Press release

Accenture Reports Very Strong Second-Quarter Fiscal 2019 Results and Raises Business Outlook for Fiscal 2019

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Accenture (NYSE: ACN) reported financial results for the second quarter
of fiscal 2019, ended Feb. 28, 2019, with revenues of $10.5 billion, an
increase of 5 percent in U.S. dollars and 9 percent in local currency
over the same period last year.

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Q2 FY19 Earnings Infographic (Graphic: Business Wire)

Q2 FY19 Earnings Infographic (Graphic: Business Wire)

Diluted earnings per share were $1.73, compared with $1.37 for the
second quarter last year, which included a $0.21 charge related to U.S.
tax law changes. Diluted EPS for the second quarter of fiscal 2019
increased 9 percent from adjusted diluted EPS of $1.58 in the same
period last year.

Operating income was $1.39 billion, a 7 percent increase over the same
period last year, and operating margin was 13.3 percent, an expansion of
20 basis points.

New bookings for the quarter were $11.8 billion, with consulting
bookings of $6.7 billion and outsourcing bookings of $5.1 billion.

David Rowland, Accenture’s interim chief executive officer, said, “We
delivered outstanding financial results for the second quarter. I am
particularly pleased with our record new bookings of $11.8 billion and
revenue growth of 9 percent in local currency, which reflect significant
market share gains. In addition, we delivered very strong profitability
while generating excellent free cash flow.

“The durability of our performance reflects the power of our highly
differentiated growth strategy — from our leadership position in the
New, to our rapidly growing business in Intelligent Platform Services,
to our relentless focus on leading with innovation. With the successful
execution of our strategy, combined with the disciplined management of
our business, we are very well-positioned to continue growing ahead of
the market and delivering significant value for clients and
shareholders.”

Financial Review

Effective Sept. 1, 2018, Accenture adopted new accounting standards that
affect the accounting for revenue and pension costs. Prior-period
results have been revised to reflect the fiscal 2019 presentation, and
the revised fiscal 2018 results are available at investor.accenture.com.

Revenues for the second quarter of fiscal 2019 were $10.45 billion,
compared with $9.91 billion for the second quarter of fiscal 2018, an
increase of 5 percent in U.S. dollars and 9 percent in local currency,
slightly above the company’s guided range of $10.10 billion to $10.40
billion. The foreign-exchange impact for the quarter was approximately
negative 4 percent, consistent with the assumption provided in the
company’s first-quarter earnings release.

  • Consulting revenues for the quarter were $5.79 billion, an increase of
    6 percent in U.S. dollars and 9 percent in local currency compared
    with the second quarter of fiscal 2018.
  • Outsourcing revenues were $4.67 billion, an increase of 5 percent in
    U.S. dollars and 9 percent in local currency compared with the second
    quarter of fiscal 2018.

Diluted EPS for the quarter were $1.73 compared with $1.37 for the
second quarter last year, which included a $0.21 charge related to U.S.
tax law changes. Excluding this charge, EPS for the second quarter of
fiscal 2018 were $1.58. The $0.15, or 9 percent, increase in EPS on an
adjusted basis in the second quarter of fiscal 2019 reflects:

  • a $0.12 increase from higher revenue and operating results;
  • a $0.05 increase from lower non-operating expense; and
  • a $0.02 increase from a lower share count;

partially offset by

  • a $0.04 decrease from a higher effective tax rate.

Gross margin (gross profit as a percentage of revenues) for the quarter
was 29.2 percent, compared with 28.9 percent for the second quarter last
year. Selling, general and administrative (SG&A) expenses for the
quarter were $1.67 billion, or 16.0 percent of revenues, compared with
$1.56 billion, or 15.8 percent of revenues, for the second quarter last
year.

Operating income for the quarter increased 7 percent, to $1.39 billion,
or 13.3 percent of revenues, compared with $1.30 billion, or
13.1 percent of revenues, for the second quarter of fiscal 2018.

The company’s effective tax rate for the quarter was 17.1 percent,
compared with 26.1 percent for the second quarter last year. Excluding
the charge related to U.S. tax law changes, the effective tax rate for
the second quarter of fiscal 2018 was 15.1 percent.

Net income for the quarter was $1.14 billion, compared with $920 million
for the second quarter last year. Excluding the charge related to U.S.
tax law changes, net income for the second quarter of fiscal 2018 was
$1.06 billion.

