LEADING
WITH VALUE
Annual Report 2019
DELIVERING IN
FISCAL 2019
Accenture reported another year of outstanding financial
results in fiscal 2019. With our team of nearly 500,000 of
the very best people, we delivered on our commitments to
create value for our clients, our people, our shareholders
and the communities in which we live and work.
We met or exceeded all the objectives in our initial business
outlook for the year. Our record performance included very
strong new bookings and revenue growth that significantly
outpaced the market. We also delivered excellent profitability
and returned record cash to shareholders, while continuing
to invest substantially in our business.
Our results across industries and markets around the world
speak to the durability of our business, the breadth and depth
of our team, the continued strong demand for our services,
and the significant growth opportunities ahead.
Among the highlights:
• We delivered record new bookings of
$45.5 billion, including our highest-ever
quarterly bookings of $12.9 billion in the
fourth quarter.
• We grew revenues to $43.2 billion, an
8.5 percent increase in local currency
and above the high end of our initial
guided range.
• We delivered diluted earnings per share of
$7.36, a 9 percent increase from adjusted
fiscal 2018 EPS of $6.74, which exclude
$0.40 in charges related to tax law changes.
• Operating margin was 14.6 percent,
an expansion of 20 basis points.
• We generated excellent free cash flow
of $6.0 billion and returned a record
$4.6 billion in cash to shareholders
through share repurchases and dividends.
• Shortly after our fiscal year-end, we
announced our first quarterly cash dividend
of $0.80 per share, a 10 percent increase
over the equivalent quarterly rate of our
previous semi-annual dividend.
1
We also delivered significant shareholder value once
again in fiscal 2019. Accenture shares provided a 19 percent
total return to shareholders for the year ended August 31,
compared with 3 percent for the S&P 500 Index. Over the
last five fiscal years, our compound annual total return
to shareholders has been 22 percent, outperforming the
S&P 500 by 12 percentage points.
Creating Value for Our Clients
Our excellent results reflect the power of
our growth strategy, which starts with our
clients and their imperative to transform their
businesses in today’s digital world. Accenture’s
ability to create value for clients by combining
unmatched technology expertise with our
privileged ecosystem relationships, our
innovation-led approach and deep industry
knowledge continues to set us apart in
the marketplace.
Our clients count on us to help them build
resilience and drive growth in an increasingly
complex and disruptive environment. Today,
we serve more than three-quarters of the
FORTUNE Global 500 and 91 of the top 100.
Of our 100 largest clients, 95 have been with
us for 10 years or more. And we are especially
pleased that we finished fiscal 2019 with
more than 200 Diamond Clients — our biggest
relationships with many of the world’s most
iconic companies — an increase of 60 clients
from five years ago.
Most of our clients are still in the early stages
of their transformations, and they recognize
that technology is core to their business — and
to ours. They understand that we have a unique
ability to imagine, create and execute at scale
and speed across markets to deliver technology
solutions that are changing industries, growing
businesses and improving lives. This is why our
clients choose to partner with Accenture.
We believe our technology capabilities are the
strongest and most innovative in the industry,
with scale and leadership in all the areas that are
most relevant to our clients. In particular, our
Intelligent Platform Services business is a clear
global leader, accounting for about 40 percent
of Accenture’s total revenues, with double-digit
growth in fiscal 2019. Intelligent Platform
Services benefits from our strong partnerships
with leading next-generation, cloud-enabled
platforms— including SAP, Microsoft, Oracle,
Salesforce and Workday. We are also a global
leader in cloud on the major platforms including
Amazon Web Services, Microsoft Azure and
Google Cloud Platform. We leverage all of these
relationships, together with our digital and
industry expertise, to help clients transform
their entire enterprises.
Our deep and broad industry expertise has
always provided durability and resilience in our
business. Today, it is also creating competitive
advantages for us as clients increasingly seek
the best solutions — not just in their own
industries, but from leaders in other industries.
More and more, we are adapting leading
solutions from one industry to accelerate
value in other industries.
For example, using artificial intelligence and
our knowledge of the communications industry,
we created a solution that helped Verizon use
digital assistant experiences to address more
than 70 percent of its customer calls. In many
cases, a 20-minute conversation with a human
agent has become a three- to four-minute digital
interaction, improving the customer experience
and allowing agents to concentrate on more
complex and interesting work.
2
We are now applying this solution across
other industries, including utilities, where
Enbridge’s gas utility customers can now
complete many transactions digitally, enhancing
their experiences significantly. And the
New Mexico Human Services Department
is deploying our solution to help employees
reduce the time it takes to provide Medicaid
coverage to newborn babies by up to 75 percent.
Continuous Innovation
As our clients navigate their futures, they rely
on us for fresh ideas, cutting-edge technology
solutions and strong execution.
In fiscal 2019, we continued to make substantial
investments in creating innovative business and
technology solutions. We invested $800 million in
R&D and now have a global portfolio of more than
7,400 patents and pending patent applications.
Our investment strategy reflects our commit-
ment to both leveraging technologies already
in the market to create value, while exploring
the potential and impact of emerging advance-
ments in artificial intelligence, blockchain,
extended reality, quantum computing, cyber-
security and more. For example, we collaborated
with Kellogg and Qualcomm Technologies
to create and pilot a virtual reality solution that
embeds eye-tracking technology in a mobile
headset to gather valuable insights about what
grocery shoppers are looking at and why.
At the same time, in fiscal 2019, we invested
$1.2 billion across 33 acquisitions to acquire
critical skills and capabilities in strategic,
high-growth areas of the market. The vast
majority of that capital was deployed in “the
New”— digital, cloud and security services.
An important strategic acquisition this year
was creative agency Droga5, which brings
unparalleled brand expertise, creativity and
strategic rigor to help clients reinvent their
customer experiences and forge meaningful
connections. Droga5 further strengthens
our market-leading business in Accenture
Interactive, which reached a key milestone
in fiscal 2019 by surpassing $10 billion in
annual revenue.
The New is our core — accounting for about
65 percent of total revenues—and we still have
huge growth opportunities across all of these
businesses. Accenture Industry X.0, which we
launched last year, is among the most exciting
as we look ahead.
Industry X.0 is focused on the digital reinvention
of industries through advanced technologies
including the Internet of Things, connected
devices and digital platforms. For example,
we have been working with Magneti Marelli
(now MARELLI), a leading automotive supplier,
to deploy sensors and artificial intelligence
to monitor critical production equipment and
anticipate possible breakdowns, improving
operating efficiency.
“ We delivered on our commitments to
create value for our clients, our people,
our shareholders and the communities
in which we live and work.“
Collaboration is fundamental to how we work
with our clients. That’s why we continue to
invest in our Innovation Architecture, which
combines research, ventures, labs, studios,
innovation centers and delivery centers. Across
this network of more than 100 world-class
facilities, innovation and industry come
together, and ideas become solutions. The
design thinking and strategic working sessions
hosted in our innovation hubs have become
integral to our clients’ understanding of their
own businesses in the context of their peers
and global best practices—as CEOs increas-
ingly benchmark themselves against the best
companies, regardless of industry.
3
Leading by Example
Our purpose is to deliver value to all our stake-
holders — and includes being a responsible
business in how we serve our clients, creating
value in our communities and for our people,
and driving strong shareholder returns.
Our people and our culture are, and will continue
to be, our biggest competitive advantage. We
strive to be a magnet for the best people, who
understand how helping our clients succeed
has an impact on the millions they employ and
the communities where we all work and live.
Our unwavering commitment to inclusion and
diversity enables us to recruit and retain the
most talented people in our markets. It creates
an environment that unleashes innovation and
allows our people to perform at their very best,
and underpins a culture in which everyone feels
they have an equal opportunity to belong and
build a career.
I am extremely pleased that for the second
year in a row, we have been ranked No. 1 on
Refinitiv’s Diversity & Inclusion Index, which
was previously produced by Thomson Reuters.
I am also proud that we achieved another
milestone on our path to gender equality by
2025. With nearly half a million people around
the world, and as a technology powerhouse,
we are now 44 percent women.
We continue to build the best possible leadership
team. During fiscal 2019, we promoted 700
new managing directors and hired more than
400 from outside Accenture, adding highly
specialized skills, industry expertise and
fresh perspectives.
To stay on top of technology trends and remain
relevant to our clients’ needs, we invested
$973 million in learning and professional devel-
opment in fiscal 2019, applying our continuous
learning approach and focusing on emerging
technologies, Agile development and intelli-
gent platforms.
Through Skills to Succeed, we have joined
with our external network of strategic partners
to equip more than 2.8 million people to date
around the world with the skills to get a job
or build a business in the digital age.
Whether at work or in our communities, we
believe our conduct counts. We strive to lead
in critical areas and recently announced our
commitment to using 100 percent renewable
energy across our global operations by 2023.
We were also very pleased to be ranked No. 1
on Barron’s new list of the Most Sustainable
International Companies.
At Accenture, one of our greatest strengths
is that we are always striving to be better. We
know our clients need us to continue developing
new solutions and helping them navigate the
complex world in which we work and live.
I am confident we will continue raising the
bar, redefining what is possible and leading
by example.
4
I want to thank David Rowland and our entire
Global Management Committee, which came
together under David’s inspiring leadership
as interim CEO to ensure that we delivered on
our commitments for fiscal 2019. This was the
ultimate way to honor Pierre Nanterme, who
passed away in January, for his incredible con-
tributions over eight years as Accenture’s CEO.
In closing, I thank all Accenture people around
the world for their dedication and commitment
to our clients and our business. Based on our
fiscal 2019 performance, the momentum in
the business and our continued discipline in
executing our growth strategy, I am very
confident in our ability to continue creating
value for all our stakeholders.
Julie Sweet
Chief Executive Officer
October 29, 2019
55
We delivered another year of
outstanding financial results in
fiscal 2019, driving superior
shareholder value.
Twelve months ended August 31, 2019
REVENUES
NEW
BOOKINGS
$43.2B
An increase of 8.5 percent in
local currency and 5 percent
in US dollars from fiscal 2018
Includes $28 billion from
digital, cloud and security
services — up about 20 percent
in local currency
OPERATING
MARGIN
14.6%
An expansion of 20 basis
points from fiscal 2018
$45.5B
Broad-based and strong across
the business, with approximately
65 percent in digital, cloud and
security services
DILUTED EARNINGS
PER SHARE
$7.36
A 9 percent increase from
$6.74 on an adjusted basis in
fiscal 2018, after excluding
$0.40 in charges related to
tax law changes
FREE
CASH FLOW
$6.0B
Defined as operating cash
flow of $6.6 billion net of
property and equipment
additions of $599 million
CASH RETURNED TO
SHAREHOLDERS
$4.6B
Defined as cash dividends
of $1.9 billion plus share
repurchases of $2.7 billion
6
Comparison of Cumulative Total Return
August 31, 2014—
August 31, 2019
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, 2014,
and ending on August 31, 2019, which was the end
of fiscal 2019. 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, 2014, $100 was invested in
our Class A shares and $100 was invested in each
of the other two indices, with dividends reinvested
$300
$250
$200
$150
$100
$50
$0
on the ex-dividend date without payment of any
2014
2015
2016
2017
2018
2019
commissions. The performance shown in the graph
represents past performance and should not be
considered an indication of future performance.
Accenture
S&P 500 Index
S&P 500 Information Technology Sector Index
Index Prices as of August 31
2014
2015
2016
2017
2018
2019
Accenture
$100
$119
$148
$172
$227
$270
S&P 500 Index
$100
$100
$113
$131
$157
$162
S&P 500 IT Sector Index
$100
$102
$122
$160
$212
$226
7
AWARDS AND
RECOGNITION
RECOGNIZED AMONG
RECOGNIZED AMONG
RANKED NO. 1 ON THE
FORTUNE’s World’s Most
Admired Companies
for 17 consecutive years;
ranked No. 1 in IT Services
category for six years
Ethisphere’s World’s Most
Ethical Companies
for 12 consecutive years
Refinitiv Diversity &
Inclusion Index
for two consecutive years; included
for four consecutive years
RANKED NO. 31 ON
RANKED NO. 248 ON
RANKED NO. 298 ON
Interbrand's Best
Global Brands
marking 18 consecutive years
Forbes’ Global 2000
marking 16 consecutive years
FORTUNE’s Global 500
marking 18 consecutive years
RANKED NO. 1 ON NEW
INCLUDED ON
RECOGNIZED ON
Barron’s
Most Sustainable
International
Companies
Dow Jones Sustainability
Index North America and
FTSE4GOOD Global Index
for 15 consecutive years
CDP’s Climate
Change "A List"
and in report for seven
consecutive years
RANKED NO. 7 ON
INCLUDED ON
RECEIVED A PERFECT SCORE ON
Wall Street Journal’s
Management Top 250
marking two
consecutive years
FORTUNE’s Change
the World
for three years
Human Rights Campaign’s
Corporate Equality Index
each year since 2008
RANKED NO. 2 ON
RANKED AMONG
RANKED AMONG
Business Today/People
Strong’s Best Companies
to Work For in India
for two consecutive years; included
for eight consecutive years
The Sunday Times
Best 25 Big Companies
to Work For
marking four consecutive years
FORTUNE’s 100 Best
Companies to Work For
in the US
marking 11 consecutive years
88
8
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 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 con-
tained 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, 2019, together
constitute Accenture’s annual report
to security holders for purposes of
Rule 14a-3(b) of the Exchange Act.
Accenture discloses information
about “the New”— digital, cloud
and security services—to provide
additional insights into the company’s
business. Revenues for the New are
approximate, require judgment to
allocate revenues for arrangements
with multiple offerings and may be
modified to reflect periodic changes
to the definition of the New.
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 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.
9
Table of Contents
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, 2019
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
Trading Symbol(s)
Name of each exchange on which registered
Class A ordinary shares, par value $0.0000225 per share
ACN
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
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 ☐ No ☑
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 ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such
files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Smaller reporting company
☑
☐
Accelerated filer
Emerging growth company
☐
☐
Non-accelerated filer
☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the common equity of the registrant held by non-affiliates of the registrant on February 28, 2019 was approximately
$102,946,507,918 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 $161.38 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 9, 2019 was 655,096,086
(which number includes 20,033,052 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 9, 2019 was 609,404.
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 January 30, 2020, 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, 2019.
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 Accountant Fees and Services
Part IV
Item 15. Exhibits, Financial Statement Schedules
Item 16. Form 10-K Summary
Signatures
Page
1
8
21
21
22
22
24
26
27
40
40
41
41
41
42
42
42
43
43
44
46
47
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.
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. Any materials we file with the SEC are
available on such Internet site.
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 492,000 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 and the Middle East). Our five operating groups, organized by industry,
bring together expertise from across the organization in strategy, consulting, digital, technology and operations to
deliver end-to-end services and solutions to clients. For fiscal 2019, our revenues were $43.2 billion, with the majority
in digital-, cloud- and security-related services.
We operate globally with one common brand and business model, providing clients around the world with the
same high level of service. Drawing on a combination of industry and functional expertise, technology and innovation
capabilities, alliance relationships, and our global delivery resources, we seek to provide differentiated, innovative
services that help our clients measurably improve their business performance and create sustainable value for their
customers and stakeholders. Our global delivery capability enables us to assemble integrated teams to provide high-
quality, cost-effective solutions to our clients.
In fiscal 2019, we continued to execute a strategy focused on industry and technology differentiation, increasingly
taking an innovation-led approach to drive value for clients. We serve clients in locally relevant ways, leveraging our
global organization as appropriate. As part of our growth strategy in fiscal 2019, 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.
1
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; orchestrating our expertise and working
synergistically 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. We do not allocate total assets
by operating group, although our operating groups do manage and control certain assets.
Operating Groups and Industry Groups
Communications, Media &
Technology
• Communications & Media
• High Tech
• Software & Platforms
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 communications, media, high tech, software
and platform companies. Professionals in this operating group help clients accelerate and deliver digital transformation,
developing comprehensive, industry-specific solutions to seize new opportunities and enhance efficiencies and
business results. Examples of our services include helping clients capture new growth by shifting to data-driven and
platform-based models, optimizing their cost structures, increasing product and business model innovation, and
differentiating and scaling digital experiences for their customers. Our Communications, Media & Technology operating
group comprises the following industry groups:
• Our Communications & Media industry group serves most of the world’s leading wireline, wireless, broadcast,
entertainment, print, publishing, cable and satellite communications service providers. This group represented
approximately 46% of our Communications, Media & Technology operating group’s revenues in fiscal 2019.
• Our High Tech industry group serves the enterprise technology, network equipment, semiconductor, consumer
technology, aerospace & defense, and medical equipment industries. This group represented approximately
24% of our Communications, Media & Technology operating group’s revenues in fiscal 2019.
• Our Software & Platforms industry group serves computer software and digital platform companies. This
group represented approximately 29% of our Communications, Media & Technology operating group’s
revenues in fiscal 2019.
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 70% of our Financial Services operating group’s revenues in fiscal 2019.
• Our Insurance industry group serves property and casualty insurers, life insurers, reinsurance firms and
insurance brokers. This group represented approximately 30% of our Financial Services operating group’s
revenues in fiscal 2019.
2
Table of Contents
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 38%
of our Health & Public Service operating group’s revenues in fiscal 2019.
• 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;
justice departments; human services agencies; educational institutions; non-profit organizations; and postal,
customs, revenue and tax agencies. Our Public Service industry group represented approximately 62% of
our Health & Public Service operating group’s revenues in fiscal 2019.
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, and represented approximately 34% of our Health & Public Service
operating group’s revenues in fiscal 2019.
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 54% of our Products
operating group’s revenues in fiscal 2019.
• Our Industrial industry group works with the following types of companies: freight and logistics; industrial and
electrical equipment, consumer durables and heavy equipment; construction and infrastructure management;
and automotive and public transportation. This group represented approximately 25% of our Products
operating group’s revenues in fiscal 2019.
• Our Life Sciences industry group serves pharmaceutical, medical technology and biotechnology companies.
This group represented approximately 21% of our Products operating group’s revenues in fiscal 2019.
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 32% of our Resources operating group’s revenues in fiscal 2019.
• Our Energy industry group serves a wide range of companies in the oil and gas industry, including upstream,
downstream, oilfield services and energy trading companies. This group represented approximately 27% of
our Resources operating group’s revenues in fiscal 2019.
• Our Utilities industry group works with electric, gas and water utilities, and new energy providers around the
world. This group represented approximately 41% of our Resources operating group’s revenues in fiscal 2019.
3
Table of Contents
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 combines deep industry expertise, advanced analytics capabilities and design methodologies
to help leaders in the C-suite envision and execute strategies that drive growth and digital transformation. We provide
a range of strategy services to enable competitiveness and innovation, including new business and operating models,
mergers and acquisitions, talent and organization, technology strategies, sustainability, security, advanced customer
services, supply chain strategies and enterprise-wide strategies to realign resources for growth.
Accenture Consulting
Accenture Consulting provides industry experts with the insights and management and technology consulting
capabilities to transform the world’s leading companies. Our consulting capabilities, including advanced analytics and
design expertise, enable our clients to develop 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,
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, blockchain and
other capabilities.
Accenture Digital
Accenture Digital brings together our global digital capabilities to help clients unlock value and transform their
businesses. 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 Applied Intelligence. We embed analytics, automation and artificial intelligence into functions
and processes at the core of our clients’ businesses to realize new cost efficiencies and create new value
from process, product and business transformation.
• Accenture Industry X.0. We help clients across industries digitally reinvent their design, engineering,
manufacturing and production to create smart, connected products and services faster and at lower cost. We
use advanced technologies including the Internet of Things, connected devices and digital platforms to unlock
new revenue streams and create new efficiencies.
