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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 10-K
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(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended August 31, 2008
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OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the transition period
from to .
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Commission File Number:
001-16565
ACCENTURE LTD
(Exact name of registrant as
specified in its charter)
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Bermuda
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98-0341111
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(State or other jurisdiction
of
incorporation or organization)
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(I.R.S. Employer Identification
No.)
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Canons Court
22 Victoria Street
Hamilton HM 12
Bermuda
(Address of principal executive
offices)
(441) 296-8262
(Registrants telephone
number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Class A common shares, par value $0.0000225 per share
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
Class X common shares, par
value $0.0000225 per share
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes þ No o
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of
1934. Yes o No þ
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 o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
(§229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K
or any amendment to this
Form 10-K. o
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):
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Large accelerated
filer þ
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Accelerated
filer o
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Non-accelerated
filer o
(Do not check if a smaller reporting company)
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Smaller reporting
company o
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Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange Act.) Yes
o No þ
The aggregate market value of the common equity of the
registrant held by non-affiliates of the registrant on
February 29, 2008 was approximately $20,836,757,456 based
on the closing price of the registrants Class A
common shares, par value $0.0000225 per share, reported on the
New York Stock Exchange on such date of $35.25 per share and on
the par value of the registrants Class X common
shares, par value $0.0000225 per share.
The number of shares of the registrants Class A
common shares, par value $0.0000225 per share, outstanding as of
October 13, 2008 was 612,769,296 (which number does not
include 48,619,328 issued shares held by subsidiaries of the
registrant). The number of shares of the registrants
Class X common shares, par value $0.0000225 per share,
outstanding as of October 13, 2008 was 116,868,387.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 2009 Annual General
Meeting of
Shareholders Part III
PART I
Disclosure
Regarding Forward-Looking Statements
This Annual Report on
Form 10-K
contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 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 might not prove to be accurate. Actual
outcomes and results could 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, the factors discussed below under the section
entitled Risk Factors.
Available
Information
Our website address is www.accenture.com. We use our website as
a channel of distribution for company information. We make
available free of charge on the Investor Relations section of
our website
(http://investor.accenture.com)
our Annual Report on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K
and all amendments to those reports as soon as reasonably
practicable after such material is electronically filed or
furnished with the Securities and Exchange Commission (the
SEC) pursuant to Section 13(a) or 15(d) of the
Exchange Act. We also make available through our website other
reports filed with or furnished to the SEC under the Exchange
Act, including our proxy statements and reports filed by
officers and directors under Section 16(a) of the Exchange
Act, as well as our Code of Business Ethics. Financial and other
material information regarding us is routinely posted on and
accessible at
http://investor.accenture.com.
We do not intend for information contained in our website to be
part of this Annual Report on
Form 10-K.
Any materials we file with the SEC may be read and copied at the
SECs Public Reference Room at 100 F Street,
N.E., Washington, DC, 20549. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330.
The SEC maintains an Internet site
(http://www.sec.gov)
that contains reports, proxy and information statements, and
other information regarding issuers that file electronically
with the SEC.
In this Annual Report on
Form 10-K,
we use the terms Accenture, we,
our Company, our and us to
refer to Accenture Ltd and its subsidiaries. All references to
years, unless otherwise noted, refer to our fiscal year, which
ends on August 31.
Overview
Accenture is one of the worlds leading management
consulting, technology services and outsourcing organizations,
with more than 186,000 employees; offices and operations in
more than 200 cities in 52 countries; and revenues before
reimbursements (net revenues) of $23.39 billion
for fiscal 2008.
Our high performance business strategy builds on our
expertise in consulting, technology and outsourcing to help
clients perform at the highest levels so they can create
sustainable value for their customers, stakeholders and
shareholders. We use our industry and business-process
knowledge, our service offering expertise and our insight into
and deep understanding of emerging technologies to
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identify new business and technology trends and formulate and
implement solutions for clients under demanding time
constraints. We help clients identify and enter new markets,
increase revenues in existing markets, improve operational
performance and deliver their products and services more
effectively and efficiently.
We operate globally with one common brand and business model
designed to enable us to provide clients around the world with
the same high level of service. Drawing on a combination of
industry expertise, functional capabilities, alliances, global
resources and technology, we deliver competitively priced,
high-value services that help our clients measurably improve
business performance. Our global delivery model enables us to
provide a complete
end-to-end
delivery capability by drawing on Accentures global
resources to deliver high-quality, cost-effective solutions to
clients under demanding timeframes.
Consulting,
Technology and Outsourcing Services and Solutions
Our business is structured around five operating groups, which
together comprise 17 industry groups serving clients in major
industries around the world. Our industry focus gives us an
understanding of industry evolution, business issues and
applicable technologies, enabling us to deliver innovative
solutions tailored to each client or, as appropriate,
more-standardized capabilities to multiple clients.
Our three growth platformsmanagement consulting, systems
integration and technology, and outsourcingare the
innovation engines through which we develop our knowledge
capital; build world-class skills and capabilities; and create,
acquire and manage key assets central to the development of
solutions for our clients. The subject matter experts within
these areas work closely with the professionals in our operating
groups to develop and deliver solutions to clients.
Client engagement teamswhich typically consist of industry
experts, capability specialists and professionals with local
market knowledgeleverage the full capabilities of our
global delivery model to deliver price-competitive solutions and
services. In certain instances our client engagement teams
include subcontractors, who supplement our professionals with
additional resources in a specific skill, service or product
area, as needed.
Operating
Groups
The following table shows the organization of our five operating
groups and their 17 industry groups. For financial reporting
purposes, our operating groups are our reportable operating
segments. We do not allocate total assets by operating group,
although our operating groups do manage and control certain
assets. For certain historical financial information regarding
our operating groups (including certain asset information), as
well as financial information by geography (including long-lived
asset information), see Note 17 (Segment Reporting) to our
Consolidated Financial Statements below under Financial
Statements and Supplementary Data.
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Operating Groups
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Communications
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Financial
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& High Tech
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Services
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Products
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Public Service
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Resources
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Communications
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Banking
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Automotive
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Public Service
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Chemicals
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Electronics &
High Tech
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Capital
Markets
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Consumer Goods &
Services
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Energy
Natural Resources
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Media &
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Insurance
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Health & Life
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Utilities
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Entertainment
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Sciences
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Industrial Equipment
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Retail
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Transportation &
Travel Services
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Communications &
High Tech
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We are a leading provider of management consulting, technology,
systems integration and outsourcing services and solutions to
the communications, electronics, high technology, media and
entertainment industries. Our Communications & High
Tech professionals help clients enhance their business results
through industry-specific solutions and by seizing the
opportunities made possible by the convergence of
communications, computing and content. Examples of our services
and solutions include the application of mobile technology,
advanced communications network optimization, broadband and
Internet protocol solutions, product innovation and digital
rights management as well as systems integration, customer care,
supply chain and workforce transformation services. In support
of these services, we selectively pursue strategic acquisitions
and have developed an array of assets, repeatable solutions,
methodologies and research facilities to demonstrate how new
technologies and industry-leading practices can be applied in
new and innovative ways to enhance our clients business
performance. In fiscal 2008, as in the prior year, our net
revenues from multiple contracts with a single client in
Communications & High Tech were greater than 10% of
the operating groups net revenues, slightly exceeding that
threshold. Our Communications & High Tech operating
group comprises the following industry groups:
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Communications. Our Communications
industry group serves many of the worlds leading wireline,
wireless, cable and satellite communications network operators
and service providers. We provide a wide range of services
designed to help our communications clients increase margins,
improve asset utilization, improve customer retention, increase
revenues, reduce overall costs and accelerate sales cycles. We
offer a suite of reusable solutions, called Accenture
Communications Solutions, designed to address major business and
operational issues related to broadband and Internet
protocol-based networks and services, including business
intelligence, billing transformation, customer contact
transformation, sales force transformation, service fulfillment
and next-generation network optimization. Our Communications
industry group represented approximately 61% of our
Communications & High Tech operating groups net
revenues in fiscal 2008.
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Electronics & High Tech. Our
Electronics & High Tech industry group serves the
communications technology, consumer technology, enterprise
technology, semiconductor, software and aerospace/defense
segments. This industry group provides services in areas such as
strategy, enterprise resource management, customer relationship
management, supply chain management, software development, human
performance, and merger/acquisition activities, including
post-merger integration. We also offer a suite of reusable
solutions, called Accenture High Tech Solutions, designed to
address the industrys major business and operational
challenges, such as new product innovation and development,
customer service and support, sales and marketing, and
globalization. Our Electronics & High Tech industry
group represented approximately 30% of our
Communications & High Tech operating groups net
revenues in fiscal 2008.
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Media & Entertainment. Our
Media & Entertainment industry group serves the
broadcast, entertainment (television, music and movie), print,
publishing and portal industries. Professionals in this industry
group provide a wide range of services, including digital
content solutions designed to help companies effectively manage,
distribute and protect content across numerous media channels.
These include Accenture Digital Media Services, which provide a
comprehensive solution set to leading content owners and
distributors, helping them adapt their organizations
business processes and systems to stay ahead of the demand for
digital content and services.
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Financial
Services
Our Financial Services operating group focuses on the
opportunities created by our clients needs to adapt to
changing market conditions, including increased cost pressures,
industry consolidation, regulatory changes, the creation of
common industry standards and protocols, and the move to a more
integrated industry model. We help clients meet these challenges
through a variety of assets, services and solutions, including
consulting and outsourcing strategies to increase cost
efficiency and transform businesses, and customer relationship
management initiatives that enable them to acquire and retain
profitable customers and improve their cross-selling
capabilities. Our Financial Services operating group comprises
the following industry groups:
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Banking. Our Banking industry group
works with retail and commercial banks and diversified financial
enterprises. We help these organizations develop and execute
strategies to target, acquire and retain customers more
effectively, expand product and service offerings, comply with
new regulatory initiatives, and leverage new technologies and
distribution channels. Our Banking industry group represented
approximately 56% of our Financial Services operating
groups net revenues in fiscal 2008.
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Capital Markets. Our Capital Markets
industry group helps investment banks, broker/dealers,
asset-management firms, depositories, clearing organizations and
exchanges improve operational efficiency and transform their
businesses to increase competitiveness. For example, we help
clients develop and implement innovative trading,
asset-management and market-information-management systems and
solutions.
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Insurance. Our Insurance industry group
helps property and casualty insurers, life insurers, reinsurance
firms and insurance brokers improve business processes,
modernize their technologies and improve the quality and
consistency of risk selection decisions. Our Insurance industry
group offers a claims management capability that enables
insurers to provide better customer service while optimizing
claims costs, as well as industry-leading insurance policy
administration technology solutions that enable insurers to
bring products to market more quickly and reduce costs. We also
provide a variety of outsourced solutions to help insurers
improve working capital and cash flow, deliver permanent cost
savings and enhance long-term growth.
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Products
Our Products operating group comprises the following industry
groups:
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Automotive. Our Automotive industry
group works with auto manufacturers, suppliers, dealers,
retailers and service providers. Professionals in this industry
group help clients develop and implement innovative solutions
focused on product development and commercialization, customer
service and retention, channel strategy and management,
branding, buyer-driven business models, cost reduction, customer
relationship management and integrated supplier partnerships.
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Consumer Goods &
Services. Our Consumer Goods &
Services industry group serves food, beverage, household goods
and personal care, tobacco and footwear/apparel manufacturers
around the world. We add value to these companies through
service offerings designed to enhance performance by addressing
critical elements of success, including large-scale enterprise
resource planning (ERP) strategy and implementation, sales and
marketing transformation, working-capital productivity
improvement, supply chain collaboration and post-merger
integration.
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Health & Life Sciences. Our
Health & Life Sciences industry group works with
healthcare providers, government health departments,
policy-making authorities/regulators, managed care
organizations, health insurers and pharmaceutical,
biotechnology, medical products and other industry-related
companies to improve the quality, accessibility and
affordability of healthcare. Our key offerings include health
clinical transformation, electronic health records and hospital
back-office services in the provider/government segment;
research and development transformation, commercial
effectiveness and customer interaction, and integrated
electronic compliance (manufacturing and supply chain) in the
pharmaceuticals and medical products segment; and health
information and data management, claims excellence/cost
containment and health plan back-office services in the payer
segment.
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Industrial Equipment. Our Industrial
Equipment industry group serves the industrial and electrical
equipment, construction, consumer durable and heavy equipment
industries. We help our clients increase operating and supply
chain efficiencies by improving processes and leveraging
technology. We also help clients generate value from strategic
mergers and acquisitions. In addition, our Industrial Equipment
industry group develops and deploys innovative solutions in the
areas of channel management, collaborative product design,
remote field maintenance, enterprise application integration and
outsourcing.
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Retail. Our Retail industry group
serves a wide spectrum of retailers and distributors, including
supermarkets, specialty premium retailers and large
mass-merchandise discounters. We provide service offerings that
help clients address new ways of reaching the retail trade and
consumers through precision marketing; maximize brand synergies
and cost reductions in mergers and acquisitions; improve supply
chain efficiencies through collaborative commerce business
models; and enhance the efficiency of internal operations.
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Transportation & Travel
Services. Our Transportation &
Travel Services industry group serves companies in the airline,
freight transportation, third-party logistics, hospitality,
gaming, car rental, passenger rail and travel distribution
industries. We help clients develop and implement strategies and
solutions to improve customer relationship management
capabilities, operate more-efficient networks, integrate supply
chains, develop procurement and electronic business marketplace
strategies, and more effectively manage maintenance, repair and
overhaul processes and expenses. Through our Navitaire
subsidiary, we offer airlines a range of transaction-processing
services on an outsourced basis, including distribution,
Internet reservations, airport check-in, revenue management and
accounting, crew scheduling and management, and disruption
recovery.
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Public
Service
Our Public Service operating group helps public-service entities
around the world improve the social and economic conditions of
their citizens. The public-service marketplace is transforming,
and traditional governmental entities are working increasingly
with the third sectornon-governmental
organizations, community-based organizations, educational
institutions, charities and non-profit organizationsto
deliver services and benefits to citizens.
We typically work with defense, revenue, human services, health,
postal, and justice and public-safety authorities or agencies,
and our clients are generally national, state or local-level
government organizations, as well as pan-geographic
organizations. Our work with clients in the U.S. federal
government represented approximately 33% of our Public Service
operating groups net revenues in fiscal 2008.
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Our offerings help public-sector clients address some of their
most pressing needs, including developing fair and equitable tax
systems that help enhance revenues; ensuring the security of
citizens and businesses; improving service delivery; and
increasing operational efficiency. We work with clients to
transform their customer-facing and back-office operations and
enable services to be delivered through appropriate technologies
that make government more accessible, in a manner consistent
with expectations established in the private sector.
The Accenture Institute for Public Service Value is our research
organization that helps our public-sector clients assess the
value they add to the sector in much the same way shareholder
value models measure the value of publicly traded entities. We
have pioneered this work through our patent-pending public
service value model. The Institute also focuses on understanding
the expectations, desires and disappointments of citizens around
the world in order to inform our solutions, and our clients, as
public-service transformations continue globally.
Resources
Our Resources operating group serves the chemicals, energy,
forest products, metals and mining, utilities and related
industries. With market conditions driving energy companies to
seek new ways of creating value for shareholders, deregulation
fundamentally reforming the utilities industry and yielding
cross-border opportunities, and an intensive focus on
productivity and portfolio management in the chemicals industry,
we are working with clients to create innovative solutions that
are designed to help them differentiate themselves in the
marketplace and gain competitive advantage. These include
helping global energy companies optimize existing upstream and
downstream operations while securing their upstream positions;
helping utilities clients deal with deregulation; helping metals
and mining clients globalize their business models; helping
chemicals clients decrease operations costs; and working with
clients across all industry segments on the green
agenda to enable them to meet emission targets and
increase energy efficiency. Our Resources operating group
comprises the following industry groups:
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Chemicals. Our Chemicals industry group
works with a wide cross-section of industry segments, including
petrochemicals, specialty chemicals, polymers and plastics,
gases and life science companies. We also have long-term
outsourcing contracts with many industry leaders.
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Energy. Our Energy industry group
serves a wide range of companies in the oil and gas industry,
including upstream, downstream and oil services companies. Our
key areas of focus include helping clients optimize production,
manage the hydrocarbon supply chain, streamline retail
operations and realize the full potential of third-party
enterprise-wide technology solutions. In addition, our
multi-client outsourcing centers enable clients to increase
operational efficiencies and exploit cross-industry synergies.
Our Energy industry group represented approximately 30% of our
Resources operating groups net revenues in fiscal 2008.
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Natural Resources. Our Natural
Resources industry group serves the forest products and metals
and mining industries. We help lumber, pulp, papermaking,
converting and packaging companies, as well as iron, steel,
aluminum, coal, copper and precious metals companies, develop
and implement new business strategies, redesign business
processes, manage complex change initiatives, and integrate
processes and technologies to achieve higher levels of
performance.
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Utilities. Our Utilities industry group
works with electric, gas and water utilities around the world to
respond to an evolving and highly competitive marketplace. The
groups work includes helping utilities transform
themselves from regulated, and sometimes state-owned, local
entities to international deregulated corporations, as well as
developing diverse products and service
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offerings to help our clients deliver higher levels of service
to their customers. These offerings include customer
relationship management, workforce enablement, supply chain
optimization, and trading and risk management. We also provide a
range of outsourced customer-care services to utilities and
retail energy companies in North America. Our Utilities industry
group represented approximately 41% of our Resources operating
groups net revenues in fiscal 2008.
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Growth
Platforms
Our management consulting, systems integration and technology,
and outsourcing growth platforms are the skill-based
innovation engines through which we develop our
knowledge capital; build world-class skills and capabilities;
and create, acquire and manage key assets central to the
development of solutions for our clients. The professionals
within these areas work closely with our operating groups to
deliver integrated services and solutions to clients.
Management
Consulting
Our management consulting growth platform is responsible for the
development and delivery of our strategic, functional, industry,
process and change consulting capabilities, working closely with
the professionals in our operating groups. This growth platform
comprises six service lines:
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Customer Relationship Management. The
professionals in our Customer Relationship Management
(CRM) service line help companies acquire, develop
and retain more profitable customer relationships. We offer a
full range of innovative capabilities that address every aspect
of CRM, including marketing, direct and indirect sales, customer
service, field support and customer contact operations. These
capabilities include rigorous approaches to improving the return
on marketing investment, methods for building insight into
customers purchase habits and service preferences,
tailoring offers and service treatment based upon that insight,
and unique methods of optimizing the quality, cost and revenue
impact of sales and service operations. We use these skills to
help our clients accelerate growth, improve marketing and sales
productivity and reduce customer-care coststhus increasing
the value of their customer relationships and enhancing the
economic value of their brands.
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Finance & Performance
Management. The professionals in our
Finance & Performance Management service line work
with our clients finance and business-unit executives to
develop financial transaction processing, risk management and
business performance reporting capabilities. Among the services
we provide are strategic consulting on the design and structure
of the finance function; the establishment of shared service
centers; and the configuration of enterprise resource planning
platforms for streamlining transaction processing. Our finance
capability services also address revenue cycle management,
billing, credit risk and collection effectiveness, electronic
invoicing and settlement, tax processing, lending and debt
recovery. Our performance management services address
shareholder value targeting, scorecard and performance metrics
development, performance reporting solutions and applied
business analytics to improve profitability. Our professionals
often utilize the resources of Accenture Finance Solutions, one
of our business process outsourcing (BPO)
businesses, and work with finance executives to develop and
implement solutions that help them align their companies
investments with their business objectives and establish
security relating to the exchange of information to reporting
institutions.
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Talent & Organization
Performance. The professionals in our
Talent & Organization Performance (formerly known as
Human Performance) service line work with clients on
a wide range of talent management, workforce and organizational
issues to deliver improved business and operational results. Our
integrated approach and
end-to-end
capabilities include
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services and solutions in organization and change management,
human resources (HR) administration, learning,
knowledge management, organizational performance management,
talent management, HR information technology (IT)
systems implementation and overall transformation of key
workforces. We help companies and governments improve the
efficiency and effectiveness of their HR services while lowering
associated costs; deliver improvements in employee and workforce
performance; and transform organizations through project-,
program- and enterprise-level change management.
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Process & Innovation
Performance. The Process &
Innovation Performance service line, established in September
2008, helps clients achieve measurable, lasting improvements in
operational performance, innovation performance and growth.
Taking an
end-to-end,
process-based approach, professionals in this service line help
clients address key business challenges such as complexity
management, lean manufacturing and operations, process
innovation, strategic cost reduction and growth through
innovation. The service line is based on the capabilities and
offerings that we gained with our 2007 acquisition of George
Group, which specializes in process, operational and business
transformation (including Lean Six Sigma) and innovation
strategy.
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Strategy. Our Strategy professionals
combine their strategy and operations experience to help our
clients turn insights into results at both the enterprise and
business-unit
level. With deep skills and capabilities in corporate strategy,
corporate restructuring, growth and innovation strategies,
mergers and acquisitions, merger integration, organization
strategy, pricing strategy and profitability assessment, we help
clients developand executepragmatic solutions that
transform organizations and drive sustained high performance.
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Supply Chain Management. The
professionals in our Supply Chain Management service line work
with clients across a broad range of industries to develop and
implement supply chain and operations strategies that enable
profitable growth in new and existing markets. Our professionals
combine global industry expertise and skills in supply chain
strategy, sourcing and procurement, supply chain planning,
manufacturing and design, fulfillment and service management to
help organizations achieve high performance. We work with
clients to implement innovative consulting and outsourcing
solutions that align operating models to support business
strategies; optimize global operations; support profitable
product launches; and enhance the skills and capabilities of the
supply chain workforce.
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Systems
Integration and Technology
Our systems integration and technology growth platform comprises
two service areas: systems integration and technology consulting.
Systems
Integration
Our key systems integration consulting services and solutions
include:
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Enterprise Solutions and Enterprise Resource
Planning. We implement a variety of
application softwareincluding SAP and Oracle, among
othersto streamline business processes, systems and
information and help organizations access, manage and exploit
data to make more-informed business decisions. Our skilled
professionals provide planning, implementation, change
management and upgrade solutions across the primary application
software product suites that underpin all major business
functions.
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Industry and Functional
Solutions. Accenture provides clients with
robust, large-scale industry and functional solutions based on
proprietary reusable assets, aggregated into industry
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solutions, such as the Accenture Communications Solutions suite
and the Accenture Revenue Solution suite for tax offices, as
well as solutions for major industry-specific requirements. We
also provide specialized services and solutions to support
specific business functions, including finance and planning,
customer relationship management, supply chain and human
resource management.
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Information Management Services. We
provide services to help organizations manage the full range of
their information needs to improve data quality, enhance
decision-making capabilities and meet compliance requirements.
Our services include business intelligence as well as
unstructured content management and portals; data management and
data quality solutions; and information architecture
development. Our information management assets complement and
are embedded in our industry and functional solutions.
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Service-Oriented Architecture. We help
CIOs and business leaders use service-oriented architecture to
enable improvement in IT efficiency and a more effective
alignment between business processes and applications. Accenture
guides organizations through a four-phased approach for
designing and building flexible IT solutions that enable
business process components to be assembled and used more
efficiently to deliver distinctive business services and
capabilities for higher performance.
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Custom Solutions. With deep skills and
expertise in both J2EE (Java-based) and .NET technology
architectures, we work with clients to develop custom solutions
that meet unique business needs, often using open-source
technology products and platforms.
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Software as a Service (SaaS). We help
clients implement SaaS solutions to meet their business needs
with the added benefits of increasing flexibility and reducing
total cost of ownership. Our services include requirements
definition, design, configuration, testing, change management,
data conversion and integration.
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Mobility Solutions. We help clients
develop solutions that give their workforces access to key
enterprise applicationsincluding online trading and wealth
management, supply chain management, telematics, radio frequency
identification, field force enablement and customer relationship
managementthrough mobile devices
and/or the
Internet. These solutions enable clients to improve efficiency,
lower costs, enhance differentiation and ensure compliance.
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Microsoft Solutions. Together with our
alliance partner Microsoft and our Avanade subsidiary, we
develop and deliver cost-efficient, innovative business
solutions based on Microsoft Windows Server and other .NET
technologies, leveraging our deep industry expertise and
practical applications of leading-edge technologies.
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Technology
Consulting
Our key technology consulting services and solutions include:
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IT Strategy &
Transformation. We help CEOs and CIOs link IT
investments to business results and help manage those
investments to ensure that planned business impact is achieved.
We also help CIOs transform how IT works, both internally and
with business partners, so that IT is run like a
business to deliver high performance.
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Enterprise Architecture. We provide
solutions that integrate IT with business capabilities to
provide a seamless operating environment for organizations. Our
solutions provide a reference point for measuring both IT
investment and results, creating the delivery roadmap that
defines how IT systems need to change to drive future business
growth and higher performance.
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Infrastructure Consulting. We provide
solutions to help organizations optimize their IT
infrastructures while reducing costs. From data center,
operations engineering and enterprise network design and
implementation to desktop solutions, our services enable clients
to rationalize, standardize, optimize, secure and transform
their IT infrastructures for improved performance of
mission-critical business processes, applications and end users.
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Security Consulting. Our solutions help
organizations forge secure business environments that enable
them to grow their capabilities and become more agile in
response to changing market forces and evolving threatsall
without incurring additional complexity. Working with us, our
clients are better able to secure data and applications, protect
identities, address threats and vulnerabilities, and meet
stringent compliance demands while reducing costs and improving
efficiency.
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Application Portfolio Optimization and
Renewal. We specialize in defining and
executing strategies that transform our clients
application portfolios into rationalized, flexible,
cost-efficient and reliable assets. Our services and solutions
help clients define and implement innovative approaches to
extending the useful life of legacy applications at a
significantly reduced cost compared with replacement, rapidly
turning around non-performing systems and migrating custom
solutions written in vintage languages or hosted on retiring
platforms to more modern, sustainable solutions. Our
capabilities combine deeply skilled professionals with a suite
of renewal tools that accelerate and automate the portfolio
optimization process.
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Digital Solutions. We provide clients
with solutions that move more of their business and internal
operations online to improve productivity, manage costs and
drive revenue growth. We work with our clients to help define
their online strategies, improve customer experiences and
identify areas for website optimization. We also help clients
incorporate next-generation digital technologysuch as
wikis, blogs, crowd-sourcing and
mash-ups,
among othersto create significant opportunities for
collaboration and sharing with their employees, suppliers and
customers.
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Research &
Development. Through Accenture Technology
Labsour research and development organizationwe use
new and emerging technologies to develop business solutions that
we believe will be the drivers of our clients growth and
enable them to be first to market with unique capabilities. Key
areas of research and development for clients include
information insight, collaboration, biometrics, virtualized
infrastructures, predictive maintenance, Web 2.0, cloud
computing and sensor technologies, among others.
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Microsoft Solutions. Together with our
alliance partner Microsoft and our Avanade subsidiary, we design
and provide cost-efficient, innovative business solutions based
on Microsoft Windows Server and other .NET technologies,
leveraging our deep industry expertise and practical
applications of leading-edge technologies.
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Outsourcing
Accenture provides a wide range of outsourcing services,
including application outsourcing, infrastructure outsourcing
and business process outsourcing.
Application
Outsourcing
Accenture takes a holistic approach to application outsourcing
that goes beyond traditional cost-cutting measures, helping
clients improve the total performance of application development
and maintenance. We provide a wide array of application
outsourcing services under flexible arrangements, managing
custom or packaged software applicationsincluding
enterprise-wide applications such as
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SAP and Oracleover their complete development and
maintenance life-cycles. The scope of services ranges from
standardized, discrete application outsourcing services,
including application testing, application management of
enterprise-wide software programs and capacity services, to
large-scale application enhancement and development for
individual or multiple applications, as well as application
portfolio rationalization and consolidation. We can also take
end-to-end
responsibility for all of a clients IT function, including
infrastructure and operations, leveraging our shared services
delivery groups and our application and infrastructure
transformation consulting expertise to deliver significant gains
in client productivity, providing services from a variety of
locations, including lower-cost locations. By transferring to
Accenture the responsibility for managing one or more of their
applications, clients can leverage our assets, scale and global
resources as well as our secure, global infrastructure delivery
capabilities. This allows clients to maintain and control the
overall performance of their IT capabilities while reducing the
complexity and costs associated with managing third parties and
increasing the flexibility, scalability, predictability and
security of their IT infrastructures.
Infrastructure
Outsourcing
We deliver an integrated set of managed infrastructure services
encompassing all infrastructure functionsfrom network
access and desktop management to remote technology support.
Services can be delivered as discrete, standalone solutions or
bundled with Accenture application outsourcing and BPO services.
Our infrastructure outsourcing services include:
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IT spend managementAsset management, as well as
managed procurement and technology spend, to reduce overall IT
non-salary spending;
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Data center servicesHosting to support development
and production environments, storage services, database
management and messaging services;
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Service deskHelp desk, single point of contact for
support and online portal services to resolve frontline issues;
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Security servicesIdentity management, intrusion and
firewall protection, end-user device and messaging security, and
policy and awareness;
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Network servicesData and voice network management,
optimization and converged services; and
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Workplace servicesLifecycle management for
desktops, field services and mobile devices, and file and print
services.
