UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________ 

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	May 31, 2019

OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from             to

Commission File Number: 001-34448

Accenture plc

(Exact name of registrant as specified in its charter)

Ireland	98-0627530
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1 Grand Canal Square,

Grand Canal Harbour,

Dublin 2, Ireland

(Address of principal executive offices)

(353) (1) 646-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A ordinary shares, par value $0.0000225 per share	ACN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ	Accelerated filer ¨	Non-accelerated filer  ¨
Smaller reporting company  ¨	Emerging growth company  ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The number of shares of the registrant’s Class A ordinary shares, par value $0.0000225 per share, outstanding as of June 13, 2019 was 671,999,633 (which number includes 34,858,446 issued shares held by the registrant). The number of shares of the registrant’s Class X ordinary shares, par value $0.0000225 per share, outstanding as of June 13, 2019 was 637,146.

ACCENTURE PLC

INDEX

	Page
Part I. Financial Information	3
Item 1. Financial Statements	3
Consolidated Balance Sheets as of May 31, 2019 (Unaudited) and August 31, 2018	3
Consolidated Income Statements (Unaudited) for the three and nine months ended May 31, 2019 and 2018	4
Consolidated Statements of Comprehensive Income (Unaudited) for the three and nine months ended May 31, 2019 and 2018	5
Consolidated Shareholders’ Equity Statement (Unaudited) for the three and nine months ended May 31, 2019 and 2018	6
Consolidated Cash Flows Statements (Unaudited) for the nine months ended May 31, 2019 and 2018	10
Notes to Consolidated Financial Statements (Unaudited)	11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
Item 4. Controls and Procedures	36
Part II. Other Information	37
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	38
Signatures	39

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCENTURE PLC

CONSOLIDATED BALANCE SHEETS

May 31, 2019 and August 31, 2018

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

	May 31, 2019			August 31, 2018
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,769,158		$	5,061,360
Short-term investments	3,338			3,192
Receivables and contract assets	8,134,147			7,496,368
Other current assets	1,235,017			1,024,639
Total current assets	14,141,660			13,585,559
NON-CURRENT ASSETS:
Contract assets	19,739			23,036
Investments	235,286			215,532
Property and equipment, net	1,341,548			1,264,020
Goodwill	6,078,816			5,383,012
Deferred contract costs	685,605			705,124
Deferred income taxes, net	4,222,011			2,086,807
Other non-current assets	1,431,695			1,185,993
Total non-current assets	14,014,700			10,863,524
TOTAL ASSETS	$	28,156,360		$	24,449,083
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings	$	4,137		$	5,337
Accounts payable	1,562,995			1,348,802
Deferred revenues	3,255,784			2,837,682
Accrued payroll and related benefits	4,461,985			4,569,172
Income taxes payable	512,820			497,885
Other accrued liabilities	754,266			892,873
Total current liabilities	10,551,987			10,151,751
NON-CURRENT LIABILITIES:
Long-term debt	19,855			19,676
Deferred revenues	571,769			618,124
Retirement obligation	1,419,191			1,410,656
Deferred income taxes, net	149,196			125,729
Income taxes payable	875,850			956,836
Other non-current liabilities	425,554			441,723
Total non-current liabilities	3,461,415			3,572,744
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of May 31, 2019 and August 31, 2018	57			57
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 671,836,371 and 663,327,677 shares issued as of May 31, 2019 and August 31, 2018, respectively	15			15
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 637,146 and 655,521 shares issued and outstanding as of May 31, 2019 and August 31, 2018, respectively	—			—
Restricted share units	1,195,983			1,234,623
Additional paid-in capital	6,059,471			4,870,764
Treasury shares, at cost: Ordinary, 40,000 shares as of May 31, 2019 and August 31, 2018; Class A ordinary, 34,640,120 and 24,293,199 shares as of May 31, 2019 and August 31, 2018, respectively	(3,761,010		)	(2,116,948		)
Retained earnings	11,709,317			7,952,413
Accumulated other comprehensive loss	(1,466,509		)	(1,576,171		)
Total Accenture plc shareholders’ equity	13,737,324			10,364,753
Noncontrolling interests	405,634			359,835
Total shareholders’ equity	14,142,958			10,724,588
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	28,156,360		$	24,449,083

The accompanying Notes are an integral part of these Consolidated Financial Statements.

