-- Revenues increase 1% in U.S. dollars and
3% in local currency to $7.13 billion --
-- EPS are $1.03; operating income is $951
million, with operating margin of 13.3% --
-- Record new bookings of $10.1 billion
include consulting bookings of $4.6 billion and outsourcing
bookings of $5.5 billion --
-- Company declares semi-annual cash
dividend of $0.93 per share --
-- Company updates business outlook for
fiscal 2014 --
Accenture (NYSE:ACN) reported financial results for the second
quarter of fiscal 2014, ended Feb. 28, 2014, with net revenues of
$7.13 billion, an increase of 1 percent in U.S. dollars
and 3 percent in local currency over the same period last year,
within the company’s guided range.
Diluted earnings per share were $1.03, compared with $1.65 for
the second quarter last year, which included benefits of $243
million, or $0.34 per share, from final determinations of
prior-year U.S. federal tax liabilities and $224 million, or $0.31
per share, from a reduction in reorganization liabilities.
Excluding these benefits, diluted EPS for the second quarter last
year were $1.00.
Operating income for the quarter was $951 million, or
13.3 percent of net revenues, compared with $1.16 billion, or
16.5 percent of net revenues, for the second quarter last
year, which included the benefit of $224 million from the reduction
in reorganization liabilities. Excluding the benefit, operating
income for the second quarter of fiscal 2013 was $940 million, or
13.3 percent of net revenues.
New bookings for the quarter were a record $10.1 billion, with
consulting bookings of $4.6 billion and outsourcing bookings
of $5.5 billion.
Pierre Nanterme, Accenture’s chairman and CEO, said, “In the
second quarter, we delivered revenues within our guided range,
reported solid earnings per share and returned substantial cash to
shareholders. We continued to see very strong demand for our
services, with $10.1 billion in new bookings, including record
consulting and record outsourcing bookings.
“Looking ahead, we are well-positioned to deliver our business
outlook for the year, given our outstanding year-to-date bookings
of $18.8 billion as well as the activity and client interest we see
in the marketplace. We remain focused on the successful execution
of our growth strategy, and are confident in our ability to deliver
value to our clients and our shareholders.”
Financial Review
Revenues before reimbursements (“net revenues”) for the second
quarter of fiscal 2014 were $7.13 billion, compared with
$7.06 billion for the second quarter of fiscal 2013, an
increase of 1 percent in U.S. dollars and 3 percent in
local currency, and within the company’s guided range of $6.95
billion to $7.25 billion. The foreign-exchange impact for the
quarter was approximately negative 1.5 percent, consistent with the
assumption provided in the company’s first-quarter earnings
release.
- Consulting net revenues for the quarter
were $3.70 billion, a decrease of 1 percent in U.S. dollars
and flat in local currency compared with the second quarter of
fiscal 2013.
- Outsourcing net revenues were
$3.43 billion, an increase of 4 percent in U.S. dollars
and 5 percent in local currency over the second quarter of
fiscal 2013.
Diluted EPS for the quarter were $1.03, compared with $1.65 for
the second quarter last year, which included $0.65 in benefits from
final determinations of prior-year tax liabilities and reductions
in reorganization liabilities. Excluding these benefits, EPS for
the second quarter last year were $1.00. The $0.03 increase from
adjusted EPS last year reflects:
- $0.01 from higher revenue and
operating results;
- $0.01 from a lower effective tax rate
excluding the impact last year of final determinations of
prior-year tax liabilities and the reduction in reorganization
liabilities; and
- $0.03 from a lower share count
partially offset by:
- $0.02 from lower non-operating
income.
Gross margin (gross profit as a percentage of net revenues) for
the quarter was 31.3 percent, compared with 31.6 percent for
the second quarter last year. Selling, general and administrative
(SG&A) expenses for the quarter were $1.28 billion, or
17.9 percent of net revenues, compared with $1.29 billion, or
18.3 percent of net revenues, for the second quarter last
year.
Operating results for the quarter reflect lower contract
profitability, primarily due to pricing pressures and higher
payroll costs and, to a lesser extent, lower margins in the early
stages of a few large contracts. Operating results also reflect a
higher level of investment in the quarter to build new capabilities
including strategic acquisitions to enhance the company’s
capabilities in key growth areas. These factors were offset by a
reduction in variable compensation expense compared to the second
quarter of fiscal 2013.