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 encompasses our cloud and infrastructure services, including security services, and our portfolio
of products and intelligent platforms and services, as well as our Advanced Technology Centers. We
continuously innovate new services, capabilities and platforms through early adoption of technologies such
as artificial intelligence, blockchain, machine learning, intelligent automation, extended reality and quantum
computing 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 develop and manage our alliance
relationships across a broad range of technology providers, including Amazon Web Services, Google,
Microsoft, Oracle, Pegasystems, Salesforce, SAP, Workday and many others, to enhance the value that we
and our clients realize from the technology ecosystem.
4
Table of Contents
Accenture Operations
Accenture Operations provides business process services for specific functions, including finance and accounting,
procurement and supply chain, marketing and sales, as well as industry-specific services, such as platform trust and
safety, health and utility services. We operate business processes on behalf of clients, through a combination of our
talent powered by data, artificial intelligence, analytics and digital technologies, to help improve their productivity,
customer experience and performance.
Global Delivery Capability
A key differentiator is our global delivery capability, which allows us to draw on the benefits of working with our
people around the world—including scalable innovation; 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.
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.
Research and Innovation
We are committed to developing leading-edge ideas. Research and innovation, which are components 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 $800 million, $791
million and $704 million in fiscal 2019, 2018 and 2017, 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.
We view innovation as a source of competitive advantage. We seek 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 architecture brings together our innovation capabilities across the Company—from
research, ventures and labs to our studios, innovation centers and delivery centers. This includes research and thought
leadership to identify market, technology and industry trends. Through Accenture Ventures, we partner with and invest
in growth-stage companies that create innovative enterprise technologies. Accenture Labs incubate and prototype
new concepts through applied research and development projects. In addition, our studios, innovation centers and
delivery centers build and scale the delivery of our innovations.
People
As a talent- and innovation-led organization, one of our key goals is to have the best people, with highly specialized
skills, across our entire business to drive our differentiation and competitiveness. We are deeply committed to investing
in our people to ensure they have opportunities to continually learn and grow in their careers, customized for the
individual in an on-demand, digital environment. We provide our people ongoing feedback, and they are rewarded
based on individual and Company performance. Our culture is underpinned by our core values, Code of Business
Ethics and unwavering commitment to inclusion and diversity.
As of August 31, 2019, we employed approximately 492,000 people and had offices and operations in more than
200 cities in 51 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, 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;
5
Table of Contents
• accounting firms that provide consulting and other services and solutions in areas that compete with us;
• solution or service providers that compete with us in a specific geographic market, industry segment or service
area, including digital and advertising agencies and emerging start-ups and other companies that can scale
rapidly to focus on or disrupt 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 Forbes Global 2000 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
and copyright 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, 2019, we had a portfolio of over 4,800 patents and over 2,500 patent applications pending
worldwide.
To protect the Accenture brand, one of our most valuable assets, we rely on intellectual property laws and
trademark registrations held around the world.
Trademarks appearing in this report are the trademarks or registered trademarks of Accenture Global Services
Ltd., Accenture Global Solutions Ltd., or third parties, as applicable.
Organizational Structure and History
Accenture plc was incorporated in Ireland on June 10, 2009 as a public limited company. We operate our business
through subsidiaries of Accenture plc.
On March 13, 2018, Accenture Holdings plc, a subsidiary of Accenture plc merged with and into Accenture plc,
with Accenture plc as the surviving entity. As a result, all of the assets and liabilities of Accenture Holdings plc were
acquired by Accenture plc, and Accenture Holdings plc ceased to exist. In connection with this internal merger,
shareholders of Accenture Holdings plc (other than Accenture entities that held shares of Accenture Holdings plc), who
primarily consisted of current and former members of Accenture Leadership and their permitted transferees, received
one Class A ordinary share of Accenture plc for each share of Accenture Holdings plc that they owned, and Accenture
plc redeemed all Class X ordinary shares of Accenture plc owned by such shareholders.
In connection with our transition in 2001 from a series of related partnerships and corporations operated under
the control of our partners to a corporate structure, partners in certain countries received common shares of Accenture
SCA, the predecessor of Accenture Holdings plc, or exchangeable shares issued by Accenture Canada Holdings Inc.,
an indirect subsidiary of Accenture SCA. Generally, these partners also received a corresponding number of Accenture
6
Table of Contents
Ltd (our predecessor holding company) Class X common shares, which entitled their holders to vote at Accenture Ltd
shareholder meetings but did not carry any economic rights.
The Consolidated Financial Statements reflect the ownership interests in Accenture Holdings plc (for applicable
periods) 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
(our 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 less than 1% as
of August 31, 2019.
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
“—Organizational Structure and History,” Class X ordinary shares generally provide the holders of 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
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
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 Canada Holdings Inc. exchangeable shares owned by that holder. Accenture plc will redeem Class X ordinary
shares upon the redemption or exchange of 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
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 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.
7
Table of Contents
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 and
political conditions and the effects of these conditions on our clients’ businesses and levels of business
activity.
Global macroeconomic and geopolitical conditions affect our clients’ businesses and the markets they serve.
Volatile, negative or uncertain economic and political 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. Because we operate globally and have significant businesses in many markets,
an economic slowdown in any of those markets could adversely affect our results of operations.
Ongoing economic and political 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 and political 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 and political volatility and uncertainty, including as a result of the United Kingdom referendum in favor of
exiting the European Union, changes in global trade policies, trade disputes and trends such as populism and economic
nationalism and their impact on us, our clients and the industries we serve, 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 and political 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 well as developments in areas such as artificial intelligence, augmented reality, automation,
blockchain, Internet of Things, quantum computing and as-a-service solutions. Technological developments 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 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
8
Table of Contents
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. In a particular operating group, business, industry or geography, a small number of clients have
contributed, or may, in the future contribute, a significant portion of the revenues of such operating group, business,
industry or geography, 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 operating group, business,
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 market-leading skills and capabilities
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. We must hire or reskill, 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 changes in technology,
industry and the macroeconomic environment, and continuously innovate to grow our business. For example, if we
are unable to hire or retrain our employees to keep pace with the rapid and continuous 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
innovate and deliver new services and solutions to fulfill client demand. There is intense competition for scarce talent
with market-leading skills and capabilities in new technologies, and our competitors have directly targeted our
employees with these highly sought-after skills and may continue to do so. As a result, we may be unable to cost-
effectively hire and retain employees with these market-leading skills, which may cause us to incur increased costs,
or be unable to fulfill client demand for our services and solutions.
We are particularly dependent on retaining members of Accenture Leadership with critical capabilities. If we are
unable to do so, our ability to innovate, generate new business opportunities and effectively lead large and complex
transformations and client relationships could be jeopardized. We depend on identifying, developing and retaining top
talent to innovate and lead our businesses. This includes developing talent and leadership capabilities in emerging
markets, where the depth of skilled employees may be limited, and competition for these resources is intense. Our
ability to expand in our key markets depends, in large part, on our ability to attract, develop, retain and integrate both
leaders for the local business and people with critical capabilities.
Similarly, our profitability depends on our ability to effectively source and staff people 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
9
Table of Contents
able to deploy the talent we need because of increased regulation of immigration or work visas, including limitations
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 individuals 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 reducing the rate of new hires and increasing 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.
We could face legal, reputational and financial risks 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 people, 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 risk of security breaches and cyberattacks
increases. Such breaches could lead to shutdowns or disruptions of or damage to our systems and those of our clients,
alliance partners and vendors, and unauthorized disclosure of sensitive or confidential information, including personal
data. In the past, we have experienced data security breaches resulting from unauthorized access to our and our
service providers’ systems, which to date have not had a material impact on our operations; however, there is no
assurance that such impacts will not be material in the future.
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
artificial intelligence, the internet of things and analytics. Unauthorized disclosure of sensitive or confidential client or
Accenture data, whether through systems failure, employee negligence, fraud, misappropriation, or other intentional
or unintentional acts, could damage our reputation, cause us to lose clients and could result in significant financial
exposure. Similarly, unauthorized access to or through our or our service providers’ 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 continuously develop and deploy
viruses, ransomware 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 expanding and evolving,
thereby increasing the difficulty of detecting and defending against them and maintaining effective security measures
and protocols.
We are subject to numerous laws and regulations designed to protect this information, such as the European
Union’s General Data Protection Regulation (“GDPR”), 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 continue to evolve, are increasing in complexity and number and increasingly conflict among the
various countries in which we operate, which has resulted in greater compliance risk and cost for us. The GDPR
imposes new compliance obligations regarding the handling of personal data and has significantly increased financial
penalties for noncompliance. For example, failure to comply with the GDPR may lead to regulatory enforcement actions,
which can result in monetary penalties of up to 4% of worldwide revenue, orders to discontinue certain data processing
operations, private lawsuits, or reputational damage. 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
10
Table of Contents
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.
The markets in which we operate 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, 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;
• solution or service providers that compete with us in a specific geographic market, industry segment or service
area, including digital and advertising agencies and emerging start-ups and other companies that can scale
rapidly to focus on or disrupt 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 growth strategy to expand 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 and expand in the markets we
currently serve. 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. The technology companies described above, including many
of our alliance partners, are increasingly able to offer services related to their software, platform and other solutions,
or are developing software, platform and other solutions that require integration services to a lesser extent. These more
integrated services and solutions may represent more attractive alternatives to clients than some of our services and
solutions, which may materially adversely affect our competitive position and 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, and are
taking 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 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, changes in the mix of earnings in countries with differing statutory tax rates, the expiration
of current tax benefits and changes in accounting principles, including the U.S. generally accepted accounting principles.
Tax rates in the jurisdictions in which we operate may change materially as a result of shifting economic conditions
11
Table of Contents
and tax policies. 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.
A number of countries where we do business, including the United States and many countries in the European
Union, have implemented, and are considering implementing, changes in relevant tax, accounting and other laws,
regulations and interpretations. For example, in December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax
Act”), which significantly changed U.S. tax law. The Tax Act’s “base erosion and anti-abuse tax” provisions, and
regulations issued thereunder, adversely impact our effective tax rate by limiting our ability to deduct certain expenses.
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. Furthermore, the Organization for Economic Co-operation and Development
(“OECD”), 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. The changes recommended by the OECD
have been or are being adopted by many of the countries in which we do business. In addition, the European Commission
has expanded upon the OECD guidelines with anti-tax avoidance directives to be applied by its member states. Among
other things, the directives require companies to provide increased country-by-country disclosure of their financial
information to tax authorities, which in turn could lead to disagreements by jurisdictions over the proper allocation of
profits between them. In connection with the OECD’s base erosion and profit shifting project, the OECD has undertaken
a new project focused on “Addressing the Tax Challenges of the Digitalization of the Economy.” This project may impact
all multinational businesses by implementing a global model for minimum taxation. Additionally, the European
Commission and some foreign jurisdictions have introduced proposals to impose a separate tax on specified digital
service activity. There is significant uncertainty regarding such proposals. The increasingly complex global tax
environment, and any unfavorable resolution of these uncertainties, 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 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
12
Table of Contents
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.
Our profitability could suffer if our cost-management strategies are unsuccessful, and we may not be able to
improve our profitability. Our ability to improve or maintain our profitability is dependent on our being able to successfully
manage our costs, including taking actions to reduce certain costs. Our cost management strategies include maintaining
appropriate alignment between the demand for our services and solutions and the workforce needed to deliver them.
If we are not effective in managing our operating costs in response to changes in demand or pricing, or if we are unable
to cost-effectively hire and retain personnel with the knowledge and skills necessary to deliver our services and solutions,
particularly in areas of new technologies and offerings and in the right geographic locations, we may incur increased
costs, which could reduce our ability to continue to invest in our business in an amount necessary to achieve our
planned rates of growth and our desired levels of profitability.
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 or our clients 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.
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 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
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 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. 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
13
Table of Contents
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.
As a result of our geographically diverse operations and our growth strategy to continue to expand in our key
markets around the world, we are more susceptible to certain risks.
We have offices and operations in more than 200 cities in 51 countries around the world. One aspect of our
growth strategy is to continue to expand in our 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 growth strategy, including the concentration
of our global delivery capability in India and the Philippines, international hostilities, terrorist activities, natural disasters
and security or data 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.
Our global delivery capability is concentrated in India and the Philippines, which may expose us to operational
risks. Our business model is dependent on our global delivery capability, 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 capability in India, where we have the largest number of people
located in our delivery centers, and the Philippines, where we have the second largest number of people located.
Concentrating our global delivery capability in these locations presents a number of operational risks, including
those listed in the following paragraph, many of which are beyond our control. 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 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.
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; regional and international hostilities and international responses to these hostilities; natural
disasters, volcanic eruptions, sea level rise, floods, droughts and the increasing frequency and severity of adverse
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, suppliers or clients. By disrupting communications and travel and
increasing the difficulty of obtaining and retaining highly skilled and qualified personnel, these types of events impact
our ability 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 physical infrastructure damage to, system failures at, cyberattacks on,
or security breaches in, our facilities or systems, could also adversely affect our ability to conduct our business and
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 to expand in our 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, government compliance, 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, enforcement actions or 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
14
Table of Contents
performance of our obligations to our clients also could result in liability for significant monetary damages, fines,
enforcement actions and/or criminal prosecution or sanctions, 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.
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, fines, 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.
We could be subject to significant legal liability and litigation expense if we fail to meet our contractual obligations,
contribute to internal control or other 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. For example, by taking over the operation of certain portions of our clients’ businesses,
including functions and systems that are critical to the core businesses of our clients, we may be exposed to additional
and evolving operational, regulatory, reputational or other risks specific to these 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. 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 industry. 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, we may be exposed to
additional and evolving risks specific to these new areas.
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
15
Table of Contents
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, information technology 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, or failure to comply with applicable IT security requirements, 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.
• 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
16
Table of Contents
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.
• Our ability to work for the U.S. government is impacted by the fact that we are an Irish company. We elected
to enter into a proxy agreement with the U.S. Department of Defense that enhances the ability of our U.S.
federal government contracting subsidiary to perform certain work for the U.S. government. The proxy
agreement regulates the management and operation of, and limits the control we can exercise over, this
subsidiary. In addition, legislative and executive proposals remain under consideration or could be proposed
in the future, which, if enacted, could place additional limitations on or even prohibit our eligibility to be awarded
state or federal government contracts in the United States 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.
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, 2019, we had approximately 492,000 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.
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. We may also experience reputational damage from
employees, advocacy groups and other stakeholders that disagree with the services and solutions that we offer or the
clients that we serve. Similarly, our reputation could be damaged by actions or statements of current or former clients,
directors, employees, competitors, vendors, alliance partners, joint venture partners, adversaries in legal proceedings,
legislators or government regulators, as well as members of the investment community or the media, including social
media influencers. There is a risk that negative or inaccurate 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 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.
17
Table of Contents
If we do not successfully manage and develop our relationships with key alliance partners or if we fail to
anticipate and establish new alliances in new technologies, our results of operations could be adversely
affected.
We have alliances with companies whose capabilities complement our own. A very significant portion of our
revenue and services and solutions are based on technology or software provided by a few major alliance partners.
See “Business—Alliances.”
The business that we conduct through these alliances could decrease or fail to grow for a variety of reasons.
The priorities and objectives of our alliance partners may differ from ours, and our alliance partners are not prohibited
from competing with us or forming closer or preferred arrangements with our competitors. In addition, some of our
alliance partners are also large clients or suppliers of technology to us. The decisions we make vis-à-vis an alliance
partner may impact our ongoing alliance relationship. In addition, our alliance partners could experience reduced
demand for their technology or software, including, for example, in response to changes in technology, which could
lessen related demand for our services and solutions.
We must anticipate and respond to continuous changes in technology and develop alliance relationships with
new providers of relevant technology. We must secure meaningful alliances with these providers early in their life cycle
so that we can develop the right number of certified people with skills in new technologies. If we are unable to maintain
our relationships with current partners and identify new and emerging providers of relevant technology to expand our
network of alliance partners, we may not be able to differentiate our services or compete effectively in the market.
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.
We might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures
or divesting businesses.
We expect to continue pursuing strategic 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 succeed in completing targeted transactions, including as a result of the market becoming
increasingly competitive, 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.
The loss of key executives, employees, customers, suppliers, vendors and other business partners of businesses we
acquire may adversely impact the value of the assets, operations or businesses. Furthermore, 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
exposure to regulatory sanctions or liabilities resulting from an acquisition target’s previous activities, internal controls
and security environment. 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 or in which we have acquired less than 100% of the equity. 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
18
Table of Contents
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 also 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,
including 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 or liability with
respect to 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.
If we are unable to protect or enforce our intellectual property rights, or if our services or solutions infringe
upon the intellectual property rights of others or we lose our ability to utilize the intellectual property of others,
our business could be adversely affected.
Our success depends, in part, upon our ability to obtain intellectual property protection for our proprietary
methodologies, processes, software and other solutions. Existing laws of the various countries in which we provide
services or solutions may offer only limited intellectual property protection of our services or solutions, 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 obtain or maintain intellectual
property protection. There is uncertainty concerning the scope of patent and other intellectual property protection for
software and business methods, which are fields in which we rely on intellectual property laws to protect our rights.
Even where we obtain intellectual property protection, our intellectual property rights may not prevent or deter
competitors, former employees, or other third parties from reverse engineering our solutions or proprietary
methodologies and processes or independently developing services or solutions 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.
In addition, 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. Additionally,
individuals and firms have purchased intellectual property assets in order to assert claims of infringement against
technology providers and customers that use such technology. 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 are unable to implement in a cost-effective manner
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. Any infringement action brought against us or our clients could be costly to defend or lead to an
expensive settlement or judgment against us.
Further, we rely on third-party software in providing some of our services and solutions. If we lose our ability to
continue using any 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.
19
Table of Contents
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
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.
Changes to accounting standards or in the estimates and assumptions we make in connection with the
preparation of our consolidated financial statements could adversely affect our financial results.
Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles.
It is possible that changes in accounting standards could have a material adverse effect on our results of operations
and financial position. 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. Our most critical accounting
estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations
under “Critical Accounting Policies and Estimates.” 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 costs that could adversely affect our results of operations.
Many of our contracts include fees subject to the attainment of targets or 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.
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;
• 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.
We are incorporated in Ireland and a significant portion of our assets is 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
20
Table of Contents
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 is 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 liability
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.
Although 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 Irish Courts will recognize a U.S. judgment if the following
important requirements are satisfied:
•
•
•
the originating court is a court of competent jurisdiction;
the judgment is final and conclusive; and
the judgment was not obtained by fraud and its recognition is not 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 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.
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 51 countries around the world. We do not own any material real property. Substantially all of our office space is
21
Table of Contents
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 16 (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.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Our executive officers and persons chosen to become executive officers as of the date hereof are as follows:
Omar Abbosh, 53, became our group chief executive—Communications, Media & Technology operating group
in September 2018. From March 2015 to September 2018, he served as our chief strategy officer. Prior to assuming
that role, Mr. Abbosh served in several management positions, including senior managing director—Growth & Strategy
for the Resources operating group and managing director of the Resources business in the United Kingdom and
Ireland. Mr. Abbosh has been with Accenture for 30 years.
Gianfranco Casati, 60, 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
our country managing director for Italy and as chairman of our geographic council in its IGEM (Italy, Greece, emerging
markets) region, supervising our offices in Italy, Greece and several Eastern European countries. Mr. Casati has been
with Accenture for 35 years.
