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Accenture Reports Very Strong Fourth-Quarter and Full-Year Fiscal 2015 Results
-- Fourth-quarter revenues increase 1% in U.S. dollars and 12% in local currency, to $7.9 billion;
quarterly EPS increase 6%, to $1.15; free cash flow is $1.4 billion --
-- For full fiscal year, revenues increase 3% in U.S. dollars and 11% in local currency, to
$31.0 billion; EPS are $4.76, including a $0.06 non-cash pension settlement charge; excluding
the charge, EPS increase 7%, to $4.82; free cash flow is $3.7 billion --
-- New bookings are $8.8 billion for fourth quarter and $34.4 billion for full year --
-- Company increases semi-annual cash dividend 8%, to $1.10 per share; Board of Directors
approves $5 billion of additional share repurchase authority --
-- For fiscal year 2016, Accenture expects net revenue growth of 5% to 8% in local currency and
EPS of $5.09 to $5.24 --
NEW YORK; Sept. 24, 2015 — Accenture (NYSE: ACN) reported financial results for the fourth quarter and full fiscal year ended Aug. 31, 2015.
For the fourth quarter, net revenues were $7.9 billion, an increase of 1 percent in U.S. dollars and 12 percent in local currency compared with the fourth quarter of fiscal 2014. Diluted earnings per share were $1.15. Operating margin was 13.9 percent. Operating cash flow was $1.5 billion and free cash flow was $1.4 billion. New bookings were $8.8 billion.
For the full fiscal year, net revenues were $31.0 billion, an increase of 3 percent in U.S. dollars and 11 percent in local currency compared with fiscal 2014. Diluted earnings per share were $4.76, including a non-cash pension settlement charge in the third quarter of $64 million, pre-tax, or $0.06 per share; excluding this charge, diluted earnings per share for fiscal 2015 were $4.82. Operating margin was 14.3 percent, including the pension settlement charge; excluding the charge, operating margin for the year was 14.5 percent, an expansion of 20 basis points. Operating cash flow was $4.1 billion and free cash flow was $3.7 billion. New bookings were $34.4 billion.
In addition, Accenture’s Board of Directors has declared a semi-annual cash dividend of $1.10 per share, an increase of $0.08 per share, or 8 percent, over its previous semi-annual dividend, declared in March. The Board also approved $5 billion in additional share repurchase authority.
Pierre Nanterme, Accenture’s chairman and CEO, said, “We delivered excellent financial results for the fourth quarter and the full fiscal year 2015. I am particularly pleased with our double-digit revenue growth in local currency for both the quarter and the year, which was broad-based across our business. For the full fiscal year, we gained substantial market share, delivered strong new bookings, earnings per share and free cash flow, and returned $3.8 billion in cash to our shareholders.
“The focused investments we are making in the high-growth areas of our business are clearly differentiating Accenture in the marketplace and contributing to our strong performance, especially in digital services. At the same time, we continue to manage our operations with discipline to further enhance our competitiveness. We are confident in our ability to continue building momentum and delivering value for our clients and shareholders.”
Financial Review
Fourth Quarter Fiscal 2015
Revenues before reimbursements (“net revenues”) for the fourth quarter of fiscal 2015 were $7.89 billion, compared with $7.78 billion for the fourth quarter of fiscal 2014, an increase of 1 percent in U.S. dollars and 12 percent in local currency and above the company’s guided range of $7.45 billion to $7.70 billion. The foreign-exchange impact for the quarter was approximately negative 10 percent, consistent with the assumption provided in the company’s third-quarter earnings release.
▪ | Consulting net revenues were $4.2 billion, an increase of 4 percent in U.S. dollars and 14 percent in local currency compared with the fourth quarter of fiscal 2014. |
▪ | Outsourcing net revenues were $3.7 billion, a decrease of 1 percent in U.S. dollars and an increase of 9 percent in local currency compared with the fourth quarter of fiscal 2014. |
Diluted EPS for the fourth quarter were $1.15, compared with $1.08 for the fourth quarter last year. The $0.07 increase in EPS reflects:
▪ | $0.02 from higher revenue and operating results; |
▪ | $0.05 from a lower effective tax rate; and |
▪ | $0.02 from a lower share count; |
partially offset by
▪ | $0.02 from lower non-operating income. |
Gross margin (gross profit as a percentage of net revenues) for the fourth quarter was 31.7 percent, compared with 31.7 percent for the fourth quarter of fiscal 2014. Selling, general and administrative (SG&A) expenses for the fourth quarter were $1.41 billion, or 17.9 percent of net revenues, compared with $1.39 billion, or 17.9 percent of net revenues, for the fourth quarter of fiscal 2014.
Operating income for the fourth quarter of fiscal 2015 was $1.09 billion, or 13.9 percent of net revenues, compared with $1.08 billion, or 13.9 percent of net revenues, for the fourth quarter of fiscal 2014.
The company’s effective tax rate for the fourth quarter was 27.1 percent, compared with 30.1 percent for the fourth quarter of fiscal 2014.
