$100
$126
$133
$178
$182
$216
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STOCK LISTING
Accenture plc Class A ordinary shares are
traded on the New York Stock Exchange under
the symbol ACN.
AVAILABLE INFORMATION
Our website address is www.accenture.com.
We use our website as a channel of distribution
for company information. We make available
free of charge on the Investor Relations
section of our website (investor.accenture.
com) our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and all amendments
to those reports as soon as reasonably
practicable after such material is electronically
filed with or furnished to the Securities and
Exchange Commission (the “SEC”) pursuant
to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”).
We also make available through our website
other reports filed with or furnished to the SEC
under the Exchange Act, including our proxy
statements and reports filed by officers and
directors under Section 16(a) of the Exchange
Act, as well as our Code of Business Ethics.
Financial and other material information
regarding Accenture is routinely posted on
and accessible at investor.accenture.com.
We do not intend for information contained
in this letter or on our website to be part of
the Annual Report on Form 10-K. This letter
and our Annual Report on Form 10-K for the
fiscal year ended August 31, 2016, together
constitute Accenture’s annual report to
security holders for purposes of Rule 14a-3(b)
of the Exchange Act.
TRADEMARK REFERENCES
Rights to trademarks referenced herein, other
than Accenture trademarks, belong to their
respective owners. We disclaim proprietary
interest in the marks and names of others.
FORWARD-LOOKING STATEMENTS AND
CERTAIN FACTORS THAT MAY AFFECT
OUR BUSINESS
We have included in this letter “forward-
looking statements” within the meaning of
Section 27A of the Securities Act of 1933
and Section 21E of the Exchange Act relating
7
to our operations, results of operations and
other matters that are based on our current
expectations, estimates, assumptions and
projections. Words such as “will,” “expect,”
“believe” and similar expressions are used to
identify these forward-looking statements.
These statements are not guarantees of future
performance and involve risks, uncertainties
and assumptions that are difficult to predict.
Forward-looking statements are based upon
assumptions as to future events that may
not prove to be accurate. Actual outcomes
and results may differ materially from what is
expressed or forecast in these forward-looking
statements. Risks, uncertainties and other
factors that might cause such differences,
some of which could be material, include, but
are not limited to, the factors discussed in our
Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q (available through the
Investor Relations section of our website at
investor.accenture.com) under the sections
entitled “Risk Factors.” Our forward-looking
statements speak only as of the date of this
letter or as of the date they are made, and we
undertake no obligation to update them.
RECONCILIATION OF
NON-GAAP MEASURES
This letter contains certain non-GAAP
(Generally Accepted Accounting Principles)
measures that our management believes
provide our shareholders with additional
insights into Accenture’s results of operations.
The non-GAAP measures in this letter are
supplemental in nature. They should not be
considered in isolation or as alternatives to net
income as indicators of company performance,
to cash flows from operating activities as
measures of liquidity, or to other financial
information prepared in accordance with
GAAP. Reconciliations of this non-GAAP
financial information to Accenture’s financial
statements as prepared under GAAP are
included in this letter.
All amounts throughout this letter are stated in
US dollars, except where noted.
Table of Contents
(Mark One)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2016
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the transition period from to
Commission File Number: 001-34448
_________________________________
Accenture plc
(Exact name of registrant as specified in its charter)
Ireland
(State or other jurisdiction of
incorporation or organization)
98-0627530
(I.R.S. Employer Identification No.)
1 Grand Canal Square,
Grand Canal Harbour,
Dublin 2, Ireland
(Address of principal executive offices)
(353) (1) 646-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Class A ordinary shares, par value $0.0000225 per share
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Class X ordinary shares, par value $0.0000225 per share
(Title of Class)
No
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934. Yes
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
No
No
No
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The aggregate market value of the common equity of the registrant held by non-affiliates of the registrant on February 29, 2016 was approximately
$62,548,022,041 based on the closing price of the registrant’s Class A ordinary shares, par value $0.0000225 per share, reported on the New York
Stock Exchange on such date of $100.26 per share and on the par value of the registrant’s Class X ordinary shares, par value $0.0000225 per
share.
The number of shares of the registrant’s Class A ordinary shares, par value $0.0000225 per share, outstanding as of October 14, 2016 was
655,397,748 (which number includes 35,089,236 issued shares held by the registrant). The number of shares of the registrant’s Class X ordinary
shares, par value $0.0000225 per share, outstanding as of October 14, 2016 was 21,875,907.
No
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A relating to the
registrant’s Annual General Meeting of Shareholders, to be held on February 10, 2017, will be incorporated by reference in this Form 10-K in response
to Items 10, 11, 12, 13 and 14 of Part III. The definitive proxy statement will be filed with the SEC not later than 120 days after the registrant’s fiscal
year ended August 31, 2016.
Table of Contents
TABLE OF CONTENTS
Business
Part I
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Properties
Item 3.
Item 4.
Part II
Item 5.
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities
Item 6.
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8.
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9.
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Shareholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
Part IV
Item 15. Exhibits, Financial Statement Schedules
Signatures
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Table of Contents
Disclosure Regarding Forward-Looking Statements
PART I
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our
operations, results of operations and other matters that are based on our current expectations, estimates, assumptions
and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,”
“believes,” “estimates,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking
statements. These statements are not guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events
that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast
in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some
of which could be material, include, but are not limited to, the factors discussed below under the section entitled “Risk
Factors.” Our forward-looking statements speak only as of the date of this report or as of the date they are made, and
we undertake no obligation to update them.
Available Information
Our website address is www.accenture.com. We use our website as a channel of distribution for company
information. We make available free of charge on the Investor Relations section of our website (http://
investor.accenture.com) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically
filed with or furnished to the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(a) or 15(d) of
the Exchange Act. We also make available through our website other reports filed with or furnished to the SEC under
the Exchange Act, including our proxy statements and reports filed by officers and directors under Section 16(a) of
the Exchange Act, as well as our Code of Business Ethics. Financial and other material information regarding us is
routinely posted on and accessible at http://investor.accenture.com. We do not intend for information contained in our
website to be part of this Annual Report on Form 10-K.
Any materials we file with the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street,
NE, Washington, DC, 20549. Information on the operation of the Public Reference Room may be obtained by calling
the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy
and information statements and other information regarding issuers that file electronically with the SEC.
In this Annual Report on Form 10-K, we use the terms “Accenture,” “we,” the “Company,” “our” and “us” to refer
to Accenture plc and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which
ends on August 31.
ITEM 1. BUSINESS
Overview
Accenture is one of the world’s leading professional services companies with approximately 384,000 people
serving clients in a broad range of industries and in three geographic regions: North America, Europe and Growth
Markets (Asia Pacific, Latin America, Africa, the Middle East, Russia and Turkey). Our five operating groups, organized
by industry, bring together expertise from across the organization to deliver services and solutions in strategy, consulting,
digital, technology including application services, and operations to our clients. Digital-, cloud- and security-related
services are increasingly important components of the services we provide. For fiscal 2016, our revenues before
reimbursements (“net revenues”) were $32.9 billion.
We operate globally with one common brand and business model, allowing us to provide clients around the world
with the same high level of service. Drawing on a combination of industry and functional expertise, technology
capabilities and alliances, and our global delivery resources, we seek to provide differentiated services that help our
clients measurably improve their business performance and create sustainable value for their customers and
stakeholders. Our global delivery model enables us to provide an end-to-end delivery capability by drawing on our
global resources to deliver high-quality, cost-effective solutions to our clients.
In fiscal 2016, we continued to implement a strategy focused on industry and technology differentiation, leveraging
our global organization to serve clients in locally relevant ways. We continued to make significant investments—in
strategic acquisitions, in assets and offerings, in branding and thought leadership, and in attracting and developing
talent—to further enhance our differentiation and competitiveness.
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Table of Contents
Operating Groups
Our five operating groups are Accenture’s reporting segments and primary market channel, organized around
13 industry groups that serve clients globally in more than 40 industries. Our industry focus gives us an understanding
of industry evolution, business issues and applicable technologies, enabling us to deliver innovative solutions tailored
to each client or, as appropriate, more standardized capabilities to multiple clients. The operating groups assemble
integrated client engagement teams, which typically consist of industry experts, capability specialists and professionals
with local market knowledge. The operating groups have primary responsibility for building and sustaining long-term
client relationships; providing management and technology consulting services; working with the other parts of our
business to sell and deliver the full range of our services and capabilities; ensuring client satisfaction; and achieving
revenue and profitability objectives.
The following table shows the current organization of our five operating groups and their 13 industry groups. We
do not allocate total assets by operating group, although our operating groups do manage and control certain assets.
For certain historical financial information regarding our operating groups (including certain asset information), as well
as financial information by geography (including long-lived asset information), see Note 16 (Segment Reporting) to
our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
Operating Groups and Industry Groups
Communications, Media
& Technology
• Communications
• Electronics & High Tech
• Media & Entertainment
Financial Services
• Banking & Capital
Markets
• Insurance
Health &
Public Service
• Health
• Public Service
Products
Resources
• Consumer Goods,
Retail & Travel
Services
• Industrial
• Life Sciences
• Chemicals & Natural
Resources
• Energy
• Utilities
Communications, Media & Technology
Our Communications, Media & Technology operating group serves the communications, electronics, high
technology, media and entertainment industries. Professionals in this operating group help clients accelerate and
deliver digital transformation, enhance business results through industry-specific solutions and seize the opportunities
made possible by the convergence of communications, computing and content. Examples of our services include
helping clients run cost-effective operations, create business model innovations, introduce new products and services,
and digitally engage and entertain their customers. Our Communications, Media & Technology operating group
comprises the following industry groups:
• Our Communications industry group serves most of the world’s leading wireline, wireless, cable and satellite
communications service providers. This group represented approximately 49% of our Communications,
Media & Technology operating group’s net revenues in fiscal 2016.
• Our Electronics & High Tech industry group serves the information and communications technology,
software, semiconductor, consumer electronics, aerospace and defense, and medical equipment industries.
This group represented approximately 37% of our Communications, Media & Technology operating group’s
net revenues in fiscal 2016.
• Our Media & Entertainment industry group serves the broadcast, entertainment, print, publishing and
Internet/social media industries. This group represented approximately 14% of our Communications, Media &
Technology operating group’s net revenues in fiscal 2016.
Financial Services
Our Financial Services operating group serves the banking, capital markets and insurance industries.
Professionals in this operating group work with clients to address growth, cost and profitability pressures, industry
consolidation, regulatory changes and the need to continually adapt to new, digital technologies. We offer services
designed to help our clients increase cost efficiency, grow their customer base, manage risk and transform their
operations. Our Financial Services operating group comprises the following industry groups:
• Our Banking & Capital Markets industry group serves retail and commercial banks, mortgage lenders,
payment providers, investment banks, wealth and asset management firms, broker/dealers, depositories,
exchanges, clearing and settlement organizations, and other diversified financial enterprises. This group
represented approximately 72% of our Financial Services operating group’s net revenues in fiscal 2016.
• Our Insurance industry group serves property and casualty insurers, life insurers, reinsurance firms and
insurance brokers. This group represented approximately 28% of our Financial Services operating group’s
net revenues in fiscal 2016.
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Health & Public Service
Our Health & Public Service operating group serves healthcare payers and providers, as well as government
departments and agencies, public service organizations, educational institutions and non-profit organizations around
the world. The group’s research-based insights and offerings, including consulting services and digital solutions, are
designed to help clients deliver better social, economic and health outcomes to the people they serve. Our Health &
Public Service operating group comprises the following industry groups:
• Our Health industry group works with healthcare providers, such as hospitals, public health systems, policy-
making authorities, health insurers (payers), and industry organizations and associations around the world to
improve the quality, accessibility and productivity of healthcare. This group represented approximately 39%
of our Health & Public Service operating group’s net revenues in fiscal 2016.
• Our Public Service industry group helps governments transform the way they deliver public services and
engage with citizens. We work primarily with defense departments and military forces; public safety authorities,
such as police forces and border management agencies; justice departments; human services agencies;
educational institutions, such as universities; non-profit organizations; and postal, customs, revenue and tax
agencies. Our work with clients in the U.S. federal government is delivered through Accenture Federal Services,
a U.S. company and a wholly owned subsidiary of Accenture LLP. Our Public Service industry group
represented approximately 61% of our Health & Public Service operating group’s net revenues in fiscal 2016.
Our work with clients in the U.S. federal government represented approximately 35% of our Health & Public
Service operating group’s net revenues in fiscal 2016.
Products
Our Products operating group serves a set of increasingly interconnected consumer-relevant industries. Our
offerings are designed to help clients transform their organizations and increase their relevance in the digital world.
We help clients enhance their performance in distribution and sales and marketing; in research and development and
manufacturing; and in business functions such as finance, human resources, procurement and supply chain while
leveraging technology. Our Products operating group comprises the following industry groups:
• Our Consumer Goods, Retail & Travel Services industry group serves food and beverage, household goods,
personal care, tobacco, fashion/apparel, agribusiness and consumer health companies; supermarkets,
hardline retailers, mass-merchandise discounters, department stores and specialty retailers; as well as airlines
and hospitality and travel services companies. This group represented approximately 55% of our Products
operating group’s net revenues in fiscal 2016.
• Our Industrial industry group works with automotive manufacturers and suppliers; freight and logistics
companies; industrial and electrical equipment, consumer durable and heavy equipment companies; and
construction and infrastructure management companies. This group represented approximately 24% of our
Products operating group’s net revenues in fiscal 2016.
• Our Life Sciences industry group serves pharmaceutical, medical technology and biotechnology companies.
This group represented approximately 21% of our Products operating group’s net revenues in fiscal 2016.
Resources
Our Resources operating group serves the chemicals, energy, forest products, metals and mining, utilities and
related industries. We work with clients to develop and execute innovative strategies, improve operations, manage
complex change initiatives and integrate digital technologies designed to help them differentiate themselves in the
marketplace, gain competitive advantage and manage their large-scale capital investments. Our Resources operating
group comprises the following industry groups:
• Our Chemicals & Natural Resources industry group works with a wide range of industry segments, including
petrochemicals, specialty chemicals, polymers and plastics, gases and agricultural chemicals, among others,
as well as the metals, mining, forest products and building materials industries. This group represented
approximately 28% of our Resources operating group’s net revenues in fiscal 2016.
• Our Energy industry group serves a wide range of companies in the oil and gas industry, including upstream,
downstream, oil services and new energy companies. This group represented approximately 29% of our
Resources operating group’s net revenues in fiscal 2016.
• Our Utilities industry group works with electric, gas and water utilities around the world. This group represented
approximately 43% of our Resources operating group’s net revenues in fiscal 2016.
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Services and Solutions
Our operating groups bring together expertise from Accenture Strategy, Accenture Consulting, Accenture Digital,
Accenture Technology and Accenture Operations to develop and deliver integrated services and solutions for our
clients.
Accenture Strategy
Accenture Strategy helps clients achieve specific business outcomes and enhance shareholder value by defining
and executing industry-specific strategies enabled by technology. We bring together our strategy capabilities in business
and technology to help senior management teams shape and execute their transformation objectives, focusing on
issues related to digital disruption, competitive agility, global operating models and the future workforce. We provide
a range of strategy services focused on areas such as digital technologies; enterprise architecture and applications;
CFO and enterprise value; IT; security; mergers and acquisitions; operations; advanced customer services;
sustainability; and talent and organization.
Accenture Consulting
Accenture Consulting provides industry experts with the insights and management and technology consulting
capabilities to transform the world’s leading companies. Accenture Consulting has primary responsibility for
orchestrating expertise from across our entire organization to enable our clients to transform their businesses.
Our consulting capabilities enable our clients to design and implement transformational change programs, either
for one or more functions or business units, or across their entire organization. We provide industry-specific consulting
services across 13 industry groups, as well as functional and technology consulting services. Our functional and
technology consulting services include finance and enterprise performance; supply chain and operations; talent and
organization; customers and channels; applications and architecture advisory; and technology advisory. We help our
clients with the digital transformation of industries, enhancing our consulting services with digital, cloud, cybersecurity,
artificial intelligence and blockchain capabilities.
Accenture Digital
Accenture Digital combines our capabilities in digital marketing, mobility and analytics to help clients provide
better experiences for the customers they serve, create new products and business models, and enhance their digital
enterprise capabilities and connections. We provide digital services across three broad areas:
• Accenture Interactive. Our end-to-end marketing solutions help clients deliver seamless multi-channel
customer experiences and enhance their marketing performance. Our services span customer experience
design, digital marketing, personalization and commerce, as well as digital content production and operations.
• Accenture Mobility. We provide clients with practical innovations in connectivity and the Internet of Things
to transform business processes and enable new operating models. Our end-to-end mobility capabilities
include collecting and exchanging valuable data through connected devices, mobile applications, embedded
software and sensor technology.
• Accenture Analytics. We deliver insight-driven outcomes at scale to help clients improve performance. Our
capabilities range from implementing analytics technologies such as big data to advanced mathematical
modeling and sophisticated statistical analysis. Our services enhance business performance and productivity
outcomes through advanced analytics, artificial intelligence and collaboration capabilities.
Accenture Technology
Accenture Technology comprises two primary areas: technology services and technology innovation &
ecosystem.
• Technology Services. Technology Services includes our application services spanning systems integration
and application outsourcing and covering the full application lifecycle, from custom systems to all emerging
technologies, across every leading technology platform (both traditional and cloud/software-as-a-service-
based). It also includes our global delivery capability in Technology and portfolio of products and platforms.
We continuously innovate new services and capabilities through early adoption of technologies such as artificial
intelligence to enhance productivity and create new growth opportunities.
• Technology Innovation & Ecosystem. We harness innovation through the research and development
activities in the Accenture Labs and through emerging technologies. We also manage our technology platforms
and our alliance relationships across a broad range of technology providers, including SAP, Oracle, Microsoft,
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salesforce.com, Workday, Pegasystems and many others, to enhance the value that we and our clients realize
from the technology ecosystem.
Accenture Operations
Accenture Operations provides business process services, infrastructure services, security services and cloud
services, including the Accenture Cloud Platform. We operate infrastructure and business processes on behalf of
clients, increasingly on an as-a-service basis, to help improve their productivity and performance.
• Business Process Services. We offer services for specific business functions, such as finance and
accounting, procurement, marketing, human resources and learning, as well as industry-specific services,
such as credit and health services. We provide these services on a global basis and across industry sectors
through our Global Delivery Network.
•
Infrastructure and Cloud Services. We provide infrastructure and security design, implementation and
operation services to help organizations take advantage of innovative technologies and improve the efficiency
and effectiveness of their existing technology. Our solutions help clients optimize their IT infrastructures—
whether on-premise, in the cloud or a hybrid of the two.
Global Delivery Model
A key differentiator is our global delivery model, which allows us to draw on the benefits of using people and
other resources from around the world—including scalable, standardized processes, methods and tools; automation
and artificial intelligence; industry expertise and specialized capabilities; cost advantages; foreign language fluency;
proximity to clients; and time zone advantages—to deliver high-quality solutions. Emphasizing quality, productivity,
reduced risk, speed to market and predictability, our global delivery model supports all parts of our business to provide
clients with price-competitive services and solutions.
Our Global Delivery Network continues to be a competitive differentiator for us. As of August 31, 2016, we had
approximately 285,000 professionals in our network globally in more than 50 delivery centers around the world, as
well as Accenture offices and client locations.
Alliances
We have sales and delivery alliances with companies whose capabilities complement our own by, among other
things, enhancing a service offering, delivering a new technology or helping us extend our services to new geographies.
By combining our alliance partners’ products and services with our own capabilities and expertise, we create innovative,
high-value business solutions for our clients. Most of our alliances are non-exclusive. These alliances can generate
significant revenues from services we provide to implement our alliance partners’ products as well as revenue from
the resale of their products. We also receive as reimbursement some direct payments, which are not material to our
business, from our alliance partners to cover costs we incur for marketing and other assistance.
Research and Innovation
We are committed to developing leading-edge ideas. Research and innovation, which is a component of our
overall investment in our business, have been major factors in our success, and we believe they will help us continue
to grow in the future. We use our investment in research and development—on which we spent $643 million, $626
million and $640 million in fiscal 2016, 2015 and 2014, respectively—to help create, commercialize and disseminate
innovative business strategies and technology solutions. We spend a significant portion of our research and
development investment to develop market-ready solutions for our clients.
Our research and innovation program is designed to generate early insights into how knowledge can be harnessed
to create innovative business solutions for our clients and to develop business strategies with significant value. Our
innovation capabilities include research and thought leadership to identify market and technology trends. We also
partner with and invest in growth-stage companies that create innovative enterprise technologies. Our Accenture Labs
incubate and prototype new concepts through applied research and development projects. In addition, our studios,
innovation centers and delivery centers build, scale and industrialize the delivery of our innovations.
Employees
As a talent-led organization, one of our key goals is to have the best talent, with highly specialized skills in each
part of our business, at the right levels in the right locations, to enhance our differentiation and competitiveness. We
are deeply committed to the career development of our employees, who receive significant and focused technical,
functional, industry, managerial and leadership skill development and training appropriate for their roles and levels
within the Company. We provide our people with expert content and opportunities to collaborate in a broad range of
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physical and virtual learning environments. We seek to reinforce our employees’ commitments to our clients, culture
and values through a comprehensive performance management and compensation system and a career philosophy
that provides rewards based on individual and Company performance. With our commitment to inclusion and diversity,
we strive to maintain a work environment that reinforces collaboration, motivation and innovation and is consistent
with our core values and Code of Business Ethics.
As of August 31, 2016, we employed approximately 384,000 people and had offices and operations in more than
200 cities in 55 countries.
Competition
We operate in a highly competitive and rapidly changing global marketplace and compete with a variety of
organizations that offer services and solutions competitive with those we offer. Our competitors include:
•
large multinational providers, including the services arms of large global technology providers (hardware,
equipment and software), that offer some or all of the services and solutions that we do;
• off-shore service providers in lower-cost locations, particularly in India, that offer services globally that are
similar to the services and solutions we offer;
• accounting firms that provide consulting and other services and solutions in areas that compete with us;
• niche solution or service providers or local competitors that compete with us in a specific geographic market,
industry segment or service area, including digital agencies and emerging start-ups and other companies that
can scale rapidly to focus on certain markets and provide new or alternative products, services or delivery
models; and
•
in-house departments of large corporations that use their own resources, rather than engage an outside firm
for the types of services and solutions we provide.
Our revenues are derived primarily from Fortune Global 500 and Fortune 1000 companies, medium-sized
companies, governments, government agencies and other enterprises. We believe that the principal competitive factors
in the industries in which we compete include:
• skills and capabilities of people;
•
•
technical and industry expertise;
innovative service and product offerings;
• ability to add business value and improve performance;
•
reputation and client references;
• contractual terms, including competitive pricing;
• ability to deliver results reliably and on a timely basis;
• scope of services;
• service delivery approach;
• quality of services and solutions;
• availability of appropriate resources; and
• global reach and scale, including level of presence in key emerging markets.
Our clients typically retain us on a non-exclusive basis.
Intellectual Property
We provide value to our clients based in part on a differentiated range of proprietary inventions, methodologies,
software, reusable knowledge capital and other intellectual property. We recognize the increasing value of intellectual
property in the marketplace and create, harvest, and protect this intellectual property. We leverage patent, trade secret,
copyright and trademark laws as well as contractual arrangements to protect our intellectual property. We have also
established policies to respect the intellectual property rights of third parties, such as our clients, partners and others.
As of August 31, 2016, we had over 2,475 patent applications pending worldwide and had been issued over
1,250 U.S. patents and 1,750 non-U.S. patents.
Trademarks appearing in this report are the trademarks or registered trademarks of Accenture Global Services
Ltd or third parties, as applicable.
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Organizational Structure
Accenture plc is an Irish public limited company with no material assets other than ordinary and deferred shares
in its subsidiary, Accenture Holdings plc, an Irish public limited company. Accenture plc owns a majority voting interest
in Accenture Holdings plc, and Accenture plc’s only business is to hold these shares. As a result, Accenture plc controls
Accenture Holdings plc’s management and operations and consolidates Accenture Holdings plc’s results in its
Consolidated Financial Statements. We operate our business through subsidiaries of Accenture Holdings plc. Accenture
Holdings plc generally reimburses Accenture plc for its expenses but does not pay Accenture plc any fees.
History
Prior to our transition to a corporate structure in fiscal 2001, we operated as a series of related partnerships and
corporations under the control of our partners. In connection with our transition to a corporate structure, our partners
generally exchanged all of their interests in these partnerships and corporations for Accenture Ltd Class A common
shares or, in the case of partners in certain countries, Class I common shares of Accenture SCA, a Luxembourg
partnership limited by shares and direct subsidiary of Accenture Ltd (“Accenture SCA”), or exchangeable shares issued
by Accenture Canada Holdings Inc., an indirect subsidiary of Accenture SCA. Generally, partners who received
Accenture SCA Class I common shares or Accenture Canada Holdings Inc. exchangeable shares also received a
corresponding number of Accenture Ltd Class X common shares, which entitled their holders to vote at Accenture Ltd
shareholder meetings but did not carry any economic rights. The combination of the Accenture Ltd Class X common
shares and the Accenture SCA Class I common shares or Accenture Canada Holdings Inc. exchangeable shares gave
these partners substantially similar economic and governance rights as holders of Accenture Ltd Class A common
shares.
On June 10, 2009, Accenture plc was incorporated in Ireland, as a public limited company, in order to effect
moving the place of incorporation of our parent holding company from Bermuda to Ireland. This transaction was
completed on September 1, 2009, at which time Accenture Ltd, our predecessor holding company, became a wholly
owned subsidiary of Accenture plc and Accenture plc became our parent holding company. Accenture Ltd was dissolved
on December 29, 2009.
On April 10, 2015, Accenture Holdings plc was incorporated in Ireland, as a public limited company, in order to
further consolidate Accenture’s presence in Ireland. On August 26, 2015, Accenture SCA merged with and into
Accenture Holdings plc, with Accenture Holdings plc as the surviving entity. This merger was a transaction between
entities under common control and had no effect on the Company’s Consolidated Financial Statements.
All references to Accenture Holdings plc included in this report with respect to periods prior to August 26, 2015
reflect the activity and/or balances of Accenture SCA (the predecessor of Accenture Holdings plc). The Consolidated
Financial Statements reflect the ownership interests in Accenture Holdings plc and Accenture Canada Holdings Inc.
held by certain current and former members of Accenture Leadership as noncontrolling interests. “Accenture
Leadership” is comprised of members of our global management committee (the Company’s primary management
and leadership team, which consists of approximately 20 of our most senior leaders), senior managing directors and
managing directors. The noncontrolling ownership interests percentage was 4% as of August 31, 2016.
Accenture plc Class A and Class X Ordinary Shares
Each Class A ordinary share and each Class X ordinary share of Accenture plc entitles its holder to one vote on
all matters submitted to a vote of shareholders of Accenture plc. A Class X ordinary share does not, however, entitle
its holder to receive dividends or to receive payments upon a liquidation of Accenture plc. As described above under
“—History,” Class X ordinary shares generally provide the holders of Accenture Holdings plc ordinary shares and
Accenture Canada Holdings Inc. exchangeable shares with a vote at Accenture plc shareholder meetings that is
equivalent to the voting rights held by Accenture plc Class A ordinary shareholders, while their economic rights consist
of interests in Accenture Holdings plc ordinary shares or in Accenture Canada Holdings Inc. exchangeable shares.
Under its memorandum and articles of association, Accenture plc may redeem, at its option, any Class X ordinary
share for a redemption price equal to the nominal value of the Class X ordinary share, or $0.0000225 per share.
Accenture plc, as successor to Accenture Ltd, has separately agreed with the original holders of Accenture Holdings
plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares not to redeem any Class X ordinary
share of such holder if the redemption would reduce the number of Class X ordinary shares held by that holder to a
number that is less than the number of Accenture Holdings plc ordinary shares or Accenture Canada Holdings Inc.
exchangeable shares owned by that holder. Accenture plc will redeem Class X ordinary shares upon the redemption
or exchange of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares so
that the aggregate number of Class X ordinary shares outstanding at any time does not exceed the aggregate number
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of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares outstanding.
Class X ordinary shares are not transferable without the consent of Accenture plc.
A transfer of Accenture plc Class A ordinary shares effected by transfer of a book-entry interest in The Depository
Trust Company will not be subject to Irish stamp duty. Other transfers of Accenture plc Class A ordinary shares may
be subject to Irish stamp duty (currently at the rate of 1% of the price paid or the market value of the Class A ordinary
shares acquired, if higher) payable by the buyer.
Accenture Holdings plc Ordinary and Deferred Shares
Only Accenture plc, Accenture Holdings plc, Accenture International S.à.r.l. and certain current and former
members of Accenture Leadership and their permitted transferees hold Accenture Holdings plc ordinary shares. Each
ordinary share entitles its holder to one vote on all matters submitted to the shareholders of Accenture Holdings plc
and entitles its holder to dividends and liquidation payments. As of October 14, 2016, Accenture plc holds a voting
interest of approximately 96% of the aggregate outstanding Accenture Holdings plc ordinary shares entitled to vote,
with the remaining 4% of the voting interest held by certain current and former members of Accenture Leadership and
their permitted transferees.
Only Accenture plc beneficially holds Accenture Holdings plc deferred shares. The deferred shares were issued
solely to ensure that Accenture Holdings plc satisfies Irish law minimum share capital requirements for public limited
companies at all times and carry no voting rights or income rights and have only limited rights on a return of capital
equal to the nominal value of those shares.
Holders of ordinary shares of Accenture Holdings plc have the ability, subject to the restrictions on redemption
contained in Accenture Holdings plc’s articles of association and the Companies Act 2014 of Ireland (the “Companies
Act”) and any contractual restrictions on redemption that may be applicable to a holder, to require that Accenture
Holdings plc redeem all or a portion of such holder’s ordinary shares of Accenture Holdings plc. In that case, Accenture
Holdings plc is obligated, subject to the availability of distributable reserves, to redeem any such ordinary shares of
Accenture Holdings plc. The redemption price per share generally equals the average of the high and low sale prices
of a Class A ordinary share of Accenture plc as reported on the New York Stock Exchange on the trading day on which
Accenture Holdings plc receives an irrevocable notice of redemption from a holder of ordinary shares of Accenture
Holdings plc if received prior to close of trading for that day, or on the following trading day if Accenture Holdings plc
receives the irrevocable notice of redemption later than the close of trading on that day. Accenture Holdings plc may,
at its option, pay the redemption price in cash or by instructing Accenture plc to deliver Class A ordinary shares on a
one-for-one basis, subject to adjustment for dividends and share splits. In order to maintain Accenture plc’s economic
interest in Accenture Holdings plc, Accenture plc generally will acquire additional Accenture Holdings plc ordinary
shares each time additional Accenture plc Class A ordinary shares are issued.
Except in the case of a redemption of Accenture Holdings plc ordinary shares or a transfer of Accenture Holdings
plc ordinary shares to Accenture plc or one of its subsidiaries, Accenture Holdings plc’s articles of association provide
that Accenture Holdings plc ordinary shares may be transferred only with the consent of the Board of Directors of
Accenture Holdings plc. In addition, all holders of ordinary shares (except Accenture plc) are precluded from having
their shares redeemed by Accenture Holdings plc or transferred to Accenture Holdings plc, Accenture plc or a subsidiary
of Accenture plc at any time or during any period when Accenture Holdings plc determines, based on the advice of
counsel, that there is material non-public information that may affect the average price per share of Accenture plc
Class A ordinary shares, if the redemption would be prohibited by applicable law or regulation, or during the period
from the announcement of a tender offer by Accenture Holdings plc or its affiliates for Accenture Holdings plc ordinary
shares, or any securities convertible into, or exchangeable or exercisable for, ordinary shares, until the expiration of
ten business days after the termination of the tender offer (other than to tender the holder’s Accenture Holdings plc
ordinary shares in the tender offer).
Accenture Canada Holdings Inc. Exchangeable Shares
Holders of Accenture Canada Holdings Inc. exchangeable shares may exchange their shares for Accenture plc
Class A ordinary shares at any time on a one-for-one basis. Accenture may, at its option, satisfy this exchange with
cash at a price per share generally equal to the market price of an Accenture plc Class A ordinary share at the time of
the exchange. Each exchangeable share of Accenture Canada Holdings Inc. entitles its holder to receive distributions
equal to any distributions to which an Accenture plc Class A ordinary share entitles its holder. The exchange of all of
the outstanding Accenture Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares would
not have a material impact on the equity ownership position of Accenture or the other shareholders of Accenture
Holdings plc.
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ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the following factors which
could materially adversely affect our business, financial condition, results of operations (including revenues and
profitability) and/or stock price. Our business is also subject to general risks and uncertainties that may broadly affect
companies, including us. Additional risks and uncertainties not currently known to us or that we currently deem to be
immaterial also could materially adversely affect our business, financial condition, results of operations and/or stock
price.
Our results of operations could be adversely affected by volatile, negative or uncertain economic
conditions and the effects of these conditions on our clients’ businesses and levels of business activity.
Global macroeconomic conditions affect our clients’ businesses and the markets they serve. Volatile, negative
or uncertain economic conditions in our significant markets have undermined and could in the future undermine business
confidence in our significant markets or in other markets, which are increasingly interdependent, and cause our clients
to reduce or defer their spending on new initiatives and technologies, or may result in clients reducing, delaying or
eliminating spending under existing contracts with us, which would negatively affect our business. Growth in the markets
we serve could be at a slow rate, or could stagnate or contract, in each case, for an extended period of time. Differing
economic conditions and patterns of economic growth and contraction in the geographical regions in which we operate
and the industries we serve have affected and may in the future affect demand for our services and solutions. A material
portion of our revenues and profitability is derived from our clients in North America and Europe. Weak demand in
these markets could have a material adverse effect on our results of operations. In addition, because we operate
globally and have significant businesses in markets outside of North America and Europe, an economic slowdown in
one or more of those other markets could adversely affect our results of operations as well. Ongoing economic volatility
and uncertainty and changing demand patterns affect our business in a number of other ways, including making it
more difficult to accurately forecast client demand and effectively build our revenue and resource plans, particularly
in consulting.
Economic volatility and uncertainty is particularly challenging because it may take some time for the effects and
changes in demand patterns resulting from these and other factors to manifest themselves in our business and results
of operations. Changing demand patterns from economic volatility and uncertainty could have a significant negative
impact on our results of operations.
Our business depends on generating and maintaining ongoing, profitable client demand for our services and
solutions, including through the adaptation and expansion of our services and solutions in response to
ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to
respond to the evolving technological environment could materially affect our results of operations.
Our revenue and profitability depend on the demand for our services and solutions with favorable margins, which
could be negatively affected by numerous factors, many of which are beyond our control and unrelated to our work
product. As described above, volatile, negative or uncertain global economic conditions and lower growth in the markets
we serve have adversely affected and could in the future adversely affect client demand for our services and solutions.
Our success depends, in part, on our ability to continue to develop and implement services and solutions that anticipate
and respond to rapid and continuing changes in technology and offerings to serve the evolving needs of our clients.
