UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



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

FOR THE QUARTERLY PERIOD ENDED ~~November 30, 2016~~February 28, 2017



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

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-34448

Accenture plc

(Exact name of registrant as specified in its charter)



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

1 Grand Canal Square,

Grand Canal Harbour,

Dublin 2, Ireland

(Address of principal executive offices)

(353) (1) 646-2000

(Registrant’s telephone number, including area code)

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

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

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



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

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

The number of shares of the registrant’s Class A ordinary shares, par value $0.0000225 per share, outstanding as of ~~December 12, 2016~~March 9, 2017 was ~~659,108,604~~662,131,781 (which number includes ~~36,478,606~~42,049,036 issued shares held by the registrant). The number of shares of the registrant’s Class X ordinary shares, par value $0.0000225 per share, outstanding as of ~~December 12, 2016~~March 9, 2017 was ~~21,320,949.~~20,999,201.

Table of Contents

ACCENTURE PLC

INDEX




	Page
Part I. Financial Information	3
Item 1. Financial Statements	3
Consolidated Balance Sheets as of ~~November 30, 2016~~February 28, 2017 (Unaudited) and August 31, 2016	3
Consolidated Income Statements (Unaudited) for the three and six months ended ~~November 30,~~February 28, 2017 and February 29, 2016 ~~and 2015~~	4
Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended ~~November 30,~~February 28, 2017 and February 29, 2016 ~~and 2015~~	5
Consolidated Shareholders’ Equity Statement (Unaudited) for the ~~three~~six months ended ~~November 30, 2016~~February 28, 2017	6
Consolidated Cash Flows Statements (Unaudited) for the ~~three~~six months ended ~~November 30,~~February 28, 2017 and February 29, 2016 ~~and 2015~~	7
Notes to Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2729
Item 4. Controls and Procedures	2729
Part II. Other Information	2729
Item 1. Legal Proceedings	2729
Item 1A. Risk Factors	2729
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2830
Item 3. Defaults Upon Senior Securities	2931
Item 4. Mine Safety Disclosures	2931
Item 5. Other Information	2931
Item 6. Exhibits	3032
Signatures	3133