Richard P. Clark, 58, 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 36 years.
Johan (Jo) G. Deblaere, 57, 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 34 years.
Simon Eaves, 52, became our group chief executive—Products operating group in October 2019. He served
as senior managing director—Products, Growth & Strategy from October 2017 to October 2019 and as senior managing
director—Products, Global Sales from February 2017 to October 2019. Previously, he held various leadership positions
in client service and consulting within our Products operating group, both in the United Kingdom and globally, including
serving as the global lead for the Customer & Channels consulting practice from August 2015 to February 2017 and
prior to that as the global lead for the Products United Kingdom & Ireland client service group. Mr. Eaves has been
with Accenture for 21 years.
James O. Etheredge, 56, became our chief executive—North America in September 2019. From December
2016 to September 2019, Mr. Etheredge served as senior managing director—US Southeast, responsible for our
business in 10 states, including the key markets of Atlanta, Charlotte and Washington, D.C. Previously, he was senior
managing director for our Products operating group in North America from 2011 until December 2016. Mr. Etheredge
has been with Accenture for 34 years.
Daniel T. London, 55, 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 our Finance & Performance Management global service line. Mr. London
has been with Accenture for 33 years.
KC McClure, 54, became our chief financial officer in January 2019. From June 2018 to January 2019, she
served as managing director—Finance Operations, where she led our finance operations across the entirety of our
businesses. From December 2016 to May 2018, she was the finance director for our Communications, Media &
Technology operating group. Prior to assuming that role, she served as our head of investor relations from September
22
Table of Contents
2010 to November 2016, and from March 2002 to August 2010, she served as the finance director for our Health &
Public Service operating group. Ms. McClure has been with Accenture for 31 years.
Domingo Mirón, 54, became our group chief executive—Financial Services operating group in September 2019.
From March 2016 to September 2019, Mr. Mirón was group operating officer for our Financial Services operating
group. Previously, he led our Financial Services business in Spain, Portugal and Israel from 2014 to March 2016 and,
from 2011 to 2014, he was our senior managing director—Financial Services, Growth & Strategy. From 2009 to 2011,
he led our Banking business in Europe, Africa and Latin America. Mr. Mirón has been with Accenture for 30 years.
Jean-Marc Ollagnier, 57, 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 33 years.
David P. Rowland, 58, became executive chairman of the Board of Directors in September 2019. From January
2019 to September 2019, he served as our interim chief executive officer. Mr. Rowland was our chief financial officer
from July 2013 to January 2019. 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 operating group and as
our finance director—Products operating group. Mr. Rowland has been with Accenture for 36 years and has served
as a director since January 2019. Prior to its merger with and into Accenture plc in March 2018, Mr. Rowland also
served on the board of Accenture Holdings plc.
Ellyn J. Shook, 56, 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 our 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 31 years.
Julie Sweet, 52, became our chief executive officer in September 2019. From June 2015 to September 2019,
she served as our chief executive officer—North America. From March 2010 to June 2015, she served as our general
counsel, secretary and chief compliance officer. Prior to joining Accenture in 2010, Ms. Sweet was a partner for 10
years in the law firm Cravath, Swaine & Moore LLP, which she joined as an associate in 1992. Ms. Sweet has been
with Accenture for 9 years and has served as a director since September 2019.
Joel Unruch, 41, became our general counsel, secretary and chief compliance officer in September 2019 and
has served as our corporate secretary since June 2015. Mr. Unruch joined Accenture in 2011 as our assistant general
counsel and assistant secretary and also oversaw ventures & acquisitions and alliances & ecosystems practices for
our legal group. Prior to joining Accenture, Mr. Unruch was corporate counsel at Amazon.com and previously an
associate in the corporate department of the law firm Cravath, Swaine & Moore LLP. Mr. Unruch has been with Accenture
for 8 years.
23
Table of Contents
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
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.
As of October 9, 2019, there were 318 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 9, 2019, there were 16
holders of record of Accenture plc Class X ordinary shares.
Dividends
For information about our dividend activity during fiscal 2019, see Note 14 (Material Transactions Affecting
Shareholders’ Equity) to our Consolidated Financial Statements under Item 8, “Financial Statements and
Supplementary Data.”
On September 27, 2018, we announced that we were changing the frequency of any cash dividend payments
to shareholders during fiscal 2020 from semi-annual to quarterly. On September 23, 2019, the Board of Directors of
Accenture plc declared a quarterly cash dividend of $0.80 per share on our Class A ordinary shares for shareholders
of record at the close of business on October 17, 2019 payable on November 15, 2019. For the remainder of fiscal
2020, we expect to declare additional quarterly dividends in December 2019 and March and June 2020, to be paid in
February, May and August 2020, subject to the approval of the Board of Directors.
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.
24
Table of Contents
Purchases of Accenture plc Class A Ordinary Shares
The following table provides information relating to our purchases of Accenture plc Class A ordinary shares during
the fourth quarter of fiscal 2019. For year-to-date information on all of our share purchases, redemptions and exchanges
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
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)
June 1, 2019 — June 30, 2019
July 1, 2019 — July 31, 2019
August 1, 2019 — August 31, 2019
Total (4)
801,659 $
462,629 $
850,036 $
2,114,324 $
183.18
194.65
193.23
189.73
785,600 $
442,846 $
819,861 $
2,048,307 $
3,924
3,832
3,674
—
_______________
(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 2019, we purchased 2,048,307 Accenture plc Class A ordinary shares under this
program for an aggregate price of $389 million. The open-market purchase program does not have an expiration
date.
As of August 31, 2019, our aggregate available authorization for share purchases and redemptions was $3,674
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, 2019, the
Board of Directors of Accenture plc has authorized an aggregate of $35.1 billion for share purchases and
redemptions by Accenture plc and Accenture Canada Holdings Inc.
During the fourth quarter of fiscal 2019, Accenture purchased 66,017 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.
25
Table of Contents
ITEM 6. SELECTED FINANCIAL DATA
The data for fiscal 2019, 2018 and 2017 and as of August 31, 2019 and 2018 are derived from the audited
Consolidated Financial Statements and related Notes that are included elsewhere in this report. The data for fiscal
2016 and 2015 and as of August 31, 2017, 2016 and 2015 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.
2019
2018 (1) (2)
2016 (1) (4)
2015 (1) (5)
Fiscal
2017 (1) (3)
(in millions of U.S. dollars)
Income Statement Data
Revenues
Operating income
Net income
Net income attributable to Accenture plc
Earnings Per Class A Ordinary Share
Basic
Diluted
Dividends per ordinary share
_______________
$
43,215 $
40,993 $
36,177 $
34,254 $
32,406
6,305
4,846
4,779
5,899
4,215
4,060
5,191
3,635
3,445
4,846
4,350
4,112
$
7.49 $
6.46 $
5.56 $
6.58 $
7.36
2.92
6.34
2.66
5.44
2.42
6.45
2.20
4,526
3,274
3,054
4.87
4.76
2.04
(1)
(2)
(3)
(4)
(5)
Effective September 1, 2018, we adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606) and eliminated our net revenues presentation and FASB ASU No. 2017-07, Compensation-
Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost. Prior period amounts have been revised to conform with the current period
presentation.
Includes the impact of a $258 million charge associated with tax law changes recorded during fiscal 2018. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of
Operations for Fiscal 2018 Compared to Fiscal 2017—Provision for Income Taxes.”
Includes the impact of a $312 million, post-tax, pension settlement charge recorded during fiscal 2017. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of
Operations for Fiscal 2018 Compared to Fiscal 2017—Pension Settlement Charge.”
Includes the impact of a $745 million, post-tax, gain on sale of businesses recorded during fiscal 2016.
Includes the impact of a $39 million, post-tax, pension settlement charge recorded during fiscal 2015.
August 31,
2019
August 31,
2018
August 31,
2017
(in millions of U.S. dollars)
August 31,
2016
Balance Sheet Data
Cash and cash equivalents
Total assets
Long-term debt, net of current portion
Accenture plc shareholders’ equity
$
6,127 $
5,061 $
4,127 $
4,906 $
29,790
16
14,409
24,449
20
10,365
22,690
22
8,949
20,609
24
7,555
26
August 31,
2015
4,361
18,203
26
6,134
Table of Contents
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 2019” means the 12-month period that ended on August 31, 2019. 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, to renew and extend existing
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 services and solutions 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
volatility in foreign currency exchange rates. The majority of our revenues are denominated in currencies other than
the U.S. dollar, including the Euro, U.K. pound and Japanese yen. Unfavorable fluctuations in foreign currency exchange
rates have had and could have in the future a material effect on our financial results.
Effective September 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards
Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). In connection with the adoption,
we present total revenues and no longer report revenues before reimbursements (net revenues). This change has no
impact on operating income but does affect ratios calculated as a percentage of revenue, such as operating margin.
Prior period results have been revised to reflect the fiscal 2019 presentation. For additional information, see Note 1
(Summary of Significant Accounting Policies) to our Consolidated Financial Statements under Item 8, “Financial
Statements and Supplementary Data.”
Summary of Results
Revenues for fiscal 2019 increased 5% in U.S. dollars and 8.5% in local currency compared to fiscal 2018.
Demand for our services and solutions continued to be strong, resulting in growth across all areas of our business.
During fiscal 2019, revenue growth in local currency was very strong in Resources, strong in Communications, Media
& Technology, Products, and Health & Public Service and modest in Financial Services. We experienced local currency
revenue growth that was very strong in Growth Markets, strong in North America and solid in Europe. Revenue growth
in local currency was strong in both outsourcing and consulting during fiscal 2019. While the business environment
remained competitive, we experienced pricing improvement in several areas of our business. We use the term “pricing”
to mean the contract profitability or margin on the work that we sell.
In our consulting business, revenues for fiscal 2019 increased 5% in U.S. dollars and 8% in local currency
compared to fiscal 2018. Consulting revenue growth in local currency in fiscal 2019 was led by very strong growth in
Resources, strong growth in Health & Public Service, Products and Communications, Media & Technology and modest
growth in Financial Services. Our consulting revenue growth continues to be driven by strong demand for digital-,
cloud- and security-related services and assisting clients with the adoption of new technologies. In addition, clients
continue 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.
In our outsourcing business, revenues for fiscal 2019 increased 6% in U.S. dollars and 9% in local currency
compared to fiscal 2018. Outsourcing revenue growth in local currency in fiscal 2019 was led by very strong growth
in Resources, Communications, Media & Technology and Products, solid growth in Financial Services and modest
27
Table of Contents
growth in Health & Public Service. We continue to experience growing demand to assist clients with the operation and
maintenance of digital-related services and cloud enablement. In addition, clients continue to be focused on
transforming their operations to improve effectiveness and cost efficiency.
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 weakens against other currencies, resulting in
favorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be higher.
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. The U.S. dollar strengthened against various
currencies during fiscal 2019, resulting in unfavorable currency translation and U.S. dollar revenue growth that was
approximately 3% lower than our revenue growth in local currency for the year. Assuming that exchange rates stay
within recent ranges, we estimate that our full fiscal 2020 revenue growth in U.S. dollars will be approximately 1%
lower in U.S. dollars than 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, office space and
certain acquisition-related costs.
Utilization for fiscal 2019 was 91%, consistent with fiscal 2018. 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 492,000 as of August 31, 2019, compared to
approximately 459,000 as of August 31, 2018. 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. Attrition, excluding
involuntary terminations, for fiscal 2019 was 17%, up from 15% in fiscal 2018. 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 become effective December 1st of each fiscal year. We strive to adjust pricing and/or the mix of resources
to reduce the impact of compensation increases on our 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.
Effective September 1, 2018, we adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715),
which required us to reclassify certain components of pension costs from operating expenses to non-operating
expenses. Prior period results have been revised to reflect the fiscal 2019 presentation. For additional information,
see Note 1 (Summary of Significant Accounting Policies) to our Consolidated Financial Statements under Item 8,
“Financial Statements and Supplementary Data.”
Gross margin (Revenues less Cost of services as a percentage of Revenues) for fiscal 2019 was 30.8%, compared
with 30.5% for fiscal 2018. The increase in gross margin for fiscal 2019 was primarily due to lower non-payroll and
labor costs as a percentage of revenues compared to fiscal 2018.
Sales and marketing and General and administrative costs as a percentage of revenues were 16.2% for fiscal
2019, compared with 16.1% for fiscal 2018. For fiscal 2019 compared to fiscal 2018, Sales and marketing costs as a
percentage of revenues increased 10 basis points and General and administrative costs as a percentage of
revenues were flat. We continuously monitor these costs and implement cost-management actions, as appropriate.
Operating margin (Operating income as a percentage of revenues) for fiscal 2019 was 14.6%, compared with
14.4% for fiscal 2018.
Effective September 1, 2018, we adopted ASU No. 2016-16, Income Taxes (Topic 740). Upon adoption, we
recorded deferred tax assets of $2.1 billion, and we will recognize incremental income tax expense going forward as
these deferred tax assets are utilized. For additional information, see Note 1 (Summary of Significant Accounting
Policies) to our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
28
Table of Contents
The effective tax rate for fiscal 2019 was 22.5%, compared with 27.4% for fiscal 2018. During fiscal 2018, we
recorded a $258 million charge associated with tax law changes. Absent this charge, our effective tax rate for fiscal
2018 would have been 23.0%. For additional information, see Note 10 (Income Taxes) to our Consolidated Financial
Statements under Item 8, “Financial Statements and Supplementary Data.”
Diluted earnings per share were $7.36 for fiscal 2019, compared with $6.34 for fiscal 2018. The impact of tax law
changes decreased diluted earnings per share by $0.40 in fiscal 2018. Excluding the impact of these changes, diluted
earnings per share would have been $6.74 for fiscal 2018.
We have presented our effective tax rate and diluted earnings per share excluding the impacts of the tax law
changes in fiscal 2018, as we believe doing so facilitates understanding as to both the impact of these changes and
our financial performance when comparing these periods.
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 revenues. Where practical,
we seek to manage foreign currency exposure for costs not incurred in the same currency as the related revenues,
such as the costs associated with our global delivery model, by using currency protection provisions in our customer
contracts and through our hedging programs. For more information on our hedging programs, see Note 8 (Financial
Instruments) to our Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
Bookings
New bookings for fiscal 2019 were $45.5 billion, with consulting bookings of $24.7 billion and outsourcing bookings
of $20.8 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 with little or no termination penalties,
and some without notice. Under Topic 606, only the non-cancelable portion of these contracts is included in our
performance obligations. Accordingly, a significant portion of what we consider contract bookings is not included in
our remaining performance obligations.
29
Table of Contents
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
Determining the method and amount of revenue to recognize requires us to make judgments and estimates.
Specifically, complex arrangements with nonstandard terms and conditions may require contract interpretation to
determine the appropriate accounting, including whether promised goods and services specified in an arrangement
are distinct performance obligations and should be accounted for separately. Other judgments include determining
whether performance obligations are satisfied over-time or at a point-in-time and the selection of the method to measure
progress towards completion.
We measure progress towards completion for technology integration consulting services using costs incurred to
date relative to total estimated costs at completion. Revenues, including estimated fees, are recorded proportionally
as costs are incurred. The amount of revenue recognized for these contracts in a period is dependent on our ability
to estimate total contract costs. We continually evaluate our estimates of total contract costs based on available
information and experience.
Additionally, the nature of our contracts gives rise to several types of variable consideration, including incentive
fees. Many contracts include incentives or penalties 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 reviews
prior to signing such contracts to evaluate whether these incentives are reasonably achievable. Our estimates are
monitored over the lives of our contracts and are based on an assessment of our anticipated performance, historical
experience and other information available at the time.
For additional information, see Note 2 (Revenues) to our Consolidated Financial Statements under Item 8,
“Financial Statements and Supplementary Data.”
Income Taxes
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”), which significantly changed
U.S. tax law. The Tax Act lowered the U.S. statutory federal income tax rate from 35% to 21%, effective January 1,
2018, resulting in a blended U.S. statutory federal income tax rate of 25.7% for our fiscal year ended August 31, 2018
and a U.S. statutory federal income tax rate of 21.0% for our fiscal year ended August 31, 2019. The Tax Act’s “base
erosion and anti-abuse tax” provision, and regulations issued thereunder, adversely impact our effective tax rate by
limiting our ability to deduct certain expenses.
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. 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.
30
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. We currently do not foresee any event that would require us to distribute these indefinitely
reinvested earnings. For additional information, see Note 10 (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 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 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 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 these 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. In addition to reporting revenues
by operating group, we also report revenues by two types of work: consulting and outsourcing, which represent the
services sold by our operating groups. Consulting revenues, which include strategy, 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 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.
31
Table of Contents
Results of Operations for Fiscal 2019 Compared to Fiscal 2018
Revenues (by operating group, geographic region and type of work) were as follows:
Fiscal
2019
2018 (1)
(in millions of U.S. dollars)
Percent
Increase
(Decrease)
U.S.
Dollars
Percent
Increase
Local
Currency
Percent of Total
Revenues
for Fiscal
2019
2018 (1)
OPERATING GROUPS
Communications, Media & Technology
$
8,757 $
Financial Services
Health & Public Service
Products
Resources
Other
TOTAL REVENUES
GEOGRAPHIC REGIONS
North America
Europe
Growth Markets
TOTAL REVENUES
TYPE OF WORK
Consulting
Outsourcing
TOTAL REVENUES
8,494
7,161
12,005
6,772
26
8,230
8,566
6,878
11,338
5,942
39
$
$
$
$
$
43,215 $
40,993
19,986 $
14,681
8,548
18,460
14,626
7,906
43,215 $
40,993
24,177 $
19,038
43,215 $
22,979
18,014
40,993
6%
(1)
4
6
14
n/m
5%
8%
—
8
5%
5%
6
5%
9%
20%
20%
3
6
9
18
n/m
8.5%
9%
5
14
20
17
28
16
—
21
17
28
14
—
100%
100%
46%
34
20
45%
36
19
8.5%
100%
100%
8%
9
8.5%
56%
44
100%
56%
44
100%
_______________
n/m = not meaningful
Amounts in table may not total due to rounding.
(1)
Effective September 1, 2018, we adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606) and eliminated our net revenues presentation. Prior period amounts have been revised to conform
with the current period presentation. In addition, we updated operating group results for fiscal 2018 to include
an acquisition previously categorized within Other.
Our business in the United States represented 44%, 43% and 45% of our consolidated revenues during fiscal
2019, 2018 and 2017, respectively. No other country individually comprised 10% or more of our consolidated revenues
during these periods.
Revenues
The following revenues commentary discusses local currency revenue changes for fiscal 2019 compared to fiscal
2018:
Operating Groups
•
•
•
•
Communications, Media & Technology revenues increased 9% in local currency, driven by growth in Software
& Platforms across all geographic regions, led by North America.
Financial Services revenues increased 3% in local currency, driven by growth in Insurance across all geographic
regions and Banking & Capital Markets in Growth Markets, partially offset by a decline in Banking & Capital
Markets in Europe.
Health & Public Service revenues increased 6% in local currency, driven by growth in Public Service in North
America and Europe.
Products revenues increased 9% in local currency, driven by growth across all industry groups and geographic
regions, led by Consumer Goods, Retail & Travel Services in Europe and Growth Markets and Life Sciences
in North America.
32
Table of Contents
•
Resources revenues increased 18% in local currency, driven by growth across all industry groups and
geographic regions.
Geographic Regions
•
•
North America revenues increased 9% in local currency, driven by the United States.
Europe revenues increased 5% in local currency, led by Italy, the United Kingdom and Ireland.