Net income for the fourth quarter was $788 million, compared with $760 million for the same period of fiscal 2014, an increase of 4 percent.
Operating cash flow for the fourth quarter was $1.50 billion, and property and equipment additions were $148 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $1.36 billion. For the same period of fiscal 2014, operating cash flow was $1.65 billion, property and equipment additions were $101 million, and free cash flow was $1.55 billion.
Days services outstanding, or DSOs, were 37 days at Aug. 31, 2015, compared with 36 days at Aug. 31, 2014.
Accenture’s total cash balance at Aug. 31, 2015 was $4.4 billion, compared with $4.9 billion at Aug. 31, 2014.
Utilization for the fourth quarter of fiscal 2015 was 90 percent, compared with 90 percent for the third quarter of fiscal 2015.
Attrition for the fourth quarter of fiscal 2015 was 14 percent, compared with 15 percent for both the third quarter of fiscal 2015 and the fourth quarter of fiscal 2014.
New Bookings
New bookings for the fourth quarter were $8.8 billion and reflect a negative 13 percent foreign-exchange impact compared with new bookings in the fourth quarter of fiscal 2014.
▪ | Consulting new bookings were $4.1 billion, or 46 percent of total new bookings. |
▪ | Outsourcing new bookings were $4.7 billion, or 54 percent of total new bookings. |
Net Revenues by Operating Group
Net revenues by operating group for the fourth quarter were as follows:
▪ | Communications, Media & Technology: $1.64 billion, compared with $1.58 billion for the fourth quarter of fiscal 2014, an increase of 4 percent in U.S. dollars and 16 percent in local currency. |
▪ | Financial Services: $1.69 billion, compared with $1.67 billion for the fourth quarter of fiscal 2014, an increase of 1 percent in U.S. dollars and 14 percent in local currency. |
▪ | Health & Public Service: $1.39 billion, compared with $1.29 billion for the fourth quarter of fiscal 2014, an increase of 7 percent in U.S. dollars and 13 percent in local currency. |
▪ | Products: $1.93 billion, compared with $1.93 billion for the fourth quarter of fiscal 2014, flat in U.S. dollars and an increase of 10 percent in local currency. |
▪ | Resources: $1.23 billion, compared with $1.29 billion for the fourth quarter of fiscal 2014, a decrease of 5 percent in U.S. dollars and an increase of 6 percent in local currency. |
Net Revenues by Geographic Region
Net revenues by geographic region* for the fourth quarter were as follows:
▪ | North America: $3.72 billion, compared with $3.39 billion for the fourth quarter of fiscal 2014, an increase of 10 percent in U.S. dollars and 11 percent in local currency. |
▪ | Europe: $2.71 billion, compared with $2.82 billion for the fourth quarter of fiscal 2014, a decrease of 4 percent in U.S. dollars and an increase of 13 percent in local currency. |
▪ | Growth Markets: $1.46 billion, compared with $1.57 billion for the fourth quarter of fiscal 2014, a decrease of 7 percent in U.S. dollars and an increase of 11 percent in local currency. |
*Beginning in fiscal 2015, the company is reporting its geographic regions as follows: North America (the United States and Canada); Europe; and Growth Markets (Asia Pacific, Latin America, Africa, the Middle East, Russia and Turkey). Previously, the company’s three geographic regions were the Americas; EMEA (Europe, the Middle East and Africa); and Asia Pacific.
Full Year Fiscal 2015
Net revenues for the full 2015 fiscal year were $31.0 billion, compared with $30.0 billion for fiscal 2014, an increase of 3 percent in U.S. dollars and 11 percent in local currency. Net revenues for fiscal 2015 reflect a foreign-exchange impact of approximately negative 7.5 percent compared with fiscal 2014.
▪ | Consulting net revenues were $16.2 billion, an increase of 3 percent in U.S. dollars and 11 percent in local currency compared with fiscal 2014. |
▪ | Outsourcing net revenues were $14.8 billion, an increase of 4 percent in U.S. dollars and 11 percent in local currency compared with fiscal 2014. |
Diluted EPS for the full 2015 fiscal year were $4.76, compared with $4.52 for fiscal 2014. The pension settlement charge had a negative $0.06 impact on EPS for fiscal 2015. Excluding this charge, EPS for the year were $4.82, an increase of $0.30, or 7 percent, from fiscal 2014. The $0.30 increase in EPS on an adjusted basis reflects:
▪ | $0.22 from higher revenue and operating results; |
▪ | $0.01 from a lower effective tax rate excluding the impact of the pension settlement charge; and |
▪ | $0.09 from a lower share count; |
partially offset by
▪ | $0.02 from lower non-operating income. |
Gross margin (gross profit as a percentage of net revenues) for fiscal 2015 was 31.6 percent, compared with 32.3 percent for fiscal 2014. Selling, general and administrative (SG&A) expenses for the full fiscal year were $5.31 billion, or 17.1 percent of net revenues, compared with $5.40 billion, or 18.0 percent of net revenues, for fiscal 2014.