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We provide these services either through our own centers and
capabilities or in conjunction with our strategic subcontractors.
Business
Process Outsourcing
We work with clients to develop and deliver business process
innovations that transform their businesses and deliver higher
levels of performance and results as well as lower costs.
Through our BPO services, we manage specific business processes
or functions for clients, providing solutions that are more
efficient and cost-effective than if the functions were provided
in-house.
We offer clients across all industries a variety of
function-specific BPO services, including finance and
accounting, human resources, learning, procurement and customer
contact. We also offer specialized services tailored to clients
in specific industries. For instance, we offer life insurers
policy administration and management services, including
high-volume transaction processing capabilities. We provide
utilities companies in North America and Europe with field
services, as well as specialized
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customer care, finance and accounting, human resources, supply
chain and IT services. We help market-leading health payers
improve service performance in core operational functions,
coupled with accompanying cost reductions. We provide services
to medical organizations that improve and accelerate clinical
development productivity. In addition, through our Navitaire
subsidiary, we offer airlines a range of transaction-processing
services, including distribution, Internet reservations, airport
check-in, revenue management and accounting, crew scheduling and
management, and disruption recovery.
In addition to providing individual BPO services, we can bundle
two or more business functions, enabling clients to consolidate
multiple business functions and their underlying IT systems with
a single service provider to achieve greater efficiencies,
control and cost savings.
Global
Delivery Model
A key Accenture differentiator is our strategic global delivery
model, which allows us to draw on the benefits of using people
and other resources from around the worldincluding
scalable, standardized processes, methods and tools; specialized
business process and technology skills; cost advantages;
foreign-language
fluency; proximity to clients; and time-zone advantagesto
deliver high-quality solutions under demanding time-frames.
Emphasizing quality, reduced risk, speed to market and
predictability, our global delivery model enables us to provide
clients with price-competitive services and solutions that drive
higher levels of performance.
A critical component of this capability is our Global Delivery
Network, which comprises local Accenture professionals working
at client sites around the world as well as more than 50
delivery centersfacilities where teams of Accenture
technology and business-process professionals use proven assets
to create and deliver business and technology solutions for
clients. Our delivery centers improve the efficiency of our
engagement teams through the reuse of processes, solution
designs, infrastructure and software and by leveraging the
experience of delivery center professionals.
Professionals in our Global Delivery Network apply a systematic
approach to delivering technology consulting, systems
integration, application outsourcing and business processing
outsourcing solutions and services delivery to create and
capture proven, repeatable processes, methodologies, tools and
architectures. For example, we continue to evolve our Accenture
Delivery Suite, which combines our common methods, tools,
architectures and metrics in support of our global delivery
efforts. The Accenture Delivery Suite provides us with a common
language, framework and reusable assets that allow us to unite
our global delivery capabilities into a single, cohesive
approach for our client service teamsenabling us to start
projects quickly, deliver with high quality, and improve our
ability to meet our clients expectations. In addition, our
ability to build seamless global teamsleveraging the right
professionals with the right skills for each taskenables
Accenture to provide a complete
end-to-end
capability, with consistent Accenture processes around the globe.
We continue to expand and enhance our Global Delivery Network,
which we believe is a competitive differentiator for us. In
fiscal 2008 we further expanded our Global Delivery Network by,
among other things, increasing industry specialization;
increasing our activities in systems integration, application
outsourcing, business process outsourcing and technology
consulting; opening new facilities; and recruiting actively in
key locations of our network, including Eastern Europe, India,
China and the Philippines. As of August 31, 2008, we had
approximately 83,000 people in our network globally, an
increase of more than 11,000 people since the end of fiscal
2007.
Alliances
We have sales and delivery alliances with companies whose
capabilities complement our own, either by enhancing a service
offering, delivering a new technology or helping us extend our
services
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to new geographies. By combining our alliance partners
products and services with our own capabilities and expertise,
we create innovative, high-value business solutions for our
clients. Some alliances are specifically aligned with one of our
service lines, thereby adding skills, technology and insights
that are applicable across many of the industries we serve.
Other alliances extend and enhance our offerings specific to a
single industry group.
Almost all of our alliances are non-exclusive. Although
individual alliance agreements do not involve direct payments to
us that are material to our business, we generate significant
revenues from services to implement our alliance partners
products.
Research
and Innovation
We are committed to developing leading-edge ideas, as we believe
that both research and innovation have been major factors in our
success and will help us continue to grow in the future. We use
our investment in research and developmenton which we
spent $390 million, $307 million and $298 million
in fiscal 2008, 2007 and 2006, respectivelyto help create,
commercialize and disseminate innovative business strategies and
technology.
Our research and innovation program is designed to generate
early insights into how knowledge can be harnessed to create
innovative business solutions for our clients and to develop
business strategies with significant value. A key component of
this is our research and development organization, Accenture
Technology Labs, which identifies and develops new technologies
that we believe will be the drivers of our clients growth
and enable them to be first to market with unique capabilities.
Our technology R&D team comprises approximately 200
professionals based in four Labs in the United States,
France and India. We also promote the creation of knowledge
capital and thought leadership through the Accenture Institute
for High Performance. In addition, we spend a significant
portion of our research and development resources directly
through our operating groups and our consulting, technology and
outsourcing capabilities to develop market-ready solutions for
our clients.
Employees
Our most important asset is our people. The diverse and global
makeup of our workforce enables us to serve our diverse and
global client base. We are deeply committed to the continued
development of our employees, who receive significant and
focused technical, functional, industry, managerial and
leadership skill development and training appropriate for their
roles and levels within our company throughout their careers
with us. We seek to reinforce our employees commitments to
our clients, culture and values through a comprehensive
performance management system and a career philosophy that
rewards both individual performance and teamwork. We strive to
maintain a work environment that reinforces our owner-operator
culture and the collaboration, motivation, alignment of
interests and sense of ownership and reward that this culture
has fostered.
As of August 31, 2008, we had more than
186,000 employees worldwide.
Competition
We operate in a highly competitive and rapidly changing global
marketplace and compete with a variety of organizations that
offer services competitive with those we offer. We compete with
a variety of companies with respect to our offerings, including:
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Off-shore service providers in lower-cost locations,
particularly Indian providers, that offer services similar to
those we offer, often at highly competitive prices;
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Large multinational providers, including the service arms of
large global technology providers, that offer some or all of the
consulting, systems integration and technology, and outsourcing
services that we do;
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Niche solution or service providers that compete with us in a
specific geographic market, industry segment or service area,
including companies that provide new or alternative products,
services or delivery models; and
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Accounting firms that are expanding or re-emphasizing their
provision of consulting services.
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In addition, a client may choose to use its own resources rather
than engage an outside firm for the types of services we provide.
Our revenues are derived primarily from Fortune Global
500 and Fortune 1000 companies, medium-sized
companies, governments, government agencies and other
enterprises. We believe that the principal competitive factors
in the industries in which we compete include:
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skills and capabilities of people;
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innovative service and product offerings;
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ability to add value;
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reputation and client references;
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price;
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scope of services;
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service delivery approach;
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technical and industry expertise;
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quality of services and solutions;
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ability to deliver results on a timely basis;
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availability of appropriate resources; and
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global reach and scale.
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Our clients typically retain us on a non-exclusive basis.
Intellectual
Property
Our success has resulted in part from our proprietary
methodologies, software, reusable knowledge capital, assets and
other intellectual property rights. We rely upon a combination
of nondisclosure and other contractual arrangements as well as
upon trade secret, copyright, patent and trademark laws to
protect our intellectual property rights and the rights of third
parties from whom we license intellectual property. We have
promulgated policies related to confidentiality and ownership
and to the use and protection of our intellectual property and
that owned by third parties, and we also enter into agreements
with our employees as appropriate.
We recognize the increasing value of intellectual property in
the marketplace and vigorously create, harvest and protect our
intellectual property. As of August 31, 2008, we had 1,709
patent applications pending in the United States and other
jurisdictions and had been issued 344 U.S. patents and 223
non-U.S. patents
in, among others, the following areas: goal-based educational
simulation; virtual call centers; hybrid telecommunications
networks; development architecture frameworks;
emotion-based
voice processing; mobile communications networks; location-based
information filtering;
14
and computerized multimedia asset systems. We intend to continue
to vigorously identify, create, harvest and protect our
intellectual property and to leverage our protected,
differentiated assets and methodologies to provide superior
value to our clients.
Organizational
Structure
Accenture Ltd is a Bermuda holding company with no material
assets other than Class II and Class III common shares
in its subsidiary, Accenture SCA, a Luxembourg partnership
limited by shares (Accenture SCA). Accenture
Ltds only business is to hold these shares and to act as
the sole general partner of Accenture SCA. Accenture Ltd owns a
majority voting interest in Accenture SCA. As the general
partner of Accenture SCA and as a result of Accenture Ltds
majority voting interest in Accenture SCA, Accenture Ltd
controls Accenture SCAs management and operations and
consolidates Accenture SCAs results in its financial
statements. Accenture operates its business through subsidiaries
of Accenture SCA. Accenture SCA generally reimburses Accenture
Ltd for its expenses but does not pay Accenture Ltd any fees.
Prior to our transition to a corporate structure in fiscal 2001,
we operated as a series of related partnerships and corporations
under the control of our partners. In connection with our
transition to a corporate structure, our partners generally
exchanged all of their interests in these partnerships and
corporations for Accenture Ltd Class A common shares or, in
the case of partners in certain countries, Accenture SCA
Class I common shares or exchangeable shares issued by
Accenture Canada Holdings Inc., an indirect subsidiary of
Accenture SCA. Generally, partners who received Accenture SCA
Class I common shares or Accenture Canada Holdings Inc.
exchangeable shares also received a corresponding number of
Accenture Ltd Class X common shares, which entitle their
holders to vote at Accenture Ltd shareholder meetings but do not
carry any economic rights.
In fiscal 2005, Accenture developed and announced a new, broader
career model for its highest-level executives that recognizes
the diversity of roles and responsibilities demonstrated by
these employees. This new career framework replaced the internal
use of the partner title with the more comprehensive
senior executive title and applies the senior
executive title to more than 4,600 of our highest-level
employees, including those employees previously referred to as
partners. However, for proper context, we continue to use the
term partner in this report to refer to these
persons in certain situations related to our reorganization and
the period prior to our incorporation.
Accenture
Ltd Class A Common Shares and Class X Common
Shares
Each Class A common share and each Class X common
share of Accenture Ltd entitles its holder to one vote on all
matters submitted to a vote of shareholders of Accenture Ltd. A
holder of a Class X common share is not, however, entitled
to receive dividends or to receive payments upon a liquidation
of Accenture Ltd.
Accenture Ltd may redeem, at its option, any Class X common
share for a redemption price equal to the par value of the
Class X common share, or $0.0000225 per share. Accenture
Ltd has separately agreed with the original holders of Accenture
SCA Class I common shares and Accenture
Canada Holdings Inc. exchangeable shares not to redeem any
Class X common share of such holder if the redemption would
reduce the number of Class X common shares held by that
holder to a number that is less than the number of Accenture SCA
Class I common shares or Accenture Canada Holdings Inc.
exchangeable shares owned by that holder, as the case may be.
Accenture Ltd will redeem Class X common shares upon the
redemption or exchange of Accenture SCA Class I common
shares and Accenture Canada Holdings Inc. exchangeable shares so
that the aggregate number of Class X common shares
outstanding at any time does not exceed the aggregate number of
Accenture SCA Class I common shares and Accenture Canada
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Holdings Inc. exchangeable shares outstanding. Class X
common shares are not transferable without the consent of
Accenture Ltd.
Accenture
SCA Class I Common Shares
Only our current and former senior executives and their
permitted transferees hold Accenture SCA Class I common
shares. Each Class I common share entitles its holder to
one vote on all matters submitted to the shareholders of
Accenture SCA and entitles its holder to dividends and
liquidation payments.
Subject to the transfer restrictions in Accenture SCAs
Articles of Association described below, Accenture SCA is
obligated, at the option of the holder, to redeem any
outstanding Accenture SCA Class I common share at any time
at a redemption price per share generally equal to its current
market value as determined in accordance with Accenture
SCAs Articles of Association. Under Accenture SCAs
Articles of Association, the market value of a Class I
common share that is not subject to transfer restrictions will
be deemed to be equal to (i) the average of the high and
low sales prices of an Accenture Ltd Class A common share
as reported on the New York Stock Exchange (or on such other
designated market on which the Class A common shares
trade), net of customary brokerage and similar transaction
costs, or (ii) if Accenture Ltd sells its Class A
common shares on the date that the redemption price is
determined (other than in a transaction with any employee or an
affiliate or pursuant to a preexisting obligation), the weighted
average sales price of an Accenture Ltd Class A common
share on the New York Stock Exchange (or on such other market on
which the Class A common shares primarily trade), net of
customary brokerage and similar transaction costs. See
Restrictions on the Transfer of Certain Accenture
SharesArticles of Association of Accenture
SCACovered Person Transfer Restrictions below for
additional information on these transfer restrictions. Accenture
SCA may, at its option, pay this redemption price with cash or
by delivering Accenture Ltd Class A common shares on a
one-for-one
basis. This
one-for-one
redemption price and exchange ratio will be adjusted if
Accenture Ltd holds more than a de minimis amount of
assets (other than its interest in Accenture SCA and assets it
holds only transiently prior to contributing them to Accenture
SCA) or incurs more than a de minimis amount of
liabilities (other than liabilities for which Accenture SCA has
a corresponding liability to Accenture Ltd). We have been
advised by our legal advisors in Luxembourg that there is no
relevant legal precedent in Luxembourg quantifying or defining
the term de minimis. In the event that a
question arises in this regard, we expect that management will
interpret de minimis in light of the facts
and circumstances existing at the time in question. At this
time, Accenture Ltd does not intend to hold any material assets
other than its interest in Accenture SCA or to incur any
material liabilities such that this
one-for-one
redemption price and exchange ratio would require adjustment and
will disclose any change in its intentions that could affect
this ratio. In order to maintain Accenture Ltds economic
interest in Accenture SCA, Accenture Ltd generally will acquire
additional Accenture SCA common shares each time additional
Accenture Ltd Class A common shares are issued.
Accenture
SCA Class II and Class III Common Shares
On June 28, 2005, Accenture SCAs shareholders
approved certain amendments to the rights of Accenture SCA
Class II common shares held by Accenture Ltd, as well as
the creation of a new class of common shares known as
Class III common shares into which all
Class I common shares held by Accenture Ltd and its
affiliates were reclassified. Accenture SCA Class II common
shares and Class III common shares may not be held by any
person other than the general partner of Accenture SCA and its
subsidiaries. All Class I common shares that are sold or
otherwise transferred to Accenture Ltd or its subsidiaries will
be automatically reclassified into Class III common shares.
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The amendments to the Class II common shares, the creation
of Class III common shares (and all lettered
sub-series
of that class) and the reclassification of all Class I
common shares held or to be held by Accenture Ltd and its
subsidiaries have no effect on the computation of Accenture
Ltds earnings per share.
Accenture SCA Class II common shares and Class III
common shares (or any lettered
sub-series
of that class) are not entitled to any cash dividends. If the
Board of Directors of Accenture Ltd authorizes the payment of a
cash dividend on Accenture Ltds Class A common
shares, Accenture Ltd, as general partner of Accenture SCA, will
cause Accenture SCA to redeem Class II common shares and
Class III common shares that Accenture Ltd holds to obtain
cash needed to pay dividends on its Class A common shares.
At any time that Accenture SCA pays a cash dividend on its
Class I common shares, new Class II common shares and
Class III common shares will be issued to the existing
holders of Class II common shares and Class III common
shares, in each case having an aggregate value of the amount of
any cash dividends that the holders of those Class II or
Class III common shares would have received had they
ratably participated in the cash dividend paid on the
Class I common shares.
Each Class II common share entitles its holder to receive a
liquidation payment equal to 10% of any liquidation payment to
which a Class I common share entitles its holder. Each
Accenture SCA Class III common share entitles its holder to
receive a liquidation payment equal to 100% of any liquidation
payment to which an Accenture SCA Class I common share
entitles its holder.
Accenture
Canada Holdings Inc. Exchangeable Shares
Subject to the transfer restrictions contained in Accenture
Ltds bye-laws described below, holders of Accenture Canada
Holdings Inc. exchangeable shares may exchange their shares for
Accenture Ltd Class A common shares at any time on a
one-for-one
basis. Accenture may, at its option, satisfy this exchange with
cash at a price per share generally equal to the market price of
an Accenture Ltd Class A common share at the time of the
exchange. Each exchangeable share of Accenture Canada Holdings
Inc. entitles its holder to receive distributions equal to any
distributions to which an Accenture Ltd Class A common
share entitles its holder.
Restrictions
on the Transfer of Certain Accenture Shares
Covered Person Transfer
Restrictions. Accenture Ltds bye-laws
contain transfer restrictions that apply to certain Accenture
current and former senior executives who hold Accenture Ltd
Class A common shares. We refer to these persons as
covered persons. The Accenture Ltd shares covered by
the transfer restrictions generally include any Accenture Ltd
Class A common shares beneficially owned by a senior
executive at the time in question and also as of or prior to the
initial public offering of the Accenture Ltd Class A common
shares in July 2001. We refer to the shares covered by these
transfer restrictions as covered shares.
Current senior executives. Historically, the
transfer restrictions applicable to covered shares lapsed with
the passage of time on an annual basis until July 24, 2009.
In 2007, we eliminated a requirement that active employees hold
at least 25% of these shares at all times during their
employment (the 25% minimum holding requirement). We
also enacted a waiver of certain transfer restrictions
applicable to active employees, permitting covered shares that
would otherwise not have become available for transfer until the
later of July 24, 2009 or the termination of the
employees employment with Accenture to become transferable
on an accelerated basis. For a schedule of dates on which
transfer restrictions are expected to be released, see below
under Transfer Schedule.
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Former senior executives. On
September 25, 2008, we also enacted a waiver of certain
transfer restrictions applicable to retired and resigned
employees, permitting covered shares that would otherwise not
have become available for transfer until July 24, 2009 to
become transferable by the holders on an accelerated basis (see
Transfer Schedule).
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Notwithstanding the foregoing, covered persons retiring from
Accenture at the age of 50 or older are permitted to transfer
covered shares they own on an accelerated basis as follows:
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Percentage of remaining
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transfer restricted shares
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Age at retirement
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permitted to be transferred
|
|
56 or older
|
|
100%
|
55
|
|
87.5%
|
54
|
|
75%
|
53
|
|
62.5%
|
52
|
|
50%
|
51
|
|
37.5%
|
50
|
|
25%
|
|
|
|
|
|
In addition, a retired senior executive who reaches the age of
56 is permitted to transfer any covered shares he or she owns.
Any remaining shares owned by retiring senior executives for
which transfer restrictions are not released on an accelerated
basis will be eligible to be transferred as if the retiring
senior executive continued to be employed by Accenture.
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Covered persons who became disabled before our transition to a
corporate structure are permitted to transfer all of their
covered shares. Current and former senior executives who have
become disabled since our transition to a corporate structure
are subject to the general transfer restrictions applicable to
employees or, if disabled after the age of 50, benefit from the
accelerated lapses of transfer restrictions applicable to
retired senior executives.
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All transfer restrictions applicable to a covered person under
Accenture Ltds bye-laws terminate upon death.
If Accenture approves in writing a covered persons pledge
of his covered shares to a lender, foreclosures by the lender on
those shares, and any subsequent sales of those shares by the
lender, are not restricted, provided that the lender gives
Accenture a right of first refusal to buy any shares at the
market price before they are sold by the lender.
Notwithstanding the transfer restrictions described in this
summary, Accenture Ltd Class X common shares may not be
transferred at any time, except upon the death of a holder of
Class X common shares or with the consent of Accenture Ltd.
Accenture Canada Holdings Inc. exchangeable shares held by
covered persons are also subject to the transfer restrictions in
Accenture Ltds bye-laws.
Term and Amendment. The transfer restrictions
in Accenture Ltds bye-laws will not terminate unless they
have been previously waived or terminated under the terms of the
bye-laws. Amendment of the transfer restrictions in Accenture
Ltds bye-laws requires the approval of the Board of
Directors of Accenture Ltd and a majority vote of Accenture
Ltds shareholders.
18
Waivers and Adjustments. The transfer
restrictions and the other provisions of Accenture Ltds
bye-laws may be waived at any time by the Board of Directors of
Accenture Ltd or its designees to permit covered persons to:
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|
|
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participate as sellers in underwritten public offerings of
common shares and tender and exchange offers and share purchase
programs by Accenture;
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|
|
|
transfer covered shares in family or charitable transfers;
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|
transfer covered shares held in employee benefit plans; and
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transfer covered shares in particular situations (for example,
to immediate family members and trusts).
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Subject to the foregoing, from time to time, pursuant to the
provisions of Accenture Ltds bye-laws, the Board of
Directors of Accenture Ltd or its designees may also approve
limited relief from the existing share transfer restrictions for
specified senior executives or groups of senior executives in
connection with particular retirement, employment and severance
arrangements that are determined to be in the best interests of
the Company.
Administration and Resolution of Disputes. The
terms and provisions of Accenture Ltds bye-laws are
administered by the Board of Directors of Accenture Ltd. The
Board of Directors of Accenture Ltd or its designees have the
sole power to enforce the provisions of the bye-laws.
Articles
of Association of Accenture SCA
General. Except in the case of a redemption of
Class I common shares or a transfer of Class I common
shares to Accenture Ltd or one of its subsidiaries, Accenture
SCAs Articles of Association provide that Accenture SCA
Class I common shares may be transferred only with the
consent of Accenture Ltd, as the general partner of Accenture
SCA.
Covered Person Transfer Restrictions. In
addition, Accenture SCAs Articles of Association contain
transfer restrictions that apply to certain Accenture current
and former senior executives who hold Accenture SCA Class I
common shares and are parties to the Accenture SCA transfer
rights agreement, including redemptions by Accenture SCA and
purchases by subsidiaries of Accenture Ltd. We refer to these
persons as covered persons. The shares covered by
these transfer restrictions generally include all Class I
common shares owned by a covered person. We refer to the shares
covered by these transfer restrictions as covered
shares.
Current senior
executives. Historically, the transfer
restrictions applicable to covered shares lapsed with the
passage of time on an annual basis until July 24, 2009. In
2007, we eliminated a requirement that active employees hold at
least 25% of these shares at all times during their employment
(the 25% minimum holding requirement). We also
enacted a waiver of certain transfer restrictions applicable to
active employees, permitting covered shares that would otherwise
not have become available for transfer until the later of
July 24, 2009 or the termination of the employees
employment with Accenture to become transferable on an
accelerated basis. For a schedule of dates on which transfer
restrictions are expected to be released, see below under
Transfer Schedule.
Former senior
executives. On March 26, 2008 and
September 25, 2008, we also enacted waivers of certain
transfer restrictions applicable to retired and resigned
employees, permitting covered shares that would otherwise not
have become available for transfer until either July 24,
2008 or July 24, 2009 to become transferable by the holders
on an accelerated basis (see Transfer
Schedule).
19
Covered persons retiring at the age of 50 or above or who become
disabled are granted accelerations of these provisions on terms
identical to those applicable to Accenture Ltd Class A
common shares held by covered persons and described under
Accenture Ltd Bye-LawsCovered Person Transfer
Restrictions above.
All transfer restrictions applicable to a covered person under
Accenture SCAs Articles of Association terminate upon
death.
If Accenture SCA approves in writing a covered persons
pledge of his covered shares to a lender, foreclosures by the
lender on those shares, and any subsequent sales of those shares
by the lender, are not restricted, provided that the lender
gives Accenture SCA a right of first refusal to buy any shares
at the market price before they are sold by the lender.
Term and Amendment. The transfer restrictions
contained in Accenture SCAs Articles of Association will
not terminate unless they have been previously waived or
terminated under the terms of the Articles of Association.
Amendment of the transfer restrictions in Accenture SCAs
Articles of Association requires the consent of Accenture
SCAs general partner and approval at a general meeting of
shareholders.
Waivers and Adjustments. The transfer
restrictions and the other provisions of Accenture SCAs
Articles of Association may be waived at any time by the general
partner of Accenture SCA or its designees to permit covered
persons to:
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participate as sellers in underwritten public offerings of
common shares and tender and exchange offers and share purchase
programs by Accenture;
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|
|
|
transfer covered shares in family or charitable
transfers; and
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transfer covered shares in particular situations (for example,
to immediate family members and trusts).
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Subject to the foregoing, from time to time, pursuant to the
provisions of Accenture SCAs Articles of Association, the
general partner of Accenture SCA or its designees may also
approve limited relief from the existing share transfer
restrictions for specified senior executives or groups of senior
executives in connection with particular retirement, employment
and severance arrangements that are determined to be in the best
interests of the Company.
Other Restrictions. In addition to the
foregoing, all holders of Class I common shares are
precluded from having their shares redeemed by Accenture SCA or
transferred to Accenture SCA, Accenture Ltd or a subsidiary of
Accenture Ltd at any time or during any period when Accenture
SCA determines, based on the advice of counsel, that there is
material non-public information that may affect the average
price per share of Accenture Ltd Class A common shares, if
the redemption would be prohibited by applicable law, during an
underwritten offering due to an underwriters
lock-up or
during the period from the announcement of a tender offer by
Accenture SCA or its affiliates for Accenture SCA Class I
common shares until the expiration of ten business days after
the termination of the tender offer (other than to tender the
holders Accenture SCA Class I common shares in the
tender offer).
Administration and Resolution of Disputes. The
terms and provisions of Accenture SCAs Articles of
Association are administered by the general partner of Accenture
SCA.
Transfer
Schedule
The following table shows the total number of covered shares
held by active employees and their permitted transferees that
are scheduled to be released from transfer restrictions each
quarter. This
20
table reflects all waivers granted to date, including the
waivers described above under Accenture Ltd
Bye-LawsCovered Person Transfer Restrictions and
Articles of Association of Accenture
SCACovered Person Transfer Restrictions, and further
assumes that any covered persons who are active employees as of
October 1, 2008 remain actively employed by Accenture
through June 1, 2009.
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Total number of Accenture Ltd
|
|
|
Class A common shares, Accenture SCA Class I
|
|
|
common shares and Accenture
|
|
|
Canada Holdings Inc. exchangeable
|
|
|
shares that are scheduled to become
|
|
|
available for transfer after giving
|
|
|
effect to waivers
|
|
2nd
Quarter Fiscal 2009
|
|
5,178,168
|
3rd
Quarter Fiscal 2009
|
|
4,762,625
|
4th Quarter
Fiscal 2009
|
|
4,273,782
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The following table shows the total number of covered shares
held by former employees and their permitted transferees that
are scheduled to be released from transfer restrictions each
quarter. This table reflects all waivers granted to date,
including the waivers described above under
Accenture Ltd Bye-LawsCovered Person Transfer
Restrictions and Articles of Association of
Accenture SCACovered Person Transfer Restrictions,
and further assumes that no covered persons who are active
employees as of October 1, 2008 retire or resign through
June 1, 2009.
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|
|
|
|
Total number of Accenture Ltd
|
|
|
Class A common shares, Accenture SCA Class I
|
|
|
common shares and Accenture
|
|
|
Canada Holdings Inc. exchangeable
|
|
|
shares that are scheduled to become
|
|
|
available for transfer after giving
|
|
|
effect to waivers
|
|
2nd
Quarter Fiscal 2009
|
|
14,667,892
|
3rd
Quarter Fiscal 2009
|
|
14,668,060
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4th Quarter
Fiscal 2009
|
|
14,668,321
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Senior
Executive Ownership Requirements
To ensure that senior executives continue to maintain equity
ownership levels that Accenture considers meaningful, we require
current senior executives to comply with the Accenture Senior
Executive Equity Ownership Policy. This policy requires senior
executives to own Accenture equity valued at a multiple (ranging
from
1/2
to 6) of their base compensation determined by their
position level. This policy remains in place notwithstanding the
waiver of the 25% minimum holding requirement described above.
Senior
Executive Trading Policy
We have a Senior Executive Trading Policy applicable to our
senior executives that provides, among other things, that
covered shares held by actively employed senior executives will
be subject to company-imposed quarterly trading guidelines. We
set allocation limits of unrestricted covered shares based on a
composite average weekly volume of trading in Accenture Ltd
Class A common shares. These guidelines allow us to manage
the total number of shares redeemed, sold or otherwise
transferred by our senior executives in any calendar quarter.
The guidelines, which can be adjusted by management, are not
legal or contractual restrictions, however, and there is a risk
that the internal sanctions available to us might not adequately
dissuade individual employees from attempting transfers in
excess of the amounts permitted under the policy. The Senior
Executive Trading Policy also prohibits senior executives from
trading in any Accenture equity during any company-designated
black-out period.