Examples of areas of significant change include digital-, cloud- and security-related offerings, which are continually
evolving as developments such as artificial intelligence, automation, blockchain, Internet of Things and as-a-service
solutions are commercialized. Technological developments such as these may materially affect the cost and use of
technology by our clients and, in the case of as-a-service solutions, could affect the nature of how we generate revenue.
Some of these technologies, such as cloud-based services, artificial intelligence and automation, and others that may
emerge, have reduced and replaced some of our historical services and solutions and may continue to do so in the
future. This has caused, and may in the future cause, clients to delay spending under existing contracts and
engagements and to delay entering into new contracts while they evaluate new technologies. Such delays can
negatively impact our results of operations if the pace and level of spending on new technologies is not sufficient to
make up any shortfall.
Developments in the industries we serve, which may be rapid, also could shift demand to new services and
solutions. If, as a result of new technologies or changes in the industries we serve, our clients demand new services
and solutions, we may be less competitive in these new areas or need to make significant investment to meet that
demand. Our growth strategy focuses on responding to these types of developments by driving innovation that will
enable us to expand our business into new growth areas. If we do not sufficiently invest in new technology and adapt
to industry developments, or evolve and expand our business at sufficient speed and scale, or if we do not make the
right strategic investments to respond to these developments and successfully drive innovation, our services and
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solutions, our results of operations, and our ability to develop and maintain a competitive advantage and to execute
on our growth strategy could be negatively affected.
We operate in a rapidly evolving environment in which there currently are, and we expect will continue to be, new
technology entrants. New services or technologies offered by competitors or new entrants may make our offerings
less differentiated or less competitive when compared to other alternatives, which may adversely affect our results of
operations. In addition, companies in the industries we serve sometimes seek to achieve economies of scale and other
synergies by combining with or acquiring other companies. If one of our current clients merges or consolidates with a
company that relies on another provider for the services and solutions we offer, we may lose work from that client or
lose the opportunity to gain additional work if we are not successful in generating new opportunities from the merger
or consolidation. At any given time in a particular industry or geography, one or a small number of clients could contribute
a significant portion of our revenues, and any decision by such a client to delay, reduce, or eliminate spending on our
services and solutions could have a disproportionate impact on the results of operations in the relevant industry and/
or geography.
Many of our consulting contracts are less than 12 months in duration, and these contracts typically permit a client
to terminate the agreement with as little as 30 days’ notice. Longer-term, larger and more complex contracts, such as
the majority of our outsourcing contracts, generally require a longer notice period for termination and often include an
early termination charge to be paid to us, but this charge might not be sufficient to cover our costs or make up for
anticipated ongoing revenues and profits lost upon termination of the contract. Many of our contracts allow clients to
terminate, delay, reduce or eliminate spending on the services and solutions we provide. Additionally, a client could
choose not to retain us for additional stages of a project, try to renegotiate the terms of its contract or cancel or delay
additional planned work. When contracts are terminated or not renewed, we lose the anticipated revenues, and it may
take significant time to replace the level of revenues lost. Consequently, our results of operations in subsequent periods
could be materially lower than expected. The specific business or financial condition of a client, changes in management
and changes in a client’s strategy are also all factors that can result in terminations, cancellations or delays.
If we are unable to keep our supply of skills and resources in balance with client demand around the world
and attract and retain professionals with strong leadership skills, our business, the utilization rate of our
professionals and our results of operations may be materially adversely affected.
Our success is dependent, in large part, on our ability to keep our supply of skills and resources in balance with
client demand around the world and our ability to attract and retain personnel with the knowledge and skills to lead
our business globally. Experienced personnel in our industry are in high demand, and competition for talent is intense.
We must hire, retain and motivate appropriate numbers of talented people with diverse skills in order to serve clients
across the globe, respond quickly to rapid and ongoing technology, industry and macroeconomic developments and
grow and manage our business. For example, if we are unable to hire or continually train our employees to keep pace
with the rapid and continuing changes in technology and the industries we serve or changes in the types of services
and solutions clients are demanding, we may not be able to develop and deliver new services and solutions to fulfill
client demand. As we expand our services and solutions, we must also hire and retain an increasing number of
professionals with different skills and professional expectations than those of the professionals we have historically
hired and retained. Additionally, if we are unable to successfully integrate, motivate and retain these professionals,
our ability to continue to secure work in those industries and for our services and solutions may suffer.
We are particularly dependent on retaining members of Accenture Leadership and other experienced managers,
and if we are unable to do so, our ability to develop new business and effectively manage our current contracts and
client relationships could be jeopardized. We depend on identifying, developing and retaining key employees to provide
leadership and direction for our businesses. This includes developing talent and leadership capabilities in emerging
markets, where the depth of skilled employees is often limited and competition for these resources is intense. Our
ability to expand geographically depends, in large part, on our ability to attract, retain and integrate both leaders for
the local business and people with the appropriate skills.
Similarly, our profitability depends on our ability to effectively utilize personnel with the right mix of skills and
experience to perform services for our clients, including our ability to transition employees to new assignments on a
timely basis. If we are unable to effectively deploy our employees globally on a timely basis to fulfill the needs of our
clients, our profitability could suffer. If the utilization rate of our professionals is too high, it could have an adverse effect
on employee engagement and attrition, the quality of the work performed as well as our ability to staff projects. If our
utilization rate is too low, our profitability and the engagement of our employees could suffer. The costs associated
with recruiting and training employees are significant. An important element of our global business model is the
deployment of our employees around the world, which allows us to move talent as needed. Therefore, if we are not
able to deploy the talent we need because of increased regulation of immigration or work visas, including limitations
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placed on the number of visas granted, limitations on the type of work performed or location in which the work can be
performed, and new or higher minimum salary requirements, it could be more difficult to staff our employees on client
engagements and could increase our costs.
Our equity-based incentive compensation plans are designed to reward high-performing personnel for their
contributions and provide incentives for them to remain with us. If the anticipated value of such incentives does not
materialize because of volatility or lack of positive performance in our stock price, or if our total compensation package
is not viewed as being competitive, our ability to attract and retain the personnel we need could be adversely affected.
In addition, if we do not obtain the shareholder approval needed to continue granting equity awards under our share
plans in the amounts we believe are necessary, our ability to attract and retain personnel could be negatively affected.
There is a risk that at certain points in time, and in certain geographical regions, we will find it difficult to hire and
retain a sufficient number of employees with the skills or backgrounds to meet current and/or future demand. In these
cases, we might need to redeploy existing personnel or increase our reliance on subcontractors to fill certain labor
needs, and if not done effectively, our profitability could be negatively impacted. Additionally, if demand for our services
and solutions were to escalate at a high rate, we may need to adjust our compensation practices, which could put
upward pressure on our costs and adversely affect our profitability if we are unable to recover these increased costs.
At certain times, however, we may also have more personnel than we need in certain skill sets or geographies or at
compensation levels that are not aligned with skill sets. In these situations, we have engaged, and may in the future
engage, in actions to rebalance our resources, including through reduced levels of new hiring and increased involuntary
terminations as a means to keep our supply of skills and resources in balance with client demand. If we are not
successful in these initiatives, our results of operations could be adversely affected.
The markets in which we compete are highly competitive, and we might not be able to compete effectively.
The markets in which we offer our services and solutions are highly competitive. Our competitors include:
•
large multinational providers, including the services arms of large global technology providers (hardware,
equipment and software), that offer some or all of the services and solutions that we do;
• off-shore service providers in lower-cost locations, particularly in India, that offer services globally that are
similar to the services and solutions we offer;
• accounting firms that provide consulting and other services and solutions in areas that compete with us;
• niche solution or service providers or local competitors that compete with us in a specific geographic market,
industry segment or service area, including digital agencies and emerging start-ups and other companies that
can scale rapidly to focus on certain markets and provide new or alternative products, services or delivery
models; and
•
in-house departments of large corporations that use their own resources, rather than engage an outside firm
for the types of services and solutions we provide.
Some competitors may have greater financial, marketing or other resources than we do and, therefore, may be
better able to compete for new work and skilled professionals, may be able to innovate and provide new services and
solutions faster than we can or may be able to anticipate the need for services and solutions before we do.
Even if we have potential offerings that address marketplace or client needs, competitors may be more successful
at selling similar services they offer, including to companies that are our clients. Some competitors are more established
in certain markets, and that may make executing our geographic expansion strategy in these markets more challenging.
Additionally, competitors may also offer more aggressive contractual terms, which may affect our ability to win work.
Our future performance is largely dependent on our ability to compete successfully in the markets we currently serve,
while expanding into additional markets. If we are unable to compete successfully, we could lose market share and
clients to competitors, which could materially adversely affect our results of operations.
In addition, we may face greater competition due to consolidation of companies in the technology sector through
strategic mergers or acquisitions. Consolidation activity may result in new competitors with greater scale, a broader
footprint or offerings that are more attractive than ours. Over time, our access to certain technology products and
services may be reduced as a result of this consolidation. Additionally, vertically integrated companies are able to offer
as a single provider more integrated services (software and hardware) to clients than we can in some cases and
therefore may represent a more attractive alternative to clients. If buyers of services favor using a single provider for
an integrated technology stack, such buyers may direct more business to such competitors, and this could materially
adversely affect our competitive position and our results of operations.
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We could have liability or our reputation could be damaged if we fail to protect client and/or Accenture data
from security breaches or cyberattacks.
We are dependent on information technology networks and systems to securely process, transmit and store
electronic information and to communicate among our locations around the world and with our clients, alliance partners
and vendors. As the breadth and complexity of this infrastructure continues to grow, including as a result of the use of
mobile technologies, social media and cloud-based services, the potential risk of security breaches and cyberattacks
increases. Such breaches could lead to shutdowns or disruptions of our systems and potential unauthorized disclosure
of sensitive or confidential information, including personal data.
In providing services and solutions to clients, we often manage, utilize and store sensitive or confidential client
or Accenture data, including personal data, and we expect these activities to increase, including through the use of
analytics. Unauthorized disclosure of sensitive or confidential client or Accenture data, whether through systems failure,
employee negligence, fraud or misappropriation, could damage our reputation, cause us to lose clients and could
result in significant financial exposure. Similarly, unauthorized access to or through our information systems or those
we develop for our clients, whether by our employees or third parties, including a cyberattack by computer programmers,
hackers, members of organized crime and/or state-sponsored organizations, who may develop and deploy viruses or
other malicious software programs or social engineering attacks, could result in negative publicity, significant
remediation costs, legal liability, damage to our reputation and government sanctions and could have a material adverse
effect on our results of operations. Cybersecurity threats are constantly evolving, thereby increasing the difficulty of
detecting and defending against them.
We are subject to numerous laws and regulations designed to protect this information, such as the national laws
implementing the European Union Directive on Data Protection (which will be replaced by the European Union General
Data Protection Regulation from 2018 onwards), various U.S. federal and state laws governing the protection of health
or other personally identifiable information and data privacy and cybersecurity laws in other regions. These laws and
regulations are increasing in complexity and number, change frequently and sometimes conflict among the various
countries in which we operate. If any person, including any of our employees, negligently disregards or intentionally
breaches our established controls with respect to client or Accenture data, or otherwise mismanages or misappropriates
that data, we could be subject to significant litigation, monetary damages, regulatory enforcement actions, fines and/
or criminal prosecution in one or more jurisdictions. These monetary damages might not be subject to a contractual
limit of liability or an exclusion of consequential or indirect damages and could be significant. In addition, our liability
insurance, which includes cyber insurance, might not be sufficient in type or amount to cover us against claims related
to security breaches, cyberattacks and other related breaches.
Our profitability could materially suffer if we are unable to obtain favorable pricing for our services and
solutions, if we are unable to remain competitive, if our cost-management strategies are unsuccessful or if
we experience delivery inefficiencies.
Our profitability is highly dependent on a variety of factors and could be materially impacted by any of the following:
Our results of operations could materially suffer if we are not able to obtain sufficient pricing to meet our profitability
expectations. If we are not able to obtain favorable pricing for our services and solutions, our revenues and profitability
could materially suffer. The rates we are able to charge for our services and solutions are affected by a number of
factors, including:
• general economic and political conditions;
• our clients’ desire to reduce their costs;
•
the competitive environment in our industry;
• our ability to accurately estimate our service delivery costs, upon which our pricing is sometimes determined,
includes our ability to estimate the impact of inflation and foreign exchange on our service delivery costs over
long-term contracts; and
•
the procurement practices of clients and their use of third-party advisors.
Our profitability could suffer if we are not able to remain competitive. The competitive environment in our industry
affects our ability to secure new contracts at our target economics in a number of ways, any of which could have a
material negative impact on our results of operations. The less we are able to differentiate our services and solutions
and/or clearly convey the value of our services and solutions, the more risk we have in winning new work in sufficient
volumes and at our target pricing and overall economics. In addition, the introduction of new services or products by
competitors could reduce our ability to obtain favorable pricing and impact our overall economics for the services or
solutions we offer. Competitors may be willing, at times, to price contracts lower than us in an effort to enter the market
or increase market share.
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Our profitability could suffer if our cost-management strategies are unsuccessful, and we may not be able to
improve our profitability to the degree we have done in the past. Our ability to improve or maintain our profitability is
dependent on our being able to successfully manage our costs. Our cost management strategies include maintaining
appropriate alignment between the demand for our services and solutions and our resource capacity. We have also
taken actions to reduce certain costs, and these initiatives include, without limitation, re-alignment of portions of our
workforce to lower-cost locations and the use of involuntary terminations as a means to keep our supply of skills and
resources in balance. These actions and our other cost-management efforts may not be successful, our efficiency may
not be enhanced and we may not achieve desired levels of profitability. Because of the significant steps taken in the
past to manage costs, it may become increasingly difficult to continue to manage our cost structure to the same degree
as in the past. If we are not effective in managing our operating costs in response to changes in demand or pricing,
or if we are unable to recover employee compensation increases through improved pricing, automation or the movement
of work to lower-cost locations, we may not be able to continue to invest in our business in an amount necessary to
achieve our planned rates of growth, we may not be able to reward our people in the manner we believe is necessary
to attract or retain personnel at desired levels, and our results of operations could be materially adversely affected.
If we do not accurately anticipate the cost, risk and complexity of performing our work or if third parties upon
whom we rely do not meet their commitments, then our contracts could have delivery inefficiencies and be less profitable
than expected or unprofitable. Our contract profitability is highly dependent on our forecasts regarding the effort and
cost necessary to deliver our services and solutions, which are based on available data and could turn out to be
materially inaccurate. If we do not accurately estimate the effort, costs or timing for meeting our contractual commitments
and/or completing engagements to a client’s satisfaction, our contracts could yield lower profit margins than planned
or be unprofitable. Similarly, if we experience unanticipated delivery difficulties due to our management, the failure of
third parties to meet their commitments or for any other reason, our contracts could yield lower profit margins than
planned or be unprofitable. In particular, large and complex arrangements often require that we utilize subcontractors
or that our services and solutions incorporate or coordinate with the software, systems or infrastructure requirements
of other vendors and service providers, including companies with which we have alliances. Our profitability depends
on the ability of these subcontractors, vendors and service providers to deliver their products and services in a timely
manner and in accordance with the project requirements, as well as on our effective oversight of their performance.
In some cases, these subcontractors are small firms, and they might not have the resources or experience to
successfully integrate their services or products with large-scale engagements or enterprises. Some of this work
involves new technologies, which may not work as intended or may take more effort to implement than initially predicted.
In addition, certain client work requires the use of unique and complex structures and alliances, some of which require
us to assume responsibility for the performance of third parties whom we do not control. Any of these factors could
adversely affect our ability to perform and subject us to additional liabilities, which could have a material adverse effect
on our relationships with clients and on our results of operations.
Changes in our level of taxes, as well as audits, investigations and tax proceedings, or changes in tax laws
or in their interpretation or enforcement, could have a material adverse effect on our effective tax rate, results
of operations, cash flows and financial condition.
We are subject to taxes in numerous jurisdictions. We calculate and provide for taxes in each tax jurisdiction in
which we operate. Tax accounting often involves complex matters and requires our judgment to determine our worldwide
provision for income taxes and other tax liabilities. We are subject to ongoing audits, investigations and tax proceedings
in various jurisdictions. Tax authorities have disagreed, and may in the future disagree, with our judgments, or may
take increasingly aggressive positions opposing the judgments we make, including with respect to our intercompany
transactions. We regularly assess the likely outcomes of our audits, investigations and tax proceedings to determine
the appropriateness of our tax liabilities. However, our judgments might not be sustained as a result of these audits,
investigations and tax proceedings, and the amounts ultimately paid could be materially different from the amounts
previously recorded. In addition, our effective tax rate in the future could be adversely affected by the expiration of
current tax benefits, changes in the mix of earnings in countries with differing statutory tax rates, challenges to our
intercompany transactions, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or
in their interpretation or enforcement. Tax rates in the jurisdictions in which we operate may change as a result of
macroeconomic or other factors outside of our control. In addition, changes in tax laws, treaties or regulations, or their
interpretation or enforcement, have become more unpredictable and may become more stringent, which could
materially adversely affect our tax position.
The overall tax environment has made it increasingly challenging for multinational corporations to operate with
certainty about taxation in many jurisdictions. For example, the European Commission has been conducting
investigations, focusing on whether local country tax rulings or tax legislation provide preferential tax treatment that
violates European Union state aid rules. In addition, the Organization for Economic Co-operation and Development,
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which represents a coalition of member countries, is supporting changes to numerous long-standing tax principles
through its base erosion and profit shifting project, which is focused on a number of issues, including the shifting of
profits among affiliated entities located in different tax jurisdictions. Furthermore, a number of countries where we do
business, including the United States and many countries in the European Union, are considering changes in relevant
tax, accounting and other laws, regulations and interpretations, including changes to tax laws applicable to multinational
corporations. The increasingly complex global tax environment could have a material adverse effect on our effective
tax rate, results of operations, cash flows and financial condition.
Although we expect to be able to rely on the tax treaty between the United States and Ireland, legislative or
diplomatic action could be taken, or the treaty may be amended in such a way, that would prevent us from being able
to rely on such treaty. Our inability to rely on the treaty would subject us to increased taxation or significant additional
expense. In addition, congressional proposals could change the definition of a U.S. person for U.S. federal income
tax purposes, which could also subject us to increased taxation. In addition, we could be materially adversely affected
by future changes in tax law or policy (or in their interpretation or enforcement) in Ireland or other jurisdictions where
we operate, including their treaties with Ireland or the United States. These changes could be exacerbated by economic,
budget or other challenges facing Ireland or these other jurisdictions.
Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange
rates.
Although we report our results of operations in U.S. dollars, a majority of our net revenues is denominated in
currencies other than the U.S. dollar. Unfavorable fluctuations in foreign currency exchange rates have had an adverse
effect, and could in the future have a material adverse effect, on our results of operations.
Because our consolidated financial statements are presented in U.S. dollars, we must translate revenues,
expenses and income, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the
end of each reporting period. Therefore, changes in the value of the U.S. dollar against other currencies will affect our
net revenues, operating income and the value of balance-sheet items, including intercompany payables and
receivables, originally denominated in other currencies. These changes cause our growth in consolidated earnings
stated in U.S. dollars to be higher or lower than our growth in local currency when compared against other periods.
Our currency hedging programs, which are designed to partially offset the impact on consolidated earnings related to
the changes in value of certain balance sheet items, might not be successful. Additionally, some transactions and
balances may be denominated in currencies for which there is no available market to hedge.
As we continue to leverage our global delivery model, more of our expenses are incurred in currencies other
than those in which we bill for the related services. An increase in the value of certain currencies, such as the Indian
rupee or Philippine peso, against the currencies in which our revenue is recorded could increase costs for delivery of
services at off-shore sites by increasing labor and other costs that are denominated in local currency. Our contractual
provisions or cost management efforts might not be able to offset their impact, and our currency hedging activities,
which are designed to partially offset this impact, might not be successful. This could result in a decrease in the
profitability of our contracts that are utilizing delivery center resources. Conversely, a decrease in the value of certain
currencies, such as the Indian rupee or Philippine peso, against the currencies in which our revenue is recorded could
place us at a competitive disadvantage compared to service providers that benefit to a greater degree from such a
decrease and can, as a result, deliver services at a lower cost. In addition, our currency hedging activities are themselves
subject to risk. These include risks related to counterparty performance under hedging contracts, risks related to
ineffective hedges and risks related to currency fluctuations. We also face risks that extreme economic conditions,
political instability, or hostilities or disasters of the type described below could impact or perhaps eliminate the underlying
exposures that we are hedging. Such an event could lead to losses being recognized on the currency hedges then in
place that are not offset by anticipated changes in the underlying hedge exposure.
Our business could be materially adversely affected if we incur legal liability.
We are subject to, and may become a party to, a variety of litigation or other claims and suits that arise from time
to time in the ordinary course of our business. Our business is subject to the risk of litigation involving current and
former employees, clients, alliance partners, subcontractors, suppliers, competitors, shareholders, government
agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory
actions or other litigation. Regardless of the merits of the claims, the cost to defend current and future litigation may
be significant, and such matters can be time-consuming and divert management’s attention and resources. The results
of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some or
all of these legal disputes may result in materially adverse monetary damages, penalties or injunctive relief against
us. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult
to compete effectively or to obtain adequate insurance in the future.
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For example, we could be subject to significant legal liability and litigation expense if we fail to meet our contractual
obligations, contribute to internal control deficiencies of a client or otherwise breach obligations to third parties, including
clients, alliance partners, employees and former employees, and other parties with whom we conduct business, or if
our subcontractors breach or dispute the terms of our agreements with them and impede our ability to meet our
obligations to our clients. We may enter into agreements with non-standard terms because we perceive an important
economic opportunity or because our personnel did not adequately follow our contracting guidelines. In addition, the
contracting practices of competitors, along with the demands of increasingly sophisticated clients, may cause contract
terms and conditions that are unfavorable to us to become new standards in the marketplace. We may find ourselves
committed to providing services or solutions that we are unable to deliver or whose delivery will reduce our profitability
or cause us financial loss. If we cannot or do not meet our contractual obligations and if our potential liability is not
adequately limited through the terms of our agreements, liability limitations are not enforced or a third party alleges
fraud or other wrongdoing to prevent us from relying upon those contractual protections, we might face significant legal
liability and litigation expense and our results of operations could be materially adversely affected. In addition, as we
expand our services and solutions into new areas, such as taking over the operation of certain portions of our clients’
businesses, which increasingly include the operation of functions and systems that are critical to the core businesses
of our clients, we may be exposed to additional operational, regulatory or other risks specific to these new areas,
including risks related to data security. A failure of a client’s system based on our services or solutions could also
subject us to a claim for significant damages that could materially adversely affect our results of operations.
While we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts
of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable. Even if we believe
a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons,
which may affect the timing and, if they prevail, the amount of our recovery.
Our work with government clients exposes us to additional risks inherent in the government contracting
environment.
Our clients include national, provincial, state and local governmental entities. Our government work carries various
risks inherent in the government contracting process. These risks include, but are not limited to, the following:
• Government entities, particularly in the United States, often reserve the right to audit our contract costs and
conduct inquiries and investigations of our business practices and compliance with government contract
requirements. U.S. government agencies, including the Defense Contract Audit Agency, routinely audit our
contract costs, including allocated indirect costs, for compliance with the Cost Accounting Standards and the
Federal Acquisition Regulation. These agencies also conduct reviews and investigations and make inquiries
regarding our accounting and other systems in connection with our performance and business practices with
respect to our government contracts. Negative findings from existing and future audits, investigations or
inquiries could affect our future sales and profitability by preventing us, by operation of law or in practice, from
receiving new government contracts for some period of time. In addition, if the U.S. government concludes
that certain costs are not reimbursable, have not been properly determined or are based on outdated estimates
of our work, then we will not be allowed to bill for such costs, may have to refund money that has already
been paid to us or could be required to retroactively and prospectively adjust previously agreed to billing or
pricing rates for our work. Negative findings from existing and future audits of our business systems, including
our accounting system, may result in the U.S. government preventing us from billing, at least temporarily, a
percentage of our costs. As a result of prior negative findings in connection with audits, investigations and
inquiries, we have from time to time experienced some of the adverse consequences described above and
may in the future experience further adverse consequences, which could materially adversely affect our future
results of operations.
•
If a government client discovers improper or illegal activities in the course of audits or investigations, we may
become subject to various civil and criminal penalties, including those under the civil U.S. False Claims Act,
and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of
payments, fines and suspensions or debarment from doing business with other agencies of that government.
The inherent limitations of internal controls may not prevent or detect all improper or illegal activities.
• U.S. government contracting regulations impose strict compliance and disclosure obligations. Disclosure is
required if certain company personnel have knowledge of “credible evidence” of a violation of federal criminal
laws involving fraud, conflict of interest, bribery or improper gratuity, a violation of the civil U.S. False Claims
Act or receipt of a significant overpayment from the government. Failure to make required disclosures could
be a basis for suspension and/or debarment from federal government contracting in addition to breach of the
specific contract and could also impact contracting beyond the U.S. federal level. Reported matters also could
lead to audits or investigations and other civil, criminal or administrative sanctions.
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• Government contracts are subject to heightened reputational and contractual risks compared to contracts
with commercial clients. For example, government contracts and the proceedings surrounding them are often
subject to more extensive scrutiny and publicity. Negative publicity, including an allegation of improper or
illegal activity, regardless of its accuracy, may adversely affect our reputation.
• Terms and conditions of government contracts also tend to be more onerous and are often more difficult to
negotiate. For example, these contracts often contain high or unlimited liability for breaches and feature less
favorable payment terms and sometimes require us to take on liability for the performance of third parties.
• Government entities typically fund projects through appropriated monies. While these projects are often
planned and executed as multi-year projects, government entities usually reserve the right to change the
scope of or terminate these projects for lack of approved funding and/or at their convenience. Changes in
government or political developments, including budget deficits, shortfalls or uncertainties, government
spending reductions or other debt constraints could result in our projects being reduced in price or scope or
terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits
on work completed prior to the termination. Furthermore, if insufficient funding is appropriated to the
government entity to cover termination costs, we may not be able to fully recover our investments.
• Political and economic factors such as pending elections, the outcome of recent elections, changes in
leadership among key executive or legislative decision makers, revisions to governmental tax or other policies
and reduced tax revenues can affect the number and terms of new government contracts signed or the speed
at which new contracts are signed, decrease future levels of spending and authorizations for programs that
we bid, shift spending priorities to programs in areas for which we do not provide services and/or lead to
changes in enforcement or how compliance with relevant rules or laws is assessed.
• Legislative and executive proposals remain under consideration or could be proposed in the future, which, if
enacted, could limit or even prohibit our eligibility to be awarded state or federal government contracts in the
United States in the future or could include requirements that would otherwise affect our results of operations.
Various U.S. federal and state legislative proposals have been introduced and/or enacted in recent years that
deny government contracts to certain U.S. companies that reincorporate or have reincorporated outside the
United States. While Accenture was not a U.S. company that reincorporated outside the United States, it is
possible that these contract bans and other legislative proposals could be applied in a way that negatively
affects Accenture.
The occurrences or conditions described above could affect not only our business with the particular government
entities involved, but also our business with other entities of the same or other governmental bodies or with certain
commercial clients, and could have a material adverse effect on our business or our results of operations.
We might not be successful at identifying, acquiring, investing in or integrating businesses, entering into joint
ventures or divesting businesses.
We expect to continue pursuing strategic and targeted acquisitions, investments and joint ventures to enhance
or add to our skills and capabilities or offerings of services and solutions, or to enable us to expand in certain geographic
and other markets. Depending on the opportunities available, we may increase the amount of capital invested in such
opportunities. We may not successfully identify suitable investment opportunities. We also might not succeed in
completing targeted transactions or achieve desired results of operations. Furthermore, we face risks in successfully
integrating any businesses we might acquire or create through a joint venture. Ongoing business may be disrupted,
and our management’s attention may be diverted by acquisition, investment, transition or integration activities. In
addition, we might need to dedicate additional management and other resources, and our organizational structure
could make it difficult for us to efficiently integrate acquired businesses into our ongoing operations and assimilate and
retain employees of those businesses into our culture and operations. Acquisitions or joint ventures may result in
significant costs and expenses, including those related to retention payments, equity compensation, severance pay,
early retirement costs, intangible asset amortization and asset impairment charges, assumed litigation and other
liabilities, and legal, accounting and financial advisory fees, which could negatively affect our profitability. We may
have difficulties as a result of entering into new markets where we have limited or no direct prior experience or where
competitors may have stronger market positions.
We might fail to realize the expected benefits or strategic objectives of any acquisition, investment or joint venture
we undertake. We might not achieve our expected return on investment or may lose money. We may be adversely
impacted by liabilities that we assume from a company we acquire or in which we invest, including from that company’s
known and unknown obligations, intellectual property or other assets, terminated employees, current or former clients
or other third parties. In addition, we may fail to identify or adequately assess the magnitude of certain liabilities,
shortcomings or other circumstances prior to acquiring, investing in or partnering with a company, including potential
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exposure to regulatory sanctions or liabilities resulting from an acquisition target’s previous activities. If any of these
circumstances occurs, they could result in unexpected legal or regulatory exposure, unfavorable accounting treatment,
unexpected increases in taxes or other adverse effects on our business. In addition, we have a lesser degree of control
over the business operations of the joint ventures and businesses in which we have made minority investments. This
lesser degree of control may expose us to additional reputational, financial, legal, compliance or operational risks.
Litigation, indemnification claims and other unforeseen claims and liabilities may arise from the acquisition or operation
of acquired businesses. For example, we may face litigation or other claims as a result of certain terms and conditions
of the acquisition agreement, such as earnout payments or closing net asset adjustments. Alternatively, shareholder
litigation may arise as a result of proposed acquisitions. If we are unable to complete the number and kind of investments
for which we plan, or if we are inefficient or unsuccessful at integrating any acquired businesses into our operations,
we may not be able to achieve our planned rates of growth or improve our market share, profitability or competitive
position in specific markets or services.
We periodically evaluate, and have engaged in, the disposition of assets and businesses. Divestitures could
involve difficulties in the separation of operations, services, products and personnel, the diversion of management’s
attention, the disruption of our business and the potential loss of key employees. After reaching an agreement with a
buyer for the disposition of a business, the transaction may be subject to the satisfaction of pre-closing conditions as
well as to obtaining necessary regulatory and government approvals, which, if not satisfied or obtained, may prevent
us from completing the transaction. Divestitures may also involve continued financial involvement in the divested assets
and businesses, such as indemnities or other financial obligations, in which the performance of the divested assets
or businesses could impact our results of operations. Any divestiture we undertake could adversely affect our results
of operations.
Our Global Delivery Network is increasingly concentrated in India and the Philippines, which may expose us
to operational risks.
Our business model is dependent on our Global Delivery Network, which includes Accenture personnel based
at more than 50 delivery centers around the world. While these delivery centers are located throughout the world, we
have based large portions of our delivery network in India, where we have the largest number of people in our delivery
network located, and the Philippines, where we have the second largest number of people located. Concentrating our
Global Delivery Network in these locations presents a number of operational risks, many of which are beyond our
control. For example, natural disasters of the type described below, some of which India and the Philippines have
experienced and other countries may experience, could impair the ability of our people to safely travel to and work in
our facilities and disrupt our ability to perform work through our delivery centers. Additionally, both India and the
Philippines have experienced, and other countries may experience, political instability, worker strikes, civil unrest and
hostilities with neighboring countries. Military activity or civil hostilities in the future, as well as terrorist activities and
other conditions, which are described more fully below, could significantly disrupt our ability to perform work through
our delivery centers. Our business continuity and disaster recovery plans may not be effective, particularly if catastrophic
events occur. If any of these circumstances occurs, we have a greater risk that the interruptions in communications
with our clients and other Accenture locations and personnel, and any down-time in important processes we operate
for clients, could result in a material adverse effect on our results of operations and our reputation in the marketplace.
As a result of our geographically diverse operations and our growth strategy to continue geographic
expansion, we are more susceptible to certain risks.
We have offices and operations in more than 200 cities in 55 countries around the world. One aspect of our
growth strategy is to continue to expand in key markets around the world. Our growth strategy might not be successful.
If we are unable to manage the risks of our global operations and geographic expansion strategy, including international
hostilities, terrorist activities, natural disasters, security breaches, failure to maintain compliance with our clients’ control
requirements and multiple legal and regulatory systems, our results of operations and ability to grow could be materially
adversely affected. In addition, emerging markets generally involve greater financial and operational risks, such as
those described below, than our more mature markets. Negative or uncertain political climates in countries or
geographies where we operate could also adversely affect us.
International hostilities, terrorist activities, natural disasters, pandemics and infrastructure disruptions could
prevent us from effectively serving our clients and thus adversely affect our results of operations. Acts of terrorist
violence; political unrest; armed regional and international hostilities and international responses to these hostilities;
natural disasters, volcanic eruptions, floods and other severe weather conditions; health emergencies or pandemics
or the threat of or perceived potential for these events; and other acts of god could have a negative impact on us.
These events could adversely affect our clients’ levels of business activity and precipitate sudden and significant
changes in regional and global economic conditions and cycles. These events also pose significant risks to our people
and to physical facilities and operations around the world, whether the facilities are ours or those of our alliance partners
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or clients. By disrupting communications and travel and increasing the difficulty of obtaining and retaining highly skilled
and qualified personnel, these events could make it difficult or impossible for us to deliver our services and solutions
to our clients. Extended disruptions of electricity, other public utilities or network services at our facilities, as well as
system failures at, or security breaches in, our facilities or systems, could also adversely affect our ability to serve our
clients. We might be unable to protect our people, facilities and systems against all such occurrences. We generally
do not have insurance for losses and interruptions caused by terrorist attacks, conflicts and wars. If these disruptions
prevent us from effectively serving our clients, our results of operations could be adversely affected.
We could be subject to strict restrictions on the movement of cash and the exchange of foreign currencies. In
some countries, we could be subject to strict restrictions on the movement of cash and the exchange of foreign
currencies, which would limit our ability to use this cash across our global operations and expose us to more extreme
currency fluctuations. This risk could increase as we continue our geographic expansion in key markets around the
world, which include emerging markets that are more likely to impose these restrictions than more established markets.
Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and
violation of these regulations could harm our business. We are subject to numerous, and sometimes conflicting, legal
regimes on matters as diverse as anticorruption, import/export controls, content requirements, trade restrictions, tariffs,
taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, anti-competition,
anti-money-laundering, data privacy and protection, wage-and-hour standards, and employment and labor relations.
The global nature of our operations, including emerging markets where legal systems may be less developed or
understood by us, and the diverse nature of our operations across a number of regulated industries, further increase
the difficulty of compliance. Compliance with diverse legal requirements is costly, time-consuming and requires
significant resources. Violations of one or more of these regulations in the conduct of our business could result in
significant fines, criminal sanctions against us and/or our employees, prohibitions on doing business and damage to
our reputation. Violations of these regulations in connection with the performance of our obligations to our clients also
could result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and
other reputational damage and restrictions on our ability to effectively carry out our contractual obligations and thereby
expose us to potential claims from our clients. Due to the varying degrees of development of the legal systems of the
countries in which we operate, local laws may not be well developed or provide sufficiently clear guidance and may
be insufficient to protect our rights.
