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Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________ 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended
May 31, 2020
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) (1646-2000
(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
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 11, 2020 was 663,704,786 (which number includes 27,508,152 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 11, 2020 was 585,059.


Table of Contents


ACCENTURE PLC
INDEX
 
 
 
Page

2

Table of Contents


PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACCENTURE PLC
CONSOLIDATED BALANCE SHEETS
May 31, 2020 and August 31, 2019
(In thousands of U.S. dollars, except share and per share amounts)
 
May 31,
2020
 
August 31,
2019
 
(Unaudited)
 
 
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
6,442,261

 
$
6,126,853

Short-term investments
3,676

 
3,313

Receivables and contract assets
8,345,601

 
8,095,071

Other current assets
1,354,698

 
1,225,364

Total current assets
16,146,236

 
15,450,601

NON-CURRENT ASSETS:
 
 
 
Contract assets
52,701

 
71,002

Investments
270,984

 
240,313

Property and equipment, net
1,445,183

 
1,391,166

Lease assets
3,222,787

 

Goodwill
7,334,594

 
6,205,550

Deferred contract costs
704,282

 
681,492

Deferred tax assets
4,242,528

 
4,349,464

Other non-current assets
1,638,024

 
1,400,292

Total non-current assets
18,911,083

 
14,339,279

TOTAL ASSETS
$
35,057,319

 
$
29,789,880

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Current portion of long-term debt and bank borrowings
$
8,697

 
$
6,411

Accounts payable
1,405,977

 
1,646,641

Deferred revenues
3,536,521

 
3,188,835

Accrued payroll and related benefits
4,426,829

 
4,890,542

Income taxes payable
443,881

 
378,017

Lease liabilities
738,642

 

Accrued consumption taxes
663,697

 
446,699

Other accrued liabilities
604,037

 
504,751

Total current liabilities
11,828,281

 
11,061,896

NON-CURRENT LIABILITIES:
 
 
 
Long-term debt
60,342

 
16,247

Deferred revenues
638,821

 
565,224

Retirement obligation
1,820,410

 
1,765,914

Deferred tax liabilities
208,146

 
133,232

Income taxes payable
907,590

 
892,688

Lease liabilities
2,704,540

 

Other non-current liabilities
405,544

 
526,988

Total non-current liabilities
6,745,393

 
3,900,293

COMMITMENTS AND CONTINGENCIES

 

SHAREHOLDERS’ EQUITY:
 
 
 
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of May 31, 2020 and August 31, 2019
57

 
57

Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 663,533,025 and 654,739,267 shares issued as of May 31, 2020 and August 31, 2019, respectively
15

 
15

Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 585,059 and 609,404 shares issued and outstanding as of May 31, 2020 and August 31, 2019, respectively

 

Restricted share units
1,337,761

 
1,411,903

Additional paid-in capital
7,190,179

 
5,804,448

Treasury shares, at cost: Ordinary, 40,000 shares as of May 31, 2020 and August 31, 2019; Class A ordinary, 27,565,988 and 18,964,863 shares as of May 31, 2020 and August 31, 2019, respectively
(3,085,444
)
 
(1,388,376
)
Retained earnings
12,565,857

 
10,421,538

Accumulated other comprehensive loss
(1,993,819
)
 
(1,840,577
)
Total Accenture plc shareholders’ equity
16,014,606

 
14,409,008

Noncontrolling interests
469,039

 
418,683

Total shareholders’ equity
16,483,645

 
14,827,691

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
35,057,319

 
$
29,789,880


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

3

Table of Contents


ACCENTURE PLC
CONSOLIDATED INCOME STATEMENTS
For the Three and Nine Months Ended May 31, 2020 and 2019
(In thousands of U.S. dollars, except share and per share amounts)
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
May 31, 2020
 
May 31, 2019
 
May 31, 2020
 
May 31, 2019
REVENUES:
 
 
 
 
 
 
 
Revenues
$
10,991,305

 
$
11,099,688

 
$
33,491,768

 
$
32,159,363

OPERATING EXPENSES:
 
 
 
 
 
 
 
