ACCENTURE SCA - FORM 10-Q - March 25, 2011

Attached files

file	filename
EX-32.1 - CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 - ACCENTURE SCA	dex321.htm
EX-31.2 - CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) - ACCENTURE SCA	dex312.htm
EX-32.2 - CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 - ACCENTURE SCA	dex322.htm
EX-31.1 - CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) - ACCENTURE SCA	dex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED February 28, 2011

¨	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: 000-49713

Accenture SCA

(Exact name of registrant as specified in its charter)

Luxembourg

98-0351796

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

46A, Avenue J.F. Kennedy

L-1855 Luxembourg

(Address of principal executive offices)

(352) 26 42 35 00

(Registrant’s telephone number, including area code)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ¨ No ¨

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


Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer þ	Smaller reporting filer company ¨
	(Do not check if a smaller reporting company)

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 I common shares, par value €1.25 per share, outstanding as of March 18, 2011 was 65,627,605 (which number does not include 983,404,459 issued shares held by the registrant or its general partner).

ACCENTURE SCA

INDEX


	Page
Part I. Financial Information		3
Item 1. Financial Statements		3
Consolidated Balance Sheets as of February 28, 2011 (Unaudited) and August 31, 2010		3
Consolidated Income Statements (Unaudited) for the three and six months ended February 28, 2011 and 2010		4
Consolidated Shareholders’ Equity and Comprehensive Income Statements (Unaudited) for the six months ended February 28, 2011		5
Consolidated Cash Flow Statements (Unaudited) for the six months ended February 28, 2011 and 2010		6
Notes to Consolidated Financial Statements (Unaudited)		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3. Quantitative and Qualitative Disclosures About Market Risk		29
Item 4. Controls and Procedures		29
Part II. Other Information		29
Item 1. Legal Proceedings		29
Item 1A. Risk Factors		29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		30
Item 3. Defaults upon Senior Securities		32
Item 4. (Removed and Reserved)		32
Item 5. Other Information		32
Item 6. Exhibits		32
Signatures		33

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCENTURE SCA

CONSOLIDATED BALANCE SHEETS

February 28, 2011 and August 31, 2010

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


	February 28, 2011			August 31, 2010
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,677,544		$	4,838,292
Short-term investments		5,192			2,987
Receivables from clients, net		3,072,103			2,534,598
Unbilled services, net		1,373,376			1,127,827
Deferred income taxes, net		567,826			569,678
Other current assets		583,236			490,243

Total current assets		10,279,277			9,563,625

NON-CURRENT ASSETS:
Unbilled services, net		48,341			54,310
Investments		37,708			41,023
Property and equipment, net		694,788			659,569
Goodwill		966,819			841,234
Deferred contract costs		536,532			518,780
Deferred income taxes, net		574,413			532,191
Other non-current assets		755,795			624,521

Total non-current assets		3,614,396			3,271,628

TOTAL ASSETS	$	13,893,673		$	12,835,253

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings	$	422		$	143
Accounts payable		846,365			885,328
Deferred revenues		2,114,235			1,772,833
Accrued payroll and related benefits		2,495,790			2,683,492
Accrued consumption taxes		308,633			263,612
Income taxes payable		182,956			247,416
Deferred income taxes, net		45,468			43,287
Other accrued liabilities		623,227			671,493

Total current liabilities		6,617,096			6,567,604

NON-CURRENT LIABILITIES:
Long-term debt		4,129			1,445
Deferred revenues relating to contract costs		523,780			497,102
Retirement obligation		998,073			952,747
Deferred income taxes, net		80,480			67,976
Income taxes payable		1,407,127			1,246,960
Other non-current liabilities		215,217			226,696

Total non-current liabilities		3,228,806			2,992,926

COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Class I common shares, par value 1.25 euros per share, 40,000,000,000 shares authorized, 1,049,032,064 shares issued as of February 28, 2011 and August 31, 2010		1,704,162			1,704,162
Restricted share units (related to Accenture plc Class A ordinary shares)		664,236			973,889
Additional paid-in capital		4,827,535			4,655,274
Treasury shares, at cost: Class I common, 320,648,049 and 330,613,860 shares as of February 28, 2011 and August 31, 2010, respectively		(11,236,625	)		(11,156,101	)
Investment in Accenture plc shares, at cost, 13,816,959 shares as of February 28, 2011 and August 31, 2010		(456,864	)		(456,864	)
Retained earnings		8,693,841			7,878,913
Accumulated other comprehensive loss		(241,228	)		(404,573	)

Total Accenture SCA shareholders’ equity		3,955,057			3,194,700
Noncontrolling interests		92,714			80,023

Total shareholders’ equity		4,047,771			3,274,723

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	13,893,673		$	12,835,253

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

ACCENTURE SCA

CONSOLIDATED INCOME STATEMENTS

For the Three and Six Months Ended February 28, 2011 and 2010

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

(Unaudited)


	Three Months Ended February 28,						Six Months Ended February 28,
	2011			2010			2011			2010
REVENUES:
Revenues before reimbursements (“Net revenues”)	$	6,053,621		$	5,176,438		$	12,099,271		$	10,558,970
Reimbursements		442,672			361,385			875,215			726,540

Revenues		6,496,293			5,537,823			12,974,486			11,285,510
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses		4,136,397			3,486,107			8,237,567			7,084,685
Reimbursable expenses		442,672			361,385			875,215			726,540

Cost of services		4,579,069			3,847,492			9,112,782			7,811,225
Sales and marketing		709,779			623,386			1,441,250			1,245,246
General and administrative costs		435,499			413,335			821,225			825,456
Reorganization costs, net		369			2,637			717			6,202

Total operating expenses		5,724,716			4,886,850			11,375,974			9,888,129

OPERATING INCOME		771,577			650,973			1,598,512			1,397,381
(Loss) gain on investments, net		(868	)		(302	)		(919	)		32
Interest income		9,893			7,029			19,286			13,974
Interest expense		(3,507	)		(4,519	)		(8,243	)		(9,000	)
Other (expense) income, net		(2,948	)		(13,791	)		10,139			(7,892	)

INCOME BEFORE INCOME TAXES		774,147			639,390			1,618,775			1,394,495
Provision for income taxes		208,397			177,511			447,469			407,818

NET INCOME		565,750			461,879			1,171,306			986,677
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc.		(1,406	)		(1,316	)		(2,967	)		(2,831	)
Net income attributable to noncontrolling interests – other		(8,143	)		(3,649	)		(14,311	)		(9,649	)

NET INCOME ATTRIBUTABLE TO ACCENTURE SCA	$	556,201		$	456,914		$	1,154,028		$	974,197

Cash dividends per share	$	—		$	—		$	0.45		$	0.75

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

ACCENTURE SCA

CONSOLIDATED SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME STATEMENTS

For the Six Months Ended February 28, 2011

(In thousands of U.S. dollars)

(Unaudited)


	Class I Common Shares				Restricted Share Units (related to Accenture plc Class A ordinary shares)			Additional Paid-in Capital			Treasury Shares						Investment in Accenture plc						Retained Earnings			Accumulated Other Comprehensive Loss			Total Accenture SCA Shareholders’ Equity			Noncontrolling Interests			Total Shareholders’ Equity
	$		No. Shares					Additional Paid-in Capital			$			No. Shares			$			No. Shares			Retained Earnings			Accumulated Other Comprehensive Loss			Total Accenture SCA Shareholders’ Equity			Noncontrolling Interests			Total Shareholders’ Equity
Balance as of August 31, 2010	$	1,704,162		1,049,032	$	973,889		$	4,655,274		$	(11,156,101	)		(330,614	)	$	(456,864	)		(13,817	)	$	7,878,913		$	(404,573	)	$	3,194,700		$	80,023		$	3,274,723
Comprehensive income:
Net income																								1,154,028						1,154,028			17,278			1,171,306
Other comprehensive income:
Unrealized gains on cash flow hedges, net of tax and reclassification adjustments																											27,212			27,212			67			27,279
Unrealized losses on marketable securities, net of reclassification adjustments																											(138	)		(138	)		—			(138	)
Foreign currency translation adjustments, net of tax																											124,000			124,000			3,390			127,390
Defined benefit plans, net of tax																											12,271			12,271			30			12,301

Other comprehensive income																											163,345						3,487

Comprehensive income																														1,317,373						1,338,138
Income tax benefit on share-based compensation plans									74,055																					74,055						74,055
Share-based compensation expense						202,324			15,864																					218,188						218,188
Purchases/redemptions of Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares									(3,768	)		(559,701	)		(12,500	)														(563,469	)		(1,438	)		(564,907	)
Issuances of Accenture SCA Class I common shares related to employee share programs						(527,112	)		97,543			479,177			22,466															49,608			122			49,730
Dividends						15,135																		(334,942	)					(319,807	)		(843	)		(320,650	)
Other, net									(11,433	)														(4,158	)					(15,591	)		(5,915	)		(21,506	)

Balance as of February 28, 2011	$	1,704,162		1,049,032	$	664,236		$	4,827,535		$	(11,236,625	)		(320,648	)	$	(456,864	)		(13,817	)	$	8,693,841		$	(241,228	)	$	3,955,057		$	92,714		$	4,047,771

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

ACCENTURE SCA

CONSOLIDATED CASH FLOW STATEMENTS

For the Six Months Ended February 28, 2011 and 2010

(In thousands of U.S. dollars)

(Unaudited)


	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,171,306		$	986,677
Adjustments to reconcile Net income to Net cash provided by operating activities —
Depreciation, amortization and asset impairments		241,143			233,416
Reorganization costs, net		717			6,202
Share-based compensation expense		218,188			219,416
Deferred income taxes, net		(43,212	)		(4,561	)
Other, net		50,188			23,839
Change in assets and liabilities, net of acquisitions —
Receivables from clients, net		(419,387	)		(266,910	)
Unbilled services, current and non-current		(152,125	)		(20,221	)
Other current and non-current assets		(255,683	)		(28,799	)
Accounts payable		(20,006	)		(29,812	)
Deferred revenues, current and non-current		244,788			158,184
Accrued payroll and related benefits		(280,638	)		(247,808	)
Income taxes payable, current and non-current		16,309			26,848
Other current and non-current liabilities		(64,085	)		(177,379	)