Operating cash flow for the quarter was $1.36 billion and property and
equipment additions were $140 million. Free cash flow, defined as
operating cash flow net of property and equipment additions, was
$1.22 billion for the quarter. For the same period last year, operating
cash flow was $924 million; property and equipment additions were
$133 million; and free cash flow was $791 million.

Days services outstanding, or DSOs, were 40 days at Feb. 28, 2019,
compared with 39 days at Aug. 31, 2018 and 40 days at Feb. 28, 2018.

Accenture’s total cash balance at Feb. 28, 2019 was $4.5 billion,
compared with $5.1 billion at Aug. 31, 2018.

New Bookings

New bookings for the second quarter were $11.8 billion and reflect a
negative 5 percent foreign-currency impact compared with new bookings in
the second quarter last year.

  • Consulting new bookings were $6.7 billion, or 57 percent of total new
    bookings.
  • Outsourcing new bookings were $5.1 billion, or 43 percent of total new
    bookings.

Revenues by Operating Group

Revenues by operating group were as follows:

  • Communications, Media & Technology: $2.15 billion, compared with
    $1.98 billion for the second quarter of fiscal 2018, an increase of
    8 percent in U.S. dollars and 12 percent in local currency.
  • Financial Services: $2.05 billion, compared with $2.10 billion for the
    second quarter of fiscal 2018, a decrease of 2 percent in U.S. dollars
    and an increase of 2 percent in local currency.
  • Health & Public Service: $1.71 billion, compared with $1.69 billion
    for the second quarter of fiscal 2018, an increase of 1 percent in
    U.S. dollars and 3 percent in local currency.
  • Products: $2.91 billion, compared with $2.74 billion for the second
    quarter of fiscal 2018, an increase of 6 percent in U.S. dollars and
    10 percent in local currency.
  • Resources: $1.64 billion, compared with $1.40 billion for the second
    quarter of fiscal 2018, an increase of 17 percent in U.S. dollars and
    22 percent in local currency.

Revenues by Geographic Region

Revenues by geographic region were as follows:

  • North America: $4.75 billion, compared with $4.42 billion for the
    second quarter of fiscal 2018, an increase of 8 percent in both U.S.
    dollars and local currency.
  • Europe: $3.63 billion, compared with $3.60 billion for the second
    quarter of fiscal 2018, an increase of 1 percent in U.S. dollars and 7
    percent in local currency.
  • Growth Markets: $2.07 billion, compared with $1.89 billion for the
    second quarter of fiscal 2018, an increase of 9 percent in U.S.
    dollars and 16 percent in local currency.

Returning Cash to Shareholders

Accenture continues to return cash to shareholders through cash
dividends and share repurchases.

Dividend

Accenture plc has declared a semi-annual cash dividend of $1.46 per
share for shareholders of record at the close of business on April 11,
2019. This dividend is payable on May 15, 2019.

Combined with the semi-annual cash dividend of $1.46 per share paid on
Nov. 15, 2018, this will bring the total dividend payments for the
fiscal year to $2.92 per share, for total projected cash dividend
payments of approximately $1.9 billion.

As previously disclosed, the company plans to begin paying dividends on
a quarterly basis in the first quarter of fiscal 2020.

Share Repurchase Activity

During the second quarter of fiscal 2019, Accenture repurchased or
redeemed 6.7 million shares, including 4.6 million shares repurchased in
the open market, for a total of $1.01 billion. This brings Accenture’s
total share repurchases and redemptions for the first half of fiscal
2019 to 11.6 million shares, including 9.0 million shares repurchased in
the open market, for a total of $1.80 billion.

Accenture’s total remaining share repurchase authority at Feb. 28, 2019
was approximately $4.5 billion.

At Feb. 28, 2019, Accenture had approximately 639 million total shares
outstanding, including 638 million Accenture plc Class A ordinary shares
and minority holdings of 0.9 million shares (Accenture Canada Holdings
Inc. exchangeable shares).

Business Outlook

As described in the Financial Review above, Accenture has adopted new
accounting standards that affect the accounting for revenue and pension
costs. Accenture’s business outlook for fiscal 2019 and comparisons to
fiscal 2018 include the impact of these new standards.

Third Quarter Fiscal 2019

Accenture expects revenues for the third quarter of fiscal 2019 to be in
the range of $10.80 billion to $11.10 billion, 5.5 percent to 8.5
percent growth in local currency, reflecting the company’s assumption of
a negative 4.5 percent foreign-exchange impact compared with the third
quarter of fiscal 2018.