In particular, in many parts of the world, including countries in which we operate and/or seek to expand, practices
in the local business community might not conform to international business standards and could violate anticorruption
laws, or regulations, including the U.S. Foreign Corrupt Practices Act and the UK Bribery Act 2010. Our employees,
subcontractors, vendors, agents, alliance or joint venture partners, the companies we acquire and their employees,
subcontractors, vendors and agents, and other third parties with which we associate, could take actions that violate
policies or procedures designed to promote legal and regulatory compliance or applicable anticorruption laws or
regulations. Violations of these laws or regulations by us, our employees or any of these third parties could subject us
to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the
violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, including
U.S. federal contracting, any of which could materially adversely affect our business, including our results of operations
and our reputation.
Changes in laws and regulations could also mandate significant and costly changes to the way we implement
our services and solutions or could impose additional taxes on our services and solutions. For example, changes in
laws and regulations to limit using off-shore resources in connection with our work or to penalize companies that use
off-shore resources, which have been proposed from time to time in various jurisdictions, could adversely affect our
results of operations. Such changes may result in contracts being terminated or work being transferred on-shore,
resulting in greater costs to us. In addition, these changes could have a negative impact on our ability to obtain future
work from government clients.
Adverse changes to our relationships with key alliance partners or in the business of our key alliance partners
could adversely affect our results of operations.
We have alliances with companies whose capabilities complement our own. A very significant portion of our
services and solutions are based on technology or software provided by a few major providers that are our alliance
partners. See “Business—Alliances.” The priorities and objectives of our alliance partners may differ from ours. As
most of our alliance relationships are non-exclusive, our alliance partners are not prohibited from competing with us
or forming closer or preferred arrangements with our competitors. One or more of our key alliance partners may be
acquired by a competitor, or key alliance partners might merge with each other, either of which could reduce our access
over time to the technology or software provided by those partners. In addition, our alliance partners could experience
reduced demand for their technology or software, including, for example, in response to changes in technology, which
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could lessen related demand for our services and solutions. If we do not obtain the expected benefits from our alliance
relationships for any reason, we may be less competitive, our ability to offer attractive solutions to our clients may be
negatively affected, and our results of operations could be adversely affected.
Our services or solutions could infringe upon the intellectual property rights of others or we might lose our
ability to utilize the intellectual property of others.
We cannot be sure that our services and solutions, including, for example, our software solutions, or the solutions
of others that we offer to our clients, do not infringe on the intellectual property rights of third parties, and these third
parties could claim that we or our clients are infringing upon their intellectual property rights. These claims could harm
our reputation, cause us to incur substantial costs or prevent us from offering some services or solutions in the future.
Any related proceedings could require us to expend significant resources over an extended period of time. In most of
our contracts, we agree to indemnify our clients for expenses and liabilities resulting from claimed infringements of
the intellectual property rights of third parties. In some instances, the amount of these indemnities could be greater
than the revenues we receive from the client. Any claims or litigation in this area could be time-consuming and costly,
damage our reputation and/or require us to incur additional costs to obtain the right to continue to offer a service or
solution to our clients. If we cannot secure this right at all or on reasonable terms, or we cannot substitute alternative
technology, our results of operations could be materially adversely affected. The risk of infringement claims against
us may increase as we expand our industry software solutions and continue to develop and license our software to
multiple clients. Additionally, in recent years, individuals and firms have purchased intellectual property assets in order
to assert claims of infringement against technology providers and customers that use such technology. Any such action
naming us or our clients could be costly to defend or lead to an expensive settlement or judgment against us. Moreover,
such an action could result in an injunction being ordered against our client or our own services or operations, causing
further damages.
In addition, we rely on third-party software in providing some of our services and solutions. If we lose our ability
to continue using such software for any reason, including because it is found to infringe the rights of others, we will
need to obtain substitute software or seek alternative means of obtaining the technology necessary to continue to
provide such services and solutions. Our inability to replace such software, or to replace such software in a timely or
cost-effective manner, could materially adversely affect our results of operations.
If we are unable to protect our intellectual property rights from unauthorized use or infringement by third
parties, our business could be adversely affected.
Our success depends, in part, upon our ability to protect our proprietary methodologies and other intellectual
property. Existing laws of the various countries in which we provide services or solutions offer only limited protection
of our intellectual property rights, and the protection in some countries may be very limited. We rely upon a combination
of confidentiality policies, nondisclosure and other contractual arrangements, and patent, trade secret, copyright and
trademark laws to protect our intellectual property rights. These laws are subject to change at any time and could
further limit our ability to protect our intellectual property. There is uncertainty concerning the scope of available
intellectual property protection for software and business methods, which are fields in which we rely on intellectual
property laws to protect our rights. Our intellectual property rights may not prevent competitors from reverse engineering
our proprietary information or independently developing products and services similar to or duplicative of ours. Further,
the steps we take in this regard might not be adequate to prevent or deter infringement or other misappropriation of
our intellectual property by competitors, former employees or other third parties, and we might not be able to detect
unauthorized use of, or take appropriate and timely steps to enforce, our intellectual property rights. Enforcing our
rights might also require considerable time, money and oversight, and we may not be successful in enforcing our
rights.
Our ability to attract and retain business and employees may depend on our reputation in the marketplace.
We believe the Accenture brand name and our reputation are important corporate assets that help distinguish
our services and solutions from those of competitors and also contribute to our efforts to recruit and retain talented
employees. However, our corporate reputation is potentially susceptible to material damage by events such as disputes
with clients, cybersecurity breaches or service outages, internal control deficiencies, delivery failures, compliance
violations, government investigations or legal proceedings. Similarly, our reputation could be damaged by actions or
statements of current or former clients, directors, employees, competitors, vendors, alliance partners, our joint ventures
or joint venture partners, adversaries in legal proceedings, legislators or government regulators, as well as members
of the investment community or the media. There is a risk that negative information about Accenture, even if based
on rumor or misunderstanding, could adversely affect our business. Damage to our reputation could be difficult,
expensive and time-consuming to repair, could make potential or existing clients reluctant to select us for new
engagements, resulting in a loss of business, and could adversely affect our recruitment and retention efforts. Damage
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to our reputation could also reduce the value and effectiveness of the Accenture brand name and could reduce investor
confidence in us, materially adversely affecting our share price.
If we are unable to manage the organizational challenges associated with our size, we might be unable to
achieve our business objectives.
As of August 31, 2016, we had approximately 384,000 employees worldwide. Our size and scale present
significant management and organizational challenges. It might become increasingly difficult to maintain effective
standards across a large enterprise and effectively institutionalize our knowledge. It might also become more difficult
to maintain our culture, effectively manage and monitor our personnel and operations and effectively communicate
our core values, policies and procedures, strategies and goals, particularly given our world-wide operations. The size
and scope of our operations increase the possibility that we will have employees who engage in unlawful or fraudulent
activity, or otherwise expose us to unacceptable business risks, despite our efforts to train them and maintain internal
controls to prevent such instances. For example, employee misconduct could involve the improper use of our clients’
sensitive or confidential information or the failure to comply with legislation or regulations regarding the protection of
sensitive or confidential information. Furthermore, the inappropriate use of social networking sites by our employees
could result in breaches of confidentiality, unauthorized disclosure of non-public company information or damage to
our reputation. If we do not continue to develop and implement the right processes and tools to manage our enterprise
and instill our culture and core values into all of our employees, our ability to compete successfully and achieve our
business objectives could be impaired. In addition, from time to time, we have made, and may continue to make,
changes to our operating model, including how we are organized, as the needs and size of our business change, and
if we do not successfully implement the changes, our business and results of operation may be negatively impacted.
We make estimates and assumptions in connection with the preparation of our consolidated financial
statements, and any changes to those estimates and assumptions could adversely affect our financial results.
Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles.
The application of generally accepted accounting principles requires us to make estimates and assumptions about
certain items and future events that affect our reported financial condition, and our accompanying disclosure with
respect to, among other things, revenue recognition and income taxes. We base our estimates on historical experience,
contractual commitments and on various other assumptions that we believe to be reasonable under the circumstances
and at the time they are made. These estimates and assumptions involve the use of judgment and are subject to
significant uncertainties, some of which are beyond our control. If our estimates, or the assumptions underlying such
estimates, are not correct, actual results may differ materially from our estimates, and we may need to, among other
things, adjust revenues or accrue additional charges that could adversely affect our results of operations.
Many of our contracts include payments that link some of our fees to the attainment of performance or business
targets and/or require us to meet specific service levels. This could increase the variability of our revenues
and impact our margins.
Many of our contracts include clauses that tie our compensation to the achievement of agreed-upon performance
standards or milestones. If we fail to satisfy these measures, it could significantly reduce or eliminate our fees under
the contracts, increase the cost to us of meeting performance standards or milestones, delay expected payments or
subject us to potential damage claims under the contract terms. Clients also often have the right to terminate a contract
and pursue damage claims under the contract for serious or repeated failure to meet these service commitments. We
also have a number of contracts in which a portion of our compensation depends on performance measures such as
cost-savings, revenue enhancement, benefits produced, business goals attained and adherence to schedule. These
goals can be complex and may depend on our clients’ actual levels of business activity or may be based on assumptions
that are later determined not to be achievable or accurate. These provisions could increase the variability in revenues
and margins earned on those contracts.
Our results of operations and share price could be adversely affected if we are unable to maintain effective
internal controls.
The accuracy of our financial reporting is dependent on the effectiveness of our internal controls. We are required
to provide a report from management to our shareholders on our internal control over financial reporting that includes
an assessment of the effectiveness of these controls. Internal control over financial reporting has inherent limitations,
including human error, the possibility that controls could be circumvented or become inadequate because of changed
conditions, and fraud. Because of these inherent limitations, internal control over financial reporting might not prevent
or detect all misstatements or fraud. If we cannot maintain and execute adequate internal control over financial reporting
or implement required new or improved controls that provide reasonable assurance of the reliability of the financial
reporting and preparation of our financial statements for external use, we could suffer harm to our reputation, incur
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incremental compliance costs, fail to meet our public reporting requirements on a timely basis, be unable to properly
report on our business and our results of operations, or be required to restate our financial statements, and our results
of operations, our share price and our ability to obtain new business could be materially adversely affected.
We are incorporated in Ireland and a significant portion of our assets are located outside the United States.
As a result, it might not be possible for shareholders to enforce civil liability provisions of the federal or state
securities laws of the United States. We may also be subject to criticism and negative publicity related to our
incorporation in Ireland.
We are organized under the laws of Ireland, and a significant portion of our assets are located outside the United
States. A shareholder who obtains a court judgment based on the civil liability provisions of U.S. federal or state
securities laws may be unable to enforce the judgment against us in Ireland or in countries other than the United States
where we have assets. In addition, there is some doubt as to whether the courts of Ireland and other countries would
recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities
provisions of the federal or state securities laws of the United States or would hear actions against us or those persons
based on those laws. We have been advised that the United States and Ireland do not currently have a treaty providing
for the reciprocal recognition and enforcement of judgments in civil and commercial matters. The laws of Ireland do,
however, as a general rule, provide that the judgments of the courts of the United States have the same validity in
Ireland as if rendered by Irish Courts. Certain important requirements must be satisfied before the Irish Courts will
recognize a U.S. judgment. The originating court must have been a court of competent jurisdiction, the judgment must
be final and conclusive and the judgment may not be recognized if it was obtained by fraud or its recognition would
be contrary to Irish public policy. Any judgment obtained in contravention of the rules of natural justice or that is
irreconcilable with an earlier foreign judgment would not be enforced in Ireland. Similarly, judgments might not be
enforceable in countries other than the United States where we have assets.
Some companies that conduct substantial business in the United States but which have a parent domiciled in
certain other jurisdictions have been criticized as improperly avoiding U.S. taxes or creating an unfair competitive
advantage over other U.S. companies. Accenture never conducted business under a U.S. parent company and pays
U.S. taxes on all of its U.S. operations. Nonetheless, we could be subject to criticism in connection with our incorporation
in Ireland.
Irish law differs from the laws in effect in the United States and might afford less protection to shareholders.
Our shareholders could have more difficulty protecting their interests than would shareholders of a corporation
incorporated in a jurisdiction of the United States. As an Irish company, we are governed by the Companies Act. The
Companies Act differs in some significant, and possibly material, respects from laws applicable to U.S. corporations
and shareholders under various state corporation laws, including the provisions relating to interested directors, mergers
and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.
Under Irish law, the duties of directors and officers of a company are generally owed to the company only.
Shareholders of Irish companies do not generally have rights to take action against directors or officers of the company
under Irish law, and may only do so in limited circumstances. Directors of an Irish company must, in exercising their
powers and performing their duties, act with due care and skill, honestly and in good faith with a view to the best
interests of the company. Directors have a duty not to put themselves in a position in which their duties to the company
and their personal interests might conflict and also are under a duty to disclose any personal interest in any contract
or arrangement with the company or any of its subsidiaries. If a director or officer of an Irish company is found to have
breached his duties to that company, he could be held personally liable to the company in respect of that breach of
duty.
Under Irish law, we must have authority from our shareholders to issue any shares, including shares that are
part of the company’s authorized but unissued share capital. In addition, unless otherwise authorized by its
shareholders, when an Irish company issues shares for cash to new shareholders, it is required first to offer those
shares on the same or more favorable terms to existing shareholders on a pro-rata basis. If we are unable to obtain
these authorizations from our shareholders, or are otherwise limited by the terms of our authorizations, our ability to
issue shares under our equity compensation plans and, if applicable, to facilitate funding acquisitions or otherwise
raise capital could be adversely affected.
We might be unable to access additional capital on favorable terms or at all. If we raise equity capital, it may
dilute our shareholders’ ownership interest in us.
We might choose to raise additional funds through public or private debt or equity financings in order to:
•
take advantage of opportunities, including more rapid expansion;
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• acquire other businesses or assets;
•
repurchase shares from our shareholders;
• develop new services and solutions; or
•
respond to competitive pressures.
Any additional capital raised through the sale of equity could dilute shareholders’ ownership percentage in us.
Furthermore, any additional financing we need might not be available on terms favorable to us, or at all.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We have major offices in the world’s leading business centers, including Boston, Chicago, New York, San
Francisco, Dublin, Frankfurt, London, Madrid, Milan, Paris, Rome, Bangalore, Beijing, Manila, Mumbai, Sao Paolo,
Shanghai, Singapore, Sydney and Tokyo, among others. In total, we have offices and operations in more than 200 cities
in 55 countries around the world. We do not own any material real property. Substantially all of our office space is
leased under long-term leases with varying expiration dates. We believe that our facilities are adequate to meet our
needs in the near future.
ITEM 3. LEGAL PROCEEDINGS
The information set forth under “Legal Contingencies” in Note 15 (Commitments and Contingencies) to our
Consolidated Financial Statements under Part II, Item 8, “Financial Statements and Supplementary Data,” is
incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Our executive officers and persons chosen to become executive officers as of the date hereof are as follows:
Gianfranco Casati, 57, became our group chief executive—Growth Markets in January 2014. From September
2006 to January 2014, he served as our group chief executive—Products operating group. From April 2002 to September
2006, Mr. Casati was managing director of the Products operating group’s Europe operating unit. He also served as
Accenture’s country managing director for Italy and as chairman of our geographic council in its IGEM (Italy, Greece,
emerging markets) region, supervising Accenture offices in Italy, Greece and several Eastern European countries. Mr.
Casati has been with Accenture for 32 years.
Richard P. Clark, 55, became our chief accounting officer in September 2013 and has served as our corporate
controller since September 2010. Prior to that, Mr. Clark served as our senior managing director of investor relations
from September 2006 to September 2010. Previously he served as our finance director—Communications, Media &
Technology operating group from July 2001 to September 2006 and as our finance director—Resources operating
group from 1998 to July 2001. Mr. Clark has been with Accenture for 33 years.
Johan (Jo) G. Deblaere, 54, became our chief operating officer in September 2009 and has also served as our
chief executive—Europe since January 2014. From September 2006 to September 2009, Mr. Deblaere served as our
chief operating officer—Outsourcing. Prior to that, from September 2005 to September 2006, he led our global network
of business process outsourcing delivery centers. From September 2000 to September 2005, he had overall
responsibility for work with public-sector clients in Western Europe. Mr. Deblaere has been with Accenture for 31 years.
Chad T. Jerdee, 49, became our general counsel and chief compliance officer in June 2015. From August 2010
to June 2015, Mr. Jerdee served as deputy general counsel—Sales & Delivery. Previously, he served as legal lead for
the outsourcing sales legal team as well as for Accenture’s growth platforms. Mr. Jerdee has been with Accenture for
19 years.
Daniel T. London, 52, became our group chief executive—Health & Public Service operating group in June
2014. From 2009 to June 2014, Mr. London was senior managing director for Health & Public Service in North America.
Previously, he served as managing director of Accenture’s Finance & Performance Management global service line.
Mr. London has been with Accenture for 30 years.
Richard A. Lumb, 55, became our group chief executive—Financial Services operating group in December
2010. From June 2006 to December 2010, Mr. Lumb led our Financial Services operating group in Europe, Africa, the
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Middle East and Latin America. He also served as our managing director of business and market development—
Financial Services operating group from September 2005 to June 2006. Mr. Lumb has been with Accenture for 31
years.
Pierre Nanterme, 57, became chairman of the Board of Directors in February 2013 and has served as our chief
executive officer since January 2011. Mr. Nanterme was our group chief executive—Financial Services operating group
from September 2007 to December 2010. Prior to assuming this role, Mr. Nanterme held various leadership roles
throughout the Company, including serving as our chief leadership officer from May 2006 through September 2007
and our country managing director for France from November 2005 to September 2007. Mr. Nanterme has been a
director since October 2010 and has been with Accenture for 33 years. In addition to serving on Accenture plc’s board
of directors, Mr. Nanterme serves on the board of its subsidiary Accenture Holdings plc.
Jean-Marc Ollagnier, 54, became our group chief executive—Resources operating group in March 2011. From
September 2006 to March 2011, Mr. Ollagnier led our Resources operating group in Europe, Latin America, the Middle
East and Africa. Previously, he served as our global managing director—Financial Services Solutions group and as
our geographic unit managing director—Gallia. Mr. Ollagnier has been with Accenture for 30 years.
David P. Rowland, 55, became our chief financial officer in July 2013. From October 2006 to July 2013, he was
our senior vice president—Finance. Previously, Mr. Rowland was our managing director—Finance Operations from
July 2001 to October 2006. Prior to assuming that role, he served as our finance director—Communications, Media
& Technology and as our finance director—Products. Mr. Rowland has been with Accenture for 33 years.
Robert E. Sell, 54, became our group chief executive—Communications, Media & Technology operating group
in March 2012. From September 2007 to March 2012, Mr. Sell led our Communications, Media & Technology operating
group in North America. Prior to assuming that role, he served in a variety of leadership roles throughout Accenture,
serving clients in a number of industries. Mr. Sell has been with Accenture for 32 years.
Ellyn J. Shook, 53, became our chief leadership officer in December 2015 and has also served as our chief
human resources officer since March 2014. From 2012 to March 2014, Ms. Shook was our senior managing director
—Human Resources and head of Accenture’s Human Resources Centers of Expertise. From 2004 to 2011, she served
as the global human resources lead for career management, performance management, total rewards, employee
engagement and mergers and acquisitions. Ms. Shook has been with Accenture for 28 years.
Julie Spellman Sweet, 49, became our group chief executive—North America in June 2015. From March 2010
to June 2015, she served as our general counsel, secretary and chief compliance officer. Prior to joining Accenture,
Ms. Sweet was, for 10 years, a partner in the Corporate department of the law firm of Cravath, Swaine & Moore LLP,
which she joined as an associate in 1992. Ms. Sweet has been with Accenture for 6 years.
Alexander M. van ’t Noordende, 53, became our group chief executive—Products operating group in January
2014. From March 2011 to January 2014, he served as our group chief executive—Management Consulting. Mr. van
’t Noordende was our group chief executive—Resources operating group from September 2006 to March 2011. Prior
to assuming that role, he led our Resources operating group in Southern Europe, Africa, the Middle East and Latin
America, and served as managing partner of the Resources operating group in France, Belgium and the Netherlands.
From 2001 until September 2006, he served as our country managing director for the Netherlands. Mr. van ’t Noordende
has been with Accenture for 29 years.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Price Range of Accenture plc Class A Ordinary Shares
Accenture plc Class A ordinary shares are traded on the New York Stock Exchange under the symbol “ACN.”
The New York Stock Exchange is the principal United States market for these shares.
The following table sets forth, on a per share basis for the periods indicated, the high and low sale prices for
Accenture plc Class A ordinary shares as reported by the New York Stock Exchange.
Fiscal 2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal 2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal 2017
First Quarter (through October 14, 2016)
Price Range
High
Low
86.49
91.94
97.95
105.37
109.86
109.65
119.72
120.78
$
$
$
$
$
$
$
$
73.98
81.66
86.40
88.43
91.68
91.40
101.00
108.66
124.96 $
108.83
$
$
$
$
$
$
$
$
$
The closing sale price of an Accenture plc Class A ordinary share as reported by the New York Stock Exchange
consolidated tape as of October 14, 2016 was $118.25. As of October 14, 2016, there were 284 holders of record of
Accenture plc Class A ordinary shares.
There is no trading market for Accenture plc Class X ordinary shares. As of October 14, 2016, there were 603
holders of record of Accenture plc Class X ordinary shares.
To ensure that members of Accenture Leadership continue to maintain equity ownership levels that we consider
meaningful, we require current members of Accenture Leadership to comply with the Accenture Equity Ownership
Requirement Policy. This policy requires members of Accenture Leadership to own Accenture equity valued at a multiple
(ranging from 1/2 to 6) of their base compensation determined by their position level.
Dividend Policy
On November 17, 2014, May 15, 2015, November 13, 2015 and May 13, 2016, Accenture plc paid a semi-annual
cash dividend of $1.02, $1.02, $1.10 and $1.10 per share, respectively, on our Class A ordinary shares, and Accenture
Holdings plc paid a semi-annual cash dividend of $1.02, $1.02, $1.10 and $1.10 per share, respectively, on its ordinary
shares.
Future dividends on Accenture plc Class A ordinary shares and Accenture Holdings plc ordinary shares, if any,
and the timing of declaration of any such dividends, will be at the discretion of the Board of Directors of Accenture plc
and will depend on, among other things, our results of operations, cash requirements and surplus, financial condition,
contractual restrictions and other factors that the Board of Directors of Accenture plc may deem relevant, as well as
our ability to pay dividends in compliance with the Companies Act.
In certain circumstances, as an Irish tax resident company, we may be required to deduct Irish dividend withholding
tax (“DWT”) (currently at the rate of 20%) from dividends paid to our shareholders. Shareholders resident in “relevant
territories” (including countries that are European Union member states (other than Ireland), the United States and
other countries with which Ireland has a tax treaty) may be exempted from Irish DWT. However, shareholders residing
in other countries will generally be subject to Irish DWT.
Recent Sales of Unregistered Securities
None.
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Purchases and Redemptions of Accenture plc Class A Ordinary Shares and Class X Ordinary Shares
The following table provides information relating to our purchases of Accenture plc Class A ordinary shares and
redemptions of Accenture plc Class X ordinary shares during the fourth quarter of fiscal 2016. For year-to-date
information on all share purchases, redemptions and exchanges by the Company and further discussion of our share
purchase activity, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Liquidity and Capital Resources—Share Purchases and Redemptions.”
Period
June 1, 2016 — June 30, 2016
Class A ordinary shares
Class X ordinary shares
July 1, 2016 — July 31, 2016
Class A ordinary shares
Class X ordinary shares
August 1, 2016 — August 31, 2016
Class A ordinary shares
Class X ordinary shares
Total
Total Number of
Shares
Purchased
Average
Price Paid
per Share (1)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (2)
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the Plans or
Programs (3)
(in millions of U.S. dollars)
1,342,918
$
116.73
1,330,550
$
17,448
$ 0.0000225
—
2,334,486
$
113.95
1,444,155
$
64,830
$ 0.0000225
—
1,703,494
$
113.75
1,667,532
$
187,020
$ 0.0000225
—
5,758
—
5,583
—
5,387
—
Class A ordinary shares (4)
Class X ordinary shares (5)
5,380,898
$
114.58
4,442,237
269,298
$ 0.0000225
—
_______________
(1)
Average price paid per share reflects the total cash outlay for the period, divided by the number of shares
acquired, including those acquired by purchase or redemption for cash and any acquired by means of employee
forfeiture.
(2)
(3)
(4)
Since August 2001, the Board of Directors of Accenture plc has authorized and periodically confirmed a publicly
announced open-market share purchase program for acquiring Accenture plc Class A ordinary shares. During
the fourth quarter of fiscal 2016, we purchased 4,442,237 Accenture plc Class A ordinary shares under this
program for an aggregate price of $510 million. The open-market purchase program does not have an expiration
date.
As of August 31, 2016, our aggregate available authorization for share purchases and redemptions was $5,387
million, which management has the discretion to use for either our publicly announced open-market share
purchase program or our other share purchase programs. Since August 2001 and as of August 31, 2016, the
Board of Directors of Accenture plc has authorized an aggregate of $30,100 million for purchases and
redemptions of Accenture plc Class A ordinary shares, Accenture Holdings plc ordinary shares or Accenture
Canada Holdings Inc. exchangeable shares.
During the fourth quarter of fiscal 2016, Accenture purchased 938,661 Accenture plc Class A ordinary shares
in transactions unrelated to publicly announced share plans or programs. These transactions consisted of
acquisitions of Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations
due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary
shares under our various employee equity share plans. These purchases of shares in connection with employee
share plans do not affect our aggregate available authorization for our publicly announced open-market share
purchase and our other share purchase programs.
(5)
Accenture plc Class X ordinary shares are redeemable at their par value of $0.0000225 per share.
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Purchases and Redemptions of Accenture Holdings plc Ordinary Shares and Accenture Canada Holdings Inc.
Exchangeable Shares
The following table provides additional information relating to our purchases and redemptions of Accenture
Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares for cash during the fourth
quarter of fiscal 2016. We believe that the following table and footnotes provide useful information regarding the share
purchase and redemption activity of Accenture. Generally, purchases and redemptions of Accenture Holdings plc
ordinary shares and Accenture Canada Holdings Inc. exchangeable shares for cash and employee forfeitures reduce
shares outstanding for purposes of computing diluted earnings per share.
Period
Accenture Holdings plc
June 1, 2016 — June 30, 2016
July 1, 2016 — July 31, 2016
August 1, 2016 — August 31, 2016
Total
Accenture Canada Holdings Inc.
June 1, 2016 — June 30, 2016
July 1, 2016 — July 31, 2016
August 1, 2016 — August 31, 2016
Total
Total Number of
Shares
Purchased (1)
Average
Price Paid
per Share (2)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
Approximate Dollar Value of
Shares that May Yet Be
Purchased
Under the Plans
or Programs (3)
61,737
89,516
23,949
175,202
$
$
$
$
— $
— $
110.63
114.14
113.36
112.80
—
—
32,009
32,009
$
$
113.58
113.58
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
_______________
(1)
During the fourth quarter of fiscal 2016, we acquired a total of 175,202 Accenture Holdings plc ordinary shares
and 32,009 Accenture Canada Holdings Inc. exchangeable shares from current and former members of
Accenture Leadership and their permitted transferees by means of purchase or redemption for cash, or
employee forfeiture, as applicable. In addition, during the fourth quarter of fiscal 2016, we issued 105,589
Accenture plc Class A ordinary shares upon redemptions of an equivalent number of Accenture Holdings plc
ordinary shares pursuant to a registration statement.
(2)
(3)
Average price paid per share reflects the total cash outlay for the period, divided by the number of shares
acquired, including those acquired by purchase or redemption for cash and any acquired by means of employee
forfeiture.
For a discussion of our aggregate available authorization for share purchases and redemptions through either
our publicly announced open-market share purchase program or our other share purchase programs, see the
“Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs” column of the
“Purchases and Redemptions of Accenture plc Class A Ordinary Shares and Class X Ordinary Shares” table
above and the applicable footnote.
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ITEM 6. SELECTED FINANCIAL DATA
The data for fiscal 2016, 2015 and 2014 and as of August 31, 2016 and 2015 are derived from the audited
Consolidated Financial Statements and related Notes that are included elsewhere in this report. The data for fiscal
2013 and 2012 and as of August 31, 2014, 2013 and 2012 are derived from the audited Consolidated Financial
Statements and related Notes that are not included in this report. The selected financial data should be read in
conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our
Consolidated Financial Statements and related Notes included elsewhere in this report.
2016 (1)
2015 (2)
Fiscal
2014
(in millions of U.S. dollars)
2013 (3)
Income Statement Data
Revenues before reimbursements (“Net
revenues”)
Revenues
Operating income
Net income
Net income attributable to Accenture plc
_______________
$
32,883
$
31,048
$
30,002
$
28,563
$
34,798
32,914
31,875
30,394
4,810
4,350
4,112
4,436
3,274
3,054
4,301
3,176
2,941
4,339
3,555
3,282
2012
27,862
29,778
3,872
2,825
2,554
(1)
(2)
(3)
Includes the impact of $849 million pre-tax Gain on sale of businesses recorded during fiscal 2016. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of
Operations for Fiscal 2016 Compared to Fiscal 2015—Gain on Sale of Businesses.”
Includes the impact of a $64 million, pre-tax, Pension settlement charge recorded during fiscal 2015. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of
Operations for Fiscal 2016 Compared to Fiscal 2015—Pension Settlement Charge.”
Includes the impact of $274 million in reorganization benefits and $243 million in U.S. federal tax benefits
recorded during fiscal 2013.
Earnings Per Class A Ordinary Share
Basic
Diluted
Dividends per ordinary share
2016
2015
Fiscal
2014
2013
2012
$
6.58
$
4.87
$
4.64
$
5.08
$
6.45
2.20
4.76
2.04
4.52
1.86
4.93
1.62
3.97
3.84
1.35
August 31,
2016
August 31,
2015
August 31,
2014
(in millions of U.S. dollars)
August 31,
2013
Balance Sheet Data
Cash and cash equivalents
Total assets
Long-term debt, net of current portion
Accenture plc shareholders’ equity
$
4,906
$
4,361
$
4,921
$
5,632
$
20,609
24
7,555
18,203
26
6,134
17,930
26
5,732
16,867
26
4,960
27
August 31,
2012
6,641
16,665
—
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements
and related Notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis also contains
forward-looking statements and should also be read in conjunction with the disclosures and information contained in
“Disclosure Regarding Forward-Looking Statements” and “Risk Factors” in this Annual Report on Form 10-K.
We use the terms “Accenture,” “we,” the “Company,” “our” and “us” in this report to refer to Accenture plc and its
subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For
example, a reference to “fiscal 2016” means the 12-month period that ended on August 31, 2016. All references to
quarters, unless otherwise noted, refer to the quarters of our fiscal year.
We use the term “in local currency” so that certain financial results may be viewed without the impact of foreign
currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance.
Financial results “in local currency” are calculated by restating current period activity into U.S. dollars using the
comparable prior year period’s foreign currency exchange rates. This approach is used for all results where the
functional currency is not the U.S. dollar.
Overview
Revenues are driven by the ability of our executives to secure new contracts and to deliver services and solutions
that add value relevant to our clients’ current needs and challenges. The level of revenues we achieve is based on
our ability to deliver market-leading service offerings and to deploy skilled teams of professionals quickly and on a
global basis.
Our results of operations are affected by economic conditions, including macroeconomic conditions and levels
of business confidence. There continues to be significant volatility and economic and geopolitical uncertainty in many
markets around the world, which may impact our business. We continue to monitor the impact of this volatility and
uncertainty and seek to manage our costs in order to respond to changing conditions. There also continues to be
significant volatility in foreign currency exchange rates. The majority of our net revenues are denominated in currencies
other than the U.S. dollar, including the Euro and the U.K. pound. Unfavorable fluctuations in foreign currency exchange
rates have had and could have in the future a material effect on our financial results.
Revenues before reimbursements (“net revenues”) for the fourth quarter of fiscal 2016 increased 8% in U.S.
dollars and 9% in local currency compared to the fourth quarter of fiscal 2015. Net revenues for fiscal 2016 increased
6% in U.S. dollars and 10% in local currency compared to fiscal 2015. Demand for our services and solutions continued
to be strong, resulting in growth across all areas of our business. During the fourth quarter of fiscal 2016, revenue
growth in local currency was significant in Products and strong in Health & Public Service and Financial Services.
Communications, Media & Technology revenue growth in local currency was solid, while Resources was flat. Revenue
growth in local currency was very strong in consulting and solid in outsourcing during the fourth quarter of fiscal 2016.
While the business environment remained competitive, we experienced pricing improvement in several areas of our
business in fiscal 2016. We use the term “pricing” to mean the contract profitability or margin on the work that we sell.
In our consulting business, net revenues for the fourth quarter of fiscal 2016 increased 11% in U.S. dollars and
13% in local currency compared to the fourth quarter of fiscal 2015. Net consulting revenues for fiscal 2016 increased
10% in U.S. dollars and 15% in local currency compared to fiscal 2015. Consulting revenue growth in local currency
in the fourth quarter of fiscal 2016 was led by very significant growth in Products, as well as strong growth in Financial
Services, Health & Public Service and Communications, Media & Technology, while Resources had a slight decline.
We continue to experience growing demand for digital-related services and assisting clients with the adoption of new
technologies. In addition, clients continued to be focused on initiatives designed to deliver cost savings and operational
efficiency, as well as projects to integrate their global operations and grow and transform their businesses. Compared
to fiscal 2015, we continued to provide a greater proportion of systems integration consulting through use of lower
cost resources in our Global Delivery Network. This trend has resulted in work volume growing faster than revenue in
our systems integration business, and we expect this trend to continue.
In our outsourcing business, net revenues for the fourth quarter of fiscal 2016 increased 4% in U.S. dollars and
6% in local currency compared to the fourth quarter of fiscal 2015. Net outsourcing revenues for fiscal 2016 increased
1% in U.S. dollars and 6% in local currency compared to fiscal 2015. Outsourcing revenue growth in local currency in
the fourth quarter of fiscal 2016 was driven by very strong growth in Health & Public Service as well as solid growth
in Products and Financial Services. We are experiencing growing demand to assist clients with cloud enablement and
the operation and maintenance of digital-related services. In addition, clients continue to be focused on transforming
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their operations to improve effectiveness and save costs. Compared to fiscal 2015, we continued to provide a greater
proportion of application outsourcing through use of lower-cost resources in our Global Delivery Network.
As we are a global company, our revenues are denominated in multiple currencies and may be significantly
affected by currency exchange rate fluctuations. If the U.S. dollar strengthens against other currencies, resulting in
unfavorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be lower.