Operating income for the quarter was $951 million, or 13.3
percent of net revenues, compared with $1.16 billion, or 16.5
percent of net revenues, for the second quarter last year, which
included the $224 million reorganization benefit. Excluding the
reorganization benefit, operating income for the second quarter
last year was $940 million, or 13.3 percent of net revenues.
The company’s effective tax rate for the quarter was
24.0 percent, compared with negative 0.5 percent for the
second quarter last year. Excluding benefits from the final
determinations of prior-year U.S. federal tax liabilities and the
reduction in reorganization liabilities, the effective tax rate for
the second quarter last year was 24.8 percent.
Net income for the quarter was $722 million, compared with
$1.19 billion for the second quarter last year, which included the
favorable impact of both the $224 million reorganization benefit
and the $243 million from final determinations of prior-year tax
liabilities.
Operating cash flow for the quarter was $292 million, and
property and equipment additions were $76 million. Free cash
flow, defined as operating cash flow net of property and equipment
additions, was $216 million. For the same period last year,
operating cash flow was $634 million; property and equipment
additions were $90 million; and free cash flow was
$544 million.
Days services outstanding, or DSOs, were 33 days, compared with
31 days at Aug. 31, 2013 and 31 days at Feb. 28, 2013.
Accenture’s total cash balance at Feb. 28, 2014 was
$3.7 billion, compared with $5.6 billion at Aug. 31,
2013. The lower cash balance at Feb. 28, 2014 was principally due
to share repurchases and cash dividend payments, as well as funds
used for business acquisitions.
Utilization for the quarter was 87 percent, compared with
87 percent for the first quarter of fiscal 2014 and 88 percent
for the second quarter of fiscal 2013. Attrition for the second
quarter of fiscal 2014 was 12 percent, compared with 11
percent for both the first quarter of fiscal 2014 and the second
quarter of fiscal 2013.
New Bookings
New bookings for the second quarter were $10.1 billion and
reflect a negative 2 percent foreign-currency impact compared
with new bookings in the second quarter last year.
- Consulting new bookings were
$4.6 billion, or 46 percent of total new bookings.
- Outsourcing new bookings were
$5.5 billion, or 54 percent of total new bookings.
Net Revenues by Operating Group
Net revenues by operating group were as follows:
- Communications, Media & Technology:
$1.41 billion, compared with $1.41 billion for the second
quarter of fiscal 2013, flat in U.S. dollars and an increase of
2 percent in local currency.
- Financial Services: $1.56 billion,
compared with $1.51 billion for the second quarter of fiscal
2013, an increase of 4 percent in U.S. dollars and
5 percent in local currency.
- Health & Public Service: $1.18
billion, compared with $1.19 billion for the second quarter of
fiscal 2013, a decrease of 1 percent in U.S. dollars and an
increase of 1 percent in local currency.
- Products: $1.75 billion, compared
with $1.68 billion for the second quarter of fiscal 2013, an
increase of 4 percent in U.S. dollars and 5 percent in local
currency.
- Resources: $1.22 billion, compared
with $1.25 billion for the second quarter of fiscal 2013, a
decrease of 2 percent in U.S. dollars and flat in local
currency.
Net Revenues by Geographic Region
Net revenues by geographic region were as follows:
- Americas: $3.36 billion, compared
with $3.28 billion for the second quarter of fiscal 2013, an
increase of 2 percent in U.S. dollars and 4 percent in
local currency.
- Europe, Middle East and Africa (EMEA):
$2.86 billion, compared with $2.80 billion for the second
quarter of fiscal 2013, an increase of 2 percent in U.S.
dollars and flat in local currency.
- Asia Pacific: $908 million,
compared with $978 million for the second quarter of fiscal 2013, a
decrease of 7 percent in U.S. dollars and an increase of
4 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 $0.93
per share on Accenture plc Class A ordinary shares for shareholders
of record at the close of business on April 11, 2014, and Accenture
SCA will declare a semi-annual cash dividend of $0.93 per share on
Accenture SCA Class I common shares for shareholders of record at
the close of business on April 8, 2014. These dividends are
both payable on May 15, 2014.
Combined with the semi-annual cash dividend of $0.93 per share
paid on Nov. 15, 2013, this will bring the total dividend payments
for the fiscal year to $1.86 per share, for total projected cash
dividend payments of approximately $1.3 billion.
