-- Revenues increased 5% in U.S. dollars and 7%
in local currency to $8.9 billion --
-- EPS of $1.05 included a $0.47 pension
settlement charge. Excluding this charge, EPS were $1.52, compared
with $1.41 in the third quarter last year --
-- Operating income was $865 million, including
the $510 million pension settlement charge. Excluding the charge,
operating income was $1.38 billion with operating margin of 15.5%,
compared with $1.31 billion and 15.5% in the third quarter last
year --
-- New bookings were $9.8 billion, with
record consulting bookings of $5.2 billion and outsourcing bookings
of $4.6 billion --
-- “The New” – digital-, cloud- and
security-related services – accounted for approximately 50% of
total revenues, with continued strong double-digit growth --
-- Accenture updates business outlook for
fiscal 2017 --
Accenture (NYSE:ACN) reported financial results for the third
quarter of fiscal 2017, ended May 31, 2017, with net revenues of
$8.9 billion, an increase of 5 percent in U.S. dollars
and 7 percent in local currency over the same period last year.
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Diluted earnings per share were $1.05, including the impact of a
pension settlement charge of $510 million, pre-tax, or $0.47
per share, in connection with the company’s previously disclosed
termination of its U.S. pension plan. Excluding this charge,
diluted earnings per share were $1.52, compared with $1.41 for the
third quarter last year.
Operating income for the quarter was $865 million, or 9.8
percent of net revenues, including the $510 million pension
settlement charge. Excluding this charge, operating income was
$1.38 billion, or 15.5 percent of net revenues, compared with
$1.31 billion, or 15.5 percent of net revenues for the third
quarter last year.
New bookings for the quarter were $9.8 billion, with record
consulting bookings of $5.2 billion and outsourcing bookings
of $4.6 billion.
Pierre Nanterme, Accenture’s chairman and CEO, said, “We are
pleased with our strong third-quarter financial results. We
delivered 7 percent revenue growth in local currency and gained
significant market share, with broad-based growth across most
dimensions of our business. I am particularly pleased with our new
bookings of $9.8 billion, which demonstrate that our services and
capabilities continue to be highly differentiated in the
marketplace.
“We are clearly benefiting from the diversity of our business –
from an industry, geographic and capability standpoint – which
drives durability in our financial performance. At the same time,
our focused investments in high-growth areas, such as digital,
cloud and security services, are further differentiating Accenture
and enabling us to grow ahead of the market. We remain very
well-positioned to continue driving profitable growth and
delivering value for our clients and shareholders.”
Financial Review
Revenues before reimbursements (“net revenues”) for the third
quarter of fiscal 2017 were $8.87 billion, compared with
$8.43 billion for the third quarter of fiscal 2016, an
increase of 5 percent in U.S. dollars and 7 percent in
local currency. Net revenues for the quarter reflect a
foreign-exchange impact of approximately negative 2 percent,
compared with the negative 2.5 percent impact we had
previously assumed. Adjusting for the actual foreign-exchange
impact, the company’s guided range for quarterly net revenues was
approximately $8.70 billion to $8.95 billion. Accenture’s
third quarter fiscal 2017 net revenues were in the upper end of
this adjusted range.
- Consulting net revenues for the quarter
were $4.82 billion, an increase of 4 percent in U.S. dollars and 6
percent in local currency compared with the third quarter of fiscal
2016.
- Outsourcing net revenues were
$4.05 billion, an increase of 6 percent in U.S. dollars and
7 percent in local currency over the third quarter of fiscal
2016.
Diluted EPS for the quarter were $1.05, compared with $1.41 for
the third quarter last year. The pension settlement charge had a
negative $0.47 impact on EPS in the third quarter of fiscal 2017.
Excluding this charge, EPS for the quarter were $1.52, an increase
of $0.11 from the third quarter last year. The $0.11 increase in
EPS on an adjusted basis reflects:
- a $0.07 increase from higher
revenue and operating results;
- a $0.02 increase from higher
non-operating income; and
- a $0.02 increase from a lower share
count.