Fiscal Year 2019

Accenture’s business outlook for the full 2019 fiscal year continues to
assume that the foreign-exchange impact on its results in U.S. dollars
will be negative 3 percent compared with fiscal 2018.

For fiscal 2019, the company now expects revenue growth to be in the
range of 6.5 percent to 8.5 percent in local currency, compared with
6 percent to 8 percent previously. The company now expects diluted EPS
to be in the range of $7.18 to $7.32, compared with $7.01 to $7.25
previously.

Accenture continues to expect operating margin for the full fiscal year
to be in the range of 14.5 percent to 14.7 percent, an expansion of 10
to 30 basis points from operating margin for fiscal 2018 of
14.4 percent, which reflects the impact of the new revenue and pension
accounting standards.

For fiscal 2019, the company now expects operating cash flow to be in
the range of $5.85 billion to $6.25 billion, compared with $5.75 billion
to $6.15 billion previously; continues to expect property and equipment
additions to be $650 million; and now expects free cash flow to be in
the range of $5.2 billion to $5.6 billion, compared with $5.1 billion to
$5.5 billion previously.

The company now expects its annual effective tax rate to be in the range
of 22.5 percent to 23.5 percent, compared with 23 percent to 25 percent
previously.

Conference Call and Webcast Details

Accenture will host a conference call at 8:00 a.m. EDT today to discuss
its second-quarter financial results. To participate, please dial +1
(800) 230-1074 [+1 (612) 288-0329 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, Mar. 28, and continuing until
Thursday, June 27, 2019. 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, June 27, 2019. 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 464620 from
10:30 a.m. EDT today, Mar. 28, through Thursday, June 27, 2019.

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 477,000 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 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. Accenture provides full-year revenue
guidance on a local-currency basis and not in U.S. dollars because the
impact of foreign exchange rate fluctuations could vary significantly
from the company’s stated assumptions.

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: Accenture’s results of
operations could be adversely affected by volatile, negative or
uncertain economic and political conditions and the effects of these
conditions on the company’s clients’ businesses and levels of business
activity; Accenture’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 Accenture 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; Accenture could face legal, reputational
and financial risks if the company fails to protect client and/or
company data from security breaches or cyberattacks; the markets in
which Accenture operates are highly competitive, and Accenture might not
be able to compete effectively; changes in Accenture’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; Accenture’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; Accenture’s
results of operations could be materially adversely affected by
fluctuations in foreign currency exchange rates; as a result of
Accenture’s geographically diverse operations and its growth strategy to
continue geographic expansion, the company is more susceptible to
certain risks; Accenture’s business could be materially adversely
affected if the company incurs legal liability; Accenture’s work with
government clients exposes the company to additional risks inherent in
the government contracting environment; if Accenture is unable to manage
the organizational challenges associated with its size, the company
might be unable to achieve its business objectives; if Accenture does
not successfully manage and develop its relationships with key alliance
partners or fails to anticipate and establish new alliances in new
technologies, the company’s results of operations could be adversely
affected; Accenture’s ability to attract and retain business and
employees may depend on its reputation in the marketplace; Accenture
might not be successful at acquiring, investing in or integrating
businesses, entering into joint ventures or divesting businesses; if
Accenture is unable to protect its intellectual property rights or if
Accenture’s services or solutions infringe upon the intellectual
property rights of others or the company loses its ability to utilize
the intellectual property of others, its business could be adversely
affected; changes to accounting standards or in the estimates and
assumptions Accenture makes in connection with the preparation of its
consolidated financial statements could adversely affect its financial
results; many of Accenture’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; Accenture’s results of operations and share price could be
adversely affected if it is unable to maintain effective internal
controls; Accenture might be unable to access additional capital on
favorable terms or at all and if the company raises equity capital, it
may dilute its shareholders’ ownership interest in the company;
Accenture 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 PLC

 

CONSOLIDATED INCOME STATEMENTS
(In thousands of
U.S. dollars, except share and per share amounts)

(Unaudited)

 
Three Months Ended Six Months Ended

February 28,
2019

 

% of
Revenues

 

February 28,
2018

 

% of
Revenues

February 28,
2019

 

% of
Revenues

 

February 28,
2018

 