Operating income for the full fiscal year was $4.44 billion, or 14.3 percent of net revenues, compared with $4.30 billion, or 14.3 percent of net revenues, for fiscal 2014. Excluding the $64 million pension settlement charge, operating income for fiscal 2015 was $4.50 billion, or 14.5 percent of net revenues, a 20-basis-point expansion from fiscal 2014.
Accenture’s annual effective tax rate for fiscal 2015 was 25.8 percent, compared with 26.1 percent in fiscal 2014. Excluding the impact of the pension settlement charge, the effective tax rate for fiscal 2015 was 26.0 percent.
Net income for the full fiscal year was $3.27 billion, compared with $3.18 billion for fiscal 2014. Excluding the after-tax impact of the pension settlement charge, net income for fiscal 2015 was $3.31 billion.
For the full 2015 fiscal year, operating cash flow was $4.09 billion and property and equipment additions were $395 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $3.70 billion. For the prior fiscal year, ended Aug. 31, 2014, operating cash flow was $3.49 billion, property and equipment additions were $322 million, and free cash flow was $3.16 billion.
Utilization for the full 2015 fiscal year was 90 percent, compared with 88 percent for fiscal 2014. Attrition for the full 2015 fiscal year was 14 percent, compared with 13 percent for fiscal
New Bookings
New bookings for the full fiscal year were $34.36 billion, a decrease of 4 percent in U.S. dollars and an increase of 3 percent in local currency over fiscal 2014.
▪ | Consulting new bookings were $16.71 billion, a decrease of 3 percent in U.S. dollars and an increase of 5 percent in local currency compared with fiscal 2014. Consulting represented 49 percent of new bookings in fiscal 2015. |
▪ | Outsourcing new bookings were $17.66 billion, a decrease of 6 percent in U.S. dollars and an increase of 2 percent in local currency compared with fiscal 2014. Outsourcing represented 51 percent of new bookings in fiscal 2015. |
Net Revenues by Operating Group
Net revenues by operating group for the full fiscal year were as follows:
▪ | Communications, Media & Technology: $6.35 billion, compared with $5.92 billion for fiscal 2014, an increase of 7 percent in U.S. dollars and 16 percent in local currency. |
▪ | Financial Services: $6.63 billion, compared with $6.51 billion for fiscal 2014, an increase of 2 percent in U.S. dollars and 11 percent in local currency. |
▪ | Health & Public Service: $5.46 billion, compared with $5.02 billion for fiscal 2014, an increase of 9 percent in U.S. dollars and 12 percent in local currency. |
▪ | Products: $7.60 billion, compared with $7.39 billion for fiscal 2014, an increase of 3 percent in U.S. dollars and 10 percent in local currency. |
▪ | Resources: $4.99 billion, compared with $5.14 billion for fiscal 2014, a decrease of 3 percent in U.S. dollars and an increase of 5 percent in local currency. |
Net Revenues by Geographic Region
Net revenues by geographic region for the full fiscal year were as follows:
▪ | North America: $14.21 billion, compared with $12.80 billion for fiscal 2014, an increase of 11 percent in U.S. dollars and 12 percent in local currency. |
▪ | Europe: $10.93 billion, compared with $11.25 billion for fiscal 2014, a decrease of 3 percent in U.S. dollars and an increase of 10 percent in local currency. |
▪ | Growth Markets: $5.91 billion, compared with $5.95 billion for fiscal 2014, a decrease of 1 percent in U.S. dollars and an increase of 11 percent in local currency. |
Returning Cash to Shareholders
Accenture continues to return cash to shareholders through cash dividends and share repurchases. In fiscal 2015, the company returned $3.81 billion to shareholders, including $1.35 billion in cash dividends and $2.45 billion in share repurchases.
Dividend
Accenture plc has declared a semi-annual cash dividend of $1.10 per share on Accenture plc Class A ordinary shares for shareholders of record at the close of business on Oct. 16, 2015, and Accenture Holdings plc will declare a semi-annual cash dividend of $1.10 per share on Accenture Holdings ordinary shares for shareholders of record at the close of business on Oct. 13, 2015. Both dividends are payable on
Nov. 13, 2015. This represents an increase of $0.08 per share, or 8 percent, over the company’s previous semi-annual dividend, declared in March.
Share Repurchase Activity
During the fourth quarter of fiscal 2015, Accenture repurchased or redeemed 6.6 million shares, including 5.3 million shares repurchased in the open market, for a total of $664 million. During the full fiscal year 2015, Accenture repurchased or redeemed 27.4 million shares, including 22.2 million shares repurchased in the open market, for a total of $2.45 billion. The Accenture Board of Directors has approved $5 billion in additional share repurchase authority, bringing Accenture’s total outstanding authority to approximately $7.6 billion.