Cost of services
7,462,617

 
7,571,390

 
22,956,150

 
22,279,291

Sales and marketing
1,118,204

 
1,184,164

 
3,471,980

 
3,274,216

General and administrative costs
697,751

 
626,191

 
2,094,697

 
1,872,275

Total operating expenses
9,278,572

 
9,381,745

 
28,522,827

 
27,425,782

OPERATING INCOME
1,712,733

 
1,717,943

 
4,968,941

 
4,733,581

Interest income
12,671

 
21,402

 
61,476

 
60,114

Interest expense
(4,961
)
 
(5,348
)
 
(19,002
)
 
(15,472
)
Other income (expense), net
(39,670
)
 
(29,690
)
 
(20,439
)
 
(87,178
)
INCOME BEFORE INCOME TAXES
1,680,773

 
1,704,307

 
4,990,976

 
4,691,045

Income tax expense
428,134

 
435,658

 
1,111,087

 
990,352

NET INCOME
1,252,639

 
1,268,649

 
3,879,889

 
3,700,693

Net income attributable to noncontrolling interest in Accenture Canada Holdings Inc.
(1,518
)
 
(1,676
)
 
(4,791
)
 
(5,213
)
Net income attributable to noncontrolling interests – other
(22,919
)
 
(17,457
)
 
(55,188
)
 
(46,795
)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC
$
1,228,202

 
$
1,249,516

 
$
3,819,910

 
$
3,648,685

Weighted average Class A ordinary shares:
 
 
 
 
 
 
 
Basic
636,146,240

 
637,831,341

 
636,445,172

 
638,439,707

Diluted
645,607,914

 
649,297,717

 
648,025,669

 
650,144,931

Earnings per Class A ordinary share:
 
 
 
 
 
 
 
Basic
$
1.93

 
$
1.96

 
$
6.00

 
$
5.72

Diluted
$
1.90

 
$
1.93

 
$
5.90

 
$
5.62

Cash dividends per share
$
0.80

 
$
1.46

 
$
2.40

 
$
2.92


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

4

Table of Contents


ACCENTURE PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three and Nine Months Ended May 31, 2020 and 2019
(In thousands of U.S. dollars)
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
May 31, 2020
 
May 31, 2019
 
May 31, 2020
 
May 31, 2019
NET INCOME
$
1,252,639

 
$
1,268,649

 
$
3,879,889

 
$
3,700,693

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
 
 
 
 
 
 
 
Foreign currency translation
(100,750
)
 
(102,620
)
 
(110,468
)
 
(69,592
)
Defined benefit plans
10,704

 
5,890

 
29,261

 
32,881

Cash flow hedges
(101,516
)
 
96,382

 
(72,035
)
 
148,036

Investments

 
(1,148
)
 

 
(1,663
)
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC
(191,562
)
 
(1,496
)
 
(153,242
)
 
109,662

Other comprehensive income (loss) attributable to noncontrolling interests
(2,285
)
 
(4,188
)
 
(2,262
)
 
(4,859
)
COMPREHENSIVE INCOME
$
1,058,792

 
$
1,262,965

 
$
3,724,385

 
$
3,805,496




 


 
 
 
 
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC
$
1,036,640

 
$
1,248,020

 
$
3,666,668

 
$
3,758,347

Comprehensive income attributable to noncontrolling interests
22,152

 
14,945

 
57,717

 
47,149

COMPREHENSIVE INCOME
$
1,058,792

 
$
1,262,965

 
$
3,724,385

 
$
3,805,496


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


5

Table of Contents


ACCENTURE PLC
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT
For the Three Months Ended May 31, 2020
(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 29, 2020
$
57

 
40

 
$
15

 
661,742

 
$

 
588

 
$
1,095,560

 
$
6,884,963

 
$
(2,571,256
)
 
(24,551
)
 
$
11,867,507

 
$
(1,802,257
)
 
$
15,474,589

 
$
446,217

 
$
15,920,806

Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,228,202

 
 
 
1,228,202

 
24,437

 
1,252,639

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(191,562
)
 
(191,562
)
 
(2,285
)
 
(193,847
)
Purchases of Class A shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
661

 
(626,116
)
 
(3,672
)
 
 
 
 
 
(625,455
)
 
(661
)
 
(626,116
)
Share-based compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
248,055

 
42,811

 
 
 
 
 
 
 
 
 
290,866

 
 
 
290,866

Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares
 
 
 
 
 
 
 
 
 
 
(3
)
 
 
 
(572
)
 
 
 
 
 
 
 
 
 
(572
)
 
 
 