Share Repurchase Activity
During the second quarter of fiscal 2014, Accenture repurchased
or redeemed 9.2 million shares, including approximately 6.5
million shares repurchased in the open market, for a total of
$739 million. This brings Accenture’s total share repurchases
and redemptions for the first half of fiscal 2014 to 18.9 million
shares, including 14.5 million shares repurchased in the open
market, for a total of $1.46 billion.
Accenture’s total remaining share repurchase authority at Feb.
28, 2014 was approximately $5.8 billion.
At Feb. 28, 2014, Accenture had approximately 673 million
total shares outstanding, including 633 million Accenture plc
Class A ordinary shares and 40 million Accenture SCA Class I
common shares and Accenture Canada Holdings Inc. exchangeable
shares.
Business Outlook
Third Quarter Fiscal 2014
Accenture expects net revenues for the third quarter of fiscal
2014 to be in the range of $7.40 billion to
$7.65 billion. This range assumes a foreign-exchange impact of
zero percent compared with the third quarter of fiscal
2013.
Full Fiscal Year 2014
For fiscal 2014, the company now expects net revenue growth to
be in the range of 3 percent to 6 percent in local
currency, compared with 2 percent to 6 percent previously.
Accenture’s business outlook for the full 2014 fiscal year
continues to assume a foreign-exchange impact of
negative 0.5 percent compared with fiscal 2013.
The company now expects diluted EPS to be in the range of $4.50
to $4.62, compared with $4.44 to $4.56 previously.
Accenture continues to expect operating margin for the full
fiscal year to be in the range of 14.3 percent to 14.5
percent. This compares with 15.2 percent in fiscal 2013 on a GAAP
basis, which included a positive impact of 100 basis points from
reductions in reorganization liabilities. Accenture continues to
expect its operating margin for fiscal 2014 to expand 10 to
30 basis points from the adjusted Non-GAAP operating margin of
14.2 percent for fiscal 2013.
For fiscal 2014, the company now expects operating cash flow to
be in the range of $3.3 billion to $3.6 billion, compared
with $3.6 billion to $3.9 billion previously; continues
to expect property and equipment additions to be $400 million;
and now expects free cash flow to be in the range of $2.9 billion
to $3.2 billion, compared with $3.2 billion to
$3.5 billion previously.
The company continues to expect to return at least
$3.7 billion to its shareholders in fiscal 2014 through
dividends and share repurchases.
The company now expects its annual effective tax rate to be in
the range of 25.5 percent to 26.5 percent, compared with
26.5 percent to 27.5 percent previously.
Accenture now expects new bookings for fiscal 2014 in the range
of $33 billion to $36 billion, compared with $32 billion
to $35 billion previously.
Conference Call and Webcast
Details
Accenture will host a conference call at 8:00 a.m. EDT today to
discuss its second-quarter fiscal 2014 financial results. To
participate, please dial +1 (800) 230-1074 [+1 (612) 234-9959
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 10:00 a.m. EDT today, Thursday,
Mar. 27, and continuing until Thursday, June 26, 2014. 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 26, 2014. 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 320421 from 10:00 a.m. EDT Thursday, Mar. 27
through Thursday, June 26, 2014.
About Accenture
Accenture is a global management consulting, technology services
and outsourcing company, with approximately 289,000 people serving
clients in more than 120 countries. Combining unparalleled
experience, comprehensive capabilities across all industries and
business functions, and extensive research on the world’s most
successful companies, Accenture collaborates with clients to help
them become high-performance businesses and governments. The
company generated net revenues of US$28.6 billion for the fiscal
year ended Aug. 31, 2013. Its home page is www.accenture.com.