At Aug. 31, 2015, Accenture had approximately 657 million total shares outstanding, including 627 million Accenture plc Class A ordinary shares and minority holdings of 30 million shares (Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares).
Business Outlook
First Quarter Fiscal 2016
Accenture expects net revenues for the first quarter of fiscal 2016 to be in the range of $7.70 billion to $7.95 billion, a growth rate of 6 percent to 9 percent in local currency. This range assumes a foreign-exchange impact of negative 8.5 percent compared with the first quarter of fiscal 2015.
Fiscal Year 2016
Accenture’s business outlook for the full 2016 fiscal year assumes a foreign-exchange impact of negative 4 percent compared with fiscal 2015.
For fiscal 2016, the company expects net revenue growth to be in the range of 5 percent to 8 percent in local currency. The company expects diluted EPS to be in the range of $5.09 to $5.24.
Accenture expects operating margin for the full fiscal year to be in the range of 14.6 percent to 14.8 percent, an expansion of 10 to 30 basis points from the adjusted operating margin of 14.5 percent in fiscal 2015.
For fiscal 2016, the company expects operating cash flow to be in the range of $4.1 billion to $4.4 billion; property and equipment additions to be $500 million; and free cash flow to be in the range of $3.6 billion to $3.9 billion.
The company expects its annual effective tax rate to be in the range of 25.0 percent to 26.0 percent.
Conference Call and Webcast Details
Accenture will host a conference call at 8:00 a.m. EDT today to discuss its fourth-quarter financial results. To participate, please dial +1 (800) 230-1059 [+1 (612) 234-9959 outside the United States, Puerto Rico and Canada] approximately 15 minutes before the scheduled start of the call. The conference call will also be accessible live on the Investor Relations section of the Accenture Web site at www.accenture.com.
A replay of the conference call will be available online at www.accenture.com beginning at 10:30 a.m. EDT today, Thursday, Sept. 24, and continuing until Thursday, Sept. 24, 2015. A podcast of the conference call will be available online at www.accenture.com beginning approximately 24 hours after the call and continuing until Thursday, Dec. 17, 2015. The replay will also be available via telephone by dialing +1 (800) 475-6701 [+1 (320) 365-3844 outside the United States, Puerto Rico and Canada] and entering access code 366268 from 10:30 a.m. EDT Thursday, Sept. 24 through Thursday, Dec. 17, 2015.
About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 358,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$31.0 billion for the fiscal year ended Aug. 31, 2015. Its home page is www.accenture.com.
Non-GAAP Financial Information
This news release includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to Accenture’s financial statements as prepared under generally accepted accounting principles (GAAP) are included in this press release. Financial results “in local currency” are calculated by restating current-period activity into U.S. dollars using the comparable prior-year period’s foreign-currency exchange rates. Accenture’s management believes providing investors with this information gives additional insights into Accenture’s results of operations. While Accenture’s management believes that the non-GAAP financial measures herein are useful in evaluating Accenture’s operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.
Forward-Looking Statements
Except for the historical information and discussions contained herein, statements in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. These include, without limitation, risks that: the company’s results of operations could be adversely affected by volatile, negative or uncertain economic conditions and the effects of these conditions on the company’s clients’ businesses and levels of business activity; the company’s business depends on generating and maintaining ongoing, profitable client demand for the company’s services and solutions, and a significant reduction in such demand could materially affect the company’s results of operations; if the company is unable to keep its supply of skills and resources in balance with client demand around the world and attract and retain professionals with strong leadership skills, the company’s business, the utilization rate of the company’s professionals and the company’s results of operations may be materially adversely affected; the markets in which the company competes are highly competitive, and the company might not be able to compete effectively; the company