21
In addition to the other information set forth in this report,
you should carefully consider the following factors which could
materially affect our business, financial condition or future
results. The risks described below are not the only risks facing
us.
Additional risks and uncertainties not currently known to us or
that we currently deem to be immaterial also may materially
adversely affect our business, financial condition
and/or
operating results.
Risks
That Relate to Our Business
Our
results of operations could be adversely affected by economic
and political conditions and the effects of these conditions on
our clients businesses and levels of business
activity.
Global economic and political conditions affect our
clients businesses and the markets they serve. A severe
and/or prolonged economic downturn or a negative or uncertain
political climate could adversely affect our clients
financial condition and the levels of business activity of our
clients and the industries we serve. This may reduce demand for
our services or depress pricing of those services and have a
material adverse effect on our results of operations. Changes in
global economic conditions could also shift demand to services
for which we do not have competitive advantages, and this could
negatively affect the amount of business that we are able to
obtain. In addition, if we are unable to successfully anticipate
changing economic and political conditions, we may be unable to
effectively plan for and respond to those changes, and our
business could be negatively affected.
Our
results of operations could be negatively affected if we cannot
expand and develop our services and solutions in response to
changes in technology and client demand.
Our success depends on our ability to develop and implement
consulting, systems integration and technology, and outsourcing
services and solutions that anticipate and respond to rapid and
continuing changes in technology, industry developments and
client needs. We may not be successful in anticipating or
responding to these developments on a timely basis, and our
offerings may not be successful in the marketplace. Implementing
new services or solutions for our clients may entail more risk
than supplying existing offerings. Also, services, solutions and
technologies offered by current or future competitors may make
our service or solution offerings uncompetitive or obsolete. Any
one of these circumstances could have a material adverse effect
on our ability to obtain or successfully deliver client work.
The
consulting, systems integration and technology, and outsourcing
markets are highly competitive, and we might not be able to
compete effectively.
The consulting, systems integration and technology, and
outsourcing markets are highly competitive. We compete with a
variety of companies with respect to our offerings, including:
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Off-shore service providers in lower-cost locations,
particularly Indian providers, that offer services similar to
those we offer, often at highly competitive prices;
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Large multinational providers, including the service arms of
large global technology providers, that offer some or all of the
consulting, systems integration and technology, and outsourcing
services that we do;
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22
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Niche solution or service providers that compete with us in a
specific geographic market, industry segment or service area,
including companies that provide new or alternative products,
services or delivery models; and
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Accounting firms that are expanding or re-emphasizing their
provision of consulting services.
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In addition, a client may choose to use its own resources rather
than engage an outside firm for the types of services we provide.
Some of our competitors may have greater financial, marketing or
other resources than we do and, therefore, may be better able to
compete for new work and skilled professionals. Additionally,
some of our competitors, particularly those located in regions
with lower costs of doing business, may be able to provide
services and solutions at lower cost or on more favorable terms
than we can, particularly in the outsourcing and systems
integration markets. There is a risk that increased competition
could put downward pressure on the prices we can charge for our
services and on our operating margins. Similarly, if our
competitors develop and implement methodologies that yield
greater efficiency and productivity, they may be able to offer
services similar to ours at lower prices without adversely
affecting their profit margins. Even if we have potential
offerings that address marketplace or client needs, our
competitors may be more successful at selling similar services
they offer, including to companies that are Accenture clients.
If we are unable to provide our clients with superior services
and solutions at competitive prices, our results of operations
may suffer.
In addition, we may face greater competition from companies that
have increased in size or scope as the result of strategic
mergers. These mergers may include consolidation activity among
hardware manufacturers, software developers and vendors, and
service providers. This vertical integration may result in
greater convergence among previously separate technology
functions or reduced access to products, and may adversely
affect our competitive position.
Our
work with government clients exposes us to additional risks
inherent in the government contracting
environment.
Our clients include national, provincial, state and local
governmental entities. Our government work carries various risks
inherent in the government contracting process. These risks
include, but are not limited to, the following:
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Government entities typically fund projects through appropriated
monies. While these projects are often planned and executed as
multi-year projects, the government entities usually reserve the
right to change the scope of or terminate these projects for
lack of approved funding and at their convenience. Changes in
government or political developments could result in our
projects being reduced in scope or terminated altogether.
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Government entities often reserve the right to audit our
contract costs, including allocated indirect costs, and conduct
inquiries and investigations of our business practices with
respect to our government contracts. If the client finds that
the costs are not reimbursable, then we will not be allowed to
bill for them, or the cost must be refunded to the client if it
has already been paid to us. Findings from an audit also may
result in our being required to prospectively adjust previously
agreed rates for our work and may affect our future margins.
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If a government client discovers improper or illegal activities
in the course of audits or investigations, we may become subject
to various civil and criminal penalties and administrative
sanctions, which may include termination of contracts,
forfeiture of profits, suspension of payments, fines and
suspensions or debarment from doing business with other agencies
of that government. The inherent limitations of internal
controls may not prevent or detect all improper
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23
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or illegal activities, regardless of their adequacy.
Additionally, an allegation of improper activity, even if not
proven, could result in adverse publicity and damage to our
reputation and business.
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Government contracts, and the proceedings surrounding them, are
often subject to more extensive scrutiny and publicity than
contracts with commercial clients. Negative publicity related to
our government contracts, regardless of its accuracy, may
further damage our business by affecting our ability to compete
for new contracts.
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Political and economic factors such as pending elections, the
outcome of recent elections, changes in leadership among key
executive or legislative decision makers, revisions to
governmental tax policies and reduced tax revenues can affect
the number and terms of new government contracts signed.
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Terms and conditions of government contracts tend to be more
onerous and are often more difficult to negotiate than those for
commercial contracts.
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The occurrences or conditions described above could affect not
only our business with the particular government agency
involved, but also our business with other agencies of the same
or other governmental entities. Additionally, because of their
visibility and political nature, government projects may present
a heightened risk to our reputation. Either of these could have
a material adverse effect on our business or our results of
operations.
Our
business could be adversely affected if our clients are not
satisfied with our services.
Our business model depends in large part on our ability to
attract new work from our base of existing clients, at times on
a sole source basis. Our business model also depends on
relationships our senior executives develop with our clients so
that we can understand our clients needs and deliver
solutions and services that are tailored to those needs. If a
client is not satisfied with the quality of work performed by us
or a subcontractor, or with the type of services or solutions
delivered, then we could incur additional costs to address the
situation, the profitability of that work might be impaired, and
the clients dissatisfaction with our services could damage
our ability to obtain additional work from that client. In
particular, clients that are not satisfied might seek to
terminate existing contracts prior to their scheduled expiration
date and could direct future business to our competitors. In
addition, negative publicity related to our client
relationships, regardless of its accuracy, may further damage
our business by affecting our ability to compete for new
contracts with current and prospective clients.
We
could be subject to liabilities if our subcontractors or the
third parties with whom we partner cannot deliver their project
contributions on time or at all.
Large and complex arrangements often require that we utilize
subcontractors or that our services and solutions incorporate or
coordinate with the software, systems or infrastructure
requirements of other vendors and service providers. Our ability
to serve our clients and deliver and implement our solutions in
a timely manner depends on the ability of these subcontractors,
vendors and service providers to meet their project obligations
in a timely manner, as well as on our effective oversight of
their performance. The quality of our services and solutions
could suffer if our subcontractors or the third parties with
whom we partner do not deliver their products and services in
accordance with project requirements. In addition, certain work
requires the use of unique and complex structures and alliances.
Some of these structures require us to assume responsibility to
the client for the performance of third parties whom we do not
control. (For a discussion of our indemnification obligations
under our client agreements, see Managements
Discussion and Analysis of Financial Condition and Results of
24
OperationsOff-Balance Sheet Arrangements.) If our
subcontractors or these third parties fail to deliver their
contributions on time or at all, if their contributions do not
meet project requirements or require us to incur unanticipated
costs to meet these requirements, or if we are unable to obtain
reimbursement for liabilities of third parties that we have
assumed, then our ability to perform could be adversely affected
and we might be subject to additional liabilities, which could
have a material adverse effect on our business, revenues,
profitability or cash flow.
Our
results of operations could be adversely affected if our clients
terminate their contracts with us on short notice.
Our clients typically retain us on a non-exclusive,
project-by-project
basis. Although we do not centrally track the termination
provisions of our consulting contracts, we estimate that the
majority of our contracts can be terminated by our clients with
short notice. Many of our consulting contracts are less than
12 months in duration, and these shorter-duration contracts
typically permit a client to terminate the agreement with as
little as 30 days notice and without significant penalty.
Longer-term, larger and more complex contracts, such as the
majority of our outsourcing contracts, generally require a
longer notice period for termination and often include an early
termination charge to be paid to us, but this charge might not
be sufficient to cover our costs or make up for anticipated
profits lost upon termination of the contract. Additionally,
large client projects often involve multiple contracts or
stages, and a client could choose not to retain us for
additional stages of a project, try to renegotiate the terms of
its contract or cancel or delay additional planned work.
Terminations, cancellations or delays could result from factors
that are beyond our control and unrelated to our work product or
the progress of the project, including the business or financial
conditions of the client, changes in ownership or management at
our clients, changes in client strategies or the economy or
markets generally. When contracts are terminated, we lose the
anticipated revenues and might not be able to eliminate
associated costs in a timely manner. Consequently, our profit
margins in subsequent periods could be lower than expected.
Outsourcing
services are a significant part of our business and subject us
to operational and financial risk.
We earned approximately 40% of our net revenues in fiscal 2008
from our outsourcing services. This portion of our business
presents potential operational and financial risks that are
different from those of our consulting, technology and systems
integration services. Our outsourcing services often involve
taking over the operation of certain portions of our
clients businesses. In some cases, we may deliver those
services using client personnel and third-party contracts that
are transferred to us. Occasionally, however, we assume
responsibility for delivering our services using client
personnel or client subcontractors who are not transferred to
us, and we therefore have less ability to fully control their
work and efforts. In addition, we could incur liability for
failure to comply with laws or regulations related to the
portions of our clients businesses that are transferred to
us.
This type of work also presents financial risks to us.
Outsourcing contracts typically have longer terms than
consulting contracts and generally have lower gross margins than
consulting contracts, particularly during the first year of the
contract. This could exert downward pressure on our overall
gross margins, particularly during the early stages of new
outsourcing contracts, which might not be offset by improved
performance on contracts in our portfolio that we have been
operating for a longer time. Furthermore, we face considerable
competition for outsourcing work and our clients are
increasingly using intensive contracting processes and
aggressive contracting techniques, sometimes assisted by
third-party advisors.
25
Our
results of operations may be affected by the rate of growth in
the use of technology in business and the type and level of
technology spending by our clients.
Our business depends in part upon continued growth in the use of
technology in business by our clients and prospective clients
and their customers and suppliers. In challenging economic
environments, our clients may reduce or defer their spending on
new technologies in order to focus on other priorities. At the
same time, many companies have already invested substantial
resources in their current means of conducting commerce and
exchanging information, and they may be reluctant or slow to
adopt new approaches that could disrupt existing personnel,
processes and infrastructures. If the growth of use of
technology in business or our clients spending on
technology in business declines or if we cannot convince our
clients or potential clients to embrace new technology
solutions, our results of operations could be adversely affected.
Our
profitability could suffer if we are not able to maintain
favorable pricing rates.
Our profit margin, and therefore our profitability, is dependent
on the rates we are able to charge for our services. If we are
not able to maintain favorable pricing for our services, our
profit margin and our profitability could suffer. The rates we
are able to charge for our services are affected by a number of
factors, including:
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our clients perceptions of our ability to add value
through our services;
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competition;
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introduction of new services or products by us or our
competitors;
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our competitors pricing policies;
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our ability to charge higher prices where market demand or the
value of our services justifies it;
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our ability to accurately estimate, attain and sustain contract
revenues, margins and cash flows over long contract periods;
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procurement practices of clients and their use of third-party
advisors;
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aggressive use by our competitors of off-shore resources to
provide lower-cost service delivery capabilities; and
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general economic and political conditions.
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Our
profitability could suffer if we are not able to maintain
favorable utilization rates.
The cost of providing our services, including the utilization
rate of our professionals, affects our profitability. Our
utilization rates are affected by a number of factors, including:
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our ability to transition employees from completed projects to
new assignments and to hire and assimilate new employees;
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our ability to forecast demand for our services and thereby
maintain an appropriate headcount in each of our geographies and
workforces;
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our ability to manage attrition; and
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our need to devote time and resources to training, business
development, professional development and other non-chargeable
activities.
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26
In recent periods we have maintained a utilization rate that is
high by our historical standards. There are no assurances this
will be our utilization rate in future periods. Additionally, we
may not achieve a utilization rate that is optimal for us. If
our utilization rate is too high, it could have an adverse
effect on employee engagement and attrition. If our utilization
rate is too low, our profit margin and profitability could
suffer.
Our
business could be negatively affected if we incur legal
liability in connection with providing our solutions and
services.
If we fail to meet our contractual obligations, fail to disclose
our financial or other arrangements with our alliance partners
or otherwise breach obligations to clients, or if our
subcontractors dispute the terms of our agreements with them, we
could be subject to legal liability. We may enter into
non-standard agreements because we perceive an important
economic opportunity or because our personnel did not adequately
adhere to our guidelines. In addition, the contracting practices
of our offshore competitors may cause contract terms and
conditions that are unfavorable to us to become standardized in
the marketplace. We may find ourselves committed to providing
services that we are unable to deliver or whose delivery will
cause us financial loss. If we cannot or do not perform our
obligations, we could face legal liability and our contracts
might not always protect us adequately through limitations on
the scope of our potential liability. If we cannot meet our
contractual obligations to provide solutions and services, and
if our exposure is not adequately limited through the terms of
our agreements, we might face significant legal liability and
our business could be adversely affected.
If our
pricing structures do not accurately anticipate the cost and
complexity of performing our work, then our contracts could be
unprofitable.
We negotiate pricing terms with our clients utilizing a range of
pricing structures and conditions. Depending on the particular
contract, these include
time-and-materials
pricing, fixed-price pricing, and contracts with features of
both of these pricing models. Our pricing is highly dependent on
our internal forecasts and predictions about our projects and
the marketplace, which might be based on limited data and could
turn out to be inaccurate. If we do not accurately estimate the
costs and timing for completing projects, our contracts could
prove unprofitable for us or yield lower profit margins than
anticipated. We could face greater risk when pricing our
outsourcing contracts, as many of our outsourcing projects
entail the coordination of operations and workforces in multiple
locations, utilizing workforces with different skillsets and
competencies and geographically distributed service centers.
Furthermore, on outsourcing work we occasionally hire employees
from our clients and assume responsibility for one or more of
our clients business processes. Our pricing, cost and
profit margin estimates on outsourcing work frequently include
anticipated long-term cost savings from transformational and
other initiatives that we expect to achieve and sustain over the
life of the outsourcing contract. There is a risk that we will
underprice our contracts, fail to accurately estimate the costs
of performing the work or fail to accurately assess the risks
associated with potential contracts. In particular, any
increased or unexpected costs, delays or failures to achieve
anticipated cost savings, or unexpected risks we encounter in
connection with the performance of this work, including those
caused by factors outside our control, could make these
contracts less profitable or unprofitable, which could have an
adverse effect on our profit margin.
Many
of our contracts utilize performance pricing that links some of
our fees to the attainment of various performance or business
targets. This could increase the variability of our revenues and
margins.
Many of our contracts include performance clauses that require
us to achieve
agreed-upon
performance standards or milestones. If we fail to satisfy these
measures, it could reduce our fees
27
under the contracts, delay expected payments or subject us to
potential damage claims under the contract terms. Additionally,
we have a number of contracts, many of which are outsourcing
contracts, in which a portion of our fees or incentives depends
on factors such as cost-savings, revenue enhancement, benefits
produced, business goals attained and adherence to schedule.
These goals can be complex and may depend in some measure on our
clients actual levels of business activity. These
provisions could increase the variability in revenues and
margins earned on those contracts.
Our
alliance relationships may not be successful.
We have alliances with companies whose capabilities complement
our own. See BusinessAlliances. As most of our
alliance relationships are non-exclusive, our alliance partners
are not prohibited from forming closer or preferred arrangements
with our competitors. Loss of or limitations on our
relationships with them could adversely affect our financial
condition and results of operations.
Our
global operations are subject to complex risks, some of which
might be beyond our control.
We have offices and operations in 52 countries around the world
and provide services to clients in more than 120 countries. In
fiscal 2008, approximately 42% of our net revenues were
attributable to the Americas region, 49% were attributable to
the Europe, Middle East and Africa region (EMEA),
and 9% were attributable to the Asia Pacific region. In
addition, our Global Delivery Network comprises local Accenture
professionals working at client sites around the world in tandem
with professionals resident in other countries located in more
than 50 delivery centers. If we are unable to manage the risks
of our global operations, including fluctuations in foreign
exchange and inflation rates, international hostilities,
terrorism, natural disasters, security breaches, failure to
maintain compliance with our clients control requirements
and multiple legal and regulatory systems, our results of
operations could be adversely affected.
Our operating results may be adversely affected by
fluctuations in foreign currency exchange
rates. Although we report our operating results
in U.S. dollars, a significant percentage of our net
revenues is denominated in currencies other than the
U.S. dollar. Fluctuations in foreign currency exchange
rates can have a number of adverse effects on us.
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Because our consolidated financial statements are presented in
U.S. dollars, we must translate revenues, expenses and
income, as well as assets and liabilities, into
U.S. dollars at exchange rates in effect during or at the
end of each reporting period. Therefore, changes in the value of
the U.S. dollar against other currencies will affect our
net revenues, operating income and the value of balance-sheet
items originally denominated in other currencies. Declines in
the value of other currencies against the U.S. dollar could
cause our consolidated earnings stated in U.S. dollars to
be lower than our consolidated earnings in local currency and
could affect our reported results when compared against other
periods. Conversely, increases in the value of other currencies
against the U.S. dollar could cause our consolidated
earnings stated in U.S. dollars to be higher than our
consolidated earnings in local currency and could affect our
reported results when compared against other periods. There is
no guarantee that our financial results will not be adversely
affected by currency exchange rate fluctuations.
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In some countries we could be subject to strict restrictions on
the movement of cash and the exchange of foreign currencies,
which could limit our ability to use this cash across our global
operations.
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As we continue to leverage our global delivery model, more of
our expenses are incurred in currencies other than those in
which we bill for the related services. An increase in the value
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28
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of certain currencies, such as the Indian rupee, against the
U.S. dollar could increase costs for delivery of services
at off-shore sites by increasing labor and other costs that are
denominated in local currency, and there can be no assurance
that our contractual provisions or our currency hedging
activities would offset this impact. This could result in a
decrease in the profitability of our contracts that are
utilizing delivery center resources.
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International hostilities, terrorist activities, natural
disasters and infrastructure disruptions could prevent us from
effectively serving our clients and thus adversely affect our
operating results. Acts of terrorist violence,
armed regional and international hostilities and international
responses to these hostilities, natural disasters, global health
risks or pandemics or the threat of or perceived potential for
these events, could have a negative impact on us. These events
could adversely affect our clients levels of business
activity and precipitate sudden significant changes in regional
and global economic conditions and cycles. These events also
pose significant risks to our people and to physical facilities
and operations around the world, whether the facilities are ours
or those of our alliance partners or clients. By disrupting
communications and travel and increasing the difficulty of
obtaining and retaining highly skilled and qualified personnel,
these events could make it difficult or impossible for us to
deliver services to our clients. Extended disruptions of
electricity, other public utilities or network services at our
facilities, as well as system failures at, or security breaches
in, our facilities or systems, could also adversely affect our
ability to serve our clients. While we plan and prepare to
defend against each of these occurrences, we might be unable to
protect our people, facilities and systems against all such
occurrences. We generally do not have insurance for losses and
interruptions caused by terrorist attacks, conflicts and wars.
If these disruptions prevent us from effectively serving our
clients, our operating results could be adversely affected.
We could have liability or our reputation could be damaged if
we do not protect client data or information systems or if our
information systems are breached. We are
dependent on information technology networks and systems to
process, transmit and store electronic information and to
communicate among our locations around the world and with our
alliance partners and clients. Security breaches of this
infrastructure could lead to shutdowns or disruptions of our
systems and potential unauthorized disclosure of confidential
information. We are also required at times to manage, utilize
and store sensitive or confidential client or employee data. As
a result, we are subject to numerous U.S. and foreign
jurisdiction laws and regulations designed to protect this
information, such as the European Union Directive on Data
Protection and various U.S. federal and state laws
governing the protection of health or other individually
identifiable information. If any person, including any of our
employees, negligently disregards or intentionally breaches our
established controls with respect to such data or otherwise
mismanages or misappropriates that data, we could be subject to
monetary damages, fines
and/or
criminal prosecution. Unauthorized disclosure of sensitive or
confidential client or employee data, whether through systems
failure, employee negligence, fraud or misappropriation, could
damage our reputation and cause us to lose clients. Similarly,
unauthorized access to or through our information systems or
those we develop for our clients, whether by our employees or
third parties, could result in negative publicity, legal
liability and damage to our reputation.
We could incur liability or our reputation could be damaged
if our provision of services and solutions to our clients
contributes to our clients internal control
deficiencies. Our clients may request that we
provide an audit of control activities we perform for them when
we host or process data belonging to them. Our ability to
acquire new clients and retain existing clients may be adversely
affected and our reputation could be harmed if we receive a
qualified opinion, or if we cannot obtain an unqualified opinion
in a timely manner. Additionally, we could incur liability if a
process we manage for a client were to result in internal
controls failures or impair our clients ability to comply
with its own internal control requirements.
29
Our global operations expose us to numerous and sometimes
conflicting legal and regulatory requirements, and violation of
these regulations could harm our
business. Because we provide services to clients
in more than 120 countries, we are subject to numerous, and
sometimes conflicting, legal regimes on matters as diverse as
import/export controls, content requirements, trade
restrictions, tariffs, taxation, sanctions, government affairs,
immigration, internal and disclosure control obligations,
securities regulation, anti-competition, data privacy and labor
relations. Violations of these regulations in the conduct of our
business could result in fines, criminal sanctions against us or
our officers, prohibitions on doing business and damage to our
reputation. Violations of these regulations in connection with
the performance of our obligations to our clients also could
result in liability for monetary damages, fines
and/or
criminal prosecution, unfavorable publicity and other
reputational damage, restrictions on our ability to process
information and allegations by our clients that we have not
performed our contractual obligations. Due to the varying
degrees of development of the legal systems of the countries in
which we operate, local laws might be insufficient to protect
our rights.
Legislation related to certain
non-U.S. corporations
has been enacted in various jurisdictions in the United States,
none of which adversely affects Accenture. However, additional
legislative proposals remain under consideration in various
legislatures which, if enacted, could limit or even prohibit our
eligibility to be awarded state or federal government contracts
in the United States in the future. Changes in laws and
regulations applicable to foreign corporations could also
mandate significant and costly changes to the way we implement
our services and solutions, such as preventing us from using
off-shore resources to provide our services, or could impose
additional taxes on the provision of our services and solutions.
These changes could threaten our ability to continue to serve
certain markets.
In many parts of the world, including countries in which we
operate, practices in the local business community might not
conform to international business standards and could violate
anticorruption regulations, including the U.S. Foreign
Corrupt Practices Act, which prohibits giving or offering to
give anything of value with the intent to influence the awarding
of government contracts. Although we have policies and
procedures to ensure legal and regulatory compliance, our
employees, subcontractors and agents could take actions that
violate these requirements. Violations of these regulations
could subject us to criminal or civil enforcement actions,
including fines and suspension or disqualification from
U.S. federal procurement contracting, any of which could
have a material adverse effect on our business.
Our
profitability could suffer if we are not able to control our
costs.
Our ability to control our costs and improve our efficiency
affects our profitability. As the continuation of pricing
pressures could result in permanent changes in pricing policies
and delivery capabilities, we must continuously improve our
management of costs. Our short-term cost reduction initiatives,
which focus primarily on reducing variable costs, might not be
sufficient to deal with all pressures on our pricing. Our
long-term cost-reduction initiatives, which focus on global
reductions in costs for service delivery and infrastructure,
rely upon our successful introduction and coordination of
multiple geographic and competency workforces and a growing
number of geographically distributed delivery centers. As we
increase the number of our professionals and execute our
strategies for growth, we might not be able to manage
significantly larger and more diverse workforces, control our
costs or improve our efficiency, and our profitability could be
negatively affected.
30
If we
are unable to attract, retain and motivate employees or
efficiently utilize their skills, we might not be able to
compete effectively and will not be able to grow our
business.
Our success and ability to grow are dependent, in large part, on
our ability to hire, retain and motivate sufficient numbers of
talented people with the increasingly diverse skills needed to
serve clients and grow our business. Competition for skilled
personnel is intense at all levels of experience and seniority.
To address this competition, we may need to further adjust our
compensation practices, which could put upward pressure on our
costs and adversely affect our profit margins. We are
particularly dependent on the skills of our senior executives,
and if we are not able to successfully retain and motivate our
senior executives and experienced managers, our ability to
develop new business and effectively lead our current projects
could be jeopardized. At the same time, the profitability of our
business model depends on our ability to effectively utilize
personnel with the right mix of skills and experience to support
our projects and global delivery centers. The processes and
costs associated with recruiting, training and retaining
employees place significant demands on our resources. There is a
risk that at certain points in time and in certain geographical
regions, we will find it difficult to hire and retain a
sufficient number of employees with the skills or backgrounds we
require, or that it will prove difficult to retain them in a
competitive labor market. If we are unable to hire and retain
talented employees with the skills, and in the locations, we
require, we might need to redeploy existing personnel or
increase our reliance on subcontractors to fill certain of our
labor needs. If we need to re-assign personnel from other areas,
or employ subcontractors, it could increase our costs and
adversely affect our profit margins. If we are not successful at
retaining and motivating our senior executives, attracting and
retaining other qualified employees in sufficient numbers to
meet the demands of our business, or utilizing our people
effectively, then our ability to compete for new work and
successfully complete existing work for our clients could be
adversely affected.
If we
are unable to collect our receivables or unbilled services, our
results of operations and cash flows could be adversely
affected.
Our business depends on our ability to successfully obtain
payment from our clients of the amounts they owe us for work
performed. We evaluate the financial condition of our clients
and usually bill and collect on relatively short cycles. In
limited circumstances, we also extend financing to our clients,
which totaled $156 million at August 31, 2008. We
maintain allowances against receivables and unbilled services.
Actual losses on client balances could differ from those that we
currently anticipate and as a result we might need to adjust our
allowances. There is no guarantee that we will accurately assess
the creditworthiness of our clients. Macroeconomic conditions
could also result in financial difficulties for our clients, and
as a result could cause clients to delay payments to us, request
modifications to their payment arrangements that could increase
our receivables balance, or default on their payment obligations
to us. Recovery of client financing and timely collection of
client balances also depend on our ability to complete our
contractual commitments and bill and collect our contracted
revenues. If we are unable to meet our contractual requirements,
we might experience delays in collection of
and/or be
unable to collect our client balances, and if this occurs, our
results of operations and cash flows could be adversely
affected. In addition, if we experience an increase in the time
to bill and collect for our services, our cash flows could be
adversely affected.
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 cannot be sure that our services and solutions, or the
solutions of others that we offer to our clients, do not
infringe on the intellectual property rights of third parties,
and we could have
31
infringement claims asserted against us or against our clients.
These claims could harm our reputation, cost us money and
prevent us from offering some services or solutions. In a number
of our contracts, we agree to indemnify our clients for expenses
or liabilities resulting from claimed infringements of the
intellectual property rights of third parties. In some
instances, the amount of these indemnities could be greater than
the revenues we receive from the client. Any claims or
litigation in this area, whether we ultimately win or lose,
could be time-consuming and costly, injure our reputation or
require us to enter into royalty or licensing arrangements. We
might not be able to enter into these royalty or licensing
arrangements on acceptable terms. If a claim of infringement
were successful against us or our clients, an injunction might
be ordered against our client or our own services or operations,
causing further damages.
We could lose our ability to utilize the intellectual property
of others. Third-party suppliers of software, hardware or other
intellectual assets could be acquired or sued, and this could
disrupt use of their products or services by Accenture and our
clients. If our ability to provide services and solutions to our
clients is impaired, our operating results could be adversely
affected.
We
have only a limited ability to protect our intellectual property
rights, which are important to our success.
Our success depends, in part, upon our ability to protect our
proprietary methodologies and other intellectual property.
Existing laws of some countries in which we provide services or
solutions might offer only limited protection of our
intellectual property rights. We rely upon a combination of
trade secrets, confidentiality policies, nondisclosure and other
contractual arrangements, and patent, copyright and trademark
laws to protect our intellectual property rights. The steps we
take in this regard might not be adequate to prevent or deter
infringement or other misappropriation of our intellectual
property, and we might not be able to detect unauthorized use
of, or take appropriate and timely steps to enforce, our
intellectual property rights.