• Growth Markets revenues increased 14% in local currency, driven by Japan, as well as Brazil and China.
Operating Expenses
Operating expenses for fiscal 2019 increased $1,816 million, or 5%, over fiscal 2018, and decreased as a
percentage of revenues to 85.4% from 85.6% during this period.
Cost of Services
Cost of services for fiscal 2019 increased $1,401 million, or 5%, over fiscal 2018, and decreased as a percentage
of revenues to 69.2% from 69.5% during this period. Gross margin for fiscal 2019 increased to 30.8% from 30.5% in
fiscal 2018. The increase in gross margin for fiscal 2019 was primarily due to lower non-payroll and labor costs as a
percentage of revenues compared to fiscal 2018.
Sales and Marketing
Sales and marketing expense for fiscal 2019 increased $251 million, or 6%, over fiscal 2018, and increased as
a percentage of revenues to 10.3% from 10.2% during this period.
General and Administrative Costs
General and administrative costs for fiscal 2019 increased $164 million, or 7%, over fiscal 2018, and remained
flat as a percentage of revenues at 5.9% during this period.
Operating Income and Operating Margin
Operating income for fiscal 2019 increased $406 million, or 7%, over fiscal 2018.
Operating income and operating margin for each of the operating groups were as follows:
Fiscal
2019
2018 (1)
Operating
Income
Operating
Margin
Operating
Income
Operating
Margin
Increase
(Decrease)
(in millions of U.S. dollars)
$
$
1,555
1,238
739
1,720
1,053
6,305
18% $
15
10
14
16
1,380
1,365
766
1,664
724
17% $
16
11
15
12
14.6% $
5,899
14.4% $
175
(128)
(27)
56
330
406
Communications, Media & Technology
Financial Services
Health & Public Service
Products
Resources
TOTAL
_______________
Amounts in table may not total due to rounding.
(1)
Effective September 1, 2018, we adopted FASB ASU No. 2017-07, Compensation-Retirement Benefits (Topic
715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.
Certain components of pension service costs were reclassified from Operating expenses to Non-operating
expenses. Prior period amounts have been revised to conform with the current period presentation.
We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income
during fiscal 2019 was similar to that disclosed for revenue. The commentary below provides insight into other factors
affecting operating group performance and operating margin for fiscal 2019 compared with fiscal 2018:
•
•
Communications, Media & Technology operating income increased primarily due to revenue growth and higher
contract profitability.
Financial Services operating income decreased as higher consulting contract profitability and revenue growth
were offset by higher operating expenses as a percentage of revenues.
33
Table of Contents
•
•
•
Health & Public Service operating income decreased as revenue growth was offset by lower consulting contract
profitability and higher operating expenses as a percentage of revenues.
Products operating income increased primarily due to revenue growth and higher contract profitability, partially
offset by higher operating expenses as a percentage of revenues.
Resources operating income increased primarily due to revenue growth and higher contract profitability.
Provision for Income Taxes
The effective tax rate for fiscal 2019 was 22.5%, compared with 27.4% for fiscal 2018. In fiscal 2018, we recorded
a $258 million charge associated with tax law changes. Absent this charge, our effective tax rate for fiscal 2018 would
have been 23.0%. The lower effective tax rate for fiscal 2019 was primarily due to changes in the geographic distribution
of earnings, higher benefits from final determinations of prior year taxes and lower expense for adjustments to prior
year tax liabilities. These decreases were partially offset by higher expense from the adoption of FASB ASU No. 2016-16
and lower tax benefits from share-based payments. For additional information, see Note 10 (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 Canada Holdings Inc. subsidiary. See “Business—Organizational Structure.” Noncontrolling
interests also includes amounts primarily attributable to noncontrolling shareholders in our Avanade Inc. subsidiary.
Net income attributable to Accenture plc represents the income attributable to the shareholders of Accenture plc.
Net income attributable to noncontrolling interests for fiscal 2019 decreased $88 million, or 57%, from fiscal 2018,
due to the decrease in the non-controlling ownership percentage in March 2018 from 4% held by Accenture Holdings
plc and Accenture Canada Holdings Inc. to less than 1% held by only Accenture Canada Holdings Inc. driven by the
Accenture Holdings plc merger with and into Accenture plc. For additional information on the merger, see Note 1
(Summary of Significant Accounting Policies) to our Consolidated Financial Statements under Item 8,“Financial
Statements and Supplementary Data.”
Earnings Per Share
Diluted earnings per share were $7.36 for fiscal 2019, compared with $6.34 for fiscal 2018. The $1.02 increase
in our diluted earnings per share included the impact of tax law changes, which decreased diluted earnings per share
for fiscal 2018 by $0.40. Excluding the impact of these changes, diluted earnings per share for fiscal 2019 increased
$0.62 compared with fiscal 2018, due to increases of $0.48 from higher revenues and operating results, $0.05 from a
lower effective tax rate, $0.05 from lower weighted average shares outstanding, and $0.04 from lower non-operating
expense. For information regarding our earnings per share calculations, see Note 3 (Earnings Per Share) to our
Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
34
Table of Contents
Results of Operations for Fiscal 2018 Compared to Fiscal 2017
Revenues (by operating group, geographic region and type of work) were as follows:
Fiscal
2018 (1)
2017 (1)
(in millions of U.S. dollars)
Percent
Increase
U.S.
Dollars
Percent
Increase
Local
Currency
Percent of Total
Revenues
for Fiscal
2018 (1)
2017 (1)
OPERATING GROUPS
Communications, Media & Technology
$
8,230 $
Financial Services
Health & Public Service
Products
Resources
Other
TOTAL REVENUES
GEOGRAPHIC REGIONS (2)
North America
Europe
Growth Markets
TOTAL REVENUES
TYPE OF WORK
Consulting
Outsourcing
TOTAL REVENUES
8,566
6,878
11,338
5,942
39
7,097
7,654
6,361
9,922
5,096
46
$
$
$
$
$
40,993 $
36,177
18,460 $
14,626
7,906
16,889
12,471
6,816
40,993 $
36,177
22,979 $
18,014
40,993 $
20,080
16,096
36,177
16%
14%
20%
20%
12
8
14
17
n/m
13%
9%
17
16
13%
14%
12
13%
8
7
11
13
n/m
10%
9%
9
16
21
17
28
14
—
21
18
27
14
—
100%
100%
45%
36
19
47%
34
19
10%
100%
100%
11%
9
10%
56%
44
100%
56%
44
100%
_______________
n/m = not meaningful
Amounts in table may not total due to rounding.
(1)
(2)
Effective September 1, 2018, we adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606) and eliminated our net revenues presentation. Prior period amounts have been revised to conform
with the current period presentation. In addition, we updated operating group results for fiscal 2018 to include
an acquisition previously categorized within Other.
Effective September 1, 2017, 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 and the
Middle East). Four countries, including Russia, were previously in Growth Markets, but are now included in
Europe. Fiscal 2017 amounts have been reclassified to conform to the current period presentation.
Revenues
The following revenues commentary discusses local currency revenue changes for fiscal 2018 compared to fiscal
2017:
Operating Groups
•
•
•
•
Communications, Media & Technology revenues increased 14% in local currency, driven by growth across
all geographic regions in Software & Platforms and Communications & Media, led by Software & Platforms in
North America.
Financial Services revenues increased 8% in local currency, driven by growth across all industry groups and
geographic regions, led by Banking & Capital Markets in Europe and Growth Markets.
Health & Public Service revenues increased 7% in local currency, driven by growth in Public Service across
all geographic regions and Health in North America.
Products revenues increased 11% in local currency, driven by growth across all geographic regions, in
Consumer Goods, Retail & Travel Services and Industrial.
35
Table of Contents
•
Resources revenues increased 13% in local currency, driven by growth across all industry groups and
geographic regions led by Chemicals & Natural Resources and Energy.
Geographic Regions
•
•
North America revenues increased 9% in local currency, driven by the United States.
Europe revenues increased 9% in local currency, driven by Germany, Italy, France, Ireland and Spain.
• Growth Markets revenues increased 16% in local currency, led by Japan, as well as Australia, Brazil, and
Singapore.
Operating Expenses
Operating expenses for fiscal 2018 increased $4,108 million, or 13%, over fiscal 2017, and remained flat as a
percentage of revenues at 85.6% during this period.
Cost of Services
Cost of services for fiscal 2018 increased $3,394 million, or 14%, over fiscal 2017, and increased as a percentage
of revenues to 69.5% from 69.4% during this period. Gross margin for fiscal 2018 decreased to 30.5% from 30.6% in
fiscal 2017. The decrease in gross margin for fiscal 2018 was principally due to higher labor costs compared to fiscal
2017, partially offset by other cost efficiencies in fiscal 2018.
Sales and Marketing
Sales and marketing expense for fiscal 2018 increased $444 million, or 12%, over fiscal 2017, and decreased
as a percentage of revenues to 10.2% from 10.4% during this period.
General and Administrative Costs
General and administrative costs for fiscal 2018 increased $271 million, or 13%, over fiscal 2017, and remained
flat as a percentage of revenues at 5.9% during this period.
Operating Income and Operating Margin
Operating income for fiscal 2018 increased $707 million, or 14%, over fiscal 2017.
Operating income and operating margin for each of the operating groups were as follows:
Fiscal
2018 (1)
2017 (1)
Operating
Income
Operating
Margin
Operating
Income
Operating
Margin
Increase
(Decrease)
(in millions of U.S. dollars)
Communications, Media & Technology
$
1,380
17% $
1,057
15% $
Financial Services
Health & Public Service
Products
Resources
TOTAL
_______________
Amounts in table may not total due to rounding.
1,365
766
1,664
724
16
11
15
12
1,256
715
1,573
589
16
11
16
12
$
5,899
14.4% $
5,191
14.4% $
323
109
51
90
134
707
(1)
Effective September 1, 2018, we adopted FASB ASU No. 2017-07, Compensation-Retirement Benefits (Topic
715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.
Certain components of pension service costs were reclassified from Operating expenses to Non-operating
expenses. Prior period amounts have been revised to conform with the current period presentation.
We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income
during fiscal 2018 was similar to that disclosed for revenue. The commentary below provides insight into other factors
affecting operating group performance and operating margin for fiscal 2018 compared with fiscal 2017:
•
•
Communications, Media & Technology operating income increased primarily due to revenue growth and higher
contract profitability.
Financial Services operating income increased primarily due to consulting revenue growth.
36
Table of Contents
•
•
•
Health & Public Service operating income decreased primarily due to lower consulting contract profitability.
Products operating income increased primarily due to revenue growth, partially offset by lower consulting
contract profitability.
Resources operating income increased primarily due to revenue growth.
Other Income (Expense), net
Other income (expense), net primarily consists of foreign currency gains and losses, non-operating components
of pension expense, as well as gains and losses associated with our investments in privately held companies.
During fiscal 2018, other expense increased $40 million over fiscal 2017, primarily due to higher net foreign exchange
losses.
Pension Settlement Charge
We recorded a pension settlement charge of $509,793 during fiscal 2017 as a result of the termination of our
U.S. pension plan. For additional information, see Note 11 (Retirement and Profit Sharing Plans) to our Consolidated
Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
Provision for Income Taxes
The effective tax rate for fiscal 2018 was 27.4%, compared with 21.3% for fiscal 2017. In fiscal 2018, we recorded
a $258 million charge associated with tax law changes. Absent this charge, our effective tax rate for fiscal 2018 would
have been 23.0%. Absent the pension settlement charge of $510 million and related tax impact of $198 million, the
effective tax rate for fiscal 2017 would have been 23.0%. For additional information, see Note 10 (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.” Noncontrolling interests also includes amounts primarily attributable to noncontrolling shareholders in our
Avanade Inc. subsidiary. Net income attributable to Accenture plc represents the income attributable to the shareholders
of Accenture plc.
Net income attributable to noncontrolling interests for fiscal 2018 decreased $35 million, or 18%, from fiscal 2017,
primarily due to the Accenture Holdings plc merger with and into Accenture plc on March 13, 2018, which decreased
the non-controlling ownership percentage from 4% held by Accenture Holdings plc and Accenture Canada Holdings
Inc. to less than 1% held by only Accenture Canada Holdings Inc. For additional information on the merger, see Note
1 (Summary of Significant Accounting Policies) to our Consolidated Financial Statements under Item 8,“Financial
Statements and Supplementary Data.”
Earnings Per Share
Diluted earnings per share were $6.34 for fiscal 2018, compared with $5.44 for fiscal 2017. The $0.90 increase
in our diluted earnings per share included the impact of the tax law changes, which decreased diluted earnings per
share for fiscal 2018 by $0.40. The impact of the pension settlement charge, net of taxes, decreased diluted earnings
per share for fiscal 2017 by $0.47. Excluding these impacts, diluted earnings per share would have been $6.74 and
$5.91 for fiscal 2018 and 2017, respectively, an increase of $0.83. This increase was due to increases of $0.82 from
higher revenues and operating results and $0.05 from lower weighted average shares outstanding, partially offset by
decreases of $0.02 from lower non-operating income and $0.02 from higher net income attributable to non-controlling
interest. For information regarding our earnings per share calculations, see Note 3 (Earnings Per Share) to our
Consolidated Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
We have presented our effective tax rate and diluted earnings per share excluding the impacts of the tax law
changes in fiscal 2018 and the pension settlement charge in fiscal 2017, as we believe doing so facilitates understanding
as to both the impact of these changes and our financial performance when comparing these periods.
37
Table of Contents
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. We could raise additional funds through other 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, 2019, Cash and cash equivalents were $6.1 billion, compared with $5.1 billion as of August 31,
2018.
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
Fiscal
2019
2018
(in millions of U.S. dollars)
2019 to 2018
Change
$
$
6,627 $
6,027 $
(1,756)
(3,767)
(39)
(1,250)
(3,709)
(134)
1,065 $
934 $
600
(506)
(58)
95
131
Operating activities: The $600 million year-over-year increase in operating cash flow was due to higher net
income as well as changes in operating assets and liabilities, including an increase in accounts payable, partially offset
by higher tax disbursements.
Investing activities: The $506 million increase in cash used was primarily due to higher spending on business
acquisitions and investments. For additional information, see Note 6 (Business Combinations) to our Consolidated
Financial Statements under Item 8, “Financial Statements and Supplementary Data.”
Financing activities: The $58 million increase in cash used was primarily due to an increase in cash dividends
paid as well as an increase in purchases of shares, partially offset by an increase in proceeds from share issuances
and a decrease in the purchase of additional interests in consolidated subsidiaries. For additional information, see
Note 14 (Material Transactions Affecting Shareholders’ Equity) to our Consolidated Financial Statements under Item
8, “Financial Statements and Supplementary Data.”
We believe that our current and longer-term working capital, investments and other general corporate funding
requirements will be satisfied for the next twelve months and thereafter 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. In addition, 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.
Borrowing Facilities
See Note 9 (Borrowings and Indebtedness) to our Consolidated Financial Statements under Item 8, “Financial
Statements and Supplementary Data.”
Share Purchases and Redemptions
We intend to continue to use a significant portion of cash generated from operations for share repurchases during
fiscal 2020. 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
38
Table of Contents
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 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. For additional information, see Note 14 (Material Transactions
Affecting Shareholders’ Equity) to our Consolidated Financial Statements under Item 8, “Financial Statements and
Supplementary Data.”
Subsequent Events
See Note 14 (Material Transactions Affecting Shareholders’ Equity) to our Consolidated Financial Statements
under Item 8, “Financial Statements and Supplementary Data.”
Obligations and Commitments
As of August 31, 2019, we had the following obligations and commitments to make future payments under
contracts, contractual obligations and commercial commitments:
Payments due by period
Contractual Cash Obligations (1)
Total
Less than
1 year
1-3 years
(in millions of U.S. dollars)
3-5 years
More than
5 years
Long-term debt
Operating leases
Retirement obligations (2)
Purchase obligations and other commitments (3)
$
23 $
6 $
11 $
6 $
3,840
95
286
688
10
206
1,114
20
61
792
20
12
—
1,246
44
6
Total
$
4,244 $
910 $
1,206 $
830 $
1,296
_______________
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 10 (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.
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 16 (Commitments and Contingencies) to our Consolidated Financial
Statements under Item 8, “Financial Statements and Supplementary Data.”
New Accounting Pronouncements
See Note 1 (Summary of Significant Accounting Policies) to our Consolidated Financial Statements under Item
8, “Financial Statements and Supplementary Data.”
39
Table of Contents
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/Japanese yen, U.S.
dollar/Euro, U.S. dollar/Indian rupee, U.S. dollar/Swiss franc, U.S. dollar/Philippine peso, U.S. dollar/Australian dollar,
U.S. dollar/U.K. pound, and U.S. dollar/Chinese yuan—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 Statements. Additionally, we have hedge positions that are designated cash flow hedges of certain intercompany
charges relating to our global delivery model. These hedges—U.S. dollar/Indian rupee, U.S. dollar/Philippine peso,
U.K. pound/Indian rupee, Euro/Indian rupee, Australian dollar/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 our global delivery resources. For additional information, see Note 8 (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
are expected to be reclassified into earnings at the time when certain anticipated intercompany charges are accrued
as Cost of services. As of August 31, 2019, it was anticipated that approximately $34 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 $509 million and $483 million as of August 31, 2019 and 2018, respectively.
Interest Rate Risk
The interest rate risk associated with our borrowing and investing activities as of August 31, 2019 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 not material in relation to our
consolidated financial position, results of operations or cash flows as of August 31, 2019.
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.
40
Table of Contents
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 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION
None.
41
Table of Contents
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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 2019 Annual General Meeting of
Shareholders filed with the SEC on December 7, 2018.
Information about our executive officers is contained in the discussion entitled “Information about our Executive
Officers” 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 2020 Annual General Meeting of Shareholders of Accenture plc to be held on January
30, 2020 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 our 2019 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 2020 Annual General Meeting of
Shareholders of Accenture plc to be held on January 30, 2020 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 our 2019 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, 2019, certain information related to our compensation plans under
which Accenture plc Class A ordinary shares may be issued.
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
Number of Shares to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights (3)
Number of Shares
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in 1st Column)
68,253 (1)
$
19,468,188 (2)
—
—
19,536,441
—
48.105
N/A
N/A
—
16,684,906
30,454,275
—
47,139,181
_______________
(1)
(2)
Consists of 68,253 restricted share units.
Consists of 19,464,437 restricted share units, with performance-based awards assuming maximum
performance, and 3,751 stock options.
Does not reflect restricted stock units because these awards have no exercise price.
(3)
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 2020 Annual General Meeting of Shareholders of Accenture
plc to be held on January 30, 2020 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 our 2019 fiscal year covered
by this Form 10-K.
42
Table of Contents
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 2020 Annual General Meeting of Shareholders of Accenture plc to be
held on January 30, 2020 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 our 2019 fiscal year covered by this
Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTANT 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 2020 Annual General Meeting of Shareholders of Accenture plc to be held on January
30, 2020 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 our 2019 fiscal year covered by this Form 10-K.