could have liability or the company’s reputation could be damaged if the company fails to protect client and/or company data or information systems as obligated by law or contract or if the company’s information systems are breached; the company’s results of operations and ability to grow could be materially negatively affected if the company cannot adapt and expand its services and solutions in response to ongoing changes in technology and offerings by new entrants; the company’s results of operations could materially suffer if the company is not able to obtain sufficient pricing to enable it to meet its profitability expectations; if the company does not accurately anticipate the cost, risk and complexity of performing its work or if the third parties upon
whom it relies do not meet their commitments, then the company’s contracts could have delivery inefficiencies and be less profitable than expected or unprofitable; the company’s results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates; the company’s profitability could suffer if its cost-management strategies are unsuccessful, and the company may not be able to improve its profitability through improvements to cost-management to the degree it has done in the past; the company’s business could be materially adversely affected if the company incurs legal liability; the company’s work with government clients exposes the company to additional risks inherent in the government contracting environment; the company might not be successful at identifying, acquiring or integrating businesses or entering into joint ventures; the company’s Global Delivery Network is increasingly concentrated in India and the Philippines, which may expose it to operational risks; changes in the company’s level of taxes, as well as audits, investigations and tax proceedings, or changes in the company’s treatment as an Irish company, could have a material adverse effect on the company’s results of operations and financial condition; as a result of the company’s geographically diverse operations and its growth strategy to continue geographic expansion, the company is more susceptible to certain risks; adverse changes to the company’s relationships with key alliance partners or in the business of its key alliance partners could adversely affect the company’s results of operations; the company’s services or solutions could infringe upon the intellectual property rights of others or the company might lose its ability to utilize the intellectual property of others; if the company is unable to protect its intellectual property rights from unauthorized use or infringement by third parties, its business could be adversely affected; the company’s ability to attract and retain business and employees may depend on its reputation in the marketplace; many of the company’s contracts include payments that link some of its fees to the attainment of performance or business targets and/or require the company to meet specific service levels, which could increase the variability of the company’s revenues and impact its margins; if the company is unable to collect its receivables or unbilled services, the company’s results of operations, financial condition and cash flows could be adversely affected; if the company is unable to manage the organizational challenges associated with its size, the company might be unable to achieve its business objectives; the company’s share price and results of operations could fluctuate and be difficult to predict; the company’s results of operations and share price could be adversely affected if it is unable to maintain effective internal controls; any changes to the estimates and assumptions that the company makes in connection with the preparation of its consolidated financial statements could adversely affect its financial results; the company may be subject to criticism and negative publicity related to its incorporation in Ireland; as well as the risks, uncertainties and other factors discussed under the “Risk Factors” heading in Accenture plc’s most recent annual report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission. Statements in this news release speak only as of the date they were made, and Accenture undertakes no duty to update any forward-looking statements made in this news release or to conform such statements to actual results or changes in Accenture’s expectations.
###
Contact:
Roxanne Taylor
Accenture
+1 (917) 452-5106
roxanne.taylor@accenture.com
ACCENTURE PLC
CONSOLIDATED INCOME STATEMENTS
(In thousands of U.S. dollars, except share and per share amounts)
(Unaudited)