% of
Revenues

REVENUES:
Revenues (1) $ 10,454,129 100.0% $ 9,909,238 100.0% $ 21,059,675 100.0% $ 19,793,551 100.0%
OPERATING EXPENSES:
Cost of services (1) 7,399,780 70.8% 7,049,698 71.1% 14,707,901 69.8% 13,869,858 70.1%
Sales and marketing (1) 1,020,036 9.8% 998,823 10.1% 2,090,052 9.9% 2,000,019 10.1%
General and administrative costs (1) 647,687   6.2% 564,673   5.7% 1,246,084   5.9% 1,129,454   5.7%
Total operating expenses 9,067,503   8,613,194   18,044,037   16,999,331  
OPERATING INCOME 1,386,626 13.3% 1,296,044 13.1% 3,015,638 14.3% 2,794,220 14.1%
Interest income 19,081 9,459 38,712 20,895
Interest expense (5,619 ) (3,840 ) (10,124 ) (8,547 )
Other income (expense), net (1) (23,834 ) (56,866 ) (57,488 ) (67,647 )
INCOME BEFORE INCOME TAXES 1,376,254 13.2% 1,244,797 12.6% 2,986,738 14.2% 2,738,921 13.8%
Provision for income taxes 235,534   325,257   554,694   630,839  
NET INCOME 1,140,720 10.9% 919,540 9.3% 2,432,044 11.5% 2,108,082 10.7%
Net income attributable to noncontrolling interests in Accenture
Holdings plc and Accenture Canada Holdings Inc.
(1,649 ) (37,401 ) (3,537 ) (86,534 )
Net income attributable to noncontrolling interests – other (2) (14,622 ) (18,436 ) (29,338 ) (34,185 )
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC $ 1,124,449   10.8% $ 863,703   8.7% $ 2,399,169   11.4% $ 1,987,363   10.0%
CALCULATION OF EARNINGS PER SHARE:
Net income attributable to Accenture plc $ 1,124,449 $ 863,703 $ 2,399,169 $ 1,987,363
Net income attributable to noncontrolling interests in Accenture
Holdings plc and Accenture Canada Holdings Inc. (3)
1,649   37,401   3,537   86,534  
Net income for diluted earnings per share calculation $ 1,126,098   $ 901,104   $ 2,402,706   $ 2,073,897  
EARNINGS PER SHARE:
-Basic $ 1.76 $ 1.40 $ 3.76 $ 3.22
-Diluted $ 1.73 $ 1.37 $ 3.69 $ 3.16
WEIGHTED AVERAGE SHARES:
-Basic 638,639,729 617,854,667 638,750,881 616,838,561
-Diluted 649,170,699 656,118,796 650,732,700 656,381,177
Cash dividends per share $ $ $ 1.46 $ 1.33
 
_________
(1)   Prior to fiscal year 2019, we presented Revenues before
reimbursements (net revenues), which excluded reimbursements for
travel and other out-of-pocket expenses. In connection with the
fiscal year 2019 adoption of the Financial Accounting Standards
Board Accounting Standards Update (“ASU”) No. 2014-09: “Revenue from
Contracts with Customers” (Topic 606), the Net revenues and
reimbursements lines were eliminated. Effective September 1, 2018,
we also adopted ASU No 2017-07: “Compensation Retirement Benefits”
(Topic 715) which required us to reclassify certain components of
pension service costs from Operating expenses to Non-operating
expenses. Prior period amounts have been revised to conform with the
current period presentation.
(2) Comprised primarily of noncontrolling interest attributable to the
noncontrolling shareholders of Avanade, Inc.
(3) 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 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.
 
         

ACCENTURE PLC

 

SUMMARY OF REVENUES
(In thousands of U.S. dollars)
(Unaudited)

 

 

Percent
Increase
(Decrease)
U.S.