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCENTURE PLC

CONSOLIDATED BALANCE SHEETS

~~November 30, 2016~~February 28, 2017 and August 31, 2016

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


	November 30, 2016			August 31, 2016			February 28, 2017			August 31, 2016
	(Unaudited)						(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,077,058		$	4,905,609		$	3,238,862		$	4,905,609
Short-term investments	2,511			2,875			2,502			2,875
Receivables from clients, net	4,298,605			4,072,180			4,452,252			4,072,180
Unbilled services, net	2,170,403			2,150,219			2,111,641			2,150,219
Other current assets	819,829			845,339			958,745			845,339
Total current assets	11,368,406			11,976,222			10,764,002			11,976,222
NON-CURRENT ASSETS:
Unbilled services, net	51,370			68,145			52,898			68,145
Investments	239,470			198,633			190,358			198,633
Property and equipment, net	928,900			956,542			968,433			956,542
Goodwill	4,008,760			3,609,437			4,224,007			3,609,437
Deferred contract costs	725,717			733,219			737,354			733,219
Deferred income taxes, net	2,079,881			2,077,312			2,030,673			2,077,312
Other non-current assets	1,041,237			989,494			1,111,048			989,494
Total non-current assets	9,075,335			8,632,782			9,314,771			8,632,782
TOTAL ASSETS	$	20,443,741		$	20,609,004		$	20,078,773		$	20,609,004
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings	$	2,773		$	2,773		$	2,944		$	2,773
Accounts payable	1,163,348			1,280,821			1,212,800			1,280,821
Deferred revenues	2,079,897			2,364,728			2,458,524			2,364,728
Accrued payroll and related benefits	4,461,239			4,040,751			3,292,768			4,040,751
Accrued consumption taxes	340,325			358,359			334,538			358,359
Income taxes payable	606,771			362,963			665,125			362,963
Other accrued liabilities	515,729			468,529			386,074			468,529
Total current liabilities	9,170,082			8,878,924			8,352,773			8,878,924
NON-CURRENT LIABILITIES:
Long-term debt	24,562			24,457			24,546			24,457
Deferred revenues	734,465			754,812			740,919			754,812
Retirement obligation	1,467,268			1,494,789			1,483,978			1,494,789
Deferred income taxes, net	48,606			111,020			53,452			111,020
Income taxes payable	664,434			850,709			516,839			850,709
Other non-current liabilities	300,173			304,917			291,117			304,917
Total non-current liabilities	3,239,508			3,540,704			3,110,851			3,540,704
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of November 30, 2016 and August 31, 2016	57			57
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 657,676,526 and 654,202,813 shares issued as of November 30, 2016 and August 31, 2016, respectively	15			15
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 21,320,949 and 21,917,155 shares issued and outstanding as of November 30, 2016 and August 31, 2016, respectively	—			—
Ordinary shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of February 28, 2017 and August 31, 2016							57			57
Class A ordinary shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 661,956,595 and 654,202,813 shares issued as of February 28, 2017 and August 31, 2016, respectively							15			15
Class X ordinary shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 20,999,201 and 21,917,155 shares issued and outstanding as of February 28, 2017 and August 31, 2016, respectively							—			—
Restricted share units	994,449			1,004,128			875,148			1,004,128
Additional paid-in capital	3,154,879			2,924,729			3,475,589			2,924,729
Treasury shares, at cost: Ordinary, 40,000 shares as of November 30, 2016 and August 31, 2016; Class A ordinary, 36,832,604 and 33,529,739 shares as of November 30, 2016 and August 31, 2016, respectively	(2,990,628		)	(2,591,907		)
Treasury shares, at cost: Ordinary, 40,000 shares as of February 28, 2017 and August 31, 2016; Class A ordinary, 41,876,212 and 33,529,739 shares as of February 28, 2017 and August 31, 2016, respectively							(3,600,403		)	(2,591,907		)
Retained earnings	8,113,539			7,879,960			8,953,190			7,879,960
Accumulated other comprehensive loss	(1,855,218		)	(1,661,720		)	(1,739,351		)	(1,661,720		)
Total Accenture plc shareholders’ equity	7,417,093			7,555,262			7,964,245			7,555,262
Noncontrolling interests	617,058			634,114			650,904			634,114
Total shareholders’ equity	8,034,151			8,189,376			8,615,149			8,189,376
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	20,443,741		$	20,609,004		$	20,078,773		$	20,609,004

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

Table of Contents

ACCENTURE PLC

CONSOLIDATED INCOME STATEMENTS

For the Three and Six Months Ended ~~November 30,~~February 28, 2017 and February 29, 2016 ~~and 2015~~

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

(Unaudited)