Gross margin (gross profit as a percentage of net revenues) for
the quarter was 32.8 percent, compared with 31.9 percent for
the third quarter last year. Selling, general and administrative
(SG&A) expenses for the quarter were $1.53 billion, or
17.3 percent of net revenues, compared with $1.38 billion, or
16.4 percent of net revenues, for the third quarter last
year.
Operating income for the quarter was $865 million, or
9.8 percent of net revenues, compared with $1.31 billion, or
15.5 percent of net revenues, for the third quarter of fiscal
2016. Excluding the $510 million pension settlement charge,
operating income for the third quarter of fiscal 2017 was $1.38
billion, or 15.5 percent of net revenues.
The company’s effective tax rate for the quarter was
19.4 percent, compared with 26.5 percent for the third
quarter last year. Excluding the impact of the pension settlement
charge, the effective tax rate for the third quarter of fiscal 2017
was 26.6 percent.
Net income for the quarter was $705 million, compared with $950
million for the third quarter last year. Excluding the after-tax
impact of the pension settlement charge, net income for the third
quarter of fiscal 2017 was $1.02 billion.
Operating cash flow for the quarter was $1.79 billion, and
property and equipment additions were $136 million. Free cash
flow, defined as operating cash flow net of property and equipment
additions, was $1.66 billion. For the same period last year,
operating cash flow was $1.59 billion; property and equipment
additions were $94 million; and free cash flow was
$1.50 billion.
Days services outstanding, or DSOs, were 41 days at May 31,
2017, compared with 39 days at Aug. 31, 2016 and 41 days at May 31,
2016.
Accenture’s total cash balance at May 31, 2017 was
$3.4 billion, compared with $4.9 billion at Aug. 31,
2016.
New Bookings
New bookings for the third quarter were $9.8 billion and
reflect a negative 1 percent foreign-currency impact compared
with new bookings in the third quarter last year.
- Consulting new bookings were
$5.2 billion, or 53 percent of total new bookings.
- Outsourcing new bookings were
$4.6 billion, or 47 percent of total new bookings.
Net Revenues by Operating Group
Net revenues by operating group were as follows:
- Communications, Media & Technology:
$1.75 billion, compared with $1.71 billion for the third
quarter of fiscal 2016, an increase of 3 percent in U.S.
dollars and 4 percent in local currency.
- Financial Services: $1.87 billion,
compared with $1.80 billion for the third quarter of fiscal
2016, an increase of 3 percent in U.S. dollars and 6 percent
in local currency.
- Health & Public Service:
$1.55 billion, compared with $1.54 billion for the third
quarter of fiscal 2016, an increase of 1 percent in U.S.
dollars and 2 percent in local currency.
- Products: $2.43 billion, compared
with $2.16 billion for the third quarter of fiscal 2016, an
increase of 13 percent in U.S. dollars and 15 percent in local
currency.
- Resources: $1.25 billion, compared
with $1.22 billion for the third quarter of fiscal 2016, an
increase of 2 percent in U.S. dollars and 4 percent in local
currency.
Net Revenues by Geographic Region
Net revenues by geographic region for the third quarter of
fiscal 2017 were as follows:
- North America: $4.12 billion,
compared with $4.02 billion for the third quarter of fiscal
2016, an increase of 3 percent in both U.S. dollars and local
currency.
- Europe: $3.04 billion, compared
with $2.95 billion for the third quarter of fiscal 2016, an
increase of 3 percent in U.S. dollars and 9 percent in local
currency.
- Growth Markets: $1.70 billion,
compared with $1.47 billion for the third quarter of fiscal 2016,
an increase of 16 percent in U.S. dollars and 13 percent in
local currency.
Rotation to “the New”
Net revenues from “the New” – digital-, cloud- and
security-related services – were approximately $4.7 billion, a
significant increase over the third quarter of fiscal 2016. In the
third quarter, “the New” accounted for approximately
50 percent of total net revenues for the first time – a key
milestone for Accenture.
Returning Cash to
Shareholders
Accenture continues to return cash to shareholders through cash
dividends and share repurchases.