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, and a significant reduction in such demand
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’s profitability could suffer if its
cost-management strategies are unsuccessful, and the company may
not be able to improve its profitability through improvements to
cost-management to the degree it has done in the past; the
company’s results of operations could materially suffer if the
company is not able to obtain sufficient pricing to enable it to
meet its profitability expectations; if the company’s pricing
estimates do not accurately anticipate the cost, risk and
complexity of the company performing its work or third parties upon
whom it relies do not meet their commitments, then the company’s
contracts could have delivery inefficiencies and be unprofitable;
the company could have liability or the company’s reputation could
be damaged if the company fails to protect client and/or company
data or information systems as obligated by law or contract or if
the company’s information systems are breached; the company’s
results of operations and ability to grow could be materially
negatively affected if the company cannot adapt and expand its
services and solutions in response to ongoing changes in technology
and offerings by new entrants; 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; the company’s Global Delivery Network is
increasingly concentrated in India and the Philippines, which may
expose it to operational risks; the company might not be successful
at identifying, acquiring or integrating businesses or entering
into joint ventures; the company’s work with government clients
exposes the company to additional risks inherent in the government
contracting environment; the company’s business could be materially
adversely affected if the company incurs legal liability; the
company’s results of operations could be materially adversely
affected by fluctuations in foreign currency exchange rates; the
company’s alliance relationships may not be successful or may
change, which could adversely affect the company’s results of
operations; outsourcing services and the continued expansion of the
company’s other services and solutions into new areas subject the
company to different operational risks than its consulting and
systems integration services; 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; 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;
changes in the company’s level of taxes, and audits, investigations
and tax proceedings, or changes in the company’s treatment as an
Irish company, could have a material adverse effect on the
company’s results of operations and financial condition; if the
company is unable to manage the organizational challenges
associated with its size, the company might be unable to achieve
its business objectives; if the company is unable to collect its
receivables or unbilled services, the company’s results of
operations, financial condition and cash flows could be adversely
affected; the company’s share price and results of operations could
fluctuate and be difficult to predict; the company’s results of
operations and share price could be adversely affected if it is
unable to maintain effective internal controls; 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; 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 PLC
CONSOLIDATED INCOME
STATEMENTS (In thousands of U.S. dollars, except share and
per share amounts) (Unaudited) Three Months
Ended February 28, Six Months Ended February 28,
2014 % of Net Revenues 2013
% of Net Revenues 2014 % of
Net Revenues 2013 % of Net Revenues
REVENUES: Revenues before reimbursements (“Net revenues”) $
7,130,667 100 % $ 7,058,042 100 % $ 14,489,416 100 % $ 14,278,003
100 % Reimbursements 436,816 435,278
877,763 883,353 Revenues 7,567,483
7,493,320 15,367,179 15,161,356
OPERATING EXPENSES:
Cost of services: Cost of services before reimbursable expenses
4,900,525 68.7 % 4,827,679 68.4 % 9,809,927 67.7 % 9,681,447 67.8 %
Reimbursable expenses 436,816 435,278
877,763 883,353 Cost of services
5,337,341 5,262,957 10,687,690 10,564,800 Sales and marketing
837,255 11.7 % 834,047 11.8 % 1,765,465 12.2 % 1,702,249 11.9 %
General and administrative costs 441,605 6.2 % 455,551 6.5 %
889,658 6.1 % 904,403 6.3 % Reorganization benefits, net
—
—
%
(223,767 ) (3.2 %) (18,015 ) (0.1 %) (223,302
) (1.6 %) Total operating expenses 6,616,201
6,328,788 13,324,798
12,948,150
OPERATING INCOME 951,282
13.3 % 1,164,532 16.5 % 2,042,381 14.1 % 2,213,206 15.5 %
Interest income 7,960 9,859 14,716 18,626 Interest expense (4,348 )
(3,641 ) (8,006 ) (8,190 ) Other (expense) income, net
(4,766 ) 10,599 (15,386 ) 4,163
INCOME BEFORE INCOME TAXES 950,128 13.3 % 1,181,349 16.7 %
2,033,705 14.0 % 2,227,805 15.6 % Provision for (benefit
from) income taxes 227,797 (5,749 )
499,728 274,676
NET INCOME 722,331 10.1
% 1,187,098 16.8 % 1,533,977 10.6 % 1,953,129 13.7 % Net
income attributable to noncontrolling interests in Accenture SCA
and Accenture Canada Holdings Inc.