3

ACCENTURE PLC

CONSOLIDATED INCOME STATEMENTS

For the Three and Nine Months Ended May 31, 2019 and 2018

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

(Unaudited)

	Three Months Ended						Nine Months Ended
	May 31, 2019			May 31, 2018			May 31, 2019			May 31, 2018
REVENUES:
Revenues	$	11,099,688		$	10,694,996		$	32,159,363		$	30,488,547
OPERATING EXPENSES:
Cost of services	7,571,390			7,362,981			22,279,291			21,232,839
Sales and marketing	1,184,164			1,106,543			3,274,216			3,106,562
General and administrative costs	626,191			590,597			1,872,275			1,720,051
Total operating expenses	9,381,745			9,060,121			27,425,782			26,059,452
OPERATING INCOME	1,717,943			1,634,875			4,733,581			4,429,095
Interest income	21,402			12,687			60,114			33,582
Interest expense	(5,348		)	(5,839		)	(15,472		)	(14,386		)
Other income (expense), net	(29,690		)	(29,165		)	(87,178		)	(96,812		)
INCOME BEFORE INCOME TAXES	1,704,307			1,612,558			4,691,045			4,351,479
Provision for income taxes	435,658			554,417			990,352			1,185,256
NET INCOME	1,268,649			1,058,141			3,700,693			3,166,223
Net income attributable to noncontrolling interests in Accenture Holdings plc and Accenture Canada Holdings Inc.	(1,676		)	(6,997		)	(5,213		)	(93,531		)
Net income attributable to noncontrolling interests – other	(17,457		)	(8,124		)	(46,795		)	(42,309		)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC	$	1,249,516		$	1,043,020		$	3,648,685		$	3,030,383
Weighted average Class A ordinary shares:
Basic	637,831,341			639,217,344			638,439,707			624,365,464
Diluted	649,297,717			654,600,026			650,144,931			655,739,568
Earnings per Class A ordinary share:
Basic	$	1.96		$	1.63		$	5.72		$	4.85
Diluted	$	1.93		$	1.60		$	5.62		$	4.76
Cash dividends per share	$	1.46		$	1.33		$	2.92		$	2.66

The accompanying Notes are an integral part of these Consolidated Financial Statements.

4

ACCENTURE PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Nine Months Ended May 31, 2019 and 2018

(In thousands of U.S. dollars)

(Unaudited)

	Three Months Ended						Nine Months Ended
	May 31, 2019			May 31, 2018			May 31, 2019			May 31, 2018
NET INCOME	$	1,268,649		$	1,058,141		$	3,700,693		$	3,166,223
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation	(102,620		)	(230,997		)	(69,592		)	(136,706		)
Defined benefit plans	5,890			(2,683		)	32,881			11,436
Cash flow hedges	96,382			(43,801		)	148,036			(124,795		)
Investments	(1,148		)	46			(1,663		)	1,148
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC	(1,496		)	(277,435		)	109,662			(248,917		)
Other comprehensive income (loss) attributable to noncontrolling interests	(4,188		)	(5,926		)	(4,859		)	340
COMPREHENSIVE INCOME	$	1,262,965		$	774,780		$	3,805,496		$	2,917,646
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC	$	1,248,020		$	765,585		$	3,758,347		$	2,781,466
Comprehensive income attributable to noncontrolling interests	14,945			9,195			47,149			136,180
COMPREHENSIVE INCOME	$	1,262,965		$	774,780		$	3,805,496		$	2,917,646

The accompanying Notes are an integral part of these Consolidated Financial Statements.

5

ACCENTURE PLC

CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT

For the Three Months Ended May 31, 2019

(In thousands of U.S. dollars and share amounts)

(Unaudited)

	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares				Restricted Share Units			Additional Paid-in Capital			Treasury Shares					Retained Earnings			Accumulated Other Comprehensive Loss			Total Accenture plc Shareholders’ Equity			Noncontrolling Interests			Total Shareholders’ Equity
	$		No. Shares	$		No. Shares	$		No. Shares								$			No. Shares
Balance as of February 28, 2019	$	57	40	$	15	670,313	$	—	651		$	954,613		$	5,783,062		$	(3,357,665	)	(32,439	)	$	11,421,964		$	(1,465,013	)	$	13,337,033		$	391,512		$	13,728,545
Net income																						1,249,516						1,249,516			19,133			1,268,649
Other comprehensive income (loss)																									(1,496		)	(1,496		)	(4,188		)	(5,684		)
Purchases of Class A shares														568			(485,625		)	(2,792	)							(485,057		)	(568		)	(485,625		)
Share-based compensation expense											226,158			37,516														263,674						263,674
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares									(14	)				(2,829		)												(2,829		)				(2,829		)
Issuances of Class A shares for employee share programs						1,523					(16,437		)	242,228			82,280			551		(249		)				307,822			355			308,177
Dividends											31,649											(961,914		)				(930,265		)	(1,250		)	(931,515		)
Other, net														(1,074		)												(1,074		)	640			(434		)
Balance as of May 31, 2019	$	57	40	$	15	671,836	$	—	637		$	1,195,983		$	6,059,471		$	(3,761,010	)	(34,680	)	$	11,709,317		$	(1,466,509	)	$	13,737,324		$	405,634		$	14,142,958