Dividend
On May 15, 2017, a semi-annual cash dividend of $1.21 per share
was paid on Accenture plc Class A ordinary shares to shareholders
of record at the close of business on April 13, 2017 and on
Accenture Holdings plc ordinary shares to shareholders of record at
the close of business on April 10, 2017.
Combined with the semi-annual cash dividend of $1.21 per share
paid on Nov. 15, 2016, this brings the total dividend payments for
the fiscal year to $2.42 per share, for total cash dividend
payments of approximately $1.57 billion.
Share Repurchase Activity
During the third quarter of fiscal 2017, Accenture repurchased
or redeemed 4.9 million shares, including 4.6 million shares
repurchased in the open market, for a total of $589 million.
This brings Accenture’s total share repurchases and redemptions for
the first three quarters of fiscal 2017 to 16.9 million shares,
including 13.7 million shares repurchased in the open market, for a
total of $1.99 billion.
Accenture’s total remaining share repurchase authority at May
31, 2017 was approximately $3.7 billion.
At May 31, 2017, Accenture had approximately 646 million
total shares outstanding, including 618 million Accenture plc
Class A ordinary shares and minority holdings of 28 million
shares (Accenture Holdings plc ordinary shares and Accenture Canada
Holdings Inc. exchangeable shares).
Business Outlook
Fourth Quarter Fiscal 2017
Accenture expects net revenues for the fourth quarter of fiscal
2017 to be in the range of $8.85 billion to
$9.10 billion, 5 percent to 8 percent growth in local
currency, reflecting the company’s assumption of a negative 0.5
percent foreign-exchange impact compared with the fourth quarter of
fiscal 2016.
Fiscal Year 2017
Accenture’s business outlook for the full 2017 fiscal year now
assumes that the foreign-exchange impact on its results in U.S.
dollars will be negative 1 percent compared with fiscal 2016;
the previous foreign-exchange assumption was negative 2
percent.
For fiscal 2017, the company now expects net revenue growth to
be in the range of 6 percent to 7 percent in local
currency, compared with 6 percent to 8 percent previously.
In May 2017, the company recorded a settlement charge of
approximately $510 million, pre-tax, in connection with the
termination of its U.S. pension plan. This settlement charge will
reduce the company’s fiscal 2017 diluted GAAP EPS by approximately
$0.47 and its full-year GAAP operating margin by approximately 150
basis points. The company previously expected the settlement charge
to be approximately $425 million, pre-tax; to reduce its fiscal
2017 diluted GAAP EPS by approximately $0.39; and to reduce its
full-year GAAP operating margin by approximately 120 basis
points.
Accenture now expects diluted GAAP EPS to be in the range of
$5.37 to $5.44, including the $0.47 impact of the pension
settlement charge. Excluding the settlement charge, the company now
expects EPS to be in the range of $5.84 to $5.91. The company
previously expected diluted EPS to be in the range of $5.31 to
$5.48 on a GAAP basis and $5.70 to $5.87 on an adjusted basis.
Accenture now expects GAAP operating margin for the full fiscal
year to be approximately 13.3 percent, including the estimated
150 basis-point impact of the pension settlement charge. Excluding
the settlement charge, the company now expects operating margin to
be approximately 14.8 percent – an expansion of 20 basis
points from fiscal 2016. The company previously expected operating
margin to be in the range of 13.5 percent to 13.7 percent on a GAAP
basis and 14.7 percent to 14.9 percent on an adjusted basis.
For fiscal 2017, the company continues to expect operating cash
flow to be in the range of $4.6 billion to $4.9 billion;
property and equipment additions to be $600 million; and free
cash flow to be in the range of $4.0 billion to
$4.3 billion.
Accenture now expects the GAAP annual effective tax rate to be
in the range of 20.5 percent to 21.5 percent. Excluding the
impact of the settlement charge, the company now expects its annual
effective tax rate to be in the range of 22.5 percent to
23.5 percent. The company previously expected its annual
effective tax rate to be in the range of 21 percent to 23 percent
on a GAAP basis and 22 percent to 24 percent on an adjusted
basis.