Depending on the circumstances, we might need to grant a
specific client greater rights in intellectual property
developed in connection with a contract than we otherwise
generally do. In certain situations, we might forego all rights
to the use of intellectual property we help create, which would
limit our ability to reuse that intellectual property for other
clients. Any limitation on our ability to provide a service or
solution could cause us to lose revenue-generating opportunities
and require us to incur additional expenses to develop new or
modified solutions for future projects.
New
tax legislation or interpretations could lead to an increase in
our tax burden.
New tax legislation, regulations or other interpretations could
materially increase our tax expense. In 2004, the United States
Congress enacted the American Jobs Creation Act of 2004, or the
AJCA, which enacted an Internal Revenue Code
provision that treats a
non-U.S. company
that undertook an expatriation transaction as a
U.S. corporation for U.S. federal income tax purposes.
Other similar proposals have been made from time to time. We do
not believe the 2004 legislation applies to Accenture; however,
future legislative developments or adverse interpretations
related to this legislation may materially increase our tax
expense. We are not able to predict with certainty the impact of
new legislation or whether a tax authority will challenge our
interpretation of this or other tax legislation.
Negative
publicity related to Bermuda companies could affect our
relationships with our clients.
From time to time, there has been negative publicity related to
companies incorporated in Bermuda. One frequent criticism is
that certain U.S. companies undertook expatriation
transactions to
32
offshore jurisdictions, such as Bermuda, to improperly avoid
U.S. taxes or to create an unfair competitive advantage
over U.S. companies. Although incorporated in Bermuda,
Accenture did not undertake an expatriation transaction.
Nonetheless, such negative publicity could harm our reputation
and impair our ability to generate new business if companies or
government agencies decline to do business with us as a result
of a negative public image of Bermuda companies or the
possibility of our clients receiving negative media attention
from doing business with us.
If we
are unable to manage the organizational challenges associated
with our size and expansion, we might be unable to achieve our
business objectives.
Since 2001, we have more than doubled the size of our workforce
so that, as of August 31, 2008, we had more than
186,000 employees, located in more than 200 cities in
52 countries. Increasingly, our expansion is taking place
outside of the United States and Europe, with particular growth
in our locations in India and the Philippines. Our size presents
significant management and organizational challenges and these
issues may become more pronounced as we continue our expansion.
It takes time for our newer employees to develop the knowledge,
skills and experience that our business model requires. As a
result, it could become increasingly difficult to maintain
common standards across an expanding enterprise or to
effectively institutionalize our know-how. Continued growth may
also make it increasingly difficult to maintain our culture,
effectively manage our personnel and operations and effectively
communicate to our personnel worldwide our core values,
strategies and goals. Finally, the size and scope of our
operations increases the possibility that an employee will
engage in unlawful or fraudulent activity, or otherwise expose
us to unacceptable business risks, despite our efforts to
maintain internal controls to prevent such instances. If we do
not continue to develop and implement the right processes and
tools to manage our large and expanding enterprise, our ability
to compete successfully and achieve our business objectives
could be impaired.
We may
not be successful at identifying, acquiring or integrating other
businesses or technologies.
We expect to continue our program of pursuing strategic
acquisitions designed to enhance our capabilities. However,
there can be no assurance that we will successfully identify
suitable acquisition candidates, succeed in completing targeted
transactions or achieve desired financial or operating results.
Furthermore, we face numerous risks in integrating any
businesses we might acquire. We might need to dedicate
additional management and other resources to complete the
transactions. Our organizational structure could make it
difficult for us to efficiently integrate acquired businesses or
technologies into our ongoing operations and assimilate
employees of those businesses into our culture and operations.
Accordingly, we might fail to realize the expected benefits or
strategic objectives of any acquisition we undertake. If we are
unable to complete the number and kind of acquisitions for which
we plan, or if we are inefficient or unsuccessful at integrating
any acquired businesses into our operations, we may not be able
to achieve our planned rates of growth or further improve our
market share, profitability or competitive position in specific
markets or services.
Consolidation
in the industries that we serve could adversely affect our
business.
Companies in the industries that we serve may seek to achieve
economies of scale and other synergies by combining with or
acquiring other companies. If two or more of our current clients
merge or consolidate and combine their operations, it may
decrease the amount of work that we perform for these clients.
If one of our current clients merges or consolidates with a
company that relies on another provider for its consulting,
systems integration and technology, or outsourcing services, we
may lose work from that client or lose the opportunity to gain
additional work. The increased market power of
33
larger companies could also increase pricing and competitive
pressures on us. Any of these possible results of industry
consolidation could adversely affect our business.
Our
ability to attract and retain business may depend on our
reputation in the marketplace.
Our services are marketed to clients and prospective clients
based on a number of factors. Since many of our specific client
engagements involve unique services and solutions, our corporate
reputation is a significant factor in our clients
evaluation of whether to engage our services. We believe the
Accenture brand name and our reputation are important corporate
assets that help distinguish our services from those of our
competitors and also contribute to our efforts to recruit and
retain talented employees. However, our corporate reputation is
potentially susceptible to damage by actions or statements made
by current or former clients, competitors, vendors, adversaries
in legal proceedings, government regulators, as well as members
of the investment community and the media. There is a risk that
negative information about Accenture, even if based on rumor or
misunderstanding, could adversely affect our business. In
particular, damage to our reputation could be difficult and
time-consuming to repair, could make potential or existing
clients reluctant to select us for new engagements, resulting in
a loss of business, and could adversely affect our recruitment
and retention efforts. Damage to our reputation could also
reduce the value and effectiveness of the Accenture brand name
and could reduce investor confidence in us, adversely affecting
our share price.
Risks
That Relate to Ownership of Our Class A Common
Shares
The
share price of Accenture Ltd Class A common shares could be
adversely affected from time to time by sales, or the
anticipation of future sales, of Class A common shares held
by our employees and former employees.
Our employees and former employees continue to hold significant
amounts of equity in Accenture in the form of Accenture Ltd
Class A common shares, restricted share units and options,
and shares in our subsidiaries, most of which are exchangeable
or redeemable for Accenture Ltd Class A common shares. The
majority of these holdings are, or may become, freely tradable
in the marketplace, as described below.
Our
current and former employees hold a large number of shares that
will become freely tradable in the periods before and after
July 24, 2009
At the time of our transition to a corporate structure in 2001,
many of our senior executives received a substantial number of
Accenture Ltd Class A common shares
and/or
securities that may be exercisable, redeemable or exchangeable
for Accenture Ltd Class A common shares or pursuant to
which Accenture Ltd Class A common shares may be delivered
to such senior executives. Those shares have generally been
subject to transfer restrictions that lapse with the passage of
time through July 24, 2009. In 2007, we eliminated a
requirement that active employees hold at least 25% of these
shares at all times during their employment. In addition, we
have also enacted a number of graduated waivers of transfer
restrictions to permit our current and former senior executives
to transfer or sell into the marketplace a portion of these
shares significantly earlier than would have been the case in
the past. As a result, there are a substantial number of shares,
previously subject to transfer restrictions, that are currently
available for sale, and more will become available through July
2009. As a result, there is a risk that sales of these shares
could have an adverse effect on our share price. For a complete
description of the transfer restrictions and waivers, see
BusinessOrganizational StructureRestrictions
on Transfer of Certain Accenture Shares.
34
Our
Senior Executive Trading Policy might not be effective at
limiting the number of shares sold
We maintain a Senior Executive Trading Policy that provides,
among other things, that covered shares held by actively
employed senior executives will be subject to company-imposed
quarterly trading guidelines. See
BusinessOrganizational StructureRestrictions
on Transfer of Certain Accenture SharesSenior Executive
Trading Policy. These guidelines, which can be adjusted by
management, are not legal or contractual restrictions, however,
and there is a risk that the internal sanctions available to us
might not adequately dissuade individual employees from
attempting transfers in excess of the amounts permitted under
the policy. Additionally, there is a risk that this policy
creates an adverse incentive for some senior executives to
retire or to terminate their employment in order to sell
unrestricted shares that would otherwise be governed by these
quarterly trading guidelines. This could have an adverse effect
on our ability to retain talented and experienced senior
executives.
The sale
of shares issued under our 2001 Share Incentive Plan could
have an adverse effect on our share price
In addition to the covered shares described above, as of
October 1, 2008, a total of 54,159,824 Accenture Ltd
Class A common shares underlying restricted share units
were scheduled to be delivered during the calendar years
indicated below:
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Calendar Year
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Number of Shares
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2008
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1,718,486
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2009
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16,548,327
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2010
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16,979,277
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2011
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6,458,262
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2012 and after
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12,455,472
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Furthermore, as of October 1, 2008, a total of 33,732,489
Accenture Ltd Class A common shares were issuable pursuant
to options that are currently exercisable. Upon delivery of
restricted stock, or exercise of employee stock options, under
our 2001 Share Incentive Plan, our employees or former employees
may choose to sell a significant number of our shares in open
market transactions. There is a risk that this could put
additional downward pressure on the price of Accenture Ltd
Class A common stock.
Our
share price has fluctuated in the past and could continue to
fluctuate, including in response to variability in revenues,
operating results and profitability, and as a result our share
price could be difficult to predict.
Our share price has fluctuated in the past and could continue to
fluctuate in the future in response to various factors. These
factors include:
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announcements by us or our competitors about developments in our
business or prospects;
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projections or speculation about our business or that of our
competitors by the media or investment analysts;
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changes in macroeconomic or political factors unrelated to our
business;
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general or industry-specific market conditions or changes in
financial markets; and
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changes in our revenues, operating results and profitability.
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35
Our revenues, operating results and profitability have varied in
the past and are likely to vary significantly from quarter to
quarter in the future, making them difficult to predict. Some of
the factors that could cause our revenues, operating results and
profitability to vary include:
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seasonality, including number of workdays and holiday and summer
vacations;
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the business decisions of our clients regarding the use of our
services;
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periodic differences between our clients estimated and
actual levels of business activity associated with ongoing work;
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the stage of completion of existing projects
and/or their
termination;
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our ability to transition employees quickly from completed to
new projects;
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the introduction of new products or services by us or our
competitors;
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changes in our pricing policies or those of our competitors;
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our ability to manage costs, including those for personnel,
travel, support services and severance;
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our ability to maintain an appropriate headcount in each of our
workforces;
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acquisition and integration costs related to possible
acquisitions of other businesses;
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changes in, or the application of changes in, accounting
principles or pronouncements under U.S. generally accepted
accounting principles, particularly those related to revenue
recognition;
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currency exchange rate fluctuations;
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changes in estimates, accruals or payments of variable
compensation to our employees; and
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|
|
global, regional and local economic and political conditions and
related risks, including acts of terrorism.
|
As a result of any of these factors, our share price could be
difficult to predict and our share price in the past might not
be a good indicator of the price of our shares in the future. In
addition, if litigation is instituted against us following
variability in our share price, we might need to devote
substantial time and resources to responding to the litigation,
and our share price could be adversely affected.
Our
share price could be adversely affected if we are unable to
maintain effective internal controls.
The accuracy of our financial reporting is dependent on the
effectiveness of our internal controls. We are required to
provide a report from management to our shareholders on our
internal control over financial reporting that includes an
assessment of the effectiveness of these controls. Internal
control over financial reporting has inherent limitations,
including human error, the possibility that controls could be
circumvented or become inadequate because of changed conditions,
and fraud. Because of these inherent limitations, internal
control over financial reporting might not prevent or detect all
misstatements or fraud. If we cannot maintain and execute
adequate internal control over financial reporting or implement
required new or improved controls that provide reasonable
assurance of the reliability of the financial reporting and
preparation of our financial statements for external use, we
could suffer harm to our reputation, fail to meet our public
reporting requirements on a timely basis, or be unable to
properly report on our business and the results of our
operations and the market price of our securities could be
materially adversely affected.
36
We are
registered in Bermuda 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.
We are organized under the laws of Bermuda, and a significant
portion of our assets are located outside the United States. A
shareholder who obtains a court judgment based on the civil
liability provisions of U.S. federal or state securities
laws may be unable to enforce the judgment against us in Bermuda
or in countries other than the United States where we have
assets. In addition, there is some doubt as to whether the
courts of Bermuda and other countries would recognize or enforce
judgments of U.S. courts obtained against us or our
directors or officers based on the civil liabilities provisions
of the federal or state securities laws of the United States or
would hear actions against us or those persons based on those
laws. We have been advised by our legal advisors in Bermuda that
the United States and Bermuda do not currently have a treaty
providing for the reciprocal recognition and enforcement of
judgments in civil and commercial matters. Therefore, a final
judgment for the payment of money rendered by any federal or
state court in the United States based on civil liability,
whether or not based solely on U.S. federal or state
securities laws, would not automatically be enforceable in
Bermuda. Similarly, those judgments might not be enforceable in
countries other than the United States where we have assets.
Bermuda
law differs from the laws in effect in the United States and
might afford less protection to shareholders.
Our shareholders could have more difficulty protecting their
interests than would shareholders of a corporation incorporated
in a jurisdiction of the United States. As a Bermuda company, we
are governed by the Companies Act 1981 of Bermuda. The Companies
Act differs in some material respects from laws generally
applicable to U.S. corporations and shareholders, including
the provisions relating to interested directors, mergers and
acquisitions, takeovers, shareholder lawsuits and
indemnification of directors.
Under Bermuda law, the duties of directors and officers of a
company are generally owed to the company only. Shareholders of
Bermuda companies do not generally have rights to take action
against directors or officers of the company, and may only do so
in limited circumstances. Officers of a Bermuda company must, in
exercising their powers and performing their duties, act
honestly and in good faith with a view to the best interests of
the company and must exercise the care and skill that a
reasonably prudent person would exercise in comparable
circumstances. Directors have a duty not to put themselves in a
position in which their duties to the company and their personal
interests might conflict and also are under a duty to disclose
any personal interest in any contract or arrangement with the
company or any of its subsidiaries. If a director or officer of
a Bermuda company is found to have breached his duties to that
company, he could be held personally liable to the company in
respect of that breach of duty. A director may be liable jointly
and severally with other directors if it is shown that the
director knowingly engaged in fraud or dishonesty. In cases not
involving fraud or dishonesty, the liability of the director
will be determined by the Bermuda courts on the basis of their
estimation of the percentage of responsibility of the director
for the matter in question, in light of the nature of the
conduct of the director and the extent of the causal
relationship between his conduct and the loss suffered.
37
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.
We might choose to raise additional funds through public or
private debt or equity financings in order to:
|
|
|
|
|
take advantage of opportunities, including more rapid expansion;
|
|
|
|
acquire other businesses or technologies;
|
|
|
|
repurchase shares from our shareholders;
|
|
|
|
develop new services and solutions; or
|
|
|
|
respond to competitive pressures.
|
Any additional capital raised through the sale of equity could
dilute shareholders ownership percentage in us.
Furthermore, any additional financing we need might not be
available on terms favorable to us, or at all.
|
|
ITEM 1B.
|
UNRESOLVED
STAFF COMMENTS
|
None.
We have major offices in the worlds leading business
centers, including New York, London, Frankfurt, Paris, Madrid,
Chicago, Milan, Tokyo, Sao Paolo, Rome, Bangalore,
San Francisco, Sydney, Manila and Boston, among others. In
total, we have offices and operations in more than
200 cities in 52 countries around the world. We do not own
any material real property. Substantially all of our office
space is leased under long-term leases with varying expiration
dates. We believe that our facilities are adequate to meet our
needs in the near future.
|
|
ITEM 3.
|
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 September 2007, the State of
Connecticut filed an action in State Superior Court in Hartford
against Accenture arising out of an alleged data security
breach. The action arose in connection with work we undertook
for the State of Connecticuts Office of the Comptroller
(the Core-CT Project), during which Accenture
properly came into the possession of confidential information,
including personally identifiable information, concerning
Connecticut citizens. The complaint alleges that some of the
information was subsequently placed on a server maintained by
the State of Ohio by Accenture employees who were transferred
from the Core-CT Project to a similar project for the State of
Ohio, and that a
back-up tape
from the Ohio server containing some of the information was
stolen in June 2007 from an Ohio state employee. The State of
Connecticut claims that Accenture breached its contract with the
Connecticut Comptrollers office and also asserts
negligence and the unauthorized taking of information by
Accenture. The complaint seeks injunctive relief and damages,
including restitution of some unspecified portion of the amount
paid to Accenture pursuant to the Core-CT Project contract.
During the investigation of this matter, it was discovered that
confidential information belonging to several other Accenture
clients appeared on the Ohio server, and
38
Accenture has notified the affected clients. Although these
events represent a breach of Accentures internal policies
on data security, we have no evidence that any individual has
been harmed as a result. Accenture is committed to maintaining
the security of its clients data and has conducted an
internal investigation to ensure the integrity of all
confidential data, including personally identifiable
information, in its possession. Accenture is continuing to take
proactive remedial measures to reinforce adherence to its data
protection policies. In addition to the Connecticut suit, it is
possible that other affected parties could bring similar
lawsuits or proceedings. We do not believe these matters will
have a material impact on our results of operations or financial
condition.
As previously reported, on April 12, 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 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 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 total amount of the
payments, resale revenue and other benefits alleged in the
complaint is $32 million. The suit alleges that these
amounts 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.
The suit could lead to other related proceedings by various
agencies of the U.S. government, including potential
suspension or debarment proceedings. We intend to defend this
matter vigorously and do not believe this matter will have a
material impact on our results of operations or financial
condition.
As previously reported in July 2003, we became aware of an
incident of possible noncompliance with the Foreign Corrupt
Practices Act
and/or with
Accentures internal controls in connection with certain of
our operations in the Middle East. In 2003, we voluntarily
reported the incident to the appropriate authorities in the
United States promptly after its discovery. Shortly thereafter,
the SEC advised us it would be undertaking an informal
investigation of this incident, and the DOJ indicated it would
also conduct a review. Since that time, there have been no
further developments. We do not believe that this incident will
have any 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 4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
No matters were submitted to a vote of security holders of
Accenture Ltd or Accenture SCA during the fourth quarter of
fiscal 2008.
Executive
Officers of the Registrant
Our executive officers and persons chosen to become executive
officers as of the date hereof are as follows:
Kevin Campbell, 48, became our group chief
executiveOutsourcing in September 2006, after serving as
our senior managing directorBusiness Process Outsourcing
beginning in February 2005. Previously, he served as the vice
president of global sales at Hewitt Associates from September
2004 to February 2005, and as president and chief operating
officer of Exult Inc. from May 2000 to
39
September 2004, when Exult merged with Hewitt. Mr. Campbell
was previously employed by Accenture from 1982 until 1999.
Gianfranco Casati, 49, became our group chief
executiveProducts operating group in September 2006. From
April 2002 to September 2006, Mr. Casati was managing
director of the Products operating groups Europe operating
unit. He also served as Accentures country managing
director for Italy and as chairman of our geographic council in
its IGEM (Italy, Greece, emerging markets) region, supervising
Accenture offices in Italy, Greece and several Eastern European
countries. Mr. Casati has been with Accenture for
24 years.
Martin I. Cole, 52, became our group chief
executiveCommunications & High Tech operating
group in September 2006, after serving as our group chief
executivePublic Service operating group from September
2004 to September 2006. From September 2000 to August 2004, he
served in leadership roles in our outsourcing group, including
serving as global managing partner of our
Outsourcing & Infrastructure Delivery group.
Mr. Cole has been with Accenture for 28 years.
Anthony G. Coughlan, 51, has been our principal
accounting officer since September 2004 and our controller since
September 2001. Mr. Coughlan has been with Accenture for
30 years.
Pamela J. Craig, 51, has been our chief financial officer
since October 2006. From March 2004 to October 2006, she was our
senior vice presidentFinance. Previously, Ms. Craig
was our group directorBusiness Operations &
Services from March 2003 to March 2004, and was our managing
partnerGlobal Business Operations from June 2001 to March
2003. Ms. Craig has served as a director of Avanade Inc.
since February 2006, and is a member of its Audit Committee.
Ms. Craig has been with Accenture for 26 years.
Juan Domenech, 52, became our group chief
executivePublic Service operating group in September 2008.
Prior to assuming his current role, he served in various
leadership roles in our Public Service operating group,
including as its chief operating officer from 2004 until
September 2008. Mr. Domenech has been with Accenture for
25 years.
Karl-Heinz Flöther, 56, has been our group chief
executiveSystems Integration & Technology since
May 2005. From December 1999 to May 2005 he was our group chief
executiveFinancial Services operating group. In addition,
Mr. Flöther served as one of our directors from June
2001 to February 2004, and is currently a director of Avanade
Inc. Mr. Flöther has been with Accenture for
29 years.
Mark Foster, 49, became our group chief
executiveManagement Consulting & Integrated
Markets in September 2006. Prior to that, Mr. Foster served
as our group chief executiveProducts operating group from
March 2002 to September 2006. From September 2000 to March 2002,
he was managing partner of our Products operating group in
Europe. Mr. Foster has been with Accenture for
24 years.
Robert N. Frerichs, 56, has been our chief risk officer
since September 2004. From November 2003 to September 2004, he
was chief operating officer of our Communication &
High Tech operating group. From August 2001 to November 2003, he
led the market maker team for our Communications &
High Tech operating group. Prior to these roles,
Mr. Frerichs held numerous leadership positions within our
Communications & High Tech operating group. He
currently serves as chairman of the Board of Directors of
Avanade Inc., and is a member of its Audit Committee.
Mr. Frerichs has been with Accenture for 32 years.
William D. Green, 55, became chairman of the Board of
Directors on August 31, 2006, and has been our chief
executive officer since September 2004 and a director since June
2001. From March 2003 to August 2004 he was our chief operating
officerClient Services, and from August 2000 to
40
August 2004 he was our country managing director, United States.
Mr. Green has been with Accenture for 30 years.
Pierre Nanterme, 49, became our group chief
executiveFinancial Services operating group on
September 1, 2007. Prior to assuming this role,
Mr. Nanterme held various leadership roles throughout the
Company, including serving as our chief leadership officer from
May 2006 through September 2007, and our country managing
director for France from November 2005 to September 2007.
Mr. Nanterme has been with Accenture for 25 years.
Stephen J. Rohleder, 51, has been our chief operating
officer since September 2004. From March 2003 to September 2004,
he was our group chief executivePublic Service operating
group. From March 2000 to March 2003, he was managing partner of
our Public Service operating group in the United States.
Mr. Rohleder has been with Accenture for 27 years.
Douglas G. Scrivner, 57, has been our general counsel and
secretary since January 1996 and our compliance officer since
September 2001. Mr. Scrivner has been with Accenture for
28 years.
Alexander M. vant Noordende, 45, became our group
chief executiveResources operating group in September
2006. Prior to assuming that role, he led our Resources
operating group in Southern Europe, Africa, the Middle East and
Latin America, and has served as managing partner of the
Resources operating group in France, Belgium and the
Netherlands. From 2001 until September 2006, Mr. vant
Noordende served as our country managing director for the
Netherlands. Mr. vant Noordende has been with Accenture
for 21 years.
41
PART II
|
|
ITEM 5.
|
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED SHAREHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Price
Range of Accenture Ltd Class A Common Shares
Accenture Ltd Class A common shares are traded on the New
York Stock Exchange under the symbol ACN. The New
York Stock Exchange is the principal United States market for
these shares.
The following table sets forth, on a per share basis for the
periods indicated, the high and low sale prices for Accenture
Ltd Class A common shares as reported by the New York Stock
Exchange.
|
|
|
|
|
|
|
|
|
|
|
Price Range
|
|
|
|
High
|
|
|
Low
|
|
|
Fiscal 2007
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
35.17
|
|
|
$
|
28.28
|
|
Second Quarter
|
|
$
|
39.25
|
|
|
$
|
33.45
|
|
Third Quarter
|
|
$
|
41.19
|
|
|
$
|
34.28
|
|
Fourth Quarter
|
|
$
|
44.03
|
|
|
$
|
37.25
|
|
Fiscal 2008
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
42.32
|
|
|
$
|
33.03
|
|
Second Quarter
|
|
$
|
38.44
|
|
|
$
|
31.91
|
|
Third Quarter
|
|
$
|
42.04
|
|
|
$
|
32.42
|
|
Fourth Quarter
|
|
$
|
42.00
|
|
|
$
|
38.02
|
|
Fiscal 2009
|
|
|
|
|
|
|
|
|
First Quarter (through October 13, 2008)
|
|
$
|
43.04
|
|
|
$
|
24.76
|
|
The closing sale price of an Accenture Ltd Class A common
share as reported by the New York Stock Exchange consolidated
tape as of October 13, 2008 was $33.63. As of
October 13, 2008, there were 1,265 holders of record
of Accenture Ltd Class A common shares.
There is no trading market for Accenture Ltd Class X common
shares. As of October 13, 2008, there were
1,257 holders of record of Accenture Ltd Class X
common shares.
Dividend
Policy
On November 15, 2007 and 2006, Accenture Ltd paid a cash
dividend of $0.42 and $0.35 per share, respectively, on its
Class A common shares and Accenture SCA paid a cash
dividend of $0.42 and $0.35 per share, respectively, on its
Class I common shares.
On September 24, 2008, Accenture Ltd declared a cash
dividend of $0.50 per share on its Class A common shares
for shareholders of record at the close of business on
October 10, 2008. Accenture Ltd will cause Accenture SCA to
declare a cash dividend of $0.50 per share on its Class I
common shares for shareholders of record at the close of
business on October 7, 2008. Both dividends are payable on
November 17, 2008.
Future dividends on Accenture Ltd Class A common shares, if
any, will be at the discretion of the Board of Directors of
Accenture Ltd and will depend on, among other things, our
results of operations, cash requirements and surplus, financial
condition, contractual restrictions and other factors that the
Board of Directors may deem relevant, as well as our ability to
pay dividends in compliance with the Bermuda Companies Act.
42
Recent
Sales of Unregistered Securities
None.
Purchases
and redemptions of Accenture Ltd Class A common shares and
Class X common shares
The following table provides information relating to the
Companys purchases of Accenture Ltd Class A common
shares and redemptions of Accenture Ltd Class X common
shares for the fourth quarter of fiscal 2008. For
year-to-date
information on all share purchases, redemptions and exchanges by
the Company and further discussion of the Companys share
purchase activity, see Managements Discussion and
Analysis of Financial Condition and Results of
OperationsLiquidity and Capital ResourcesShare
Purchases and Redemptions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Approximate Dollar
|
|
|
|
|
|
|
|
|
|
Total Number of Shares
|
|
|
Value of Shares that May
|
|
|
|
|
|
|
|
|
|
Purchased as Part of
|
|
|
Yet Be Purchased Under
|
|
|
|
Total Number of
|
|
|
Average Price
|
|
|
Publicly Announced
|
|
|
Publicly Announced
|
|
Period
|
|
Shares Purchased
|
|
|
Paid per Share(1)
|
|
|
Plans or Programs(2)
|
|
|
Plans or Programs(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
June 1, 2008June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,086
|
|
Class X common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 1, 2008July 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common shares
|
|
|
656,162
|
|
|
$
|
38.79
|
|
|
|
|
|
|
$
|
2,558
|
|
Class X common shares
|
|
|
14,730,993
|
|
|
$
|
0.0000225
|
|
|
|
|
|
|
|
|
|
August 1, 2008August 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,503
|
|
Class X common shares
|
|
|
3,286,276
|
|
|
$
|
0.0000225
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common shares(4)
|
|
|
656,162
|
|
|
$
|
38.79
|
|
|
|
|
|
|
|
|
|
Class X common shares(5)
|
|
|
18,017,269
|
|
|
$
|
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 redemption or
purchase and any acquired by means of employee forfeiture.
|
|
(2)
|
|
Since August 2001, the Board of
Directors of Accenture Ltd has authorized and periodically
confirmed a publicly announced open-market share purchase
program for acquiring Accenture Ltd Class A common shares.
During the fourth quarter of fiscal 2008, we did not purchase
any Accenture Ltd Class A common shares under this program.
The open-market purchase program does not have an expiration
date.
|
|
(3)
|
|
As of August 31, 2008, our
aggregate available authorization for share repurchases and
redemptions was $2,503 million, which management has the
discretion to use for either our publicly announced open-market
share purchase program or our other share purchase programs. To
date, the Board of Directors of Accenture Ltd has authorized an
aggregate of $11.1 billion for repurchases and redemptions
of Accenture Ltd Class A common shares, Accenture SCA
Class I common shares or Accenture Canada Holdings Inc.
exchangeable shares. This includes $3.0 billion authorized
on October 25, 2007.
|
|
(4)
|
|
During the fourth quarter of fiscal
2008, Accenture purchased 656,162 Accenture Ltd Class A
common shares in transactions unrelated to publicly announced
share plans or programs. These transactions consisted of
acquisitions of Accenture Ltd Class A common shares via
share withholding for payroll tax obligations due from employees
and former employees in connection with the delivery of
Accenture Ltd Class A common shares under our various
employee equity share plans.
|
|
(5)
|
|
During the fourth quarter of fiscal
2008, we redeemed 18,017,269 Accenture Ltd Class X common
shares pursuant to our bye-laws. Accenture Ltd Class X
common shares are redeemable at their par value of $0.0000225
per share.
|
Purchases
and redemptions of Accenture SCA Class I common shares and
Accenture Canada Holdings Inc. exchangeable shares
The following table provides additional information relating to
purchases and redemptions by Accenture of Accenture SCA
Class I common shares and Accenture Canada Holdings Inc.
exchangeable shares during the fourth quarter of fiscal 2008.