If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues, revenue
growth and results of operations in U.S. dollars may be higher. When compared to the same periods in fiscal 2015,
the U.S. dollar strengthened against many currencies during the fourth quarter and fiscal year ended August 31, 2016,
resulting in unfavorable currency translation and U.S. dollar revenue growth that was approximately 2% and 5% lower,
respectively, than our revenue growth in local currency. Assuming that exchange rates stay within recent ranges for
fiscal 2017, we estimate that our full fiscal 2017 revenue growth in U.S. dollars will be approximately equal to our
revenue growth in local currency.
The primary categories of operating expenses include Cost of services, Sales and marketing and General and
administrative costs. Cost of services is primarily driven by the cost of client-service personnel, which consists mainly
of compensation, subcontractor and other personnel costs, and non-payroll costs on outsourcing contracts. Cost of
services includes a variety of activities such as: contract delivery; recruiting and training; software development; and
integration of acquisitions. Sales and marketing costs are driven primarily by: compensation costs for business
development activities; marketing- and advertising-related activities; and certain acquisition-related costs. General
and administrative costs primarily include costs for non-client-facing personnel, information systems and office space.
Utilization for the fourth quarter of fiscal 2016 was 92%, up from 91% in the third quarter of fiscal 2016 and 90%
in the fourth quarter of fiscal 2015. We continue to hire to meet current and projected future demand. We proactively
plan and manage the size and composition of our workforce and take actions as needed to address changes in the
anticipated demand for our services and solutions, given that compensation costs are the most significant portion of
our operating expenses. Based on current and projected future demand, we have increased our headcount, the majority
of which serve our clients, to approximately 384,000 as of August 31, 2016, compared to approximately 358,000 as
of August 31, 2015. The year-over-year increase in our headcount reflects an overall increase in demand for our
services and solutions, as well as headcount added in connection with acquisitions. Annualized attrition, excluding
involuntary terminations, for the fourth quarter of fiscal 2016 was 16%, up from 15% in the third quarter of fiscal 2016
and 14% in the fourth quarter of fiscal 2015. We evaluate voluntary attrition, adjust levels of new hiring and use
involuntary terminations as means to keep our supply of skills and resources in balance with changes in client demand.
In addition, we adjust compensation in certain skill sets and geographies in order to attract and retain appropriate
numbers of qualified employees. For the majority of our personnel, compensation increases for fiscal 2016 became
effective December 1, 2015. We strive to adjust pricing and/or the mix of resources to reduce the impact of compensation
increases on our gross margin. Our ability to grow our revenues and maintain or increase our margin could be adversely
affected if we are unable to: keep our supply of skills and resources in balance with changes in the types or amounts
of services and solutions clients are demanding; recover increases in compensation; deploy our employees globally
on a timely basis; manage attrition; and/or effectively assimilate and utilize new employees.
Gross margin (Net revenues less Cost of services before reimbursable expenses as a percentage of Net revenues)
for the fourth quarter of fiscal 2016 was 31.3%, compared with 31.7% for the fourth quarter of fiscal 2015. Gross margin
for fiscal 2016 was 31.3%, compared with 31.6% for fiscal 2015. The reduction in gross margin for fiscal 2016 was
principally due to higher labor costs and higher costs associated with acquisition activities compared to fiscal 2015.
Sales and marketing and General and administrative costs as a percentage of net revenues were 17.2% for the
fourth quarter of fiscal 2016, compared with 17.9% for the fourth quarter of fiscal 2015. Sales and marketing and
General and administrative costs as a percentage of net revenues were 16.6% for fiscal 2016, compared with 17.1%
for fiscal 2015. We continuously monitor these costs and implement cost-management actions, as appropriate. For
fiscal 2016 compared to fiscal 2015, Sales and marketing costs as a percentage of net revenues decreased 40 basis
points principally due to improved operational efficiency in our business development activities, and General and
administrative costs as a percentage of net revenues decreased 10 basis points.
Operating expenses in fiscal 2015 included a Pension settlement charge of $64 million related to lump sum cash
payments made from our U.S. defined benefit pension plan to former employees who elected to receive such payments.
For additional information, see Note 10 (Retirement and Profit Sharing Plans) to our Consolidated Financial Statements
under Item 8, “Financial Statements and Supplementary Data.”
Operating margin (Operating income as a percentage of Net revenues) for the fourth quarter of fiscal 2016 was
14.1%, compared with 13.9% for the fourth quarter of fiscal 2015. Operating margin for fiscal 2016 was 14.6%, compared
with 14.3% for fiscal 2015. The Pension settlement charge of $64 million recorded in fiscal 2015 decreased operating
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margin by 20 basis points for fiscal 2015. Excluding the effect of the Pension settlement charge, operating margin for
fiscal 2015 would have been 14.5%.
During fiscal 2016, we recorded a $548 million gain on sale of business and $56 million in taxes related to the
divestiture of our Navitaire business, as well as a $301 million gain on sale of business and $48 million in taxes related
to the partial divestiture of our Duck Creek business. For additional information, see Note 5 (Business Combinations
and Divestitures) to our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary
Data.”
The effective tax rate for fiscal 2016 was 22.4%, compared with 25.8% for fiscal 2015. Absent the $849 million
Gain on sale of businesses and related $104 million in taxes recorded during fiscal 2016, our effective tax rate for
fiscal 2016 would have been 24.2%. Absent the $64 million Pension settlement charge and related $25 million in taxes
recorded during fiscal 2015, our effective tax rate for fiscal 2015 would have been 26.0%.
Diluted earnings per share were $6.45 for fiscal 2016, compared with $4.76 for fiscal 2015. The Gain on sale of
businesses, net of taxes, recorded during fiscal 2016 increased Diluted earnings per share by $1.11 in fiscal 2016.
The Pension settlement charge, net of taxes, recorded during fiscal 2015 decreased Diluted earnings per share by
$0.06 in fiscal 2015. Excluding these impacts, Diluted earnings per share would have been $5.34 and $4.82 for fiscal
2016 and 2015, respectively.
We have presented Operating income, operating margin, effective tax rate and Diluted earnings per share
excluding the impacts of the fiscal 2016 Gain on sale of businesses and the fiscal 2015 Pension settlement charge,
as we believe doing so facilitates understanding as to both the impacts of these items and our operating performance
in comparison to the prior period.
Our Operating income and Diluted earnings per share are affected by currency exchange rate fluctuations on
revenues and costs. Most of our costs are incurred in the same currency as the related net revenues. Where practical,
we seek to manage foreign currency exposure for costs not incurred in the same currency as the related net revenues,
such as the cost of our Global Delivery Network, by using currency protection provisions in our customer contracts
and through our hedging programs. We seek to manage our costs, taking into consideration the residual positive and
negative effects of changes in foreign exchange rates on those costs. For more information on our hedging programs,
see Note 7 (Derivative Financial Instruments) to our Consolidated Financial Statements under Item 8, “Financial
Statements and Supplementary Data.”
Bookings and Backlog
New bookings for the fourth quarter of fiscal 2016 were $8.99 billion, with consulting bookings of $4.81 billion
and outsourcing bookings of $4.18 billion. New bookings for fiscal 2016 were $35.39 billion, with consulting bookings
of $19.16 billion and outsourcing bookings of $16.23 billion.
We provide information regarding our new bookings, which include new contracts, including those acquired
through acquisitions, as well as renewals, extensions and changes to existing contracts, because we believe doing
so provides useful trend information regarding changes in the volume of our new business over time. New bookings
can vary significantly quarter to quarter depending in part on the timing of the signing of a small number of large
outsourcing contracts. The types of services and solutions clients are demanding and the pace and level of their
spending may impact the conversion of new bookings to revenues. For example, outsourcing bookings, which are
typically for multi-year contracts, generally convert to revenue over a longer period of time compared to consulting
bookings. Information regarding our new bookings is not comparable to, nor should it be substituted for, an analysis
of our revenues over time. New bookings involve estimates and judgments. There are no third-party standards or
requirements governing the calculation of bookings. We do not update our new bookings for material subsequent
terminations or reductions related to bookings originally recorded in prior fiscal years. New bookings are recorded
using then-existing foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange
rate fluctuations.
The majority of our contracts are terminable by the client on short notice, and some without notice. Accordingly,
we do not believe it is appropriate to characterize bookings attributable to these contracts as backlog. Normally, if a
client terminates a project, the client remains obligated to pay for commitments we have made to third parties in
connection with the project, services performed and reimbursable expenses incurred by us through the date of
termination.
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Critical Accounting Policies and Estimates
The preparation of our Consolidated Financial Statements in conformity with U.S. generally accepted accounting
principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported
amounts of revenues and expenses. We continually evaluate our estimates, judgments and assumptions based on
available information and experience. Because the use of estimates is inherent in the financial reporting process,
actual results could differ from those estimates. Certain of our accounting policies require higher degrees of judgment
than others in their application. These include certain aspects of accounting for revenue recognition and income taxes.
Revenue Recognition
Our contracts have different terms based on the scope, deliverables and complexity of the engagement, the
terms of which frequently require us to make judgments and estimates in recognizing revenues. We have many types
of contracts, including time-and-materials contracts, fixed-price contracts and contracts with features of both of these
contract types. In addition, some contracts include incentives related to costs incurred, benefits produced or adherence
to schedules that may increase the variability in revenues and margins earned on such contracts. We conduct rigorous
reviews prior to signing such contracts to evaluate whether these incentives are reasonably achievable.
We recognize revenues from technology integration consulting contracts using the percentage-of-completion
method of accounting, which involves calculating the percentage of services provided during the reporting period
compared with the total estimated services to be provided over the duration of the contract. Our contracts for technology
integration consulting services generally span six months to two years. Estimated revenues used in applying the
percentage-of-completion method include estimated incentives for which achievement of defined goals is deemed
probable. This method is followed where reasonably dependable estimates of revenues and costs can be made.
Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and recorded
revenues and estimated costs are subject to revision as the contract progresses. Such revisions may result in increases
or decreases to revenues and income and are reflected in the Consolidated Financial Statements in the periods in
which they are first identified. If our estimates indicate that a contract loss will occur, a loss provision is recorded in
the period in which the loss first becomes probable and reasonably estimable. Contract losses are determined to be
the amount by which the estimated total direct and indirect costs of the contract exceed the estimated total revenues
that will be generated by the contract and are included in Cost of services and classified in Other accrued liabilities.
Revenues from contracts for non-technology integration consulting services with fees based on time and materials
or cost-plus are recognized as the services are performed and amounts are earned. We consider amounts to be earned
once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and
collectibility is reasonably assured. In such contracts, our efforts, measured by time incurred, typically are provided in
less than a year and represent the contractual milestones or output measure, which is the contractual earnings pattern.
For non-technology integration consulting contracts with fixed fees, we recognize revenues as amounts become billable
in accordance with contract terms, provided the billable amounts are not contingent, are consistent with the services
delivered and are earned. Contingent or incentive revenues relating to non-technology integration consulting contracts
are recognized when the contingency is satisfied and we conclude the amounts are earned.
Outsourcing contracts typically span several years and involve complex delivery, often through multiple workforces
in different countries. In a number of these arrangements, we hire client employees and become responsible for certain
client obligations. Revenues are recognized on outsourcing contracts as amounts become billable in accordance with
contract terms, unless the amounts are billed in advance of performance of services, in which case revenues are
recognized when the services are performed and amounts are earned. Revenues from time-and-materials or cost-
plus contracts are recognized as the services are performed. In such contracts, our effort, measured by time incurred,
represents the contractual milestones or output measure, which is the contractual earnings pattern. Revenues from
unit-priced contracts are recognized as transactions are processed based on objective measures of output. Revenues
from fixed-price contracts are recognized on a straight-line basis, unless revenues are earned and obligations are
fulfilled in a different pattern. Outsourcing contracts can also include incentive payments for benefits delivered to clients.
Revenues relating to such incentive payments are recorded when the contingency is satisfied and we conclude the
amounts are earned. We continuously review and reassess our estimates of contract profitability. Circumstances that
potentially affect profitability over the life of the contract include decreases in volumes of transactions or other inputs/
outputs on which we are paid, failure to deliver agreed benefits, variances from planned internal/external costs to
deliver our services and other factors affecting revenues and costs.
Costs related to delivering outsourcing services are expensed as incurred, with the exception of certain transition
costs related to the set-up of processes, personnel and systems, which are deferred during the transition period and
expensed evenly over the period outsourcing services are provided. The deferred costs are specific internal costs or
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incremental external costs directly related to transition or set-up activities necessary to enable the outsourced services.
Generally, deferred amounts are protected in the event of early termination of the contract and are monitored regularly
for impairment. Impairment losses are recorded when projected remaining undiscounted operating cash flows of the
related contract are not sufficient to recover the carrying amount of contract assets. Amounts billable to the client for
transition or set-up activities are deferred and recognized as revenue evenly over the period outsourcing services are
provided. Contract acquisition and origination costs are expensed as incurred.
We enter into contracts that may consist of multiple deliverables. These contracts may include any combination
of technology integration consulting services, non-technology integration consulting services or outsourcing services
described above. Revenues for contracts with multiple deliverables are allocated based on the lesser of the element’s
relative selling price or the amount that is not contingent on future delivery of another deliverable. The selling price of
each deliverable is determined by obtaining third party evidence of the selling price for the deliverable and is based
on the price charged when largely similar services are sold on a standalone basis by the Company to similarly situated
customers. If the amount of non-contingent revenues allocated to a deliverable accounted for under the percentage-
of-completion method of accounting is less than the costs to deliver such services, then such costs are deferred and
recognized in future periods when the revenues become non-contingent. Revenues are recognized in accordance
with our accounting policies for the separate deliverables when the services have value on a stand-alone basis, selling
price of the separate deliverables exists and, in arrangements that include a general right of refund relative to the
completed deliverable, performance of the in-process deliverable is considered probable and substantially in our
control. While determining fair value and identifying separate deliverables require judgment, generally fair value and
the separate deliverables are readily identifiable as we also sell those deliverables unaccompanied by other
deliverables.
Revenues recognized in excess of billings are recorded as Unbilled services. Billings in excess of revenues
recognized are recorded as Deferred revenues until revenue recognition criteria are met. Client prepayments (even if
nonrefundable) are deferred and recognized over future periods as services are delivered or performed.
Our consulting revenues are affected by the number of work days in a fiscal quarter, which in turn is affected by
the level of vacation days and holidays. Consequently, since our first and third quarters typically have approximately
5-10% more work days than our second and fourth quarters, our consulting revenues are typically higher in our first
and third quarters than in our second and fourth quarters.
Net revenues include the margin earned on computer hardware, software and related services resale contracts,
as well as revenues from alliance agreements, neither of which is material to us. Reimbursements include billings for
travel and other out-of-pocket expenses and third-party costs, such as the cost of hardware, software and related
services resales. In addition, Reimbursements include allocations from gross billings to record an amount equivalent
to reimbursable costs, where billings do not specifically identify reimbursable expenses. We report revenues net of
any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific
revenue-producing transactions.
Income Taxes
Determining the consolidated provision for income tax expense, income tax liabilities and deferred tax assets
and liabilities involves judgment. Deferred tax assets and liabilities, measured using enacted tax rates, are recognized
for the future tax consequences of temporary differences between the tax and financial statement bases of assets and
liabilities. As a global company, we calculate and provide for income taxes in each of the tax jurisdictions in which we
operate. This involves estimating current tax exposures in each jurisdiction as well as making judgments regarding
the recoverability of deferred tax assets. Tax exposures can involve complex issues and may require an extended
period to resolve. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized and adjust the valuation allowances accordingly.
Factors considered in making this determination include the period of expiration of the tax asset, planned use of the
tax asset, tax planning strategies and historical and projected taxable income as well as tax liabilities for the tax
jurisdiction in which the tax asset is located. Valuation allowances will be subject to change in each future reporting
period as a result of changes in one or more of these factors. Changes in the geographic mix or estimated level of
annual income before taxes can affect the overall effective tax rate.
We apply an estimated annual effective tax rate to our quarterly operating results to determine the interim provision
for income tax expense. In accordance with Financial Accounting Standards Board (“FASB”) guidance on uncertainty
in income taxes, a change in judgment that impacts the measurement of a tax position taken in a prior year is recognized
as a discrete item in the interim period in which the change occurs. In the event there is a significant unusual or
infrequent item recognized in our quarterly operating results, the tax attributable to that item is recorded in the interim
period in which it occurs.
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Table of Contents
No taxes have been provided on undistributed foreign earnings that are planned to be indefinitely reinvested. If
future events, including material changes in estimates of cash, working capital and long-term investment requirements,
necessitate that these earnings be distributed, an additional provision for taxes may apply, which could materially affect
our future effective tax rate. During fiscal 2015, the Company distributed substantially all of the earnings of its U.S.
subsidiaries that were previously considered indefinitely reinvested and recorded a tax liability of $247 million for
withholding taxes payable on this distribution. We currently do not foresee any event that would require us to distribute
any remaining undistributed earnings. For additional information, see Note 9 (Income Taxes) to our Consolidated
Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
As a matter of course, we are regularly audited by various taxing authorities, and sometimes these audits result
in proposed assessments where the ultimate resolution may result in us owing additional taxes. We establish tax
liabilities or reduce tax assets for uncertain tax positions when, despite our belief that our tax return positions are
appropriate and supportable under local tax law, we believe we may not succeed in realizing the tax benefit of certain
positions if challenged. In evaluating a tax position, we determine whether it is more likely than not that the position
will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the
technical merits of the position. Our estimate of the ultimate tax liability contains assumptions based on past
experiences, judgments about potential actions by taxing jurisdictions as well as judgments about the likely outcome
of issues that have been raised by taxing jurisdictions. The tax position is measured at the largest amount of benefit
that is greater than 50 percent likely of being realized upon settlement. We evaluate these uncertain tax positions each
quarter and adjust the related tax liabilities or assets in light of changing facts and circumstances, such as the progress
of a tax audit or the expiration of a statute of limitations. We believe the estimates and assumptions used to support
our evaluation of uncertain tax positions are reasonable. However, final determinations of prior-year tax liabilities,
either by settlement with tax authorities or expiration of statutes of limitations, could be materially different from estimates
reflected in assets and liabilities and historical income tax provisions. The outcome of these final determinations could
have a material effect on our income tax provision, net income, or cash flows in the period in which that determination
is made. We believe our tax positions comply with applicable tax law and that we have adequately accounted for
uncertain tax positions.
Revenues by Segment/Operating Group
Our five reportable operating segments are our operating groups, which are Communications, Media &
Technology; Financial Services; Health & Public Service; Products; and Resources. Operating groups are managed
on the basis of net revenues because our management believes net revenues are a better indicator of operating group
performance than revenues. In addition to reporting net revenues by operating group, we also report net revenues by
two types of work: consulting and outsourcing, which represent the services sold by our operating groups. Consulting
net revenues, which include management and technology consulting and systems integration, reflect a finite, distinct
project or set of projects with a defined outcome and typically a defined set of specific deliverables. Outsourcing net
revenues typically reflect ongoing, repeatable services or capabilities provided to transition, run and/or manage
operations of client systems or business functions.
From time to time, our operating groups work together to sell and implement certain contracts. The resulting
revenues and costs from these contracts may be apportioned among the participating operating groups. Generally,
operating expenses for each operating group have similar characteristics and are subject to the same factors, pressures
and challenges. However, the economic environment and its effects on the industries served by our operating groups
affect revenues and operating expenses within our operating groups to differing degrees. The mix between consulting
and outsourcing is not uniform among our operating groups. Local currency fluctuations also tend to affect our operating
groups differently, depending on the geographic concentrations and locations of their businesses.
While we provide discussion about our results of operations below, we cannot measure how much of our revenue
growth in a particular period is attributable to changes in price or volume. Management does not track standard
measures of unit or rate volume. Instead, our measures of volume and price are extremely complex, as each of our
services contracts is unique, reflecting a customized mix of specific services that does not fit into standard comparability
measurements. Revenue for our services is a function of the nature of each service to be provided, the skills required
and the outcome sought, as well as estimated cost, risk, contract terms and other factors.
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Table of Contents
Results of Operations for Fiscal 2016 Compared to Fiscal 2015
Net revenues (by operating group, geographic region and type of work) and reimbursements were as follows:
Fiscal
2016
2015
(in millions of U.S. dollars)
Percent
Increase
(Decrease)
U.S.
Dollars
Percent
Increase
Local
Currency
Percent of Total
Net Revenues
for Fiscal
2016
2015
OPERATING GROUPS
Communications, Media & Technology
$
6,616
$
Financial Services
Health & Public Service
Products
Resources
Other
TOTAL NET REVENUES
Reimbursements
TOTAL REVENUES
GEOGRAPHIC REGIONS
North America
Europe
Growth Markets
TOTAL NET REVENUES
TYPE OF WORK
Consulting
Outsourcing
TOTAL NET REVENUES
7,031
5,987
8,395
4,839
15
32,883
1,915
6,349
6,635
5,463
7,596
4,989
17
31,048
1,866
$
$
$
$
$
34,798
$
32,914
15,653
$
11,448
5,781
14,209
10,930
5,909
32,883
$
31,048
17,868
$
15,015
32,883
$
16,204
14,844
31,048
4%
9%
20%
20%
6
10
11
(3)
n/m
6%
3
6%
10%
5
(2)
6%
10%
1
6%
11
12
15
3
n/m
10%
11%
11
8
21
18
26
15
—
21
18
25
16
—
100%
100%
48%
35
17
46%
35
19
10%
100%
100%
15%
6
10%
54%
46
100%
52%
48
100%
_______________
n/m = not meaningful
Amounts in table may not total due to rounding.
Our business in the United States represented 46%, 43% and 40% of our consolidated net revenues during fiscal
2016, 2015 and 2014, respectively. No other country individually comprised 10% or more of our consolidated net
revenues during these periods.
Net Revenues
The following net revenues commentary discusses local currency net revenue changes for fiscal 2016 compared
to fiscal 2015:
Operating Groups
• Communications, Media & Technology net revenues increased 9% in local currency. Net revenues reflected
strong growth, driven by growth across all industry groups in North America and Growth Markets, as well as
Media & Entertainment in Europe.
• Financial Services net revenues increased 11% in local currency. Net revenues reflected very strong growth,
driven by growth in both industry groups across all geographic regions, led by Banking & Capital Markets in
Europe.
• Health & Public Service net revenues increased 12% in local currency. Net revenues reflected very strong
growth, driven by growth in both industry groups across all geographic regions, led by Public Service and
Health in North America.
• Products net revenues increased 15% in local currency. Net revenues reflected very strong growth, driven by
growth across all industry groups and geographic regions, led by Consumer Goods, Retail & Travel Services,
as well as Industrial in Europe and Life Sciences in North America.
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Table of Contents
• Resources net revenues increased 3% in local currency. Net revenues reflected modest growth, as significant
growth in Utilities across all geographic regions was largely offset by declines in Chemicals & Natural Resources
in Growth Markets and North America and Energy in Europe and Growth Markets. We have experienced lower
or negative revenue growth in Chemicals & Natural Resources and Energy, principally due to economic
challenges in these industries, and we expect this trend to continue in the near term.
Geographic Regions
• North America net revenues increased 11% in local currency, driven by the United States.
• Europe net revenues increased 11% in local currency, driven by the United Kingdom, Italy, Switzerland, Spain,
Germany and France.
• Growth Markets net revenues increased 8% in local currency, led by Japan, as well as China, India, South
Africa and Mexico.
Operating Expenses
Operating expenses for fiscal 2016 increased $1,509 million, or 5%, over fiscal 2015, and decreased as a
percentage of revenues to 86.2% from 86.5% during this period. Operating expenses before reimbursable expenses
for fiscal 2016 increased $1,460 million, or 5%, over fiscal 2015, and decreased as a percentage of net revenues to
85.4% from 85.7% during this period.
Cost of Services
Cost of services for fiscal 2016 increased $1,415 million, or 6%, over fiscal 2015, and increased as a percentage
of revenues to 70.5% from 70.2% during this period. Cost of services before reimbursable expenses for fiscal 2016
increased $1,367 million, or 6%, over fiscal 2015, and increased as a percentage of net revenues to 68.7% from 68.4%
during this period. Gross margin for fiscal 2016 decreased to 31.3% from 31.6% in fiscal 2015. The reduction in gross
margin for fiscal 2016 was principally due to higher labor costs and higher costs associated with acquisition activities
compared to fiscal 2015.
Sales and Marketing
Sales and marketing expense for fiscal 2016 increased $75 million, or 2%, over fiscal 2015, and decreased as
a percentage of net revenues to 10.9% from 11.3% during this period. The decrease as a percentage of net revenues
was principally due to improved operational efficiency in our business development activities.
General and Administrative Costs
General and administrative costs for fiscal 2016 increased $83 million, or 5%, over fiscal 2015, and decreased
as a percentage of net revenues to 5.7% from 5.8% during this period.
Pension Settlement Charge
We recorded a Pension settlement charge of $64 million during fiscal 2015 as a result of lump sum cash payments
made from our U.S. defined benefit pension plan to former employees who elected to receive such payments. For
additional information, see Note 10 (Retirement and Profit Sharing Plans) to our Consolidated Financial Statements
under Item 8, “Financial Statements and Supplementary Data.”
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Table of Contents
Operating Income and Operating Margin
Operating income for fiscal 2016 increased $375 million, or 8%, over fiscal 2015. During fiscal 2015, we recorded
a Pension settlement charge of $64 million, which decreased operating margin by 20 basis points. Excluding the effect
of the fiscal 2015 Pension settlement charge, operating margin for fiscal 2016 increased 10 basis points compared
with fiscal 2015.
Operating income and operating margin for each of the operating groups were as follows:
Fiscal
2016
2015
Operating
Income
Operating
Margin
Operating
Income
(in millions of U.S. dollars)
Operating
Margin
$
$
966
1,128
807
1,282
628
4,810
15%
$
16
13
15
13
14.6%
$
871
1,079
701
1,082
702
4,436
14%
16
13
14
14
14.3%
Communications, Media & Technology
Financial Services
Health & Public Service
Products
Resources
Total
_______________
Amounts in table may not total due to rounding.
Operating Income and Operating Margin Excluding Fiscal 2015 Pension Settlement Charge (Non-GAAP)
2016
Operating Income and
Operating Margin as
Reported (GAAP)
Operating
Income
Operating
Margin
Fiscal
2015
Operating Income and Operating Margin
Excluding Pension Settlement Charge
(Non-GAAP)
Operating
Income
(Adjusted)
Operating
Margin
(Adjusted)
Pension
Settlement
Charge (1)
(in millions of U.S. dollars)
Operating
Income
(GAAP)
Increase
(Decrease)
Communications, Media &
Technology
Financial Services
$
Health & Public Service
Products
Resources
Total
966
1,128
807
1,282
628
15%
$
871
$
16
13
15
13
1,079
701
1,082
702
$
4,810
14.6%
$
4,436
$
13
13
12
16
11
64
$
884
1,093
713
1,098
713
14%
$
16
13
14
14
$
4,500
14.5%
$
82
35
94
184
(85)
310
_______________
Amounts in table may not total due to rounding.
(1)
Represents Pension settlement charge related to lump sum cash payment from plan assets offered to eligible
former employees.
We estimate that the aggregate percentage impact of foreign currency exchange rates on our Operating income
during fiscal 2016 was similar to that disclosed for Net revenue. In addition, during fiscal 2016, each operating group
experienced higher costs associated with acquisition activity. The commentary below provides insight into other factors
affecting operating group performance and operating margin for fiscal 2016 compared with fiscal 2015, exclusive of
the Pension settlement charge recorded in fiscal 2015:
• Communications, Media & Technology operating income increased primarily due to higher contract profitability
and consulting revenue growth.
• Financial Services operating income increased primarily due to consulting revenue growth.
• Health & Public Service operating income increased due to revenue growth and higher contract profitability.
36
Table of Contents
• Products operating income increased due to very significant consulting revenue growth and lower sales and
marketing costs as a percentage of net revenues.
• Resources operating income decreased due to lower outsourcing contract profitability, partially offset by lower
sales and marketing costs as a percentage of net revenues.
Other Expense, net
Other expense, net primarily consists of foreign currency gains and losses as well as gains and losses associated
with our investments in privately held companies. During fiscal 2016, Other expense, net increased $25 million over
fiscal 2015, primarily due to higher net foreign exchange losses, including losses incurred on the devaluation of the
Nigerian Naira.
Gain on Sale of Businesses
We recorded a gain from the Navitaire divestiture of $548 million and a gain from the Duck Creek partial divestiture
of $301 million during fiscal 2016. For additional information, see Note 5 (Business Combinations and Divestitures) to
our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
Provision for Income Taxes
The effective tax rate for fiscal 2016 was 22.4%, compared with 25.8% for fiscal 2015. Absent the $849 million
Gain on sale of businesses and related $104 million in taxes recorded during fiscal 2016, the effective tax rate for fiscal
2016 would have been 24.2%. Absent the $64 million Pension settlement charge and related $25 million in taxes
recorded during fiscal 2015, the effective tax rate for fiscal 2015 would have been 26.0%. The effective tax rate for
fiscal 2016 benefited from a final determination of U.S. Federal taxes for fiscal 2012. The effective tax rate for fiscal
2015 benefited from a final determination of U.S. Federal taxes for fiscal years 2010 and 2011. This was offset by
expenses associated with an increase in deferred tax liabilities during fiscal 2015, when we concluded that certain
undistributed earnings of our U.S. subsidiaries would no longer be considered indefinitely reinvested. For additional
information, see Note 9 (Income Taxes) to our Consolidated Financial Statements under Item 8, “Financial Statements
and Supplementary Data.”
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests reflects the income earned or expense incurred attributable to
the equity interest that some current and former members of Accenture Leadership and their permitted transferees
have in our Accenture Holdings plc and Accenture Canada Holdings Inc. subsidiaries. See “Business—Organizational
Structure.” Net income attributable to Accenture plc represents the income attributable to the shareholders of Accenture
plc. Since January 2002, noncontrolling interests has also included immaterial amounts primarily attributable to
noncontrolling shareholders in our Avanade Inc. subsidiary.
Net income attributable to noncontrolling interests for fiscal 2016 increased $18 million, or 8%, over fiscal 2015.
The increase was due to higher Net income of $1,076 million, primarily driven by the Gain on sale of businesses,
partially offset by a reduction in the Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc.
exchangeable shares average noncontrolling ownership interest during fiscal 2016.
Earnings Per Share
Diluted earnings per share were $6.45 for fiscal 2016, compared with $4.76 for fiscal 2015. The $1.69 increase
in our Diluted earnings per share included the impact of the Gain on sale of businesses, net of taxes, which increased
Diluted earnings per share for fiscal 2016 by $1.11 and the impact of the Pension settlement charge, net of taxes,
which decreased Diluted earnings per share for fiscal 2015 by $0.06. Excluding these impacts, Diluted earnings per
share for fiscal 2016 increased $0.52 compared with fiscal 2015, due to increases of $0.34 from higher revenues and
operating results, $0.13 from a lower effective tax rate and $0.08 from lower weighted average shares outstanding.
These increases were partially offset by a decrease of $0.03 from higher non-operating expense. For information
regarding our Earnings per share calculations, see Note 2 (Earnings Per Share) to our Consolidated Financial
Statements under Item 8, “Financial Statements and Supplementary Data.”
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Table of Contents
Results of Operations for Fiscal 2015 Compared to Fiscal 2014
Net revenues (by operating group, geographic region and type of work) and reimbursements were as follows:
Fiscal
2015
2014
(in millions of U.S. dollars)
Percent
Increase
(Decrease)
U.S.
Dollars
Percent
Increase
Local
Currency
Percent of Total
Net Revenues
for Fiscal
2015
2014
OPERATING GROUPS
Communications, Media & Technology
$
6,349
$
Financial Services
Health & Public Service
Products
Resources
Other
TOTAL NET REVENUES
Reimbursements
TOTAL REVENUES
GEOGRAPHIC REGIONS (1)
North America
Europe
Growth Markets
TOTAL NET REVENUES
TYPE OF WORK
Consulting
Outsourcing
TOTAL NET REVENUES
6,635
5,463
7,596
4,989
17
31,048
1,866
5,924
6,511
5,022
7,395
5,135
15
30,002
1,872
$
$
$
$
$
32,914
$
31,875
14,209
$
10,930
5,909
12,797
11,255
5,951
31,048
$
30,002
16,204
$
14,844
31,048
$
15,738
14,265
30,002
7%
16%
20%
20%
2
9
3
(3)
n/m
3%
—
3%
11%
(3)
(1)
3%
3%
4
3%
11
12
10
5
n/m
11%
12%
10
11
21
18
25
16
—
22
17
24
17
—
100%
100%
46%
35
19
43%
37
20
11%
100%
100%
11%
11
11%
52%
48
100%
52%
48
100%
_______________
n/m = not meaningful
Amounts in table may not total due to rounding.
(1)
Effective September 1, 2014, we revised the reporting of our geographic regions as follows: North America
(the United States and Canada); Europe; and Growth Markets (Asia Pacific, Latin America, Africa, the Middle
East, Russia and Turkey). Prior period amounts have been reclassified to conform to the current period
presentation.
Net Revenues
The following net revenues commentary discusses local currency net revenue changes for fiscal 2015 compared
to fiscal 2014:
Operating Groups
• Communications, Media & Technology net revenues increased 16% in local currency. Outsourcing revenues
reflected significant growth, driven by growth across all industry groups and geographic regions, led by
Communications in all geographic regions as well as Media & Entertainment in North America. Consulting
revenues reflected significant growth, driven by growth across all industry groups and geographic regions, led
by Communications in North America and Growth Markets.
• Financial Services net revenues increased 11% in local currency. Consulting revenues reflected significant
growth, driven by growth across both industry groups and all geographic regions, led by Banking & Capital
Markets in Europe. Outsourcing revenue growth was driven by Banking & Capital Markets and Insurance in
Europe and Banking & Capital Markets in Growth Markets. These outsourcing increases were partially offset
by a decline in Banking & Capital Markets in North America.
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Table of Contents
• Health & Public Service net revenues increased 12% in local currency. Outsourcing revenues reflected very
significant growth, led by Health and Public Service in North America. Consulting revenue growth was driven
by Health and Public Service in North America.
• Products net revenues increased 10% in local currency. Consulting revenues reflected very strong growth,
driven by growth across all industry groups and geographic regions, led by Consumer Goods, Retail & Travel
Services and Industrial in Europe. Outsourcing revenues reflected strong growth, driven by all geographic
regions and in most industry groups, led by Consumer Goods, Retail & Travel Services. These outsourcing
increases were partially offset by a decline in Industrial in Europe.
• Resources net revenues increased 5% in local currency. Outsourcing revenues reflected strong growth, driven
by Utilities across all geographic regions, Chemicals & Natural Resources in Growth Markets and Energy in
Europe. Consulting revenues reflected slight growth, driven by Utilities across all geographic regions and
Chemicals & Natural Resources in Europe. These consulting increases were largely offset by declines in
Energy in Europe and North America and Chemicals & Natural Resources in Growth Markets.
Geographic Regions
• North America net revenues increased 12% in local currency, driven by the United States.
• Europe net revenues increased 10% in local currency, driven by Germany, the United Kingdom, Spain, the
Netherlands, Italy and France.