Conference Call and Webcast
Details
Accenture will host a conference call at 8:00 a.m. EDT today to
discuss its third-quarter financial results. To participate, please
dial +1 (800) 230-1059 [+1 (612) 234-9960 outside the United
States, Puerto Rico and Canada] approximately 15 minutes before the
scheduled start of the call. The conference call will also be
accessible live on the Investor Relations section of the Accenture
Web site at www.accenture.com.
A replay of the conference call will be available online at
www.accenture.com beginning at 10:30 a.m. EDT today, June 22,
and continuing until Thursday, Sept. 28, 2017. A podcast of the
conference call will be available online at www.accenture.com
beginning approximately 24 hours after the call and continuing
until Thursday, Sept. 28, 2017. The replay will also be available
via telephone by dialing +1 (800) 475-6701 [+1 (320) 365-3844
outside the United States, Puerto Rico and Canada] and entering
access code 424735 from 10:30 a.m. EDT today, June 22, through
Thursday, Sept. 28, 2017.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With more than 411,000
people serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit us
at www.accenture.com.
Additional Information
Accenture discloses information about “the New” – digital-,
cloud- and security-related services – to provide additional
insights into the company’s business. Net 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.”
Non-GAAP Financial
Information
This news release includes certain non-GAAP financial
information as defined by Securities and Exchange Commission
Regulation G. Pursuant to the requirements of this regulation,
reconciliations of this non-GAAP financial information to
Accenture’s financial statements as prepared under generally
accepted accounting principles (GAAP) are included in this press
release. 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.
Accenture’s management believes providing investors with this
information gives additional insights into Accenture’s results of
operations. While Accenture’s management believes that the non-GAAP
financial measures herein are useful in evaluating Accenture’s
operations, this information should be considered as supplemental
in nature and not as a substitute for the related financial
information prepared in accordance with GAAP.
Forward-Looking
Statements
Except for the historical information and discussions contained
herein, statements in this news release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. 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 involve a number of
risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed or implied. These
include, without limitation, risks that: the company’s results of
operations could be adversely affected by volatile, negative or
uncertain economic conditions and the effects of these conditions
on the company’s clients’ businesses and levels of business
activity; the company’s business depends on generating and
maintaining ongoing, profitable client demand for the company’s
services and solutions, including through the adaptation and
expansion of its 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 changing
technological environment could materially affect the company’s
results of operations; if the company is unable to keep its supply
of skills and resources in balance with client demand around the
world and attract and retain professionals with strong leadership
skills, the company’s business, the utilization rate of the
company’s professionals and the company’s results of operations may
be materially adversely affected; the markets in which the company
competes are highly competitive, and the company might not be able
to compete effectively; the company could have liability or the
company’s reputation could be damaged if the company fails to
protect client and/or company data from security breaches or
cyberattacks; the company’s profitability could materially suffer
if the company is unable to obtain favorable pricing for its
services and solutions, if the company is unable to remain
competitive, if its cost-management strategies are unsuccessful or
if it experiences delivery inefficiencies; changes in the company’s
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 the company’s
effective tax rate, results of operations, cash flows and financial
condition; the company’s results of operations could be materially
adversely affected by fluctuations in foreign currency exchange
rates; the company’s business could be materially adversely
affected if the company incurs legal liability; the company’s work
with government clients exposes the company to additional risks
inherent in the government contracting environment; the company
might not be successful at identifying, acquiring, investing in or
integrating businesses, entering into joint ventures or divesting
businesses; the company’s Global Delivery Network is increasingly
concentrated in India and the Philippines, which may expose it to
operational risks; as a result of the company’s geographically
diverse operations and its growth strategy to continue geographic
expansion, the company is more susceptible to certain risks;
adverse changes to the company’s relationships with key alliance
partners or in the business of its key alliance partners could
adversely affect the company’s results of operations; the company’s
services or solutions could infringe upon the intellectual property
rights of others or the company might lose its ability to utilize
the intellectual property of others; if the company is unable to
protect its intellectual property rights from unauthorized use or
infringement by third parties, its business could be adversely
affected; the company’s ability to attract and retain business and
employees may depend on its reputation in the marketplace; if the
company is unable to manage the organizational challenges
associated with its size, the company might be unable to achieve
its business objectives; any changes to the estimates and
assumptions that the company makes in connection with the
preparation of its consolidated financial statements could
adversely affect its financial results; many of the company’s
contracts include payments that link some of its fees to the
attainment of performance or business targets and/or require the
company to meet specific service levels, which could increase the
variability of the company’s revenues and impact its margins; the
company’s results of operations and share price could be adversely
affected if it is unable to maintain effective internal controls;
the company may be subject to criticism and negative publicity
related to its incorporation in Ireland; as well as the risks,
uncertainties and other factors discussed under the “Risk Factors”
heading in Accenture plc’s most recent annual report on Form 10-K
and other documents filed with or furnished to the Securities and
Exchange Commission. Statements in this news release speak only as
of the date they were made, and Accenture undertakes no duty to
update any forward-looking statements made in this news release or
to conform such statements to actual results or changes in
Accenture’s expectations.