Net cash provided by operating activities		707,503			879,092

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and sales of available-for-sale investments		691			6,352
Purchases of available-for-sale investments		(726	)		(6,800	)
Proceeds from sales of property and equipment		1,930			2,186
Purchases of property and equipment		(154,058	)		(78,863	)
Purchases of businesses and investments, net of cash acquired		(118,262	)		(89	)

Net cash used in investing activities		(270,425	)		(77,214	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common shares		49,730			146,777
Purchases of shares		(564,907	)		(789,932	)
Repayments of long-term debt, net		(1,260	)		(549	)
Cash dividends paid		(320,650	)		(551,442	)
Excess tax benefits from share-based payment arrangements		105,798			33,706
Other, net		(19,210	)		(13,149	)

Net cash used in financing activities		(750,499	)		(1,174,589	)
Effect of exchange rate changes on cash and cash equivalents		152,673			(54,200	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(160,748	)		(426,911	)
CASH AND CASH EQUIVALENTS, beginning of period		4,838,292			4,541,662

CASH AND CASH EQUIVALENTS, end of period	$	4,677,544		$	4,114,751

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

ACCENTURE SCA

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 SCA, a Luxembourg partnership limited by shares, and its controlled subsidiary companies (collectively, the “Company”) 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. 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, 2010 included in the Company’s Annual Report on Form 10-K filed with the SEC on October 26, 2010.

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 the Company may undertake in the future, actual results may be different 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 six months ended February 28, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2011.

Certain amounts reported in previous years have been reclassified to conform to the current-period presentation.

The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, the Company is not aware of any events or transactions that occurred subsequent to the balance sheet date but prior to filing that would require recognition or disclosure in its Consolidated Financial Statements.

Accenture plc (“Accenture”) is a holding company incorporated in Ireland with no material assets other than Accenture SCA Class I common shares. Accenture acts as the sole general partner of the Company and owns a majority voting interest in the Company. Information regarding various aspects of the activities of Accenture are described in these notes as they affect the financial results and conditions of the Company.

Allowances for Client Receivables and Unbilled Services

As of February 28, 2011 and August 31, 2010, total allowances for client receivables and unbilled services were $75,518 and $104,753, respectively.

Accumulated Depreciation

As of February 28, 2011 and August 31, 2010, total accumulated depreciation was $1,673,610 and $1,559,738, respectively.

Recently Adopted Accounting Pronouncements

In September 2010, the Company adopted guidance issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition guidance for arrangements with multiple deliverables. The guidance: eliminates the residual method of allocation in previous guidance; requires that arrangement considerations be allocated at the inception of the arrangement to all deliverables using the relative selling price; and requires a vendor to use estimates of a selling price developed in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis for all deliverables that meet the remaining separation criteria when vendor-specific objective evidence and third-party evidence, respectively, do not exist as estimates of selling price. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements.

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)

(Unaudited)

2. INCOME TAXES

Effective Tax Rate

The Company’s effective tax rates for the three months ended February 28, 2011 and 2010 were 26.9% and 27.8%, respectively. The Company’s effective tax rates for the six months ended February 28, 2011 and 2010 were 27.6% and 29.2%, respectively. The effective tax rates for the three and six months ended February 28, 2011 are lower than the effective tax rates for the three and six months ended February 28, 2010 due to a number of factors that impact the geographic mix of income.

3. REORGANIZATION COSTS, NET

In fiscal 2001, the Company accrued reorganization liabilities in connection with its transition to a corporate structure. These liabilities included certain non-income tax liabilities, such as stamp taxes, as well as liabilities for certain individual income tax exposures related to the transfer of interests in certain entities to the Company as part of the reorganization. These primarily represent unusual and disproportionate individual income tax exposures assumed by certain, but not all, of the Company’s shareholders and partners in certain tax jurisdictions specifically related to the transfer of their partnership interests in certain entities to the Company as part of the reorganization. (Prior to fiscal 2005, the Company referred to its highest-level employees with the “partner” title and the Company continues to use the term “partner” to refer to these persons in certain situations related to its reorganization and the period prior to its incorporation.) The Company identified certain shareholders and partners who may incur such unusual and disproportionate financial damage in certain jurisdictions. These include shareholders and partners who were subject to tax in their jurisdiction on items of income arising from the reorganization transaction that were not taxable for most other shareholders and partners. In addition, certain other shareholders and partners were subject to a different rate or amount of tax than other shareholders or partners in the same jurisdiction. When additional taxes are assessed on these shareholders or partners in connection with these transfers, the Company has made and intends to make payments, and in one country has contractually committed, to reimburse certain costs associated with the assessment either to the shareholder or partner, or to the taxing authority. The Company has recorded reorganization expense and the related liability where such liabilities are probable. Interest accruals are made to cover reimbursement of interest on such tax assessments.

The Company’s reorganization activity was as follows:


	Three Months Ended February 28,					Six Months Ended February 28,
	2011		2010			2011		2010
Reorganization liability, beginning of period	$	281,781	$	315,525		$	271,907	$	296,104
Final determinations (1)		—		(743	)		—		(743	)
Interest expense accrued		369		3,380			717		6,945
Foreign currency translation adjustments		14,019		(30,044	)		23,545		(14,188	)

Reorganization liability, end of period	$	296,169	$	288,118		$	296,169	$	288,118

(1)	Includes final agreements with tax authorities and expirations of statues of limitations.

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)

(Unaudited)

As of February 28, 2011, reorganization liabilities of $284,843 were included in Other accrued liabilities because expirations of statutes of limitations or other final determinations could occur within 12 months, and reorganization liabilities of $11,326 were included in Other non-current liabilities. Timing of the resolution of tax audits or the initiation of additional litigation and/or criminal tax proceedings may delay final resolution. Final resolution, through settlement, conclusion of legal proceedings or a tax authority’s decision not to pursue a claim, will result in payment by the Company of amounts in settlement or judgment of these matters and/or recording of a reorganization benefit or cost in the Company’s Consolidated Income Statement. It is possible the aggregate amount of such payments in connection with resolution of all such proceedings could exceed the currently recorded amounts. As of February 28, 2011, only a small number of jurisdictions remain that have active audits/investigations or open statutes of limitations, and only one is significant. In that jurisdiction, current and former partners, and the Company, are engaged in disputes with tax authorities in connection with the corporate reorganization in 2001, some of which have resulted, and others of which are expected to result in litigation. These individuals and the Company intend to vigorously defend their positions.

4. BUSINESS COMBINATIONS AND GOODWILL

The changes in the carrying amount of goodwill by reportable operating segment are as follows:


	August 31, 2010		Additions/ Adjustments (1)		Foreign Currency Translation Adjustments		February 28, 2011
Communications & High Tech	$	151,514	$	11,369	$	6,740	$	169,623
Financial Services		141,232		6,756		2,596		150,584
Health & Public Service		280,546		3,155		1,999		285,700
Products		193,356		72,618		8,597		274,571
Resources		74,586		9,131		2,624		86,341

Total	$	841,234	$	103,029	$	22,556	$	966,819

(1)	Additions/Adjustments primarily related to immaterial acquisitions made during the six months ended February 28, 2011.

5. SHAREHOLDERS’ EQUITY

Comprehensive Income

Comprehensive income was as follows:


	Three months ended February 28,				Six months ended February 28,
	2011		2010		2011		2010
Comprehensive income attributable to Accenture SCA	$	655,184	$	357,247	$	1,317,373	$	1,008,384
Comprehensive income attributable to noncontrolling interests		11,390		1,496		20,765		11,696

Total comprehensive income	$	666,574	$	358,743	$	1,338,138	$	1,020,080

Issuances of Accenture SCA Class I Common Shares Related to Employee Share Programs

Issuances of Accenture SCA Class I common shares related to employee share programs represent the net amount of issuances to Accenture in connection with transactions related to the issuance of Accenture plc Class A ordinary shares delivered pursuant to outstanding options awards, grants of restricted share units and other issuances under equity compensation plans and include the offsetting impact of shares acquired by the Company via share withholding for payroll tax obligations.

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)

(Unaudited)

Dividends

The Company’s dividend activity during the six months ended February 28, 2011 was as follows:

Dividend Payment Date

Dividend
Per Share

Accenture SCA Class I Common
Shares

Accenture Canada Holdings Inc.
Exchangeable Shares

Total Cash
Outlay

Record Date

Cash Outlay

Record Date

Cash Outlay

November 15, 2010

0.45

October 12, 2010

319,807

October 12, 2010

843

320,650

The payment of the cash dividends also resulted in the issuance of additional restricted share units to holders of restricted share units.

Subsequent Event

On March 23, 2011, the Board of Directors of Accenture plc declared a cash dividend of $0.45 per share on Accenture plc Class A ordinary shares for shareholders of record at the close of business on April 15, 2011. Accenture plc will cause Accenture SCA to declare a cash dividend of $0.45 per share on its Class I common shares for shareholders of record at the close of business on April 12, 2011. Both dividends are payable on May 13, 2011.

6. DERIVATIVE FINANCIAL INSTRUMENTS

In the normal course of business, the Company uses derivative financial instruments to manage foreign currency exchange rate risk. Derivative transactions are governed by a uniform set of policies and procedures covering areas such as authorization, counterparty exposure and hedging practices. Positions are monitored using techniques such as market value and sensitivity analyses. The Company does not enter into derivative transactions for trading purposes.

Certain derivatives also give rise to credit risks from the possible non-performance by counterparties. Credit risk is generally limited to the fair value of those contracts that are favorable to the Company, and the maximum amount of loss due to credit risk, based on the gross fair value of all of the Company’s derivative financial instruments, was approximately $69,523 as of February 28, 2011. The Company has limited its credit risk by entering into derivative transactions only with highly-rated global financial institutions, limiting the amount of credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial institutions with which it does business.