• Growth Markets net revenues increased 11% in local currency, driven by Japan, Brazil and Australia, partially
offset by declines in South Korea and Singapore.
Operating Expenses
Operating expenses for fiscal 2015 increased $904 million, or 3%, over fiscal 2014, and remained flat as a
percentage of revenues at 86.5%, compared with fiscal 2014. Operating expenses before reimbursable expenses for
fiscal 2015 increased $910 million, or 4%, over fiscal 2014, and remained flat as a percentage of net revenues at
85.7%, compared with fiscal 2014.
Cost of Services
Cost of services for fiscal 2015 increased $915 million, or 4%, over fiscal 2014, and increased as a percentage
of revenues to 70.2% from 69.6% during this period. Cost of services before reimbursable expenses for fiscal 2015
increased $921 million, or 5%, over fiscal 2014, and increased as a percentage of net revenues to 68.4% from 67.7%
during this period. Gross margin for fiscal 2015 decreased to 31.6% from 32.3% in fiscal 2014, principally due to higher
labor costs, increased usage of subcontractors and higher non-payroll costs including recruiting and training costs
from the addition of a larger number of employees compared to fiscal 2014.
Sales and Marketing
Sales and marketing expense for fiscal 2015 decreased $78 million, or 2%, from fiscal 2014, and decreased as
a percentage of net revenues to 11.3% from 11.9% during this period. The decrease as a percentage of net revenues
was principally due to improved operational efficiency in our business development activities.
General and Administrative Costs
General and administrative costs for fiscal 2015 decreased $15 million, or 1%, from fiscal 2014, and decreased
as a percentage of net revenues to 5.8% from 6.1% during this period.
Pension Settlement Charge
We recorded a Pension settlement charge of $64 million, pre-tax, during fiscal 2015 as a result of lump sum cash
payments made from our U.S. defined benefit pension plan to former employees who elected to receive such payments.
For additional information, refer to Note 10 (Retirement and Profit Sharing Plans) to our Consolidated Financial
Statements under Item 8, “Financial Statements and Supplementary Data.”
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Table of Contents
Operating Income and Operating Margin
Operating income for fiscal 2015 increased $135 million, or 3%, from fiscal 2014. The Pension settlement charge
of $64 million recorded in fiscal 2015 decreased operating margin by 20 basis points. Excluding the effects of the
Pension settlement charge, operating margin for fiscal 2015 increased 20 basis points compared with fiscal 2014.
Operating income and operating margin for each of the operating groups were as follows:
Fiscal
2015
2014
Operating
Income
Operating
Margin
Operating
Income
(in millions of U.S. dollars)
Operating
Margin
$
$
871
1,079
701
1,082
702
4,436
14%
$
16
13
14
14
770
957
679
992
902
13%
15
14
13
18
14.3%
$
4,301
14.3%
Communications, Media & Technology
Financial Services
Health & Public Service
Products
Resources
Total
_______________
Amounts in table may not total due to rounding.
Operating Income and Operating Margin Excluding Fiscal 2015 Pension Settlement Charge (Non-GAAP)
Fiscal
2015
Operating
Income
(GAAP)
Operating Income and Operating Margin
Excluding Pension Settlement Charge
(Non-GAAP)
Operating
Income
(Adjusted)
Pension
Settlement
Charge (1)
Operating
Margin
(Adjusted)
(in millions of U.S. dollars)
2014
Operating Income and
Operating Margin as
Reported (GAAP)
Operating
Income
Operating
Margin
Increase
(Decrease)
Communications, Media &
Technology
Financial Services
Health & Public Service
Products
Resources
Total
$
871
$
1,079
701
1,082
702
$
4,436
$
_______________
Amounts in table may not total due to rounding.
13
13
12
16
11
64
$
884
1,093
713
1,098
713
14%
$
16
13
14
14
770
957
679
992
902
13%
$
15
14
13
18
$
4,500
14.5%
$
4,301
14.3%
$
114
136
34
106
(190)
200
(1)
Represents Pension settlement charge related to lump sum cash payment from plan assets offered to eligible
former employees.
We estimate that the aggregate percentage impact of foreign currency exchange rates on our Operating income
during fiscal 2015 was similar to that disclosed for Net revenue. In addition, during fiscal 2015, each operating group
recorded a portion of the $64 million Pension settlement charge. The commentary below provides insight into other
factors affecting operating group performance and operating margin for fiscal 2015, exclusive of the Pension settlement
charge, compared with fiscal 2014:
• Communications, Media & Technology operating income increased primarily due to revenue growth and lower
sales and marketing costs as a percentage of net revenues.
• Financial Services operating income increased primarily due to consulting revenue growth, lower sales and
marketing costs as a percentage of net revenues and higher contract profitability.
• Health & Public Service operating income increased due to outsourcing revenue growth.
• Products operating income increased due to higher contract profitability and consulting revenue growth.
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• Resources operating income decreased due to lower contract profitability.
Other Expense, net
Other expense, net for fiscal 2015 increased $29 million over fiscal 2014, primarily due to higher net foreign
exchange losses, including losses incurred on the devaluation of the Venezuelan Bolivar Fuerte.
Provision for Income Taxes
The effective tax rate for fiscal 2015 was 25.8%, compared with 26.1% for fiscal 2014. Absent the tax impact of
the $64 million Pension settlement charge recorded during the third quarter of fiscal 2015, the effective tax rate for
fiscal 2015 would have been 26.0%. The fiscal 2015 tax rate includes higher benefits related to final determinations
of tax liabilities for prior years, including a $170 million benefit related to final settlement of U.S. tax audits for fiscal
years 2010 and 2011, and benefits related to changes in the geographic distribution of earnings, offset by an increase
in withholding taxes payable on the distribution of U.S. earnings. For additional information, see Note 9 (Income Taxes)
to our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests reflects the income earned or expense incurred attributable
to the equity interest that some current and former members of Accenture Leadership and their permitted transferees
have in our Accenture Holdings plc and Accenture Canada Holdings Inc. subsidiaries. See “Business—Organizational
Structure.” Net income attributable to Accenture plc represents the income attributable to the shareholders of Accenture
plc. Since January 2002, noncontrolling interests has also included immaterial amounts primarily attributable to
noncontrolling shareholders in our Avanade Inc. subsidiary.
Net income attributable to noncontrolling interests for fiscal 2015 decreased $14 million, or 6%, from fiscal 2014.
The decrease was due to a reduction in the Accenture Holdings plc ordinary shares and Accenture Canada Holdings
Inc. exchangeable shares average noncontrolling ownership interest, partially offset by higher Net income of $98 million
for fiscal 2015.
Earnings Per Share
Diluted earnings per share were $4.76 for fiscal 2015, compared with $4.52 for fiscal 2014. The $0.24 increase
in our diluted earnings per share included the impact of the $64 million Pension settlement charge, which decreased
diluted earnings per share for fiscal 2015 by $0.06. Excluding the impact of this charge, diluted earnings per share for
fiscal 2015 increased $0.30 compared with fiscal 2014, due to increases of $0.22 from higher revenues and operating
results, $0.09 from lower weighted average shares outstanding and $0.01 from a lower effective tax rate. These
increases were partially offset by a decrease of $0.02 from lower non-operating income. For information regarding our
earnings per share calculations, see Note 2 (Earnings Per Share) to our Consolidated Financial Statements under
Item 8, “Financial Statements and Supplementary Data.”
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Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations, available cash reserves and debt capacity
available under various credit facilities. In addition, we could raise additional funds through public or private debt or
equity financings. We may use our available or additional funds to, among other things:
•
•
•
•
facilitate purchases, redemptions and exchanges of shares and pay dividends;
acquire complementary businesses or technologies;
take advantage of opportunities, including more rapid expansion; or
develop new services and solutions.
As of August 31, 2016, Cash and cash equivalents were $4.9 billion, compared with $4.4 billion as of August 31,
2015.
Cash flows from operating, investing and financing activities, as reflected in our Consolidated Cash Flows
Statements, are summarized in the following table:
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
_______________
Amounts in table may not total due to rounding.
Fiscal
2015
2016
2014
2016 to 2015
Change
(in millions of U.S. dollars)
$
$
4,575
$
4,092
$
3,486
$
(610)
(3,397)
(23)
(1,170)
(3,202)
(280)
(1,056)
(3,165)
25
483
560
(195)
257
545
$
(561) $
(711) $
1,105
Operating activities: The year-over-year increase in operating cash flow was primarily driven by revenue growth
and higher operating income, as well as higher collections on net client balances (receivables from clients, current
and non-current unbilled services and deferred revenues), partially offset by other changes in operating assets and
liabilities, including higher spending on certain compensation payments.
Investing activities: Cash used in investing activities decreased $560 million year-over-year, as higher spending
on business acquisitions, investments and property and equipment was more than offset by proceeds of $815 million
from the Navitaire divestiture and Duck Creek partial divestiture. For additional information, see Note 5 (Business
Combinations and Divestitures) to our Consolidated Financial Statements under Item 8, “Financial Statements and
Supplementary Data.”
Financing activities: The $195 million increase in cash used in financing activities was primarily due to an
increase in the net purchases of shares and an increase in cash dividends paid. For additional information, see Note
13 (Material Transactions Affecting Shareholders’ Equity) to our Consolidated Financial Statements under Item 8,
“Financial Statements and Supplementary Data.”
We believe that our available cash balances and the cash flows expected to be generated from operations will
be sufficient to satisfy our current and planned working capital and investment needs for the next twelve months. We
also believe that our longer-term working capital and other general corporate funding requirements will be satisfied
through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial
market activities.
Substantially all of our cash is held in jurisdictions where there are no regulatory restrictions or material tax effects
on the free flow of funds. Domestic cash inflows for our Irish parent, principally dividend distributions from lower-tier
subsidiaries, have been sufficient to meet our historic cash requirements, and we expect this to continue into the future.
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Borrowing Facilities
As of August 31, 2016, we had the following borrowing facilities, including the issuance of letters of credit, to
support general working capital purposes:
Syndicated loan facility (1)
Separate, uncommitted, unsecured multicurrency revolving credit facilities (2)
Local guaranteed and non-guaranteed lines of credit (3)
Total
_______________
Facility
Amount
Borrowings
Under
Facilities
(in millions of U.S. dollars)
$
$
1,000
$
516
165
1,681
$
—
—
—
—
(1)
(2)
On December 22, 2015, we replaced our $1.0 billion syndicated loan facility maturing on October 31, 2016
with a $1.0 billion syndicated loan facility maturing on December 22, 2020. This facility provides unsecured,
revolving borrowing capacity for general working capital purposes, including the issuance of letters of credit.
We continue to be in compliance with relevant covenant terms. The facility is subject to annual commitment
fees. As of August 31, 2016 and 2015, we had no borrowings under either the current or the prior loan facility.
We maintain separate, uncommitted and unsecured multicurrency revolving credit facilities. These facilities
provide local-currency financing for the majority of our operations. Interest rate terms on the revolving facilities
are at market rates prevailing in the relevant local markets. As of August 31, 2016 and 2015, we had no
borrowings under these facilities.
(3)
We also maintain local guaranteed and non-guaranteed lines of credit for those locations that cannot access
our global facilities. As of August 31, 2016 and 2015, we had no borrowings under these various facilities.
Under the borrowing facilities described above, we had an aggregate of $169 million and $167 million of letters
of credit outstanding as of August 31, 2016 and 2015, respectively. In addition, we had total outstanding debt of
approximately $27 million at both August 31, 2016 and 2015.
Share Purchases and Redemptions
The Board of Directors of Accenture plc has authorized funding for our publicly announced open-market share
purchase program for acquiring Accenture plc Class A ordinary shares and for purchases and redemptions of Accenture
plc Class A ordinary shares, Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable
shares held by current and former members of Accenture Leadership and their permitted transferees.
Our share purchase activity during fiscal 2016 was as follows:
Open-market share purchases (1)
Other share purchase programs
Other purchases (2)
Total
_______________
Accenture plc Class A
Ordinary
Shares
Amount
Accenture Holdings plc Ordinary
and Accenture Canada
Holdings Inc. Exchangeable
Shares
Amount
(in millions of U.S. dollars, except share amounts)
19,989,726
$
2,122
— $
—
3,857,795
—
411
653,222
—
23,847,521
$
2,533
653,222
$
—
72
—
72
(1)
(2)
We conduct a publicly announced open-market share purchase program for Accenture plc Class A ordinary
shares. These shares are held as treasury shares by Accenture plc and may be utilized to provide for select
employee benefits, such as equity awards to our employees.
During fiscal 2016, as authorized under our various employee equity share plans, we acquired Accenture plc
Class A ordinary shares primarily via share withholding for payroll tax obligations due from employees and
former employees in connection with the delivery of Accenture plc Class A ordinary shares under those plans.
These purchases of shares in connection with employee share plans do not affect our aggregate available
authorization for our publicly announced open-market share purchase and the other share purchase programs.
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We intend to continue to use a significant portion of cash generated from operations for share repurchases during
fiscal 2017. The number of shares ultimately repurchased under our open-market share purchase program may vary
depending on numerous factors, including, without limitation, share price and other market conditions, our ongoing
capital allocation planning, the levels of cash and debt balances, other demands for cash, such as acquisition activity,
general economic and/or business conditions, and board and management discretion. Additionally, as these factors
may change over the course of the year, the amount of share repurchase activity during any particular period cannot
be predicted and may fluctuate from time to time. Share repurchases may be made from time to time through open-
market purchases, in respect of purchases and redemptions of Accenture Holdings plc ordinary shares and Accenture
Canada Holdings Inc. exchangeable shares, through the use of Rule 10b5-1 plans and/or by other means. The
repurchase program may be accelerated, suspended, delayed or discontinued at any time, without notice.
Other Share Redemptions
During fiscal 2016, we issued 775,023 Accenture plc Class A ordinary shares upon redemptions of an equivalent
number of Accenture Holdings plc ordinary shares pursuant to our registration statement on Form S-3 (the “registration
statement”). The registration statement allows us, at our option, to issue freely tradable Accenture plc Class A ordinary
shares in lieu of cash upon redemptions of Accenture Holdings plc ordinary shares held by current and former members
of Accenture Leadership and their permitted transferees.
Subsequent Developments
On September 27, 2016, the Board of Directors of Accenture plc declared a semi-annual cash dividend of $1.21
per share on our Class A ordinary shares for shareholders of record at the close of business on October 21, 2016. On
September 28, 2016, the Board of Directors of Accenture Holdings plc declared a semi-annual cash dividend of $1.21
per share on its ordinary shares for shareholders of record at the close of business on October 18, 2016. Both dividends
are payable on November 15, 2016.
Obligations and Commitments
As of August 31, 2016, we had the following obligations and commitments to make future payments under
contracts, contractual obligations and commercial commitments:
Contractual Cash Obligations (1)
Long-term debt
Operating leases
Retirement obligations (2)
Purchase obligations and other commitments (3)
Payments due by period
Total
Less than
1 year
1-3 years
3-5 years
More than
5 years
(in millions of U.S. dollars)
$
27
$
3
$
7
$
8
$
2,817
106
145
517
11
56
821
22
89
577
22
—
9
903
51
—
962
Total
$
3,096
$
586
$
940
$
607
$
_______________
Amounts in table may not total due to rounding.
(1)
(2)
(3)
The liability related to unrecognized tax benefits has been excluded from the contractual obligations table
because a reasonable estimate of the timing and amount of cash outflows from future tax settlements cannot
be determined. For additional information, see Note 9 (Income Taxes) to our Consolidated Financial Statements
under Item 8, “Financial Statements and Supplementary Data.”
Amounts represent projected payments under certain unfunded retirement plans for former pre-incorporation
partners. Given these plans are unfunded, we pay these benefits directly. These plans were eliminated for
active partners after May 15, 2001.
Other commitments include, among other things, information technology, software support and maintenance
obligations, as well as other obligations in the ordinary course of business that we cannot cancel or where we
would be required to pay a termination fee in the event of cancellation. Amounts shown do not include recourse
that we may have to recover termination fees or penalties from clients.
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Off-Balance Sheet Arrangements
In the normal course of business and in conjunction with some client engagements, we have entered into
contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters. To
date, we have not been required to make any significant payment under any of these arrangements. For further
discussion of these transactions, see Note 15 (Commitments and Contingencies) to our Consolidated Financial
Statements under Item 8, “Financial Statements and Supplementary Data.”
Recently Adopted Accounting Pronouncement
In August 2016, we early adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update
(“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes, which amends existing guidance on income
taxes to require the classification of all deferred tax assets and liabilities as non-current on the balance sheet. We
adopted this ASU using the retrospective method which required reclassification of current deferred taxes as previously
reported on our August 31, 2015 Consolidated Balance Sheets to non-current, resulting in an increase to non-current
deferred tax assets of $816 million and a decrease to noncurrent deferred tax liabilities of $22 million.
New Accounting Pronouncements
On March 31, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment
Accounting, which simplifies the accounting for share-based payment transactions. The new guidance requires excess
tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In
addition, the ASU includes provisions that impact the classification of awards as either equity or liabilities and the
classification of excess tax benefits on the cash flow statements. We will early adopt the standard effective September
1, 2016. Following adoption, the primary impact on our Consolidated Financial Statements will be the recognition of
excess tax benefits in the provision for income taxes rather than Additional paid-in capital, which will likely result in
increased volatility in the reported amounts of income tax expense and net income. We estimate this change will reduce
our fiscal 2017 effective tax rate by less than two percentage points. The actual impact of adopting this standard on
the effective tax rate will vary depending on our share price during fiscal 2017. Provisions of the new guidance related
to changes to classification of excess tax benefits in the cash flow statements are expected to be adopted retrospectively.
We are continuing to evaluate the impacts of the adoption of this guidance and our preliminary assessments are subject
to change.
On March 15, 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of
Accounting, which eliminates the requirement to retrospectively apply equity method accounting when an entity
increases ownership or influence in a previously held investment. The ASU will be effective for us beginning September
1, 2017, including interim periods in our fiscal year 2018. We do not expect the adoption of this ASU to have a material
impact on our Consolidated Financial Statements.
On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which amends existing guidance to require
lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term
leases and to disclose additional quantitative and qualitative information about leasing arrangements. The ASU will
be effective for us beginning September 1, 2019, including interim periods in our fiscal year 2020, and allows for a
modified retrospective method upon adoption. We are assessing the impact of this ASU on our Consolidated Financial
Statements.
On January 5, 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and
Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of
financial instruments. The ASU will be effective for us beginning September 1, 2018, including interim periods in our
fiscal year 2019. We do not expect the adoption of this ASU to have a material impact on our Consolidated Financial
Statements.
On May 28, 2014, the FASB issued ASU No. 2014-09 (Accounting Standard Codification 606), Revenue from
Contracts with Customers, which will replace most existing revenue recognition guidance in U.S. GAAP. The core
principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount
that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the
nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant
judgments and changes in judgments. The ASU will be effective for us beginning September 1, 2018, including interim
periods in our fiscal year 2019, and allows for both retrospective and modified retrospective methods of adoption. We
will adopt the guidance on September 1, 2018 and apply the modified retrospective method.We are assessing the
impact of this ASU on our Consolidated Financial Statements.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
All of our market risk sensitive instruments were entered into for purposes other than trading.
Foreign Currency Risk
We are exposed to foreign currency risk in the ordinary course of business. We hedge material cash flow exposures
when feasible using forward contracts. These instruments are subject to fluctuations in foreign currency exchange
rates and credit risk. Credit risk is managed through careful selection and ongoing evaluation of the financial institutions
utilized as counterparties.
Certain of these hedge positions are undesignated hedges of balance sheet exposures such as intercompany
loans and typically have maturities of less than one year. These hedges—primarily U.S. dollar/Indian rupee, U.S. dollar/
Euro, U.S. dollar/Japanese yen, U.S. dollar/U.K. pound, U.S. dollar/Brazilian real, U.S. dollar/Swiss franc, U.S. dollar/
Philippine peso and U.S. dollar/Norwegian krone—are intended to offset remeasurement of the underlying assets and
liabilities. Changes in the fair value of these derivatives are recorded in Other expense, net in the Consolidated Income
Statement. Additionally, we have hedge positions that are designated cash flow hedges of certain intercompany charges
relating to our Global Delivery Network. These hedges—U.S. dollar/Indian rupee, U.S. dollar/Philippine peso, Euro/
Indian rupee, U.K. pound/Indian rupee and Japanese yen/Chinese yuan, which typically have maturities not exceeding
three years—are intended to partially offset the impact of foreign currency movements on future costs relating to
resources supplied by our Global Delivery Network. For additional information, see Note 7 (Derivative Financial
Instruments) to our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
For designated cash flow hedges, gains and losses currently recorded in Accumulated other comprehensive loss
will be reclassified into earnings at the time when certain anticipated intercompany charges are accrued as Cost of
services. As of August 31, 2016, it was anticipated that approximately $61 million of net gains, net of tax, currently
recorded in Accumulated other comprehensive loss will be reclassified into Cost of services within the next 12 months.
We use sensitivity analysis to determine the effects that market foreign currency exchange rate fluctuations may
have on the fair value of our hedge portfolio. The sensitivity of the hedge portfolio is computed based on the market
value of future cash flows as affected by changes in exchange rates. This sensitivity analysis represents the hypothetical
changes in value of the hedge position and does not reflect the offsetting gain or loss on the underlying exposure. A
10% change in the levels of foreign currency exchange rates against the U.S. dollar (or other base currency of the
hedge if not a U.S. dollar hedge) with all other variables held constant would have resulted in a change in the fair value
of our hedge instruments of approximately $328 million and $305 million as of August 31, 2016 and 2015, respectively.
Interest Rate Risk
The interest rate risk associated with our borrowing and investing activities as of August 31, 2016 is not material
in relation to our consolidated financial position, results of operations or cash flows. While we may do so in the future,
we have not used derivative financial instruments to alter the interest rate characteristics of our investment holdings
or debt instruments.
Other Market Risk
The privately held companies in which we invest are often in a start-up or development stage, which is inherently
risky. The technologies or products these companies have under development are typically in the early stages and
may never materialize, which could result in a loss of a substantial part of our investment in these companies. The
evaluation of privately held companies is based on information that we request from these companies, which is not
subject to the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these
evaluations is subject to the timing and accuracy of the data received from these companies. We have minimal exposure
on our long-term investments in privately held companies as these investments were insignificant as of August 31,
2016.
Equity Price Risk
The equity price risk associated with our marketable equity securities that are subject to market price volatility is
not material in relation to our consolidated financial position, results of operations or cash flows.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the Index to Consolidated Financial Statements and financial statements commencing on page F-1, which
are incorporated herein by reference.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, has
evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange
Act) as of the end of the period covered by this report. Any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control objectives. Based on that evaluation,
the principal executive officer and the principal financial officer of Accenture plc have concluded that, as of the end of
the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance
level.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting
to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. Internal control over
financial reporting includes those policies and procedures that:
i. pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets;
ii. provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that our receipts and expenditures
are being made only in accordance with authorizations of management and our Board of Directors; and
iii. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on our financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Under the supervision and with the participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting
using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control—Integrated Framework (2013). Based on its evaluation, our management concluded that our internal
control over financial reporting was effective as of the end of the fiscal year covered by this Annual Report on Form 10-
K.
KPMG LLP, an independent registered public accounting firm, has audited the Consolidated Financial Statements
included in this Annual Report on Form 10-K and, as part of their audit, has issued its attestation report, included
herein, on the effectiveness of our internal control over financial reporting. See “Report of Independent Registered
Public Accounting Firm” on page F-2.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the fourth quarter
of fiscal 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Except as described in Part II, Item 5 of our Quarterly Report on Form 10-Q for the quarter ended February 29,
2016, there have been no material changes to the procedures by which security holders may recommend nominees
to our Board of Directors from those described in the proxy statement for our Annual General Meeting of Shareholders
filed with the SEC on December 11, 2015.
Information about our executive officers is contained in the discussion entitled “Executive Officers of the Registrant”
in Part I of this Form 10-K. The remaining information called for by Item 10 will be included in the sections captioned
“Re-Appointment of Directors,” “Corporate Governance” and “Beneficial Ownership” included in the definitive proxy
statement relating to the 2017 Annual General Meeting of Shareholders of Accenture plc to be held on February 10,
2017 and is incorporated herein by reference. Accenture plc will file such definitive proxy statement with the SEC
pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2016 fiscal year covered by this
Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information called for by Item 11 will be included in the sections captioned “Executive Compensation” and
“Director Compensation” included in the definitive proxy statement relating to the 2017 Annual General Meeting of
Shareholders of Accenture plc to be held on February 10, 2017 and is incorporated herein by reference. Accenture
plc will file such definitive proxy statement with the SEC pursuant to Regulation 14A not later than 120 days after the
end of the Company’s 2016 fiscal year covered by this Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDER MATTERS
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth, as of August 31, 2016, certain information related to our compensation plans under
which Accenture plc Class A ordinary shares may be issued.
Number of
Shares to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants
and
Rights
Weighted-
Average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights
Number of
Shares
Remaining
Available for
Future
Issuance
Under Equity
Compensation
Plans
(Excluding
Securities
Reflected in
1st Column)
439,242 (1)
$
22,478,425 (2)
—
—
22,917,667
35.417
48.105
N/A
N/A
—
23,167,880
47,420,425
—
70,588,305
Plan Category
Equity compensation plans approved by shareholders:
2001 Share Incentive Plan
Amended and Restated 2010 Share Incentive Plan
Amended and Restated 2010 Employee Share Purchase Plan
Equity compensation plans not approved by shareholders
Total
_______________
(1)
(2)
Consists of 419,683 restricted share units and 19,559 stock options.
Consists of 22,474,674 restricted share units and 3,751 stock options.
The remaining information called for by Item 12 will be included in the section captioned “Beneficial Ownership”
included in the definitive proxy statement relating to the 2017 Annual General Meeting of Shareholders of Accenture
plc to be held on February 10, 2017 and is incorporated herein by reference. Accenture plc will file such definitive proxy
statement with the SEC pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2016 fiscal
year covered by this Form 10-K.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information called for by Item 13 will be included in the section captioned “Corporate Governance” included
in the definitive proxy statement relating to the 2017 Annual General Meeting of Shareholders of Accenture plc to be
held on February 10, 2017 and is incorporated herein by reference. Accenture plc will file such definitive proxy statement
with the SEC pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2016 fiscal year
covered by this Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information called for by Item 14 will be included in the section captioned “Audit” included in the definitive
proxy statement relating to the 2017 Annual General Meeting of Shareholders of Accenture plc to be held on February
10, 2017 and is incorporated herein by reference. Accenture plc will file such definitive proxy statement with the SEC
pursuant to Regulation 14A not later than 120 days after the end of the Company’s 2016 fiscal year covered by this
Form 10-K.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) List of documents filed as part of this report:
1. Financial Statements as of August 31, 2016 and August 31, 2015 and for the three years ended August 31, 2016
—Included in Part II of this Form 10-K:
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Shareholders’ Equity Statements
Consolidated Cash Flows Statements
Notes to Consolidated Financial Statements
2. Financial Statement Schedules:
None
3. Exhibit Index:
Exhibit
Number
3.1
3.2
10.1
10.2
10.3*
10.4
10.5*
10.6*
10.7*
10.8
10.9
10.10*
10.11
10.12
10.13
10.14*
Exhibit
Amended and Restated Memorandum and Articles of Association of Accenture plc (incorporated by
reference to Exhibit 3.1 to Accenture plc’s 8-K filed on February 3, 2016)
Certificate of Incorporation of Accenture plc (incorporated by reference to Exhibit 3.2 to Accenture plc’s 8-
K12B filed on September 1, 2009 (the “8-K12B”))
Form of Voting Agreement, dated as of April 18, 2001, among Accenture Ltd and the covered persons
party thereto as amended and restated as of February 3, 2005 (incorporated by reference to Exhibit 9.1
to the Accenture Ltd February 28, 2005 10-Q (File No. 001-16565) (the “February 28, 2005 10-Q”))
Assumption Agreement of the Amended and Restated Voting Agreement, dated September 1, 2009
(incorporated by reference to Exhibit 10.4 to the 8-K12B)
Form of Non-Competition Agreement, dated as of April 18, 2001, among Accenture Ltd and certain
employees (incorporated by reference to Exhibit 10.2 to the Accenture Ltd Registration Statement on Form
S-1 (File No. 333-59194) filed on April 19, 2001 (the “April 19, 2001 Form S-1”))
Assumption and General Amendment Agreement between Accenture plc and Accenture Ltd, dated
September 1, 2009 (incorporated by reference to Exhibit 10.1 to the 8-K12B)
2001 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the Accenture Ltd Registration
Statement on Form S-1/A (File No. 333-59194) filed on July 12, 2001)
Amended and Restated 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.1 to Accenture
plc’s 8-K filed on February 3, 2016)
Amended and Restated 2010 Employee Share Purchase Plan (incorporated by reference to Exhibit 10.2
to Accenture plc’s 8-K filed on February 3, 2016)
Memorandum and Articles of Association and Deed Poll of Accenture Holdings plc (incorporated by
reference to Exhibit 3.1 to Accenture Holdings plc’s 8-K12G3 filed on August 26, 2015 (the “8-K12G3”)
Form of Accenture SCA Transfer Rights Agreement, dated as of April 18, 2001, among Accenture SCA
and the covered persons party thereto as amended and restated as of February 3, 2005 (incorporated by
reference to Exhibit 10.2 to the February 28, 2005 10-Q)
Form of Non-Competition Agreement, dated as of April 18, 2001, among Accenture SCA and certain
employees (incorporated by reference to Exhibit 10.7 to the April 19, 2001 Form S-1)
Form of Letter Agreement, dated April 18, 2001, between Accenture SCA and certain shareholders of
Accenture SCA (incorporated by reference to Exhibit 10.8 to the April 19, 2001 Form S-1)
Form of Support Agreement, dated as of May 23, 2001, between Accenture Ltd and Accenture Canada
Holdings Inc. (incorporated by reference to Exhibit 10.9 to the Accenture Ltd Registration Statement on
Form S-1/A (File No. 333-59194) filed on July 2, 2001 (the “July 2, 2001 Form S-1/A”))
First Supplemental Agreement to Support Agreement among Accenture plc, Accenture Ltd and Accenture
Canada Holdings Inc., dated September 1, 2009 (incorporated by reference to Exhibit 10.2 to the 8-K12B)
Employment Agreement between Accenture SAS and Pierre Nanterme dated as of June 20, 2013
(incorporated by reference to Exhibit 10.2 to the May 31, 2013 10-Q)
50
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10.15*
10.16*
10.17*
10.18
10.19
10.20
10.21
10.22*
10.23*
10.24*
10.25*
10.26*
10.27*
10.28*
10.29*
10.30*
10.31*
10.32*
10.33*
10.34*
10.35*
10.36*
10.37*
Form of Employment Agreement of executive officers in the United States (incorporated by reference to
Exhibit 10.3 to the February 28, 2013 10-Q)
Form of Employment Agreement of executive officers in the United Kingdom (incorporated by reference
to Exhibit 10.16 to the August 31, 2013 10-K)
Form of Employment Agreement of executive officers in Singapore (incorporated by reference to Exhibit
10.17 to the August 31, 2015 10-K)
Form of Articles of Association of Accenture Canada Holdings Inc. (incorporated by reference to Exhibit
10.11 to the July 2, 2001 Form S-1/A)
Articles of Amendment to Articles of Association of Accenture Canada Holdings Inc. (incorporated by
reference to Exhibit 10.21 to the August 31, 2013 10-K)
Form of Exchange Trust Agreement by and between Accenture Ltd and Accenture Canada Holdings Inc.
and CIBC Mellon Trust Company, made as of May 23, 2001 (incorporated by reference to Exhibit 10.12
to the July 2, 2001 Form S-1/A)
First Supplemental Agreement to Exchange Trust Agreement among Accenture plc, Accenture Ltd,
Accenture Canada Holdings Inc. and Accenture Inc., dated September 1, 2009 (incorporated by reference
to Exhibit 10.3 to the 8-K12B)
Form of Key Executive Performance-Based Award Restricted Share Unit Agreement pursuant to the
Amended and Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit
10.4 to the February 29, 2016 10-Q)
Form of Key Executive Performance-Based Award Restricted Share Unit Agreement pursuant to Accenture
plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.2 to the February 28, 2015 10-Q)
Form of Amendment to Senior Officer Performance Equity Award Restricted Share Unit Agreement
pursuant to Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the
November 30, 2014 10-Q)
Form of Senior Officer Performance Equity Award Restricted Share Unit Agreement pursuant to Accenture
plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the February 28, 2014 10-Q)
Form of Senior Officer Performance Equity Award Restricted Share Unit Agreement in France pursuant
to Accenture Ltd 2001 Share Incentive Plan (incorporated by reference to Exhibit 10.29 to the August 31,
2012 10-K)
Form of Accenture Leadership Performance Equity Award Restricted Share Unit Agreement pursuant to
the Amended and Restated Accenture plc Accenture plc 2010 Share Incentive Plan (incorporated by
reference to Exhibit 10.5 to the February 29, 2016 10-Q)
Form of Accenture Leadership Performance Equity Award Restricted Share Unit Agreement pursuant to
Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the February 28,
2015 10-Q)
Form of Voluntary Equity Investment Program Matching Grant Restricted Share Unit Agreement pursuant
to the Amended and Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to
Exhibit 10.6 to the February 29, 2016 10-Q)
Form of Voluntary Equity Investment Program Matching Grant Restricted Share Unit Agreement pursuant
to Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.4 to the February 28,
2015 10-Q)
Form of Amendment to the Senior Officer Performance Equity Award Restricted Share Unit Agreement,
the Accenture Leadership Performance Equity Award Restricted Share Unit Agreement and the Voluntary
Equity Investment Program Matching Grant Restricted Share Unit Agreement (filed herewith)
Form of Restricted Share Unit Agreement for director grants pursuant to the Amended and Restated
Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.7 to the February 29,
2016 10-Q)
Form of Restricted Share Unit Agreement for director grants pursuant to Accenture Ltd 2001 Share Incentive
Plan (incorporated by reference to Exhibit 10.1 to the Accenture Ltd February 29, 2008 10-Q)
Accenture LLP Leadership Separation Benefits Plan (filed herewith)
Description of Global Annual Bonus Plan (incorporated by reference to Exhibit 10.49 to the August 31,
2013 10-K)
Form of Indemnification Agreement, between Accenture International S.à.r.l. and the indemnitee party
thereto (incorporated by reference to Exhibit 10.5 to the 8-K12B)
Form of Indemnification Agreement, between Accenture Holdings plc, Accenture LLP and the indemnitee
party thereto (incorporated by reference to Exhibit 10.1 of the 8-K12G3)
21.1
Subsidiaries of the Registrant (filed herewith)
51
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23.1
23.2
24.1
31.1
31.2
32.1
32.2
99.1
101
Consent of KPMG LLP (filed herewith)
Consent of KPMG LLP related to the Accenture plc 2010 Employee Share Purchase Plan (filed herewith)
Power of Attorney (included on the signature page hereto)
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith)
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith)
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Amended and Restated Accenture plc 2010 Employee Share Purchase Plan Financial Statements (filed
herewith)
The following financial information from Accenture plc’s Annual Report on Form 10-K for the fiscal year
ended August 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated
Balance Sheets as of August 31, 2016 and August 31, 2015, (ii) Consolidated Income Statements for the
years ended August 31, 2016, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income
for the years ended August 31, 2016, 2015 and 2014, (iv) Consolidated Shareholders’ Equity Statement
for the years ended August 31, 2016, 2015 and 2014, (v) Consolidated Cash Flows Statements for the
years ended August 31, 2016, 2015 and 2014, and (vi) the Notes to Consolidated Financial Statements
(*)
Indicates management contract or compensatory plan or arrangement.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information
or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you
should not rely on them for that purpose. In particular, any representations and warranties made by us in these
agreements or other documents were made solely within the specific context of the relevant agreement or document
and may not describe the actual state of affairs as of the date they were made or at any other time.