(572
)
Issuances of Class A shares for employee share programs
 
 
 
 
 
 
1,791

 
 
 
 
 
(24,614
)
 
264,298

 
111,928

 
617

 
(2,809
)
 
 
 
348,803

 
362

 
349,165

Dividends
 
 
 
 
 
 
 
 
 
 
 
 
18,760

 
 
 
 
 
 
 
(527,043
)
 
 
 
(508,283
)
 
(630
)
 
(508,913
)
Other, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,982
)
 
 
 
 
 
 
 
 
 
(1,982
)
 
1,599

 
(383
)
Balance as of May 31, 2020
$
57

 
40

 
$
15

 
663,533

 
$

 
585

 
$
1,337,761

 
$
7,190,179

 
$
(3,085,444
)
 
(27,606
)
 
$
12,565,857

 
$
(1,993,819
)
 
$
16,014,606

 
$
469,039

 
$
16,483,645


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

6

Table of Contents


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.

7

Table of Contents


ACCENTURE PLC
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT
For the Nine Months Ended May 31, 2020
(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, 2019
$
57

 
40

 
$
15

 
654,739

 
$

 
609

 
$
1,411,903

 
$
5,804,448

 
$
(1,388,376
)
 
(19,005
)
 
$
10,421,538

 
$
(1,840,577
)
 
$
14,409,008

 
$
418,683

 
$
14,827,691

Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,819,910

 
 
 
3,819,910

 
59,979

 
3,879,889

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(153,242
)
 
(153,242
)
 
(2,262
)
 
(155,504
)
Purchases of Class A shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,527

 
(2,318,768
)
 
(12,176
)
 
 
 
 
 
(2,316,241
)
 
(2,527
)
 
(2,318,768
)
Share-based compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
858,578

 
79,522

 
 
 
 
 
 
 
 
 
938,100

 
 
 
938,100

Purchases/redemptions of Accenture Canada Holdings Inc. exchangeable shares and Class X shares
 
 
 
 
 
 
 
 
 
 
(24
)
 
 
 
(7,187
)
 
 
 
 
 
 
 
 
 
(7,187
)
 
 
 
(7,187
)
Issuances of Class A shares for employee share programs
 
 
 
 
 
 
8,794

 
 
 
 
 
(989,782
)
 
1,308,659

 
621,700

 
3,575

 
(91,917
)
 
 
 
848,660

 
905

 
849,565

Dividends
 
 
 
 
 
 
 
 
 
 
 
 
57,062

 
 
 
 
 
 
 
(1,583,674
)
 
 
 
(1,526,612
)
 
(1,920
)
 
(1,528,532
)
Other, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,210

 
 
 
 
 


 
 
 
2,210

 
(3,819
)
 
(1,609
)
Balance as of May 31, 2020
$
57

 
40

 
$
15

 
663,533

 
$

 
585

 
$
1,337,761

 
$
7,190,179

 
$
(3,085,444
)
 
(27,606
)
 
$
12,565,857

 
$
(1,993,819
)
 
$
16,014,606

 
$
469,039

 
$
16,483,645


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

8

Table of Contents


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.


9

Table of Contents


ACCENTURE PLC
CONSOLIDATED CASH FLOWS STATEMENTS
For the Nine Months Ended May 31, 2020 and 2019
(In thousands of U.S. dollars)
(Unaudited)
 
May 31, 2020
 
May 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$
3,879,889

 
$
3,700,693

Adjustments to reconcile Net income to Net cash provided by (used in) operating activities —
 
 
 
Depreciation, amortization and other
1,286,234

 
652,592

Share-based compensation expense
938,100

 
856,952

Deferred tax expense (benefit)
128,245

 
(47,130
)
Other, net
(142,943
)
 
(85,725
)
Change in assets and liabilities, net of acquisitions —
 
 
 
Receivables and contract assets, current and non-current
(96,365
)
 
(493,733
)
Other current and non-current assets
(483,825
)
 
(373,142
)
Accounts payable
(245,718
)
 
94,144

Deferred revenues, current and non-current
263,274

 
342,633

Accrued payroll and related benefits
(475,183
)
 
(67,970
)
Income taxes payable, current and non-current
74,338

 
(52,518
)
Other current and non-current liabilities
(67,028
)
 
(16,096
)
Net cash provided by (used in) operating activities
5,059,018

 
4,510,700

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchases of property and equipment
(410,414
)
 