ACCENTURE PLCCONSOLIDATED INCOME
STATEMENTS(In thousands of U.S. dollars, except share and
per share amounts)(Unaudited)
Three Months Ended Nine Months Ended May
31, 2017
% of NetRevenues
May 31, 2016
% of NetRevenues
May 31, 2017
% of NetRevenues
May 31, 2016
% of NetRevenues
REVENUES: Revenues before reimbursements (“Net revenues”) $
8,867,036 100 % $ 8,434,757 100 % $ 25,700,224 100 % $ 24,393,485
100 % Reimbursements 489,751 534,287
1,424,348 1,438,596
Revenues
9,356,787 8,969,044 27,124,572 25,832,081
OPERATING
EXPENSES: Cost of services: Cost of services before
reimbursable expenses 5,957,405 67.2 % 5,745,205 68.1 % 17,556,405
68.3 % 16,771,598 68.8 % Reimbursable expenses 489,751
534,287 1,424,348
1,438,596
Cost of services
6,447,156 6,279,492 18,980,753 18,210,194 Sales and marketing
986,228 11.1 % 933,770 11.1 % 2,746,544 10.7 % 2,639,895 10.8 %
General and administrative costs 548,175 6.2 % 449,839 5.3 %
1,551,435 6.0 % 1,366,745 5.6 % Pension settlement charge
509,793 5.7 % — — 509,793 2.0 %
— —
Total operating expenses
8,491,352 7,663,101 23,788,525
22,216,834
OPERATING INCOME 865,435 9.8
% 1,305,943 15.5 % 3,336,047 13.0 % 3,615,247 14.8 % Interest
income 8,549 7,679 25,574 21,532 Interest expense (3,613 ) (3,711 )
(10,637 ) (12,306 ) Other income (expense), net (4,213 ) (16,207 )
(22,846 ) (33,391 ) Gain (loss) on sale of businesses 8,242
— (4,107 ) 553,577
INCOME BEFORE INCOME TAXES 874,400 9.9 % 1,293,704 15.3 %
3,324,031 12.9 % 4,144,659 17.0 % Provision for income taxes
169,599 343,421 672,273
925,837
NET INCOME 704,801 7.9 % 950,283 11.3 %
2,651,758 10.3 % 3,218,822 13.2 % Net income attributable to
noncontrolling interests in Accenture Holdings plc and Accenture
Canada Holdings Inc. (23,024 ) (42,574 ) (107,437 ) (145,529 ) Net
income attributable to noncontrolling interests – other (1)
(12,309 ) (10,462 ) (31,625 ) (30,627 )
NET
INCOME ATTRIBUTABLE TO ACCENTURE PLC $ 669,468 7.6 % $
897,247 10.6 % $ 2,512,696 9.8 % $ 3,042,666
12.5 %
CALCULATION OF EARNINGS PER SHARE: Net income
attributable to Accenture plc $ 669,468 $ 897,247 $ 2,512,696 $
3,042,666 Net income attributable to noncontrolling interests in
Accenture Holdings plc and Accenture Canada Holdings Inc. (2)
23,024 42,574 107,437
145,529 Net income for diluted earnings per share
calculation $ 692,492 $ 939,821 $ 2,620,133 $
3,188,195
EARNINGS PER SHARE: -Basic $ 1.08 $ 1.44 $
4.05 $ 4.86 -Diluted $ 1.05 $ 1.41 $ 3.96 $ 4.77
WEIGHTED
AVERAGE SHARES: -Basic 619,436,804 623,725,913 621,025,256
625,563,431 -Diluted 658,770,425 666,403,323 661,130,306
668,525,906 Cash dividends per share $ 1.21 $ 1.10 $ 2.42 $ 2.20
_________ (1) Comprised primarily of noncontrolling
interest attributable to the noncontrolling shareholders of
Avanade, Inc. (2) Diluted earnings per share assumes the redemption
of all Accenture Holdings plc ordinary shares owned by holders of