The Company also utilizes standard counterparty master agreements containing provisions for the netting of certain foreign currency transaction obligations and for set-off of certain obligations in the event of an insolvency of one of the parties to the transaction. These provisions may reduce the Company’s potential overall loss resulting from the insolvency of a counterparty and reduce a counterparty’s potential overall loss resulting from the insolvency of the Company. Additionally, these agreements contain early termination provisions triggered by adverse changes in a counterparty’s credit rating, thereby enabling the Company to accelerate settlement of a transaction prior to its contractual maturity and potentially decrease the Company’s realized loss on an open transaction. Similarly, a decrement in the Company’s credit rating could trigger a counterparty’s early termination rights, thereby enabling a counterparty to accelerate settlement of a transaction prior to its contractual maturity and potentially increase the Company’s realized loss on an open transaction. The aggregate fair value of the Company’s derivative instruments with credit-risk-related contingent features that are in a liability position as of February 28, 2011 was $11,657.

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)

(Unaudited)

The Company’s derivative financial instruments consist of deliverable and non-deliverable foreign currency forward contracts. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements. All of the significant inputs to the third-party valuation models are observable in active markets. Inputs include current market-based parameters such as forward rates, yield curves and credit default swap pricing.

The Company classifies cash flows from its derivative programs as cash flows from operating activities in the Consolidated Cash Flow Statement. The notional and fair values of all derivative instruments were as follows:


	February 28, 2011					August 31, 2010
	Notional Value		Fair Value			Notional Value		Fair Value
Foreign currency forward contracts:
To buy	$	2,447,264	$	63,952		$	2,402,633	$	6,747
To sell		538,012		(6,086	)		187,681		(427	)

Cash Flow Hedges

Certain of the Company’s subsidiaries are exposed to currency risk through their use of resources supplied by the Company’s Global Delivery Network. To mitigate this risk, the Company uses foreign currency forward contracts to hedge the foreign exchange risk of the forecasted intercompany expenses denominated in foreign currencies for up to three years in the future. The Company has designated these derivatives as cash flow hedges. As of February 28, 2011, the Company held no derivatives that were designated as fair value or net investment hedges.

For a cash flow hedge, the effective portion of the change in estimated fair value of a hedging instrument is recorded in Accumulated other comprehensive loss as a separate component of Shareholders’ Equity and is reclassified into Cost of services in the Consolidated Income Statement during the period in which the hedged transaction is recognized. The ineffective portion of the change in fair value of a cash flow hedge is recognized immediately in Other (expense) income, net in the Consolidated Income Statement and for the three and six months ended February 28, 2011 and 2010 was not material. In addition, the Company did not discontinue any cash flow hedges during the three and six months ended February 28, 2011 and 2010.

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)

(Unaudited)

The activity related to the change in net unrealized gains (losses) on cash flow hedges, net of tax, in Accumulated other comprehensive loss was as follows:


	Six Months Ended February 28,
	2011			2010
Net unrealized gains (losses) on cash flow hedges, net of tax, beginning of period	$	6,228		$	(10,575	)
Change in fair value, net of tax		33,468			26,578
Reclassification adjustments into earnings, net of tax		(6,189	)		(3,470	)
Portion attributable to Noncontrolling interests, net of tax		(67	)		(65	)

Net unrealized gains on cash flow hedges, net of tax, end of period	$	33,440		$	12,468

As of February 28, 2011, $11,273 of the amounts related to derivatives designated as cash flow hedges and recorded in Accumulated other comprehensive loss is expected to be reclassified into earnings in the next 12 months.

The fair values of derivative instruments designated as cash flow hedges are recorded in the Consolidated Balance Sheet as follows:


	February 28, 2011		August 31, 2010
Assets
Other current assets	$	21,339	$	10,806
Other non-current assets		36,690		13,962

Total	$	58,029	$	24,768

Liabilities
Other accrued liabilities	$	2,724	$	9,845
Other non-current liabilities		895		5,202

Total	$	3,619	$	15,047

Other Derivatives

The Company also uses foreign currency forward contracts, which have not been designated as hedges, to hedge balance sheet exposures, such as intercompany loans. These instruments are generally short-term in nature, with typical maturities of less than one year, and are subject to fluctuations in foreign exchange rates. Realized gains or losses and changes in the estimated fair value of these derivatives was a net gain of $27,449 and $66,978 for the three and six months ended February 28, 2011, respectively. Realized gains or losses and changes in the estimated fair value of these derivatives was a net loss of $(34,544) and a net gain of $38,949 for the three and six months ended February 28, 2010, respectively. Net gains are offset by net foreign currency losses, including net losses related to the underlying balance sheet exposures and are recorded in Other (expense) income, net in the Consolidated Income Statement. Net losses are offset by net foreign currency gains, including net gains related to the underlying balance sheet exposures and are recorded in Other (expense) income, net in the Consolidated Income Statement.

The fair values of other derivative instruments are recorded in the Consolidated Balance Sheet as follows:


	February 28, 2011		August 31, 2010
Other current assets	$	11,494	$	4,422
Other accrued liabilities		8,038		7,823

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)

(Unaudited)

7. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has the right to purchase or may also be required to purchase substantially all of the remaining outstanding shares of its Avanade Inc. subsidiary (“Avanade”) not owned by the Company at fair value if certain events occur. Certain holders of Avanade common stock and options to purchase the stock have put rights that, under certain circumstances and conditions, would require Avanade to redeem shares of its stock at fair value. As of February 28, 2011 and August 31, 2010, the Company has reflected the fair value of $97,562 and $93,404, respectively, related to Avanade’s redeemable common stock and the intrinsic value of the options on redeemable common stock in Other accrued liabilities on the Consolidated Balance Sheet.

Indemnifications and Guarantees

In the normal course of business and in conjunction with certain client engagements, the Company has entered into contractual arrangements through which it may be obligated to indemnify clients with respect to certain matters. These arrangements with clients can include provisions whereby the Company has joint and several liability in relation to the performance of certain contractual obligations along with third parties also providing services and products for a specific project. Indemnification provisions are also included in arrangements under which the Company agrees to hold the indemnified party harmless with respect to third party claims related to such matters as title to assets sold or licensed or certain intellectual property rights.

Typically, the Company has contractual recourse against third parties for certain payments made by the Company in connection with arrangements where third party nonperformance has given rise to the client’s claim. Payments by the Company under any of the arrangements described above are generally conditioned on the client making a claim which may be disputed by the Company typically under dispute resolution procedures specified in the particular arrangement. The limitations of liability under these arrangements may be expressly limited or may not be expressly specified in terms of time and/or amount.

As of February 28, 2011 and August 31, 2010, the Company’s aggregate potential liability to its clients for expressly limited guarantees involving the performance of third parties was approximately $694,000 and $556,000, respectively, of which all but approximately $79,000 and $71,000, respectively, may be recovered from the other third parties if the Company is obligated to make payments to the indemnified parties that are the consequence of a performance default by the other third parties. For arrangements with unspecified limitations, the Company cannot reasonably estimate the aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such payments, due to the conditional nature and unique facts of each particular arrangement.

To date, the Company has not been required to make any significant payment under any of the arrangements described above. The Company has assessed the current status of performance/payment risk related to arrangements with limited guarantees, unspecified limitations and/or indemnification provisions and believes that any potential payments would be immaterial to the Consolidated Financial Statements, as a whole.

Legal Contingencies

As of February 28, 2011, the Company or its present personnel had been named as a defendant in various litigation matters. The Company and/or its personnel also from time to time are involved in investigations by various regulatory or legal authorities concerning matters arising in the course of its business around the world. Based on the present status of these matters, management believes these matters will not ultimately have a material effect on the Company’s results of operations or financial condition.

ACCENTURE SCA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed)

(Unaudited)

8. SEGMENT REPORTING

The Company’s reportable operating segments are the five operating groups, which are Communications & High Tech, Financial Services, Health & Public Service, Products and Resources. Information regarding the Company’s reportable operating segments is as follows:


	Three Months Ended February 28,
	2011				2010
	Net Revenues		Operating Income		Net Revenues		Operating Income
Communications & High Tech	$	1,274,449	$	150,445	$	1,110,147	$	141,633
Financial Services		1,265,620		204,214		1,076,879		185,015
Health & Public Service		964,612		89,569		851,563		36,799
Products		1,373,646		125,785		1,205,575		141,209
Resources		1,171,016		201,564		929,309		146,317
Other		4,278		—		2,965		—

Total	$	6,053,621	$	771,577	$	5,176,438	$	650,973


	Six Months Ended February 28,
	2011				2010
	Net Revenues		Operating Income		Net Revenues		Operating Income
Communications & High Tech	$	2,558,925	$	343,686	$	2,269,460	$	286,013
Financial Services		2,566,738		448,795		2,180,916		379,882
Health & Public Service		1,896,212		147,352		1,798,075		171,761
Products		2,769,687		283,046		2,409,635		257,243
Resources		2,299,333		375,633		1,893,472		302,482
Other		8,376		—		7,412		—

Total	$	12,099,271	$	1,598,512	$	10,558,970	$	1,397,381

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2010, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 31, 2010.

We use the terms “we,” the “Company,” “our” and “us” in this report to refer to Accenture SCA and its subsidiaries. Accenture plc (“Accenture”) is the sole general partner of the Company. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to “fiscal 2010” means the 12-month period that ended on August 31, 2010. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.

We use the term “in local currency” so that certain financial results may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. 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. This approach is used for all results where the functional currency is not the U.S. dollar.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to:

•

Our results of operations could be adversely affected by negative or uncertain economic or geopolitical conditions and the effects of these conditions on our clients’ businesses and levels of business activity.

•

Our results of operations and ability to grow could be materially negatively affected if we cannot adapt and expand our services and solutions in response to changes in technology and client demand.

•

The consulting and outsourcing markets are highly competitive, and we might not be able to compete effectively.