							Three Months Ended						Six Months Ended
	2016			2015			February 28, 2017			February 29, 2016			February 28, 2017			February 29, 2016
REVENUES:
Revenues before reimbursements (“Net revenues”)	$	8,515,517		$	8,013,163		$	8,317,671		$	7,945,565		$	16,833,188		$	15,958,728
Reimbursements	490,086			452,821			444,511			451,488			934,597			904,309
Revenues	9,005,603			8,465,984			8,762,182			8,397,053			17,767,785			16,863,037
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses	5,785,485			5,450,644			5,813,515			5,575,749			11,599,000			11,026,393
Reimbursable expenses	490,086			452,821			444,511			451,488			934,597			904,309
Cost of services	6,275,571			5,903,465			6,258,026			6,027,237			12,533,597			11,930,702
Sales and marketing	888,827			875,793			871,489			830,332			1,760,316			1,706,125
General and administrative costs	509,246			465,466			494,014			451,440			1,003,260			916,906
Total operating expenses	7,673,644			7,244,724			7,623,529			7,309,009			15,297,173			14,553,733
OPERATING INCOME	1,331,959			1,221,260			1,138,653			1,088,044			2,470,612			2,309,304
Interest income	8,297			7,126			8,728			6,727			17,025			13,853
Interest expense	(3,048		)	(4,052		)	(3,976		)	(4,543		)	(7,024		)	(8,595		)
Other income (expense), net	(6,087		)	4,029			(12,546		)	(21,213		)	(18,633		)	(17,184		)
Gain (loss) on sale of businesses							(12,349		)	553,577			(12,349		)	553,577
INCOME BEFORE INCOME TAXES	1,331,121			1,228,363			1,118,510			1,622,592			2,449,631			2,850,955
Provision for income taxes	271,372			359,682			231,302			222,734			502,674			582,416
NET INCOME	1,059,749			868,681			887,208			1,399,858			1,946,957			2,268,539
Net income attributable to noncontrolling interests in Accenture Holdings plc and Accenture Canada Holdings Inc.	(46,452		)	(39,576		)	(37,961		)	(63,379		)	(84,413		)	(102,955		)
Net income attributable to noncontrolling interests – other	(8,821		)	(10,206		)	(10,495		)	(9,959		)	(19,316		)	(20,165		)
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC	$	1,004,476		$	818,899		$	838,752		$	1,326,520		$	1,843,228		$	2,145,419
Weighted average Class A ordinary shares:
Basic	621,569,764			626,463,124			621,999,948			626,523,793			621,787,252			626,505,960
Diluted	663,752,830			671,300,744			661,079,375			668,125,087			662,446,680			669,758,590
Earnings per Class A ordinary share:
Basic	$	1.62		$	1.31		$	1.35		$	2.12		$	2.96		$	3.42
Diluted	$	1.58		$	1.28		$	1.33		$	2.08		$	2.91		$	3.36
Cash dividends per share	$	1.21		$	1.10		$	—		$	—		$	1.21		$	1.10

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

Table of Contents

ACCENTURE PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended ~~November 30,~~February 28, 2017 and February 29, 2016 ~~and 2015~~

(In thousands of U.S. dollars)

(Unaudited)


							Three Months Ended						Six Months Ended
	2016			2015			February 28, 2017			February 29, 2016			February 28, 2017			February 29, 2016
NET INCOME	$	1,059,749		$	868,681		$	887,208		$	1,399,858		$	1,946,957		$	2,268,539
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation	(190,691		)	(114,379		)	82,772			(24,632		)	(107,919		)	(139,011		)
Defined benefit plans	11,432			4,101			(6,897		)	3,545			4,535			7,646
Cash flow hedges	(14,503		)	32,777			39,992			(10,975		)	25,489			21,802
Marketable securities	264			—			—			(98		)	264			(98		)
OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ACCENTURE PLC	(193,498		)	(77,501		)	115,867			(32,160		)	(77,631		)	(109,661		)
Other comprehensive income (loss) attributable to noncontrolling interests	(12,309		)	1,310			1,728			(2,077		)	(10,581		)	(767		)
COMPREHENSIVE INCOME	$	853,942		$	792,490		$	1,004,803		$	1,365,621		$	1,858,745		$	2,158,111

COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE PLC	$	810,978		$	741,398		$	954,619		$	1,294,360		$	1,765,597		$	2,035,758
Comprehensive income attributable to noncontrolling interests	42,964			51,092			50,184			71,261			93,148			122,353
COMPREHENSIVE INCOME	$	853,942		$	792,490		$	1,004,803		$	1,365,621		$	1,858,745		$	2,158,111

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

Table of Contents

ACCENTURE PLC

CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT

For the ~~Three~~Six Months Ended ~~November 30, 2016~~February 28, 2017

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

(Unaudited)