(42,849 ) (78,363 ) (91,947 ) (137,318 ) Net income attributable to
noncontrolling interests – other (1) (8,182 ) (6,933
) (18,884 ) (15,192 )
NET INCOME
ATTRIBUTABLE TO ACCENTURE PLC $ 671,300 9.4 % $
1,101,802 15.6 % $ 1,423,146 9.8 % $ 1,800,619
12.6 %
CALCULATION OF EARNINGS PER SHARE: Net income
attributable to Accenture plc $ 671,300 $ 1,101,802 $ 1,423,146 $
1,800,619 Net income attributable to noncontrolling interests in
Accenture SCA
and Accenture Canada Holdings Inc. (2)
42,849 78,363 91,947
137,318 Net income for diluted earnings per share
calculation $ 714,149 $ 1,180,165 $ 1,515,093
$ 1,937,937
EARNINGS PER SHARE: -Basic $ 1.06 $ 1.70
$ 2.24 $ 2.79 -Diluted (3) $ 1.03 $ 1.65 $ 2.18 $ 2.71
WEIGHTED
AVERAGE SHARES: -Basic 635,929,351 649,520,337 636,314,554
644,608,780 -Diluted (3) 693,209,942 715,464,436 695,508,819
715,567,376 Cash dividends per share $
—
$
—
$ 0.93 $ 0.81
__________________ (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 SCA Class I common 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. (3) Diluted weighted
average Accenture plc Class A ordinary shares and earnings per
share amounts in fiscal 2013 have been restated to reflect
additional restricted share units issued to holders of restricted
share units in connection with the fiscal 2014 payment of cash
dividends.
ACCENTURE PLC
SUMMARY OF REVENUES
(In thousands of U.S. dollars) (Unaudited)
Three Months Ended February 28,
Percent
Increase
(Decrease)
Percent
Increase
(Decrease)
Local
2014
2013
U.S. dollars
Currency
OPERATING GROUPS Communications, Media & Technology $
1,408,616 $ 1,411,489 —% 2% Financial
Services 1,563,655 1,508,865 4
5
Health & Public Service 1,183,728 1,192,698 (1) 1 Products
1,745,515 1,680,719 4 5 Resources
1,224,897 1,251,874 (2) — Other 4,256
12,397 n/m n/m
TOTAL Net Revenues 7,130,667
7,058,042 1% 3% Reimbursements 436,816
435,278 — TOTAL REVENUES $ 7,567,483 $
7,493,320 1%
GEOGRAPHY Americas $ 3,361,579 $
3,279,776 2% 4% EMEA 2,861,214 2,800,359 2 — Asia Pacific
907,874 977,907 (7) 4
TOTAL
Net Revenues $ 7,130,667 $
7,058,042 1% 3%
TYPE OF WORK Consulting $ 3,696,916 $
3,752,965 (1)% —% Outsourcing 3,433,751
3,305,077 4 5
TOTAL Net Revenues $
7,130,667 $ 7,058,042 1% 3%
Six Months Ended February 28,
Percent
Increase
(Decrease)
Percent
Increase
(Decrease)
Local
2014 2013
U.S. dollars
Currency
OPERATING GROUPS Communications, Media & Technology $
2,819,599 $ 2,870,275 (2)%
—%
Financial Services 3,161,621 3,071,807 3 4 Health & Public
Service 2,413,802 2,367,408 2 4 Products 3,546,577 3,379,262 5
6
Resources 2,539,904 2,573,339 (1) — Other
7,913 15,912 n/m n/m
TOTAL Net Revenues
14,489,416 14,278,003 1% 3% Reimbursements
877,763 883,353 (1) TOTAL REVENUES $
15,367,179 $ 15,161,356 1%
GEOGRAPHY
Americas $ 6,795,333 $ 6,612,896 3% 4% EMEA 5,783,355 5,625,255 3 —
Asia Pacific 1,910,728
2,039,852 (6) 4
TOTAL Net Revenues $
14,489,416 $ 14,278,003 1% 3%
TYPE OF WORK
Consulting $ 7,634,583 $ 7,713,641 (1)% —% Outsourcing
6,854,833 6,564,362 4 6
TOTAL
Net Revenues $ 14,489,416 $
14,278,003 1% 3%
__________________ n/m = not
meaningful
ACCENTURE PLC For the Three
Months Ended February 28, 2014 and 2013 (In thousands of
U.S. dollars) (Unaudited) OPERATING INCOME BY
OPERATING GROUP
Operating Income as Reported (GAAP) Three
Months Ended February 28, 2014
2013 Operating
Income
Operating
Margin
Operating
Income
Operating
Margin
Communications, Media & Technology $ 181,815 13 %
$ 225,744 16 % Financial Services 209,138 13
244,158 16 Health & Public Service 145,614 12 188,218 16
Products 205,526 12 264,234 16 Resources
209,189 17 242,178 19 Total $
951,282 13.3 % $ 1,164,532 16.5 %