•

Our work with government clients exposes us to additional risks inherent in the government contracting environment, including risks related to the U.S. federal budget.

•

Our business could be adversely affected if our clients are not satisfied with our services.

•

Our results of operations could be materially adversely affected if our clients terminate their contracts with us.

•

Outsourcing services are a significant part of our business and subject us to additional operational and financial risk.

•

Our results of operations could materially suffer if we are not able to obtain favorable pricing.

•

If we are unable to keep our supply of skills and resources in balance with client demand around the world, our business, the utilization rate of our professionals and our results of operations may be materially adversely affected.

•

Our business could be materially adversely affected if we incur legal liability in connection with providing our services and solutions.

•

If our pricing estimates do not accurately anticipate the cost and complexity of performing our work, then our contracts could be unprofitable.

•

Many of our contracts include performance payments that link some of our fees to the attainment of performance or business targets. This could increase the variability of our revenues and margins.

•

Our ability to attract and retain business may depend on our reputation in the marketplace.

•

Our alliance relationships may not be successful or may change, which could adversely affect our results of operations.

•

Our Global Delivery Network is increasingly concentrated in India and the Philippines, which may expose us to operational risks.

•

As a result of our geographically diverse operations and our growth strategy to continue geographic expansion, we are more susceptible to certain risks.

•

Revenues, revenue growth and earnings in U.S. dollars may be lower if the U.S. dollar strengthens against other currencies, particularly the Euro and British pound.

•

We could have liability or our reputation could be damaged if we fail to protect client data and Accenture and Company data or information systems as obligated by law or contract or if our information systems are breached.

•

We could be subject to liabilities or damage our relationships with clients if our subcontractors or the third parties with whom we partner cannot meet their commitments on time or at all.

•

Our services or solutions could infringe upon the intellectual property rights of others or we might lose our ability to utilize the intellectual property of others.

•

We have only a limited ability to protect our intellectual property rights, which are important to our success.

•

Changes in our level of taxes, and audits, investigations and tax proceedings, could have a material adverse effect on our results of operations and financial condition.

•

Our profitability could suffer if our cost-management strategies are unsuccessful.

•

If we are unable to collect our receivables or unbilled services, our results of operations, financial condition and cash flows could be adversely affected.

•

We may be subject to criticism, negative publicity and legislative or regulatory action related to Accenture’s incorporation in Ireland.

•

If we are unable to manage the organizational challenges associated with our size, we might be unable to achieve our business objectives.

•

We may not be successful at identifying, acquiring or integrating other businesses.

•

Consolidation in the industries that we serve could adversely affect our business.

•

The share price of Accenture plc Class A ordinary shares and our results of operations could fluctuate and be difficult to predict.

•

The share price of Accenture plc Class A ordinary shares could be adversely affected if we are unable to maintain effective internal controls.

•

Accenture SCA is incorporated in Luxembourg and a significant portion of our assets are located outside the United States. As a result, it might not be possible for shareholders to enforce civil liability provisions of the federal or state securities laws of the United States.

•

Luxembourg law differs from the laws in effect in the United States and might afford less protection to shareholders.

•

We might be unable to access additional capital on favorable terms or at all. If we raise equity capital, it may dilute our shareholders’ ownership interest in us.

For a more detailed discussion of these factors, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2010. We undertake no obligation to update or revise any forward-looking statements.

Overview

Our results of operations are affected by economic conditions, including macroeconomic conditions, credit market conditions and levels of business confidence. Revenues are driven by the ability of our executives to secure new contracts and to deliver solutions and services that add value relevant to our clients’ current needs and challenges. The level of revenues we achieve is based on our ability to deliver market-leading service offerings and to deploy skilled teams of professionals quickly and on a global basis.

Revenues before reimbursements (“net revenues”) for the second quarter of fiscal 2011 were $6.05 billion, compared with $5.18 billion for the second quarter of fiscal 2010, an increase of 17% in U.S. dollars and 18% in local currency. Net revenues for the six months ended February 28, 2011 were $12.10 billion, compared with $10.56 billion for the six months ended February 28, 2010, an increase of 15% in U.S. dollars and 16% in local currency. This very strong growth in the first half of fiscal 2011 contrasts with a 10% local currency revenue decline in the first half of fiscal 2010, compared to the first half of fiscal 2009. The first half of fiscal 2010 reflected the most significant negative impact of the economic downturn. All of our operating groups experienced quarterly year-over-year revenue growth in local currency in the second quarter of fiscal 2011, with very strong growth in Resources and Financial Services. Overall market demand for our services has improved and, based on new contract bookings over the last several quarters, we expect growth to continue in most areas of our business, although moderating, particularly in outsourcing, from the very strong year-over-year growth we experienced in the second quarter of fiscal 2011. We also expect the level of growth will vary across segments and geographic regions and between consulting and outsourcing services. There is economic and geopolitical uncertainty in some markets around the world, as well as uncertainty due to recent events in Japan. Our ability to manage any potential impact to client demand patterns resulting from these uncertainties will be a driver of our performance.

In our consulting business, net revenues for the second quarter of fiscal 2011 were $3.51 billion, compared with $2.93 billion for the second quarter of fiscal 2010, an increase of 20% in both U.S. dollars and local currency. Consulting net revenues for the six months ended February 28, 2011 were $7.08 billion, compared with $6.05 billion for the six months ended February 28, 2010, an increase of 17% in U.S. dollars and 18% in local currency. All five operating groups experienced quarterly year-over-year consulting revenue growth in the second quarter, with very strong growth in Resources and Products. In our consulting business overall, clients continue to focus on initiatives designed to deliver cost savings and performance improvement, have also initiated projects to grow and transform their businesses and continue to use a phased approach to contracting work. We continue to provide a greater proportion of systems integration consulting through use of lower-cost resources in our Global Delivery Network. This trend has resulted in work volume growing faster than revenues, and we expect this to continue in the medium term. In addition, pricing continues to be affected by a competitive business environment.

In our outsourcing business, net revenues for the second quarter of fiscal 2011 were $2.54 billion, compared with $2.24 billion for the second quarter of fiscal 2010, an increase of 13% in U.S. dollars and 15% local currency. Outsourcing net revenues for the six months ended February 28, 2011 were $5.02 billion, compared with $4.51 billion for the six months ended February 28, 2010, an increase of 11% in U.S. dollars and 13% in local currency. All five operating groups experienced quarterly year-over-year outsourcing revenue growth in the second quarter, with significant growth in Financial Services and Communications and High Tech. We continue to experience higher volumes, scope and geographic expansions and new work at existing clients. In addition, clients continue to be focused on projects that will reduce IT and business costs, and we are launching more projects in these areas.

As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange-rate fluctuations. If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues and revenue growth in U.S. dollars may be higher. If the U.S. dollar strengthens against other currencies, resulting in unfavorable currency translation, our revenues and revenue growth in U.S. dollars may be lower. When compared to the first half of fiscal 2010, the U.S. dollar strengthened against many currencies in the first half of fiscal 2011. This resulted in unfavorable currency translation and U.S. dollar revenue results that were approximately 1% lower than our results in local currency for both the second quarter and first half of fiscal 2011. Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2011, we estimate the foreign-exchange impact to our full fiscal 2011 revenue growth will be approximately 2% higher growth in U.S. dollars than our growth in local currency.

The primary categories of operating expenses include cost of services, sales and marketing and general and administrative costs. Cost of services is primarily driven by the cost of client-service personnel, which consists mainly of compensation, sub-contractor and other personnel costs, and non-payroll outsourcing costs. Cost of services as a percentage of revenues is driven by the prices we obtain for our solutions and services, the utilization of our client-service personnel and the level of non-payroll costs associated with new outsourcing contracts. Utilization primarily represents the percentage of our consulting professionals’ time spent on billable work. Utilization for the second quarter of fiscal 2011 was approximately 86% and within our target range. This level of utilization reflects continued strong demand for resources in our Global Delivery Network and in most countries. We continue to hire to meet current and projected future demand.

We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services, given that payroll costs are the most significant portion of our operating expenses. Based on current and projected future demand, we have increased our headcount, the majority of which serve our clients, to approximately 215,000 as of February 28, 2011, compared with approximately 211,000 as of November 30, 2010 and 181,000 as of February 28, 2010. This 19% year-over-year increase in our headcount reflects an overall increase in demand for our services, including those delivered through our Global Delivery Network in lower-cost locations. Annualized attrition, excluding involuntary terminations, for the second quarter of fiscal 2011 was 14%, compared with 15% in both the first quarter of fiscal 2011 and the second quarter of fiscal 2010. We adjust levels of new hiring, evaluate voluntary attrition and use involuntary terminations as means to keep our supply of skills and resources in balance with client demand. In addition, we also adjust compensation in certain skill sets and geographies in order to attract and retain appropriate numbers of qualified employees, and we may need to continue to adjust compensation in the future. Compensation increases for fiscal 2011, which for the majority of our personnel were effective September 1, 2010, were higher than in the prior fiscal year. As in prior fiscal years, we strive to adjust pricing and/or the mix of resources to reduce the impact of compensation increases on our gross margin. Our ability to grow our revenues and increase our margins could be adversely affected if we are unable to hire sufficient employees with the skills and background where they are needed, manage attrition, recover increases in compensation and/or effectively assimilate and utilize new employees.

Gross margin (Net revenues less Cost of services before reimbursable expenses as a percentage of Net revenues) for the second quarter of fiscal 2011 was 31.7%, compared with 32.7% for the second quarter of fiscal 2010. Gross margin for the six months ended February 28, 2011 was 31.9%, compared with 32.9% for the six months ended February 28, 2010. Our contract profitability for the first half of fiscal 2011 was lower than the same period in fiscal 2010, particularly in consulting, as we continue our efforts to absorb higher annual compensation increases and subcontractor costs with improved pricing and a more efficient resource mix. Gross margin also includes the impact of higher recruiting and training costs from the addition of a larger number of new employees to meet demand.