	Ordinary Shares			Class A Ordinary Shares			Class X Ordinary Shares				Restricted Share Units				Additional Paid-in Capital			Treasury Shares						Retained Earnings				Accumulated Other Comprehensive Loss				Total Accenture plc Shareholders’ Equity				Noncontrolling Interests				Total Shareholders’ Equity			Ordinary Shares				Class A Ordinary Shares			Class X Ordinary Shares						Restricted Share Units			Additional Paid-in Capital			Treasury Shares						Retained Earnings			Accumulated Other Comprehensive Loss			Total Accenture plc Shareholders’ Equity				Noncontrolling Interests				Total Shareholders’ Equity
	$		No. Shares	$		No. Shares	$		No. Shares					$				No. Shares									$								No. Shares								$		No. Shares		$		No. Shares			$			No. Shares
Balance as of August 31, 2016	$	57	40	$	15	654,203	$	—	21,917				$	1,004,128				$	2,924,729		$	(2,591,907	)		(33,570	)				$	7,879,960			$	(1,661,720		)		$	7,555,262			$	634,114	$	8,189,376	$	57	40	$	15		654,203				$	—				21,917			$	1,004,128		$	2,924,729		$	(2,591,907	)	(33,570	)		$	7,879,960			$	(1,661,720	)		$	7,555,262	$	634,114	$	8,189,376
Net income																								1,004,476								1,004,476				55,273				1,059,749																												1,843,228						1,843,228				103,729				1,946,957
Other comprehensive income (loss)																												(193,498		)		(193,498		)		(12,309		)		(205,807		)																													(77,631		)	(77,631		)		(10,581		)		(88,212		)
Purchases of Class A ordinary shares															21,989			(554,366		)	(4,764	)										(532,377		)		(21,989		)		(554,366		)																	52,722			(1,349,899		)		(11,546	)							(1,297,177		)		(52,722		)		(1,349,899		)
Share-based compensation expense											135,998				13,798																	149,796								149,796																375,571			26,752															402,323								402,323
Purchases/redemptions of Accenture Holdings plc ordinary shares, Accenture Canada Holdings Inc. exchangeable shares and Class X ordinary shares									(596	)					(32,809		)															(32,809		)		(760		)		(33,569		)											(918	)					(52,062		)													(52,062		)		(1,622		)		(53,684		)
Issuances of Class A ordinary shares:
Employee share programs						3,070					(169,873		)		218,620			155,645			1,461											204,392				8,319				212,711									7,262							(527,848		)	523,780			341,403				3,200								337,335				13,566				350,901
Upon redemption of Accenture Holdings plc ordinary shares						403									2,510																	2,510				(2,510		)		—									492										3,123															3,123				(3,123		)		—
Dividends											24,196													(774,333		)						(750,137		)		(34,990		)		(785,127		)														23,297												(773,434		)				(750,137		)		(34,990		)		(785,127		)
Other, net															6,042									3,436								9,478				(8,090		)		1,388																			(3,455		)							3,436						(19		)		2,533				2,514
Balance as of November 30, 2016	$	57	40	$	15	657,676	$	—	21,321		$	994,449			$	3,154,879		$	(2,990,628	)	(36,873	)		$	8,113,539			$	(1,855,218	)		$	7,417,093			$	617,058			$	8,034,151
Balance as of February 28, 2017																																											$	57	40		$	15	661,957	$	—		20,999			$	875,148		$	3,475,589		$	(3,600,403	)		(41,916	)	$	8,953,190		$	(1,739,351	)	$	7,964,245			$	650,904			$	8,615,149

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

Table of Contents

ACCENTURE PLC

CONSOLIDATED CASH FLOWS STATEMENTS

For the ~~Three~~Six Months Ended ~~November 30,~~February 28, 2017 and February 29, 2016 ~~and 2015~~

(In thousands of U.S. dollars)

(Unaudited)