Dollars

Percent
Increase
(Decrease)
Local

Currency

 

Three Months Ended

February 28,
2019

February 28,
2018 (1)

OPERATING GROUPS
Communications, Media & Technology $ 2,145,607 $ 1,978,124 8% 12%
Financial Services 2,052,720 2,102,491 (2) 2
Health & Public Service 1,709,099 1,685,439 1 3
Products 2,906,851 2,737,389 6 10
Resources 1,640,627 1,401,892 17 22
Other (775 ) 3,903   n/m n/m
Total $ 10,454,129   $ 9,909,238   5% 9%
GEOGRAPHY
North America $ 4,753,796 $ 4,415,923 8% 8%
Europe 3,632,765 3,599,496 1 7
Growth Markets 2,067,568   1,893,819   9 16
Total $ 10,454,129   $ 9,909,238   5% 9%
TYPE OF WORK
Consulting $ 5,786,965 $ 5,476,397 6% 9%
Outsourcing 4,667,164   4,432,841   5 9
Total $ 10,454,129   $ 9,909,238   5% 9%
 

Percent
Increase
(Decrease)
U.S.
Dollars

Percent
Increase
(Decrease)
Local

Currency

Six Months Ended

February 28,
2019

February 28,
2018 (1)

OPERATING GROUPS
Communications, Media & Technology $ 4,280,183 $ 3,897,982 10% 13%
Financial Services 4,172,882 4,245,066 (2) 1
Health & Public Service 3,463,589 3,368,614 3 4
Products 5,835,361 5,446,187 7 10
Resources 3,292,166 2,805,868 17 22
Other 15,494   29,834   n/m n/m
Total $ 21,059,675   $ 19,793,551   6% 9%
GEOGRAPHY
North America $ 9,610,098 $ 8,857,667 8% 9%
Europe 7,341,580 7,181,363 2 6
Growth Markets 4,107,997   3,754,521   9 16
Total $ 21,059,675   $ 19,793,551   6% 9%
TYPE OF WORK
Consulting $ 11,754,337 $ 11,021,233 7% 10%
Outsourcing 9,305,338   8,772,318   6 9
Total $ 21,059,675   $ 19,793,551   6% 9%
 
_________
(1)   Effective September 1, 2018, we adopted ASU No. 2014-09 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.
 
     

ACCENTURE PLC

 

OPERATING INCOME BY OPERATING GROUP
(In thousands of U.S.
dollars)
(Unaudited)

 
Three Months Ended
February 28, 2019   February 28, 2018 (1)
Operating
Income
  Operating
Margin
Operating
Income
  Operating
Margin
Increase
(Decrease)
Communications, Media & Technology $ 368,338 17% $ 316,853 16% $ 51,485
Financial Services 269,214 13 311,063 15 (41,849 )
Health & Public Service 145,649 9 157,675 9 (12,026 )
Products 375,179 13 378,490 14 (3,311 )
Resources 228,246   14 131,963   9 96,283  
Total $ 1,386,626   13.3%   $ 1,296,044   13.1%   $ 90,582  
 

Six Months Ended

February 28, 2019 February 28, 2018 (1)
Operating
Income
Operating
Margin
Operating
Income
Operating
Margin
Increase
(Decrease)
Communications, Media & Technology $ 755,359 18% $ 614,538 16% $ 140,821
Financial Services 630,062 15 683,175 16 (53,113 )
Health & Public Service 343,085 10 383,230 11 (40,145 )
Products 812,763 14 791,442 15 21,321
Resources 474,369   14 321,835   11 152,534  
Total $ 3,015,638   14.3% $ 2,794,220   14.1%   $ 221,418  
_________
(1)   Effective September 1, 2018, we adopted ASU No. 2017-07, which
required us to reclassify certain components of pension service
costs from Operating expenses to Non-operating expenses. Prior
period amounts have been revised to conform with the current period
presentation.
 
 

ACCENTURE PLC

 

RECONCILIATION OF NET INCOME AND DILUTED EARNINGS PER SHARE, AS
REPORTED (GAAP), TO NET INCOME
AND DILUTED EARNINGS PER
SHARE, AS ADJUSTED (NON-GAAP)
(In thousands of U.S. dollars,
except per share amounts)
(Unaudited)

 
  Three Months Ended
 

February 28,
2019

  February 28, 2018
 

As Reported
(GAAP)

As Reported
(GAAP)

 

Tax Law
Changes (1)

 

Adjusted
(Non-GAAP)

Income before income taxes $ 1,376,254 $ 1,244,797 $ $ 1,244,797
Provision for income taxes   235,534 325,257 (136,724 ) 188,533
Net income   $ 1,140,720 $ 919,540 $ 136,724   $ 1,056,264
Effective tax rate 17.1% 26.1% 15.1%
Diluted earnings per share $ 1.73 $ 1.37 $ 0.21 $ 1.58
 
 

Six Months Ended

 

February 28,
2019

February 28, 2018
 

As Reported
(GAAP)

As Reported
(GAAP)

Tax Law
Changes (1)

Adjusted
(Non-GAAP)

Income before income taxes $ 2,986,738 $ 2,738,921 $ $ 2,738,921
Provision for income taxes   554,694 630,839 (136,724 ) 494,115
Net income   $ 2,432,044 $ 2,108,082 $ 136,724   $ 2,244,806
Effective tax rate 18.6% 23.0% 18.0%
Diluted earnings per share $ 3.69 $ 3.16 $ 0.21 $ 3.37
__________________
(1)   Represents tax expense associated with the enactment of the U.S. Tax
Cuts and Jobs Act.
 