Sales and marketing and general and administrative costs as a percentage of net revenues were 18.9% for the second quarter of fiscal 2011, compared with 20.0% for the second quarter of fiscal 2010. Sales and marketing and general and administrative costs as a percentage of net revenues were 18.7% for the six months ended February 28, 2011, compared with 19.6% for the six months ended February 28, 2010. Sales and marketing is driven primarily by compensation costs for business-development activities, investment in offerings, and marketing- and advertising-related activities. General and administrative costs primarily include costs for non-client-facing personnel, information systems and office space. We continuously monitor these costs and implement cost-management actions, as appropriate, to maintain or lower these costs as a percentage of revenues. These actions include performing a greater proportion of these activities in lower-cost locations. The decrease in general and administrative costs as percentage of net revenues was due to management of these costs at a growth rate lower than that of net revenues, as well as a reduction in the bad debt reserve in the first quarter of fiscal 2011. Our margins could be adversely affected if our cost-management actions are not sufficient to maintain sales and marketing and general and administrative costs at or below current levels as a percentage of net revenues.

Operating income for the second quarter of fiscal 2011 was $772 million, compared with $651 million for the second quarter of fiscal 2010. Operating income for the six months ended February 28, 2011 was $1,599 million, compared with $1,397 million for the six months ended February 28, 2010. Operating margin (Operating income as a percentage of Net revenues) for the second quarter of fiscal 2011 was 12.7%, compared with 12.6% for the second quarter of fiscal 2010. Operating margin for the six months ended February 28, 2011 was 13.2%, flat with the six months ended February 28, 2010.

Our Operating income is also affected by currency exchange-rate fluctuations on revenues and costs. Most of our costs are incurred in the same currency as the related net revenues. Where practical, we also seek to manage foreign currency exposure for costs not incurred in the same currency as the related net revenues by using currency protection provisions in our customer contracts and through our hedging programs. We estimate that the aggregate percentage impact of foreign exchange rates on our operating expenses is similar to that disclosed for net revenues.

Bookings and Backlog

New contract bookings for the second quarter of fiscal 2011 were $6.98 billion, with consulting bookings of $3.80 billion and outsourcing bookings of $3.18 billion. New contract bookings for the six months ended February 28, 2011 were $13.29 billion, with consulting bookings of $7.53 billion and outsourcing bookings of $5.77 billion.

We provide information regarding our new contract bookings because we believe doing so provides useful trend information regarding changes in the volume of our new business over time. However, new bookings can vary significantly quarter to quarter depending in part on the timing of the signing of a small number of large outsourcing contracts. Clients continue to seek flexibility by using a phased approach to contracting consulting work, which is resulting in smaller initial total contract values than in the past. Information regarding our new bookings is not comparable to, nor should it be substituted for, an analysis of our revenues over time. There are no third-party standards or requirements governing the calculation of bookings. New contract bookings involve estimates and judgments regarding new contracts as well as renewals, extensions and changes to existing contracts. We do not update our new bookings for material subsequent terminations or reductions related to bookings originally recorded in prior fiscal years. New contract bookings are recorded using then-existing foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange rate fluctuations.

The majority of our contracts are terminable by the client on short notice and some without notice. Accordingly, we do not believe it is appropriate to characterize bookings attributable to these contracts as backlog. Normally, if a client terminates a project, the client remains obligated to pay for commitments we have made to third parties in connection with the project, services performed and reimbursable expenses incurred by us through the date of termination.

Revenues by Segment/Operating Group

Our five reportable operating segments are our operating groups, which are Communications & High Tech, Financial Services, Health & Public Service, Products and Resources. Operating groups are managed on the basis of net revenues because our management believes net revenues are a better indicator of operating group performance than revenues. In addition to reporting net revenues by operating group, we also report net revenues by two types of work: consulting and outsourcing, which represent the services sold by our operating groups. Consulting net revenues, which include management and technology consulting and systems integration, reflect a finite, distinct project or set of projects with a defined outcome and typically a defined set of specific deliverables. Outsourcing net revenues typically reflect ongoing, repeatable services or capabilities provided to transition, run and/or manage operations of client systems or business functions.

From time to time, our operating groups work together to sell and implement certain contracts. The resulting revenues and costs from these contracts may be apportioned among the participating operating groups. Generally, operating expenses for each operating group have similar characteristics and are subject to the same factors, pressures and challenges. However, the economic environment and its effects on the industries served by our operating groups affect revenues and operating expenses within our operating groups to differing degrees. The mix between consulting and outsourcing is not uniform among our operating groups. Local currency fluctuations also tend to affect our operating groups differently, depending on the geographic concentrations and locations of their businesses.

While we provide discussion about our results of operations below, we cannot measure how much of our revenue growth in a particular period is attributable to changes in price or volume. Management does not track standard measures of unit or rate volume. Instead, our measures of volume and price are extremely complex, as each of our services contracts is unique, reflecting a customized mix of specific services that does not fit into standard comparability measurements. Pricing for our services is a function of the nature of each service to be provided, the skills required and outcome sought, as well as estimated cost, risk, contract terms and other factors.

Results of Operations for the Three Months Ended February 28, 2011 Compared to the Three Months Ended February 28, 2010

Net revenues (by operating group, geographic region and type of work) and reimbursements were as follows:


	Three Months Ended February 28,				Percent Increase			Percent Increase Local			Percent of Total Net Revenues for the Three Months Ended February 28,
	2011		2010		U.S. dollars			Currency			2011			2010
	(in millions of U.S. dollars)
OPERATING GROUPS
Communications & High Tech	$	1,274	$	1,110		15	%		16	%		21	%		21	%
Financial Services		1,266		1,077		18			20			21			21
Health & Public Service		965		852		13			14			16			17
Products		1,374		1,206		14			15			23			23
Resources		1,171		929		26			25			19			18
Other		4		3		n/m			n/m			—			—

TOTAL NET REVENUES (1)		6,054		5,176		17	%		18	%		100	%		100	%

Reimbursements		443		361		22

TOTAL REVENUES (1)	$	6,496	$	5,538		17	%

GEOGRAPHIC REGIONS
Americas	$	2,675	$	2,203		21	%		20	%		44	%		43	%
EMEA (2)		2,592		2,386		9			14			43			46
Asia Pacific		787		587		34			25			13			11

TOTAL NET REVENUES	$	6,054	$	5,176		17	%		18	%		100	%		100	%

TYPE OF WORK
Consulting	$	3,509	$	2,932		20	%		20	%		58	%		57	%
Outsourcing		2,544		2,244		13			15			42			43

TOTAL NET REVENUES (1)	$	6,054	$	5,176		17	%		18	%		100	%		100	%

n/m = not meaningful

(1)	May not total due to rounding.

(2)	EMEA includes Europe, the Middle East and Africa.

Net Revenues

Operating Groups

The following net revenues by operating group commentary discusses local currency net revenue changes for the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010.

•

Communications & High Tech net revenues increased 16% in local currency. Consulting revenues reflected strong growth, driven by growth across all industry groups in EMEA and Americas. Outsourcing revenues increased significantly, driven by growth across all geographic regions and industry groups, with the exception of Electronics & High Tech in EMEA.

•

Financial Services net revenues increased 20% in local currency. Consulting revenues increased significantly, driven by growth in Banking and Insurance in EMEA and all industry groups in Americas, partially offset by a decline in Banking in Asia Pacific. Outsourcing revenues increased significantly, driven by growth across all industry groups in EMEA and Americas.

•

Health & Public Service net revenues increased 14% in local currency. Consulting revenues reflected growth in Americas, with significant growth in Health, partially offset by a decline in Public Service in EMEA. The increase in consulting revenues was significantly impacted by a delivery inefficiency on a consulting contract in Public Service in Americas in the second quarter of fiscal 2010, which negatively affected revenues in that quarter. Outsourcing revenues increased due to growth in Americas, including significant growth in Health, and also reflected revenues recognized upon favorable resolution of billing holdbacks on certain contracts with United States government agencies. In addition, the uncertainty and challenges in the public sector, particularly in the United States, the United Kingdom and several other countries, continue to have a significant impact on demand in our public service business. This had a negative impact on our revenues and new contract bookings in our Public Service business during the first half of fiscal 2011, and we expect this trend to continue.

•

Products net revenues increased 15% in local currency. Consulting revenues increased significantly, driven by growth across all geographic regions and most industry groups. Outsourcing revenues increased, driven by growth across all geographic regions and most industry groups, led by Retail in Americas.

•

Resources net revenues increased 25% in local currency. Consulting revenues reflected very significant growth, driven by growth across all geographic regions and industry groups, led by Natural Resources. Outsourcing revenues increased, led by growth in Natural Resources and Energy in Americas and Utilities in EMEA.

Geographic Regions

•

Americas net revenues increased 20% in local currency, led by the United States, Brazil and Canada.

•

EMEA net revenues increased 14% in local currency. We experienced growth in local currency in most countries in EMEA, led by the United Kingdom, France, Germany, Italy, Austria, South Africa, Switzerland and Norway.

•

Asia Pacific net revenues increased 25% in local currency, led by Japan, Singapore, Australia and China.

Operating Expenses

Operating expenses for the second quarter of fiscal 2011 were $5,725 million, an increase of $838 million, or 17%, over the second quarter of fiscal 2010, and decreased as a percentage of revenues to 88.1% from 88.2% during this period. Operating expenses before reimbursable expenses for the second quarter of fiscal 2011 were $5,282 million, an increase of $757 million, or 17%, over the second quarter of fiscal 2010, and decreased as a percentage of net revenues to 87.3% from 87.4% during this period.

Cost of Services

Cost of services for the second quarter of fiscal 2011 was $4,579 million, an increase of $732 million, or 19%, over the second quarter of fiscal 2010, and increased as a percentage of revenues to 70.5% from 69.5% over this period. Cost of services before reimbursable expenses for the second quarter of fiscal 2011 was $4,136 million, an increase of $650 million, or 19%, over the second quarter of fiscal 2010, and increased as a percentage of net revenues to 68.3% from 67.3% over this period. Gross margin for the second quarter of fiscal 2011 decreased to 31.7% from 32.7% during this period. Our contract profitability for the second quarter of fiscal 2011 was lower than the same period in fiscal 2010, particularly in consulting, as we continue our efforts to absorb higher annual compensation increases and subcontractor costs with improved pricing and a more efficient resource mix. Gross margin also includes the impact of higher recruiting and training costs from the addition of a larger number of new employees to meet demand.