	2016			2015			February 28, 2017			February 29, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,059,749		$	868,681		$	1,946,957		$	2,268,539
Adjustments to reconcile Net income to Net cash provided by operating activities —
Depreciation, amortization and asset impairments	187,433			181,882			375,240			354,627
Share-based compensation expense	149,796			129,183			402,323			357,715
(Gain) loss on sale of business							12,349			(553,577		)
Deferred income taxes, net	(86,013		)	(19,850		)	(60,273		)	(62,810		)
Other, net	(141,184		)	(78,868		)	(124,788		)	(52,964		)
Change in assets and liabilities, net of acquisitions —
Receivables from clients, net	(279,151		)	(244,126		)	(362,416		)	(172,884		)
Unbilled services, current and non-current, net	(64,113		)	(135,917		)	58,006			(155,667		)
Other current and non-current assets	(71,564		)	(224,933		)	(263,458		)	(383,309		)
Accounts payable	(103,390		)	(64,504		)	(73,976		)	(75,286		)
Deferred revenues, current and non-current	(207,437		)	(127,712		)	110,105			329,608
Accrued payroll and related benefits	488,615			418,471			(716,926		)	(641,903		)
Income taxes payable, current and non-current	86,551			(122,926		)	(2,658		)	(184,712		)
Other current and non-current liabilities	64,590			63,876			(61,900		)	(19,925		)
Net cash provided by (used in) operating activities	1,083,882			643,257			1,238,585			1,007,452
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property and equipment	1,238			951
Purchases of property and equipment	(84,553		)	(94,777		)	(188,962		)	(242,845		)
Purchases of businesses and investments, net of cash acquired	(599,107		)	(612,666		)	(829,198		)	(747,637		)
Proceeds from the sale of businesses and investments, net of cash transferred	(7,200		)	—			(22,921		)	618,310
Proceeds from sales of property and equipment							7,293			1,539
Net cash provided by (used in) investing activities	(689,622		)	(706,492		)	(1,033,788		)	(370,633		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares	212,711			182,285			350,901			303,167
Purchases of shares	(587,935		)	(657,811		)	(1,403,583		)	(1,486,761		)
Proceeds from (repayments of) long-term debt, net	138			219			361			378
Cash dividends paid	(785,127		)	(720,676		)	(785,127		)	(720,676		)
Other, net	(2,562		)	(2		)	(6,647		)	(12,313		)
Net cash provided by (used in) financing activities	(1,162,775		)	(1,195,985		)	(1,844,095		)	(1,916,205		)
Effect of exchange rate changes on cash and cash equivalents	(60,036		)	(28,353		)	(27,449		)	(46,721		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(828,551		)	(1,287,573		)	(1,666,747		)	(1,326,107		)
CASH AND CASH EQUIVALENTS, beginning of period	4,905,609			4,360,766			4,905,609			4,360,766
CASH AND CASH EQUIVALENTS, end of period	$	4,077,058		$	3,073,193		$	3,238,862		$	3,034,659

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

Table of Contents

ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited interim Consolidated Financial Statements of Accenture plc and its controlled subsidiary companies have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. We use the terms “Accenture,” “we,” the “Company” and “our” in the Notes to Consolidated Financial Statements to refer to Accenture plc and its subsidiaries. These Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended August 31, 2016 included in the Company’s Annual Report on Form 10-K filed with the SEC on October 28, 2016.

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. The Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results for these interim periods. The results of operations for the three and six months ended ~~November 30, 2016~~February 28, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2017.

Allowances for Client Receivables and Unbilled Services

As of ~~November 30, 2016~~February 28, 2017 and August 31, 2016, total allowances recorded for client receivables and unbilled services were ~~$79,281~~$75,885 and $79,440, respectively.

Accumulated Depreciation

As of ~~November 30, 2016~~February 28, 2017 and August 31, 2016, total accumulated depreciation was ~~$1,752,468~~$1,832,022 and $1,730,025, respectively.

Recently Adopted Accounting Pronouncement

On September 1, 2016, the Company early adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies the accounting for share-based payment transactions. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. The standard clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on the Company’s cash flows statement and provides an accounting policy election to account for forfeitures as they occur. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows.

The primary impact of the adoption of the ASU on the Company’s Consolidated Financial Statements was the recognition of excess tax benefits in the provision for income taxes rather than Additional paid-in capital, which reduced income tax expense by ~~$30,598~~$57,489 and $88,087 for the three and six months ended ~~November 30, 2016.~~February 28, 2017, respectively. The Company elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The Company also elected to retrospectively apply the presentation requirements for cash flows related to excess tax benefits for all periods presented, which resulted in an increase to both net cash provided by operating activities and net cash used in financing activities of ~~$31,952~~$78,801 for the ~~three~~six months ended ~~November 30, 2015.~~February 29, 2016. The presentation requirement for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in the Company’s consolidated cash flows statements since these cash flows have historically been presented as a financing activity.