The accompanying Notes are an integral part of these Consolidated Financial Statements.

6

ACCENTURE PLC

CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT

For the Three Months Ended May 31, 2018

(In thousands of U.S. dollars and share amounts)

(Unaudited)

	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares				Restricted Share Units			Additional Paid-in Capital			Treasury Shares					Retained Earnings			Accumulated Other Comprehensive Loss			Total Accenture plc Shareholders’ Equity			Noncontrolling Interests			Total Shareholders’ Equity
	$		No. Shares	$		No. Shares	$		No. Shares								$			No. Shares
Balance as of February 28, 2018	$	57	40	$	14	646,634	$	—	19,719		$	884,982		$	4,266,838		$	(2,552,028	)	(28,913	)	$	8,149,090		$	(1,066,266	)	$	9,682,687		$	755,739		$	10,438,426
Net income																						1,043,020						1,043,020			15,121			1,058,141
Other comprehensive income (loss)																									(277,435		)	(277,435		)	(5,926		)	(283,361		)
Purchases of Class A ordinary shares														965			(719,873		)	(4,687	)							(718,908		)	(965		)	(719,873		)
Share-based compensation expense											211,739			34,161														245,900						245,900
Purchases/redemptions of Accenture Holdings plc ordinary shares, Accenture Canada Holdings Inc. exchangeable shares and Class X ordinary shares														(312		)												(312		)				(312		)
Issuances of Class A ordinary shares:
Employee share programs						1,674					(15,157		)	227,497			70,889			587								283,229			376			283,605
Upon redemption of Accenture Holdings plc ordinary shares				1		25,554			(19,054	)				404,911														404,912			(404,912		)
Dividends											29,387											(883,218		)				(853,831		)	(1,279		)	(855,110		)
Other, net														125								(12,062		)				(11,937		)	(2,743		)	(14,680		)
Balance as of May 31, 2018	$	57	40	$	15	673,862	$	—	665		$	1,110,951		$	4,934,185		$	(3,201,012	)	(33,013	)	$	8,296,830		$	(1,343,701	)	$	9,797,325		$	355,411		$	10,152,736

The accompanying Notes are an integral part of these Consolidated Financial Statements.

7

ACCENTURE PLC

CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT

For the Nine Months Ended May 31, 2019

(In thousands of U.S. dollars and share amounts)

(Unaudited)

	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares				Restricted Share Units			Additional Paid-in Capital			Treasury Shares					Retained Earnings			Accumulated Other Comprehensive Loss			Total Accenture plc Shareholders’ Equity			Noncontrolling Interests			Total Shareholders’ Equity
	$		No. Shares	$		No. Shares	$		No. Shares								$			No. Shares
Balance as of August 31, 2018	$	57	40	$	15	663,328	$	—	656		$	1,234,623		$	4,870,764		$	(2,116,948	)	(24,333	)	$	7,952,413		$	(1,576,171	)	$	10,364,753		$	359,835		$	10,724,588
Cumulative effect adjustment																						2,134,818						2,134,818			3,158			2,137,976
Net income																						3,648,685						3,648,685			52,008			3,700,693
Other comprehensive income (loss)																									109,662			109,662			(4,859		)	104,803
Purchases of Class A shares														2,841			(2,268,189		)	(14,316	)							(2,265,348		)	(2,841		)	(2,268,189		)
Share-based compensation expense											787,633			69,319														856,952						856,952
Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares									(19	)				(16,399		)												(16,399		)				(16,399		)
Issuances of Class A shares for employee share programs						8,508					(884,308		)	1,134,959			624,127			3,969		(121,250		)				753,528			926			754,454
Dividends											58,035											(1,919,760		)				(1,861,725		)	(2,628		)	(1,864,353		)
Other, net														(2,013		)						14,411						12,398			35			12,433
Balance as of May 31, 2019	$	57	40	$	15	671,836	$	—	637		$	1,195,983		$	6,059,471		$	(3,761,010	)	(34,680	)	$	11,709,317		$	(1,466,509	)	$	13,737,324		$	405,634		$	14,142,958

The accompanying Notes are an integral part of these Consolidated Financial Statements.