noncontrolling interests and the exchange of all Accenture Canada
Holdings Inc. exchangeable shares for Accenture plc Class A
ordinary shares on a one-for-one basis. The income effect does not
take into account “Net income attributable to noncontrolling
interests — other,” since those shares are not redeemable or
exchangeable for Accenture plc Class A ordinary shares.
ACCENTURE PLCSUMMARY OF
REVENUES(In thousands of U.S.
dollars)(Unaudited)
PercentIncrease (Decrease) U.S.
dollars PercentIncrease (Decrease)
Local Currency Three Months Ended May 31,
2017 May 31, 2016 OPERATING GROUPS
Communications, Media & Technology $ 1,754,657 $ 1,707,707 3%
4% Financial Services 1,865,071 1,804,876 3 6 Health & Public
Service 1,554,424 1,539,496 1 2 Products 2,429,140 2,158,070 13 15
Resources 1,245,875 1,220,809 2 4 Other 17,869 3,799
n/m n/m
TOTAL Net Revenues 8,867,036 8,434,757 5% 7%
Reimbursements 489,751 534,287 (8)
TOTAL
REVENUES $ 9,356,787 $ 8,969,044 4%
GEOGRAPHY North America $ 4,122,850 $ 4,016,565 3% 3% Europe
3,042,923 2,946,374 3 9 Growth Markets 1,701,263 1,471,818
16 13
TOTAL Net Revenues $ 8,867,036 $
8,434,757 5% 7%
TYPE OF WORK Consulting $ 4,820,444 $
4,621,267 4% 6% Outsourcing 4,046,592 3,813,490 6 7
TOTAL Net Revenues $ 8,867,036 $ 8,434,757 5%
7%
Nine Months Ended PercentIncrease
(Decrease) U.S. dollars PercentIncrease
(Decrease) Local Currency May 31, 2017
May 31, 2016 OPERATING GROUPS Communications, Media
& Technology $ 5,061,581 $ 4,919,046 3% 3% Financial Services
5,444,451 5,234,821 4 7 Health & Public Service 4,566,762
4,445,627 3 3 Products 7,014,137 6,142,723 14 16 Resources
3,585,458 3,639,890 (1) — Other 27,835 11,378 n/m n/m
TOTAL Net Revenues 25,700,224 24,393,485 5% 7%
Reimbursements 1,424,348 1,438,596 (1)
TOTAL
REVENUES $ 27,124,572 $ 25,832,081 5%
GEOGRAPHY North America $ 12,060,014 $ 11,570,865 4% 4%
Europe 8,811,601 8,615,845 2 8 Growth Markets 4,828,609
4,206,775 15 11
TOTAL Net Revenues $ 25,700,224
$ 24,393,485 5% 7%
TYPE OF WORK Consulting $
13,819,448 $ 13,260,176 4% 6% Outsourcing 11,880,776
11,133,309 7 8
TOTAL Net Revenues $ 25,700,224
$ 24,393,485 5% 7%
n/m = not meaningful
ACCENTURE PLC
RECONCILIATION OF OPERATING INCOME, AS
REPORTED (GAAP), TO ADJUSTED OPERATING INCOME (NON-GAAP)
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended May 31,
2017 May 31, 2016 OperatingIncome
OperatingMargin OperatingIncome
OperatingMargin
Increase(Decrease) Communications, Media &
Technology $ 286,931 16% $ 259,344 15% $ 27,587 Financial Services
321,052 17 294,367 16 26,685 Health & Public Service 206,570 13
243,137 16 (36,567 ) Products 402,558 17 346,165 16 56,393
Resources 158,117 13 162,930 13 (4,813 ) Pension Settlement Charge
(1) (509,793 ) — — — (509,793 )
Operating Income
(GAAP) 865,435 9.8% 1,305,943 15.5% (440,508 ) Pension
Settlement Charge (1) 509,793 — 509,793
Adjusted Operating Income (non-GAAP) $ 1,375,228