43
Table of Contents
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, 2019 and August 31, 2018 and for the three years ended August 31, 2019
—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
4.1
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 7, 2018)
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”))
Description of Accenture plc’s Securities (filed herewith)
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))
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)
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 7, 2018)
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)
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 (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)
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)
44
Table of Contents
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*
21.1
23.1
23.2
24.1
31.1
31.2
32.1
32.2
99.1
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
10.3 to the February 28, 2018 10-Q)
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
10.2 to the February 28, 2019 10-Q)
Form of Accenture Leadership Performance Equity Award Restricted Share Unit Agreement pursuant to
the Amended and Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit
10.3 to the February 28, 2017 10-Q)
Form of Accenture Leadership Performance Equity 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 28, 2018 10-Q)
Form of Accenture Leadership Performance Equity Award Restricted Share Unit Agreement pursuant to
the Amended and Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to
Exhibit 10.3 to the February 28, 2019 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 10.5 to the February 28, 2018 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 10.4 to the February 28, 2019 10-Q)
Form of CEO Discretionary 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 28,
2018 10-Q)
Form of CEO Discretionary Grant Restricted Share Unit Agreement pursuant to the Amended and
Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.5 to the
February 28, 2019 10-Q)
Form of Director 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 28, 2019 10-Q)
Accenture LLP Leadership Separation Benefits Plan (incorporated by reference to Exhibit 10.30 to the
August 31, 2017 10-K)
Description of Global Annual Bonus Plan (incorporated by reference to Exhibit 10.31 to the August 31,
2017 10-K)
Form of Indemnification Agreement, between Accenture Inc. and the indemnitee party thereto (incorporated
by reference to Exhibit 10.28 to the August 31, 2018 10-K)
Subsidiaries of the Registrant (filed herewith)
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 Principal 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 Principal 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 Principal 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 Principal 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)
45
Table of Contents
101
The following financial information from Accenture plc’s Annual Report on Form 10-K for the fiscal year
ended August 31, 2019, formatted in Inline XBRL: (i) Consolidated Balance Sheets as of August 31, 2019
and August 31, 2018, (ii) Consolidated Income Statements for the years ended August 31, 2019, 2018
and 2017, (iii) Consolidated Statements of Comprehensive Income for the years ended August 31, 2019,
2018 and 2017, (iv) Consolidated Shareholders’ Equity Statements for the years ended August 31, 2019,
2018 and 2017, (v) Consolidated Cash Flows Statements for the years ended August 31, 2019, 2018 and
2017, and (vi) the Notes to Consolidated Financial Statements
104
The cover page from Accenture plc’s Annual Report on Form 10-K for the year ended August 31, 2019,
formatted in Inline XBRL (included as Exhibit 101)
(*)
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.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
46
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 29, 2019 by the undersigned, thereunto duly authorized.
SIGNATURES
ACCENTURE PLC
By:
/s/ JULIE SWEET
Name: Julie Sweet
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints Julie Sweet, KC McClure 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, 2019
(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 29, 2019 by the following persons on behalf of the registrant and in the capacities indicated.
Signature
Title
/s/ JULIE SWEET
Julie Sweet
/s/ KC MCCLURE
KC McClure
/s/ RICHARD P. CLARK
Richard P. Clark
/s/ DAVID P. ROWLAND
David P. Rowland
/s/ MARJORIE MAGNER
Marjorie Magner
/s/ JAIME ARDILA
Jaime Ardila
Chief Executive Officer and Director
(principal executive officer)
Chief Financial Officer
(principal financial officer)
Chief Accounting Officer
(principal accounting officer)
Executive Chairman of the Board and Director
Lead Director
Director
47
Table of Contents
/s/ HERBERT HAINER
Herbert Hainer
/s/ NANCY MCKINSTRY
Nancy McKinstry
/s/ GILLES C. PÉLISSON
Gilles C. Pélisson
/s/ PAULA A. PRICE
Paula A. Price
Director
Director
Director
Director
/s/ VENKATA S.M. RENDUCHINTALA
Director
Venkata S.M. Renduchintala
/s/ ARUN SARIN
Arun Sarin
/s/ FRANK K. TANG
Frank K. Tang
/s/ TRACEY T. TRAVIS
Tracey T. Travis
Director
Director
Director
48
Table of Contents
ACCENTURE PLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements as of August 31, 2019 and 2018 and for the years ended August 31,
2019, 2018 and 2017:
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-5
F-6
F-7
F-8
F-11
F-12
F- 1
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Accenture plc:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Accenture plc (and subsidiaries) (the
Company) as of August 31, 2019 and 2018, 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, 2019, and the
related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal
control over financial reporting as of August 31, 2019, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of August 31, 2019 and 2018, and the results of its operations and its cash
flows for each of the years in the three-year period ended August 31, 2019, in conformity with U.S. generally
accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of August 31, 2019 based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for
revenue and certain costs effective September 1, 2018 due to the adoption of Accounting Standard Update (ASU)
No. 2014-09, which established Accounting Standard Codification Topic 606, Revenue from Contracts with
Customers and its method of accounting for income taxes related to intra-entity transfers of assets effective
September 1, 2018 due to the adoption of ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of
Assets Other Than Inventory.
Basis for Opinions
The Company’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
appearing under Item 9A. Our responsibility is to express an opinion on the Company’s consolidated financial
statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a
public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. 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.
F- 2
Table of Contents
Definition and Limitations of Internal Control Over Financial Reporting
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.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that: (1)
relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the
accounts or disclosures to which they relate.
Evaluation of estimated costs to complete certain technology integration consulting services contracts
As discussed in Notes 1 and 2 to the consolidated financial statements, revenues from contracts for technology
integration consulting services where the Company designs, builds, and implements new or enhanced system
applications and related processes for its clients are recognized over time since control of the system is
transferred continuously to the client. Generally, revenue is recognized using costs incurred to date relative to
total estimated costs at completion to measure progress toward satisfying the Company’s performance
obligations, which typically occurs over time periods ranging from six months to two years.
We identified the evaluation of estimated costs to complete certain technology integration consulting services
contracts as a critical audit matter. Subjective auditor judgment was required to evaluate the assumptions used
to develop the estimate of costs to complete the contracts.
The primary procedures we performed to address this critical audit matter included the following. We tested
certain internal controls over the Company’s process for estimating costs to complete technology integration
consulting services contracts, including controls over the assumptions used to develop the estimate of costs to
complete the contracts. We tested the estimated costs to complete for certain technology integration consulting
services contracts by evaluating:
•
•
•
•
The scope of the work and timing of delivery for consistency with the underlying contractual terms;
The estimate for consistency with the status of delivery, based on internal and customer-facing information;
Changes to estimated costs, if any, including the amount and timing of the change; and
Actual costs incurred subsequent to the balance sheet date to assess if they were consistent with the
estimate for that time period.
We evaluated the Company’s ability to estimate costs by comparing estimates developed at contract inception
to actual costs ultimately incurred to satisfy the performance obligation.
Evaluation of unrecognized tax benefits
As discussed in Note 10 to the consolidated financial statements, the Company has $1,233 million of
unrecognized tax benefits as of August 31, 2019. The Company recognizes tax positions when it believes such
positions are more likely than not of being sustained if challenged. Recognized tax positions are measured at
F- 3
Table of Contents
the largest amount of benefit greater than 50 percent likely of being realized. The Company uses estimates and
assumptions in determining the amount of unrecognized tax benefits.
We identified the evaluation of the Company’s unrecognized tax benefits related to transfer pricing and certain
other intercompany transactions as a critical audit matter. Complex auditor judgment was required in evaluating
the Company’s interpretation of tax law and its analysis of the recognition and measurement of its tax positions.
The primary procedures we performed to address this critical audit matter included the following. We tested
certain internal controls over the Company’s unrecognized tax benefits process, including controls over transfer
pricing and certain other intercompany transactions. We involved tax and transfer pricing professionals with
specialized skills and knowledge, who assisted in:
•
•
•
•
•
Evaluating the Company’s interpretation of tax laws and income tax consequences of intercompany
transactions, including internal restructurings and intra-entity transfers of assets;
Assessing transfer pricing studies for compliance with applicable laws and regulations;
Analyzing the Company’s tax positions, including the methodology over the measurement of unrecognized
tax benefits related to transfer pricing;
Evaluating the Company’s determination of unrecognized tax benefits, including the associated effect in
other jurisdictions; and
Inspecting settlements with applicable taxing authorities.
In addition, we evaluated the Company’s ability to estimate its unrecognized tax benefits by comparing historical
unrecognized tax benefits to actual results upon the conclusion of examinations by applicable taxing authorities.
/s/ KPMG LLP
We have served as the Company’s auditor since 2002.
Chicago, Illinois
October 29, 2019
F- 4
Table of Contents
ACCENTURE PLC
CONSOLIDATED BALANCE SHEETS
August 31, 2019 and 2018
(In thousands of U.S. dollars, except share and per share amounts)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Short-term investments
Receivables and contract assets
Other current assets
Total current assets
NON-CURRENT ASSETS:
Contract assets
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
Current portion of long-term debt and bank borrowings
Accounts payable
Deferred revenues
Accrued payroll and related benefits
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, 2019 and
August 31, 2018
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 654,739,267 and
663,327,677 shares issued as of August 31, 2019 and August 31, 2018, respectively
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 609,404 and
655,521 shares issued and outstanding as of August 31, 2019 and August 31, 2018, respectively
Restricted share units
Additional paid-in capital
Treasury shares, at cost: Ordinary, 40,000 shares as of August 31, 2019 and August 31, 2018; Class A ordinary,
18,964,863 and 24,293,199 shares as of August 31, 2019 and August 31, 2018, respectively
Retained earnings
Accumulated other comprehensive loss
Total Accenture plc shareholders’ equity
Noncontrolling interests
Total shareholders’ equity
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
August 31,
2019
August 31,
2018
$ 6,126,853
$ 5,061,360
3,313
8,095,071
1,225,364
3,192
7,496,368
1,024,639
15,450,601
13,585,559
71,002
240,313
1,391,166
6,205,550
681,492
4,349,464
1,400,292
23,036
215,532
1,264,020
5,383,012
705,124
2,086,807
1,185,993
14,339,279
10,863,524
$ 29,789,880
$ 24,449,083
$
6,411
$
5,337
1,646,641
3,188,835
4,890,542
378,017
951,450
1,348,802
2,837,682
4,569,172
497,885
892,873
11,061,896
10,151,751
16,247
565,224
19,676
618,124
1,765,914
1,410,656
133,232
892,688
526,988
125,729
956,836
441,723
3,900,293
3,572,744
57
15
—
57
15
—
1,411,903
5,804,448
1,234,623
4,870,764
(1,388,376)
(2,116,948)
10,421,538
7,952,413
(1,840,577)
(1,576,171)
14,409,008
10,364,753
418,683
14,827,691
359,835
10,724,588
$ 29,789,880
$ 24,449,083
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 5
Table of Contents
ACCENTURE PLC
CONSOLIDATED INCOME STATEMENTS
For the Years Ended August 31, 2019, 2018 and 2017
(In thousands of U.S. dollars, except share and per share amounts)
REVENUES:
Revenues
OPERATING EXPENSES:
Cost of services
Sales and marketing
General and administrative costs
Total operating expenses
OPERATING INCOME
Interest income
Interest expense
Other income (expense), net
Pension settlement charge
Gain (loss) 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
2019
2018
2017
$ 43,215,013 $ 40,992,534 $ 36,176,841
29,900,325
28,499,170
25,105,349
4,447,456
4,196,201
3,752,313
2,562,158
2,398,384
2,127,777
36,909,939
35,093,755
30,985,439
6,305,074
5,898,779
5,191,402
87,508
(22,963)
56,337
(19,539)
(117,822)
(127,484)
—
—
—
—
37,940
(15,545)
(87,720)
(509,793)
(252)
6,251,797
5,808,093
4,616,032
1,405,556
4,846,241
1,593,499
4,214,594
981,100
3,634,932
(6,694)
(60,435)
(95,063)
(59,624)
(149,131)
(40,652)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC
$ 4,779,112 $ 4,059,907 $ 3,445,149
Weighted average Class A ordinary shares:
Basic
Diluted
Earnings per Class A ordinary share:
Basic
Diluted
Cash dividends per share
638,098,125
628,451,742
620,104,250
650,204,873
655,296,150
660,463,227
$
$
$
7.49 $
7.36 $
2.92 $
6.46 $
6.34 $
2.66 $
5.56
5.44
2.42
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 6
Table of Contents
ACCENTURE PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended August 31, 2019, 2018 and 2017
(In thousands of U.S. dollars)
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation
Defined benefit plans
Cash flow hedges
Investments
2019
2018
2017
$ 4,846,241 $ 4,214,594 $ 3,634,932
(132,707)
(305,225)
(253,039)
21,335
123,003
(198,645)
(1,663)
1,148
149,920
368,885
46,624
1,507
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC
Other comprehensive income (loss) attributable to noncontrolling interests
(264,406)
(481,387)
566,936
(6,749)
(2,233)
31,724
COMPREHENSIVE INCOME
$ 4,575,086 $ 3,730,974 $ 4,233,592
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC
$ 4,514,706 $ 3,578,520 $ 4,012,085
Comprehensive income attributable to noncontrolling interests
60,380
152,454
221,507
COMPREHENSIVE INCOME
$ 4,575,086 $ 3,730,974 $ 4,233,592
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 7
Table of Contents
ACCENTURE PLC
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENTS
For the Years Ended August 31, 2019, 2018 and 2017
(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, 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
Net income
Other comprehensive income
(loss)
Purchases of Class A ordinary
shares
3,445,149
566,936
3,445,149
566,936
189,783
31,724
3,634,932
598,660
98,039
(2,552,880)
(21,258)
(2,454,841)
(98,039)
(2,552,880)
Cancellation of treasury shares
(1)
(26,858)
(413,509)
3,014,356
26,858
(2,600,846)
755,011
40,224
—
795,235
—
795,235
(1,386)
(92,160)
(92,160)
(4,011)
(96,171)
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
10,861
760
(715,790)
975,322
481,341
4,521
(90,612)
650,261
5,595
25,784
(5,595)
676,045
—
51,677
5,595
(21,841)
(1,550,411)
(1,385)
(1,498,734)
(68,844)
(1,567,578)
(23,226)
55,807
32,581
Balance as of August 31, 2017 $ 57
40
$ 14
638,966
$ —
20,531
$ 1,095,026
$ 3,516,399
$ (1,649,090)
(23,449) $
7,081,855
$
(1,094,784) $
8,949,477
$
760,723
$
9,710,200
F- 8
Table of Contents
Net income
Other comprehensive income
(loss)
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, 2019, 2018, and 2017
(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
4,059,907
4,059,907
154,687
4,214,594
(481,387)
(481,387)
(2,233)
(483,620)
49,766
(2,554,084)
(16,706)
(2,504,318)
(49,766)
(2,554,084)
(11,621)
(206,782)
1,582,067
11,621
(1,375,285)
913,801
63,107
(821)
(80,169)
—
976,908
—
976,908
(80,169)
(4,841)
(85,010)
10,077
25,906
1
(829,085)
1,132,024
504,159
4,201
(68,656)
(19,054)
408,652
738,442
408,653
14,704
(408,653)
753,146
—
54,881
(12,233)
(1,725,953)
(19,455)
(1,671,072)
(31,688)
(37,652)
(67,134)
(1,708,724)
(98,822)
Balance as of August 31, 2018 $ 57
40
$ 15
663,328
$ —
656
$ 1,234,623
$ 4,870,764
$ (2,116,948)
(24,333) $
7,952,413
$
(1,576,171) $
10,364,753
$
359,835
$
10,724,588
F- 9
Table of Contents
Cumulative effect adjustment
Net income
Other comprehensive income
(loss)
Purchases of Class A shares
Cancellation of treasury shares
Share-based compensation
expense
Purchases/redemptions of
Accenture Canada Holdings
Inc. exchangeable shares and
Class X shares
Issuances of Class A shares
for employee share programs
Dividends
Other, net
ACCENTURE PLC
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENTS — (continued)
For the Years Ended August 31, 2019, 2018, and 2017
(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
2,134,818
4,779,112
2,134,818
4,779,112
(264,406)
(264,406)
3,158
67,129
(6,749)
2,137,976
4,846,241
(271,155)
3,302
(2,669,336)
(16,431)
(2,666,034)
(3,302)
(2,669,336)
(17,599)
(326,092)
2,745,321
17,599
(2,419,229)
1,023,794
69,459
(47)
(21,768)
—
1,093,253
—
1,093,253
(21,768)
(10)
(21,778)
9,010
(903,526)
1,219,600
652,587
4,160
(121,250)
847,411
1,034
848,445
57,012
(10,817)
(1,918,737)
14,411
(1,861,725)
(2,628)
(1,864,353)
3,594
216
3,810
Balance as of August 31, 2019 $ 57
40
$ 15
654,739
$ —
609
$ 1,411,903
$ 5,804,448
$ (1,388,376)
(19,005) $ 10,421,538
$
(1,840,577) $
14,409,008
$
418,683
$
14,827,691
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 10
Table of Contents
ACCENTURE PLC
CONSOLIDATED CASH FLOWS STATEMENTS
For the Years Ended August 31, 2019, 2018 and 2017
(In thousands of U.S. dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile Net income to Net cash provided by (used in)
operating activities—
Depreciation, amortization and asset impairments
Share-based compensation expense
Pension settlement charge
(Gain) loss on sale of businesses
Deferred income taxes, net
Other, net
Change in assets and liabilities, net of acquisitions—
Receivables and contract assets, current and non-current
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
2019
2018
2017
$ 4,846,241 $ 4,214,594 $ 3,634,932
892,760
1,093,253
—
—
(96,360)
(87,522)
926,776
976,908
—
—
94,000
7,609
801,789
795,235
460,908
252
(364,133)
88,123
(526,297)
(710,804)
(73,322)
(489,817)
(510,102)
(415,568)
177,186
258,067
386,930
(162,916)
335,428
(167,971)
176,853
646,416
183,933
188,479
173,712
(38,954)
(117,725)
15,721
12,069
Net cash provided by (used in) operating activities
6,626,953
6,026,691
4,973,039
CASH FLOWS FROM INVESTING ACTIVITIES:
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
Other investing, net
Net cash provided by (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
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(599,009)
(619,187)
(515,919)
(1,193,071)
(657,546)
(1,704,188)
27,951
8,553
20,197
6,932
(24,035)
10,263
(1,755,576)
(1,249,604)
(2,233,879)
848,445
753,146
676,045
(2,691,114)
(2,639,094)
(2,649,051)
(4,772)
(4,195)
(2,120)
(1,864,353)
(1,708,724)
(1,567,578)
(55,377)
(110,161)
(17,531)
(3,767,171)
(3,709,028)
(3,560,235)
(38,713)
(133,559)
42,326
1,065,493
934,500
(778,749)
CASH AND CASH EQUIVALENTS, beginning of period
5,061,360
4,126,860
4,905,609
CASH AND CASH EQUIVALENTS, end of period
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid
Income taxes paid, net
$ 6,126,853 $ 5,061,360 $ 4,126,860
$
22,624 $
19,673 $
15,751
$ 1,587,273 $ 1,373,244 $ 1,288,788
The accompanying Notes are an integral part of these Consolidated Financial Statements.
F- 11
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
and innovation capabilities, alliance relationships and global delivery resources, Accenture plc seeks to provide
differentiated innovative 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 assemble
integrated teams to provide high-quality, cost-effective solutions to clients.
Basis of Presentation
The Consolidated Financial Statements include the accounts of Accenture plc, an Irish company, and our controlled
subsidiary companies. Accenture plc is an Irish public limited company, which operates its business through its
subsidiaries. Prior to March 13, 2018, Accenture plc’s only business was 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. We
operated our business through Accenture Holdings plc and subsidiaries of Accenture Holdings plc. Accenture plc
controlled Accenture Holdings plc’s management and operations and consolidated Accenture Holdings plc’s results in
our Consolidated Financial Statements.