Three Months
Ended February 28, 2014 2013 Operating
Income and
Operating Margin as
Reported (GAAP)
Operating Income and Operating Margin
Excluding Reorganization
Benefits
(Non-GAAP)
Operating
Income
Operating
Margin
Operating
Income
(GAAP)
Reorganization
Benefits (1)
Operating
Income (2)
Operating
Margin (2)
Increase
(Decrease)
Communications, Media & Technology $ 181,815 13 % $
225,744 $ 43,304 $ 182,440 13 % $ (625
) Financial Services 209,138 13 244,158 48,170 195,988 13 13,150
Health & Public Service 145,614 12 188,218 39,446 148,772 12
(3,158 ) Products 205,526 12 264,234 52,924 211,310 13 (5,784 )
Resources 209,189 17 242,178
40,411 201,767 16 7,422
Total $ 951,282 13.3 % $ 1,164,532 $ 224,255 $
940,277 13.3 % $ 11,005
RECONCILIATION OF NET INCOME AND
DILUTED EARNINGS PER SHARE, AS REPORTED (GAAP), TO NET INCOME AND
DILUTED
EARNINGS PER SHARE, AS ADJUSTED
(NON-GAAP)
Three Months Ended February 28, 2014
2013 Net Income
Diluted
Earnings
Per Share
Net Income
Diluted
Earnings
Per Share
As reported (GAAP) $ 722,331 $ 1.03 $
1,187,098 $ 1.65 Less impact of
reorganization benefits (1)(2) — — (224,255 ) (0.31 ) Less benefit
from final determinations of U.S. federal tax liabilities
— —
(242,938 ) (0.34 ) As adjusted (Non-GAAP) $
722,331 $ 1.03 $ 719,905
$ 1.00
__________________
(1)
Represents reorganization benefits related
to final determinations of certain reorganization liabilities
established in connection with our transition to a corporate
structure during 2001.
(2)
Reorganization benefits had the effect of
increasing income before income taxes without any increase in
income tax expense.
ACCENTURE PLC For the Six Months
Ended February 28, 2014 and 2013 (In thousands of U.S.
dollars) (Unaudited)
OPERATING INCOME BY OPERATING GROUP Operating
Income as Reported (GAAP) Six Months Ended February 28,
2014 2013 Operating
Income
Operating
Margin
Operating
Income
Operating
Margin
Communications, Media & Technology $ 335,183 12 %
$ 408,792 14 % Financial Services 472,706 15 485,256
16 Health & Public Service 324,919 13 331,677 14 Products
452,913 13 499,926 15 Resources 456,660 18
487,555 19 Total $ 2,042,381
14.1 % $ 2,213,206 15.5 %
Six Months Ended
February 28, 2014 2013
Operating Income and
Operating Margin as
Reported (GAAP)
Operating Income and Operating Margin
Excluding Reorganization
Benefits
(Non-GAAP)
Operating
Income
Operating
Margin
Operating
Income
(GAAP)
Reorganization
Benefits (1)
Operating
Income (2)
Operating
Margin (2)
Increase
(Decrease)
Communications, Media & Technology $ 335,183 12 % $
408,792 $ 43,304 $ 365,488 13 % $
(30,305 ) Financial Services 472,706 15 485,256 48,170 437,086 14
35,620 Health & Public Service 324,919 13 331,677 39,446
292,231 12 32,688 Products 452,913 13 499,926 52,924 447,002 13
5,911 Resources 456,660 18 487,555
40,411 447,144 17 9,516
Total $ 2,042,381 14.1 % $ 2,213,206 $
224,255 $ 1,988,951 13.9 % $ 53,430
RECONCILIATION OF NET INCOME AND DILUTED EARNINGS PER
SHARE, AS REPORTED (GAAP), TO NET INCOME AND DILUTED
EARNINGS PER SHARE, AS ADJUSTED
(NON-GAAP)
Six Months Ended February 28, 2014
2013 Net Income
Diluted
Earnings
Per Share
Net Income
Diluted
Earnings
Per Share
As reported (GAAP) $ 1,533,977 $ 2.18 $
1,953,129 $ 2.71 Less impact of
reorganization benefits (1)(2) — — (224,255 ) (0.31 ) Less benefit
from final determinations of U.S. federal tax liabilities
— —
(242,938 ) (0.34 ) As adjusted (Non-GAAP) $
1,533,977 $ 2.18 $
1,485,936 $ 2.06
__________________
(1)
Represents reorganization benefits related
to final determinations of certain reorganization liabilities
established in connection with our transition to a corporate
structure during 2001.