15.5% $ 1,305,943 15.5% $ 69,285
Nine Months Ended May 31, 2017
May 31, 2016 OperatingIncome
OperatingMargin OperatingIncome
OperatingMargin Increase(Decrease)
Communications, Media & Technology $ 759,513 15% $ 749,729 15%
$ 9,784 Financial Services 908,705 17 847,686 16 61,019 Health
& Public Service 594,912 13 625,510 14 (30,598 ) Products
1,175,019 17 923,724 15 251,295 Resources 407,691 11 468,598 13
(60,907 ) Pension Settlement Charge (1) (509,793 ) — — —
(509,793 )
Operating Income (GAAP) 3,336,047 13.0% 3,615,247
14.8% (279,200 ) Pension Settlement Charge (1) 509,793 —
509,793
Adjusted Operating Income (non-GAAP) $
3,845,840 15.0% $ 3,615,247 14.8% $ 230,593
_______________ (1) Represents pension settlement charge related to
the termination of our U.S. pension plan.
ACCENTURE PLC
RECONCILIATION OF NET INCOME AND
DILUTED EARNINGS PER SHARE, AS REPORTED (GAAP), TO NET
INCOMEAND DILUTED EARNINGS PER SHARE, AS ADJUSTED
(NON-GAAP)
(In thousands of U.S. dollars, except
per share amounts)
(Unaudited)
Three Months Ended May 31, 2017
May 31, 2016
As Reported(GAAP)
PensionSettlementCharge
(1)
Adjusted(Non-GAAP)
As Reported(GAAP)
Income before income taxes $ 874,400 $ 509,793 $ 1,384,193 $
1,293,704 Provision for income taxes 169,599
198,219 367,818 343,421 Net income $
704,801 $ 311,574 $ 1,016,375 $ 950,283
Effective tax rate 19.4 % 26.6 % 26.5 % Diluted earnings per share
$ 1.05 $ 0.47 $ 1.52 $ 1.41
Nine Months
Ended May 31, 2017 May 31, 2016
As Reported(GAAP)
PensionSettlementCharge
(1)
Adjusted(Non-GAAP)
As Reported(GAAP)
Gain onSale ofBusiness
(2)
Adjusted(Non-GAAP)
Income before income taxes $ 3,324,031 $ 509,793 $ 3,833,824 $
4,144,659 $ (553,577 ) $ 3,591,082 Provision for income taxes
672,273 198,219 870,492
925,837 (58,278 ) 867,559 Net Income $
2,651,758 $ 311,574 $ 2,963,332 $ 3,218,822 $
(495,299 ) $ 2,723,523 Effective tax rate 20.2 % 22.7
% 22.3 % 24.2 % Diluted earnings per share $ 3.96 $ 0.47 $ 4.43 $
4.77 $ (0.74 ) $ 4.03 _______________ (1) Represents pension
settlement charge related to the termination of our U.S. pension
plan. (2) Represents gain on sale of business related to Navitaire
divestiture
ACCENTURE PLCCONSOLIDATED
BALANCE SHEETS(In thousands of U.S. dollars)
May 31, 2017 August 31, 2016
(Unaudited) ASSETS CURRENT ASSETS: Cash and
cash equivalents $ 3,382,208 $ 4,905,609 Short-term investments
2,639 2,875 Receivables from clients, net 4,474,415 4,072,180
Unbilled services, net 2,267,310 2,150,219 Other current assets
1,079,163 845,339 Total current assets 11,205,735
11,976,222
NON-CURRENT ASSETS: Unbilled services, net 50,914
68,145 Investments 199,465 198,633 Property and equipment, net
1,041,006 956,542 Goodwill 4,610,996 3,609,437 Other non-current
assets 4,027,476 3,800,025
Total non-current assets
9,929,857 8,632,782
TOTAL ASSETS $ 21,135,592
$ 20,609,004