The Companys management believes the following
43
table and footnotes provide useful information regarding the
share purchase and redemption activity of the Company.
Generally, purchases and redemptions of Accenture SCA
Class I common shares and Accenture Canada Holdings Inc.
exchangeable shares reduce shares outstanding for purposes of
computing earnings per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Approximate Dollar
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Shares
|
|
|
|
|
|
|
|
|
|
Total Number of
|
|
|
that May Yet Be
|
|
|
|
|
|
|
|
|
|
Shares Purchased as
|
|
|
Purchased Under
|
|
|
|
|
|
|
|
|
|
Part of Publicly
|
|
|
Publicly
|
|
|
|
Total Number of
|
|
|
Average Price
|
|
|
Announced Plans or
|
|
|
Announced Plans
|
|
Period
|
|
Shares Purchased(1)
|
|
|
Paid per Share(2)
|
|
|
Programs
|
|
|
or Programs(3)
|
|
|
Accenture SCA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 1, 2008June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class I common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 1, 2008July 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class I common shares
|
|
|
13,000,148
|
|
|
$
|
40.12
|
|
|
|
|
|
|
|
|
|
August 1, 2008August 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class I common shares
|
|
|
1,299,982
|
|
|
$
|
41.21
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class I common shares(4)
|
|
|
14,300,130
|
|
|
$
|
40.22
|
|
|
|
|
|
|
|
|
|
Accenture Canada Holdings Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 1, 2008June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchangeable shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 1, 2008July 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchangeable shares
|
|
|
162,817
|
|
|
$
|
40.16
|
|
|
|
|
|
|
|
|
|
August 1, 2008August 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchangeable shares
|
|
|
40,784
|
|
|
$
|
40.85
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchangeable shares
|
|
|
203,601
|
|
|
$
|
40.30
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
During the fourth quarter of fiscal
2008, we acquired a total of 14,300,130 Accenture SCA
Class I common shares and 203,601 Accenture Canada Holdings
Inc. exchangeable shares from current and former senior
executives and their permitted transferees. This includes
acquisitions by means of redemption or purchase, or employee
share forfeiture, as applicable.
|
|
(2)
|
|
Average price per share reflects
the total cash outlay for the period, divided by the number of
shares acquired, including those acquired by redemption or
purchase and any acquired by means of employee forfeiture.
|
|
(3)
|
|
As of August 31, 2008, our
aggregate available authorization for share repurchases and
redemptions was $2,503 million, which management has the
discretion to use for either our publicly announced open-market
share purchase program or our other share purchase programs. To
date, the Board of Directors of Accenture Ltd has authorized an
aggregate of $11.1 billion for repurchases and redemptions
of Accenture Ltd Class A common shares, Accenture SCA
Class I common shares or Accenture Canada Holdings Inc.
exchangeable shares. This includes $3.0 billion authorized
on October 25, 2007.
|
|
(4)
|
|
In addition to the amounts included
in this table, during the fourth quarter of fiscal 2008, we also
redeemed a total of 7,066,139 Accenture SCA Class I common
shares from current and former senior executives and their
permitted transferees by issuing an equivalent number of
Accenture Ltd Class A common shares. See
Managements Discussion and Analysis of Financial
Condition and Results of OperationsLiquidity and Capital
ResourcesOther Share Redemptions.
|
Purchases
and redemptions of Accenture SCA Class II and
Class III common shares
During the fourth quarter of fiscal 2008, Accenture SCA did not
redeem any Accenture SCA Class II or Class III common
shares from Accenture. Transactions involving Accenture SCA
Class II and Class III common shares consist
exclusively of inter-company transactions undertaken to
facilitate other corporate purposes. These inter-company
transactions do not reduce shares outstanding for purposes of
computing earnings per share reflected in the Companys
Consolidated Financial Statements under Financial
Statements and Supplementary Data.
44
|
|
ITEM 6.
|
SELECTED
FINANCIAL DATA
|
The data as of August 31, 2008 and 2007 and for the years
ended August 31, 2008, 2007 and 2006 are derived from the
audited Consolidated Financial Statements and related Notes that
are included elsewhere in this report. The data as of
August 31, 2006, 2005 and 2004 and for the years ended
August 31, 2005 and 2004 are derived from audited
Consolidated Financial Statements and related Notes that are not
included in this report. The selected financial data should be
read in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations
and our Consolidated Financial Statements and related Notes
included elsewhere in this report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006(1)(2)
|
|
|
2005
|
|
|
2004
|
|
|
|
(in millions)
|
|
|
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues before reimbursements (Net revenues)
|
|
$
|
23,387
|
|
|
$
|
19,696
|
|
|
$
|
16,646
|
|
|
$
|
15,547
|
|
|
$
|
13,673
|
|
Revenues
|
|
|
25,314
|
|
|
|
21,453
|
|
|
|
18,228
|
|
|
|
17,094
|
|
|
|
15,113
|
|
Operating income
|
|
|
3,012
|
|
|
|
2,493
|
|
|
|
1,841
|
|
|
|
2,111
|
|
|
|
1,759
|
|
Income before minority interest
|
|
|
2,197
|
|
|
|
1,723
|
|
|
|
1,433
|
|
|
|
1,509
|
|
|
|
1,223
|
|
Net income
|
|
|
1,692
|
|
|
|
1,243
|
|
|
|
973
|
|
|
|
940
|
|
|
|
691
|
|
|
|
|
(1)
|
|
Includes the financial impact of
the resolution of the NHS matter recorded during fiscal 2006.
See Managements Discussion and Analysis of Financial
Condition and Results of OperationsResults of Operations
for the Year Ended August 31, 2007 Compared to Year Ended
August 31, 2006.
|
|
(2)
|
|
Includes the impact of the adoption
of Statement of Financial Accounting Standards No. 123R,
Share-Based Payment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
Earnings Per Class A Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.77
|
|
|
$
|
2.06
|
|
|
$
|
1.65
|
|
|
$
|
1.60
|
|
|
$
|
1.25
|
|
Diluted
|
|
|
2.65
|
|
|
|
1.97
|
|
|
|
1.59
|
|
|
|
1.56
|
|
|
|
1.22
|
|
Dividends per Common Share
|
|
|
0.42
|
|
|
|
0.35
|
|
|
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of August 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(in millions)
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,603
|
|
|
$
|
3,314
|
|
|
$
|
3,067
|
|
|
$
|
2,484
|
|
|
$
|
2,553
|
|
Total assets
|
|
|
12,399
|
|
|
|
10,747
|
|
|
|
9,497
|
|
|
|
8,957
|
|
|
|
8,013
|
|
Long-term debt, net of current portion
|
|
|
2
|
|
|
|
3
|
|
|
|
27
|
|
|
|
44
|
|
|
|
32
|
|
Shareholders equity
|
|
|
2,541
|
|
|
|
2,063
|
|
|
|
1,894
|
|
|
|
1,697
|
|
|
|
1,472
|
|
45
|
|
ITEM 7.
|
MANAGEMENTS
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 Annual Report on
Form 10-K.
This discussion and analysis also contains forward-looking
statements and should also be read in conjunction with the
disclosures and information contained in Disclosure
Regarding Forward-Looking Statements and Risk
Factors in this Annual Report on
Form 10-K.
We use the terms Accenture, we,
our Company, our and us in
this report to refer to Accenture Ltd and its subsidiaries. All
references to years, unless otherwise noted, refer to our fiscal
year, which ends on August 31. For example, a reference to
fiscal 2008 means the
12-month
period that ended on August 31, 2008. All references to
quarters, unless otherwise noted, refer to the quarters of our
fiscal year.
Overview
Our results of operations are affected by economic conditions
generally, including macroeconomic conditions. We are monitoring
current macroeconomic and credit market conditions and levels of
business confidence and their potential effect on our clients
and on us. A severe
and/or
prolonged economic downturn could adversely affect our
clients financial condition and the levels of business
activities in the industries and geographies where we operate.
This may reduce demand for our services or depress pricing of
those services and have a material adverse effect on our new
contract bookings and results of operations. Particularly in
light of recent economic uncertainty, we continue to monitor our
costs closely in order to respond to changing conditions and to
manage any impact to our results of operations.
Our results of operations are also affected by levels of
business activity and rates of change in the industries we
serve, as well as by the pace of technological change and the
type and level of technology spending by our clients. The
ability to identify and capitalize on these market and
technological changes early in their cycles is a key driver of
our performance.
Revenues are driven by the ability of our executives to secure
new contracts and to deliver solutions and services that add
value to our clients. Our ability to add value to clients and
therefore drive revenues depends in part 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
fiscal 2008 were $23.39 billion, compared with
$19.70 billion for fiscal 2007, an increase of 19% in
U.S. dollars and 11% in local currency. Net revenues for
the fourth quarter of fiscal 2008 were $6.00 billion,
compared with $5.11 billion for the fourth quarter of
fiscal 2007, an increase of 17% in U.S. dollars and 10% in
local currency.
Consulting net revenues for fiscal 2008 were
$14.12 billion, compared with $11.86 billion for
fiscal 2007, an increase of 19% in U.S. dollars and 11% in
local currency. For the fourth quarter of fiscal 2008,
consulting net revenues were $3.61 billion, compared with
$3.04 billion for the fourth quarter of fiscal 2007, an
increase of 19% in U.S. dollars and 11% in local currency.
Outsourcing net revenues for fiscal 2008 were
$9.27 billion, compared with $7.84 billion for fiscal
2007, an increase of 18% in U.S. dollars and 11% in local
currency. Outsourcing net revenues for the fourth quarter of
fiscal 2008 were $2.39 billion, compared with
$2.07 billion for the fourth quarter of fiscal 2007, an
increase of 15% in U.S. dollars and 9% in local currency.
Outsourcing contracts typically have longer terms than
consulting contracts and generally have lower gross margins than
consulting contracts, particularly in the first year. Long-term
relationships with many of our
46
clients continue to contribute to our success in growing our
outsourcing business. Long-term, complex outsourcing contracts,
including their consulting components, require ongoing review of
their terms and scope of work, in light of our clients
evolving business needs and our performance expectations. Should
the size or number of modifications to these arrangements
increase, as our business continues to grow and these contracts
evolve, we may experience increased variability in expected cash
flows, revenues and profitability.
As we are a global company, our revenues are denominated in
multiple currencies and may be significantly affected by
currency exchange-rate fluctuations. During the majority of
fiscal 2007 and fiscal 2008, the U.S. dollar weakened
against many currencies, resulting in favorable currency
translation and greater reported U.S. dollar revenues,
operating expenses and operating income. However, in the fourth
quarter of fiscal 2008, the U.S. dollar began to strengthen
against many currencies. In the future, if the U.S. dollar
continues to strengthen against other currencies, our revenue
growth in U.S. dollars may be lower than our growth in
local currency. In the future, if the U.S. dollar weakens
against other currencies, our revenue growth in
U.S. dollars may be higher 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 the growth of new
outsourcing contracts. Utilization represents the percentage of
our professionals time spent on billable work. Utilization
for the fourth quarter of fiscal 2008 was approximately 84%,
down slightly from the third quarter of fiscal 2008 and in the
range we expect. Utilization for the fourth quarter of fiscal
2007 was also approximately 84%. Sales and marketing expense is
driven primarily by compensation costs for business-development
activities, the development of new service offerings and
client-targeting, image-development and brand-recognition
activities. General and administrative costs primarily include
costs for non-client-facing personnel, information systems and
office space, which we seek to manage, as a percentage of
revenues, at levels consistent with or lower than levels in
prior-year periods. Operating expenses also include
reorganization costs and benefits, which may vary substantially
from year to year.
Gross margin (Net revenues less Cost of services before
reimbursable expenses as a percentage of net revenues) for the
three months and year ended August 31, 2008 were 31.7% and
30.7%, respectively, compared with 31.2% and 30.7%,
respectively, for the same periods in fiscal 2007.
Our cost-management strategies include anticipating changes in
demand for our services and identifying cost-management
initiatives. A primary element of these strategies is to
aggressively plan and manage our payroll costs to meet the
anticipated demand for our services, given that payroll costs
are the most significant portion of our operating expenses.
Our headcount increased to more than 186,000 as of
August 31, 2008, compared with approximately 170,000 as of
August 31, 2007. Annualized attrition, excluding
involuntary terminations, for the three months and year ended
August 31, 2008 was 15% and 16%, respectively, compared
with 18% for the three months and year ended August 31,
2007. We monitor our current and projected future demands and
recruit new employees as needed to balance our mix of skills and
resources to meet that demand, to replace departing employees,
and to expand our global sourcing approach, which includes our
Global Delivery Network and other capabilities around the world.
From time to time, we 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.
47
We also use managed attrition as a means to keep our supply of
skills and resources in balance with client demand. In addition,
compensation increases for fiscal 2008, which for the majority
of our personnel were effective September 1, 2007, were
higher than in prior fiscal years. As in prior fiscal years, we
have adjusted and expect to continue to adjust pricing with the
objective of recovering these increases. Our margins and ability
to grow our business could be adversely affected if we do not
continue to manage headcount and attrition, recover increases in
compensation
and/or
effectively assimilate and utilize large numbers of new
employees.
Sales and marketing and general and administrative costs as a
percentage of net revenues were 17.7% for fiscal 2008, compared
with 17.9% for fiscal 2007. The decrease as a percentage of net
revenues was primarily due to strong revenue growth and our
management of general and administrative costs at a growth rate
lower than that of our Net revenues.
Operating income was $785 million, or 13.1% as a percentage
of net revenues, for the three months ended August 31, 2008
compared with $642 million, or 12.6%, for the three months
ended August 31, 2007. Operating income was
$3,012 million, or 12.9% as a percentage of net revenues,
for the year ended August 31, 2008 compared with $2,493, or
12.7%, for the year ended August 31, 2007.
Our Operating income and Earnings per share are also affected by
currency exchange-rate fluctuations on revenues and costs, which
have been favorable in fiscal 2008 and 2007. Most of our costs
are incurred in the same currency as the related revenues. Where
practical, we also seek to manage foreign currency exposure for
costs not incurred in the same currency as the related revenues,
by using currency protection provisions in our customer
contracts and our hedging programs. We estimate that the
aggregate percentage impact of foreign exchange rates on our
operating expenses is similar to that disclosed for revenues.
For more information on our hedging programs, see Item 7A,
Quantitative and Qualitative Disclosure About Market
Risk.
From time to time we purchase Accenture shares through our
open-market purchase program and also purchase and redeem
Accenture shares held by our current and former senior
executives and their permitted transferees. During the year
ended August 31, 2008, we purchased 60.8 million of
our shares for $2,261 million. This included
$668 million for purchases of 19.0 million Accenture
Ltd Class A common shares and $1,593 million for
redemptions and purchases of 41.8 million 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.
Bookings
and Backlog
New contract bookings for the three months ended August 31,
2008 were $7.67 billion, with consulting bookings of
$3.63 billion and outsourcing bookings of
$4.04 billion. New contract bookings for the year ended
August 31, 2008 were $26.79 billion, with consulting
bookings of $14.77 billion and outsourcing bookings of
$12.02 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 on the timing of the signing of a small number of
large contracts. 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 additions to existing
contracts. Subsequent cancellations, extensions and other
matters may affect the amount of bookings previously
48
reported. New contract bookings are recorded using then existing
currency exchange rates and are not subsequently adjusted for
currency fluctuations.
The majority of our contracts are terminable by the client on
short notice or 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.
Critical
Accounting Policies and Estimates
The preparation of our Consolidated Financial Statements in
conformity with U.S. generally accepted accounting
principles requires us to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the Consolidated Financial Statements and the reported amounts
of revenues and expenses. We continually evaluate our estimates,
judgments and assumptions based on available information and
experience. Because the use of estimates is inherent in the
financial reporting process, actual results could differ from
those estimates. Certain of our accounting policies require
higher degrees of judgment than others in their application.
These include certain aspects of accounting for revenue
recognition, income taxes and defined benefit pension plans.
Revenue
Recognition
Our contracts have different terms based on the scope,
deliverables and complexity of the engagement, the terms of
which frequently require Accenture to make judgments and
estimates in recognizing revenues. We have many types of
contracts, including
time-and-materials
contracts, fixed-price contracts and contracts with features of
both of these contract types. In addition, some contracts
include incentives related to costs incurred, benefits produced
or adherence to schedule that may increase the variability in
revenues and margins earned on such contracts. We conduct
rigorous reviews prior to signing such contracts to evaluate
whether these incentives are reasonably achievable.
We recognize revenues from technology integration consulting
contracts using the percentage-of-completion method pursuant to
the American Institute of Certified Public Accountants Statement
of Position
81-1,
Accounting for Performance of Construction Type and
Certain Production-Type Contracts
(SOP 81-1).
Percentage-of-completion accounting involves calculating the
percentage of services provided during the reporting period
compared with the total estimated services to be provided over
the duration of the contract. Estimated revenues for applying
the percentage-of-completion method include estimated incentives
for which achievement of defined goals is deemed probable. This
method is followed where reasonably dependable estimates of
revenues and costs can be made. Estimates of total contract
revenues and costs are continuously monitored during the term of
the contract, and recorded revenues and costs are subject to
revision as the contract progresses. Such revisions may result
in increases or decreases to revenues and income and are
reflected in the Consolidated Financial Statements in the
periods in which they are first identified. If our estimates
indicate that a contract loss will occur, a loss provision is
recorded in the period in which the loss first becomes probable
and reasonably estimable. Contract losses are determined to be
the amount by which the estimated direct and indirect costs of
the contract exceed the estimated total revenues that will be
generated by the contract and are included in Cost of services
and classified in Other accrued liabilities. Contract loss
provisions recorded as of August, 31, 2008 and 2007 are
immaterial.
Revenues from contracts for non-technology integration
consulting services with fees based on time and materials or
cost-plus are recognized as the services are performed and
amounts are earned in accordance with SEC Staff Accounting
Bulletin (SAB) No. 101, Revenue
Recognition in Financial
49
Statements (SAB 101), as amended
by SAB No. 104, Revenue Recognition
(SAB 104). We consider amounts to be earned
once evidence of an arrangement has been obtained, services are
delivered, fees are fixed or determinable, and collectibility is
reasonably assured. In such contracts, our efforts, measured by
time incurred, typically represent the contractual milestones or
output measure, which is the contractual earnings pattern. For
non-technology integration consulting contracts with fixed fees,
we recognize revenues as amounts become billable in accordance
with contract terms, provided the billable amounts are not
contingent, are consistent with the services delivered, and are
earned. Contingent or incentive revenues relating to
non-technology integration consulting contracts are recognized
when the contingency is satisfied and we conclude the amounts
are earned.
Outsourcing contracts typically span several years and involve
complex delivery, often through multiple workforces in different
countries. In a number of these arrangements, we hire client
employees and become responsible for certain client obligations.
Revenues are recognized on outsourcing contracts as amounts
become billable in accordance with contract terms, unless the
amounts are billed in advance of performance of services in
which case revenues are recognized when the services are
performed and amounts are earned in accordance with
SAB 101, as amended by SAB 104. Revenues from
time-and-materials
or cost-plus contracts are recognized as the services are
performed. In such contracts, our effort, measured by time
incurred, represents the contractual milestones or output
measure, which is the contractual earnings pattern. Revenues
from unit-priced contracts are recognized as transactions are
processed based on objective measures of output. Revenues from
fixed-price contracts are recognized on a straight-line basis,
unless revenues are earned and obligations are fulfilled in a
different pattern. Outsourcing contracts can also include
incentive payments for benefits delivered to clients. Revenues
relating to such incentive payments are recorded when the
contingency is satisfied and we conclude the amounts are earned.
We continuously review and reassess our estimates of contract
profitability. Circumstances that potentially affect
profitability over the life of the contract include decreases in
volumes of transactions or other inputs/outputs on which we are
paid, failure to deliver agreed benefits, variances from planned
internal/external costs to deliver our services, and other
factors affecting revenues and costs.
Costs related to delivering outsourcing services are expensed as
incurred, with the exception of certain transition costs related
to the
set-up of
processes, personnel and systems, which are deferred during the
transition period and expensed evenly over the period
outsourcing services are provided. The deferred costs are
specific internal costs or incremental external costs directly
related to transition or
set-up
activities necessary to enable the outsourced services.
Generally, deferred amounts are protected in the event of early
termination of the contract and are monitored regularly for
impairment. Impairment losses are recorded when projected
undiscounted operating cash flows of the related contract are
not sufficient to recover the carrying amount of contract
assets. Amounts billable to the client for transition or
set-up
activities are deferred and recognized as revenue evenly over
the period outsourcing services are provided.
Revenues for contracts with multiple elements are allocated
pursuant to Emerging Issues Task Force Issue
00-21,
Accounting for Revenue Arrangements with Multiple
Deliverables, based on the lesser of the
elements relative fair value or the amount that is not
contingent on future delivery of another element. If the amount
of non-contingent revenues allocated to a delivered element is
less than the costs to deliver such services, then such costs
are deferred and recognized in future periods when the revenues
become non-contingent. Fair value is determined based on the
prices charged when each element is sold separately. Revenues
are recognized in accordance with our accounting policies for
the separate elements when the services have value on a
stand-alone basis, fair value of the separate elements exists
and, in arrangements that include a general right of refund
relative to the delivered element, performance of the
undelivered element is considered probable and substantially in
our control. While determining fair value
50
and identifying separate elements require judgment, generally
fair value and the separate elements are readily identifiable as
we also sell those elements unaccompanied by other elements.
Revenues recognized in excess of billings are recorded as
Unbilled services. Billings in excess of revenues recognized are
recorded as Deferred revenues until revenue recognition criteria
are met. Client prepayments (even if nonrefundable) are deferred
and recognized over future periods as services are delivered or
performed.
Our consulting revenues are affected by the number of work days
in the fiscal quarter, which in turn is affected by the level of
vacation days and holidays. Consequently, since we typically
have approximately 5 to 10 percent more work days in our
first and third quarters than in our second and fourth quarters,
our consulting revenues are typically higher in our first and
third quarters than in our second and fourth quarters.
Net revenues include the margin earned on computer hardware and
software resale contracts, as well as revenues from alliance
agreements, neither of which is material to us. Reimbursements
include billings for travel and other out-of-pocket expenses and
third-party costs, such as the cost of hardware and software
resales. In addition, Reimbursements may include allocations
from gross billings to record an amount equivalent to
reimbursable costs, where billings do not specifically identify
reimbursable expenses. We report revenues net of any
revenue-based taxes assessed by governmental authorities that
are imposed on and concurrent with specific revenue-producing
transactions.
Income
Taxes
Determining the consolidated provision for income tax expense,
income tax liabilities and deferred tax assets and liabilities
involves judgment. As a global company, we calculate and provide
for income taxes in each of the tax jurisdictions in which we
operate. This involves estimating current tax exposures in each
jurisdiction as well as making judgments regarding the
recoverability of deferred tax assets. Tax exposures can involve
complex issues and may require an extended period to resolve.
Changes in the geographic mix or estimated level of annual
income before taxes can affect the overall effective tax rate.
We apply an estimated annual effective tax rate to our quarterly
operating results to determine the provision for income tax
expense. In accordance with FIN 48, a change in judgment
that impacts the measurement of a tax position taken in a prior
year is recognized as a discrete item in the interim period in
which the change occurs. In the event there is a significant
unusual or infrequent item recognized in our quarterly operating
results, the tax attributable to that item is recorded in the
interim period in which it occurs.
No taxes have been provided on undistributed foreign earnings
that are planned to be indefinitely reinvested. If future
events, including material changes in estimates of cash, working
capital and long-term investment requirements, necessitate that
these earnings be distributed, an additional provision for
withholding taxes may apply, which could materially affect our
future effective tax rate.
As a matter of course, we are regularly audited by various
taxing authorities, and sometimes these audits result in
proposed assessments where the ultimate resolution may result in
us owing additional taxes. We establish tax liabilities or
reduce tax assets for uncertain tax benefits when, despite our
belief that our tax return positions are appropriate and
supportable under local tax law, we believe we may not succeed
in realizing the tax benefit of certain positions if challenged.
We evaluate these uncertain tax benefits each quarter and adjust
the related tax liabilities or assets in light of changing facts
and circumstances, such as the progress of a tax audit or the
expiration of a statute of limitations. We believe the estimates
and assumptions used to support our evaluation of uncertain tax
benefits are reasonable. However, final determinations of
prior-year tax liabilities, either by settlement with tax
51
authorities or expiration of statutes of limitations, could be
materially different from estimates reflected in assets and
liabilities and historical income tax provisions. The outcome of
these final determinations could have a material effect on our
income tax provision, net income, or cash flows in the period in
which that determination is made. We believe our tax positions
comply with applicable tax law and that we have adequately
accounted for uncertain tax benefits.
Defined
Benefit Pension Plans
In the United States and certain other countries, we maintain
and administer defined benefit pension plans. The annual cost of
these plans can be significantly affected by changes in
assumptions and differences between expected and actual
experience.
In September 2006, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 158,
Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 106, and 132(R)
(SFAS No. 158). SFAS No. 158
requires companies to prospectively recognize the funded status
of pension and other postretirement benefit plans on the balance
sheet. Under SFAS No. 158, gains and losses, prior
service costs and credits and any remaining transition amounts
under SFAS No. 87, Employers Accounting
for Pensions, (SFAS No. 87) that
have not yet been recognized through pension expense will be
recognized in accumulated other comprehensive income, net of
tax, until they are amortized as a component of net periodic
pension/postretirement benefits expense. Additionally,
SFAS No. 158 requires companies to measure plan assets
and obligations at their year-end balance sheet date. We adopted
the recognition and disclosure provisions as of August 31,
2007 and will adopt the year-end measurement date provision as
of August 31, 2009.
The adoption of SFAS No. 158 affected the
August 31, 2007 Consolidated Balance Sheet as follows:
increase in assets of $2 million, decrease in liabilities
of $24 million, and increase in shareholders equity
of $26 million. For additional information, refer to
Note 11 (Retirement and Profit Sharing Plans) to our
Consolidated Financial Statements under Financial
Statements and Supplementary Data.
We utilize actuarial methods required by SFAS No. 87
to account for our defined benefit pension plans. The actuarial
methods require numerous assumptions to calculate the net
periodic pension benefit expense and the related projected
benefit obligation for our defined benefit pension plans. Two of
the most significant assumptions are the discount rates and
expected long-term rate of return on plan assets. In making
these assumptions, we are required to consider current market
conditions, including changes in interest rates. Changes in the
related net periodic pension costs may occur in the future due
to changes in these and other assumptions. Our assumptions
reflect our historical experience and managements best
judgment regarding future expectations. The assumptions, assets
and liabilities used to measure our annual pension expense are
determined as of June 30 or August 31 for our U.S. and
non-U.S. benefit
plans.
Key weighted-average assumptions used to determine annual
pension expense are as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
Non-U.S.
|
|
|
|
|
|
Non-U.S.
|
|
|
|
|
|
Non-U.S.
|
|
|
|
U.S. Plans
|
|
|
Plans
|
|
|
U.S. Plans
|
|
|
Plans
|
|
|
U.S. Plans
|
|
|
Plans
|
|
|
Discount rate
|
|
|
6.75
|
%
|
|
|
5.45
|
%
|
|
|
6.25
|
%
|
|
|
5.08
|
%
|
|
|
6.50
|
%
|
|
|
4.68
|
%
|
Expected return on plan assets
|
|
|
7.50
|
%
|
|
|
5.86
|
%
|
|
|
7.50
|
%
|
|
|
5.97
|
%
|
|
|
7.50
|
%
|
|
|
5.67
|
%
|
Rate of increase in future compensation
|
|
|
4.59
|
%
|
|
|
3.59
|
%
|
|
|
4.50
|
%
|
|
|
3.84
|
%
|
|
|
4.50
|
%
|
|
|
3.45
|
%
|
52
Discount
Rate
The discount rate is required to be used in each pension plan
actuarial valuation. Our methodology for selecting the discount
rate for our U.S. Plans is to match the plans cash
flows to that of a yield curve that provides the equivalent
yields on zero-coupon corporate bonds for each maturity. Our
discount rate assumption for our
non-U.S. Plans
primarily reflects the market rate for high-quality,
fixed-income debt instruments. The discount rate assumptions are
based on the expected duration of the benefit payments for each
of our pension plans as of the annual measurement date and is
subject to change each year. Our estimated U.S. pension
expense for fiscal 2009 reflects a 50 basis point increase
in our discount rate, while our
non-U.S. estimated
pension expense for fiscal 2009 reflects a 33 basis point
increase in our discount rate. These changes in discount rate
will decrease estimated pension expense in fiscal 2009 by
approximately $15.0 million.