Three Months Ended August 31, | Year Ended August 31, | |||||||||||||||||||||||||||
2015 | % of Net Revenues | 2014 | % of Net Revenues | 2015 | % of Net Revenues | 2014 | % of Net Revenues | |||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||
Revenues before reimbursements (“Net revenues”) | $ | 7,888,505 | 100 | % | $ | 7,777,340 | 100 | % | $ | 31,047,931 | 100 | % | $ | 30,002,394 | 100 | % | ||||||||||||
Reimbursements | 476,006 | 489,979 | 1,866,493 | 1,872,284 | ||||||||||||||||||||||||
Revenues | 8,364,511 | 8,267,319 | 32,914,424 | 31,874,678 | ||||||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||||||
Cost of services: | ||||||||||||||||||||||||||||
Cost of services before reimbursable expenses | 5,384,100 | 68.3 | % | 5,308,720 | 68.3 | % | 21,238,692 | 68.4 | % | 20,317,928 | 67.7 | % | ||||||||||||||||
Reimbursable expenses | 476,006 | 489,979 | 1,866,493 | 1,872,284 | ||||||||||||||||||||||||
Cost of services | 5,860,106 | 5,798,699 | 23,105,185 | 22,190,212 | ||||||||||||||||||||||||
Sales and marketing | 924,114 | 11.7 | % | 918,118 | 11.8 | % | 3,505,045 | 11.3 | % | 3,582,833 | 11.9 | % | ||||||||||||||||
General and administrative costs | 486,683 | 6.2 | % | 471,137 | 6.1 | % | 1,803,943 | 5.8 | % | 1,819,136 | 6.1 | % | ||||||||||||||||
Pension settlement charge | — | — | — | — | 64,382 | 0.2 | % | — | — | |||||||||||||||||||
Reorganization benefits, net | — | — | — | — | — | — | (18,015 | ) | (0.1 | )% | ||||||||||||||||||
Total operating expenses | 7,270,903 | 7,187,954 | 28,478,555 | 27,574,166 | ||||||||||||||||||||||||
OPERATING INCOME | 1,093,608 | 13.9 | % | 1,079,365 | 13.9 | % | 4,435,869 | 14.3 | % | 4,300,512 | 14.3 | % | ||||||||||||||||
Interest income | 8,111 | 8,141 | 33,991 | 30,370 | ||||||||||||||||||||||||
Interest expense | (3,832 | ) | (5,325 | ) | (14,578 | ) | (17,621 | ) | ||||||||||||||||||||
Other (expense) income, net | (16,426 | ) | 5,877 | (44,752 | ) | (15,560 | ) | |||||||||||||||||||||
INCOME BEFORE INCOME TAXES | 1,081,461 | 13.7 | % | 1,088,058 | 14.0 | % | 4,410,530 | 14.2 | % | 4,297,701 | 14.3 | % | ||||||||||||||||
Provision for income taxes | 293,336 | 327,890 | 1,136,741 | 1,121,743 | ||||||||||||||||||||||||
NET INCOME | 788,125 | 10.0 | % | 760,168 | 9.8 | % | 3,273,789 | 10.5 | % | 3,175,958 | 10.6 | % | ||||||||||||||||
Net income attributable to noncontrolling interests in Accenture Holdings plc and Accenture Canada Holdings Inc. | (40,953 | ) | (43,637 | ) | (178,925 | ) | (187,107 | ) | ||||||||||||||||||||
Net income attributable to noncontrolling interests – other (1) | (9,544 | ) | (15,515 | ) | (41,283 | ) | (47,353 | ) | ||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC | $ | 737,628 | 9.4 | % | $ | 701,016 | 9.0 | % | $ | 3,053,581 | 9.8 | % | $ | 2,941,498 | 9.8 | % | ||||||||||||
CALCULATION OF EARNINGS PER SHARE: | ||||||||||||||||||||||||||||
Net income attributable to Accenture plc | $ | 737,628 | $ | 701,016 | $ | 3,053,581 | $ | 2,941,498 | ||||||||||||||||||||
Net income attributable to noncontrolling interests in Accenture Holdings plc and Accenture Canada Holdings Inc. (2) | 40,953 | 43,637 | 178,925 | 187,107 | ||||||||||||||||||||||||
Net income for diluted earnings per share calculation | $ | 778,581 | $ | 744,653 | $ | 3,232,506 | $ | 3,128,605 | ||||||||||||||||||||
EARNINGS PER SHARE: | ||||||||||||||||||||||||||||
-Basic | $ | 1.18 | $ | 1.11 | $ | 4.87 | $ | 4.64 | ||||||||||||||||||||
-Diluted | $ | 1.15 | $ | 1.08 | $ | 4.76 | $ | 4.52 | ||||||||||||||||||||
WEIGHTED AVERAGE SHARES: | ||||||||||||||||||||||||||||
-Basic | 624,715,181 | 631,249,362 | 626,799,586 | 634,216,250 | ||||||||||||||||||||||||
-Diluted | 675,749,438 | 688,345,020 | 678,757,070 | 692,389,966 | ||||||||||||||||||||||||
Cash dividends per share | $ | — | $ | — | $ | 2.04 | $ | 1.86 | ||||||||||||||||||||
_______________
(1) | Comprised primarily of noncontrolling interest attributable to the noncontrolling shareholders of Avanade, Inc. |
(2) | Diluted earnings per share assumes the redemption of all Accenture Holdings plc ordinary shares owned by holders of noncontrolling interests and the exchange of all Accenture Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares on a one-for-one basis. |
ACCENTURE PLC
SUMMARY OF REVENUES
(In thousands of U.S. dollars)
(Unaudited)
Percent Increase Local Currency | ||||||||||||
Percent Increase (Decrease) U.S. dollars | ||||||||||||
Three Months Ended August 31, | ||||||||||||
2015 | 2014 | |||||||||||
OPERATING GROUPS | ||||||||||||
Communications, Media & Technology | $ | 1,638,072 | $ | 1,579,324 | 4% | 16% | ||||||
Financial Services | 1,690,696 | 1,672,541 | 1 | 14 | ||||||||