On March 13, 2018, Accenture Holdings plc merged with and into Accenture plc, with Accenture plc as the surviving
entity. As a result, all of the assets and liabilities of Accenture Holdings plc were acquired by Accenture plc, and
Accenture Holdings plc ceased to exist. In connection with this internal merger, shareholders of Accenture Holdings
plc (other than Accenture entities that held shares of Accenture Holdings plc), who primarily consisted of current and
former members of Accenture Leadership and their permitted transferees, received one Class A ordinary share of
Accenture plc for each share of Accenture Holdings plc that they owned, and Accenture plc redeemed all Class X
ordinary shares of Accenture plc owned by such shareholders.
The shares of Accenture Holdings plc (for applicable periods) and Accenture Canada Holdings Inc. held by persons
other than us are treated as a noncontrolling interest in the Consolidated Financial Statements. The noncontrolling
interest percentage was less than 1% as of August 31, 2019 and 2018, respectively.
All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example,
a reference to “fiscal 2019” means the 12-month period that ended on August 31, 2019. All references to quarters,
unless otherwise noted, refer to the quarters of our 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 we may undertake in the future, actual results may be different from
those estimates.
Revenue Recognition
We account for revenue in accordance with FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606), which we adopted on September 1, 2018 using the modified retrospective method.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the
unit of accounting in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and
recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance
obligations, we allocate the contract’s transaction price to each performance obligation based on the relative standalone
selling price. The primary method used to estimate standalone selling price is the expected cost plus a margin approach,
under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin
for that distinct good or service based on margins for similar services sold on a standalone basis. While determining
relative standalone selling price and identifying separate performance obligations require judgment, generally relative
standalone selling prices and the separate performance obligations are readily identifiable as we sell those performance
obligations unaccompanied by other performance obligations. Contract modifications are routine in the performance
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)
of our contracts. Contracts are often modified to account for changes in the contract specifications, requirements or
duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price
or if the post-modification services are distinct from the services provided prior to the modification, the modification is
accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.
Our revenues are derived from contracts for outsourcing services, technology integration consulting services and
non-technology consulting services. These contracts have different terms based on the scope, performance obligations
and complexity of the engagement, 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, fee-per-
transaction contracts and contracts with multiple fee types.
The nature of our contracts gives rise to several types of variable consideration, including incentive fees. Many
contracts include incentives or penalties related to costs incurred, benefits produced or adherence to schedules that
may increase the variability in revenues and margins earned on such contracts. These variable amounts generally are
awarded or refunded upon achievement of or failure to achieve certain performance metrics, milestones or cost targets
and can be based upon client discretion. We include these variable fees in the estimated transaction price when there
is a basis to reasonably estimate the amount of the fee and it is not probable a significant reversal of revenue will occur.
These estimates reflect the expected value of the variable fee and are based on an assessment of our anticipated
performance, historical experience and other information available at the time.
Our performance obligations are satisfied over time as work progresses or at a point in time. The majority of our
revenues are recognized over time based on the extent of progress towards satisfying our performance obligations.
The selection of the method to measure progress towards completion requires judgment and is based on the contract
and the nature of the services to be provided.
Outsourcing Contracts
Our outsourcing contracts typically span several years. Revenues are generally recognized on outsourcing
contracts over time because our clients benefit from the services as they are performed. Outsourcing contracts require
us to provide a series of distinct services each period over the contract term. Revenues from unit-priced contracts are
recognized as transactions are processed. When contractual billings represent an amount that corresponds directly
with the value provided to the client (e.g., time-and-materials contracts), revenues are recognized as amounts become
billable in accordance with contract terms.
Technology Integration Consulting Services
Revenues from contracts for technology integration consulting services where we design/redesign, build and
implement new or enhanced systems and related processes for our clients are recognized over time as control of the
system is transferred continuously to the client. Contracts for technology integration consulting services generally span
six months to two years. Generally, revenue is recognized using costs incurred to date relative to total estimated costs
at completion to measure progress toward satisfying our performance obligations. Revenues, including estimated fees,
are recorded proportionally as costs are incurred. Incurred cost represents work performed, which corresponds with,
and thereby best depicts, the transfer of control to the client.
Non-Technology Integration Consulting Services
Our contracts for non-technology integration consulting services are typically less than a year in duration.
Revenues are generally recognized over time as our clients benefit from the services as they are performed, or the
contract includes termination provisions enabling payment for performance completed to date. When contractual billings
represent an amount that corresponds directly with the value provided to the client (e.g. time-and-materials contracts),
revenues are recognized as amounts become billable in accordance with contract terms. Revenues from fixed-price
contracts are generally recognized using costs incurred to date relative to total estimated costs at completion to measure
progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds
with, and thereby best depicts, the transfer of control to the client. For non-technology integration consulting contracts
which do not qualify to recognize revenue over time, we recognize revenues at a point in time when we satisfy our
performance obligations and the client obtains control of the promised good or service.
Contract Estimates
Estimates of total contract revenues and costs are continuously monitored over the lives of our contracts, and
recorded revenues and cost estimates are subject to revision as the contract progresses. If at any time the estimate
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)
of contract profitability indicates an anticipated loss on a technology integration consulting contract, we recognize the
loss in the quarter it first becomes probable and reasonably estimable.
Contract Balances
The timing of revenue recognition, billings and cash collections results in Receivables, Contract assets, and
Deferred revenues (Contract liabilities) on our Consolidated Balance Sheet. Amounts are billed as work progresses
in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., monthly or quarterly) or upon
achievement of contractual milestones. Our receivables are rights to consideration that are conditional only upon the
passage of time as compared to our contract assets, which are rights to consideration conditional upon additional
factors. When we bill or receive payments from our clients before revenue is recognized, we record Contract liabilities.
Contract assets and liabilities are reported on our Consolidated Balance Sheet on a contract-by-contract basis at the
end of each reporting period.
For some outsourcing contracts, we receive payments for transition or set-up activities, which are deferred and
recognized as revenue as the services are provided. These advance payments are typically not a significant financing
component because they are used to meet working capital demands in the early stages of a contract and to protect
us from the other party failing to complete its obligations under the contract. We elected the practical expedient to
report 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
We calculate and provide for income taxes in each of the tax jurisdictions in which we operate. 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. We establish liabilities or reduce assets
when we believe tax positions are not more likely than not of being sustained if challenged. Recognized tax positions
are measured at the largest amount of benefit greater than 50 percent likely of being realized. Each fiscal quarter, we
evaluate tax positions and adjust 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 income (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 $159 and $45,658 as of August 31, 2019 and 2018, 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.
Allowances for Client Receivables
We record our client receivables at their face amounts less allowances. On a periodic basis, we evaluate our
receivables and establish allowances based on historical experience and other currently available information. As of
August 31, 2019 and 2018, total allowances recorded for client receivables were $45,538 and $49,913, respectively.
The allowance reflects our best estimate of collectibility risks on outstanding receivables. In limited circumstances, we
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)
agree 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.
Concentrations of Credit Risk
Our financial instruments, consisting primarily of cash and cash equivalents, foreign currency exchange rate
instruments and client receivables, are exposed to concentrations of credit risk. We place our cash and cash equivalents
and foreign exchange instruments with highly-rated financial institutions, limit the amount of credit exposure with any
one financial institution and conduct ongoing evaluations of the credit worthiness of the financial institutions with which
we do 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 fair value measurement alternative method of accounting.
For investments in which we can exercise significant influence but do not control, we use the equity method of accounting.
For equity securities without a readily determinable fair value, we use the fair value measurement alternative and
measure the securities at cost less impairment, if any, plus or minus observable price changes in orderly transactions
for an identical or similar investment of the same issuer.
Investments are periodically assessed for other-than-temporary impairment. If an investment is deemed to have
experienced an other-than-temporary decline below its cost basis, we reduce the carrying amount of the investment
to its estimated fair value.
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. We review the recoverability of goodwill by reportable operating segment annually, or more frequently when
indicators of impairment exist. Based on the results of our annual impairment analysis, we determined that no impairment
existed as of August 31, 2019 or 2018, 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 sixteen years.
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)
Operating Expenses
Selected components of operating expenses were as follows:
Research and development costs
Advertising costs (1)
Provision for (release of) doubtful accounts (2)
2019
799,734 $
$
85,521
974
Fiscal
2018
790,779 $
78,464
(1,060)
2017
704,317
79,883
10,117
_______________
(1)
(2)
Advertising costs are expensed as incurred.
For additional information, see “Allowances for Client Receivables”.
Recently Adopted Accounting Pronouncements
Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09 (“Topic
606”)
On September 1, 2018, we adopted Topic 606, which replaced most existing revenue recognition guidance. The
core principle of Topic 606 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. Topic 606 has been applied to contracts
that were not completed as of September 1, 2018. Results for reporting periods beginning after September 1, 2018
are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance
with our historic accounting. See Note 2 (Revenues) to these Consolidated Financial Statements for further details.
In connection with the adoption of Topic 606, we are now presenting total revenues and no longer reporting
revenues before reimbursements. Prior period results have been revised to reflect this change in presentation.
Additionally, revisions were made to decrease both revenues and cost of services by $610,894,and $588,637 in fiscal
2018 and 2017, respectively, for hardware/software resale previously included in reimbursements. These revisions
had no impact on operating income.
The impact of adopting the new standard was not material to our Consolidated Financial Statements. The primary
impacts included additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows
arising from client contracts, including judgments and changes in estimates. Upon adoption, we recorded a decrease
to retained earnings of $6,451, net of an income tax impact of $3,071, as of September 1, 2018.
The impact of adopting the new standard for fiscal 2019 was an increase to revenues of approximately $51.1
million. The impact on our balance sheet as of August 31, 2019 was not material with the exception of the classification
of $2.2 billion of receivables and $627.7 million of contract assets, which were classified as Unbilled services, net prior
to fiscal 2019.
FASB ASU No. 2016-16
On September 1, 2018, we adopted FASB ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of
Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of intra-entity transfers,
other than inventory, when the transfer occurs. Upon adoption, we recorded deferred tax assets and an increase in
retained earnings of $2,144,427, and we will recognize incremental income tax expense as these deferred tax assets
are utilized. Our fiscal 2019 annual effective tax rate was 3.3% higher due to the adoption. The adoption had no impact
on cash flows.
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)
The impact of adoption as of September 1, 2018 of FASB ASU No. 2014-09 (Topic 606) and No. 2016-16 (Topic
740) on our Consolidated Balance Sheets was as follows:
Balance Sheet
CURRENT ASSETS
Receivables from clients, net
Unbilled services, net
Contract assets
Receivables and contract assets
NON-CURRENT ASSETS
Unbilled services, net
Contract assets
Deferred contract costs
Deferred income taxes, net
CURRENT LIABILITIES
Deferred revenues
SHAREHOLDERS' EQUITY
Retained earnings
FASB ASU No. 2017-07
Balance as of
August 31, 2018
Adjustments Due
to ASU 2014-09
(Topic 606)
Adjustments Due
to ASU 2016-16
(Topic 740)
Balance as of
September 1, 2018
$
$
$
4,996,454 $
2,100,402 $
— $
7,096,856
2,499,914
—
(2,499,914)
547,809
—
—
—
547,809
7,496,368 $
148,297 $
— $
7,644,665
23,036 $
(23,036) $
—
705,124
2,086,807
23,036
(2,867)
3,071
— $
—
—
2,144,427
—
23,036
702,257
4,234,305
2,837,682
154,952
—
2,992,634
7,952,413
(6,451)
2,144,427
10,090,389
On September 1, 2018, we adopted FASB ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715):
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new
guidance amends certain presentation and disclosure requirements for employers with defined benefit pension and
post-retirement medical plans. The standard requires the service cost component of the net benefit cost to be in the
same line item as other compensation in operating income and the other components of net benefit cost to be presented
outside of operating income on a retrospective basis. Upon adoption, we reclassified $58 million and $558 million
(including fiscal 2017 pension settlement charge of $510 million) of operating expenses to non-operating expense for
fiscal 2018 and fiscal 2017, respectively, to conform with the fiscal 2019 treatment of these expenses.
FASB ASU No. 2016-01
On September 1, 2018, we adopted FASB ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of
recognition, measurement, presentation and disclosure of financial instruments. The standard requires investments
previously accounted for under the cost method of accounting to be measured at fair value with changes in fair value
recognized in net income. Investments in equity securities that do not have readily determinable fair values will be
measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly
transactions. We adopted this standard using the prospective method. The adoption did not have a material impact
on our Consolidated Financial Statements.
FASB ASU No. 2018-02
On August 31, 2019, we early adopted FASB ASU 2018-02, Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income, which permits entities to reclassify the disproportionate income tax effects
of the Tax Act on items within accumulated other comprehensive income (loss) (“AOCI”) to retained earnings. These
disproportionate income tax effect items are referred to as “stranded tax effects.” The amendments in this update only
relate to the reclassification of the income tax effects of the Tax Act. Other accounting guidance that requires the effect
of changes in tax laws or rates to be included in net income is not affected by this update. Upon adoption we elected
not to reclassify immaterial stranded tax effects. We release stranded tax effects from AOCI using the specific
identification approach for our defined benefit plans and the portfolio approach for other items.
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)
New Accounting Pronouncement
The following standard, issued by the FASB, will result in a change in practice and will have a financial impact on
our Consolidated Financial Statements:
Standard
2016-02:
Leases
and related
updates
(Topic 842)
for
Description
The ASU amends existing
guidance to require lessees
to recognize assets and
the balance
liabilities on
sheet
the rights and
obligations created by leases
and to disclose additional
quantitative and qualitative
information about
leasing
arrangements. The guidance
allows either a modified
retrospective or an effective
date transition method.
Accenture
Adoption Date
September 1,
2019
to
Impact on the Financial Statements or Other Significant
Matters
We adopted the ASU on September 1, 2019, using the
effective date method. We expect
recognize
approximately $3 billion of operating lease assets and
liabilities on our Consolidated Balance Sheets, primarily
relating to real estate. We do not expect the ASU to have
a material impact on our other Consolidated Financial
Statements or footnotes. We elected the package of
require
practical expedients which does not
reassessment of prior conclusions related to contracts
containing leases, lease classification or initial direct
costs. We also elected to combine lease and non-lease
components for our real estate and automobile leases.
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)
2. REVENUES
Disaggregation of Revenue
See Note 17 (Segment Reporting) to these Consolidated Financial Statements for our disaggregated revenues.
Remaining Performance Obligations
On August 31, 2019, we had approximately $20 billion of remaining performance obligations. Our remaining
performance obligations represent the amount of transaction price for which work has not been performed and revenue
has not been recognized. The majority of our contracts are terminable by the client on short notice with little or no
termination penalties, and some without notice. Under Topic 606, only the non-cancelable portion of these contracts
is included in our performance obligations. Additionally, our performance obligations only include variable consideration
if we assess it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty
is resolved. Based on the terms of our contracts, a significant portion of what we consider contract bookings is not
included in our remaining performance obligations. We expect to recognize approximately 66% of our remaining
performance obligations as revenue in fiscal 2020, an additional 14% in fiscal 2021, and the balance thereafter.
Contract Estimates
Adjustments in contract estimates related to performance obligations satisfied or partially satisfied in prior periods
decreased our revenues by approximately $4 million for fiscal 2019. No adjustment on any one contract was material
to our Consolidated Financial Statements during fiscal 2019.
Contract Balances
Deferred transition revenues were $563,245 and $581,395 as of August 31, 2019 and 2018, respectively, and
are included in Non-current deferred revenues. Costs related to these activities are also deferred and are expensed
as the services are provided. 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 $681,492 and $690,868 as of August 31, 2019 and 2018, respectively, and are included in
Deferred contract costs. Deferred transition amortization expense for fiscal 2019, 2018 and 2017 was $274,814,
$333,118 and $289,555, respectively.
The following table provides information about the balances of our Receivables, Contract assets and Contract
liabilities (Deferred revenues):
Receivables, net of allowance
Contract assets (current)
Receivables and contract assets (current)
Contract assets (non-current)
Deferred revenues (current)
Deferred revenues (non-current)
$
August 31, 2019
As of September 1,
2018 (as adjusted)
7,467,338 $
627,733
8,095,071
71,002
3,188,835
565,224
7,096,856
547,809
7,644,665
23,036
2,992,634
618,124
Changes in the contract asset and liability balances during fiscal 2019, were a result of normal business activity
and not materially impacted by any other factors.
Revenues recognized during fiscal 2019 that were included in Deferred revenues as of September 1, 2018 were
$2.9 billion.
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)
3. 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
2019
Fiscal
2018
2017
$ 4,779,112 $ 4,059,907 $ 3,445,149
638,098,125
628,451,742
620,104,250
$
7.49 $
6.46 $
5.56
Net income attributable to Accenture plc
$ 4,779,112 $ 4,059,907 $ 3,445,149
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)
6,694
95,063
149,131
$ 4,785,806 $ 4,154,970 $ 3,594,280
638,098,125
628,451,742
620,104,250
892,654
14,716,884
28,107,510
Diluted effect of employee compensation related to Class A ordinary shares
11,111,679
11,948,075
12,082,241
Diluted effect of share purchase plans related to Class A ordinary shares
102,415
179,449
169,226
Diluted weighted average Class A ordinary shares
Diluted earnings per share
650,204,873
655,296,150
660,463,227
$
7.36 $
6.34 $
5.44
_______________
(1)
Diluted earnings per share assumes the exchange of all Accenture Canada Holdings Inc. exchangeable shares
for Accenture plc Class A ordinary shares on a one-for-one basis and the redemption of all Accenture Holdings
plc ordinary shares owned by holders of noncontrolling interests prior to March 13, 2018, when these were
redeemed for Accenture plc Class A ordinary shares. 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- 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)
4. 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 (expense)
Portion attributable to noncontrolling interests
Foreign currency translation, net of tax
Ending balance
Defined benefit plans
Beginning balance
Actuarial gains (losses)
Pension settlement
Prior service costs arising during the period
Reclassifications into net periodic pension and
post-retirement expense (1)
Income tax benefit (expense)
Portion attributable to noncontrolling interests
Defined benefit plans, net of tax
Ending balance
Cash flow hedges
Beginning balance
Unrealized gain (loss)
Reclassification adjustments into Cost of services
Income tax benefit (expense)
Portion attributable to noncontrolling interests
Cash flow hedges, net of tax
Ending balance (2)
Investments
Beginning balance
Unrealized gain (loss)
Income tax benefit (expense)
Portion attributable to noncontrolling interests
Investments, net of tax
Ending balance
2019
Fiscal
2018
2017
$
(1,075,268) $
(770,043) $
(919,963)
(138,680)
(310,548)
164,073
(607)
6,580
3,354
1,969
(132,707)
(305,225)
(1,207,975)
(1,075,268)
(988)
(13,165)
149,920
(770,043)
(419,284)
(379,090)
793
(2,105)
32,985
94,052
326
(253,039)
(672,323)
(84,010)
209,017
(48,333)
(37,522)
(159)
123,003
38,993
2,391
(1,970)
305
2
(1,663)
728
(440,619)
(809,504)
19,862
3,030
(28,696)
34,972
(7,799)
(34)
21,335
(419,284)
114,635
(169,958)
(93,105)
64,118
300
(198,645)
(84,010)
1,243
1,455
(305)
(2)
1,148
2,391
49,565
509,793
847
44,913
(219,817)
(16,416)
368,885
(440,619)
68,011
195,848
(118,840)
(28,309)
(2,075)
46,624
114,635
(264)
1,758
(183)
(68)
1,507
1,243
Accumulated other comprehensive loss
$
(1,840,577) $
(1,576,171) $
(1,094,784)
_______________
(1)
As of August 31, 2019, $54,799 of net losses is expected to be reclassified into net periodic pension and post-retirement
expense recognized in cost of services, sales and marketing, general and administrative costs and non-operating expenses
in the next twelve months.