A 25 basis point increase in the discount rate would
decrease our annual pension expense by $5.1 million. A
25 basis point decrease in the discount rate would increase
our annual pension expense by $6.6 million.
Expected
Return on Plan Assets
The expected long-term rate of return on plan assets should,
over time, approximate the actual long-term returns on pension
plan assets and is based on historical returns and the future
expectations for returns for each asset class, as well as the
target asset allocation of the asset portfolio. A 7.50% expected
return on plan assets assumption was used for both fiscal 2009
and 2008 for our U.S. plans, while the expected return on
plan assets assumptions for our
non-U.S. plans
were 5.86% and 5.97% in fiscal 2009 and 2008, respectively.
A 25 basis point change in our return on plan assets would
change our annual pension expense by $3.6 million.
U.S. generally accepted accounting principles include
mechanisms that serve to limit the volatility in our earnings
which otherwise would result from recording changes in the value
of plan assets and benefit obligations in our Consolidated
Financial Statements in the periods in which those changes
occur. For example, while the expected long-term rate of return
on plan assets should, over time, approximate the actual
long-term returns, differences between the expected and actual
returns could occur in any given year. These differences
contribute to the deferred actuarial gains or losses, which are
then amortized over time. Negative market returns occurred for
fiscal 2008, as compared to fiscal 2007, causing actual pension
plan asset returns to be lower than our expected returns.
Revenues
by Segment/Operating Group
Our five reportable operating segments are our operating groups,
which are Communications & High Tech, Financial
Services, Products, Public Service (known as
Government prior to September 1, 2007) 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 services, 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.
53
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.
54
Results
of Operations for the Year Ended August 31, 2008 Compared
to Year Ended August 31, 2007
Net revenues (by operating group, geography and type of work)
and reimbursements were as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
Net Revenues
|
|
|
|
Year Ended
|
|
|
Percent
|
|
|
Increase
|
|
|
for the Year Ended
|
|
|
|
August 31,
|
|
|
Increase
|
|
|
Local
|
|
|
August 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
U.S.$
|
|
|
Currency
|
|
|
2008
|
|
|
2007
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING GROUPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications & High Tech
|
|
$
|
5,450
|
|
|
$
|
4,600
|
|
|
|
18
|
%
|
|
|
10
|
%
|
|
|
23
|
%
|
|
|
23
|
%
|
Financial Services
|
|
|
5,005
|
|
|
|
4,357
|
|
|
|
15
|
|
|
|
6
|
|
|
|
22
|
|
|
|
22
|
|
Products
|
|
|
6,069
|
|
|
|
4,913
|
|
|
|
24
|
|
|
|
17
|
|
|
|
26
|
|
|
|
25
|
|
Public Service
|
|
|
2,871
|
|
|
|
2,561
|
|
|
|
12
|
|
|
|
7
|
|
|
|
12
|
|
|
|
13
|
|
Resources
|
|
|
3,963
|
|
|
|
3,243
|
|
|
|
22
|
|
|
|
14
|
|
|
|
17
|
|
|
|
17
|
|
Other
|
|
|
29
|
|
|
|
22
|
|
|
|
n/m
|
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL Net Revenues
|
|
|
23,387
|
|
|
|
19,696
|
|
|
|
19
|
%
|
|
|
11
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reimbursements
|
|
|
1,927
|
|
|
|
1,757
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL REVENUES
|
|
$
|
25,314
|
|
|
$
|
21,453
|
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GEOGRAPHY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
9,726
|
|
|
$
|
8,483
|
|
|
|
15
|
%
|
|
|
12
|
%
|
|
|
42
|
%
|
|
|
43
|
%
|
EMEA
|
|
|
11,546
|
|
|
|
9,534
|
|
|
|
21
|
|
|
|
10
|
|
|
|
49
|
|
|
|
48
|
|
Asia Pacific
|
|
|
2,115
|
|
|
|
1,679
|
|
|
|
26
|
|
|
|
15
|
|
|
|
9
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL Net Revenues
|
|
$
|
23,387
|
|
|
$
|
19,696
|
|
|
|
19
|
%
|
|
|
11
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TYPE OF WORK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
$
|
14,117
|
|
|
$
|
11,856
|
|
|
|
19
|
%
|
|
|
11
|
%
|
|
|
60
|
%
|
|
|
60
|
%
|
Outsourcing
|
|
|
9,270
|
|
|
|
7,840
|
|
|
|
18
|
|
|
|
11
|
|
|
|
40
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL Net Revenues
|
|
$
|
23,387
|
|
|
$
|
19,696
|
|
|
|
19
|
%
|
|
|
11
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/m = not meaningful
We conduct business in the following countries that individually
comprised more than 10% of consolidated net revenues within the
three years ended August 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
United States
|
|
|
34
|
%
|
|
|
36
|
%
|
|
|
39
|
%
|
United Kingdom
|
|
|
12
|
|
|
|
14
|
|
|
|
13
|
|
55
Results
of Operations for the Year Ended August 31, 2008 Compared
to Year Ended August 31, 2007
Revenues
The following revenues by operating group commentary discusses
local currency revenues changes for the year ended
August 31, 2008 compared to August 31, 2007:
|
|
|
|
|
Communications & High Techs net revenues
increased 10% in local currency, driven by solid consulting and
outsourcing growth. The consulting increase was driven by growth
in the EMEA region across all industry groups. The outsourcing
increase was led by growth in our Communications industry group
across all geographic regions and in our Electronics &
High Tech industry group in the Asia Pacific region.
|
|
|
|
Financial Services net revenues increased 6% in local currency,
primarily due to outsourcing growth in our Banking industry
group across all geographic regions and in our Insurance and
Capital Markets industry groups in the Americas region.
Consulting growth in our Banking and Insurance industry groups
in the Americas region and in our Banking industry group in the
Asia Pacific region was offset by a consulting revenue decline
in the EMEA region, principally in our Banking and Capital
Markets industry groups. During the first nine months of fiscal
2008, we recorded modest growth in our Financial Services
consulting business. However, during the fourth quarter of
fiscal 2008, we experienced a slight year over year decline in
our consulting business.
|
|
|
|
Products net revenues increased 17% in local currency, driven by
strong consulting and outsourcing growth across all geographic
regions. The consulting growth was led by our Retail and
Health & Life Sciences industry groups in the Americas
region and by our Consumer Goods & Services, Retail
and Industrial Equipment industry groups in the EMEA region. The
outsourcing growth was led by our Health & Life
Sciences and Consumer Goods & Services industry groups
in the Americas region and by our Consumer Goods &
Services, Automotive and Industrial Equipment industry groups in
the EMEA region.
|
|
|
|
Public Services net revenues increased 7% in local currency,
primarily due to consulting growth across all geographic
regions, led by strong growth in the EMEA and Americas regions,
partially offset by an outsourcing decline in the Americas
region.
|
|
|
|
Resources net revenues increased 14% in local currency,
primarily driven by strong consulting growth across all
geographic regions, led by our Utilities and Natural Resources
industry groups, and by solid outsourcing growth, led by our
Utilities and Energy industry groups in the Americas region.
|
In the Americas region, we achieved net revenues of
$9,726 million for fiscal 2008, compared with
$8,483 million for fiscal 2007, an increase of 15% in
U.S. dollars and 12% in local currency. Growth was
principally driven by our business in the United States, Brazil
and Canada.
In the EMEA region, we achieved net revenues of
$11,546 million for fiscal 2008, compared with
$9,534 million for fiscal 2007, an increase of 21% in
U.S. dollars and 10% in local currency. Growth was led by
our business in Italy, Spain and France.
In the Asia Pacific region, we achieved net revenues of
$2,115 million in fiscal 2008, compared with
$1,679 million for fiscal 2007, an increase of 26% in
U.S. dollars and 15% in local currency. Growth was
principally driven by our business in Japan, China and Singapore.
56
Operating
Expenses
Operating expenses were $22,302 million in fiscal 2008, an
increase of $3,342 million, or 18%, over fiscal 2007, and
decreased as a percentage of revenues to 88.1% from 88.4% during
this period. Operating expenses before reimbursable expenses
were $20,375 million in fiscal 2008, an increase of
$3,172 million, or 18%, over fiscal 2007, and decreased as
a percentage of net revenues to 87.1% from 87.3% during this
period.
Cost
of Services
Cost of services was $18,128 million in fiscal 2008, an
increase of $2,717 million, or 18%, over fiscal 2007, and
decreased as a percentage of revenues to 71.6% from 71.8% during
this period. Cost of services before reimbursable expenses was
$16,201 million in fiscal 2008, an increase of
$2,547 million, or 19%, over fiscal 2007, and remained flat
as a percentage of net revenues at 69.3%. Gross margin (net
revenues less cost of services before reimbursable expenses as a
percentage of net revenues) remained flat at 30.7% during this
period.
Sales
and Marketing
Sales and marketing expense was $2,271 million in fiscal
2008, an increase of $367 million, or 19%, over fiscal
2007, and remained flat as a percentage of net revenues at 9.7%
during this period.
General
and Administrative Costs
General and administrative costs were $1,880 million in
fiscal 2008, an increase of $262 million, or 16%, over
fiscal 2007, and decreased as a percentage of net revenues to
8.0% from 8.2% during this period. The decrease as a percentage
of net revenues was primarily due to strong revenue growth and
our management of these costs at a growth rate lower than that
of our net revenues.
Reorganization
Costs (Benefits)
We recorded net reorganization costs of $23 million and
$26 million for the year ended August 31, 2008 and
2007, respectively, related to interest expense associated with
carrying the reorganization liabilities. In fiscal 2001, we
accrued reorganization liabilities in connection with our
transition to a corporate structure. As of August 31, 2008,
the remaining liability for reorganization costs was
$309 million, of which $299 million was classified as
Other accrued liabilities because expirations of statutes of
limitations or other final determinations could occur within
12 months. We anticipate that reorganization liabilities
will be substantially diminished by the end of fiscal 2009
because we expect final determinations will have occurred.
However, resolution of current tax audits, initiation of
additional audits or litigation may delay final settlements.
Final settlement will result in a payment on a final settlement
and/or
recording a reorganization cost or benefit in our Consolidated
Income Statement. For additional information, refer to
Note 3 (Reorganization Costs (Benefits)) to our
Consolidated Financial Statements under Financial
Statements and Supplementary Data.
57
Operating
Income
Operating income was $3,012 million in fiscal 2008, an
increase of $519 million, or 21%, from fiscal 2007.
Operating income as a percentage of net revenues was 12.9% and
12.7% in fiscal 2008 and 2007, respectively. Operating income
for each of the operating groups was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31,
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
Operating
|
|
|
Percent of OG
|
|
|
Operating
|
|
|
Percent of OG
|
|
|
Increase
|
|
|
|
Income
|
|
|
Net Revenues
|
|
|
Income
|
|
|
Net Revenues
|
|
|
(Decrease)
|
|
|
|
(in millions)
|
|
|
Communications & High Tech
|
|
$
|
657
|
|
|
|
12
|
%
|
|
$
|
582
|
|
|
|
13
|
%
|
|
$
|
75
|
|
Financial Services
|
|
|
661
|
|
|
|
13
|
|
|
|
491
|
|
|
|
11
|
|
|
|
170
|
|
Products
|
|
|
864
|
|
|
|
14
|
|
|
|
669
|
|
|
|
14
|
|
|
|
195
|
|
Public Service
|
|
|
260
|
|
|
|
9
|
|
|
|
272
|
|
|
|
11
|
|
|
|
(12
|
)
|
Resources
|
|
|
570
|
|
|
|
14
|
|
|
|
479
|
|
|
|
15
|
|
|
|
91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,012
|
|
|
|
12.9
|
%
|
|
$
|
2,493
|
|
|
|
12.7
|
%
|
|
$
|
519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income commentary for each of the operating groups is
as follows:
|
|
|
|
|
Communications & High Tech operating income increased
principally due to revenue growth, partially offset by delivery
inefficiencies on a small number of consulting contracts.
|
|
|
|
Financial Services operating income increased primarily due to
outsourcing revenue growth and improved outsourcing contract
margins, partially offset by a decline in contract margins due
to a lower proportion of high-margin consulting contracts. In
addition, operating income for the twelve months ended
August 31, 2007 reflects the impact of delivery
inefficiencies on several contracts.
|
|
|
|
Products operating income increased due to revenue growth,
partially offset by lower outsourcing contract profitability.
|
|
|
|
Public Service operating income decreased slightly in fiscal
2008. Consulting revenue growth and improved outsourcing
contract margins were more than offset by profitability
challenges, including delivery inefficiencies on a few
contracts, revenue adjustments on certain contracts and higher
selling costs associated with business-development opportunities
which fueled strong fourth quarter fiscal 2008 bookings. The
fiscal 2007 operating income also reflects asset impairments
associated with an outsourcing contract recorded during the
first quarter of fiscal 2007.
|
|
|
|
Resources operating income increased primarily due to strong
revenue growth.
|
Gain
on Investments, net
Gain on investments, net was $6 million in fiscal 2008, a
decrease of $12 million from fiscal 2007. The fiscal 2007
gain was primarily from a gain on the sale of a remaining
investment from our portfolio of investments that was written
down in fiscal 2002.
Interest
Income
Interest income was $115 million in fiscal 2008, a decrease
of $40 million, or 26%, from fiscal 2007. The decrease was
primarily due to lower interest rates.
58
Other
Expense, net
Other expense, net was $2 million in fiscal 2008, a
decrease of $20 million from fiscal 2007. The decrease
resulted primarily from a decrease in net foreign currency
exchange losses.
Provision
for Income Taxes
The effective tax rates for fiscal 2008 and 2007 were 29.3% and
34.2%, respectively. The effective tax rate decreased in 2008
primarily as a result of benefits related to: final
determinations of prior year tax liabilities, which reduced the
rate by 3.9%; non-US research and development tax credits, which
reduced the rate by 1.3%; and changes in the geographic
distribution of income. These benefits were offset by expenses
related to tax rate changes enacted during the year ended
August 31, 2008, which reduced the value of our deferred
tax assets. Fiscal 2007 included a reduction in the effective
tax rate of 0.8%, recorded as a result of a nonrecurring benefit
related to a reduction in the valuation allowance on our
deferred tax assets.
Minority
Interest
Minority interest eliminates the income earned or expense
incurred attributable to the equity interest that some of our
current and former senior executives and their permitted
transferees have in our Accenture SCA and Accenture Canada
Holdings Inc. subsidiaries. See
BusinessOrganizational Structure. The
resulting Net income of Accenture Ltd represents the income
attributable to the shareholders of Accenture Ltd. Since January
2002, minority interest has also included immaterial amounts
primarily attributable to minority shareholders in our Avanade
Inc. subsidiary.
Minority interest was $505 million in fiscal 2008, an
increase of $26 million, or 5%, over fiscal 2007. The
increase was primarily due to an increase in Income before
minority interest of $474 million, partially offset by a
reduction in the Accenture SCA Class I common shares and
Accenture Canada Holdings Inc. exchangeable shares average
minority ownership interests to 22% for the year ended
August 31, 2008 from 27% for the year ended August 31,
2007.
Earnings
Per Share
Diluted earnings per share were $2.65 in fiscal 2008, compared
with $1.97 in fiscal 2007. The $0.68 increase in our earnings
per share was primarily the result of the following: $0.25 from
strong growth in revenues and operating income in local
currency; $0.19 from a lower effective tax rate and $0.12 from
lower weighted average shares outstanding, partially offset by
$0.02 from lower non-operating income. In addition, favorable
foreign currency exchange rates accounted for $0.14 of the
increase. For information regarding our earnings per share
calculation, see Note 2 (Earnings Per Share) to our
Consolidated Financial Statements under Financial
Statements and Supplementary Data.
59
Results
of Operations for the Year Ended August 31, 2007 Compared
to Year Ended August 31, 2006
Net revenues (by operating group, geography and type of work)
and reimbursements were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
Net Revenues
|
|
|
|
Year Ended
|
|
|
Percent
|
|
|
Increase
|
|
|
for the Year Ended
|
|
|
|
August 31,
|
|
|
Increase
|
|
|
Local
|
|
|
August 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
U.S.$
|
|
|
Currency
|
|
|
2007
|
|
|
2006
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING GROUPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications & High Tech
|
|
$
|
4,600
|
|
|
$
|
4,177
|
|
|
|
10
|
%
|
|
|
5
|
%
|
|
|
23
|
%
|
|
|
25
|
%
|
Financial Services
|
|
|
4,357
|
|
|
|
3,558
|
|
|
|
22
|
|
|
|
16
|
|
|
|
22
|
|
|
|
22
|
|
Products(1)
|
|
|
4,913
|
|
|
|
4,011
|
|
|
|
23
|
|
|
|
18
|
|
|
|
25
|
|
|
|
24
|
|
Public Service(1)(2)
|
|
|
2,561
|
|
|
|
2,221
|
|
|
|
15
|
|
|
|
12
|
|
|
|
13
|
|
|
|
13
|
|
Resources
|
|
|
3,243
|
|
|
|
2,666
|
|
|
|
22
|
|
|
|
17
|
|
|
|
17
|
|
|
|
16
|
|
Other
|
|
|
22
|
|
|
|
13
|
|
|
|
n/m
|
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL Net Revenues
|
|
|
19,696
|
|
|
|
16,646
|
|
|
|
18
|
%
|
|
|
13
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reimbursements
|
|
|
1,757
|
|
|
|
1,582
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL REVENUES
|
|
$
|
21,453
|
|
|
$
|
18,228
|
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GEOGRAPHY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
8,483
|
|
|
$
|
7,741
|
|
|
|
10
|
%
|
|
|
9
|
%
|
|
|
43
|
%
|
|
|
46
|
%
|
EMEA
|
|
|
9,534
|
|
|
|
7,644
|
|
|
|
25
|
|
|
|
16
|
|
|
|
48
|
|
|
|
46
|
|
Asia Pacific
|
|
|
1,679
|
|
|
|
1,261
|
|
|
|
33
|
|
|
|
28
|
|
|
|
9
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL Net Revenues
|
|
$
|
19,696
|
|
|
$
|
16,646
|
|
|
|
18
|
%
|
|
|
13
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TYPE OF WORK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
$
|
11,856
|
|
|
$
|
9,892
|
|
|
|
20
|
%
|
|
|
15
|
%
|
|
|
60
|
%
|
|
|
59
|
%
|
Outsourcing
|
|
|
7,840
|
|
|
|
6,754
|
|
|
|
16
|
|
|
|
12
|
|
|
|
40
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL Net Revenues
|
|
$
|
19,696
|
|
|
$
|
16,646
|
|
|
|
18
|
%
|
|
|
13
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/m = not meaningful
|
|
|
(1)
|
|
During the second quarter of fiscal
2006, in connection with certain large, long-term contracts (the
NHS Contracts), we recorded a $450 million
aggregate loss provision that was reflected in Cost of services.
We later entered into an agreement to transfer to a third party
the majority of our rights and obligations under the NHS
Contracts. This agreement resulted in a $339 million
reduction in net revenues in the fourth quarter of fiscal 2006,
which was offset by a $339 million decrease in Cost of
services, including a reversal of the remainder of the loss
provision recorded earlier in fiscal 2006. These adjustments
were reflected in the operating results of our Products and
Public Service operating groups.
|
|
(2)
|
|
Known as Government
prior to September 1, 2007.
|
Revenues
Our Communications & High Tech operating group
achieved net revenues of $4,600 million for the year ended
August 31, 2007, compared with $4,177 million for the
year ended August 31, 2006, an increase of 10% in
U.S. dollars and 5% in local currency. The increase was
driven by outsourcing growth across all industry groups and all
geographic regions and consulting growth in the Asia Pacific
60
and EMEA regions. This was partially offset by a consulting
decline in our Communications industry group in the Americas
region.
Our Financial Services operating group achieved net revenues of
$4,357 million for the year ended August 31, 2007,
compared with $3,558 million for the year ended
August 31, 2006, an increase of 22% in U.S. dollars
and 16% in local currency, with both consulting and outsourcing
contributing to the growth. The increase was primarily driven by
growth in the EMEA region across all industry groups,
particularly Banking; and in the Americas region, particularly
in our Capital Markets and Insurance industry groups.
Our Products operating group achieved net revenues of
$4,913 million for the year ended August 31, 2007,
compared with $4,011 million for the year ended
August 31, 2006, an increase of 23% in U.S. dollars
and 18% in local currency, with both consulting and outsourcing
contributing to the growth. The increase was driven by strong
growth in our Consumer Goods & Services and
Health & Life Sciences industry groups in the EMEA
region and in our Retail and Health & Life Sciences
industry groups in the Americas region. These increases more
than offset an expected revenue decline in our Retail industry
group in the EMEA region during the year ended August 31,
2007 related to a contract termination in the third quarter of
fiscal 2006. Revenue growth was also affected by a fiscal 2006
$169 million reduction in consulting revenues in our
Health & Life Sciences industry group in the EMEA
region associated with the resolution of the NHS matter recorded
during the fourth quarter of fiscal 2006. See footnote
(1) to the Net revenues (by operating group,
geography and type of work) and reimbursements table above.
Our Public Service operating group achieved net revenues of
$2,561 million for the year ended August 31, 2007,
compared with $2,221 million for the year ended
August 31, 2006, an increase of 15% in U.S. dollars
and 12% in local currency. The increase was driven by consulting
growth in the EMEA and Americas regions. Revenue growth was also
affected by a fiscal 2006 $169 million reduction in
consulting revenues associated with the resolution of the NHS
matter recorded during the fourth quarter of fiscal 2006. See
footnote (1) to the Net revenues (by operating group,
geography and type of work) and reimbursements table above.
Our Resources operating group achieved net revenues of
$3,243 million for the year ended August 31, 2007,
compared with $2,666 million for the year ended
August 31, 2006, an increase of 22% in U.S. dollars
and 17% in local currency, primarily driven by strong consulting
growth across all geographic regions and strong outsourcing
growth in the EMEA region. We experienced strong growth across
all four industry groups: Energy, Utilities, Chemicals and
Natural Resources.
In the Americas region, we achieved net revenues of
$8,483 million in fiscal 2007, compared with
$7,741 million for fiscal 2006, an increase of 10% in
U.S. dollars and 9% in local currency. Growth was
principally driven by our business in the United States, Brazil
and Canada.
In the EMEA region, we achieved net revenues of
$9,534 million for fiscal 2007, compared with
$7,644 million for fiscal 2006, an increase of 25% in
U.S. dollars and 16% in local currency. Growth was
principally driven by our business in the United Kingdom, Spain,
Italy, the Netherlands, Germany and France.
In the Asia Pacific region, we achieved net revenues of
$1,679 million in fiscal 2007, compared with
$1,261 million for fiscal 2006, an increase of 33% in
U.S. dollars and 28% in local currency. Growth was
principally driven by our business in Australia, Japan and
Singapore.
61
Operating
Expenses
Operating expenses were $18,960 million in fiscal 2007, an
increase of $2,573 million, or 16%, over fiscal 2006, and
decreased as a percentage of revenues to 88.4% from 89.9% during
this period. Operating expenses before reimbursable expenses
were $17,203 million in fiscal 2007, an increase of
$2,398 million, or 16%, over fiscal 2006, and decreased as
a percentage of net revenues to 87.3% from 88.9% during this
period. Excluding the effects of reorganization benefits
recorded in fiscal 2006, operating expenses as a percentage of
net revenues for the year ended August 31, 2007 decreased
2.0 percentage points compared with the year ended
August 31, 2006.
Cost
of Services
Cost of services was $15,411 million in fiscal 2007, an
increase of $2,177 million, or 16%, over fiscal 2006, and
decreased as a percentage of revenues to 71.8% from 72.6% during
this period. Cost of services before reimbursable expenses were
$13,654 million in fiscal 2007, an increase of
$2,002 million, or 17%, over fiscal 2006, and decreased as
a percentage of net revenues to 69.3% from 70.0% during this
period. Gross margin (net revenues less cost of services before
reimbursable expenses as a percentage of net revenues) increased
to 30.7% from 30.0% over this period. The decrease in Cost of
services as a percentage of net revenues was principally due to
the net impact during fiscal 2006 of the NHS Transfer Agreement
and the second-quarter fiscal 2006 NHS adjustments, partially
offset by higher annual bonus accruals during fiscal 2007. See
footnote (1) to the Net revenues (by operating group,
geography and type of work) and reimbursements table above.
Sales
and Marketing
Sales and marketing expense was $1,904 million in fiscal
2007, an increase of $196 million, or 12%, over fiscal
2006, and decreased as a percentage of net revenues to 9.7% from
10.2% during this period. This decrease as a percentage of net
revenues was primarily due to lower business and market
development costs as a result of higher utilization of our
client service personnel on contracts.
General
and Administrative Costs
General and administrative costs were $1,618 million in
fiscal 2007, an increase of $125 million, or 8%, over
fiscal 2006, and decreased as a percentage of net revenues to
8.2% from 9.0% during this period. This decrease as a percentage
of net revenues was primarily due to lower costs resulting from
our continued efforts to leverage cost efficient locations.
Reorganization
Costs (Benefits)
We recorded net reorganization costs of $26 million for the
year ended August 31, 2007 related to interest expense
associated with our reorganization liabilities. During fiscal
2006, we recorded net reorganization benefits of
$48 million, which included a $72 million reduction in
reorganization liabilities offset by $24 million of
interest expense associated with carrying these liabilities. In
fiscal 2006, the reduction in liabilities was primarily due to
final determinations of certain reorganization liabilities
established in connection with our transition to a corporate
structure in 2001. For additional information, refer to
Note 3 (Reorganization Costs (Benefits)) to our
Consolidated Financial Statements under Financial
Statements and Supplementary Data.
Operating
Income
Operating income was $2,493 million in fiscal 2007, an
increase of $652 million, or 35%, from fiscal 2006.
Operating income as a percentage of net revenues was 12.7% and
11.1% in fiscal 2007
62
and 2006, respectively. Excluding the effects of reorganization
benefits during fiscal 2006, Operating income as a percentage of
net revenues for the year ended August 31, 2007 increased
by 2.1 percentage points, compared with the year ended
August 31, 2006. Operating income for each of the operating
groups was as follows:
Operating income for each of the operating groups was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
Reorganization
|
|
|
Increase
|
|
|
|
2007
|
|
|
2006
|
|
|
(Decrease)
|
|
|
Benefits(1)
|
|
|
(Decrease)
|
|
|
|
(in millions)
|
|
|
Communications & High Tech
|
|
$
|
582
|
|
|
$
|
631
|
|
|
$
|
(49
|
)
|
|
$
|
17
|
|
|
$
|
(32
|
)
|
Financial Services
|
|
|
491
|
|
|
|
388
|
|
|
|
103
|
|
|
|
15
|
|
|
|
118
|
|
Products
|
|
|
669
|
|
|
|
400
|
|
|
|
269
|
|
|
|
18
|
|
|
|
287
|
|
Public Service
|
|
|
272
|
|
|
|
83
|
|
|
|
189
|
|
|
|
11
|
|
|
|
200
|
|
Resources
|
|
|
479
|
|
|
|
339
|
|
|
|
140
|
|
|
|
11
|
|
|
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,493
|
|
|
$
|
1,841
|
|
|
$
|
652
|
|
|
$
|
72
|
|
|
$
|
724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Represents the effect of
reorganization benefits recorded during the year ended
August 31, 2006.
|
The following Operating income commentary by operating group
excludes the effect of reorganization benefits recorded in
fiscal 2006:
|
|
|
|
|
Communications & High Tech operating income decreased
due to higher compensation costs and a decline in contract
margins due to a lower proportion of high-margin consulting
contracts.
|
|
|
|
Financial Services operating income increased due to revenue
growth, higher utilization and lower sales and marketing costs
as a percentage of net revenues, partially offset by higher
compensation costs and delivery inefficiencies on certain
contracts.
|
|
|
|
Products operating income increased due to strong revenue growth
and lower sales and marketing costs as a percentage of revenue
before reimbursements, partially offset by higher compensation
costs. Operating income also increased due to the impact of a
$225 million loss provision associated with the NHS
Contracts recorded during the second quarter of fiscal 2006,
partially offset by revenue recognized in connection with a
contract termination in our Retail industry group in the EMEA
region recorded during the third quarter of fiscal 2006. See
footnote (1) to the Net revenues (by operating group,
geography and type of work) and reimbursements table above.
|
|
|
|
Public Service operating income increased due to the impact of a
$225 million loss provision associated with the NHS
Contracts recorded during the second quarter of fiscal 2006. The
fiscal 2007 operating income also reflects consulting revenue
growth and improved consulting contract margins, offset by
higher compensation costs and asset impairments associated with
an outsourcing contract recorded during the first quarter of
fiscal 2007. See footnote (1) to the Net revenues (by
operating group, geography and type of work) and
reimbursements table above.
|
|
|
|
Resources operating income increased due to strong revenue
growth and improved contract margins, partially offset by higher
compensation costs.
|
Higher compensation costs for the year ended August 31,
2007 resulted from higher annual bonus accruals and market
compensation adjustments in certain skill sets and geographies.