(2)
Reorganization benefits had the effect of
increasing income before income taxes without any increase in
income tax expense.
ACCENTURE PLC CONSOLIDATED
BALANCE SHEETS (In thousands of U.S. dollars)
February 28, 2014 August 31, 2013 (Unaudited)
ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 3,680,274 $ 5,631,885
Short-term investments 2,706 2,525 Receivables from clients, net
3,588,189 3,333,126 Unbilled services, net 1,730,495 1,513,448
Other current assets 1,632,216
1,363,194 Total current assets
10,633,880 11,844,178
NON-CURRENT
ASSETS: Unbilled services, net 30,947 18,447 Investments 43,350
43,631 Property and equipment, net 783,961 779,675 Other
non-current assets 4,865,071
4,181,118 Total non-current assets
5,723,329 5,022,871
TOTAL ASSETS $
16,357,209 $ 16,867,049
LIABILITIES
AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings $ 167 $ -
Accounts payable 936,315 961,851 Deferred revenues 2,438,786
2,230,615 Accrued payroll and related benefits 2,711,689 3,460,393
Other accrued liabilities 1,201,401
1,508,131 Total current liabilities
7,288,358 8,160,990
NON-CURRENT
LIABILITIES: Long-term debt 26,322 25,600 Other non-current
liabilities 3,255,842
3,252,630 Total non-current liabilities
3,282,164 3,278,230
TOTAL ACCENTURE PLC
SHAREHOLDERS’ EQUITY 5,272,315 4,960,186
NONCONTROLLING
INTERESTS 514,372
467,643
TOTAL SHAREHOLDERS’ EQUITY
5,786,687 5,427,829
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY $ 16,357,209 $
16,867,049
ACCENTURE PLC CONSOLIDATED CASH FLOWS
STATEMENTS (In thousands of U.S. dollars)
(Unaudited) Three Months Ended February 28,
Six Months Ended February 28, 2014 2013
2014 2013 CASH FLOWS FROM OPERATING
ACTIVITIES: Net income $ 722,331 $
1,187,098 $ 1,533,977 $ 1,953,129
Depreciation, amortization and asset impairments 149,140 157,266
294,467 297,190 Reorganization benefits, net - (223,767 ) (18,015 )
(223,302 ) Share-based compensation expense 206,780 184,434 333,686
298,604 Change in assets and liabilities/other, net
(785,871 ) (670,807 )
(1,670,502 ) (1,800,212 ) Net cash
provided by operating activities 292,380
634,224
473,613 525,409
CASH FLOWS
FROM INVESTING ACTIVITIES: Purchases of property and equipment
(76,167 ) (90,241 ) (135,126 ) (176,788 ) Purchases of businesses
and investments, net of cash acquired (472,202 ) (88,011 ) (609,589
) (297,963 ) Other investing, net 710
1,589 1,504
2,351 Net cash used in investing
activities (547,659 )
(176,663 ) (743,211 )
(472,400 )
CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds
from issuance of ordinary shares 112,587 112,239 292,820 276,845
Purchases of shares (739,238 ) (608,958 ) (1,460,752 ) (829,789 )
Cash dividends paid - - (630,234 ) (560,135 ) Other financing, net
50,572 31,295
83,571
69,993 Net cash used in financing activities
(576,079 ) (465,424 )
(1,714,595 ) (1,043,086 ) Effect of
exchange rate changes on cash and cash equivalents
(15,566 ) (34,943 )
32,582 (14,363 )
NET DECREASE
IN CASH AND CASH EQUIVALENTS (846,924 ) (42,806 ) (1,951,611 )
(1,004,440 )
CASH AND CASH EQUIVALENTS, beginning of period
4,527,198
5,678,892 5,631,885
6,640,526
CASH AND CASH EQUIVALENTS,
end of period $ 3,680,274 $
5,636,086 $ 3,680,274 $
5,636,086
AccentureRoxanne Taylor,
+1-917-452-5106roxanne.taylor@accenture.com
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