Sales and Marketing

Sales and marketing expense for the second quarter of fiscal 2011 was $710 million, an increase of $86 million, or 14%, over the second quarter of fiscal 2010, and decreased as a percentage of net revenues to 11.7% from 12.0% during this period.

General and Administrative Costs

General and administrative costs for the second quarter of fiscal 2011 were $435 million, an increase of 22 million, or 5%, over the second quarter of fiscal 2010, and decreased as a percentage of net revenues to 7.2% from 8.0% during this period. The decrease as a percentage of net revenues was primarily due to management of these costs at a growth rate lower than that of net revenues.

Operating Income and Operating Margin

Operating income for the second quarter of fiscal 2011 was $772 million, an increase of $121 million, or 19%, over the second quarter of fiscal 2010, and increased as percentage of net revenues to 12.7% from 12.6% over this period. Operating income and operating margin for each of the operating groups were as follows:


	Three Months Ended February 28,
	2011					2010
	Operating Income		Operating Margin			Operating Income		Operating Margin			Increase (Decrease) (1)
			(in millions of U.S. dollars)
Communications & High Tech	$	150		12	%	$	142		13	%	$	9
Financial Services		204		16			185		17			19
Health & Public Service		90		9			37		4			53
Products		126		9			141		12			(15	)
Resources		202		17			146		16			55

Total	$	772		12.7	%	$	651		12.6	%	$	121

(1)	May not total due to rounding.

We estimate that the aggregate percentage impact of foreign currency exchange rates on our Operating income during the second quarter of fiscal 2011 was similar to that disclosed for Net revenues. During the second quarter of fiscal 2011, each operating group benefitted from our management of General and administrative costs at a growth rate lower than that of our net revenues. In addition, each operating group experienced higher recruiting and training costs from the addition of a larger number of new employees to meet demand. The commentary below provides additional insight into operating group performance and operating margin for the second quarter of fiscal 2011, compared with the second quarter of fiscal 2010, exclusive of these impacts.

•

Communications & High Tech operating income increased, primarily due to revenue growth, partially offset by lower consulting contract profitability and higher selling costs as a percentage of net revenues.

•

Financial Services operating income increased, driven by revenue growth, partially offset by lower contract profitability.

•

Health & Public Service operating income increased, primarily due to revenue growth, including revenues recognized upon favorable resolution of billing holdbacks on certain contracts with United States government agencies, partially offset by lower consulting and outsourcing contract profitability. Fiscal 2010 operating income included the negative impact of inefficient delivery on a contract in Public Service in Americas.

•

Products operating income decreased. Revenue growth was more than offset by lower contract profitability, as we have not yet fully recovered higher cost increases through pricing for our services. Products operating results in both periods were also impacted by expected lower margins on certain contracts.

•

Resources operating income increased, driven by significant consulting revenue growth.

Interest Income

Interest income for the second quarter of fiscal 2011 was $10 million, an increase of $3 million, or 41%, over the second quarter of fiscal 2010. The increase was primarily due to higher interest rates and cash balances.

Other Expense, net

Other expense, net for the second quarter of fiscal 2011 was $3 million, a decrease of $11 million from the second quarter of fiscal 2010. The change was driven by lower net foreign currency exchange losses during the second quarter of fiscal 2011.

Provision for Income Taxes

The effective tax rate for the second quarter of fiscal 2011 was 26.9%, compared with 27.8% for the second quarter of fiscal 2010. The effective tax rate is lower in the second quarter of fiscal 2011 due to a number of factors that impact our geographic mix of income.

Our provision for income taxes is based on many factors and subject to volatility year to year. We expect the fiscal 2011 annual effective tax rate to be in the range of 28% to 29%. The fiscal 2010 annual effective tax rate was 29.3%.

Results of Operations for the Six Months Ended February 28, 2011 Compared to the Six Months Ended February 28, 2010

Net revenues (by operating group, geographic region and type of work) and reimbursements were as follows:


	Six Months Ended February 28,				Percent Increase			Percent Increase Local			Percent of Total Net Revenues for the Six Months Ended February 28,
	2011		2010		U.S. dollars			Currency			2011			2010
	(in millions of U.S. dollars)
OPERATING GROUPS
Communications & High Tech	$	2,559	$	2,269		13	%		14	%		21	%		21	%
Financial Services		2,567		2,181		18			20			21			21
Health & Public Service		1,896		1,798		5			6			16			17
Products		2,770		2,410		15			16			23			23
Resources		2,299		1,893		21			21			19			18
Other		8		7		n/m			n/m			—			—

TOTAL NET REVENUES (1)		12,099		10,559		15	%		16	%		100	%		100	%

Reimbursements		875		727		20

TOTAL REVENUES	$	12,974	$	11,286		15	%

GEOGRAPHIC REGIONS
Americas	$	5,309	$	4,432		20	%		19	%		44	%		42	%
EMEA		5,229		4,937		6			12			43			47
Asia Pacific		1,561		1,190		31			22			13			11

TOTAL NET REVENUES	$	12,099	$	10,559		15	%		16	%		100	%		100	%

TYPE OF WORK
Consulting	$	7,077	$	6,052		17	%		18	%		58	%		57	%
Outsourcing		5,022		4,507		11			13			42			43

TOTAL NET REVENUES	$	12,099	$	10,559		15	%		16	%		100	%		100	%

n/m = not meaningful

(1)	May not total due to rounding.

Net Revenues

The following net revenues by operating group commentary discusses local currency net revenue changes for the six months ended February 28, 2011 compared to the six months ended February 28, 2010.

Operating Groups

•

Communications & High Tech net revenues increased 14% in local currency. Consulting revenues reflected strong growth, driven by growth across all industry groups and geographic regions, led by Americas. Outsourcing revenues reflected strong growth, driven by growth across all geographic regions and industry groups, with the exception of Electronics & High Tech in EMEA.

•

Financial Services net revenues increased 20% in local currency. Consulting revenues increased significantly, driven by growth in Banking in EMEA and all industry groups in Americas, partially offset by a decline in Banking in Asia Pacific. Outsourcing revenues increased significantly, driven by growth across all industry groups in EMEA and Americas.

•

Health & Public Service net revenues increased 6% in local currency. Consulting revenues reflected growth in Americas, with significant growth in Health, partially offset by a decline in Public Service in EMEA. The increase in consulting revenues was significantly impacted by a delivery inefficiency on a consulting contract in Public Service in Americas in the first half of fiscal 2010, which negatively affected revenues in that period. Outsourcing revenues increased due to growth in Americas and also reflected revenues recognized upon favorable resolution of billing holdbacks on certain contracts with United States government agencies. In addition, the uncertainty and challenges in the public sector, particularly in the United States, the United Kingdom and several other countries, continue to have a significant impact on demand in our public service business. This had a negative impact on our revenues and new contract bookings in our Public Service business during the first half of fiscal 2011, and we expect this trend to continue.

•

Products net revenues increased 16% in local currency. Consulting revenues increased significantly, driven by growth across all geographic regions and industry groups, led by Consumer Goods & Services and Retail. Outsourcing revenues increased, driven by growth across all geographic regions and most industry groups, led by Retail.

•

Resources net revenues increased 21% in local currency. Consulting revenues reflected very significant growth, driven by growth in Americas and Asia Pacific and in most industry groups, led by Natural Resources. Outsourcing revenues reflected strong growth, driven by growth in Utilities and Energy in EMEA and Energy and Natural Resources in Americas.

Geographic Regions

•

Americas net revenues increased 19% in local currency, led by the United States, Brazil and Canada.

•

EMEA net revenues increased 12% in local currency. We experienced growth in local currency in most countries in EMEA, led by the United Kingdom, France, Italy, Germany, South Africa, Switzerland and Finland.

•

Asia Pacific net revenues increased 22% in local currency, led by Japan, Singapore, Australia and India.

Operating Expenses

Operating expenses for the six months ended February 28, 2011 were $11,376 million, an increase of $1,488 million, or 15%, over the six months ended February 28, 2010, and increased as a percentage of revenues to 87.7% from 87.6% over this period. Operating expenses before reimbursable expenses for the six months ended February 28, 2011 were $10,501 million, an increase of $1,339 million, or 15%, over the six months ended February 28, 2010 and as a percentage of net revenues was 86.8% in both periods.

Cost of Services

Cost of services for the six months ended February 28, 2011 was $9,113 million, an increase of $1,302 million, or 17%, over the six months ended February 28, 2010, and increased as a percentage of revenues to 70.2% from 69.2% over this period. Cost of services before reimbursable expenses for the six months ended February 28, 2011 was $8,238 million, an increase of $1,153 million, or 16%, over the six months ended February 28, 2010, and increased as a percentage of net revenues to 68.1% from 67.1% over this period. Gross margin for the six months ended February 28, 2011 decreased to 31.9% from 32.9% during this period. Our contract profitability for the first half of fiscal 2011 was lower than the same period in fiscal 2010, particularly in consulting, as we continue our efforts to absorb higher annual compensation increases and subcontractor costs with improved pricing and a more efficient resource mix. Gross margin also includes the impact of higher recruiting and training costs from the addition of a larger number of new employees to meet demand.

Sales and Marketing

Sales and marketing expense for the six months ended February 28, 2011 was $1,441 million, an increase of $196 million, or 16%, over the six months ended February 28, 2010, and increased as a percentage of net revenues to 11.9% from 11.8% over this period.

General and Administrative Costs

General and administrative costs for the six months ended February 28, 2011 were $821 million, a decrease of $4 million, or 1%, from the six months ended February 28, 2010, and decreased as a percentage of net revenues to 6.8% from 7.8% during this period. The decrease as a percentage of net revenues was primarily due to management of these costs at a growth rate lower than that of net revenues, as well as a reduction in the allowance for client receivables and unbilled services due to better than expected bad debt experience.