63
Gain
on Investments, net
Gain on investments, net was $19 million in fiscal 2007, an
increase of $17 million over fiscal 2006. The increase
resulted primarily from a gain on the sale of a remaining
investment from our portfolio of investments that was written
down in fiscal 2002.
Interest
Income
Interest income was $155 million in fiscal 2007, an
increase of $25 million, or 19%, over fiscal 2006. The
increase resulted primarily from an increase in interest rates
and higher average cash balances.
Other
Expense
Other expense was $22 million in fiscal 2007, a decrease of
$6 million from fiscal 2006. The decrease resulted
primarily from a decrease in net foreign currency exchange
losses.
Provision
for Income Taxes
The effective tax rates for fiscal 2007 and 2006 were 34.2% and
25.5%, respectively. The effective tax rate increased in 2007
primarily as a result of benefits recorded in fiscal 2006
related to final determinations of prior-year tax liabilities.
Final determinations of prior year tax liabilities, including
final agreements with tax authorities and expirations of
statutes of limitations, reduced the annual effective tax rate
in 2007 and 2006 by 1.8 and 10.8 percentage points,
respectively.
Minority
Interest
Minority interest was $480 million in fiscal 2007, an
increase of $20 million, or 4%, from fiscal 2006. The
increase was primarily due to an increase in income before
minority interest of $290 million, partially offset by a
reduction in the Accenture SCA Class I common shares and
Accenture Canada Holdings Inc. exchangeable shares average
ownership interests to 27% for the year ended August 31,
2007 from 32% for the year ended August 31, 2006.
Earnings
Per Share
Diluted earnings per share were $1.97 in fiscal 2007, compared
with $1.59 in fiscal 2006. Our earnings per share for the year
ended August 31, 2006 were reduced by $0.26 due to the net
impact of the second-quarter fiscal 2006 NHS adjustments. See
footnote (1) to the Net revenues (by operating group,
geography and type of work) and reimbursements table
above. This reduction of earnings per share was partially offset
by increases of $0.08 resulting from the impact of
reorganization benefits and $0.16 resulting from the impact of
tax benefits recorded in June 2006. For information regarding
our earnings per share calculation, see Note 2 (Earnings
Per Share) to our Consolidated Financial Statements under
Financial Statements and Supplementary Data.
Liquidity
and Capital Resources
Our primary sources of liquidity are cash flows from operations,
debt capacity available under various credit facilities and
available cash reserves. We may also be able to raise additional
funds through public or private debt or equity financings in
order to:
|
|
|
|
|
take advantage of opportunities, including more rapid expansion;
|
|
|
|
acquire complementary businesses or technologies;
|
|
|
|
develop new services and solutions;
|
64
|
|
|
|
|
respond to competitive pressures; or
|
|
|
|
facilitate purchases, redemptions and exchanges of Accenture
shares.
|
As of August 31, 2008, cash and cash equivalents of
$3,603 million combined with $23 million of liquid
fixed-income securities that are classified as investments in
our Consolidated Balance Sheet totaled $3,626 million,
compared with $3,614 million as of August 31, 2007, an
increase of $12 million.
Cash flows from operating, investing and financing activities,
as reflected in our Consolidated Cash Flows Statements, are
summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 to 2007
|
|
|
|
2008
|
|
|
2007(1)
|
|
|
2006
|
|
|
Change
|
|
|
|
(in millions)
|
|
|
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
2,803
|
|
|
$
|
2,631
|
|
|
$
|
2,668
|
|
|
$
|
172
|
|
Investing activities
|
|
|
(324
|
)
|
|
|
(350
|
)
|
|
|
(243
|
)
|
|
|
26
|
|
Financing activities
|
|
|
(2,162
|
)
|
|
|
(2,128
|
)
|
|
|
(1,944
|
)
|
|
|
(34
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(29
|
)
|
|
|
95
|
|
|
|
102
|
|
|
|
(124
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents(1)
|
|
$
|
288
|
|
|
$
|
247
|
|
|
$
|
583
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
May not total due to rounding.
|
Operating activities: The
$172 million increase in cash provided by operating
activities was primarily due to higher net income, partially
offset by an increase in net client balances (receivables from
clients, current and non-current unbilled services and deferred
revenues) and other changes in operating assets and liabilities.
Investing activities: The
$26 million decrease in cash used was primarily due to a
decrease in net purchases of available-for-sale securities and
lower spending on property and equipment, driven by effective
space management within the Global Delivery Network, partially
offset by increased spending on business acquisitions. For
additional information regarding our business acquisitions, see
Note 6 (Business Combinations and Goodwill) to our
Consolidated Financial Statements under Financial
Statements and Supplementary Data.
Financing activities: The
$34 million increase in cash used was primarily due to an
increase in cash dividends paid. For additional information, see
Note 14 (Material Transactions Affecting Shareholders
Equity) to our Consolidated Financial Statements under
Financial Statements and Supplementary Data.
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.
65
Borrowing
Facilities
As of August 31, 2008, we had the following borrowing
facilities, including the issuance of letters of credit, to
support general working capital purposes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
Facility
|
|
|
Under
|
|
|
|
Amount
|
|
|
Facilities
|
|
|
|
(in millions)
|
|
|
Syndicated loan facility(1)
|
|
$
|
1,200
|
|
|
$
|
|
|
Separate bilateral, uncommitted, unsecured multicurrency
revolving credit facilities(2)
|
|
|
350
|
|
|
|
5
|
|
Local guaranteed and non-guaranteed lines of credit(3)
|
|
|
152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,702
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This facility, which matures on
July 31, 2012, provides unsecured, revolving borrowing
capacity for general working capital purposes, including the
issuance of letters of credit. Financing is provided under this
facility at the prime rate or at the London Interbank Offered
Rate plus a spread. This facility requires us to: (1) limit
liens placed on our assets to (a) liens incurred in the
ordinary course of business (subject to certain qualifications)
and (b) other liens securing obligations not to exceed 30%
of our consolidated assets; and (2) maintain a
debt-to-cash-flow ratio not exceeding 1.75 to 1.00. We continue
to be in compliance with these terms. As of August 31, 2008
and 2007, we had no borrowings under the facility. The facility
is subject to annual commitment fees.
|
|
(2)
|
|
We maintain two separate bilateral,
uncommitted, unsecured multicurrency revolving credit
facilities. These facilities provide local-currency financing
for the majority of our operations. Interest rate terms on the
bilateral revolving facilities are at market rates prevailing in
the relevant local markets. As of August 31, 2008 and 2007,
we had $5 million and $1 million, respectively, of
borrowings under these facilities.
|
|
(3)
|
|
We also maintain local guaranteed
and non-guaranteed lines of credit for those locations that
cannot access our global facilities. As of August 31, 2008
and 2007, we had no borrowings under these various facilities.
|
Under the borrowing facilities described above, we had an
aggregate of $169 million and $164 million of letters
of credit outstanding as of August 31, 2008 and 2007,
respectively. In addition, we had no other short-term borrowings
as of August 31, 2008 and 2007, respectively.
We also had total outstanding debt of $3 million and
$25 million as of August 31, 2008 and 2007,
respectively. The outstanding debt as of August 31, 2007
was primarily incurred in conjunction with the purchase of
Accenture HR Services.
Share
Purchases and Redemptions
The Board of Directors of Accenture Ltd has authorized funding
for our publicly announced open-market share purchase program
for acquiring Accenture Ltd Class A common shares and for
purchases and redemptions of Accenture Ltd Class A common
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.
66
A summary of our share purchase activity for cash during the
year ended August 31, 2008 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accenture SCA Class I
|
|
|
|
|
|
|
Accenture Ltd Class A
|
|
|
Common Shares and Accenture Canada
|
|
|
|
|
|
|
Common Shares
|
|
|
Holdings Inc. Exchangeable Shares
|
|
|
Total
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
|
(in millions, except share amounts)
|
|
|
Open-market share purchases(1)
|
|
|
10,250,028
|
|
|
$
|
358
|
|
|
|
|
|
|
$
|
|
|
|
|
10,250,028
|
|
|
$
|
358
|
|
Other share purchase programs
|
|
|
5,898,398
|
|
|
|
196
|
(2)
|
|
|
41,757,115
|
(3)
|
|
|
1,593
|
|
|
|
47,655,513
|
|
|
|
1,789
|
|
Other purchases(4)
|
|
|
2,874,791
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
|
2,874,791
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
19,023,217
|
|
|
$
|
668
|
|
|
|
41,757,115
|
|
|
$
|
1,593
|
|
|
|
60,780,332
|
|
|
$
|
2,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
We conduct a publicly announced,
open-market share purchase program for Accenture Ltd
Class A common shares. These shares are held as treasury
shares by one or more subsidiaries of Accenture Ltd and may be
utilized to provide for select employee benefits, such as equity
awards to our employees.
|
|
(2)
|
|
On February 1, 2008, Accenture
Equity Finance B.V., an indirect subsidiary of Accenture SCA,
purchased 5,898,398 Accenture Ltd Class A common shares at
a per share price of $33.29, resulting in a cash outlay of
approximately $196 million. Shares from this transaction
were purchased from certain former senior executives residing
outside the United States.
|
|
(3)
|
|
Primarily represents purchases and
redemptions of Accenture SCA Class I common shares and
Accenture Canada Holdings Inc. exchangeable shares from current
and former senior executives and their permitted transferees.
|
|
(4)
|
|
During the year ended
August 31, 2008, as authorized under our various employee
equity share plans, we acquired Accenture Ltd Class A
common shares primarily via share withholding for payroll tax
obligations due from employees and former employees in
connection with the delivery of Accenture Ltd Class A
common shares under those plans.
|
On October 25, 2007, the Board of Directors of Accenture
Ltd authorized an additional $3.0 billion for share
purchases. Management has discretion to use this authorization
for purchases under either our publicly announced open-market
share purchase program or our other share purchase programs. As
of August 31, 2008, our aggregate available authorization
was $2.5 billion.
Other
Share Redemptions
During fiscal 2008, we issued 11,130,150 Accenture Ltd
Class A common shares upon redemptions of an equivalent
number of Accenture SCA Class I common shares pursuant to
our registration statement on
Form S-3
(the registration statement) filed on May 15,
2007. The registration statement allows us, at our option, to
issue freely tradable Accenture Ltd Class A common shares
in lieu of cash upon redemptions of Accenture SCA Class I
common shares held by our senior executives, former executives
and their permitted transferees.
Senior
Executive Ownership Requirements
To ensure that senior executives continue to maintain equity
ownership levels that Accenture considers meaningful, we require
current senior executives to comply with the Accenture Senior
Executive Equity Ownership Policy. This policy requires senior
executives to own Accenture equity valued at a multiple (ranging
from
1/2
to 6) of their base compensation determined by their
position level.
Senior
Executive Trading Policy
We have a Senior Executive Trading Policy applicable to our
senior executives that provides, among other things, that
covered shares held by actively employed senior executives will
be subject to company-imposed quarterly trading guidelines. We
set allocation limits of unrestricted covered shares based on a
composite average weekly volume of trading in Accenture Ltd
Class A common shares.
67
These guidelines allow us to manage the total number of shares
redeemed, sold or otherwise transferred by our senior executives
in any calendar quarter. The guidelines, which can be adjusted
by management, are not legal or contractual restrictions,
however, and there is a risk that the internal sanctions
available to us might not adequately dissuade individual
employees from attempting transfers in excess of the amounts
permitted under the policy. The Senior Executive Trading Policy
also prohibits senior executives from trading in any Accenture
equity during any company-designated black-out period.
Subsequent
Development
On September 24, 2008, Accenture Ltd declared a cash
dividend of $0.50 per share on our Class A common shares
for shareholders of record at the close of business on
October 10, 2008. Accenture Ltd will cause Accenture SCA to
declare a cash dividend of $0.50 per share on its Class I
common shares for shareholders of record at the close of
business on October 7, 2008. Both dividends are payable on
November 17, 2008.
Obligations
and Commitments
As of August 31, 2008, we had the following obligations and
commitments to make future payments under contracts, contractual
obligations and commercial commitments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments due by period
|
|
Contractual Cash Obligations(1)(2)
|
|
Total(3)
|
|
|
Less than 1 year
|
|
|
1-3 years
|
|
|
3-5 years
|
|
|
More than 5 years
|
|
|
|
(in millions)
|
|
|
Long-term debt
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
|
|
|
$
|
|
|
Operating leases
|
|
|
2,260
|
|
|
|
427
|
|
|
|
600
|
|
|
|
358
|
|
|
|
875
|
|
Retirement obligations(4)
|
|
|
158
|
|
|
|
36
|
|
|
|
44
|
|
|
|
23
|
|
|
|
55
|
|
Other commitments(5)
|
|
|
103
|
|
|
|
71
|
|
|
|
27
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,524
|
|
|
$
|
536
|
|
|
$
|
672
|
|
|
$
|
385
|
|
|
$
|
930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
We adopted FIN 48 on
September 1, 2007. The liability related to unrecognized
tax benefits has been excluded from the contractual obligations
table because a reasonable estimate of the timing and amount of
cash out flows from future tax settlements cannot be determined.
For additional information, refer to Note 10 (Income Taxes)
to our Consolidated Financial Statements under Financial
Statements and Supplementary Data.
|
|
(2)
|
|
In fiscal 2001, we accrued
reorganization liabilities in connection with our transition to
a corporate structure. As of August 31, 2008, the remaining
liability for reorganization costs was $309 million, of
which $299 million was classified as Other accrued
liabilities because expirations of statutes of limitations or
other final determinations could occur within 12 months.
The reorganization liabilities have been excluded from the
contractual obligations table because a reasonable estimate of
the timing and amount of cash out flows from future tax
settlements cannot be determined. We anticipate that
reorganization liabilities will be substantially diminished by
the end of fiscal 2009 because we expect final determinations
will have occurred. However, resolution of current tax audits,
initiation of additional audits or litigation may delay final
settlements. Final settlement will result in a payment on a
final settlement and/or recording a reorganization cost or
benefit in our Consolidated Income Statement. For additional
information, refer to Note 3 (Reorganization Costs
(Benefits)) to our Consolidated Financial Statements under
Financial Statements and Supplementary Data.
|
|
(3)
|
|
May not total due to rounding.
|
|
(4)
|
|
This represents projected payments
under certain unfunded retirement plans for former
pre-incorporation partners. Because both of these plans are
unfunded, we pay these benefits directly. These plans were
eliminated for active partners after May 15, 2001.
|
|
(5)
|
|
Other commitments include, among
other things, information technology, software support and
maintenance obligations, as well as other obligations in the
ordinary course of business that we cannot cancel or where we
would be required to pay a termination fee in the event of
cancellation. Amounts shown do not include recourse that we may
have to recover termination fees or penalties from clients.
|
Off-Balance
Sheet Arrangements
We have various agreements by which we may be obligated to
indemnify the other party with respect to certain matters.
Generally, these indemnification provisions are included in
contracts arising in the normal course of business under which
we customarily agree to hold the indemnified party
68
harmless against losses arising from a breach of representations
related to such matters as title to assets sold, licensed or
certain intellectual property rights and other matters. Payments
by us under such indemnification clauses are generally
conditioned on the other party making a claim. Such claims are
generally subject to challenge by us and dispute resolution
procedures specified in the particular contract. Furthermore,
our obligations under these arrangements may be limited in terms
of time
and/or
amount and, in some instances, we may have recourse against
third parties for certain payments made by us. It is not
possible to predict the maximum potential amount of future
payments under these indemnification agreements due to the
conditional nature of our obligations and the unique facts of
each particular agreement. Historically, we have not made any
payments under these agreements that have been material
individually or in the aggregate. As of August 31, 2008, we
were not aware of any obligations under such indemnification
agreements that would require material payments.
From time to time, we enter into contracts with clients whereby
we have joint and several liability with other participants
and/or third
parties providing related services and products to clients.
Under these arrangements, we and other parties may assume some
responsibility to the client or a third party for the
performance of others under the terms and conditions of the
contract with or for the benefit of the client or in relation to
the performance of certain contractual obligations. To date, we
have not been required to make any payments under any of the
contracts described in this paragraph. For further discussion of
these transactions, see Note 16 (Commitments and
Contingencies) to our Consolidated Financial Statements under
Financial Statements and Supplementary Data.
Recently
Adopted Accounting Pronouncements
On September 1, 2007, we adopted the provisions of
FIN 48, which is a change in accounting for income taxes.
FIN 48 specifies how tax benefits for uncertain tax
positions are to be recognized, measured and derecognized in
financial statements; requires certain disclosures of uncertain
tax matters; specifies how reserves for uncertain tax positions
should be classified in the balance sheet; and provides
transition and interim-period guidance, among other provisions.
For additional information, see Note 10 (Income Taxes) to
our Consolidated Financial Statements under Item 1,
Financial Statements.
New
Accounting Pronouncements
In March 2008, the FASB issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging
Activities, an amendment of FASB Statement
No. 133. This Statement requires enhanced
disclosures for derivative instruments and hedging activities
about (i) how and why a company uses derivative
instruments, (ii) how derivative instruments and related
hedged items are accounted for under SFAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities and its related interpretations, and
(iii) how derivative instruments and related hedged items
affect a Companys financial position, financial
performance and cash flows. We will adopt the provisions of
SFAS 161 on December 1, 2008. We are currently
assessing the potential impact that adoption of
SFAS No. 161 may have on our Consolidated Financial
Statements.
In December 2007, the FASB issued SFAS No. 141 (revised
2007), Business Combinations
(SFAS 141R), which is a revision of
SFAS 141, Business Combinations. SFAS 141R
establishes principles and requirements for: recognizing and
measuring the identifiable assets acquired, the liabilities
assumed and any noncontrolling interest in the acquiree;
recognizing and measuring the goodwill acquired in the business
combination or a gain from a bargain purchase; expensing
acquisition related costs as incurred; and determining what
information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the
business combination. We will adopt the provisions of
SFAS 141R for acquisitions that occur on or after
September 1, 2009. The
69
impact of SFAS 141R on our Consolidated Financial
Statements will depend on the size and nature of any
acquisitions on or after September 1, 2009.
In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51
(SFAS 160). SFAS 160 establishes
accounting and reporting standards for the noncontrolling
interest in a subsidiary (previously referred to as minority
interests). Upon adoption of SFAS 160 on September 1,
2009, our minority interest will be reported as a separate
component of Consolidated Shareholders Equity.
In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements
(SFAS 157), which defines fair value,
establishes a framework for measuring fair value in
U.S. generally accepted accounting principles and expands
disclosures about fair value measurements. SFAS 157 does
not require any new fair value measurements, but provides
guidance on how to measure fair value by providing a fair value
hierarchy used to classify the source of the information. In
February 2008, the FASB issued FASB Staff Position
157-2,
Effective Date of FASB Statement No. 157
(FSP 157-2),
which delays the effective date of SFAS 157 for all
non-financial assets and non-financial liabilities, except for
items that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually).
On September 1, 2008, we adopted the provisions of
SFAS 157 and it did not have a material impact on our
Consolidated Financial Statements. On September 1, 2009, we
will adopt the provisions of
FSP 157-2,
and we are currently assessing the potential impact that
adoption of
FSP 157-2
may have on our Consolidated Financial Statements.
|
|
ITEM 7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
All of our market risk sensitive instruments were entered into
for purposes other than trading.
Foreign
Currency Risk
We are exposed to foreign currency risk in the ordinary course
of business. We hedge material cash flow exposures when feasible
using forward contracts. These instruments are subject to
fluctuations in foreign exchange rates and credit risk. Credit
risk is managed through careful selection and ongoing evaluation
of the financial institutions utilized as counterparties.
Certain of these hedge positions are undesignated hedges of
balance sheet exposures such as intercompany loans and typically
have maturities of less than one year. These
hedgesprimarily U.S. dollar/Indian rupee, U.S.
dollar/euro, U.S. dollar/Swiss franc, U.S. dollar/yen and U.S.
dollar/Norwegian kroneare intended to offset remeasurement
of the underlying assets and liabilities. Changes in the fair
value of these derivatives are recorded in Other expense, net in
the Consolidated Income Statement. Additionally, we have hedge
positions that are designated cash flow hedges of certain
intercompany charges relating to our Global Delivery Network and
typically have maturities not exceeding three years. These
hedgesU.S. dollar/Indian rupee, U.S. dollar/Philippine
peso and U.K. pound/Indian rupeeare intended to partially
offset the impact of currency movements on future costs relating
to resources supplied by Accentures Global Delivery
Network.
For designated cash flow hedges, gains (losses) currently
recorded in Accumulated Other Comprehensive Income will be
reclassified into earnings at the time when certain anticipated
intercompany charges are accrued as Cost of Services. As of
August 31, 2008, it is anticipated that $2.2 million
of the net gains, net of tax currently recorded in Accumulated
Other Comprehensive Income will be reclassified into Cost of
Services within the next 12 months.
We use sensitivity analysis to determine the effects that market
exchange rate fluctuations may have on the fair value of our
hedge portfolio. The sensitivity of the hedge portfolio is
computed based on the market value of future cash flows as
affected by changes in exchange rates. This sensitivity
70
analysis represents the hypothetical changes in value of the
hedge position and does not reflect the offsetting gain or loss
on the underlying exposure. A 10% change in the levels of
foreign currency exchange rates against the U.S. dollar (or
other base currency of the hedge if not a U.S. dollar hedge)
with all other variables held constant would have resulted in a
change in the fair value of our hedge instruments of
approximately $146 million and $9 million as of
August 31, 2008 and 2007, respectively.
Interest
Rate Risk
The interest rate risk associated with our borrowing and
investing activities as of August 31, 2008 is not material
in relation to our consolidated financial position, results of
operations or cash flows. While we may do so in the future, we
have not used derivative financial instruments to alter the
interest rate characteristics of our investment holdings or debt
instruments.
Equity
Price Risk
The equity price risk associated with our marketable equity
securities that are subject to market price volatility is not
material in relation to our consolidated financial position,
results of operations or cash flows.
|
|
ITEM 8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
See the index included on
page F-1,
Index to Consolidated Financial Statements.
|
|
ITEM 9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
None.
|
|
ITEM 9A.
|
CONTROLS
AND PROCEDURES
|
|
|
(a)
|
Evaluation
of Disclosure Controls and Procedures
|
An evaluation was performed under the supervision and with the
participation of our management, including our chief executive
officer and our chief financial officer, 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.
Based on that evaluation, the chief executive officer and the
chief financial officer of Accenture Ltd have concluded that, as
of the end of the period covered by this report, Accenture
Ltds disclosure controls and procedures are effective.
|
|
(b)
|
Managements
Annual Report on Internal Control over Financial
Reporting
|
Accentures management is responsible for establishing and
maintaining adequate internal control over financial reporting
to provide reasonable assurance regarding the reliability of our
financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted
accounting principles. Internal control over financial reporting
includes those policies and procedures that:
(i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets;
(ii) provide reasonable assurance that the transactions are
recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles,
71
and that our receipts and expenditures are being made only in
accordance with the authorization of management
and/or our
Board of Directors; and
(iii) provide reasonable assurance regarding the prevention
or timely detection of any unauthorized acquisition, use or
disposition of our assets that could have a material effect on
our financial statements.
Due to its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate due
to changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Under the supervision and with the participation of our
management, including our chief executive officer and chief
financial officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting
using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal
ControlIntegrated Framework. Based on its evaluation, our
management concluded that our internal control over financial
reporting was effective as of the end of the period covered by
this Annual Report on
Form 10-K.
KPMG LLP, an independent registered public accounting firm, has
audited the Consolidated Financial Statements included in this
Annual Report on
Form 10-K
and, as part of their audit, has issued its attestation report,
included herein, on the effectiveness of our internal control
over financial reporting. See Report of Independent
Registered Public Accounting Firm on
page F-2.
|
|
(c)
|
Changes
in Internal Control over Financial Reporting
|
There has been no change in Accenture Ltds internal
control over financial reporting that occurred during the fourth
quarter of fiscal 2008 that has materially affected, or is
reasonably likely to materially affect, Accenture Ltds
internal control over financial reporting.
|
|
ITEM 9B.
|
OTHER
INFORMATION
|
None.
72
PART III
|
|
ITEM 10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Information about our directors is incorporated by reference
from the discussion under the heading Board and Corporate
Governance MattersDirector Biographies in the Proxy
Statement for our 2009 Annual General Meeting of Shareholders
(the 2009 Proxy Statement). Information about our
executive officers is contained in the discussion entitled
Executive Officers of the Registrant in Part I
of this
Form 10-K.
Information about compliance with Section 16(a) of the
Exchange Act is incorporated by reference from the discussion
under the heading Section 16(a) Beneficial Ownership
Reporting Compliance in the 2009 Proxy Statement.
Information about our Code of Business Ethics governing our
employees, including our chief executive officer, chief
financial officer and principal accounting officer, is
incorporated by reference from the discussion under the heading
Board and Corporate Governance MattersBoard Meetings
and Committees in the 2009 Proxy Statement. Information
about our Audit Committee, including the members of the
Committee, and our Audit Committee financial experts is
incorporated by reference from the discussion under the heading
Board and Corporate Governance MattersAudit
Committee in the 2009 Proxy Statement.
There have been no material changes to the procedures by which
security holders may recommend nominees to our Board of
Directors from those described in the Proxy Statement for our
Annual General Meeting of Shareholders filed with the SEC on
December 28, 2007.
|
|
ITEM 11.
|
EXECUTIVE
COMPENSATION
|
Information about director and executive compensation is
incorporated by reference from the discussion under the headings
Compensation of Executive Officers and Directors,
Compensation Committee Interlocks and Insider
Participation and Reports of the Committees of the
BoardCompensation Committee Report in the 2009 Proxy
Statement.
|
|
ITEM 12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS
|
Information about security ownership of certain beneficial
owners and management and related shareholder matters is
incorporated by reference from the discussion under the headings
Beneficial Ownership of Directors and Executive
Officers and Beneficial Ownership of More Than Five
Percent of Any Class of Voting Securities in the 2009
Proxy Statement.
73
Securities
Authorized for Issuance under Equity Compensation
Plans
The following table sets forth, as of August 31, 2008,
certain information related to our compensation plans under
which Accenture Ltd Class A common shares may be issued.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
Number of Shares
|
|
|
|
|
|
Remaining Available
|
|
|
|
to be Issued Upon
|
|
|
|
|
|
for Future Issuance
|
|
|
|
Exercise of
|
|
|
Weighted-Average
|
|
|
Under Equity
|
|
|
|
Outstanding
|
|
|
Exercise Price of
|
|
|
Compensation Plans
|
|
|
|
Options,
|
|
|
Outstanding
|
|
|
(Excluding
|
|
|
|
Warrants and
|
|
|
Options, Warrants
|
|
|
Securities Reflected
|
|
Plan Category
|
|
Rights
|
|
|
and Rights
|
|
|
in 1st Column)
|
|
|
Equity compensation plans approved by shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
2001 Share Incentive Plan
|
|
|
89,666,887
|
(1)
|
|
$
|
19.14
|
|
|
|
140,153,960
|
|
2001 Employee Share Purchase Plan
|
|
|
|
|
|
|
N/A
|
|
|
|
21,672,757
|
|
Equity compensation plans not approved by shareholders
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
89,666,887
|
|
|
|
|
|
|
|
161,826,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Consists of 34,981,064 stock
options with a weighted average exercise price of $19.14 per
share and 54,685,823 restricted share units.
|
|
|
ITEM 13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
Information about certain relationships and transactions with
related persons is incorporated by reference from the discussion
under the heading Board and Corporate Governance
MattersCertain Relationships and Related Person
Transactions in the 2009 Proxy Statement. Information
about director independence is incorporated by reference from
the discussion under the heading Board and Corporate
Governance MattersDirector Independence in the 2009
Proxy Statement.
|
|
ITEM 14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
Information about the fees for professional services rendered by
our independent auditors in 2008 and 2007 and our Audit
Committees policy on pre-approval of audit and permissible
non-audit services of our independent auditors is incorporated
by reference from the discussion under the heading
Independent Auditors Fees in the 2009 Proxy
Statement.