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT
LIABILITIES: Current portion of long-term debt and bank
borrowings $ 2,942 $ 2,773 Accounts payable 1,291,138 1,280,821
Deferred revenues 2,550,233 2,364,728 Accrued payroll and related
benefits 3,613,189 4,040,751 Other accrued liabilities 1,696,823
1,189,851 Total current liabilities 9,154,325
8,878,924
NON-CURRENT LIABILITIES: Long-term debt 24,732
24,457 Other non-current liabilities 3,079,875 3,516,247
Total non-current liabilities 3,104,607 3,540,704
TOTAL
ACCENTURE PLC SHAREHOLDERS’ EQUITY 8,167,356 7,555,262
NONCONTROLLING INTERESTS 709,304 634,114
TOTAL
SHAREHOLDERS’ EQUITY 8,876,660 8,189,376
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY $ 21,135,592 $
20,609,004
ACCENTURE PLCCONSOLIDATED CASH
FLOWS STATEMENTS(In thousands of U.S.
dollars)(Unaudited)
Three Months Ended Nine Months Ended May 31,
2017 May 31, 2016 May 31, 2017
May 31, 2016 CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 704,801 $ 950,283 $ 2,651,758 $ 3,218,822
Depreciation, amortization and asset impairments 194,480 181,010
569,720 535,637 Share-based compensation expense 209,614 226,929
611,937 584,644 Pension settlement charge 460,908 — 460,908 —
(Gain) loss on sale of businesses (8,242 ) — 4,107 (553,577 )
Change in assets and liabilities/other, net 231,011 235,767
(1,267,273 ) (1,184,085 ) Net cash provided by (used in)
operating activities 1,792,572 1,593,989 3,031,157
2,601,441
CASH FLOWS FROM INVESTING
ACTIVITIES: Purchases of property and equipment (135,811 )
(93,655 ) (324,773 ) (336,500 ) Purchases of businesses and
investments, net of cash acquired (412,302 ) (84,911 ) (1,241,500 )
(832,548 ) Proceeds from the sale of businesses and investments,
net of cash transferred (1,268 ) — (24,189 ) 618,310 Other
investing, net 1,684 1,321 8,977 2,860
Net cash provided by (used in) investing activities (547,697 )
(177,245 ) (1,581,485 ) (547,878 )
CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from issuance of ordinary shares 250,019
222,825 600,920 525,992 Purchases of shares (588,622 ) (478,289 )
(1,992,205 ) (1,965,050 ) Cash dividends paid (782,451 ) (717,462 )
(1,567,578 ) (1,438,138 ) Other financing, net (2,522 ) (1,429 )
(8,808 ) (13,364 ) Net cash provided by (used in) financing
activities (1,123,576 ) (974,355 ) (2,967,671 ) (2,890,560 ) Effect
of exchange rate changes on cash and cash equivalents 22,047
20,830 (5,402 ) (25,891 )
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 143,346 463,219 (1,523,401 ) (862,888 )
CASH AND CASH EQUIVALENTS, beginning of period 3,238,862
3,034,659 4,905,609 4,360,766
CASH
AND CASH EQUIVALENTS, end of period $ 3,382,208 $
3,497,878 $ 3,382,208 $ 3,497,878
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170622005270/en/
AccentureRoxanne Taylor,
+1-917-452-5106roxanne.taylor@accenture.com
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