   

ACCENTURE PLC

 

CONSOLIDATED BALANCE SHEETS
(In thousands of U.S.
dollars)

 
February 28, 2019 August 31, 2018
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,464,889 $ 5,061,360
Short-term investments 3,111 3,192
Receivables and contract assets (1) 8,151,411 7,496,368
Other current assets 1,213,889   1,024,639
Total current assets 13,833,300   13,585,559
NON-CURRENT ASSETS:
Contract assets (1) 20,691 23,036
Investments 229,085 215,532
Property and equipment, net 1,282,765 1,264,020
Goodwill 5,782,856 5,383,012
Other non-current assets 6,241,511   3,977,924
Total non-current assets 13,556,908   10,863,524
TOTAL ASSETS $ 27,390,208   $ 24,449,083
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings $ 4,365 $ 5,337
Accounts payable 1,472,130 1,348,802
Deferred revenues 3,335,751 2,837,682
Accrued payroll and related benefits 4,016,627 4,569,172
Other accrued liabilities 1,390,176   1,390,758
Total current liabilities 10,219,049   10,151,751
NON-CURRENT LIABILITIES:
Long-term debt 19,753 19,676
Other non-current liabilities 3,422,861   3,553,068
Total non-current liabilities 3,442,614   3,572,744
TOTAL ACCENTURE PLC SHAREHOLDERS’ EQUITY 13,337,033 10,364,753
NONCONTROLLING INTERESTS 391,512   359,835
TOTAL SHAREHOLDERS’ EQUITY 13,728,545   10,724,588
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 27,390,208   $ 24,449,083
________
(1)   Effective September 1, 2018 we adopted ASU No. 2014-09, which
resulted in the reclassification of Unbilled services into
Receivables and contract assets and Deferred revenues. Prior period
amounts have been revised to conform with the current period
presentation.
 
   

ACCENTURE PLC

 

CONSOLIDATED CASH FLOWS STATEMENTS
(In thousands of
U.S. dollars)

(Unaudited)

 
Three Months Ended Six Months Ended

February 28,
2019

 

February 28,
2019

February 28,
2019

 

February 28,
2019

CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 1,140,720 $ 919,540 $ 2,432,044 $ 2,108,082
Depreciation, amortization and asset impairments 219,598 220,664 431,283 453,297
Share-based compensation expense 346,762 293,035 593,278 505,926
Change in assets and liabilities/other, net (347,430) (509,182) (1,069,447) (1,137,410)
Net cash provided by (used in) operating activities 1,359,650 924,057 2,387,158 1,929,895
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (139,797) (132,896) (217,488) (266,248)
Purchases of businesses and investments, net of cash acquired (314,665) (216,607) (515,082) (344,104)
Proceeds from the sale of businesses and investments, net of cash
transferred
1,368 (398) 1,809 (398)
Other investing, net 1,419 4,225 6,218 6,115
Net cash provided by (used in) investing activities (451,675) (345,676) (724,543) (604,635)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares 180,095 143,495 446,277 383,225
Purchases of shares (1,007,807) (803,947) (1,796,134) (1,367,085)
Cash dividends paid (932,838) (853,614)
Other financing, net (4,211) (42,752) (11,396) (44,750)
Net cash provided by (used in) financing activities (831,923) (703,204) (2,294,091) (1,882,224)
Effect of exchange rate changes on cash and cash equivalents 25,047 38,191 35,005 25,183
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 101,099 (86,632) (596,471) (531,781)
CASH AND CASH EQUIVALENTS, beginning of period 4,363,790 3,681,711 5,061,360 4,126,860
CASH AND CASH EQUIVALENTS, end of period $ 4,464,889 $ 3,595,079 $ 4,464,889 $ 3,595,079