~~New Accounting Pronouncements~~

On October 24, 2016, the FASB issued ASU No. 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of intra-entity transfers, other than inventory, when the transfer occurs. Under current guidance in U.S. GAAP, in the case of depreciable or amortizable assets, the income tax consequences are deferred at the time of the intra-entity transfer and recognized as the assets are depreciated or amortized. The ASU will be effective for the Company beginning September 1, 2018, including interim periods in its fiscal year 2019, and requires modified retrospective transition with a cumulative

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

New Accounting Pronouncements

~~catch-up adjustment~~The following standards, issued by the FASB, will, or are expected to, ~~opening retained earnings~~result in a change in practice and/or have a financial impact to the ~~period of adoption. The Company is assessing the impact of this ASU on its~~Company’s Consolidated Financial ~~Statements.~~Statements:

On August 26, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU will be effective for the Company beginning September 1, 2018, including interim periods in its fiscal year 2019, and requires the retrospective method of adoption unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is assessing the impact of this ASU on its Consolidated Financial Statements.



Standard	Description	Accenture Adoption Date	Impact on the Financial Statements or Other Significant Matters
2016-16: Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory	The guidance requires an entity to recognize the income tax consequences of intra-entity transfers, other than inventory, when the transfer occurs. Under current guidance in U.S. GAAP, in the case of depreciable or amortizable assets, the income tax consequences are deferred at the time of the intra-entity transfer and recognized as the assets are depreciated or amortized. The guidance requires modified retrospective transition with a cumulative catch-up adjustment to opening retained earnings in the period of adoption.	September 1, 2018	The Company is assessing the impact of this ASU on its Consolidated Financial Statements.
2016-02: Leases	The guidance amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The guidance allows for a modified retrospective method upon adoption.	September 1, 2019	While the Company is continuing to assess the potential impact of this ASU, it currently believes the most significant impact relates to its accounting for office space operating leases. The Company anticipates this ASU will have a material impact on its Consolidated Balance Sheets. However, the Company does not believe adoption will have a material impact on its Consolidated Income Statements.
2014-09: (Accounting Standard Codification 606), Revenue from Contracts with Customers and related updates	The guidance replaces most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The guidance allows for both retrospective and modified retrospective methods of adoption.	September 1, 2018	The Company will apply the modified retrospective method of adoption. The Company has performed an initial assessment of the impact of the ASU on its policies, processes, systems and controls and is implementing system enhancements to generate the information necessary for the new disclosures. The Company expects revenue recognition across its portfolio of services to remain largely unchanged. However, the Company expects to recognize revenue earlier than it does under current guidance in a few areas, including accounting for variable fees and for certain consulting services, which will be recognized over time rather than at a point in time. While the Company has not finalized its assessment of the impact of the ASU, based on the analysis completed to date, the Company does not currently anticipate that the ASU will have a material impact on its Consolidated Financial Statements.

On March 15, 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement to retrospectively apply equity method accounting when an entity increases ownership or influence in a previously held investment. The ASU will be effective for the Company beginning September 1, 2017, including interim periods in its fiscal year 2018. The Company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The ASU will be effective for the Company beginning September 1, 2019, including interim periods in its fiscal year 2020, and allows for a modified retrospective method upon adoption. The Company is assessing the impact of this ASU on its Consolidated Financial Statements.

On January 5, 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The ASU will be effective for the Company beginning September 1, 2018, including interim periods in its fiscal year 2019. The Company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

On May 28, 2014, the FASB issued ASU No. 2014-09 (Accounting Standard Codification 606), Revenue from Contracts with Customers, which will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU will be effective for the Company beginning September 1, 2018, including interim periods in its fiscal year 2019, and allows for both retrospective and modified retrospective methods of adoption. The Company will adopt the guidance on September 1, 2018 and apply the modified retrospective method. The Company is assessing the impact of this ASU on its Consolidated Financial Statements.