Operating Income and Operating Margin

Operating income for the six months ended February 28, 2011 was $1,599 million, an increase of $201 million, or 14%, over the six months ended February 28, 2010, and as a percentage of net revenues was 13.2% in both periods. Operating income and operating margin for each of the operating groups were as follows:


	Six Months Ended February 28,										Increase (Decrease) (1)
	2011					2010
	Operating Income		Operating Margin			Operating Income		Operating Margin
			(in millions of U.S. dollars)
Communications & High Tech	$	344		13	%	$	286		13	%	$	58
Financial Services		449		17			380		17			69
Health & Public Service		147		8			172		10			(24	)
Products		283		10			257		11			26
Resources		376		16			302		16			73

Total (1)	$	1,599		13.2	%	$	1,397		13.2	%	$	201

(1)	May not total due to rounding.

We estimate that the aggregate percentage impact of foreign currency exchange rates on our Operating income during the six months ended February 28, 2011 was similar to that disclosed for Net revenues. During the six months ended February 28, 2011, each operating group benefitted from our management of General and administrative costs at a growth rate lower than that of our net revenues, as well as a reduction in the bad debt reserve in the first quarter of fiscal 2011. In addition, each operating group experienced higher recruiting and training costs from the addition of a larger number of new employees to meet demand. The commentary below provides additional insight into operating group performance and operating margin for the six months ended February 28, 2011, compared with the six months ended February 28, 2010, exclusive of these impacts.

•

Financial Services operating income increased, driven by revenue growth, partially offset by lower contract profitability.

•

Health & Public Service operating income decreased. Revenue growth, including revenues recognized upon favorable resolution of billing holdbacks on certain contracts with United States government agencies, was more than offset by lower consulting and outsourcing contract profitability and higher selling costs as a percentage of net revenues. Fiscal 2010 operating income included the negative impact of inefficient delivery on a contract in Public Service in Americas.

•

Products operating income increased, primarily driven by revenue growth, partially offset by lower contract profitability, as we have not yet fully recovered higher cost increases through pricing for our services. Products operating results in both periods were also impacted by expected lower margins on certain contracts.

•

Resources operating income increased, driven by significant consulting revenue growth, partially offset by lower consulting contract profitability.

Interest Income

Interest income for the six months ended February 28, 2011 was $19 million, an increase of $5 million, or 38%, over the six months ended February 28, 2010. The increase was primarily due to higher interest rates and cash balances.

Other Income (Expense), net

Other income (expense), net for the six months ended February 28, 2011 was $10 million, an increase of $18 million over the six months ended February 28, 2010. The change was driven by net foreign exchange gains during the six months ended February 28, 2011, compared with net foreign exchange losses during the six months ended February 28, 2010.

Provision for Income Taxes

The effective tax rate for the six months ended February 28, 2011 was 27.6%, compared with 29.2% for the six months ended February 28, 2010. The effective tax rate is lower in the six months ended February 28, 2011 due to a number of factors that impact our geographic mix of income.

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations, available cash reserves and debt capacity available under various credit facilities. In addition, we could raise additional funds through public or private debt or equity financings. We may use our available or additional funds to:

•

take advantage of opportunities, including more rapid expansion;

•

acquire complementary businesses or technologies;

•

develop new services and solutions; or

•

facilitate purchases, redemptions and exchanges of Accenture’s and our shares.

As of February 28, 2011, cash and cash equivalents was $4.7 billion, compared with $4.8 billion as of August 31, 2010.

Cash flows from operating, investing and financing activities, as reflected in our Consolidated Cash Flows Statements, are summarized in the following table:


	Six Months Ended February 28,
	2011			2010			Change (1)
	(in millions of U.S. dollars)
Net cash provided by (used in):
Operating activities	$	708		$	879		$	(172	)
Investing activities		(270	)		(77	)		(193	)
Financing activities		(750	)		(1,175	)		424
Effect of exchange rate changes on cash and cash equivalents		153			(54	)		207

Net decrease in cash and cash equivalents (1)	$	(161	)	$	(427	)	$	266

(1)	May not total due to rounding.

Operating activities. The $172 million decrease in cash provided by operating activities was primarily due to an increase in net client balances (receivables from clients, current and non-current unbilled services and deferred revenues) and changes in other operating assets and liabilities, partially offset by higher net income.

Investing activities. The $193 million increase in cash used was primarily due to increases in spending on business acquisitions and purchases of property and equipment.

Financing activities. The $424 million decrease in cash used was primarily due to lower cash dividends paid as a result of our transition to semi-annual dividend payments and decreases in net purchases of shares. For additional information, see Note 5 (Shareholders’ Equity) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

We believe that our available cash balances and the cash flows expected to be generated from operations will be sufficient to satisfy our current and planned working capital and investment needs for the next twelve months. We also believe that our longer-term working capital and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facilities and future financial market activities.

Borrowing Facilities

As of February 28, 2011, we had the following borrowing facilities, including the issuance of letters of credit, to support general working capital purposes:


	Facility Amount		Borrowings Under Facilities
	(in millions of U.S. dollars)
Syndicated loan facility	$	1,200	$	—
Separate, uncommitted, unsecured multicurrency revolving credit facilities		433		—
Local guaranteed and non-guaranteed lines of credit		159		—

Total	$	1,792	$	—

Under the borrowing facilities described above, we had an aggregate of $171 million of letters of credit outstanding as of February 28, 2011. In addition, we had total outstanding debt of $5 million as of February 28, 2011.

Share Purchases and Redemptions

The Board of Directors of Accenture plc has authorized funding for purchases and redemptions of Accenture plc Class A ordinary shares, Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares held by our current and former senior executives and their permitted transferees. As of February 28, 2011, Accenture’s and our aggregate available authorization was $2,355 million for our publicly announced open-market share purchase and these other share purchase programs.

Our share purchase activity during the six months ended February 28, 2011 was as follows:


	Accenture SCA Class I Common Shares and Accenture Canada Holdings Inc. Exchangeable Shares
	Shares		Amount
	(in millions of U.S. dollars, except share amounts)
Accenture SCA Class I common shares		9,171,934	$	425
Accenture Canada Holdings Inc. exchangeable shares		107,501		5

Total		9,279,435	$	430

Accenture and we intend to continue to use a significant portion of cash generated from operations for share repurchases during fiscal 2011. The number of shares ultimately repurchased under Accenture’s open-market share purchase program may vary depending on numerous factors, including, without limitation, share price and other market conditions, Accenture’s and our ongoing capital allocation planning, the levels of cash and debt balances, other demands for cash, such as acquisition activity, general economic and/or business conditions, and board and management discretion. Additionally, as these factors may change over the course of the year, the amount of share repurchase activity during any particular period cannot be predicted, and may fluctuate from time to time. Share repurchases may be made from time to time through open-market purchases, in respect of redemptions of Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares, through the use of Rule 10b5-1 plans and/or by other means. The repurchase program may be accelerated, suspended, delayed or discontinued at any time, without notice.

Other Share Redemptions

During the six months ended February 28, 2011, Accenture issued 4,733,620 Accenture plc Class A ordinary shares upon redemptions of an equivalent number of Accenture SCA Class I common shares pursuant to Accenture’s registration statement on Form S-3 (the “registration statement”). The registration statement allows Accenture, at our option, to issue freely tradable Accenture plc Class A ordinary shares in lieu of cash upon redemptions of Accenture SCA Class I common shares held by senior executives, former executives and their permitted transferees.

For a complete description of all share purchase and redemption activity for the second quarter of fiscal 2011, see Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds.”

Subsequent Development

On March 23, 2011, the Board of Directors of Accenture plc declared a cash dividend of $0.45 per share on its Class A ordinary shares for shareholders of record at the close of business on April 15, 2011. Accenture plc will cause Accenture SCA to declare a cash dividend of $0.45 per share on our Class I common shares for shareholders of record at the close of business on April 12, 2011. Both dividends are payable on May 13, 2011.

Off-Balance Sheet Arrangements

In the normal course of business and in conjunction with some client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters. These arrangements with clients can include provisions whereby we have joint and several liability in relation to the performance of certain contractual obligations along with third parties also providing services and products for a specific project. Indemnification provisions are also included in arrangements under which we agree to hold the indemnified party harmless with respect to third party claims related to such matters as title to assets sold or licensed or certain intellectual property rights.

Typically, we have contractual recourse against third parties for certain payments made by us in connection with arrangements where third party nonperformance has given rise to the client’s claim. Payments by us under any of the arrangements described above are generally conditioned on the client making a claim which may be disputed by us typically under dispute resolution procedures specified in the particular arrangement. The limitations of liability under these arrangements may be expressly limited or may not be expressly specified in terms of time and/or amount.

For arrangements with unspecified limitations, we cannot reasonably estimate the aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such payments, due to the conditional nature and unique facts of each particular arrangement.

To date, we have not been required to make any significant payment under any of the arrangements described above. For further discussion of these transactions, see Note 7 (Commitments and Contingencies) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Recently Adopted Accounting Pronouncements

In September 2010, we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition guidance for arrangements with multiple deliverables. The guidance: eliminates the residual method of allocation in previous guidance; requires that arrangement considerations be allocated at the inception of the arrangement to all deliverables using the relative selling price; and requires a vendor to use estimates of a selling price developed in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis for all deliverables that meet the remaining separation criteria when vendor-specific objective evidence and third-party evidence, respectively, do not exist as estimates of selling price. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements under Item 1, “Financial Statements.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the six months ended February 28, 2011, there were no material changes in our market risk exposure. For a discussion of our market risk associated with foreign currency risk, interest rate risk and equity price risk as of August 31, 2010, see “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended August 31, 2010.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer of Accenture, the general partner of Accenture SCA, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based on that evaluation, the principal executive officer and the principal financial officer of Accenture have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the second quarter of fiscal 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in a number of judicial and arbitration proceedings concerning matters arising in the ordinary course of our business. We and/or our personnel also from time to time are involved in investigations by various regulatory or legal authorities concerning matters arising in the course of our business around the world. We do not expect that any of these matters, individually or in the aggregate, will have a material impact on our results of operations or financial condition.