As of August 31, 2019, $34,207 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.
(2)
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)
5. 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
August 31, 2019
August 31, 2018
$
56 $
60
1,723,623
394,671
1,228,845
3,347,195
1,625,950
374,294
1,125,814
3,126,118
(1,956,029)
(1,862,098)
$
1,391,166 $
1,264,020
Depreciation expense for fiscal 2019, 2018 and 2017 was $440,796, $423,471 and $362,817, respectively.
6. BUSINESS COMBINATIONS
We completed a number of individually immaterial acquisitions during fiscal years 2019, 2018 and 2017. These
acquisitions were completed primarily to expand our services and solutions offerings. The table below gives additional
details related to these acquisitions:
Total consideration
Goodwill
Intangible assets
$
2019
1,170,044 $
920,696
282,144
Fiscal
2018
596,148 $
431,087
140,403
2017
1,643,205
1,350,969
328,776
The intangible assets primarily consist of customer-related intangibles, which are being amortized over one to
twelve years. The goodwill was allocated among our reportable operating segments and is partially deductible for U.S.
federal income tax purposes.
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)
7. 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,
2017
Additions/
Adjustments
Foreign
Currency
Translation
August 31,
2018
Additions/
Adjustments
Foreign
Currency
Translation
August 31,
2019
$
775,802 $
98,223 $
(8,516) $
865,509 $ 146,632 $
(19,398) $
992,743
1,151,024
934,374
32,390
27,816
(21,348)
1,162,066
252,870
(21,308)
1,393,628
(3,142)
959,048
54,441
(8,061)
1,005,428
1,698,140
270,701
(20,440)
1,948,401
423,525
(43,609)
2,328,317
443,012
13,163
$ 5,002,352 $ 442,293 $
(8,187)
485,434
47,274
(61,633) $ 5,383,012 $ 924,742 $ (102,204) $ 6,205,550
447,988
(9,828)
Goodwill includes immaterial adjustments related to prior period acquisitions.
Intangible Assets
Our definite-lived intangible assets by major asset class were as follows:
Intangible Asset Class
August 31, 2018
Accumulated
Amortization
Gross
Carrying
Amount
Net
Carrying
Amount
Gross
Carrying
Amount
August 31, 2019
Accumulated
Amortization
Net
Carrying
Amount
Customer-related
$
862,418 $
(299,702) $
562,716
$ 1,013,976 $
(358,130) $
655,846
Technology
Patents
Other
Total
94,844
128,179
50,490
(55,690)
(66,659)
(26,770)
39,154
61,520
23,720
119,686
127,796
78,344
(45,851)
(66,167)
(28,875)
73,835
61,629
49,469
$ 1,135,931 $
(448,821) $
687,110
$ 1,339,802 $
(499,023) $
840,779
Total amortization related to our intangible assets was $177,150, $170,187 and $149,417 for fiscal 2019, 2018
and 2017, respectively. Estimated future amortization related to intangible assets held at August 31, 2019 is as follows:
Fiscal Year
2020
2021
2022
2023
2024
Thereafter
Total
Estimated Amortization
189,490
155,186
134,594
117,959
94,022
149,528
840,779
$
$
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)
8. FINANCIAL INSTRUMENTS
Derivatives
In the normal course of business, we use 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. We do not enter into derivative transactions for trading purposes. We classify cash
flows from our derivative programs as cash flows from operating activities in the Consolidated Cash Flows Statements.
Certain derivatives 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 us, and the maximum amount of loss due to
credit risk, based on the gross fair value of our derivative financial instruments that are in an asset position, was
$110,617 as of August 31, 2019.
We utilize 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 our potential overall loss resulting from the insolvency of a counterparty
and reduce a counterparty’s potential overall loss resulting from our insolvency. Additionally, these agreements contain
early termination provisions triggered by adverse changes in a counterparty’s credit rating, thereby enabling us to
accelerate settlement of a transaction prior to its contractual maturity and potentially decrease our realized loss on an
open transaction. Similarly, a decrement in our 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 our realized loss on an open transaction. The aggregate fair value of our derivative instruments with credit-
risk-related contingent features that were in a liability position as of August 31, 2019 was $59,791.
Our 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 11 (Retirement and Profit Sharing Plans) to these
Consolidated Financial Statements.
Cash Flow Hedges
Certain of our subsidiaries are exposed to currency risk through their use of our global delivery resources. To
mitigate this risk, we use 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. We have designated
these derivatives as cash flow hedges. As of August 31, 2019 and 2018, we 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, our 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. We assess the ongoing effectiveness of our 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. We measure and record 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 Statements 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 $48,333, $93,105 and $118,840 during fiscal 2019, 2018 and 2017, respectively. The
ineffective portion of the change in fair value of a cash flow hedge is recognized immediately in Other income (expense),
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)
net in the Consolidated Income Statements and for fiscal 2019, 2018 and 2017, was not material. In addition, we did
not discontinue any cash flow hedges during fiscal 2019, 2018 or 2017.
Other Derivatives
We also use 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 net losses of $112,113 and $114,076 for fiscal 2019
and 2018, respectively, and a net gain of $66,748 for fiscal 2017. Gains and losses on these contracts are recorded
in Other income (expense), net in the Consolidated Income Statements 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,
2019
August 31,
2018
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
$
53,033 $
49,525
8,059
110,617 $
29,380
1,065
28,700
59,145
18,826 $
8,770
50,870
64,365
32,195
25,455
59,791 $
140,690
50,826 $
(81,545)
8,709,917 $
8,783,014
$
$
$
$
$
We utilize 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, we record 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,
2019
August 31,
2018
$
$
88,811 $
37,985
23,599
105,144
50,826 $
(81,545)
Equity Securities Without Readily Determinable Fair Values
We hold investments in equity securities that do not have readily determinable fair values. We record these
investments at cost and remeasure them to fair value based on certain observable price changes or impairment events
as they occur. The carrying amount of these investments was $131,675 as of August 31, 2019. Prior to the adoption
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)
of FASB ASU No. 2016-01, these investments were accounted for under the cost method. For additional information,
see Note 1 (Summary of Significant Accounting Policies) to these Consolidated Financial Statements.
9. BORROWINGS AND INDEBTEDNESS
As of August 31, 2019, 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
$
1,000,000 $
790,191
220,355
$
2,010,546 $
—
—
2,458
2,458
_______________
(1)
This facility, which matures on December 22, 2020, 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. We continue to be in compliance
with relevant covenant terms. The facility is subject to annual commitment fees. As of August 31, 2019 and
2018, we had no borrowings under the facility.
(2)
(3)
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, 2019 and 2018, we had no
borrowings under these facilities.
We also maintain local guaranteed and non-guaranteed lines of credit for those locations that cannot access
our global facilities. As of August 31, 2019 and 2018, we had borrowings under these various facilities of $2,458
and $0, respectively.
Under the borrowing facilities described above, we had an aggregate of $390,295 and $324,602 of letters of
credit outstanding as of August 31, 2019 and 2018, respectively. In addition, we had total outstanding debt of $22,658
and $25,013 as of August 31, 2019 and 2018, respectively.
F- 26
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.
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 (benefit) expense
Total
2019
Fiscal
2018
2017
$
159,578 $
70,050 $
152,002
86,113
1,256,225
1,501,916
3,574
1,425,875
1,499,499
17,269
1,175,962
1,345,233
(143,217)
(39,588)
86,445
(96,360)
219,034
57,044
(182,078)
94,000
(200,483)
(26,069)
(137,581)
(364,133)
$
1,405,556 $
1,593,499 $
981,100
The components of Income before income taxes were as follows:
U.S. sources (1)
Non-U.S. sources
Total
_______________
2019
Fiscal
2018
2017
$
$
853,173 $
645,943 $
251,456
5,398,624
5,162,150
4,364,576
6,251,797 $
5,808,093 $
4,616,032
(1)
Includes U.S. pension settlement charge of 509,793 for fiscal 2017.
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”), which significantly changed
U.S. tax law. The Tax Act lowered the U.S. statutory federal income tax rate from 35% to 21%, effective January 1,
2018, resulting in a blended U.S. statutory federal income tax rate of 25.7% for our fiscal year ended August 31, 2018
and a U.S. statutory federal income tax rate of 21.0% for our fiscal year ended August 31, 2019. During fiscal 2018,
we recognized tax expense of $177,651 due primarily to the remeasurement of our net deferred tax assets at the new,
lower rates. Our analysis and decisions around accounting for the Tax Act are complete.
The reconciliation of the U.S. federal statutory income tax rate to our 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 other rates
Final determinations (1)
Other net activity in unrecognized tax benefits
Excess tax benefits from share based payments
Changes in tax laws and rates
Other, net
Effective income tax rate
_______________
2019
Fiscal
2018
2017
21.0%
25.7%
1.5
1.1
(3.4)
3.2
(1.2)
—
0.3
1.1
(6.1)
(1.9)
5.8
(2.3)
4.4
0.7
35.0%
1.3
(16.3)
(3.6)
8.4
(2.7)
(1.5)
0.7
22.5%
27.4%
21.3%
(1)
Final determinations include final agreements with tax authorities and expirations of statutes of limitations.
As of August 31, 2019, we had not recognized a deferred tax liability on $425,028 of undistributed earnings for
certain foreign subsidiaries, because these earnings are intended to be indefinitely reinvested. If such earnings were
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)
distributed, some countries may impose additional taxes. The unrecognized deferred tax liability (the amount payable
if distributed) is approximately $54,000.
Portions of our operations are subject to reduced tax rates or are free of tax under various tax holidays which
expire between fiscal 2020 and 2023. Some of the holidays are renewable at reduced levels, under certain conditions,
with possible renewal periods through 2033. The income tax benefits attributable to the tax status of these subsidiaries
were estimated to be approximately $95,000, $103,000 and $95,000 in fiscal 2019, 2018 and 2017, respectively.
The revaluation of deferred tax assets and liabilities due to enacted changes in tax laws and tax rates did not
have a material impact on our effective tax rate in fiscal 2019. Changes in tax laws and tax rates decreased our net
deferred tax assets by $247,216 in fiscal 2018.
The components of our 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
Deferred amortization deductions
Indirect effects of unrecognized tax benefits
Licenses and other intangibles
Other
Total deferred tax assets
Valuation allowance
Deferred tax assets, net of valuation allowance
Deferred tax liabilities
Revenue recognition
Investments in subsidiaries
Intangibles
Other
Total deferred tax liabilities
Net deferred tax assets
August 31,
2019
August 31,
2018
$
446,920 $
343,415
116,518
623,986
292,045
527,748
175,196
793,084
302,093
1,964,506
213,496
110,424
428,703
259,276
400,253
122,821
728,564
355,152
31,798
212,710
5,455,592
2,993,116
(606,765)
(451,775)
4,848,827
2,541,341
(43,124)
(182,186)
(234,098)
(173,187)
(632,595)
(66,128)
(138,417)
(205,741)
(169,977)
(580,263)
$
4,216,232 $
1,961,078
We recorded valuation allowances of $606,765 and $451,775 as of August 31, 2019 and 2018, respectively,
against deferred tax assets principally associated with certain tax credit and tax net operating loss carryforwards, as
we believe it is more likely than not that these assets will not be realized. For all other deferred tax assets, we believe
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 2019, we recorded a net increase of $154,990 in the valuation allowance. The majority
of this change related to valuation allowances on certain tax credit carryforwards, as the Company believes it is more
likely than not that these assets will not be realized. During fiscal 2018, we recorded a net decrease of $1,112,779 in
the valuation allowance. Substantially all of this change related to the write-off of certain tax credit carryforwards for
which we had a full valuation allowance.
We had tax credit carryforwards as of August 31, 2019 of $527,748, of which $24,958 will expire between 2020
and 2029, $113 will expire between 2030 and 2039, and $502,677 has an indefinite carryforward period. We had net
operating loss carryforwards as of August 31, 2019 of $832,118. Of this amount, $206,741 expires between 2020 and
2029, $28,216 expires between 2030 and 2039, and $597,161 has an indefinite carryforward period.
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)
As of August 31, 2019, we had $1,233,014 of unrecognized tax benefits, of which $908,522, if recognized, would
favorably affect our effective tax rate. As of August 31, 2018, we had $1,210,520 of unrecognized tax benefits, of which
$818,638, if recognized, would favorably affect our effective tax rate. The remaining unrecognized tax benefits as of
August 31, 2019 and 2018 of $324,492 and $391,882, respectively, represent items recorded as 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
2019
2018
$
1,210,520 $
211,671
354,890
(262,055)
(146,732)
(103,384)
(31,896)
945,850
349,343
317,215
(284,711)
(37,050)
(68,605)
(11,522)
$
1,233,014 $
1,210,520
For the year ended August 31, 2019, most of the additions for tax positions related to prior years are for items
that had no net impact to the consolidated financial statements.
We recognize interest and penalties related to unrecognized tax benefits in the Provision for income taxes. During
fiscal 2019, 2018 and 2017, we recognized expense of $8,645, $37,230 and $37,350 in interest and penalties,
respectively. Accrued interest and penalties related to unrecognized tax benefits of $114,566 ($105,852, net of tax
benefits) and $125,886 ($114,631, net of tax benefits) were reflected on our Consolidated Balance Sheets as of August
31, 2019 and 2018, respectively.
We are currently under audit by the U.S. Internal Revenue Service for fiscal 2016. We are 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, we do not believe the outcome of these audits will have a material adverse
effect on our consolidated financial position or results of operations. With limited exceptions, we are no longer subject
to income tax audits by taxing authorities for the years before 2010. We believe that it is reasonably possible that our
unrecognized tax benefits could decrease by approximately $291,000 or increase by approximately $397,000 in the
next 12 months as a result of settlements, lapses of statutes of limitations, tax audit activity and other adjustments.
The majority of these amounts relate to transfer pricing matters in both U.S. and non-U.S. tax jurisdictions.
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)
11. RETIREMENT AND PROFIT SHARING PLANS
Defined Benefit Pension and Postretirement Plans
In the United States and certain other countries, we maintain and administer defined benefit retirement plans
and postretirement medical plans for certain current, retired and resigned employees. In addition, our 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 our
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
Postretirement Plans
August 31,
2019
August 31,
2018
August 31,
2017
August 31,
2019
August 31,
2018
August 31,
2017
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
U.S. and
Non-U.S.
Plans
U.S. and
Non-U.S.
Plans
U.S. and
Non-U.S.
Plans
3.00% 2.24% 4.00% 3.29% 3.75% 2.83%
3.00%
3.98%
3.73%
4.00% 3.29% 3.75% 2.83% 3.50% 2.40%
3.98%
3.73%
3.51%
4.25% 3.02% 4.25% 3.56% 4.25% 3.52%
3.18%
3.64%
4.13%
2.23% 4.02% 2.23% 3.67% 2.25% 3.63%
N/A
2.23% 3.67% 2.25% 3.63% 2.57% 3.47%
N/A
N/A
N/A
N/A
N/A
Discount rate for determining
projected benefit obligation
Discount rate for determining net
periodic pension expense
Long term rate of return on plan
assets
Rate of increase in future
compensation for determining
projected benefit obligation
Rate of increase in future
compensation for determining
net periodic pension expense
We utilize a full yield curve approach to estimate the service and interest cost components by applying specific
spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.
This approach provides a correlation between projected benefit cash flows and the corresponding yield curve spot
rates and provides a precise measurement of service and interest costs. The discount rate assumptions are based on
the expected duration of the benefit payments for each of our 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.
Assumed U.S. Health Care Cost Trend
Our U.S. postretirement plan assumed annual rate of increase in the per capita cost of health care benefits is
6.6% for the plan year ending June 30, 2020. The rate is assumed to decrease on a straight-line basis to 4.5% for the
plan year ending June 30, 2038 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 $93,643, while a one percentage point decrease
would reduce the benefit obligation by $72,873.
U.S. Defined Benefit Pension Plan Settlement Charges
In May 2017, we settled our U.S. pension plan obligations. Plan participants elected to receive either a lump-sum
distribution or to transfer benefits to a third-party annuity provider. As a result of the settlement, we were relieved of
any further obligation under our U.S. pension plan. During fiscal 2017, we recorded a pension settlement charge of
$509,793, and related income tax benefits of $198,219. The charge primarily consisted of unrecognized actuarial
losses of $460,908 previously included in Accumulated other comprehensive loss. In connection with the settlement,
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)
we made a $118,500 cash contribution ($48,885 related to additional actuarial losses and $69,615 to fund previously
recorded pension liabilities). In connection with the plan termination, we created a separate defined benefit plan, with
substantially the same terms as the terminated plan, for approximately 600 active employees who are currently eligible
to accrue benefits.
Pension and Postretirement Expense
Pension expense for fiscal 2019, 2018 and 2017 was $137,030, $125,320 and $622,302 (including the above
noted settlement charge), respectively. Postretirement expense for fiscal 2019, 2018 and 2017 was not material to our
Consolidated Financial Statements. Starting in fiscal 2019, the service cost component of pension and postretirement
expense is included in operating expenses while the other components of net benefit cost are included in Other income
(expense), net. Prior period amounts have been revised to conform with the current period presentation.
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)
Benefit Obligation, Plan Assets and Funded Status
The changes in the benefit obligations, plan assets and funded status of our pension and postretirement benefit
plans for fiscal 2019 and 2018 were as follows:
Pension Plans
August 31,
2019
August 31,
2018
U.S. Plans
Non-
U.S. Plans
U.S. Plans
Non-
U.S. Plans
Postretirement Plans
August 31,
2019
August 31,
2018
U.S. and
Non-U.S.
Plans
U.S. and
Non-U.S.
Plans
$ 331,916 $ 1,772,712 $ 342,863 $ 1,816,462 $ 535,632 $ 529,680
3,100
12,364
—
—
—
—
—
88,913
52,466
11,989
28,510
2,105
(6,477)
(9,343)
50,002
379,173
(13,825)
—
(85,624)
(68,047)
4,233
10,626
—
—
—
—
4,289
(16,149)
(13,946)
—
81,840
46,993
12,189
(121)
28,696
(4,946)
(70,124)
(25,942)
(69,841)
(42,494)
18,056
20,498
20,929
17,537
—
—
—
—
—
16,880
(13,637)
(833)
—
—
—
(2,782)
—
(18,001)
(10,499)
(1,232)
Reconciliation of benefit obligation
Benefit obligation, beginning of year
Service cost
Interest cost
Participant contributions
Acquisitions/divestitures/transfers
Amendments
Curtailment
Pension settlement
Actuarial (gain) loss
Benefits paid
Exchange rate impact
Benefit obligation, end of year
$ 383,557 $ 2,166,377 $ 331,916 $ 1,772,712 $ 576,596 $ 535,632
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
$ 210,576 $ 1,127,376 $ 204,629 $ 1,154,128 $
28,713 $
26,541
50,397
—
10,131
—
—
(13,824)
—
97,845
25,347
81,531
11,989
(8,801)
(85,624)
(35,601)
(5,278)
—
6,792
—
4,924
—
(505)
—
20,882
109,292
11,920
13,176
—
4,289
(13,946)
—
12,189
(71,562)
(69,841)
(13,622)
—
—
—
—
(13,637)
(10,499)
—
—
Fair value of plan assets, end of year
$ 257,280 $ 1,214,062 $ 210,576 $ 1,127,376 $
31,920 $
28,713
Funded status, end of year
$ (126,277) $ (952,315) $ (121,340) $ (645,336) $ (544,676) $ (506,919)
Amounts recognized in the Consolidated
Balance Sheets
Non-current assets
Current liabilities
Non-current liabilities
$
6,707 $
67,396 $
6,757 $ 106,621 $
— $
—
(10,473)
(33,981)
(10,854)
(27,306)
(1,257)
(1,856)
(122,511)
(985,730)
(117,243)
(724,651)
(543,419)
(505,063)
Funded status, end of year
$ (126,277) $ (952,315) $ (121,340) $ (645,336) $ (544,676) $ (506,919)
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)
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, 2019 and 2018 was as follows:
Pension Plans
August 31,
2019
August 31,
2018
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Postretirement Plans
August 31,
2019
August 31,
2018
U.S. and
Non-U.S.