Health & Public Service | 1,390,552 | 1,294,050 | 7 | 13 | ||||||||
Products | 1,931,567 | 1,933,864 | — | 10 | ||||||||
Resources | 1,233,469 | 1,293,631 | (5) | 6 | ||||||||
Other | 4,149 | 3,930 | n/m | n/m | ||||||||
TOTAL Net Revenues | 7,888,505 | 7,777,340 | 1% | 12% | ||||||||
Reimbursements | 476,006 | 489,979 | (3) | |||||||||
TOTAL REVENUES | $ | 8,364,511 | $ | 8,267,319 | 1% | |||||||
GEOGRAPHY | ||||||||||||
North America | $ | 3,715,006 | $ | 3,387,352 | 10% | 11% | ||||||
Europe | 2,711,716 | 2,823,152 | (4) | 13 | ||||||||
Growth Markets | 1,461,783 | 1,566,836 | (7) | 11 | ||||||||
TOTAL Net Revenues | $ | 7,888,505 | $ | 7,777,340 | 1% | 12% | ||||||
TYPE OF WORK | ||||||||||||
Consulting | $ | 4,159,936 | $ | 4,016,623 | 4% | 14% | ||||||
Outsourcing | 3,728,569 | 3,760,717 | (1) | 9 | ||||||||
TOTAL Net Revenues | $ | 7,888,505 | $ | 7,777,340 | 1% | 12% | ||||||
Percent Increase Local Currency | ||||||||||||
Percent Increase (Decrease) U.S. dollars | ||||||||||||
Year Ended August 31, | ||||||||||||
2015 | 2014 | |||||||||||
OPERATING GROUPS | ||||||||||||
Communications, Media & Technology | $ | 6,349,372 | $ | 5,923,821 | 7% | 16% | ||||||
Financial Services | 6,634,771 | 6,511,228 | 2 | 11 | ||||||||
Health & Public Service | 5,462,550 | 5,021,692 | 9 | 12 | ||||||||
Products | 7,596,051 | 7,394,980 | 3 | 10 | ||||||||
Resources | 4,988,627 | 5,135,309 | (3) | 5 | ||||||||
Other | 16,560 | 15,364 | n/m | n/m | ||||||||
TOTAL Net Revenues | 31,047,931 | 30,002,394 | 3% | 11% | ||||||||
Reimbursements | 1,866,493 | 1,872,284 | — | |||||||||
TOTAL REVENUES | $ | 32,914,424 | $ | 31,874,678 | 3% | |||||||
GEOGRAPHY | ||||||||||||
North America | $ | 14,209,387 | $ | 12,796,846 | 11% | 12% | ||||||
Europe | 10,929,572 | 11,254,953 | (3) | 10 | ||||||||
Growth Markets | 5,908,972 | 5,950,595 | (1) | 11 | ||||||||
TOTAL Net Revenues | $ | 31,047,931 | $ | 30,002,394 | 3% | 11% | ||||||
TYPE OF WORK | ||||||||||||
Consulting | $ | 16,203,915 | $ | 15,737,661 | 3% | 11% | ||||||
Outsourcing | 14,844,016 | 14,264,733 | 4 | 11 | ||||||||
TOTAL Net Revenues | $ | 31,047,931 | $ | 30,002,394 | 3% | 11% | ||||||
_______________
n/m = not meaningful
ACCENTURE PLC
OPERATING INCOME BY OPERATING GROUP
(In thousands of U.S. dollars)
(Unaudited)
Operating Income as Reported (GAAP) | |||||||||||
Three Months Ended August 31, | |||||||||||
2015 | 2014 | ||||||||||
Operating Income | Operating Margin | Operating Income | Operating Margin | ||||||||
Communications, Media & Technology | $ | 243,068 | 15% | $ | 212,026 | 13% | |||||
Financial Services | 287,791 | 17 | 231,713 | 14 | |||||||
Health & Public Service | 132,683 | 10 | 140,645 | 11 | |||||||
Products | 265,631 | 14 | 285,574 | 15 | |||||||
Resources | 164,435 | 13 | 209,407 | 16 | |||||||
Total | $ | 1,093,608 | 13.9% | $ | 1,079,365 | 13.9% | |||||
Operating Income as Reported (GAAP) | |||||||||||
Year Ended August 31, | |||||||||||
2015 | 2014 | ||||||||||
Operating Income | Operating Margin | Operating Income | Operating Margin | ||||||||
Communications, Media & Technology | $ | 871,388 | 14% | $ | 770,166 | 13% | |||||
Financial Services | 1,079,397 | 16 | 957,347 | 15 | |||||||
Health & Public Service | 700,960 | 13 | 678,663 | 14 | |||||||
Products | 1,082,351 | 14 | 991,844 | 13 | |||||||
Resources | 701,773 | 14 | 902,492 | 18 | |||||||
Total | $ | 4,435,869 | 14.3% | $ | 4,300,512 | 14.3% | |||||
Year Ended August 31, | |||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Operating Income and Operating Margin Excluding Pension Settlement Charge (Non-GAAP) | Operating Income and Operating Margin as Reported (GAAP) | ||||||||||||||||||||||
Operating Income (GAAP) | Pension Settlement Charge (1) | Operating Income | Operating Margin | Operating Income | Operating Margin | Increase (Decrease) | |||||||||||||||||
Communications, Media & Technology | $ | 871,388 | $ | 12,547 | $ | 883,935 | 14% | $ | 770,166 | 13% | $ | 113,769 | |||||||||||
Financial Services | 1,079,397 | 13,460 | 1,092,857 | 16 | 957,347 | 15 | 135,510 | ||||||||||||||||
Health & Public Service | 700,960 | 11,664 | 712,624 | 13 | 678,663 | 14 | 33,961 | ||||||||||||||||
Products | 1,082,351 | 15,823 | 1,098,174 | 14 | 991,844 | 13 | 106,330 | ||||||||||||||||
Resources | 701,773 | 10,888 | 712,661 | 14 | 902,492 | 18 | (189,831 | ) | |||||||||||||||
Total | $ | 4,435,869 | $ | 64,382 | $ | 4,500,251 | 14.5% | $ | 4,300,512 | 14.3% | $ | 199,739 | |||||||||||
RECONCILIATION OF NET INCOME AND DILUTED EARNINGS PER SHARE, AS REPORTED (GAAP), TO NET INCOME AND DILUTED EARNINGS PER SHARE, AS ADJUSTED (NON-GAAP)