52
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf on October 28, 2016 by the undersigned, thereunto duly authorized.
SIGNATURES
ACCENTURE PLC
By:
/s/ PIERRE NANTERME
Name: Pierre Nanterme
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints Pierre Nanterme, David P. Rowland and Joel Unruch, and each of them, as his or her true
and lawful attorneys-in-fact and agents, with power to act with or without the others and with full power of substitution
and resubstitution, to do any and all acts and things and to execute any and all instruments which said attorneys and
agents and each of them may deem necessary or desirable to enable the registrant to comply with the U.S. Securities
Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange
Commission thereunder in connection with the registrant’s Annual Report on Form 10-K for the fiscal year ended
August 31, 2016 (the “Annual Report”), including specifically, but without limiting the generality of the foregoing, power
and authority to sign the name of the registrant and the name of the undersigned, individually and in his or her capacity
as a director or officer of the registrant, to the Annual Report as filed with the U.S. Securities and Exchange Commission,
to any and all amendments thereto, and to any and all instruments or documents filed as part thereof or in connection
therewith; and each of the undersigned hereby ratifies and confirms all that said attorneys and agents and each of
them shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on
October 28, 2016 by the following persons on behalf of the registrant and in the capacities indicated.
Signature
Title
/s/ PIERRE NANTERME
Pierre Nanterme
/s/ DAVID P. ROWLAND
David P. Rowland
/s/ RICHARD P. CLARK
Richard P. Clark
/s/ JAIME ARDILA
Jaime Ardila
/s/ DINA DUBLON
Dina Dublon
Chief Executive Officer, Chairman of the Board and Director
(principal executive officer)
Chief Financial Officer
(principal financial officer)
Chief Accounting Officer
(principal accounting officer)
Director
Director
53
Table of Contents
/s/ CHARLES GIANCARLO
Charles Giancarlo
/s/ WILLIAM L. KIMSEY
William L. Kimsey
/s/ MARJORIE MAGNER
Marjorie Magner
/s/ BLYTHE J. MCGARVIE
Blythe J. McGarvie
/s/ NANCY MCKINSTRY
Nancy McKinstry
/s/ GILLES C. PÉLISSON
Gilles C. Pélisson
/s/ PAULA A. PRICE
Paula A. Price
/s/ ARUN SARIN
Arun Sarin
/s/ WULF VON SCHIMMELMANN
Wulf von Schimmelmann
/s/ FRANK K. TANG
Frank K. Tang
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
54
Table of Contents
ACCENTURE PLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements as of August 31, 2016 and 2015 and for the years ended August 31,
2016, 2015 and 2014:
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Shareholders’ Equity Statements
Consolidated Cash Flows Statements
Notes to Consolidated Financial Statements
Page
F-2
F-3
F-4
F-5
F-6
F-8
F-9
F- 1
Table of Contents
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Accenture plc:
We have audited the accompanying consolidated balance sheets of Accenture plc and its subsidiaries (the
Company) as of August 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income,
shareholders’ equity, and cash flows for each of the years in the three-year period ended August 31, 2016. We also
have audited Accenture plc’s internal control over financial reporting as of August 31, 2016, based on criteria established
in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Accenture plc’s management is responsible for these consolidated financial statements, for
maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over
Financial Reporting (Item 9A). Our responsibility is to express an opinion on these consolidated financial statements
and an opinion on the Company’s internal control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement and whether effective internal control over financial
reporting was maintained in all material respects. Our audits of the consolidated financial statements included
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide
a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of Accenture plc and its subsidiaries as of August 31, 2016 and 2015, and the results of their operations
and their cash flows for each of the years in the three-year period ended August 31, 2016, in conformity with U.S.
generally accepted accounting principles. Also in our opinion, Accenture plc maintained, in all material respects,
effective internal control over financial reporting as of August 31, 2016, based on criteria established in Internal Control
- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
/s/ KPMG LLP
Chicago, Illinois
October 28, 2016
F- 2
Table of Contents
ACCENTURE PLC
CONSOLIDATED BALANCE SHEETS
August 31, 2016 and 2015
(In thousands of U.S. dollars, except share and per share amounts)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Short-term investments
Receivables from clients, net
Unbilled services, net
Other current assets
Total current assets
NON-CURRENT ASSETS:
Unbilled services, net
Investments
Property and equipment, net
Goodwill
Deferred contract costs
Deferred income taxes, net
Other non-current assets
Total non-current assets
TOTAL ASSETS
CURRENT LIABILITIES:
LIABILITIES AND SHAREHOLDERS’ EQUITY
August 31,
2016
August 31,
2015
$ 4,905,609
2,875
$ 4,360,766
2,448
4,072,180
2,150,219
845,339
11,976,222
3,840,920
1,884,504
611,436
10,700,074
68,145
198,633
956,542
3,609,437
733,219
2,077,312
15,501
45,027
801,884
2,929,833
655,482
2,089,928
989,494
8,632,782
$ 20,609,004
964,918
7,502,573
$ 18,202,647
Current portion of long-term debt and bank borrowings
$
2,773
$
1,848
Accounts payable
Deferred revenues
Accrued payroll and related benefits
Accrued consumption taxes
Income taxes payable
Other accrued liabilities
Total current liabilities
NON-CURRENT LIABILITIES:
Long-term debt
Deferred revenues
Retirement obligation
Deferred income taxes, net
Income taxes payable
Other non-current liabilities
Total non-current liabilities
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of August 31, 2016 and
August 31, 2015
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 654,202,813 and
804,757,785 shares issued as of August 31, 2016 and August 31, 2015, respectively
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 21,917,155 and
23,335,142 shares issued and outstanding as of August 31, 2016 and August 31, 2015, respectively
Restricted share units
Additional paid-in capital
Treasury shares, at cost: Ordinary, 40,000 shares as of August 31, 2016 and August 31, 2015; Class A ordinary,
33,529,739 and 178,056,462 shares as of August 31, 2016 and August 31, 2015, respectively
Retained earnings
Accumulated other comprehensive loss
Total Accenture plc shareholders’ equity
Noncontrolling interests
Total shareholders’ equity
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
1,280,821
2,364,728
4,040,751
358,359
362,963
468,529
8,878,924
24,457
754,812
1,494,789
111,020
850,709
304,917
3,540,704
1,151,464
2,251,617
3,687,468
319,350
516,827
562,432
8,491,006
25,587
524,455
1,108,623
91,372
996,077
317,956
3,064,070
57
15
—
57
18
1
1,004,128
2,924,729
1,031,203
4,516,810
(2,591,907)
(11,472,400)
7,879,960
(1,661,720)
7,555,262
13,470,008
(1,411,972)
6,133,725
634,114
8,189,376
$ 20,609,004
513,846
6,647,571
$ 18,202,647
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 3
Table of Contents
ACCENTURE PLC
CONSOLIDATED INCOME STATEMENTS
For the Years Ended August 31, 2016, 2015 and 2014
(In thousands of U.S. dollars, except share and per share amounts)
REVENUES:
Revenues before reimbursements (“Net revenues”)
Reimbursements
Revenues
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses
Reimbursable expenses
Cost of services
Sales and marketing
General and administrative costs
Pension settlement charge
Reorganization benefits, net
Total operating expenses
OPERATING INCOME
Interest income
Interest expense
Other expense, net
Gain on sale of businesses
INCOME BEFORE INCOME TAXES
Provision for income taxes
NET INCOME
Net income attributable to noncontrolling interests in
Accenture Holdings plc and Accenture Canada Holdings Inc.
Net income attributable to noncontrolling interests – other
2016
2015
2014
$ 32,882,723
$ 31,047,931
$ 30,002,394
1,914,938
1,866,493
1,872,284
34,797,661
32,914,424
31,874,678
22,605,296
21,238,692
20,317,928
1,914,938
1,866,493
1,872,284
24,520,234
23,105,185
22,190,212
3,580,439
3,505,045
3,582,833
1,886,543
1,803,943
1,819,136
—
—
64,382
—
—
(18,015)
29,987,216
28,478,555
27,574,166
4,810,445
4,435,869
4,300,512
30,484
(16,258)
(69,922)
848,823
33,991
(14,578)
(44,752)
—
30,370
(17,621)
(15,560)
—
5,603,572
4,410,530
4,297,701
1,253,969
4,349,603
1,136,741
3,273,789
1,121,743
3,175,958
(195,560)
(178,925)
(187,107)
(42,151)
(41,283)
(47,353)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC
$ 4,111,892
$ 3,053,581
$ 2,941,498
Weighted average Class A ordinary shares:
Basic
Diluted
Earnings per Class A ordinary share:
Basic
Diluted
Cash dividends per share
624,797,820
626,799,586
634,216,250
667,770,274
678,757,070
692,389,966
$
$
$
6.58
6.45
2.20
$
$
$
4.87
4.76
2.04
$
$
$
4.64
4.52
1.86
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 4
Table of Contents
ACCENTURE PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended August 31, 2016, 2015 and 2014
(In thousands of U.S. dollars)
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation
Defined benefit plans
Cash flow hedges
Marketable securities
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE
PLC
Other comprehensive income (loss) attributable to noncontrolling interests
COMPREHENSIVE INCOME
2016
2015
2014
$ 4,349,603
$ 3,273,789
$ 3,175,958
(66,459)
(528,908)
89,805
(285,885)
7,524
(105,739)
101,299
(17,079)
196,732
1,297
(1,561)
—
(249,748)
(540,024)
180,798
(7,881)
10,160
9,183
$ 4,091,974
$ 2,743,925
$ 3,365,939
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC
$ 3,862,144
$ 2,513,557
$ 3,122,296
Comprehensive income attributable to noncontrolling interests
229,830
230,368
243,643
COMPREHENSIVE INCOME
$ 4,091,974
$ 2,743,925
$ 3,365,939
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 5
Table of Contents
ACCENTURE PLC
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENTS
For the Years Ended August 31, 2016, 2015 and 2014
(In thousands of U.S. dollars and share amounts)
Ordinary
Shares
Class A
Ordinary
Shares
Class X
Ordinary
Shares
No.
Shares
$
$
No.
Shares
No.
Shares
$
Restricted
Share
Units
Additional
Paid-in
Capital
Treasury Shares
$
No.
Shares
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Accenture plc
Shareholders’
Equity
Noncontrolling
Interests
Total
Shareholders’
Equity
Balance as of August 31, 2013 $ 57
40
$ 17
771,302
$ 1
30,312
$ 875,156
$ 2,393,936
$ (7,326,079)
(135,299) $ 10,069,844
$
(1,052,746) $
4,960,186
$
467,643
$
5,427,829
Net income
Other comprehensive income
(loss)
Income tax benefit on share-
based compensation plans
Purchases of Class A ordinary
shares
Share-based compensation
expense
Purchases/redemptions of
Accenture Holdings plc
ordinary shares, Accenture
Canada Holdings Inc.
exchangeable shares and
Class X ordinary shares
Issuances of Class A ordinary
shares:
Employee share programs
Upon redemption of
Accenture Holdings plc
ordinary shares
Dividends
Other, net
78,421
2,941,498
180,798
2,941,498
180,798
78,421
234,460
3,175,958
9,183
189,981
78,421
128,395
(2,403,373)
(30,629)
(2,274,978)
(128,395)
(2,403,373)
625,792
45,509
671,301
671,301
(2,255)
(147,278)
(147,278)
(8,783)
(156,061)
1
14,325
(634,619)
858,012
306,250
7,518
529,644
28,853
558,497
1,242
55,257
5,784
(15,387)
(1,234,147)
(19,064)
5,784
(1,178,890)
(34,451)
(5,784)
(76,026)
32,151
—
(1,254,916)
(2,300)
Balance as of August 31, 2014 $ 57
40
$ 18
786,869
$ 1
28,057
$ 921,586
$ 3,347,392
$ (9,423,202)
(158,410) $ 11,758,131
$
(871,948) $
5,732,035
$
553,302
$
6,285,337
F- 6
Table of Contents
Net income
Other comprehensive income
(loss)
Income tax benefit on share-
based compensation plans
Purchases of Class A ordinary
shares
Share-based compensation
expense
Purchases/redemptions of
Accenture Holdings plc
ordinary shares, Accenture
Canada Holdings Inc.
exchangeable shares and
Class X ordinary shares
Issuances of Class A ordinary
shares:
Employee share programs
Upon redemption of
Accenture Holdings plc
ordinary shares
Dividends
Other, net
ACCENTURE PLC
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENTS — (continued)
For the Years Ended August 31, 2016, 2015, and 2014
(In thousands of U.S. dollars and share amounts)
Ordinary
Shares
Class A
Ordinary
Shares
Class X
Ordinary
Shares
No.
Shares
$
$
No.
Shares
No.
Shares
$
Restricted
Share
Units
Additional
Paid-in
Capital
202,868
Treasury Shares
$
No.
Shares
Retained
Earnings
3,053,581
Accumulated
Other
Comprehensive
Loss
Total
Accenture plc
Shareholders’
Equity
Noncontrolling
Interests
Total
Shareholders’
Equity
(540,024)
3,053,581
(540,024)
202,868
220,208
10,160
3,273,789
(529,864)
202,868
112,476
(2,273,933)
(25,449)
(2,161,457)
(112,476)
(2,273,933)
634,195
46,134
680,329
680,329
(4,722)
(170,168)
(170,168)
(8,888)
(179,056)
11,649
6,240
(575,979)
878,939
224,735
5,763
51,401
29,815
69,354
527,695
29,815
26,454
(29,815)
554,149
—
(1,328,188)
(13,516)
(1,276,787)
55,838
(76,684)
(68,415)
(1,353,471)
(12,577)
Balance as of August 31, 2015 $ 57
40
$ 18
804,758
$ 1
23,335
$ 1,031,203
$ 4,516,810
$ (11,472,400)
(178,096) $ 13,470,008
$
(1,411,972) $
6,133,725
$
513,846
$
6,647,571
F- 7
Table of Contents
Net income
Other comprehensive income
(loss)
Income tax benefit on share-
based compensation plans
Purchases of Class A ordinary
shares
Cancellation of treasury shares
Share-based compensation
expense
Purchases/redemptions of
Accenture Holdings plc
ordinary shares, Accenture
Canada Holdings Inc.
exchangeable shares and
Class X ordinary shares
Issuances of Class A ordinary
shares:
Employee share programs
Upon redemption of
Accenture Holdings plc
ordinary shares
Dividends
Other, net
ACCENTURE PLC
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENTS — (continued)
For the Years Ended August 31, 2016, 2015, and 2014
(In thousands of U.S. dollars and share amounts)
Ordinary
Shares
Class A
Ordinary
Shares
Class X
Ordinary
Shares
No.
Shares
$
$
No.
Shares
No.
Shares
$
Restricted
Share
Units
Additional
Paid-in
Capital
112,562
Treasury Shares
$
No.
Shares
Retained
Earnings
4,111,892
Accumulated
Other
Comprehensive
Loss
Total
Accenture plc
Shareholders’
Equity
Noncontrolling
Interests
Total
Shareholders’
Equity
(249,748)
4,111,892
(249,748)
112,562
237,711
(7,881)
4,349,603
(257,629)
112,562
103,760
(2,532,796)
(23,848)
(2,429,036)
(103,760)
(2,532,796)
(4)
(163,016)
(2,923,579)
11,199,016
163,016
(8,275,433)
701,923
56,253
—
758,176
—
758,176
(1)
(1,418)
(68,481)
(68,482)
(3,711)
(72,193)
1
11,686
775
(785,141)
1,138,304
214,273
5,358
3,541
51,137
5,006
(14,441)
567,437
3,541
23,920
(3,541)
591,357
—
(1,423,316)
(3,191)
(1,372,179)
(12,626)
(65,959)
43,489
(1,438,138)
30,863
Balance as of August 31, 2016 $ 57
40
$ 15
654,203
$ —
21,917
$ 1,004,128
$ 2,924,729
$ (2,591,907)
(33,570) $
7,879,960
$
(1,661,720) $
7,555,262
$
634,114
$
8,189,376
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 8
Table of Contents
ACCENTURE PLC
CONSOLIDATED CASH FLOWS STATEMENTS
For the Years Ended August 31, 2016, 2015 and 2014
(In thousands of U.S. dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile Net income to Net cash provided by operating
activities—
Depreciation, amortization and asset impairments
Reorganization benefits, net
Share-based compensation expense
Gain on sale of businesses
Deferred income taxes, net
Other, net
Change in assets and liabilities, net of acquisitions—
Receivables from clients, net
Unbilled services, current and non-current, net
Other current and non-current assets
Accounts payable
Deferred revenues, current and non-current
Accrued payroll and related benefits
Income taxes payable, current and non-current
Other current and non-current liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property and equipment
Purchases of property and equipment
Purchases of businesses and investments, net of cash acquired
Proceeds from the sale of businesses and investments, net of cash transferred
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares
Purchases of shares
Proceeds from (repayments of) long-term debt, net
Cash dividends paid
Excess tax benefits from share-based payment arrangements
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
2016
2015
2014
$ 4,349,603
$ 3,273,789
$ 3,175,958
729,052
645,923
—
—
758,176
680,329
(848,823)
—
65,940
(459,109)
(53,706)
(237,876)
(177,156)
(158,990)
(192,912)
(268,135)
(655,876)
(400,524)
72,626
302,738
386,018
(251,255)
90,690
113,548
182,836
586,548
105,037
28,761
620,743
(18,015)
671,301
—
(74,092)
104,950
(464,639)
(239,893)
(343,392)
72,526
93,927
(138,618)
108,860
(83,531)
4,575,115
4,092,137
3,486,085
4,220
5,784
(496,566)
(395,017)
(932,542)
(791,704)
814,538
10,553
5,526
(321,870)
(740,067)
—
(610,350)
(1,170,384)
(1,056,411)
591,357
554,149
558,497
(2,604,989)
(2,452,989)
(2,559,434)
(1,059)
701
543
(1,438,138)
(1,353,471)
(1,254,916)
92,285
(36,389)
84,026
(34,712)
114,293
(24,399)
(3,396,933)
(3,202,296)
(3,165,416)
(22,989)
(279,996)
25,162
544,843
(560,539)
(710,580)
CASH AND CASH EQUIVALENTS, beginning of period
4,360,766
4,921,305
5,631,885
CASH AND CASH EQUIVALENTS, end of period
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid
Income taxes paid
$ 4,905,609
$ 4,360,766
$ 4,921,305
$
16,285
$
14,810
$ 1,425,480
$ 1,433,538
$
$
17,595
962,976
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 9
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Accenture plc is one of the world’s leading organizations providing consulting, technology and outsourcing services
and operates globally with one common brand and business model designed to enable it to provide clients around the
world with the same high level of service. Drawing on a combination of industry and functional expertise, technology
capabilities and alliances, and global delivery resources, Accenture plc seeks to provide differentiated services that
help clients measurably improve their business performance and create sustainable value for their customers and
stakeholders. Accenture plc’s global delivery model enables it to provide an end-to-end delivery capability by drawing
on its global resources to deliver high-quality, cost-effective solutions to clients.
Basis of Presentation
The Consolidated Financial Statements include the accounts of Accenture plc, an Irish company, and its controlled
subsidiary companies (collectively, the “Company”). Accenture plc’s only business is to hold ordinary and deferred
shares in, and to act as the controlling shareholder of, its subsidiary, Accenture Holdings plc, an Irish public limited
company. The Company operates its business through Accenture Holdings plc and subsidiaries of Accenture Holdings
plc. Accenture plc controls Accenture Holdings plc’s management and operations and consolidates Accenture Holdings
plc’s results in its Consolidated Financial Statements.
On April 10, 2015, Accenture Holdings plc was incorporated in Ireland, as a public limited company, in order to
further consolidate Accenture’s presence in Ireland. On August 26, 2015, Accenture SCA merged with and into
Accenture Holdings plc, with Accenture Holdings plc as the surviving entity. This merger was a transaction between
entities under common control and had no effect on the Company’s Consolidated Financial Statements.
All references to Accenture Holdings plc included in this report with respect to periods prior to August 26, 2015
reflect the activity and/or balances of Accenture SCA (the predecessor of Accenture Holdings plc). The shares of
Accenture Holdings plc and Accenture Canada Holdings Inc. held by persons other than the Company are treated as
a noncontrolling interest in the Consolidated Financial Statements. The noncontrolling interest percentages were 4%
and 5% as of August 31, 2016 and 2015, respectively.
All references to years, unless otherwise noted, refer to the Company’s fiscal year, which ends on August 31.
For example, a reference to “fiscal 2016” means the 12-month period that ended on August 31, 2016. All references
to quarters, unless otherwise noted, refer to the quarters of the Company’s fiscal year.
The preparation of the Consolidated Financial Statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect amounts reported in the Consolidated
Financial Statements and accompanying disclosures. Although these estimates are based on management’s best
knowledge of current events and actions that the Company may undertake in the future, actual results may be different
from those estimates.
Revenue Recognition
Revenues from contracts for technology integration consulting services where the Company designs/redesigns,
builds and implements new or enhanced systems applications and related processes for its clients are recognized on
the percentage-of-completion method, which involves calculating the percentage of services provided during the
reporting period compared to the total estimated services to be provided over the duration of the contract. Contracts
for technology integration consulting services generally span six months to two years. Estimated revenues used in
applying the percentage-of-completion method include estimated incentives for which achievement of defined goals
is deemed probable. This method is followed where reasonably dependable estimates of revenues and costs can be
made. Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and
recorded revenues and estimated costs are subject to revision as the contract progresses. Such revisions may result
in increases or decreases to revenues and income and are reflected in the Consolidated Financial Statements in the
periods in which they are first identified. If the Company’s estimates indicate that a contract loss will occur, a loss
provision is recorded in the period in which the loss first becomes probable and reasonably estimable. Contract losses
are determined to be the amount by which the estimated total direct and indirect costs of the contract exceed the
estimated total revenues that will be generated by the contract and are included in Cost of services and classified in
Other accrued liabilities.
F- 10
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Revenues from contracts for non-technology integration consulting services with fees based on time and materials
or cost-plus are recognized as the services are performed and amounts are earned. The Company considers amounts
to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable,
and collectibility is reasonably assured. In such contracts, the Company’s efforts, measured by time incurred, typically
are provided in less than a year and represent the contractual milestones or output measure, which is the contractual
earnings pattern. For non-technology integration consulting contracts with fixed fees, the Company recognizes
revenues as amounts become billable in accordance with contract terms, provided the billable amounts are not
contingent, are consistent with the services delivered and are earned. Contingent or incentive revenues relating to
non-technology integration consulting contracts are recognized when the contingency is satisfied and the Company
concludes the amounts are earned.
Outsourcing contracts typically span several years and involve complex delivery, often through multiple workforces
in different countries. In a number of these arrangements, the Company hires client employees and becomes
responsible for certain client obligations. Revenues are recognized on outsourcing contracts as amounts become
billable in accordance with contract terms, unless the amounts are billed in advance of performance of services, in
which case revenues are recognized when the services are performed and amounts are earned. Revenues from time-
and-materials or cost-plus contracts are recognized as the services are performed. In such contracts, the Company’s
effort, measured by time incurred, represents the contractual milestones or output measure, which is the contractual
earnings pattern. Revenues from unit-priced contracts are recognized as transactions are processed based on objective
measures of output. Revenues from fixed-price contracts are recognized on a straight-line basis, unless revenues are
earned and obligations are fulfilled in a different pattern. Outsourcing contracts can also include incentive payments
for benefits delivered to clients. Revenues relating to such incentive payments are recorded when the contingency is
satisfied and the Company concludes the amounts are earned.
Costs related to delivering outsourcing services are expensed as incurred with the exception of certain transition
costs related to the set-up of processes, personnel and systems, which are deferred during the transition period and
expensed evenly over the period outsourcing services are provided. The deferred costs are specific internal costs or
incremental external costs directly related to transition or set-up activities necessary to enable the outsourced services.
Generally, deferred amounts are protected in the event of early termination of the contract and are monitored regularly
for impairment. Impairment losses are recorded when projected remaining undiscounted operating cash flows of the
related contract are not sufficient to recover the carrying amount of contract assets. Deferred transition costs were
$709,444 and $630,420 as of August 31, 2016 and 2015, respectively, and are included in Deferred contract costs.
Amounts billable to the client for transition or set-up activities are deferred and recognized as revenue evenly over the
period outsourcing services are provided. Deferred transition revenues were $604,674 and $522,968 as of August 31,
2016 and 2015, respectively, and are included in non-current Deferred revenues. Contract acquisition and origination
costs are expensed as incurred.
The Company enters into contracts that may consist of multiple deliverables. These contracts may include any
combination of technology integration consulting services, non-technology integration consulting services or
outsourcing services described above. Revenues for contracts with multiple deliverables are allocated based on the
lesser of the element’s relative selling price or the amount that is not contingent on future delivery of another deliverable.
The selling price of each deliverable is determined by obtaining third party evidence of the selling price for the deliverable
and is based on the price charged when largely similar services are sold on a standalone basis by the Company to
similarly situated customers. If the amount of non-contingent revenues allocated to a deliverable accounted for under
the percentage-of-completion method of accounting is less than the costs to deliver such services, then such costs
are deferred and recognized in future periods when the revenues become non-contingent. Revenues are recognized
in accordance with the Company’s accounting policies for the separate deliverables when the services have value on
a stand-alone basis, selling price of the separate deliverables exists and, in arrangements that include a general right
of refund relative to the completed deliverable, performance of the in-process deliverable is considered probable and
substantially in the Company’s control. While determining fair value and identifying separate deliverables require
judgment, generally fair value and the separate deliverables are readily identifiable as the Company also sells those
deliverables unaccompanied by other deliverables.
Revenues recognized in excess of billings are recorded as Unbilled services. Billings in excess of revenues
recognized are recorded as Deferred revenues until revenue recognition criteria are met. Client prepayments (even if
nonrefundable) are deferred and recognized over future periods as services are delivered or performed.
F- 11
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Revenues before reimbursements (“net revenues”) include the margin earned on computer hardware, software
and related services resale, as well as revenues from alliance agreements. Reimbursements include billings for travel
and other out-of-pocket expenses and third-party costs, such as the cost of hardware, software and related services
resales. In addition, Reimbursements include allocations from gross billings to record an amount equivalent to
reimbursable costs, where billings do not specifically identify reimbursable expenses. The Company reports revenues
net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific
revenue-producing transactions.
Employee Share-Based Compensation Arrangements
Share-based compensation expense is recognized over the requisite service period for awards of equity
instruments to employees based on the grant date fair value of those awards expected to ultimately vest. Forfeitures
are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original
estimates.
Income Taxes
The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates.
Deferred tax assets and liabilities, measured using enacted tax rates, are recognized for the future tax consequences
of temporary differences between the tax and financial statement bases of assets and liabilities. A valuation allowance
reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company establishes
liabilities or reduces assets for uncertain tax positions when the Company believes those tax positions are not more
likely than not of being sustained if challenged. Each fiscal quarter, the Company evaluates these uncertain tax positions
and adjusts the related tax assets and liabilities in light of changing facts and circumstances.
Translation of Non-U.S. Currency Amounts
Assets and liabilities of non-U.S. subsidiaries whose functional currency is not the U.S. dollar are translated into
U.S. dollars at fiscal year-end exchange rates. Revenue and expense items are translated at average foreign currency
exchange rates prevailing during the fiscal year. Translation adjustments are included in Accumulated other
comprehensive loss. Gains and losses arising from intercompany foreign currency transactions that are of a long-term
investment nature are reported in the same manner as translation adjustments.
Cash and Cash Equivalents
Cash and cash equivalents consist of all cash balances and liquid investments with original maturities of three
months or less, including certificates of deposit and time deposits. Cash and cash equivalents also include restricted
cash of $45,478 and $45,935 as of August 31, 2016 and 2015, respectively, which primarily relates to cash held to
meet certain insurance requirements. As a result of certain subsidiaries’ cash management systems, checks issued
but not presented to the banks for payment may create negative book cash balances. Such negative balances are
classified as Current portion of long term debt and bank borrowings.
Client Receivables, Unbilled Services and Allowances
The Company records its client receivables and unbilled services at their face amounts less allowances. On a
periodic basis, the Company evaluates its receivables and unbilled services and establishes allowances based on
historical experience and other currently available information. As of August 31, 2016 and 2015, total allowances
recorded for client receivables and unbilled services were $79,440 and $70,165, respectively. The allowance reflects
the Company’s best estimate of collectibility risks on outstanding receivables and unbilled services. In limited
circumstances, the Company agrees to extend financing to certain clients. The terms vary by contract, but generally
payment for services is contractually linked to the achievement of specified performance milestones.
F- 12
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Concentrations of Credit Risk
The Company’s financial instruments, consisting primarily of cash and cash equivalents, foreign currency
exchange rate instruments, client receivables and unbilled services, are exposed to concentrations of credit risk. The
Company places its cash and cash equivalents and foreign exchange instruments with highly-rated financial institutions,
limits the amount of credit exposure with any one financial institution and conducts ongoing evaluations of the credit
worthiness of the financial institutions with which it does business. Client receivables are dispersed across many
different industries and countries; therefore, concentrations of credit risk are limited.
Investments
All liquid investments with an original maturity greater than three months but less than one year are considered
to be short-term investments. Non-current investments are primarily non-marketable equity securities of privately held
companies and are accounted for using either the equity or cost methods of accounting, in accordance with the
requirements of Accounting Standards Codification 323, Investments—Equity Method and Joint Ventures. Marketable
securities are classified as available-for-sale investments and reported at fair value with changes in unrealized gains
and losses recorded as a separate component of Accumulated other comprehensive loss until realized. Interest and
amortization of premiums and discounts for debt securities are included in Interest income.
Cost method investments are periodically assessed for other-than-temporary impairment. For investments in
privately held companies, if there are no identified events or circumstances that would have a significant adverse effect
on the fair value of the investment, the fair value is not estimated. If an investment is deemed to have experienced an
other-than-temporary decline below its cost basis, the Company reduces the carrying amount of the investment to its
quoted or estimated fair value, as applicable, and establishes a new cost basis for the investment.
Property and Equipment
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation of property and equipment
is computed on a straight-line basis over the following estimated useful lives:
Computers, related equipment and software
Furniture and fixtures
Leasehold improvements
Goodwill
2 to 7 years
5 to 10 years
Lesser of lease term or 15 years
Goodwill represents the excess of the purchase price of an acquired entity over the fair value of net assets
acquired. The Company reviews the recoverability of goodwill by reportable operating segment annually, or more
frequently when indicators of impairment exist. Based on the results of its annual impairment analysis, the Company
determined that no impairment existed as of August 31, 2016 and 2015, as each reportable operating segment’s
estimated fair value substantially exceeded its carrying value.
Long-Lived Assets
Long-lived assets, including deferred contract costs and identifiable intangible assets, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may
not be recoverable. Recoverability of long-lived assets or groups of assets is assessed based on a comparison of the
carrying amount to the estimated future net cash flows. If estimated future undiscounted net cash flows are less than
the carrying amount, the asset is considered impaired and a loss is recorded equal to the amount required to reduce
the carrying amount to fair value.
Intangible assets with finite lives are generally amortized using the straight-line method over their estimated
economic useful lives, ranging from one to fifteen years.
F- 13
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Operating Expenses
Selected components of operating expenses were as follows:
Training costs
Research and development costs
Advertising costs
Provision for (release of) doubtful accounts (1)
$
2016
940,509
643,407
80,601
15,312
Fiscal
2015
841,440
$
2014
786,517
$
625,541
79,899
(10,336)
639,513
87,559
(12,867)
_______________
(1)
For additional information, see “Client Receivables, Unbilled Services and Allowances”.
Recently Adopted Accounting Pronouncement
In August 2016, the Company early adopted Financial Accounting Standards Board (“FASB”) Accounting
Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes, which amends existing
guidance on income taxes to require the classification of all deferred tax assets and liabilities as non-current on the
balance sheet. The Company adopted this ASU using the retrospective method which required reclassification of
current deferred taxes as previously reported on the Company’s August 31, 2015 Consolidated Balance Sheets to
non-current, resulting in an increase to non-current deferred tax assets of $815,909 and a decrease to noncurrent
deferred tax liabilities of $22,218.
New Accounting Pronouncements
On March 31, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment
Accounting, which simplifies the accounting for share-based payment transactions. The new guidance requires excess
tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In
addition, the ASU includes provisions that impact the classification of awards as either equity or liabilities and the
classification of excess tax benefits on the cash flow statements. The Company will early adopt the standard effective
September 1, 2016. Following adoption, the primary impact on the Company’s Consolidated Financial Statements will
be the recognition of excess tax benefits in the provision for income taxes rather than Additional paid-in capital, which
will likely result in increased volatility in the reported amounts of income tax expense and net income. The Company
estimates this change will reduce its fiscal 2017 effective tax rate by less than two percentage points. The actual impact
of adopting this standard on the effective tax rate will vary depending on the Company’s share price during fiscal 2017.
Provisions of the new guidance related to changes to classification of excess tax benefits in the cash flow statements
are expected to be adopted retrospectively. The Company is continuing to evaluate the impacts of the adoption of this
guidance and its preliminary assessments are subject to change.
On March 15, 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of
Accounting, which eliminates the requirement to retrospectively apply equity method accounting when an entity
increases ownership or influence in a previously held investment. The ASU will be effective for the Company beginning
September 1, 2017, including interim periods in its fiscal year 2018. The Company does not expect the adoption of
this ASU to have a material impact on its Consolidated Financial Statements.
On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which amends existing guidance to require
lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term
leases and to disclose additional quantitative and qualitative information about leasing arrangements. The ASU will
be effective for the Company beginning September 1, 2019, including interim periods in its fiscal year 2020, and allows
for a modified retrospective method upon adoption. The Company is assessing the impact of this ASU on its
Consolidated Financial Statements.
On January 5, 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and
Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of
financial instruments. The ASU will be effective for the Company beginning September 1, 2018, including interim
periods in its fiscal year 2019. The Company does not expect the adoption of this ASU to have a material impact on
its Consolidated Financial Statements.