Plans
U.S. and
Non-U.S.
Plans
Net loss
Prior service (credit) cost
$ 106,328 $ 633,619 $ 105,580 $ 357,250 $ 121,798 $ 114,827
—
21,954
—
22,293
19,427
23,671
Accumulated other comprehensive loss,
pre-tax
$ 106,328 $ 655,573 $ 105,580 $ 379,543 $ 141,225 $ 138,498
Funded Status for Defined Benefit Plans
The accumulated benefit obligation for defined benefit pension plans as of August 31, 2019 and 2018 was as
follows:
Accumulated benefit obligation
August 31,
2019
August 31,
2018
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
$
376,886 $
1,964,148 $
325,152 $
1,614,649
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, 2019 and 2018:
Projected benefit obligation in excess of
plan assets
Projected benefit obligation
Fair value of plan assets
Pension Plans
August 31,
2019
August 31,
2018
U.S. Plans
Non-U.S.
Plans
U.S. Plans
Non-U.S.
Plans
Postretirement Plans
August 31,
2019
U.S. and
Non-U.S.
Plans
August 31,
2018
U.S. and
Non-U.S.
Plans
$ 132,984 $ 1,514,448 $ 128,097 $ 1,009,762 $ 576,596 $ 535,632
—
494,065
—
257,805
31,920
28,713
August 31,
2019
August 31,
2018
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
$
132,984 $
1,300,082 $
128,097 $
848,217
—
465,935
—
220,220
F- 33
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, our 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. We recognize 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 us. 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
Our target allocation for fiscal 2020 and weighted-average plan assets allocations as of August 31, 2019 and
2018 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
2020 Target
Allocation
2019
2018
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
—%
100
—
—
—
27%
—%
19%
—%
20%
53
1
16
3
95
5
—
—
59
2
17
3
94
6
—
—
57
2
17
4
100%
100%
100%
100%
100%
100%
F- 34
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 our 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, 2019 were as follows:
Non-U.S. Plans
Equity
Mutual fund equity securities
Fixed Income
Non-U.S. government debt securities
Non-U.S. corporate debt securities
Mutual fund debt securities
Cash and short-term investments
Insurance contracts
Other
Total
Level 1
Level 2
Level 3
Total
$
— $
226,386 $
— $
226,386
125,332
19,562
—
9,799
—
—
—
—
569,712
9,426
76,219
44,205
—
—
—
—
133,421
—
125,332
19,562
569,712
19,225
209,640
44,205
$
154,693 $
925,948 $
133,421 $
1,214,062
There were no transfers between Levels 1 and 2 during fiscal 2019. The level 3 assets are invested in an insurance
buy-in contract in a Non-U.S. plan. The fair value of the assets is set to an actuarially calculated present value of the
underlying liabilities.
The U.S. Plans have $289,200 in Level 2 assets, primarily made up of U.S. corporate debt securities of $166,756
and U.S. government, state and local debt securities of $71,745.
The following table provides a reconciliation of the beginning and ending balances of Level 3 assets for fiscal
2019:
Level 3 Assets
Beginning balance
Purchases, sales and settlements
Changes in fair value
Ending Balance
Fiscal 2019
$
114,960
17,428
1,033
$
133,421
F- 35
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)
The fair values of defined benefit pension and postretirement plan assets as of August 31, 2018 were as follows:
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
$
— $
222,061 $
— $
222,061
117,389
4
17,687
—
—
—
535,092
5,502
72,820
41,861
—
—
—
114,960
—
117,389
535,096
23,189
187,780
41,861
$
135,080 $
877,336 $
114,960 $ 1,127,376
There were no transfers between Levels 1 and 2 during fiscal 2018. The level 3 assets are invested in an insurance
buy-in contract in a Non-U.S. plan. The fair value of the assets is set to an actuarially calculated present value of the
underlying liabilities.
The U.S. Plans have $239,289 in Level 2 assets, primarily made up of U.S. corporate debt securities of $136,814
and U.S. government, state and local debt securities of $58,239.
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. We estimate we will pay approximately $93,292 in fiscal 2020 related
to contributions to our U.S. and non-U.S. defined benefit pension plans and benefit payments related to the unfunded
frozen plan for former pre-incorporation partners. We have not determined whether we will make additional voluntary
contributions for our defined benefit pension plans. Our postretirement plan contributions in fiscal 2020 are not expected
to be material to our 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:
2020
2021
2022
2023
2024
2025-2029
Pension Plans
U.S. Plans
Non-U.S.
Plans
Postretirement
Plans
U.S. and Non-
U.S. Plans
$
14,097 $
73,946 $
14,870
15,638
16,425
17,144
95,831
80,978
87,353
101,844
102,642
559,093
11,727
13,378
15,144
17,065
19,224
131,206
Defined Contribution Plans
In the United States and certain other countries, we maintain and administer defined contribution plans for certain
current, retired and resigned employees. Total expenses recorded for defined contribution plans were $530,501,
$485,736 and $454,124 in fiscal 2019, 2018 and 2017, respectively.
F- 36
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)
12. SHARE-BASED COMPENSATION
Share Incentive Plans
The Amended and Restated Accenture plc 2010 Share Incentive Plan, as amended and approved by our
shareholders in 2018 (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 99,000,000 Accenture plc Class A ordinary shares are
currently authorized for awards under the Amended 2010 SIP. As of August 31, 2019, there were 16,684,906 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. We issue 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:
2019
Fiscal
2018
2017
Total share-based compensation expense included in Net income
$
1,093,253 $
976,908 $
795,235
Income tax benefit related to share-based compensation included in
Net income
356,062
404,124
349,114
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 our 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 2019 was as follows:
Nonvested balance as of August 31, 2018
Granted (1)
Vested (2)
Forfeited
Nonvested balance as of August 31, 2019
Number of Restricted
Share Units
Weighted Average
Grant-Date Fair Value
19,078,607 $
8,942,952
(7,625,120)
(1,394,324)
19,002,115 $
125.59
144.52
119.89
127.32
136.66
_______________
(1)
The weighted average grant-date fair value for restricted share units granted for fiscal 2019, 2018 and 2017
was $144.52, $153.33 and $117.72, respectively.
(2)
The total grant-date fair value of restricted share units vested for fiscal 2019, 2018 and 2017 was $914,206,
$842,002 and $726,324, respectively.
As of August 31, 2019, there was $967,811 of total unrecognized restricted share unit compensation expense
related to nonvested awards, which is expected to be recognized over a weighted average period of 1.2 years. As of
August 31, 2019, there were 530,575 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 2019, 2018 or 2017. As of August 31, 2019 we had 3,751 stock
options outstanding and exercisable at a weighted average exercise price of $48.11 and a weighted average remaining
contractual term of 1.4 years.
F- 37
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)
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, 2019, we had issued 59,545,725 Accenture plc Class A ordinary shares under the 2010 ESPP. We issued
5,433,817, 5,428,356 and 6,103,977 shares to employees in fiscal 2019, 2018 and 2017, respectively, under the 2010
ESPP.
F- 38
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)
13. SHAREHOLDERS’ EQUITY
Accenture plc
Ordinary Shares
We have 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
Most of our partners who received Accenture Canada Holdings Inc. exchangeable shares in connection with our
transition to a corporate structure received a corresponding number of Accenture plc 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. 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 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 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 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 Canada Holdings
Inc. exchangeable shares outstanding. Class X ordinary shares are not transferable without the consent of Accenture
plc.
Equity of Subsidiaries Redeemable or Exchangeable for Accenture plc Class A Ordinary Shares
Accenture Canada Holdings Inc. Exchangeable Shares
Partners resident in Canada and New Zealand received Accenture Canada Holdings Inc. exchangeable shares
in connection with our 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. We
may, at our 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.
F- 39
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)
14. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS’ EQUITY
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 and Accenture Canada Holdings Inc. exchangeable shares held by current and former
members of Accenture Leadership and their permitted transferees. As of August 31, 2019, our aggregate available
authorization was $3,674,089 for our publicly announced open-market share purchase and these other share purchase
programs.
Our share purchase activity during fiscal 2019 was as follows:
Open-market share purchases (1)
Other share purchase programs
Other purchases (2)
Total
_______________
Accenture plc Class A
Ordinary Shares
Accenture Canada
Holdings Inc. Exchangeable Shares
Shares
Amount
Shares
Amount
13,686,253 $
2,254,576
— $
—
—
2,744,554
414,760
128,282
—
16,430,807 $
2,669,336
128,282 $
—
21,778
—
21,778
(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 2019, 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.
Cancellation of Treasury Shares
During fiscal 2019, we cancelled 17,599,481 Accenture plc Class A ordinary shares that were held as treasury
shares and had an aggregate cost of $2,745,321. 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.
Dividends
Our dividend activity during fiscal 2019 was as follows:
Dividend Payment Date
Dividend
Per
Share
Accenture plc Class A
Ordinary Shares
Accenture Canada
Holdings Inc. Exchangeable Shares
Record Date
Cash Outlay
Record Date
Cash Outlay
Total Cash
Outlay
November 15, 2018
$
1.46 October 18, 2018
May 15, 2019
Total Dividends
1.46 April 11, 2019
$
$
931,460 October 16, 2018
930,265 April 9, 2019
1,861,725
$
$
1,378
1,250
2,628
$
$
932,838
931,515
1,864,353
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 Events
On September 23, 2019, the Board of Directors of Accenture plc declared a quarterly cash dividend of $0.80 per
share on our Class A ordinary shares for shareholders of record at the close of business on October 17, 2019 payable
on November 15, 2019. The payment of the cash dividend will result in the issuance of an immaterial number of
additional restricted share units to holders of restricted share units.
F- 40
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. LEASE COMMITMENTS
We have 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 2019, 2018 and 2017 was as follows:
Rental expense
Sublease income from third parties
2019
Fiscal
2018
2017
$
666,461 $
653,531 $
617,014
(26,863)
(28,219)
(28,992)
Future minimum rental commitments under non-cancelable operating leases as of August 31, 2019 were as
follows:
2020
2021
2022
2023
2024
Thereafter
Operating
Lease
Payments
Operating
Sublease
Income
$
688,020 $
597,307
516,544
428,481
363,107
1,246,097
$
3,839,556 $
(24,884)
(17,908)
(8,535)
(7,541)
(7,184)
(30,708)
(96,760)
16. COMMITMENTS AND CONTINGENCIES
Commitments
We have either the right to purchase at fair value or, if certain events occur, may be required to purchase at fair
value outstanding shares of our SinnerSchrader AG subsidiary. As of August 31, 2019 and 2018, we have reflected
the fair value of approximately $10,000 and $47,000, respectively, related to redeemable common stock of the
subsidiary 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, we have entered into
contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters.
These arrangements with clients can include provisions whereby we have 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, our consulting arrangements may include warranty provisions that our solutions will substantially
operate in accordance with the applicable system requirements. Indemnification provisions are also included in
arrangements under which we agree 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, we have contractual recourse against third parties for certain payments we made in connection with
arrangements where third-party nonperformance has given rise to the client’s claim. Payments we made under any
of the arrangements described above are generally conditioned on the client making a claim, which may be disputed
by us 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, 2019 and 2018, our aggregate potential liability to our clients for expressly limited guarantees
involving the performance of third parties was approximately $794,000 and $782,000, respectively, of which all but
approximately $128,000 and $130,000, respectively, may be recovered from the other third parties if we are 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, we cannot reasonably estimate the aggregate maximum potential liability,
F- 41
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)
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, we have not been required to make any significant payment under any of the arrangements described
above. We have assessed the current status of performance/payment risk related to arrangements with limited
guarantees, warranty obligations, unspecified limitations and/or indemnification provisions and believe that any
potential payments would be immaterial to the Consolidated Financial Statements.
Legal Contingencies
As of August 31, 2019, we or our present personnel had been named as a defendant in various litigation matters.
We and/or our personnel also from time to time are involved in investigations by various regulatory or legal authorities
concerning matters arising in the course of our business around the world. Based on the present status of these
matters, including the putative class action lawsuit discussed below, management believes the range of reasonably
possible losses in addition to amounts accrued, net of insurance recoveries, will not have a material effect on our
results of operations or financial condition.
On July 24, 2019, Accenture was named in a putative class action lawsuit filed by consumers of Marriott
International, Inc. (“Marriott”) in the U.S. District Court for the District of Maryland. The complaint alleges negligence
by us, and seeks monetary damages, costs and attorneys’ fees and other related relief, relating to a data security
incident involving unauthorized access to the reservations database of Starwood Worldwide Resorts, Inc. (“Starwood”),
which was acquired by Marriott on September 23, 2016. Since 2009, we have provided certain IT infrastructure
outsourcing services to Starwood. We believe the lawsuit is without merit and we will vigorously defend it. We cannot
reasonably estimate a range of loss, if any, at this time.
F- 42
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. 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.
Our chief operating decision makers are our Chief Executive Officer and Chief Financial Officer. Our operating
segments are managed separately because each operating segment represents a strategic business unit providing
consulting and outsourcing services to clients in different industries.
Our reportable operating segments are our five operating groups, which are Communications, Media &
Technology, Financial Services, Health & Public Service, Products and Resources. Information regarding our reportable
operating segments is as follows:
Fiscal
2019
Communications,
Media &
Technology
Financial
Services
Health &
Public
Service
Products
Resources
Other
Total
Revenues
$
8,757,250
$ 8,493,819
$ 7,160,787
$ 12,004,934
$ 6,771,976
$ 26,247
$ 43,215,013
Depreciation and amortization (2)
Operating income
Net assets (liabilities) as of
August 31 (3)
2018
146,607
150,451
1,554,820
1,237,918
154,177
738,974
282,772
158,753
1,719,881
1,053,481
—
—
892,760
6,305,074
1,202,697
(46,302)
1,092,836
1,736,031
1,016,019
92,224
5,093,505
Revenues (1)
$
8,229,842
$ 8,565,695
$ 6,877,779
$ 11,337,863
$ 5,942,012
$ 39,343
$ 40,992,534
Depreciation and amortization (2)
Operating income (1)
Net assets as of August 31 (3)
2017
176,232
161,451
1,379,914
1,365,427
984,345
23,666
171,084
765,838
989,150
271,853
1,663,852
146,156
723,748
—
—
926,776
5,898,779
1,571,620
1,046,216
153,725
4,768,722
Revenues (1)
$
7,097,353
$ 7,654,465
$ 6,360,695
$ 9,921,960
$ 5,096,324
$ 46,044
$ 36,176,841
Depreciation and amortization (2)
Operating income (1)
Net assets as of August 31 (3)
_______________
148,690
147,343
1,057,334
1,256,125
916,325
155,386
143,659
715,136
911,605
228,400
1,573,477
133,697
589,330
—
—
801,789
5,191,402
1,299,898
953,820
112,264
4,349,298
(1)
(2)
(3)
Effective September 1, 2018, we adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606) and FASB ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Prior period amounts
have been revised to conform with the current period presentation. In addition, we updated operating group
results for fiscal 2018 to include an acquisition previously categorized within Other.
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.
We do not allocate total assets by operating segment. Operating segment assets directly attributed to an
operating segment and provided to the chief operating decision makers include receivables and current and
non-current contract assets, 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.
F- 43
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 are attributed to geographic regions and countries based on where client services are supervised.
Information regarding geographic regions and countries is as follows:
Fiscal
2019
North America
Europe
Growth Markets
Total
Revenues
$ 19,986,136 $ 14,680,739 $
8,548,138 $ 43,215,013
Property and equipment, net as of August 31
395,782
354,362
641,022
1,391,166
Revenues (1)
2018
$ 18,460,395 $ 14,625,769 $
7,906,370 $ 40,992,534
Property and equipment, net as of August 31
375,237
319,487
569,296
1,264,020
Revenues (1)
2017
$ 16,889,272 $ 12,471,454 $
6,816,115 $ 36,176,841
Property and equipment, net as of August 31
274,463
294,154
571,981
1,140,598
_______________
(1)
Effective September 1, 2018, we adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606). Prior period amounts have been revised to conform with the current period presentation.
Our business in the United States represented 44%, 43% and 45% of our consolidated revenues during fiscal
2019, 2018 and 2017, respectively. No other country individually comprised 10% or more of our consolidated revenues
during these periods. Business in Ireland, our country of domicile, represented approximately 1% of our consolidated
revenues during each of fiscal 2019, 2018 and 2017.
We conduct business in Ireland and in the following countries that hold 10% or more of our total consolidated
Property and equipment, net:
United States
India
Ireland
Revenues by type of work were as follows:
Consulting
Outsourcing
Total Revenues
_______________
August 31,
2019
August 31,
2018
August 31,
2017
26%
18
7
27%
19
7
23%
25
5
2019
Fiscal
2018 (1)
2017 (1)
$ 24,177,428 $ 22,978,798 $ 20,080,455
19,037,585
18,013,736
16,096,386
43,215,013
40,992,534
36,176,841
(1)
Effective September 1, 2018, we adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606). Prior period amounts have been revised to conform with the current period presentation.
F- 44
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)
18. QUARTERLY DATA (unaudited)
Fiscal 2019
Revenues
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
Fiscal 2018 (1)
Revenues
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
_______________
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Annual
$ 10,605,546 $ 10,454,129 $ 11,099,688 $ 11,055,650 $ 43,215,013
7,308,121
1,629,012
1,291,324
1,274,720
7,399,780
1,386,626
1,140,720
1,124,449
7,571,390
1,717,943
1,268,649
1,249,516
7,621,034
29,900,325
1,571,493
1,145,548
1,130,427
6,305,074
4,846,241
4,779,112
638,877,445
638,639,729
637,831,341
637,049,388
638,098,125
652,151,450
649,170,699
649,297,717
650,523,417
650,204,873
$
$
2.00 $
1.96 $
1.76 $
1.73 $
1.96 $
1.93 $
1.77 $
1.74 $
7.49
7.36
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Annual
$
9,884,313 $
9,909,238 $ 10,694,996 $ 10,503,987 $ 40,992,534
6,820,160
1,498,176
1,188,542
1,123,660
7,049,698
1,296,044
919,540
863,703
7,362,981
1,634,875
1,058,141
1,043,020
7,266,331
28,499,170
1,469,684
1,048,371
1,029,524
5,898,779
4,214,594
4,059,907
615,835,525
617,854,667
639,217,344
640,575,241
628,451,742
656,671,417
656,118,796
654,600,026
653,960,751
655,296,150
$
$
1.82 $
1.79 $
1.40 $
1.37 $
1.63 $
1.60 $
1.61 $
1.58 $
6.46
6.34
(1)
Effective September 1, 2018, we adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606) and FASB ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Prior period amounts
have been revised to conform with the current period presentation.
F- 45