Year Ended August 31, | |||||||||||||||
2015 | 2014 | ||||||||||||||
As Reported (GAAP) | Pension Settlement Charge (1) | Adjusted (Non-GAAP) | As Reported (GAAP) | ||||||||||||
Income before incomes taxes | $ | 4,410,530 | $ | 64,382 | $ | 4,474,912 | $ | 4,297,701 | |||||||
Provision for income taxes | 1,136,741 | 25,238 | 1,161,979 | 1,121,743 | |||||||||||
Net income | $ | 3,273,789 | $ | 39,144 | $ | 3,312,933 | $ | 3,175,958 | |||||||
Effective tax rate | 25.8 | % | 26.0 | % | 26.1 | % | |||||||||
Diluted earnings per share | $ | 4.76 | $ | 0.06 | $ | 4.82 | $ | 4.52 | |||||||
________
(1) | Represents non-cash pension settlement charge related to lump sum cash payments from the company's U.S. pension plan to former employees who elected to receive such payments. The payments settled the company's pension obligations to those who participated. |
ACCENTURE PLC
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
August 31, 2015 | August 31, 2014 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 4,360,766 | $ | 4,921,305 | ||||
Short-term investments | 2,448 | 2,602 | ||||||
Receivables from clients, net | 3,840,920 | 3,859,567 | ||||||
Unbilled services, net | 1,884,504 | 1,803,767 | ||||||
Other current assets | 1,490,756 | 1,317,201 | ||||||
Total current assets | 11,579,394 | 11,904,442 | ||||||
NON-CURRENT ASSETS: | ||||||||
Unbilled services, net | 15,501 | 28,039 | ||||||
Investments | 45,027 | 66,783 | ||||||
Property and equipment, net | 801,884 | 793,444 | ||||||
Other non-current assets | 5,824,252 | 5,137,744 | ||||||
Total non-current assets | 6,686,664 | 6,026,010 | ||||||
TOTAL ASSETS | $ | 18,266,058 | $ | 17,930,452 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Current portion of long-term debt and bank borrowings | $ | 1,848 | $ | 330 | ||||
Accounts payable | 1,151,464 | 1,064,228 | ||||||
Deferred revenues | 2,251,617 | 2,348,034 | ||||||
Accrued payroll and related benefits | 3,687,468 | 3,380,748 | ||||||
Other accrued liabilities | 1,439,802 | 1,364,739 | ||||||
Total current liabilities | 8,532,199 | 8,158,079 | ||||||
NON-CURRENT LIABILITIES: | ||||||||
Long-term debt | 25,587 | 26,403 | ||||||
Other non-current liabilities | 3,060,701 | 3,460,633 | ||||||
Total non-current liabilities | 3,086,288 | 3,487,036 | ||||||
TOTAL ACCENTURE PLC SHAREHOLDERS’ EQUITY | 6,133,725 | 5,732,035 | ||||||
NONCONTROLLING INTERESTS | 513,846 | 553,302 | ||||||
TOTAL SHAREHOLDERS’ EQUITY | 6,647,571 | 6,285,337 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 18,266,058 | $ | 17,930,452 | ||||
ACCENTURE PLC
CONSOLIDATED CASH FLOWS STATEMENTS
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended August 31, | Year Ended August 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | 788,125 | $ | 760,168 | $ | 3,273,789 | $ | 3,175,958 | ||||||||
Depreciation, amortization and asset impairments | 173,763 | 164,079 | 645,923 | 620,743 | ||||||||||||
Reorganization benefits, net | — | — | — | (18,015 | ) | |||||||||||
Share-based compensation expense | 148,638 | 151,312 | 680,329 | 671,301 | ||||||||||||
Change in assets and liabilities/other, net | 394,060 | 573,653 | (507,904 | ) | (963,902 | ) | ||||||||||
Net cash provided by operating activities | 1,504,586 | 1,649,212 | 4,092,137 | 3,486,085 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Purchases of property and equipment | (148,037 | ) | (101,457 | ) | (395,017 | ) | (321,870 | ) | ||||||||
Purchases of businesses and investments, net of cash acquired | (349,502 | ) | (64,847 | ) | (791,704 | ) | (740,067 | ) | ||||||||
Other investing, net | 3,050 | 1,431 | 16,337 | 5,526 | ||||||||||||
Net cash used in investing activities | (494,489 | ) | (164,873 | ) | (1,170,384 | ) | (1,056,411 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Proceeds from issuance of ordinary shares | 57,810 | 70,729 | 554,149 | 558,497 | ||||||||||||
Purchases of shares | (664,015 | ) | (657,567 | ) | (2,452,989 | ) | (2,559,434 | ) | ||||||||
Cash dividends paid | — | — | (1,353,471 | ) | (1,254,916 | ) | ||||||||||
Other financing, net | (2,154 | ) | 1,997 | 50,015 | 90,437 | |||||||||||
Net cash used in financing activities | (608,359 | ) | (584,841 | ) | (3,202,296 | ) | (3,165,416 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (67,161 | ) | (27,052 | ) | (279,996 | ) | 25,162 | |||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 334,577 | 872,446 | (560,539 | ) | (710,580 | ) | ||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 4,026,189 | 4,048,859 | 4,921,305 | 5,631,885 | ||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 4,360,766 | $ | 4,921,305 | $ | 4,360,766 | $ | 4,921,305 | ||||||||