(357,749
)
Purchases of businesses and investments, net of cash acquired
(1,326,366
)
 
(1,055,915
)
Proceeds from sales of businesses and investments
84,886

 
27,915

Other investing, net
3,717

 
6,041

Net cash provided by (used in) investing activities
(1,648,177
)
 
(1,379,708
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from issuance of shares
849,565

 
754,453

Purchases of shares
(2,325,955
)
 
(2,284,587
)
Proceeds from (repayments of) long-term debt, net
(207
)
 
(983
)
Cash dividends paid
(1,528,532
)
 
(1,864,353
)
Other, net
(30,421
)
 
(20,683
)
Net cash provided by (used in) financing activities
(3,035,550
)
 
(3,416,153
)
Effect of exchange rate changes on cash and cash equivalents
(59,883
)
 
(7,041
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
315,408

 
(292,202
)
CASH AND CASH EQUIVALENTS, beginning of period
6,126,853

 
5,061,360

CASH AND CASH EQUIVALENTS, end of period
$
6,442,261

 
$
4,769,158

SUPPLEMENTAL CASH FLOW INFORMATION:
 
 
 
Income taxes paid, net
$
993,848

 
$
1,052,517

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

10

Table of Contents
ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)



1. BASIS OF PRESENTATION
The accompanying unaudited interim Consolidated Financial Statements of Accenture plc and its controlled subsidiary companies have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. We use the terms “Accenture,” “we” and “our” in the Notes to Consolidated Financial Statements to refer to Accenture plc and its subsidiaries. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2019 included in our Annual Report on Form 10-K filed with the SEC on October 29, 2019.
The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from those estimates. The Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results for these interim periods. The results of operations for the three and nine months ended May 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2020.
Effective March 1, 2020, we began managing our business under a new growth model through our three geographic markets, North America, Europe and Growth Markets, which became our reportable segments in the third quarter of fiscal 2020. Prior to this change, our reportable segments were our five operating groups, Communications, Media & Technology, Financial Services, Health & Public Service, Products and Resources. See Note 6 (Goodwill and Intangible Assets) and Note 12 (Segment Reporting) to these Consolidated Financial Statements for further details regarding the change in our reportable segments.
Allowance for Client Receivables
As of May 31, 2020 and August 31, 2019, total allowance recorded for client receivables was $37,468 and $45,538, respectively.
Depreciation and Amortization
Depreciation expense was $119,148 and $338,830 for the three and nine months ended May 31, 2020, respectively, and $109,398 and $322,746 for the three and nine months ended May 31, 2019, respectively. As of May 31, 2020 and August 31, 2019, total accumulated depreciation was $2,238,805 and $1,956,029, respectively. Deferred transition amortization expense was $71,278 and $217,946 for the three and nine months ended May 31, 2020, respectively, and $67,225 and $204,313 for the three and nine months ended May 31, 2019, respectively. See Note 6 (Goodwill and Intangible Assets) to these Consolidated Financial Statements for intangible asset amortization balances.

11

Table of Contents
ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)
(Unaudited)

Recently Adopted Accounting Pronouncements
Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02 and related updates (“Topic 842”)
On September 1, 2019, we adopted FASB ASU No. 2016-02, Leases, and related updates (“Topic 842”) using the effective date method. Prior period amounts were not adjusted. The primary impact of adoption is the requirement for lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by both operating and finance leases. Enhanced quantitative and qualitative disclosures about leasing arrangements are also required. We elected the package of practical expedients which does not require reassessment of prior conclusions related to identifying leases, lease classification or initial direct costs. We also elected the practical expedient to combine lease and nonlease components, accounting for the combined components as a single lease component, for our office real estate and automobile leases. The standard did not have a material impact on our Consolidated Income Statement.
The impact of adopting Topic 842 on our Consolidated Balance Sheets was as follows:
Balance Sheet
Balance as of August 31, 2019
 
Adjustments due to ASU 2016-02 (Topic 842)
 
Balance as of September 1, 2019
CURRENT ASSETS
 
 
 
 
 
Other current assets
$
1,225,364

 
$
(38,666
)
 
$
1,186,698

NON-CURRENT ASSETS
 
 
 
 
 
Lease assets

 
3,169,608

 
3,169,608

Other non-current assets
1,400,292

 
(10,333
)
 
1,389,959