F- 14
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
On May 28, 2014, the FASB issued ASU No. 2014-09 (Accounting Standard Codification 606), Revenue from
Contracts with Customers, which will replace most existing revenue recognition guidance in U.S. GAAP. The core
principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount
that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the
nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant
judgments and changes in judgments. The ASU will be effective for the Company beginning September 1, 2018,
including interim periods in its fiscal year 2019, and allows for both retrospective and modified retrospective methods
of adoption. The Company will adopt the guidance on September 1, 2018 and apply the modified retrospective method.
The Company is assessing the impact of this ASU on its Consolidated Financial Statements.
2. EARNINGS PER SHARE
Basic and diluted earnings per share were calculated as follows:
Basic Earnings per share
Net income attributable to Accenture plc
Basic weighted average Class A ordinary shares
Basic earnings per share
Diluted Earnings per share
2016
Fiscal
2015
2014
$ 4,111,892
$ 3,053,581
$ 2,941,498
624,797,820
626,799,586
634,216,250
$
6.58
$
4.87
$
4.64
Net income attributable to Accenture plc
$ 4,111,892
$ 3,053,581
$ 2,941,498
Net income attributable to noncontrolling interests in Accenture Holdings
plc and Accenture Canada Holdings Inc. (1)
Net income for diluted earnings per share calculation
Basic weighted average Class A ordinary shares
Class A ordinary shares issuable upon redemption/exchange of
noncontrolling interests (1)
195,560
178,925
187,107
$ 4,307,452
$ 3,232,506
$ 3,128,605
624,797,820
626,799,586
634,216,250
29,712,982
36,693,816
40,333,904
Diluted effect of employee compensation related to Class A ordinary shares
13,105,585
15,094,672
17,689,942
Diluted effect of share purchase plans related to Class A ordinary shares
153,887
168,996
149,870
Diluted weighted average Class A ordinary shares
Diluted earnings per share
667,770,274
678,757,070
692,389,966
$
6.45
$
4.76
$
4.52
_______________
(1)
Diluted earnings per share assumes the redemption of all Accenture Holdings plc ordinary shares owned by
holders of noncontrolling interests and the exchange of all Accenture Canada Holdings Inc. exchangeable
shares for Accenture plc Class A ordinary shares, on a one-for-one basis. The income effect does not take
into account “Net income attributable to noncontrolling interests—other,” since those shares are not redeemable
or exchangeable for Accenture plc Class A ordinary shares.
F- 15
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
3. ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table summarizes the changes in the accumulated balances for each component of accumulated
other comprehensive loss attributable to Accenture plc:
Foreign currency translation
Beginning balance
Foreign currency translation
Income tax benefit
Portion attributable to noncontrolling interests
Foreign currency translation, net of tax
Ending balance
Defined benefit plans
Beginning balance
Actuarial losses
Pension settlement
Prior service costs arising during the period
Reclassifications into net periodic pension and post-retirement expense
Income tax benefit (expense)
Portion attributable to noncontrolling interests
Defined benefit plans, net of tax
Ending balance (1)
Cash flow hedges
Beginning balance
Unrealized gains (losses)
Reclassification adjustments into Cost of services
Income tax (expense) benefit
Portion attributable to noncontrolling interests
Cash flow hedges, net of tax
Ending balance (2)
Marketable securities
Beginning balance
Unrealized gain (loss)
Income tax (expense) benefit
Portion attributable to noncontrolling interests
Marketable securities, net of tax
Ending balance
2016
Fiscal
2015
2014
$
(853,504) $
(324,596) $
(414,401)
(67,884)
(524,729)
2,120
(695)
(66,459)
(919,963)
(523,619)
(481,331)
—
1,561
26,639
153,869
13,377
(285,885)
(809,504)
(33,288)
180,196
(23,004)
(51,153)
(4,740)
101,299
68,011
(1,561)
2,231
(873)
(61)
1,297
(264)
6,520
(10,699)
(528,908)
(853,504)
(531,143)
(77,228)
64,382
(79)
27,538
(6,725)
(364)
7,524
(523,619)
(16,209)
(17,207)
(15,207)
14,508
827
(17,079)
(33,288)
—
(2,693)
1,056
76
(1,561)
(1,561)
91,170
2,236
(3,601)
89,805
(324,596)
(425,404)
(177,243)
—
(468)
20,026
45,459
6,487
(105,739)
(531,143)
(212,941)
222,100
101,026
(114,325)
(12,069)
196,732
(16,209)
—
—
—
—
—
—
Accumulated other comprehensive loss
$
(1,661,720) $
(1,411,972) $
(871,948)
_______________
(1)
(2)
As of August 31, 2016, $50,410 of net losses is expected to be reclassified into net periodic pension expense recognized
in Cost of services, Sales and marketing and General and administrative costs in the next twelve months.
As of August 31, 2016, $61,135 of net unrealized gains related to derivatives designated as cash flow hedges is expected
to be reclassified into Cost of services in the next twelve months.
F- 16
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
4. PROPERTY AND EQUIPMENT
The components of Property and equipment, net were as follows:
Buildings and land
Computers, related equipment and software
Furniture and fixtures
Leasehold improvements
Property and equipment, gross
Total accumulated depreciation
Property and equipment, net
5. BUSINESS COMBINATIONS AND DIVESTITURES
Fiscal 2016
Business Combinations
August 31, 2016
August 31, 2015
$
2,914
$
2,939
1,428,134
1,386,226
354,523
900,996
310,971
750,716
2,686,567
2,450,852
(1,730,025)
(1,648,968)
$
956,542
$
801,884
On October 20, 2015, the Company acquired Cloud Sherpas (through its holding company, Declarative Holdings,
Inc.), a leader in cloud advisory and technology services, for approximately $409,424, net of cash acquired. This
acquisition enhances the Company’s ability to provide clients with cloud strategy and technology consulting, as well
as cloud application implementation, integration and management services, and resulted in approximately 1,100
employees joining the Company. In connection with this acquisition, the Company recorded goodwill of $385,337,
which was allocated to all five reportable operating segments, and intangible assets of $66,522, primarily related to
customer-related intangibles. The goodwill is non-deductible for U.S. federal income tax purposes. The intangible
assets are being amortized over one to seven years. The pro forma effects of this acquisition on the Company’s
operations were not material.
During fiscal 2016, the Company also completed other individually immaterial acquisitions for total consideration
of $458,892, net of cash acquired. These acquisitions were completed primarily to expand the Company’s services
and solutions offerings. In connection with these acquisitions, the Company recorded goodwill of $382,326, which was
allocated among the reportable operating segments, and intangible assets of $109,981, primarily consisting of
customer-related and technology intangibles. The goodwill is partially deductible for U.S. federal income tax purposes.
The intangible assets are being amortized over one to ten years. The pro forma effects of these acquisitions on the
Company’s operations were not material.
Divestiture
On January 26, 2016, the Company completed the sale of Navitaire LLC (“Navitaire”), a wholly owned subsidiary
of the Company that provides technology and business solutions to the airline industry, to Amadeus IT Group, S.A.
(“Amadeus”). Concurrent with the sale, the Company also entered into several arrangements to provide services to
Amadeus, principally infrastructure outsourcing, over the next five years. The Company received a total of $825,644,
net of transaction costs and cash divested, of which $214,500 was recorded as deferred revenue attributable to
arrangements to provide services to Amadeus. In connection with the sale of Navitaire, the Company recorded a gain
of $547,584 (reported in “Gain on sale of businesses” in the Consolidated Income Statements) and recorded related
income taxes of $55,759. Approximately 600 Navitaire employees transferred to Amadeus as a part of this sale.
Joint Venture
On August 1, 2016, the Company completed the transfer of its Duck Creek business to Apax Partners LLP in
exchange for $196,198, net of transaction costs and cash divested, and a 40% non-controlling interest in the newly
formed joint venture, Duck Creek Technologies LLC (“Duck Creek”). Duck Creek’s business is to accelerate the
innovation of claims, billing and policy administration software for the insurance industry. In connection with the
transaction, which resulted in the recording of the retained non-controlling interest at fair value, the Company recorded
a gain of $301,239 (reported in “Gain on sale of businesses” in the Consolidated Income Statements) and related
income tax expense of $48,286. The fair value of the Company’s retained interest in Duck Creek was calculated based
on the terms of the transfer and other factors related to the valuation of the non-controlling interest. Adjustments related
F- 17
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
to the completion of certain post-closing matters may be recorded in subsequent periods. Approximately 1,000
employees moved to Duck Creek as a part of this transaction.
Fiscal 2015 Acquisitions
On March 25, 2015, the Company acquired Agilex Technologies, Inc., a provider of digital solutions for the U.S.
federal government, for $264,444, net of cash acquired. This acquisition enhanced Accenture’s digital capabilities in
analytics, cloud and mobility for federal agencies and resulted in approximately 730 employees joining the Company.
In connection with this acquisition, the Company recorded goodwill of $206,123, which was allocated to the Health &
Public Service operating segment, and intangible assets of $50,800, primarily consisting of customer-related
intangibles. The goodwill is non-deductible for U.S. federal income tax purposes. The intangible assets are being
amortized over one to eight years. The pro forma effects of this acquisition on the Company’s operations were not
material.
During fiscal 2015, the Company also completed other individually immaterial acquisitions for total consideration
of $510,236, net of cash acquired. These acquisitions were completed primarily to expand the Company’s services
and solutions offerings. In connection with these acquisitions, the Company recorded goodwill of $427,435, which was
allocated among the reportable operating segments, and intangible assets of $120,970, primarily consisting of
customer-related and technology intangibles. The goodwill is partially deductible for U.S. federal income tax purposes.
The intangible assets are being amortized over one to eleven years. The pro forma effects of these acquisitions on
the Company’s operations were not material.
Fiscal 2014 Acquisitions
On December 4, 2013, the Company acquired Procurian Inc. (“Procurian”), a provider of procurement business
process solutions, for $386,407, net of cash acquired. This acquisition enhanced Accenture’s capabilities in procurement
business process outsourcing across a range of industries and resulted in approximately 780 employees joining
Accenture. In connection with this acquisition, the Company recorded goodwill of $305,627, which was allocated to all
five reportable operating segments, and intangible assets of $60,514, primarily consisting of customer-related and
technology intangibles. The goodwill is substantially non-deductible for U.S. federal income tax purposes. The intangible
assets are being amortized over one to twelve years. The pro forma effects of this acquisition on the Company’s
operations were not material.
During fiscal 2014, the Company also completed other individually immaterial acquisitions for total consideration
of $320,225, net of cash acquired. These acquisitions were completed primarily to expand the Company’s services
and solutions offerings. In connection with these acquisitions, the Company recorded goodwill of $256,704, which was
allocated among the reportable operating segments, and intangible assets of $80,305, primarily consisting of customer-
related and technology intangibles. The goodwill is partially deductible for U.S. federal income tax purposes. The
intangible assets are being amortized over one to twelve years. The pro forma effects of these acquisitions on the
Company’s operations were not material.
F- 18
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
6. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill by reportable operating segment were as follows:
Communications, Media &
Technology
Financial Services
Health & Public Service
Products
Resources
Total
August 31,
2014
Additions/
Adjustments
Foreign
Currency
Translation
August 31,
2015
Additions/
Adjustments
Foreign
Currency
Translation
August 31,
2016
$
338,855
$
42,797
$
(16,828) $
364,824
$ 194,365
$
(12,623) $
546,566
707,093
375,052
836,858
35,060
(28,723)
(4,620)
713,430
588,893
(33,364)
1,001,768
218,461
198,274
149,811
130,787
134,607
(8,865)
(3,831)
854,376
715,849
(23,384)
1,112,991
138,036
$ 2,395,894
144,844
$ 639,436
(21,962)
260,918
$ (105,497) $ 2,929,833
123,613
$ 733,183
$
(4,876)
379,655
(53,579) $ 3,609,437
Goodwill includes immaterial adjustments related to divestitures and prior period acquisitions.
Intangible Assets
The Company’s definite-lived intangible assets by major asset class were as follows:
Intangible Asset Class
Gross
Carrying
Amount
August 31, 2016
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
August 31, 2015
Accumulated
Amortization
Net
Carrying
Amount
Customer-related
$
532,753
$
(159,774) $
372,979
$
449,219
$
(120,841) $
328,378
Technology
Patents
Other
Total
100,363
118,906
43,804
(48,270)
(57,951)
(19,680)
52,093
60,955
24,124
104,824
114,979
31,480
(44,988)
(54,064)
(15,702)
59,836
60,915
15,778
$
795,826
$
(285,675) $
510,151
$
700,502
$
(235,595) $
464,907
Total amortization related to the Company’s intangible assets was $117,882, $99,633 and $75,232 for fiscal 2016,
2015 and 2014, respectively. Estimated future amortization related to intangible assets held at August 31, 2016 is as
follows:
Fiscal Year
2017
2018
2019
2020
2021
Thereafter
Total
Estimated
Amortization
$
107,291
92,066
74,617
65,658
45,747
124,772
510,151
$
F- 19
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
7. DERIVATIVE FINANCIAL INSTRUMENTS
In the normal course of business, the Company uses derivative financial instruments to manage foreign currency
exchange rate risk. Derivative transactions are governed by a uniform set of policies and procedures covering areas
such as authorization, counterparty exposure and hedging practices. Positions are monitored using techniques such
as market value and sensitivity analyses. The Company does not enter into derivative transactions for trading purposes.
The Company classifies cash flows from its derivative programs as cash flows from operating activities in the
Consolidated Cash Flows Statements.
Certain derivatives also give rise to credit risks from the possible non-performance by counterparties. Credit risk
is generally limited to the fair value of those contracts that are favorable to the Company, and the maximum amount
of loss due to credit risk, based on the gross fair value of all of the Company’s derivative financial instruments, was
$129,603 as of August 31, 2016.
The Company also utilizes standard counterparty master agreements containing provisions for the netting of
certain foreign currency transaction obligations and for set-off of certain obligations in the event of an insolvency of
one of the parties to the transaction. These provisions may reduce the Company’s potential overall loss resulting from
the insolvency of a counterparty and reduce a counterparty’s potential overall loss resulting from the insolvency of the
Company. Additionally, these agreements contain early termination provisions triggered by adverse changes in a
counterparty’s credit rating, thereby enabling the Company to accelerate settlement of a transaction prior to its
contractual maturity and potentially decrease the Company’s realized loss on an open transaction. Similarly, a
decrement in the Company’s credit rating could trigger a counterparty’s early termination rights, thereby enabling a
counterparty to accelerate settlement of a transaction prior to its contractual maturity and potentially increase the
Company’s realized loss on an open transaction. The aggregate fair value of the Company’s derivative instruments
with credit-risk-related contingent features that are in a liability position as of August 31, 2016 was $33,774.
The Company’s derivative financial instruments consist of deliverable and non-deliverable foreign currency
forward contracts. Fair values for derivative financial instruments are based on prices computed using third-party
valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.
All of the significant inputs to the third-party valuation models are observable in active markets. Inputs include current
market-based parameters such as forward rates, yield curves and credit default swap pricing. For additional information
related to the three-level hierarchy of fair value measurements, see Note 10 (Retirement and Profit Sharing Plans) to
these Consolidated Financial Statements.
Cash Flow Hedges
Certain of the Company’s subsidiaries are exposed to currency risk through their use of resources supplied by
the Company’s Global Delivery Network. To mitigate this risk, the Company uses foreign currency forward contracts
to hedge the foreign exchange risk of the forecasted intercompany expenses denominated in foreign currencies for
up to three years in the future. The Company has designated these derivatives as cash flow hedges. As of August 31,
2016 and 2015, the Company held no derivatives that were designated as fair value or net investment hedges.
In order for a derivative to qualify for hedge accounting, the derivative must be formally designated as a fair value,
cash flow or net investment hedge by documenting the relationship between the derivative and the hedged item. The
documentation includes a description of the hedging instrument, the hedged item, the risk being hedged, the Company’s
risk management objective and strategy for undertaking the hedge, the method for assessing the effectiveness of the
hedge and the method for measuring hedge ineffectiveness. Additionally, the hedge relationship must be expected to
be highly effective at offsetting changes in either the fair value or cash flows of the hedged item at both inception of
the hedge and on an ongoing basis. The Company assesses the ongoing effectiveness of its hedges using the
Hypothetical Derivative Method, which measures hedge ineffectiveness based on a comparison of the change in fair
value of the actual derivative designated as the hedging instrument and the change in fair value of a hypothetical
derivative. The hypothetical derivative would have terms that identically match the critical terms of the hedged item. The
Company measures and records hedge ineffectiveness at the end of each fiscal quarter.
For a cash flow hedge, the effective portion of the change in estimated fair value of a hedging instrument is
recorded in Accumulated other comprehensive loss as a separate component of Shareholders’ Equity and is reclassified
into Cost of services in the Consolidated Income Statement during the period in which the hedged transaction is
recognized. The amounts related to derivatives designated as cash flow hedges that were reclassified into Cost of
services were a net gain of $23,004 and $15,207 during fiscal 2016 and 2015, respectively, and a net loss of $101,026
during fiscal 2014. The ineffective portion of the change in fair value of a cash flow hedge is recognized immediately
F- 20
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
in Other expense, net in the Consolidated Income Statement and for fiscal 2016, 2015 and 2014, was not material. In
addition, the Company did not discontinue any cash flow hedges during fiscal 2016 and 2015 or 2014.
Other Derivatives
The Company also uses foreign currency forward contracts, which have not been designated as hedges, to hedge
balance sheet exposures, such as intercompany loans. These instruments are generally short-term in nature, with
typical maturities of less than one year, and are subject to fluctuations in foreign exchange rates. Realized gains or
losses and changes in the estimated fair value of these derivatives were a net loss of $84,293 and $257,783 for fiscal
2016 and 2015, respectively, and a net gain of $78,446 for fiscal 2014. Gains and losses on these contracts are recorded
in Other expense, net in the Consolidated Income Statement and are offset by gains and losses on the related hedged
items.
Fair Value of Derivative Instruments
The notional and fair values of all derivative instruments were as follows:
August 31,
2016
August 31,
2015
Assets
Cash Flow Hedges
Other current assets
Other non-current assets
Other Derivatives
Other current assets
Total assets
Liabilities
Cash Flow Hedges
Other accrued liabilities
Other non-current liabilities
Other Derivatives
Other accrued liabilities
Total liabilities
Total fair value
Total notional value
$
71,955
$
45,683
11,965
129,603
$
28,282
13,503
18,233
60,018
10,820
$
5,547
48,683
48,746
17,407
33,774
95,829
7,604,486
$
$
$
31,862
129,291
(69,273)
6,363,110
$
$
$
$
$
The Company utilizes standard counterparty master agreements containing provisions for the netting of certain
foreign currency transaction obligations and for the set-off of certain obligations in the event of an insolvency of one
of the parties to the transaction. In the Consolidated Balance Sheets, the Company records derivative assets and
liabilities at gross fair value. The potential effect of netting derivative assets against liabilities under the counterparty
master agreements was as follows:
Net derivative assets
Net derivative liabilities
Total fair value
August 31,
2016
August 31,
2015
$
$
114,785
$
36,661
18,956
105,934
95,829
$
(69,273)
F- 21
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
8. BORROWINGS AND INDEBTEDNESS
As of August 31, 2016, the Company had the following borrowing facilities, including the issuance of letters of
credit, to support general working capital purposes:
Syndicated loan facility (1)
Separate, uncommitted, unsecured multicurrency revolving credit facilities (2)
Local guaranteed and non-guaranteed lines of credit (3)
Total
Facility
Amount
Borrowings
Under
Facilities
$
1,000,000
$
515,873
164,692
$
1,680,565
$
—
—
—
—
_______________
(1)
On December 22, 2015, the Company replaced its $1,000,000 syndicated loan facility maturing on October 31,
2016 with a $1,000,000 syndicated loan facility maturing on December 22, 2020. This facility provides
unsecured, revolving borrowing capacity for general working capital purposes, including the issuance of letters
of credit. Financing is provided under this facility at the prime rate or at the London Interbank Offered Rate
plus a spread. This facility requires the Company to: (1) limit liens placed on its assets to (a) liens incurred in
the ordinary course of business (subject to certain qualifications) and (b) other liens securing obligations not
to exceed 30% of its consolidated assets; and (2) maintain an Adjusted Indebtedness-to-EBITDA ratio not
exceeding 1.75 to 1.00. The Company continues to be in compliance with relevant covenant terms. The facility
is subject to annual commitment fees. As of August 31, 2016 and 2015, the Company had no borrowings under
either the current or the prior loan facility.
(2)
(3)
The Company maintains separate, uncommitted and unsecured multicurrency revolving credit facilities. These
facilities provide local currency financing for the majority of the Company’s operations. Interest rate terms on
the revolving facilities are at market rates prevailing in the relevant local markets. As of August 31, 2016 and
2015, the Company had no borrowings under these facilities.
The Company also maintains local guaranteed and non-guaranteed lines of credit for those locations that
cannot access the Company’s global facilities. As of August 31, 2016 and 2015, the Company had no borrowings
under these various facilities.
Under the borrowing facilities described above, the Company had an aggregate of $168,663 and $166,506 of
letters of credit outstanding as of August 31, 2016 and 2015, respectively. In addition, the Company had total outstanding
debt of $27,230 and $27,435 as of August 31, 2016 and 2015, respectively.
F- 22
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
9. INCOME TAXES
Current taxes
U.S. federal
U.S. state and local
Non-U.S.
Total current tax expense
Deferred taxes
U.S. federal
U.S. state and local
Non-U.S.
Total deferred tax expense (benefit)
Total
2016
Fiscal
2015
2014
$
314,121
$
617,488
$
397,722
38,255
835,653
72,133
906,229
46,854
751,259
1,188,029
1,595,850
1,195,835
8,588
1,056
56,296
65,940
(94,621)
(11,245)
(353,243)
(459,109)
26,941
2,911
(103,944)
(74,092)
$
1,253,969
$
1,136,741
$
1,121,743
The components of Income before income taxes were as follows:
U.S. sources
Non-U.S. sources
Total
2016
Fiscal
2015
2014
$
$
1,047,909
$
1,321,511
$
1,119,627
4,555,663
3,089,019
3,178,074
5,603,572
$
4,410,530
$
4,297,701
The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate was
as follows:
U.S. federal statutory income tax rate
U.S. state and local taxes, net
Non-U.S. operations taxed at lower rates
Final determinations (1)
Other net activity in unrecognized tax benefits
Change in indefinite reinvestment assertion
Divestitures
Other, net
Effective income tax rate
2016
Fiscal
2015
2014
35.0%
1.1
(12.0)
(2.1)
2.7
(0.6)
(3.4)
1.7
35.0%
1.3
(15.4)
(5.1)
3.2
5.6
—
1.2
35.0%
1.3
(12.1)
(1.7)
3.0
—
—
0.6
22.4%
25.8%
26.1%
_______________
(1)
Final determinations include final agreements with tax authorities and expirations of statutes of limitations.
During fiscal 2015, the Company concluded that substantially all of the undistributed earnings of its U.S.
subsidiaries would no longer be considered indefinitely reinvested and recorded an estimated tax liability of $247,097
for withholding taxes payable on the distribution of these earnings. These earnings were distributed in the form of a
U.S. dividend declared and paid on August 26, 2015. The Company intends to indefinitely reinvest any future U.S.
earnings. As of August 31, 2016, the Company had not recognized a deferred tax liability on $1,297,932 of undistributed
earnings for certain foreign subsidiaries, because these earnings are intended to be indefinitely reinvested. If such
earnings were distributed, some countries may impose additional taxes. The unrecognized deferred tax liability (the
amount payable if distributed) is approximately $116,000.
F- 23
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Portions of the Company’s operations are subject to reduced tax rates or are free of tax under various tax holidays
which expire between fiscal 2017 and 2021. Some of the holidays are renewable at reduced levels, under certain
conditions, with possible renewal periods through 2031. The income tax benefits attributable to the tax status of these
subsidiaries were estimated to be approximately $100,000, $111,000 and $91,000 in fiscal 2016, 2015 and 2014,
respectively.
The effect on deferred tax assets and liabilities of enacted changes in tax laws and tax rates did not have a
material impact on the Company’s effective tax rate.
The components of the Company’s deferred tax assets and liabilities included the following:
Deferred tax assets
Pensions
Revenue recognition
Compensation and benefits
Share-based compensation
Tax credit carryforwards
Net operating loss carryforwards
Depreciation and amortization
Deferred amortization deductions
Indirect effects of unrecognized tax benefits
Other
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Revenue recognition
Depreciation and amortization
Investments in subsidiaries
Other
Total deferred tax liabilities
Net deferred tax assets
August 31,
2016
August 31,
2015
$
306,776
$
278,944
113,890
797,707
262,508
112,113
558,127
262,040
1,161,084
1,179,988
131,018
97,015
687,351
354,544
139,105
119,463
97,218
687,406
357,031
157,449
4,050,998
3,809,779
(1,243,207)
(1,229,146)
2,807,791
2,580,633
(109,749)
(205,431)
(330,673)
(195,646)
(841,499)
(75,352)
(167,467)
(213,351)
(125,907)
(582,077)
$
1,966,292
$
1,998,556
The Company recorded valuation allowances of $1,243,207 and $1,229,146 as of August 31, 2016 and 2015,
respectively, against deferred tax assets principally associated with certain tax credit and tax net operating loss
carryforwards, as the Company believes it is more likely than not that these assets will not be realized. For all other
deferred tax assets, the Company believes it is more likely than not that the results of future operations will generate
sufficient taxable income to realize these deferred tax assets. During fiscal 2016, the Company recorded a net increase
of $14,061 in the valuation allowance. The majority of this change related to valuation allowances on certain tax net
operating loss carryforwards, as the Company believes it is more likely than not that these assets will not be realized.
The Company had tax credit carryforwards as of August 31, 2016 of $1,161,084, of which $30,288 will expire
between 2017 and 2026, $828 will expire between 2027 and 2036, and $1,129,968 has an indefinite carryforward
period. The Company had net operating loss carryforwards as of August 31, 2016 of $518,475. Of this amount, $254,978
expires between 2017 and 2026, $2,130 expires between 2027 and 2036, and $261,367 has an indefinite carryforward
period.
As of August 31, 2016, the Company had $985,755 of unrecognized tax benefits, of which $508,313, if recognized,
would favorably affect the Company’s effective tax rate. As of August 31, 2015, the Company had $997,935 of
unrecognized tax benefits, of which $534,929, if recognized, would favorably affect the Company’s effective tax rate.
The remaining unrecognized benefits as of August 31, 2016 and 2015 of $477,442 and $463,006, respectively, represent
F- 24
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
items recorded as adjustments to equity and offsetting tax benefits associated with the correlative effects of potential
transfer pricing adjustments, state income taxes and timing adjustments.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits was as follows:
Balance, beginning of year
Additions for tax positions related to the current year
Additions for tax positions related to prior years
Reductions for tax positions related to prior years
Statute of limitations expirations
Settlements with tax authorities
Foreign currency translation
Balance, end of year
Fiscal
2016
2015
$
997,935
$
1,333,606
163,097
126,353
155,637
97,694
(63,782)
(470,147)
(208,295)
(3,703)
(25,850)
(28,116)
(33,743)
(56,996)
$
985,755
$
997,935
The Company recognizes interest and penalties related to unrecognized tax benefits in the Provision for income
taxes. During fiscal 2016, 2015 and 2014, the Company recognized expense (benefit) of $8,681, $(17,373) and $16,370
in interest and penalties, respectively. Accrued interest and penalties related to unrecognized tax benefits of $109,269
($95,057, net of tax benefits) and $101,843 ($84,530, net of tax benefits) were reflected on the Company’s Consolidated
Balance Sheets as of August 31, 2016 and 2015, respectively.
The Company is participating in the U.S. Internal Revenue Service (“IRS”) Compliance Assurance Program
(“CAP”) beginning with the 2016 fiscal year. As part of CAP, tax years are audited on a contemporaneous basis so that
all or most issues are resolved prior to the filing of the tax return. The Company is currently under audit by the IRS for
fiscal 2013 and 2014. The Company is also currently under audit in numerous state and non-U.S. tax jurisdictions.
Although the outcome of tax audits is always uncertain and could result in significant cash tax payments, the Company
does not believe the outcome of these audits will have a material adverse effect on the Company’s consolidated financial
position or results of operations. With limited exceptions, the Company is no longer subject to income tax audits by
taxing authorities for the years before 2007. The Company believes that it is reasonably possible that its unrecognized
tax benefits could decrease by approximately $562,000 or increase by approximately $169,000 in the next 12 months
as a result of settlements, lapses of statutes of limitations and other adjustments. The majority of these amounts relate
to transfer pricing matters in both U.S. and non-U.S. tax jurisdictions.
F- 25
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
10. RETIREMENT AND PROFIT SHARING PLANS
Defined Benefit Pension and Postretirement Plans
In the United States and certain other countries, the Company maintains and administers defined benefit
retirement plans and postretirement medical plans for certain current, retired and resigned employees. In addition, the
Company’s U.S. defined benefit pension plans include a frozen plan for former pre-incorporation partners, which is
unfunded. Benefits under the employee retirement plans are primarily based on years of service and compensation
during the years immediately preceding retirement or termination of participation in the plan. The defined benefit
pension disclosures include the Company’s U.S. and material non-U.S. defined benefit pension plans.
Assumptions
The weighted-average assumptions used to determine the defined benefit pension obligations as of August 31
and the net periodic pension expense were as follows:
Pension Plans
August 31,
2016
August 31,
2015
August 31,
2014
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
Postretirement Plans
August
31,
2016
August
31,
2015
August
31,
2014
U.S.
and
Non-
U.S.
Plans
U.S.
and
Non-
U.S.
Plans
U.S.
and
Non-
U.S.
Plans
3.50% 2.40% 4.50% 3.47% 4.25% 3.53%
3.51% 4.46%
4.25%
Discount rate for determining projected
benefit obligation
Discount rate for determining net periodic
pension expense
4.96%
4.87%
4.50% 3.47% 4.25% 3.53% 5.00% 4.18%
4.46% 4.25%
Long term rate of return on plan assets
4.75% 3.99% 5.50% 4.55% 5.50% 4.79%
4.54% 5.05%
Rate of increase in future compensation
for determining projected benefit
obligation
Rate of increase in future compensation
for determining net periodic pension
expense
2.57% 3.47% 3.65% 3.56% 3.65% 3.75%
N/A
N/A
N/A
3.60% 3.56% 3.65% 3.75% 3.60% 3.79%
N/A
N/A
N/A
Beginning in fiscal 2016, the Company changed the method it uses to estimate the service and interest cost
components of net periodic pension expense. Historically, the Company selected a discount rate for the U.S. plans by
matching the plans’ cash flows to that of the average of two yield curves that provide the equivalent yields on zero-
coupon corporate bonds for each maturity. The discount rate assumption for the non-U.S. Plans primarily reflected the
market rate for high-quality, fixed-income debt instruments. Beginning in fiscal 2016, the Company utilized a full yield
curve approach to estimate these components by applying specific spot rates along the yield curve used in the
determination of the benefit obligation to the relevant projected cash flows. The Company made this change to improve
the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a
more precise measurement of service and interest costs. This change does not affect the measurement of the
Company’s total benefit obligations. The Company accounted for this change as a change in estimate and, accordingly,
recognized its effect prospectively beginning in fiscal 2016.
The discount rate assumptions are based on the expected duration of the benefit payments for each of the
Company’s defined benefit pension and postretirement plans as of the annual measurement date and are subject to
change each year.
The expected long-term rate of return on plan assets should, over time, approximate the actual long-term returns
on defined benefit pension and postretirement plan assets and is based on historical returns and the future expectations
for returns for each asset class, as well as the target asset allocation of the asset portfolio.
F- 26
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ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Assumed U.S. Health Care Cost Trend
The Company’s U.S. postretirement plan assumed annual rate of increase in the per capita cost of health care
benefits is 6.8% for the plan year ending June 30, 2017. The rate is assumed to decrease on a straight-line basis to
4.5% for the plan year ending June 30, 2027 and remain at that level thereafter. A one percentage point increase in
the assumed health care cost trend rates would increase the benefit obligation by $81,422, while a one percentage
point decrease would reduce the benefit obligation by $62,615.
U.S. Defined Benefit Pension Plan Settlement Charge
During fiscal 2015, the Company offered a voluntary one-time lump sum payment option to certain eligible former
employees who had vested benefits under the Company’s U.S. pension plan that, if accepted, would settle the
Company’s pension obligations to them. This resulted in lump sum payments from plan assets of $279,571 during
fiscal 2015. As a result of this settlement and the adoption of the new U.S. mortality tables released by the Society of
Actuaries, the Company remeasured the assets and liabilities of the U.S. pension plan, which in aggregate resulted
in a net reduction to the projected benefit obligation of $179,938 as well as a non-cash settlement charge of $64,382,
pre-tax, during fiscal 2015.
Pension and Postretirement Expense
Pension expense for fiscal 2016, 2015 and 2014 was $94,827, $143,968 (including the above noted settlement
charge) and $87,422, respectively. Postretirement expense for fiscal 2016, 2015 and 2014 was not material to the
Company’s Consolidated Financial Statements.
F- 27
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Benefit Obligation, Plan Assets and Funded Status
The changes in the benefit obligations, plan assets and funded status of the Company’s pension and
postretirement benefit plans for fiscal 2016 and 2015 were as follows:
Pension Plans
August 31,
2016
August 31,
2015
U.S. Plans
Non-
U.S. Plans
U.S. Plans
Non-
U.S. Plans
Postretirement Plans
August 31,
2016
August 31,
2015
U.S. and
Non-U.S.
Plans
U.S. and
Non-U.S.
Plans
$ 1,635,744
$ 1,439,225
$ 1,909,651
$ 1,519,007
$ 403,095
$ 375,312
7,305
63,470
—
—
—
—
—
—
72,502
43,827
9,857
41,719
(1,561)
(689)
8,899
76,969
—
—
—
—
—
(279,571)
1,332
—
(35,478)
(44,726)
67,471
48,199
6,081
(364)
79
—
—
—
18,565
15,618
17,784
15,602
—
—
—
84
—
—
—
—
—
—
—
—
14,618
74,213
14,180
(39,685)
(11,143)
(11,186)
—
(176,181)
532
(8,597)
371,294
261,252
(47,807)
—
(52,549)
(56,805)
Reconciliation of benefit obligation
Benefit obligation, beginning of year
Service cost
Interest cost
Participant contributions
Acquisitions/divestitures/transfers
Amendments
Curtailment
Pension settlement
Special termination benefits
Actuarial (gain) loss
Benefits paid
Exchange rate impact
Benefit obligation, end of year
$ 2,030,006
$ 1,758,110
$ 1,635,744
$ 1,439,225
$ 500,964
$ 403,095
Reconciliation of fair value of plan assets
Fair value of plan assets, beginning of
year
Actual return on plan assets
Acquisitions/divestitures/transfers
Employer contributions
Participant contributions
Pension settlement
Benefits paid
Exchange rate impact
$ 1,596,186
$
982,471
$ 1,883,789
$ 1,032,378
$
24,643
$
29,484
242,112
—
10,944
—
—
97,638
24,052
71,046
9,857
25,580
39,797
—
11,114
—
—
52,033
6,081
—
—
(279,571)
3,856
—
9,774
—
—
92
—
6,253
—
—
(47,807)
—
(52,549)
(51,361)
(44,726)
(39,685)
(11,143)
(11,186)
—
(108,133)
—
—
Fair value of plan assets, end of year
$ 1,801,435
$ 1,081,154
$ 1,596,186
$ 982,471
$
27,130
$
24,643
Funded status, end of year
$ (228,571) $ (676,956) $
(39,558) $ (456,754) $ (473,834) $ (378,452)
Amounts recognized in the Consolidated
Balance Sheets
Non-current assets
Current liabilities
Non-current liabilities
$
— $
59,335
$ 102,686
$
64,690
$
— $
—
(11,091)
(16,691)
(11,148)
(10,287)
(1,579)
(1,416)
(217,480)
(719,600)
(131,096)
(511,157)
(472,255)
(377,036)
Funded status, end of year
$ (228,571) $ (676,956) $
(39,558) $ (456,754) $ (473,834) $ (378,452)
F- 28
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Accumulated Other Comprehensive Loss
The pre-tax accumulated net loss and prior service (credit) cost recognized in Accumulated other comprehensive
loss as of August 31, 2016 and 2015 was as follows:
Pension Plans
August 31,
2016
August 31,
2015
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Postretirement Plans
August 31,
2016
August 31,
2015
U.S. and
Non-U.S.