PART IV
|
|
ITEM 15.
|
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
|
(a) List of documents filed as part of this report:
|
|
1. |
Financial Statements as of August 31, 2008 and
August 31, 2007 and for the three years ended
August 31, 2008Included in Part II of this Form
10-K:
|
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Shareholders Equity and Comprehensive Income
Statements
Consolidated Cash Flows Statements
Notes to Consolidated Financial Statements
74
|
|
2. |
Financial Statement Schedules:
|
None
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit
|
|
|
3
|
.1
|
|
Memorandum of Continuance of the Registrant, dated
February 21, 2001 (incorporated by reference to
Exhibit 3.1 to the Registrants Registration Statement
on
Form S-1/A
filed on July 2, 2001 (the July 2, 2001
Form S-1/A)).
|
|
3
|
.2
|
|
Form of Bye-laws of the Registrant, effective as of
February 7, 2008 (incorporated by reference to
Exhibit 3.1 to the February 29, 2008
10-Q).
|
|
9
|
.1
|
|
Form of Voting Agreement, dated as of April 18, 2001, among
the Registrant and the covered persons party thereto as amended
and restated as of February 3, 2005 (incorporated by
reference to Exhibit 9.1 to the February 28, 2005
10-Q).
|
|
10
|
.1
|
|
Form of Non-Competition Agreement, dated as of April 18,
2001, among the Registrant and certain employees (incorporated
by reference to Exhibit 10.2 to the Registrants
Registration Statement on
Form S-1
filed on April 19, 2001 (the April 19, 2001
Form S-1)).
|
|
10
|
.2
|
|
2001 Share Incentive Plan (incorporated by reference to
Exhibit 10.3 to the Registrants Registration
Statement on
Form S-1/A
filed on July 12, 2001).
|
|
10
|
.3
|
|
2001 Employee Share Purchase Plan (incorporated by reference to
Exhibit 10.1 to the November 30, 2001
10-Q).
|
|
10
|
.4
|
|
Form of Articles of Association of Accenture SCA, updated as of
December 14, 2007 (incorporated by reference to
Exhibit 3.2 to the November 30, 2007
10-Q).
|
|
10
|
.5
|
|
Form of Accenture SCA Transfer Rights Agreement, dated as of
April 18, 2001, among Accenture SCA and the covered persons
party thereto as amended and restated as of February 3,
2005 (incorporated by reference to Exhibit 10.2 to the
February 28, 2005
10-Q).
|
|
10
|
.6
|
|
Form of Non-Competition Agreement, dated as of April 18,
2001, among Accenture SCA and certain employees (incorporated by
reference to Exhibit 10.7 to the April 19, 2001
Form S-1).
|
|
10
|
.7
|
|
Form of Letter Agreement, dated April 18, 2001, between
Accenture SCA and certain shareholders of Accenture SCA
(incorporated by reference to Exhibit 10.8 to the
April 19, 2001
Form S-1).
|
|
10
|
.8
|
|
Form of Support Agreement, dated as of May 23, 2001,
between the Registrant and Accenture Canada Holdings Inc.
(incorporated by reference to Exhibit 10.9 to the
July 2, 2001
Form S-1/A).
|
|
10
|
.9
|
|
Form of Employment Agreement of Messrs. Campbell, Cole,
Frerichs, Green, Rohleder and Scrivner and Ms. Craig
(incorporated by reference to Exhibit 10.10 to the
Registrants Registration Statement on
Form S-1/A
filed on June 8, 2001 (the June 8, 2001
S-1/A)).
|
|
10
|
.10
|
|
Form of Employment Agreement of Karl-Heinz Flöther (filed
herewith).
|
|
10
|
.11
|
|
Form of Employment Agreement of Messrs. Coughlan and Foster
(filed herewith).
|
|
10
|
.12
|
|
Form of Employment Agreement of Gianfranco Casati (English
translation) (filed herewith).
|
|
10
|
.13
|
|
Form of Employment Agreement of Alexander van t Noordende
(English translation) (incorporated by reference to
Exhibit 10.14 to the August 31, 2006
10-K).
|
|
10
|
.14
|
|
Form of Employment Agreement of Pierre Nanterme (English
translation) (incorporated by reference to Exhibit 10.14 to
the August 31, 2007
10-K).
|
|
10
|
.15
|
|
Form of Employment Agreement of Juan Domenech (English
translation) (filed herewith).
|
|
10
|
.16
|
|
Form of Articles of Association of Accenture Canada Holdings
Inc. (incorporated by reference to Exhibit 10.11 to the
July 2, 2001
Form S-1/A).
|
75
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit
|
|
|
10
|
.17
|
|
Form of Exchange Trust Agreement by and between the
Registrant and Accenture Canada Holdings Inc. and CIBC Mellon
Trust Company, made as of May 23, 2001 (incorporated
by reference to Exhibit 10.12 to the July 2, 2001
Form S-1/A).
|
|
10
|
.18
|
|
Form of Transfer Restriction Agreement dated as of
October 1, 2002 among Accenture Ltd and the transferors and
transferees signatory thereto (incorporated by reference to
Exhibit 9.1 to the November 30, 2002
10-Q).
|
|
10
|
.19
|
|
Form of Transfer Restriction Agreement dated as of
October 1, 2002 among Accenture SCA and the transferors and
transferees signatory thereto (incorporated by reference to
Exhibit 9.1 to Accenture SCAs November 30, 2002
10-Q).
|
|
10
|
.20
|
|
Form of First Amendment, dated as of May 1, 2003, to
Transfer Restriction Agreement dated as of October 1, 2002
among Accenture Ltd and the transferors and transferees
signatory thereto (incorporated by reference to
Exhibit 99.(d)(13) to Accenture SCAs and Accenture
International SARLs Schedule TO filed on
September 30, 2003).
|
|
10
|
.21
|
|
Form of First Amendment, dated as of May 1, 2003, to
Transfer Restriction Agreement dated as of October 1, 2002
among Accenture SCA and the transferors and transferees
signatory thereto (incorporated by reference to
Exhibit 99.(d)(14) to Accenture SCAs and Accenture
International SARLs Schedule TO filed on
September 30, 2003).
|
|
10
|
.22
|
|
Form of Second Amendment, dated as of October 1, 2003, to
Transfer Restriction Agreement dated as of October 1, 2002
among Accenture Ltd and the transferors and transferees
signatory thereto (incorporated by reference to
Exhibit 99.(d)(15) to Accenture SCAs and Accenture
International SARLs Schedule TO filed on
April 29, 2004).
|
|
10
|
.23
|
|
Form of Second Amendment, dated as of October 1, 2003, to
Transfer Restriction Agreement dated as of October 1, 2002
among Accenture SCA and the transferors and transferees
signatory thereto (incorporated by reference to
Exhibit 99.(d)(16) to Accenture SCAs and Accenture
International SARLs Schedule TO filed on
April 29, 2004).
|
|
10
|
.24
|
|
Form of Ltd Transfer Restriction Agreement for the Accenture
Family and Charitable Transfer Program dated as of April 1,
2005 among Accenture Ltd and the transferors and transferees
signatory thereto (incorporated by reference to
Exhibit 10.3 to the May 31, 2005
10-Q).
|
|
10
|
.25
|
|
Form of SCA Transfer Restriction Agreement for the Accenture
Family and Charitable Transfer Program dated as of April 1,
2005 among Accenture SCA and the transferors and transferees
signatory thereto (incorporated by reference to
Exhibit 10.2 to the May 31, 2005
10-Q).
|
|
10
|
.26
|
|
Form of Transfer Agreement (for transfers of
Unrestricted Shares of Accenture Ltd) for the
Accenture Family and Charitable Transfer Program dated as of
April 1, 2005 among Accenture Ltd and the transferors and
transferees signatory thereto (incorporated by reference to
Exhibit 10.5 to the May 31, 2005
10-Q).
|
|
10
|
.27
|
|
Form of Transfer Agreement (for transfers of
Unrestricted Shares of Accenture SCA) for the
Accenture Family and Charitable Transfer Program dated as of
April 1, 2005 among Accenture SCA and the transferors and
transferees signatory thereto (incorporated by reference to
Exhibit 10.4 to the May 31, 2005
10-Q).
|
|
10
|
.28
|
|
Form of Restricted Share Unit Agreement for senior executives
pursuant to the Accenture Ltd 2001 Share Incentive Plan
(incorporated by reference to Exhibit 4.1 to the
November 30, 2004
10-Q).
|
|
10
|
.29
|
|
Form of Nonqualified Share Option Agreement for senior
executives pursuant to the Accenture Ltd 2001 Share
Incentive Plan (incorporated by reference to Exhibit 4.2 to
the November 30, 2004
10-Q).
|
76
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit
|
|
|
10
|
.30
|
|
Form of Key Executive Performance-Based Award Restricted Share
Unit Agreement pursuant to Accenture Ltd 2001 Share
Incentive Plan (incorporated by reference to Exhibit 10.1
to the February 28, 2007
10-Q).
|
|
10
|
.31
|
|
Form of Senior Officer Performance Equity Award Restricted Share
Unit Agreement pursuant to Accenture Ltd 2001 Share
Incentive Plan (incorporated by reference to Exhibit 10.2
to the February 28, 2007
10-Q).
|
|
10
|
.32
|
|
Form of Senior Leadership Equity Award Restricted Share Unit
Agreement pursuant to Accenture Ltd 2001 Share Incentive
Plan (incorporated by reference to Exhibit 10.3 to the
February 28, 2007
10-Q).
|
|
10
|
.33
|
|
Form of Voluntary Equity Investment Program Matching Grant
Restricted Share Unit Agreement pursuant to Accenture Ltd
2001 Share Incentive Plan (incorporated by reference to
Exhibit 10.4 to the February 28, 2007
10-Q).
|
|
10
|
.34
|
|
Form of Restricted Share Unit Agreement for director grants
pursuant to Accenture Ltd 2001 Share Incentive Plan
(incorporated by reference to Exhibit 10.1 to the
February 29, 2008
10-Q).
|
|
10
|
.35
|
|
Description of Annual Bonus Plan (incorporated by reference to
Exhibit 10.1 to the February 28, 2006
10-Q).
|
|
21
|
.1
|
|
Subsidiaries of the Registrant (filed herewith).
|
|
23
|
.1
|
|
Consent of KPMG LLP (filed herewith).
|
|
23
|
.2
|
|
Consent of KPMG LLP related to the Accenture Ltd 2001 Employee
Share Purchase Plan (filed herewith).
|
|
24
|
.1
|
|
Power of Attorney (included on the signature page hereto).
|
|
31
|
.1
|
|
Certification of the Chief Executive Officer pursuant to
Rules 13a-14(a)
and 15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
31
|
.2
|
|
Certification of the Chief Financial Officer pursuant to
Rules 13a-14(a)
and 15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
32
|
.1
|
|
Certification of the Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
32
|
.2
|
|
Certification of the Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
99
|
.1
|
|
Accenture Ltd 2001 Employee Share Purchase Plan Financial
Statements (filed herewith).
|
77
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf on October 20, 2008
by the undersigned, thereunto duly authorized.
Accenture Ltd
Name: William D. Green
Title: Chief Executive Officer
POWER OF
ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints William
D. Green, Pamela J. Craig and Douglas G. Scrivner, and each of
them, as his or her true and lawful attorneys-in-fact and
agents, with power to act with or without the others and with
full power of substitution and resubstitution, to do any and all
acts and things and to execute any and all instruments which
said attorneys and agents and each of them may deem necessary or
desirable to enable the registrant to comply with the
U.S. Securities Exchange Act of 1934, as amended, and any
rules, regulations and requirements of the U.S. Securities
and Exchange Commission thereunder in connection with the
registrants Annual Report on
Form 10-K
for the fiscal year ended August 31, 2008 (the Annual
Report), including specifically, but without limiting the
generality of the foregoing, power and authority to sign the
name of the registrant and the name of the undersigned,
individually and in his or her capacity as a director or officer
of the registrant, to the Annual Report as filed with the
U.S. Securities and Exchange Commission, to any and all
amendments thereto, and to any and all instruments or documents
filed as part thereof or in connection therewith; and each of
the undersigned hereby ratifies and confirms all that said
attorneys and agents and each of them shall do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below on October 20, 2008
by the following persons on behalf of the registrant and in the
capacities indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/ William
D. Green
William
D. Green
|
|
Chief Executive Officer,
Chairman of the Board and Director
(principal executive officer)
|
|
|
|
/s/ Dina
Dublon
Dina
Dublon
|
|
Director
|
|
|
|
/s/ Dennis
F. Hightower
Dennis
F. Hightower
|
|
Director
|
|
|
|
/s/ Nobuyuki
Idei
Nobuyuki
Idei
|
|
Director
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/ William
L. Kimsey
William
L. Kimsey
|
|
Director
|
|
|
|
/s/ Robert
I. Lipp
Robert
I. Lipp
|
|
Director
|
|
|
|
/s/ Marjorie
Magner
Marjorie
Magner
|
|
Director
|
|
|
|
/s/ Blythe
J. McGarvie
Blythe
J. McGarvie
|
|
Director
|
|
|
|
/s/ Sir
Mark Moody-Stuart
Sir
Mark Moody-Stuart
|
|
Director
|
|
|
|
/s/ Wulf
von Schimmelmann
Wulf
von Schimmelmann
|
|
Director
|
|
|
|
/s/ Pamela
J. Craig
Pamela
J. Craig
|
|
Chief Financial Officer
(principal financial officer)
|
|
|
|
/s/ Anthony
G. Coughlan
Anthony
G. Coughlan
|
|
Principal Accounting Officer and Controller
(principal accounting officer)
|
ACCENTURE
LTD
INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
Page
|
|
|
|
|
F-2
|
|
Consolidated Financial Statements as of August 31, 2008 and
2007 and for the three years ended August 31, 2008:
|
|
|
|
|
|
|
|
F-4
|
|
|
|
|
F-5
|
|
|
|
|
F-6
|
|
|
|
|
F-8
|
|
|
|
|
F-9
|
|
F-1
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Accenture Ltd:
We have audited the accompanying Consolidated Balance Sheets of
Accenture Ltd and its subsidiaries as of August 31, 2008
and 2007, and the related Consolidated Statements of Income,
Shareholders Equity and Comprehensive Income, and Cash
Flows for each of the years in the three-year period ended
August 31, 2008. We also have audited Accenture Ltds
internal control over financial reporting as of August 31,
2008, based on criteria established in Internal
ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Accenture Ltds management is responsible for these
Consolidated Financial Statements, for maintaining effective
internal control over financial reporting, and for its
assessment of the effectiveness of internal control over
financial reporting, included in the accompanying
Managements Annual Report On Internal Control Over
Financial Reporting (Item 9A(b)). Our responsibility is to
express an opinion on these consolidated financial statements
and an opinion on the Companys internal control over
financial reporting based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are
free of material misstatement and whether effective internal
control over financial reporting was maintained in all material
respects. Our audits of the consolidated financial statements
included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. Our audit of internal control over financial
reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our
opinions.
A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A companys
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In our opinion, the Consolidated Financial Statements referred
to above present fairly, in all material respects, the financial
position of Accenture Ltd and its subsidiaries as of
August 31, 2008 and 2007, and the results of their
operations and their cash flows for each of the years in the
three-
F-2
year period ended August 31, 2008, in conformity with
U.S. generally accepted accounting principles. Also in our
opinion, Accenture Ltd maintained, in all material respects,
effective internal control over financial reporting as of
August 31, 2008, based on criteria established in
Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
As disclosed in Note 10 to the Consolidated Financial
Statements, the Company, as of September 1, 2007, changed
its method of accounting for uncertain tax positions. As
disclosed in Note 11 to the Consolidated Financial
Statements, the Company, as of August 31, 2007, changed its
method of accounting for defined benefit pension and other post
retirement plans. Additionally, as disclosed in Note 1 to
the Consolidated Financial Statements, the Company, as of
September 1, 2005, changed its method of accounting for
share-based awards.
/s/ KPMG LLP
Chicago, Illinois
October 20, 2008
F-3
ACCENTURE
LTD
CONSOLIDATED
BALANCE SHEETS
August 31,
2008 and 2007
(In thousands of U.S. dollars, except share and per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
ASSETS
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,602,760
|
|
|
$
|
3,314,396
|
|
Short-term investments
|
|
|
20,282
|
|
|
|
231,278
|
|
Receivables from clients, net
|
|
|
2,996,815
|
|
|
|
2,409,299
|
|
Unbilled services, net
|
|
|
1,518,580
|
|
|
|
1,290,035
|
|
Deferred income taxes, net
|
|
|
425,859
|
|
|
|
318,172
|
|
Other current assets
|
|
|
594,832
|
|
|
|
407,998
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
9,159,128
|
|
|
|
7,971,178
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Unbilled services, net
|
|
|
43,627
|
|
|
|
63,995
|
|
Investments
|
|
|
19,034
|
|
|
|
81,935
|
|
Property and equipment, net
|
|
|
800,164
|
|
|
|
808,069
|
|
Goodwill
|
|
|
839,957
|
|
|
|
643,728
|
|
Deferred contract costs
|
|
|
539,856
|
|
|
|
407,640
|
|
Deferred income taxes, net
|
|
|
613,943
|
|
|
|
389,858
|
|
Other non-current assets
|
|
|
382,816
|
|
|
|
380,759
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
3,239,397
|
|
|
|
2,775,984
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
12,398,525
|
|
|
$
|
10,747,162
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Current portion of long-term debt and bank borrowings
|
|
$
|
6,570
|
|
|
$
|
23,795
|
|
Accounts payable
|
|
|
1,017,227
|
|
|
|
985,071
|
|
Deferred revenues
|
|
|
1,810,661
|
|
|
|
1,701,990
|
|
Accrued payroll and related benefits
|
|
|
2,809,196
|
|
|
|
2,274,098
|
|
Accrued consumption taxes
|
|
|
343,658
|
|
|
|
220,219
|
|
Income taxes payable
|
|
|
249,986
|
|
|
|
942,310
|
|
Deferred income taxes, net
|
|
|
57,258
|
|
|
|
39,078
|
|
Other accrued liabilities
|
|
|
553,322
|
|
|
|
692,759
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
6,847,878
|
|
|
|
6,879,320
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
1,708
|
|
|
|
2,565
|
|
Deferred revenues relating to contract costs
|
|
|
555,935
|
|
|
|
303,159
|
|
Retirement obligation
|
|
|
483,857
|
|
|
|
494,416
|
|
Deferred income taxes, net
|
|
|
32,258
|
|
|
|
31,758
|
|
Income taxes payable
|
|
|
1,086,244
|
|
|
|
32,330
|
|
Other non-current liabilities
|
|
|
197,970
|
|
|
|
200,096
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
2,357,972
|
|
|
|
1,064,324
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MINORITY INTEREST
|
|
|
652,169
|
|
|
|
740,186
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS EQUITY:
|
|
|
|
|
|
|
|
|
Preferred shares, 2,000,000,000 shares authorized, zero
shares issued and outstanding
|
|
|
|
|
|
|
|
|
Class A common shares, par value $0.0000225 per share,
20,000,000,000 shares authorized, 659,097,033 and
635,108,578 shares issued as of August 31, 2008 and
August 31, 2007, respectively
|
|
|
15
|
|
|
|
14
|
|
Class X common shares, par value $0.0000225 per share,
1,000,000,000 shares authorized, 118,331,269 and
162,629,929 shares issued and outstanding as of
August 31, 2008 and August 31, 2007, respectively
|
|
|
3
|
|
|
|
4
|
|
Restricted share units
|
|
|
819,577
|
|
|
|
649,475
|
|
Additional paid-in capital
|
|
|
|
|
|
|
|
|
Treasury shares, at cost, 46,215,019 and 39,187,569 shares
as of August 31, 2008 and August 31, 2007, respectively
|
|
|
(1,405,732
|
)
|
|
|
(1,033,025
|
)
|
Retained earnings
|
|
|
3,120,515
|
|
|
|
2,362,703
|
|
Accumulated other comprehensive income
|
|
|
6,128
|
|
|
|
84,161
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
2,540,506
|
|
|
|
2,063,332
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
|
|
$
|
12,398,525
|
|
|
$
|
10,747,162
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes are an
integral part of these Consolidated Financial Statements.
F-4
ACCENTURE
LTD
CONSOLIDATED
INCOME STATEMENTS
For the
Years Ended August 31, 2008, 2007 and 2006
(In thousands of U.S. dollars, except share and per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues before reimbursements (Net revenues)
|
|
$
|
23,386,802
|
|
|
$
|
19,695,814
|
|
|
$
|
16,646,391
|
|
Reimbursements
|
|
|
1,927,024
|
|
|
|
1,756,933
|
|
|
|
1,581,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
25,313,826
|
|
|
|
21,452,747
|
|
|
|
18,228,366
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services before reimbursable expenses
|
|
|
16,201,217
|
|
|
|
13,654,341
|
|
|
|
11,652,216
|
|
Reimbursable expenses
|
|
|
1,927,024
|
|
|
|
1,756,933
|
|
|
|
1,581,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
18,128,241
|
|
|
|
15,411,274
|
|
|
|
13,234,191
|
|
Sales and marketing
|
|
|
2,270,789
|
|
|
|
1,903,990
|
|
|
|
1,708,392
|
|
General and administrative costs
|
|
|
1,880,342
|
|
|
|
1,618,498
|
|
|
|
1,492,690
|
|
Reorganization costs (benefits), net
|
|
|
22,872
|
|
|
|
26,366
|
|
|
|
(47,966
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
22,302,244
|
|
|
|
18,960,128
|
|
|
|
16,387,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
3,011,582
|
|
|
|
2,492,619
|
|
|
|
1,841,059
|
|
Gain on investments, net
|
|
|
6,476
|
|
|
|
18,532
|
|
|
|
2,018
|
|
Interest income
|
|
|
114,621
|
|
|
|
154,566
|
|
|
|
129,547
|
|
Interest expense
|
|
|
(22,704
|
)
|
|
|
(25,036
|
)
|
|
|
(21,146
|
)
|
Other expense, net
|
|
|
(2,213
|
)
|
|
|
(21,763
|
)
|
|
|
(27,811
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
|
|
3,107,762
|
|
|
|
2,618,918
|
|
|
|
1,923,667
|
|
Provision for income taxes
|
|
|
910,574
|
|
|
|
895,861
|
|
|
|
490,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE MINORITY INTEREST
|
|
|
2,197,188
|
|
|
|
1,723,057
|
|
|
|
1,433,132
|
|
Minority interest in Accenture SCA and Accenture Canada Holdings
Inc.
|
|
|
(485,891
|
)
|
|
|
(453,917
|
)
|
|
|
(447,382
|
)
|
Minority interestother
|
|
|
(19,546
|
)
|
|
|
(25,992
|
)
|
|
|
(12,421
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
1,691,751
|
|
|
$
|
1,243,148
|
|
|
$
|
973,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average Class A common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
610,949,205
|
|
|
|
604,128,805
|
|
|
|
589,099,824
|
|
Diluted
|
|
|
822,371,710
|
|
|
|
862,431,623
|
|
|
|
894,664,164
|
|
Earnings per Class A common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.77
|
|
|
$
|
2.06
|
|
|
$
|
1.65
|
|
Diluted
|
|
$
|
2.65
|
|
|
$
|
1.97
|
|
|
$
|
1.59
|
|
Cash dividends per share
|
|
$
|
0.42
|
|
|
$
|
0.35
|
|
|
$
|
0.30
|
|
The accompanying Notes are an
integral part of these Consolidated Financial Statements.
F-5
ACCENTURE
LTD
CONSOLIDATED
SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
STATEMENTS
For the
Years Ended August 31, 2008, 2007 and 2006
(In thousands of U.S. dollars and in thousands of share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
Class X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Common
|
|
|
Restricted
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
|
|
|
|
|
|
|
Preferred
|
|
|
Shares
|
|
|
Shares
|
|
|
Share
|
|
|
Paid-in
|
|
|
Treasury Shares
|
|
|
Retained
|
|
|
Income
|
|
|
|
|
|
|
Shares
|
|
|
$
|
|
|
No. Shares
|
|
|
$
|
|
|
No. Shares
|
|
|
Units
|
|
|
Capital
|
|
|
$
|
|
|
No. Shares
|
|
|
Earnings
|
|
|
(Loss)
|
|
|
Total
|
|
|
Balance as of August 31, 2005
|
|
$
|
|
|
|
$
|
13
|
|
|
|
602,706
|
|
|
$
|
7
|
|
|
|
321,088
|
|
|
$
|
365,708
|
|
|
$
|
1,365,013
|
|
|
$
|
(763,682
|
)
|
|
|
(32,266
|
)
|
|
$
|
962,339
|
|
|
$
|
(232,484
|
)
|
|
$
|
1,696,914
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
973,329
|
|
|
|
|
|
|
|
973,329
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized losses on marketable securities, net of
reclassification adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,260
|
)
|
|
|
(1,260
|
)
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,423
|
|
|
|
52,423
|
|
Minimum pension liability adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
154,827
|
|
|
|
154,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
205,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,179,319
|
|
Income tax benefit on:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,508
|
|
Contract termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
497
|
|
|
|
|
|
|
|
497
|
|
Purchases of Class A common shares
|
|
|
|
|
|
|
|
|
|
|
(581
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,192
|
)
|
|
|
(366,481
|
)
|
|
|
(15,470
|
)
|
|
|
|
|
|
|
|
|
|
|
(382,673
|
)
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
152,158
|
|
|
|
112,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
265,110
|
|
Purchases/redemptions of Accenture SCA Class I common
shares, Accenture Canada Holdings Inc. exchangeable shares and
Class X common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(76,081
|
)
|
|
|
|
|
|
|
(1,704,353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,704,354
|
)
|
Issuances of Class A common shares related to employee
share programs
|
|
|
|
|
|
|
1
|
|
|
|
15,441
|
|
|
|
|
|
|
|
|
|
|
|
(49,141
|
)
|
|
|
273,089
|
|
|
|
260,206
|
|
|
|
10,745
|
|
|
|
(47,237
|
)
|
|
|
|
|
|
|
436,918
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(281,537
|
)
|
|
|
|
|
|
|
(267,973
|
)
|
Minority interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
569,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
569,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of August 31, 2006
|
|
$
|
|
|
|
$
|
14
|
|
|
|
617,566
|
|
|
$
|
6
|
|
|
|
245,007
|
|
|
$
|
482,289
|
|
|
$
|
701,006
|
|
|
$
|
(869,957
|
)
|
|
|
(36,991
|
)
|
|
$
|
1,607,391
|
|
|
$
|
(26,494
|
)
|
|
$
|
1,894,255
|
|
Adoption of FASB Statement No. 158, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,053
|
|
|
|
26,053
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,243,148
|
|
|
|
|
|
|
|
1,243,148
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on marketable securities, net of
reclassification adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,165
|
|
|
|
2,165
|
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,474
|
|
|
|
84,474
|
|
Minimum pension liability adjustment, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,037
|
)
|
|
|
(2,037
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,327,750
|
|
Income tax benefit on:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,469
|
|
Contract termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|
|
|
|
|
|
|
31
|
|
Purchases of Class A common shares
|
|
|
|
|
|
|
|
|
|
|
(759
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(21,559
|
)
|
|
|
(412,918
|
)
|
|
|
(12,518
|
)
|
|
|
(6,372
|
)
|
|
|
|
|
|
|
(440,849
|
)
|
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
242,435
|
|
|
|
62,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
304,563
|
|
F-6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
Class X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Common
|
|
|
Restricted
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
|
|
|
|
|
|
|
Preferred
|
|
|
Shares
|
|
|
Shares
|
|
|
Share
|
|
|
Paid-in
|
|
|
Treasury Shares
|
|
|
Retained
|
|
|
Income
|
|
|
|
|
|
|
Shares
|
|
|
$
|
|
|
No. Shares
|
|
|
$
|
|
|
No. Shares
|
|
|
Units
|
|
|
Capital
|
|
|
$
|
|
|
No. Shares
|
|
|
Earnings
|
|
|
(Loss)
|
|
|
Total
|
|
|
Purchases/redemptions of Accenture SCA Class I common
shares, Accenture Canada Holdings Inc. exchangeable shares and
Class X common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
(82,377
|
)
|
|
|
|
|
|
|
(1,706,399
|
)
|
|
|
|
|
|
|
|
|
|
|
(160,697
|
)
|
|
|
|
|
|
|
(1,867,098
|
)
|
Issuances of Class A common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share programs
|
|
|
|
|
|
|
|
|
|
|
15,116
|
|
|
|
|
|
|
|
|
|
|
|
(89,846
|
)
|
|
|
338,763
|
|
|
|
249,850
|
|
|
|
10,321
|
|
|
|
(10,517
|
)
|
|
|
|
|
|
|
488,250
|
|
Upon redemption of Accenture SCA Class I common shares
|
|
|
|
|
|
|
|
|
|
|
3,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,597
|
|
|
|
2,625
|
|
|
|
|
|
|
|
|
|
|
|
(310,281
|
)
|
|
|
|
|
|
|
(293,059
|
)
|
Minority interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
595,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
595,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of August 31, 2007
|
|
$
|
|
|
|
$
|
14
|
|
|
|
635,109
|
|
|
$
|
4
|
|
|
|
162,630
|
|
|
$
|
649,475
|
|
|
$
|
|
|
|
$
|
(1,033,025
|
)
|
|
|
(39,188
|
)
|
|
$
|
2,362,703
|
|
|
$
|
84,161
|
|
|
$
|
2,063,332
|
|
Adoption of FASB Interpretation No. 48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,756
|
)
|
|
|
|
|
|
|
|
|
|
|
19,245
|
|
|
|
|
|
|
|
17,489
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,691,751
|
|
|
|
|
|
|
|
1,691,751
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on cash flow hedges, net of tax and
reclassification adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,381
|
|
|
|
11,381
|
|
Unrealized gains on marketable securities, net of
reclassification adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|