As previously reported, in April 2007, the U.S. Department of Justice (the “DOJ”) intervened in a civil “qui tam” action previously filed under seal by two private individuals in the U.S. District Court for the Eastern District of Arkansas against Accenture and several of its indirect subsidiaries. The complaint as amended alleges that, in connection with work we undertook for the U.S. federal government, we received payments, resale revenue or other benefits as a result of, or otherwise acted improperly in connection with, alliance agreements we maintain with technology vendors and others in violation of our contracts with the U.S. government and/or applicable law or regulations. Similar suits were brought against other companies in our industry. The suit alleges that these amounts and relationships were not disclosed to the government in violation of the Federal False Claims Act and the Anti-Kickback Act, among other statutes. The DOJ complaint seeks various remedies including treble damages, statutory penalties and disgorgement of profits. While the complaint does not allege damages with specificity, the amount sought by the DOJ will depend on the theories it pursues, and could be significant. The suit could lead to other related proceedings and actions by various agencies of the U.S. government, including potential suspension or debarment proceedings. We intend to defend such matters vigorously and do not believe they will have a material impact on our results of operations or financial condition.

We currently maintain the types and amounts of insurance customary in the industries and countries in which we operate, including coverage for professional liability, general liability and management liability. We consider our insurance coverage to be adequate both as to the risks and amounts for the businesses we conduct.

ITEM 1A. RISK FACTORS

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2010. There have been no material changes to risk factors disclosed in our Annual Report on Form 10-K for the year ended August 31, 2010.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases and redemptions of Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares

The following table provides information relating to purchases and redemptions by us of Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares for cash during the second quarter of fiscal 2011.


Period	Total Number of Shares Purchased (1)		Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (3)
							(in millions of U.S. dollars)
Accenture SCA
December 1, 2010 — December 31, 2010
Class I common shares		678,404		$48.48		—		—
January 1, 2011 — January 31, 2011
Class I common shares		1,015,231		$50.46		—		—
February 1, 2011 — February 28, 2011
Class I common shares		420,991		$52.49		—		—
Total
Class I common shares		2,114,626		$50.23		—		—
Accenture Canada Holdings Inc.
December 1, 2010 — December 31, 2010
Exchangeable shares		219		$48.42		—		—
January 1, 2011 — January 31, 2011
Exchangeable shares		40,924		$49.75		—		—
February 1, 2011 — February 28, 2011
Exchangeable shares		25,158		$52.21		—		—
Total
Exchangeable shares		66,301		$50.68		—		—

(1)

During the second quarter of fiscal 2011, we acquired a total of 2,114,626 Accenture SCA Class I common shares and 66,301 Accenture Canada Holdings Inc. exchangeable shares from current and former senior executives and their permitted transferees. This includes acquisitions by means of purchase or redemption, or employee forfeiture, as applicable. In addition, during the second quarter of fiscal 2011, Accenture issued 2,685,990 Accenture plc Class A ordinary shares upon redemptions of an equivalent number of Accenture SCA Class I common shares pursuant to the registration statement.

(2)	Average price per share reflects the total cash outlay for the period, divided by the number of shares acquired, including those acquired by purchase or redemption and any acquired by means of employee forfeiture.

(3)

As of February 28, 2011, Accenture’s and our aggregate available authorization for share purchases and redemptions was $2,355 million, which management has the discretion to use for either Accenture’s publicly announced open-market share purchase program or the other share purchase programs. Since August 2001 and as of February 28, 2011, the Board of Directors of Accenture plc has authorized an aggregate of $15.1 billion for purchases and redemptions of Accenture plc Class A ordinary shares, Accenture SCA Class I common shares or Accenture Canada Holdings Inc. exchangeable shares.

Other Transactions Related to Accenture SCA Class I common shares

On December 31, 2010, January 31, 2011 and February 28, 2011, we transferred an aggregate of 7,172,603 Accenture SCA Class I common shares to Accenture in connection with transactions related to the issuance of Accenture plc Class A ordinary shares delivered pursuant to outstanding options awards, grants of restricted share units and other issuances under equity compensation plans. In each case, the Accenture SCA Class I common shares we transferred in reliance on the exemption from registration contained in Section 4(2) of the Securities Act on the basis that the transaction did not involve any public offering. A portion of these share transactions have been previously reported on our Current Report on Form 8-K filed with the SEC on March 4, 2011.

Purchases and redemptions of Accenture plc Class A ordinary shares and Class X ordinary shares

The following table provides additional information relating to the purchase by Accenture of Accenture plc Class A ordinary shares and redemptions of Accenture plc Class X ordinary shares for the second quarter of fiscal 2011. We believe the following table and footnotes provide useful information because the market value of Accenture SCA Class I common shares is based on the share price of Accenture plc Class A ordinary shares, and purchases of these shares may affect the share price of Accenture plc Class A ordinary shares.


Period	Total Number of Shares Purchased		Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (3)
							(in millions of U.S. dollars)
December 1, 2010 — December 31, 2010
Class A ordinary shares		558,680		$ 43.47		139,100		$2,432
Class X ordinary shares		944,901		$0.0000225		—		—
January 1, 2011 — January 31, 2011
Class A ordinary shares		343,169		$ 48.18		—		$2,379
Class X ordinary shares		1,637,126		$0.0000225		—		—
February 1, 2011 — February 28, 2011
Class A ordinary shares		547,094		$ 49.53		—		$2,355
Class X ordinary shares		1,296,044		$0.0000225		—		—
Total
Class A ordinary shares (4)		1,448,943		$ 46.87		139,100
Class X ordinary shares (5)		3,878,071		$0.0000225		—

(1)	Average price per share reflects the total cash outlay for the period, divided by the number of shares acquired, including those acquired by purchase or redemption and any acquired by means of employee forfeiture.

(2)

Since August 2001, the Board of Directors of Accenture plc has authorized and periodically confirmed a publicly announced open-market share purchase program for acquiring Accenture plc Class A ordinary shares. During the second quarter of fiscal 2011, Accenture purchased 139,100 Accenture plc Class A ordinary shares under this program for an aggregate price of $6.1 million. The open-market purchase program does not have an expiration date.

(3)

(4)

During the second quarter of fiscal 2011, Accenture and we purchased 1,309,843 Accenture plc Class A ordinary shares in transactions unrelated to publicly announced share plans or programs. These transactions primarily consisted of acquisitions of Accenture plc Class A ordinary shares via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares under Accenture’s various employee equity share plans. These purchases of shares in connection with employee share plans do not affect our aggregate available authorization for Accenture’s and our publicly announced open-market share purchase and the other share purchase programs.

(5)	During the second quarter of fiscal 2011, Accenture redeemed 3,878,071 Accenture plc Class X ordinary shares pursuant to its articles of association. Accenture plc Class X ordinary shares are redeemable at their par value of $0.0000225 per share.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

(a) None.

(b) None.

ITEM 6. EXHIBITS

Exhibit Index:


Exhibit Number		Exhibit
3.1		Form of Articles of Association of Accenture SCA, updated as of November 15, 2010 (incorporated by reference to Exhibit 10.1 to the November 30, 2010 Accenture plc 10-Q)

3.2		Memorandum and Articles of Association of Accenture plc (incorporated by reference to Exhibit 3.1 to Accenture plc’s 8-K12B filed on September 1, 2009)

10.1		Form of Key Executive Performance-Based Award Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.2 to the February 28, 2011 Accenture plc 10-Q)

10.2		Form of Senior Officer Performance Equity Award Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the February 28, 2011 Accenture plc 10-Q)

10.3		Form of Senior Executive Performance Equity Award Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.4 to the February 28, 2011 Accenture plc 10-Q)

10.4		Form of Voluntary Equity Investment Program Matching Grant Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.5 to the February 28, 2011 Accenture plc 10-Q)

31.1		Certification of the Chief Executive Officer of Accenture plc, the general partner of Accenture SCA, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the Chief Financial Officer of Accenture plc, the general partner of Accenture SCA, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of the Chief Executive Officer of Accenture plc, the general partner of Accenture SCA, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Chief Financial Officer of Accenture plc, the general partner of Accenture SCA, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: March 25, 2011


ACCENTURE SCA, represented by its general partner, Accenture plc, itself represented by its duly authorized signatory

By:		/s/ Pamela J. Craig
Name:		Pamela J. Craig
Title:		Chief Financial Officer of Accenture plc, general partner of Accenture SCA

EXHIBIT INDEX


Exhibit Number		Exhibit

3.1		Form of Articles of Association of Accenture SCA, updated as of November 15, 2010 (incorporated by reference to Exhibit 10.1 to the November 30, 2010 Accenture plc 10-Q)

3.2		Memorandum and Articles of Association of Accenture plc (incorporated by reference to Exhibit 3.1 to Accenture plc’s 8-K12B filed on September 1, 2009)

10.1		Form of Key Executive Performance-Based Award Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.2 to the February 28, 2011 Accenture plc 10-Q)

10.2		Form of Senior Officer Performance Equity Award Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the February 28, 2011 Accenture plc 10-Q)

10.3		Form of Senior Executive Performance Equity Award Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.4 to the February 28, 2011 Accenture plc 10-Q)

10.4		Form of Voluntary Equity Investment Program Matching Grant Restricted Share Unit Agreement pursuant to the Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.5 to the February 28, 2011 Accenture plc 10-Q)

31.1		Certification of the Chief Executive Officer of Accenture plc, the general partner of Accenture SCA, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the Chief Financial Officer of Accenture plc, the general partner of Accenture SCA, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of the Chief Executive Officer of Accenture plc, the general partner of Accenture SCA, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Chief Financial Officer of Accenture plc, the general partner of Accenture SCA, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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ACCENTURE SCA Reports