Plans
U.S. and
Non-U.S.
Plans
Net loss
Prior service (credit) cost
$ 592,873
$ 480,408
$ 397,065
$ 295,098
$ 143,777
$
75,224
—
(6,860)
—
(7,281)
31,569
35,173
Accumulated other comprehensive loss,
pre-tax
$ 592,873
$ 473,548
$ 397,065
$ 287,817
$ 175,346
$ 110,397
Funded Status for Defined Benefit Plans
The accumulated benefit obligation for defined benefit pension plans as of August 31, 2016 and 2015 was as
follows:
Accumulated benefit obligation
August 31,
2016
August 31,
2015
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
$
2,017,437
$
1,592,598
$
1,626,972
$
1,313,946
The following information is provided for defined benefit pension plans and postretirement plans with projected
benefit obligations in excess of plan assets and for defined benefit pension plans with accumulated benefit obligations
in excess of plan assets as of August 31, 2016 and 2015:
Pension Plans
August 31,
2016
August 31,
2015
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Postretirement Plans
August 31,
2016
U.S. and
Non-U.S.
Plans
August 31,
2015
U.S. and
Non-U.S.
Plans
Projected benefit obligation in excess of
plan assets
Projected benefit obligation
Fair value of plan assets
$ 2,030,006
$ 1,400,510
$ 142,244
$ 757,741
$ 500,964
$ 403,095
1,801,435
664,220
—
236,297
27,130
24,643
August 31,
2016
August 31,
2015
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Accumulated benefit obligation in excess of plan assets
Accumulated benefit obligation
Fair value of plan assets
$
2,017,437
$
1,233,952
$
142,244
$
629,524
1,801,435
627,738
—
204,076
F- 29
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Investment Strategies
U.S. Pension Plans
The overall investment objective of the defined benefit pension plans is to match the duration of the plans’ assets
to the plans’ liabilities while managing risk in order to meet current defined benefit pension obligations. The plans’
future prospects, their current financial conditions, the Company’s current funding levels and other relevant factors
suggest that the plans can tolerate some interim fluctuations in market value and rates of return in order to achieve
long-term objectives without undue risk to the plans’ ability to meet their current benefit obligations. The Company
recognizes that asset allocation of the defined benefit pension plans’ assets is an important factor in determining long-
term performance. Actual asset allocations at any point in time may vary from the target asset allocations and will be
dictated by current and anticipated market conditions, required cash flows and investment decisions of the investment
committee and the pension plans’ investment funds and managers. Ranges are established to provide flexibility for
the asset allocation to vary around the targets without the need for immediate rebalancing.
Non-U.S. Pension Plans
Plan assets in non-U.S. defined benefit pension plans conform to the investment policies and procedures of each
plan and to relevant legislation. The pension committee or trustee of each plan regularly, but at least annually, reviews
the investment policy and the performance of the investment managers. In certain countries, the trustee is also required
to consult with the Company. Asset allocation decisions are made to provide risk adjusted returns that align with the
overall investment strategy for each plan. Generally, the investment return objective of each plan is to achieve a total
annualized rate of return that exceeds inflation over the long term by an amount based on the target asset allocation
mix of that plan. In certain countries, plan assets are invested in funds that are required to hold a majority of assets
in bonds, with a smaller proportion in equities. Also, certain plan assets are entirely invested in contracts held with the
plan insurer, which determines the strategy. Defined benefit pension plans in certain countries are unfunded.
Risk Management
Plan investments are exposed to risks including market, interest rate and operating risk. In order to mitigate
significant concentrations of these risks, the assets are invested in a diversified portfolio primarily consisting of fixed
income instruments and equities. To minimize asset volatility relative to the liabilities, plan assets allocated to debt
securities appropriately match the duration of individual plan liabilities. Equities are diversified between U.S. and non-
U.S. index funds and are intended to achieve long term capital appreciation. Plan asset allocation and investment
managers’ guidelines are reviewed on a regular basis.
Plan Assets
The Company’s target allocation for fiscal 2017 and weighted-average plan assets allocations as of August 31,
2016 and 2015 by asset category for defined benefit pension plans were as follows:
Asset Category
Equity securities
Debt securities
Cash and short-term investments
Insurance contracts
Other
Total
2017 Target
Allocation
2016
2015
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
—%
77
23
—
—
36%
51
3
7
3
—%
75
25
—
—
29%
58
2
7
4
10%
87
3
—
—
30%
56
3
6
5
100%
100%
100%
100%
100%
100%
F- 30
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Fair Value Measurements
Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly
transaction between market participants at the measurement date and in the principal or most advantageous market
for that asset or liability. The fair value should be calculated based on assumptions that market participants would use
in pricing the asset or liability, not on assumptions specific to the entity.
The three-level hierarchy of fair value measurements is based on whether the inputs to those measurements
are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect the Company’s market assumptions. The fair-value hierarchy requires the use of observable
market data when available and consists of the following levels:
•
•
•
Level 1—Quoted prices for identical instruments in active markets;
Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar
instruments in markets that are not active; and model-derived valuations in which all significant inputs are
observable in active markets; and
Level 3—Valuations derived from valuation techniques in which one or more significant inputs are
unobservable.
The fair values of defined benefit pension and postretirement plan assets as of August 31, 2016 were as follows:
U.S. Plans
Fixed Income
U.S. government, state and local debt securities
Non-U.S. government debt securities
U.S. corporate debt securities
Non-U.S. corporate debt securities
Mutual fund debt securities
Cash and short-term investments
Total
Non-U.S. Plans
Equity
Mutual fund equity securities
Fixed Income
Non-U.S. government debt securities
Mutual fund debt securities
Cash and short-term investments
Insurance contracts
Other
Total
Level 1
Level 2
Level 3
Total
—
—
—
—
286,360
359,583
38,232
614,136
79,124
—
—
451,130
—
—
—
—
—
—
359,583
38,232
614,136
79,124
286,360
451,130
$
286,360
$
1,542,205
$
— $
1,828,565
Level 1
Level 2
Level 3
Total
$
— $
311,324
$
— $
311,324
91,745
15,608
19,382
—
—
—
524,472
4,048
72,525
42,050
—
—
—
—
—
91,745
540,080
23,430
72,525
42,050
$
126,735
$
954,419
$
— $
1,081,154
There were no transfers between Levels 1 and 2 during fiscal 2016.
F- 31
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Expected Contributions
Generally, annual contributions are made at such times and in amounts as required by law and may, from time
to time, exceed minimum funding requirements. The Company estimates it will pay approximately $80,077 in fiscal
2017 related to contributions to its U.S. and non-U.S. defined benefit pension plans and benefit payments related to
the unfunded frozen plan for former pre-incorporation partners. The Company has not determined whether it will make
additional voluntary contributions for its defined benefit pension plans. The Company’s postretirement plan contributions
in fiscal 2017 are not expected to be material to the Company’s Consolidated Financial Statements.
Estimated Future Benefit Payments
Benefit payments for defined benefit pension plans and postretirement plans, which reflect expected future
service, as appropriate, are expected to be paid as follows:
2017
2018
2019
2020
2021
2022-2026
Pension Plans
U.S. Plans (1)
Non-U.S.
Plans
Postretirement
Plans
U.S. and Non-
U.S. Plans
$
46,881
$
44,537
$
49,865
53,277
56,950
61,361
50,094
55,964
66,225
75,166
10,259
11,469
12,598
13,942
15,830
373,921
416,507
110,756
_______________
(1)
Excludes the impact of the anticipated U.S. pension plan termination noted below.
U.S. Pension Plan Termination
On March 18, 2016, Accenture plc’s Board of Directors approved an amendment to terminate the Company’s
U.S. pension plan, effective May 30, 2016, for all active and former employees who are no longer accruing benefits
in the pension plan (approximately 16,200 people). The amendment also provides for the creation of a separate defined
benefit plan with substantially the same terms for approximately 600 active employees who are currently eligible to
accrue benefits. The U.S. pension plan is expected to be settled in 12 to 18 months from the termination effective date,
subject to receipt of customary regulatory approvals.
The Company’s ultimate settlement obligation will depend upon both the nature and timing of participant
settlements and prevailing market conditions. Upon settlement, the Company expects to recognize additional expense,
consisting of unrecognized actuarial losses included in Accumulated other comprehensive loss that totaled
approximately $467,000 as of August 31, 2016, adjusted for the difference between the ultimate settlement obligation
and the Company’s accrued pension obligation. The Company does not expect the settlement of the U.S. pension
plan obligations to have a material impact on its cash position.
Defined Contribution Plans
In the United States and certain other countries, the Company maintains and administers defined contribution
plans for certain current, retired and resigned employees. Total expenses recorded for defined contribution plans were
$419,932, $397,123 and $331,801 in fiscal 2016, 2015 and 2014, respectively.
F- 32
Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
11. SHARE-BASED COMPENSATION
Share Incentive Plans
The Amended and Restated Accenture plc 2010 Share Incentive Plan, as amended and approved by the
Company’s shareholders in 2016 (the “Amended 2010 SIP”), is administered by the Compensation Committee of the
Board of Directors of Accenture and provides for the grant of nonqualified share options, incentive stock options,
restricted share units and other share-based awards. A maximum of 83,000,000 Accenture plc Class A ordinary shares
are currently authorized for awards under the Amended 2010 SIP. As of August 31, 2016, there were 23,167,880 shares
available for future grants. Accenture plc Class A ordinary shares covered by awards that terminate, lapse or are
cancelled may again be used to satisfy awards under the Amended 2010 SIP. The Company issues new Accenture
plc Class A ordinary shares and shares from treasury for shares delivered under the Amended 2010 SIP.
A summary of information with respect to share-based compensation is as follows:
2016
Fiscal
2015
2014
Total share-based compensation expense included in Net income
$
758,176
$
680,329
$
671,301
Income tax benefit related to share-based compensation included in Net income
236,423
212,019
206,007
Restricted Share Units
Under the Amended 2010 SIP, participants may be, and previously under the predecessor 2001 Share Incentive
Plan were, granted restricted share units, each of which represent an unfunded, unsecured right to receive an Accenture
plc Class A ordinary share on the date specified in the participant’s award agreement. The fair value of the awards is
based on the Company’s stock price on the date of grant. The restricted share units granted under these plans are
subject to cliff or graded vesting, generally ranging from two to seven years. For awards with graded vesting,
compensation expense is recognized over the vesting term of each separately vesting portion. Compensation expense
is recognized on a straight-line basis for awards with cliff vesting. Restricted share unit activity during fiscal 2016 was
as follows:
Nonvested balance as of August 31, 2015
Granted (1)
Vested (2)
Forfeited
Nonvested balance as of August 31, 2016
Number of Restricted
Share Units
Weighted Average
Grant-Date Fair Value
24,733,581
$
9,699,688
(10,987,988)
(1,481,576)
21,963,705
$
71.83
105.16
72.50
77.82
85.81
_______________
(1)
The weighted average grant-date fair value for restricted share units granted for fiscal 2016, 2015 and 2014
was $105.16, $89.63 and $80.61, respectively.
(2)
The total grant-date fair value of restricted share units vested for fiscal 2016, 2015 and 2014 was $796,620,
$581,936 and $628,999, respectively.
As of August 31, 2016, there was $677,433 of total restricted share unit compensation expense related to
nonvested awards not yet recognized, which is expected to be recognized over a weighted average period of 1.3
years. As of August 31, 2016, there were 930,652 restricted share units vested but not yet delivered as Accenture plc
Class A ordinary shares.
Stock Options
There were no stock options granted during fiscal 2016, 2015 or 2014. As of August 31, 2016 we had 23,310
stock options outstanding and exercisable at a weighted average exercise price of $37.46 and a weighted average
remaining contractual term of 2.5 years.
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ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Employee Share Purchase Plan
2010 ESPP
The Amended and Restated Accenture plc 2010 Employee Share Purchase Plan (the “2010 ESPP”) is a
nonqualified plan that provides eligible employees of Accenture plc and its designated affiliates with an opportunity to
purchase Accenture plc Class A ordinary shares through payroll deductions. Under the 2010 ESPP, eligible employees
may purchase Accenture plc Class A ordinary shares through the Employee Share Purchase Plan (the “ESPP”) or the
Voluntary Equity Investment Program (the “VEIP”). Under the ESPP, eligible employees may elect to contribute 1%
to 10% of their eligible compensation during each semi-annual offering period (up to $7.5 per offering period) to
purchase Accenture plc Class A ordinary shares at a discount. Under the VEIP, eligible members of Accenture
Leadership may elect to contribute up to 30% of their eligible compensation towards the monthly purchase of Accenture
plc Class A ordinary shares at fair market value. At the end of the VEIP program year, Accenture Leadership participants
who did not withdraw from the program will be granted restricted share units under the Amended 2010 SIP equal to
50% of the number of shares purchased during that year and held by the participant as of the grant date.
A maximum of 90,000,000 Accenture plc Class A ordinary shares may be issued under the 2010 ESPP. As of
August 31, 2016, the Company had issued 42,579,575 Accenture plc Class A ordinary shares under the 2010 ESPP.
The Company issued 5,850,113, 6,232,031 and 7,067,832 shares to employees in fiscal 2016, 2015 and 2014,
respectively, under the 2010 ESPP.
12. SHAREHOLDERS’ EQUITY
Accenture plc
Ordinary Shares
The Company has 40,000 authorized ordinary shares, par value €1 per share. Each ordinary share of Accenture
plc entitles its holder to receive payments upon a liquidation of Accenture plc; however a holder of an ordinary share
is not entitled to vote on matters submitted to a vote of shareholders of Accenture plc or to receive dividends.
Class A Ordinary Shares
An Accenture plc Class A ordinary share entitles its holder to one vote per share, and holders of those shares
do not have cumulative voting rights. Each Class A ordinary share entitles its holder to a pro rata part of any dividend
at the times and in the amounts, if any, which Accenture plc’s Board of Directors from time to time determines to declare,
subject to any preferred dividend rights attaching to any preferred shares. Each Class A ordinary share is entitled on
a winding-up of Accenture plc to be paid a pro rata part of the value of the assets of Accenture plc remaining after
payment of its liabilities, subject to any preferred rights on liquidation attaching to any preferred shares.
Class X Ordinary Shares
An Accenture plc Class X ordinary share entitles its holder to one vote per share, and holders of those shares
do not have cumulative voting rights. A Class X ordinary share does not entitle its holder to receive dividends, and
holders of those shares are not entitled to be paid any amount upon a winding-up of Accenture plc. Most of the
Company’s partners who received Accenture SCA Class I common shares or Accenture Canada Holdings Inc.
exchangeable shares in connection with the Company’s transition to a corporate structure received a corresponding
number of Accenture plc Class X ordinary shares. Accenture plc may redeem, at its option, any Class X ordinary share
for a redemption price equal to the par value of the Class X ordinary share. Accenture plc has separately agreed with
the original holders of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable
shares not to redeem any Class X ordinary share of such holder if the redemption would reduce the number of Class X
ordinary shares held by that holder to a number that is less than the number of Accenture Holdings plc ordinary shares
or Accenture Canada Holdings Inc. exchangeable shares owned by that holder, as the case may be. Accenture plc
will redeem Class X ordinary shares upon the redemption or exchange of Accenture Holdings plc ordinary shares and
Accenture Canada Holdings Inc. exchangeable shares so that the aggregate number of Class X ordinary shares
outstanding at any time does not exceed the aggregate number of Accenture Holdings plc ordinary shares and Accenture
Canada Holdings Inc. exchangeable shares outstanding. Class X ordinary shares are not transferable without the
consent of Accenture plc.
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ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Equity of Subsidiaries Redeemable or Exchangeable for Accenture plc Class A Ordinary Shares
Accenture Holdings plc Ordinary Shares
Members of Accenture Leadership in certain countries, including the United States, received Accenture SCA
Class I common shares in connection with the Company’s transition to a corporate structure. On August 26, 2015,
Accenture SCA merged with and into Accenture Holdings plc, with Accenture Holdings plc as the surviving entity. In
connection with this transaction, holders of Accenture SCA Class I common shares (other than Accenture SCA itself)
received, on a one-for-one basis, ordinary shares of Accenture Holdings plc. Only Accenture plc, Accenture Holdings
plc, Accenture International S.à.r.l. and certain current and former members of Accenture Leadership and their permitted
transferees hold Accenture Holdings plc ordinary shares. Each Accenture Holdings plc share entitles its holder to one
vote on all matters submitted to a vote of shareholders of Accenture Holdings plc and entitles its holders to dividends
and liquidation payments.
Accenture Holdings plc is obligated, at the option of the holder, to redeem any outstanding Accenture Holdings
plc ordinary share at a redemption price per share generally equal to its current market value as determined in
accordance with Accenture Holdings plc’s memorandum and articles of association. Under Accenture Holdings plc’s
memorandum and articles of association, the market value of an ordinary share will be deemed to be equal to (i) the
average of the high and low sales prices of an Accenture plc Class A ordinary share as reported on the New York Stock
Exchange, net of customary brokerage and similar transaction costs, or (ii) if Accenture sells its Class A ordinary shares
on the date that the redemption price is determined (other than in a transaction with any employee or an affiliate or
pursuant to a preexisting obligation), the weighted average sales price of an Accenture plc Class A ordinary share on
the New York Stock Exchange, net of customary brokerage and similar transaction costs. Accenture Holdings plc may,
at its option, pay this redemption price with cash or by causing Accenture plc to deliver Class A ordinary shares on a
one-for-one basis. Each holder of Accenture Holdings plc ordinary shares is entitled to a pro rata part of any dividend
and to the value of any remaining assets of Accenture Holdings plc after payment of its liabilities upon dissolution.
Accenture Canada Holdings Inc. Exchangeable Shares
Partners resident in Canada and New Zealand received Accenture Canada Holdings Inc. exchangeable shares
in connection with the Company’s transition to a corporate structure. Holders of Accenture Canada Holdings Inc.
exchangeable shares may exchange their shares for Accenture plc Class A ordinary shares at any time on a one-for-
one basis. The Company may, at its option, satisfy this exchange with cash at a price per share generally equal to the
market price of an Accenture plc Class A ordinary share at the time of the exchange. Each exchangeable share of
Accenture Canada Holdings Inc. entitles its holder to receive distributions equal to any distributions to which an
Accenture plc Class A ordinary share entitles its holder.
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ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
13. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS’ EQUITY
Share Purchases and Redemptions
The Board of Directors of Accenture plc has authorized funding for the Company’s publicly announced open-
market share purchase program for acquiring Accenture plc Class A ordinary shares and for purchases and redemptions
of Accenture plc Class A ordinary shares, Accenture Holdings plc ordinary shares and Accenture Canada Holdings
Inc. exchangeable shares held by current and former members of Accenture Leadership and their permitted transferees.
As of August 31, 2016, the Company’s aggregate available authorization was $5,386,517 for its publicly announced
open-market share purchase and these other share purchase programs.
The Company’s share purchase activity during fiscal 2016 was as follows:
Open-market share purchases (1)
Other share purchase programs
Other purchases (2)
Total
_______________
Accenture plc Class A
Ordinary Shares
Shares
Amount
Accenture Holdings plc
Ordinary Shares and Accenture Canada
Holdings Inc. Exchangeable Shares
Amount
Shares
19,989,726
$
2,122,066
— $
—
—
3,857,795
410,730
653,222
—
23,847,521
$
2,532,796
653,222
$
—
72,193
—
72,193
(1)
(2)
The Company conducts a publicly announced open-market share purchase program for Accenture plc Class
A ordinary shares. These shares are held as treasury shares by Accenture plc and may be utilized to provide
for select employee benefits, such as equity awards to the Company’s employees.
During fiscal 2016, as authorized under the Company’s various employee equity share plans, the Company
acquired Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations due
from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares
under those plans. These purchases of shares in connection with employee share plans do not affect the
Company’s aggregate available authorization for the Company’s publicly announced open-market share
purchase and the other share purchase programs.
Other Share Redemptions
During fiscal 2016, the Company issued 775,023 Accenture plc Class A ordinary shares upon redemptions of an
equivalent number of Accenture Holdings plc ordinary shares pursuant to its registration statement on Form S-3 (the
“registration statement”). The registration statement allows the Company, at its option, to issue freely tradable Accenture
plc Class A ordinary shares in lieu of cash upon redemptions of Accenture Holdings plc ordinary shares held by current
and former members of Accenture Leadership and their permitted transferees.
Cancellation of Treasury Shares
During fiscal 2016, the Company received authorization from the Board of Directors of Accenture plc to cancel
163,015,507 Accenture plc Class A ordinary shares that were held as treasury shares and had an aggregate cost of
$11,199,016. The effect of the cancellation of these treasury shares was recognized in Class A ordinary shares and
Additional paid-in capital with the residual recorded in Retained earnings. There was no effect on total shareholders’
equity as a result of this cancellation.
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ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Dividends
The Company’s dividend activity during fiscal 2016 was as follows:
Dividend Payment Date
November 13, 2015
May 13, 2016
Total Dividends
Dividend
Per
Share
Accenture plc Class A
Ordinary Shares
Accenture Holdings plc Ordinary
Shares and Accenture Canada
Holdings Inc. Exchangeable Shares
Record Date
Cash Outlay
Record Date
Cash Outlay
Total Cash
Outlay
$
1.10 October 16, 2015
$
687,285 October 13, 2015
1.10 April 15, 2016
684,894 April 12, 2016
$ 1,372,179
$
$
33,391
$ 720,676
32,568
717,462
65,959
$1,438,138
The payment of the cash dividends also resulted in the issuance of an immaterial number of additional restricted
share units to holders of restricted share units.
Subsequent Event
On September 27, 2016, the Board of Directors of Accenture plc declared a semi-annual cash dividend of $1.21
per share on its Class A ordinary shares for shareholders of record at the close of business on October 21, 2016. On
September 28, 2016, the Board of Directors of Accenture Holdings plc declared a semi-annual cash dividend of $1.21
per share on its ordinary shares for shareholders of record at the close of business on October 18, 2016. Both dividends
are payable on November 15, 2016. The payment of the cash dividends will result in the issuance of an immaterial
number of additional restricted share units to holders of restricted share units.
14. LEASE COMMITMENTS
The Company has operating leases, principally for office space, with various renewal options. Substantially all
operating leases are non-cancelable or cancelable only by the payment of penalties. Rental expense in agreements
with rent holidays and scheduled rent increases is recorded on a straight-line basis over the lease term. Rental expense,
including operating costs and taxes, and sublease income from third parties during fiscal 2016, 2015 and 2014 was
as follows:
Rental expense
Sublease income from third parties
2016
Fiscal
2015
2014
$
578,149
$
547,206
$
539,711
(26,403)
(27,293)
(29,482)
Future minimum rental commitments under non-cancelable operating leases as of August 31, 2016 were as
follows:
2017
2018
2019
2020
2021
Thereafter
Operating
Lease
Payments
Operating
Sublease
Income
$
516,622
$
445,853
375,393
318,828
257,949
902,659
(16,147)
(15,410)
(13,996)
(12,324)
(11,074)
(50,350)
$
2,817,304
$
(119,301)
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Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
15. COMMITMENTS AND CONTINGENCIES
Commitments
The Company has the right to purchase or may also be required to purchase substantially all of the remaining
outstanding shares of its Avanade Inc. subsidiary (“Avanade”) not owned by the Company at fair value if certain events
occur. Certain holders of Avanade common stock and options to purchase the stock have put rights that, under certain
circumstances and conditions, would require Avanade to redeem shares of its stock at fair value. As of August 31,
2016 and 2015, the Company has reflected the fair value of $54,221 and $79,023, respectively, related to Avanade’s
redeemable common stock and the intrinsic value of the options on redeemable common stock in Other accrued
liabilities in the Consolidated Balance Sheets.
Indemnifications and Guarantees
In the normal course of business and in conjunction with certain client engagements, the Company has entered
into contractual arrangements through which it may be obligated to indemnify clients with respect to certain matters.
These arrangements with clients can include provisions whereby the Company has joint and several liability in relation
to the performance of certain contractual obligations along with third parties also providing services and products for
a specific project. In addition, the Company’s consulting arrangements may include warranty provisions that the
Company’s solutions will substantially operate in accordance with the applicable system requirements. Indemnification
provisions are also included in arrangements under which the Company agrees to hold the indemnified party harmless
with respect to third-party claims related to such matters as title to assets sold or licensed or certain intellectual property
rights.
Typically, the Company has contractual recourse against third parties for certain payments made by the Company
in connection with arrangements where third-party nonperformance has given rise to the client’s claim. Payments by
the Company under any of the arrangements described above are generally conditioned on the client making a claim,
which may be disputed by the Company typically under dispute resolution procedures specified in the particular
arrangement. The limitations of liability under these arrangements may be expressly limited or may not be expressly
specified in terms of time and/or amount.
As of August 31, 2016 and 2015, the Company’s aggregate potential liability to its clients for expressly limited
guarantees involving the performance of third parties was approximately $749,000 and $655,000, respectively, of
which all but approximately $113,000 and $43,000, respectively, may be recovered from the other third parties if the
Company is obligated to make payments to the indemnified parties as a consequence of a performance default by the
other third parties. For arrangements with unspecified limitations, the Company cannot reasonably estimate the
aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such
payments, due to the conditional nature and unique facts of each particular arrangement.
To date, the Company has not been required to make any significant payment under any of the arrangements
described above. The Company has assessed the current status of performance/payment risk related to arrangements
with limited guarantees, warranty obligations, unspecified limitations and/or indemnification provisions and believes
that any potential payments would be immaterial to the Consolidated Financial Statements, as a whole.
Legal Contingencies
As of August 31, 2016, the Company or its present personnel had been named as a defendant in various litigation
matters. The Company and/or its personnel also from time to time are involved in investigations by various regulatory
or legal authorities concerning matters arising in the course of its business around the world. Based on the present
status of these matters, management believes the range of reasonably possible losses in addition to amounts accrued,
net of insurance recoveries, will not have a material effect on the Company’s results of operations or financial condition.
F- 38
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ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
16. SEGMENT REPORTING
Operating segments are components of an enterprise where separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate
resources and in assessing performance.
The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s operating segments
are managed separately because each operating segment represents a strategic business unit providing consulting
and outsourcing services to clients in different industries.
The Company’s reportable operating segments are the five operating groups, which are Communications,
Media & Technology, Financial Services, Health & Public Service, Products and Resources. Information regarding the
Company’s reportable operating segments is as follows:
Fiscal
2016
Communications,
Media &
Technology
Financial
Services
Health &
Public
Service
Products
Resources
Other
Total
Net revenues
$
6,615,717
$ 7,031,053
$ 5,986,878
$ 8,395,038
$ 4,838,963
$ 15,074
$ 32,882,723
Depreciation and amortization (1)
141,356
139,518
134,788
206,806
965,574
1,127,750
807,012
1,282,461
106,584
627,648
—
—
729,052
4,810,445
923,764
123,827
892,569
1,281,551
820,273
(137,761)
3,904,223
Operating income
Net assets as of August 31 (2)
2015
Net revenues
$
6,349,372
$ 6,634,771
$ 5,462,550
$ 7,596,051
$ 4,988,627
$ 16,560
$ 31,047,931
Depreciation and amortization (1)
152,329
128,413
115,010
168,731
81,440
871,388
1,079,397
700,960
1,082,351
701,773
798,623
186,739
812,278
1,158,953
723,113
(59,371)
3,620,335
—
—
645,923
4,435,869
Operating income
Net assets as of August 31 (2)
2014
Net revenues
$
5,923,821
$ 6,511,228
$ 5,021,692
$ 7,394,980
$ 5,135,309
$ 15,364
$ 30,002,394
Depreciation and amortization (1)
Operating income
Net assets as of August 31 (2)
_______________
136,029
770,166
926,952
139,759
957,347
128,179
101,345
678,663
791,084
169,704
991,844
974,546
73,906
902,492
—
—
620,743
4,300,512
735,048
(127,396)
3,428,413
(1)
(2)
Amounts include depreciation on property and equipment and amortization of intangible assets controlled by
each operating segment, as well as an allocation for amounts they do not directly control.
The Company does not allocate total assets by operating segment. Operating segment assets directly attributed
to an operating segment and provided to the chief operating decision maker include Receivables from clients,
current and non-current Unbilled services, Deferred contract costs and current and non-current Deferred
revenues.
The accounting policies of the operating segments are the same as those described in Note 1 (Summary of
Significant Accounting Policies) to these Consolidated Financial Statements.
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ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Revenues are attributed to geographic regions and countries based on where client services are supervised.
Information regarding geographic regions and countries is as follows:
Fiscal
2016
Net revenues
Reimbursements
Revenues
North America
Europe
Growth Markets
Total
$ 15,653,290
$ 11,448,361
$
5,781,072
$ 32,882,723
970,248
635,362
309,328
1,914,938
16,623,538
12,083,723
6,090,400
34,797,661
Property and equipment, net as of August 31
244,351
220,500
491,691
956,542
2015
Net revenues
Reimbursements
Revenues
$ 14,209,387
$ 10,929,572
$
5,908,972
$ 31,047,931
891,443
628,342
346,708
1,866,493
15,100,830
11,557,914
6,255,680
32,914,424
Property and equipment, net as of August 31
230,359
179,925
391,600
801,884
2014 (1)
Net revenues
Reimbursements
Revenues
$ 12,796,846
$ 11,254,953
$
5,950,595
$ 30,002,394
882,481
624,219
365,584
1,872,284
13,679,327
11,879,172
6,316,179
31,874,678
Property and equipment, net as of August 31
240,886
190,450
362,108
793,444
_______________
(1)
Effective September 1, 2014, we revised the reporting of the Company’s geographic regions as follows: North
America (the United States and Canada); Europe; and Growth Markets (Asia Pacific, Latin America, Africa,
the Middle East, Russia and Turkey). Fiscal 2014 amounts have been reclassified to conform to the current
period presentation.
The Company’s business in the United States represented 46%, 43% and 40% of its consolidated net revenues
during fiscal 2016, 2015 and 2014, respectively. No other country individually comprised 10% or more of the Company’s
consolidated net revenues during these periods. Business in Ireland, the Company’s country of domicile, represented
approximately 1% of its consolidated net revenues during each of fiscal 2016, 2015 and 2014.
The Company conducts business in Ireland and in the following countries that hold 10% or more of its total
consolidated Property and equipment, net:
United States
India
Ireland
Revenues by type of work were as follows:
Consulting
Outsourcing
Net revenues
Reimbursements
Revenues
August 31,
2016
August 31,
2015
August 31,
2014
25%
25
4
28%
26
2
29%
22
2
2016
Fiscal
2015
2014
$ 17,867,891
$ 16,203,915
$ 15,737,661
15,014,832
14,844,016
14,264,733
32,882,723
31,047,931
30,002,394
1,914,938
1,866,493
1,872,284
$ 34,797,661
$ 32,914,424
$ 31,874,678
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Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
17. QUARTERLY DATA (unaudited)
Fiscal 2016
Net revenues
Reimbursements
Revenues
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Annual
$
8,013,163
$
7,945,565
$
8,434,757
$
8,489,238
$ 32,882,723
452,821
451,488
534,287
476,342
1,914,938
8,465,984
8,397,053
8,969,044
8,965,580
34,797,661
Cost of services before reimbursable
expenses
Reimbursable expenses
Cost of services
Operating income
Net income
Net income attributable to Accenture plc
Weighted average Class A ordinary
shares:
—Basic
—Diluted
Earnings per Class A ordinary share:
—Basic
—Diluted
Ordinary share price per share:
—High
—Low
$
$
5,450,644
5,575,749
5,745,205
5,833,698
22,605,296
452,821
5,903,465
1,221,260
868,681
818,899
451,488
6,027,237
1,088,044
1,399,858
1,326,520
534,287
6,279,492
1,305,943
950,283
897,247
476,342
1,914,938
6,310,040
24,520,234
1,195,198
1,130,781
1,069,226
4,810,445
4,349,603
4,111,892
626,463,124
626,523,793
623,725,913
622,555,642
624,797,820
671,300,744
668,125,087
666,403,323
665,365,231
667,770,274
1.31
$
2.12
$
1.44
$
1.72
$
1.28
2.08
1.41
1.68
109.86
$
109.65
$
119.72
$
120.78
$
91.68
91.40
101.00
108.66
6.58
6.45
120.78
91.40
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Table of Contents
ACCENTURE PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
Fiscal 2015
Net revenues
Reimbursements
Revenues
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Annual
$
7,895,715
$
7,493,329
$
7,770,382
$
7,888,505
$ 31,047,931
447,542
438,261
504,684
476,006
1,866,493
8,343,257
7,931,590
8,275,066
8,364,511
32,914,424
Cost of services before reimbursable
expenses
Reimbursable expenses
Cost of services
Operating income
Net income
Net income attributable to Accenture plc
Weighted average Class A ordinary
shares:
—Basic
—Diluted
Earnings per Class A ordinary share:
—Basic
—Diluted
Ordinary share price per share:
—High
—Low
$
$
5,356,425
5,252,690
5,245,477
5,384,100
21,238,692
447,542
5,803,967
1,187,709
892,242
831,530
438,261
5,690,951
1,021,033
743,192
690,726
504,684
5,750,161
1,133,519
850,230
793,697
476,006
1,866,493
5,860,106
23,105,185
1,093,608
788,125
737,628
4,435,869
3,273,789
3,053,581
628,439,218
628,254,759
625,969,418
624,715,181
626,799,586
682,333,149
679,165,137
677,825,768
675,749,438
678,757,070
1.32
$
1.10
$
1.27
$
1.18
$
1.29
1.08
1.24
1.15
86.49
$
91.94
$
97.95
$
105.37
$
73.98
81.66
86.40
88.43
4.87
4.76
105.37
73.98
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