8

ACCENTURE PLC

CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT

For the Nine Months Ended May 31, 2018

(In thousands of U.S. dollars and share amounts)

(Unaudited)

	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares				Restricted Share Units			Additional Paid-in Capital			Treasury Shares					Retained Earnings			Accumulated Other Comprehensive Loss			Total Accenture plc Shareholders’ Equity			Noncontrolling Interests			Total Shareholders’ Equity
	$		No. Shares	$		No. Shares	$		No. Shares								$			No. Shares
Balance as of August 31, 2017	$	57	40	$	14	638,966	$	—	20,531		$	1,095,026		$	3,516,399		$	(1,649,090	)	(23,449	)	$	7,081,855		$	(1,094,784	)	$	8,949,477		$	760,723		$	9,710,200
Net income																						3,030,383						3,030,383			135,840			3,166,223
Other comprehensive income (loss)																									(248,917		)	(248,917		)	340			(248,577		)
Purchases of Class A ordinary shares														49,029			(2,004,114		)	(13,337	)							(1,955,085		)	(49,029		)	(2,004,114		)
Share-based compensation expense											688,719			63,107														751,826						751,826
Purchases/redemptions of Accenture Holdings plc ordinary shares, Accenture Canada Holdings Inc. exchangeable shares and Class X ordinary shares									(812	)				(78,318		)												(78,318		)	(4,838		)	(83,156		)
Issuances of Class A ordinary shares:
Employee share programs						8,990					(729,020		)	997,725			452,192			3,773		(68,656		)				652,241			14,589			666,830
Upon redemption of Accenture Holdings plc ordinary shares				1		25,906			(19,054	)				408,652														408,653			(408,653		)	—
Dividends											56,226											(1,727,298		)				(1,671,072		)	(37,652		)	(1,708,724		)
Other, net														(22,409		)						(19,454		)				(41,863		)	(55,909		)	(97,772		)
Balance as of May 31, 2018	$	57	40	$	15	673,862	$	—	665		$	1,110,951		$	4,934,185		$	(3,201,012	)	(33,013	)	$	8,296,830		$	(1,343,701	)	$	9,797,325		$	355,411		$	10,152,736

The accompanying Notes are an integral part of these Consolidated Financial Statements.

9

ACCENTURE PLC

CONSOLIDATED CASH FLOWS STATEMENTS

For the Nine Months Ended May 31, 2019 and 2018

(In thousands of U.S. dollars)

(Unaudited)

	May 31, 2019			May 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,700,693		$	3,166,223
Adjustments to reconcile Net income to Net cash provided by (used in) operating activities —
Depreciation, amortization and asset impairments	652,592			691,686
Share-based compensation expense	856,952			751,826
Deferred income taxes, net	(47,130		)	(75,985		)
Other, net	(85,725		)	44,135
Change in assets and liabilities, net of acquisitions —
Receivables and contract assets, current and non-current	(493,733		)	(652,315		)
Other current and non-current assets	(373,142		)	(241,979		)
Accounts payable	94,144			(132,607		)
Deferred revenues, current and non-current	342,633			85,853
Accrued payroll and related benefits	(67,970		)	7,469
Income taxes payable, current and non-current	(52,518		)	100,939
Other current and non-current liabilities	(16,096		)	172,188
Net cash provided by (used in) operating activities	4,510,700			3,917,433
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(357,749		)	(439,804		)
Purchases of businesses and investments, net of cash acquired	(1,055,915		)	(456,402		)
Proceeds from sales of businesses and investments, net of cash transferred	27,915			14,325
Other investing, net	6,041			7,245
Net cash provided by (used in) investing activities	(1,379,708		)	(874,636		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares	754,453			666,830
Purchases of shares	(2,284,587		)	(2,087,270		)
Proceeds from (repayments of) long-term debt, net	(983		)	(456		)
Cash dividends paid	(1,864,353		)	(1,708,724		)
Other, net	(20,683		)	(47,792		)
Net cash provided by (used in) financing activities	(3,416,153		)	(3,177,412		)
Effect of exchange rate changes on cash and cash equivalents	(7,041		)	(63,400		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(292,202		)	(198,015		)