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

2. EARNINGS PER SHARE

Basic and diluted earnings per share were calculated as follows:


	Three Months Ended				Three Months Ended				Six Months Ended
	November 30, 2016		November 30, 2015		February 28, 2017		February 29, 2016		February 28, 2017		February 29, 2016
Basic Earnings per share
Net income attributable to Accenture plc	$	1,004,476	$	818,899	$	838,752	$	1,326,520	$	1,843,228	$	2,145,419
Basic weighted average Class A ordinary shares	621,569,764		626,463,124		621,999,948		626,523,793		621,787,252		626,505,960
Basic earnings per share	$	1.62	$	1.31	$	1.35	$	2.12	$	2.96	$	3.42
Diluted Earnings per share
Net income attributable to Accenture plc	$	1,004,476	$	818,899	$	838,752	$	1,326,520	$	1,843,228	$	2,145,419
Net income attributable to noncontrolling interests in Accenture Holdings plc and Accenture Canada Holdings Inc. (1)	46,452		39,576		37,961		63,379		84,413		102,955
Net income for diluted earnings per share calculation	$	1,050,928	$	858,475	$	876,713	$	1,389,899	$	1,927,641	$	2,248,374
Basic weighted average Class A ordinary shares	621,569,764		626,463,124		621,999,948		626,523,793		621,787,252		626,505,960
Class A ordinary shares issuable upon redemption/exchange of noncontrolling interests (1)	28,718,885		30,251,110		28,180,804		29,915,340		28,451,331		30,083,184
Diluted effect of employee compensation related to Class A ordinary shares	13,224,914		14,367,590		10,732,934		11,520,457		11,966,080		12,914,682
Diluted effect of share purchase plans related to Class A ordinary shares	239,267		218,920		165,689		165,497		242,017		254,764
Diluted weighted average Class A ordinary shares	663,752,830		671,300,744		661,079,375		668,125,087		662,446,680		669,758,590
Diluted earnings per share	$	1.58	$	1.28	$	1.33	$	2.08	$	2.91	$	3.36

_______________

(1)

Diluted earnings per share assumes the redemption of all Accenture Holdings plc ordinary shares owned by holders of noncontrolling interests and the exchange of all Accenture Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares on a one-for-one basis. The income effect does not take into account “Net income attributable to noncontrolling interests — other,” since those shares are not redeemable or exchangeable for Accenture plc Class A ordinary shares.

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

3. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss attributable to Accenture plc:


	Three Months Ended						Three Months Ended						Six Months Ended
	November 30, 2016			November 30, 2015			February 28, 2017			February 29, 2016			February 28, 2017			February 29, 2016
Foreign currency translation
Beginning balance	$	(919,963	)	$	(853,504	)	$	(1,110,654	)	$	(967,883	)	$	(919,963	)	$	(853,504	)
Foreign currency translation	(203,725		)	(113,463		)	84,249			(29,210		)	(119,476		)	(142,673		)
Income tax benefit (expense)	852			(1,372		)	(1,247		)	2,865			(395		)	1,493
Portion attributable to noncontrolling interests	12,182			456			(230		)	1,713			11,952			2,169
Foreign currency translation, net of tax	(190,691		)	(114,379		)	82,772			(24,632		)	(107,919		)	(139,011		)
Ending balance	(1,110,654		)	(967,883		)	(1,027,882		)	(992,515		)	(1,027,882		)	(992,515		)

Defined benefit plans
Beginning balance	(809,504		)	(523,619		)	(798,072		)	(519,518		)	(809,504		)	(523,619		)
Reclassifications into net periodic pension and post-retirement expense (1)	17,824			6,633			(6,794		)	6,572			11,030			13,205
Income tax benefit (expense)	(5,863		)	(2,336		)	(427		)	(2,858		)	(6,290		)	(5,194		)
Portion attributable to noncontrolling interests	(529		)	(196		)	324			(169		)	(205		)	(365		)
Defined benefit plans, net of tax	11,432			4,101			(6,897		)	3,545			4,535			7,646
Ending balance	(798,072		)	(519,518		)	(804,969		)	(515,973		)	(804,969		)	(515,973		)

Cash flow hedges
Beginning balance	68,011			(33,288		)	53,508			(511		)	68,011			(33,288		)
Unrealized (loss) gain	(6,106		)	48,347
Unrealized gain (loss)							89,886			(23,599		)	83,780			24,748
Reclassification adjustments into Cost of services	(22,149		)	1,450			(25,319		)	2,529			(47,468		)	3,979
Income tax benefit (expense)	13,081			(15,450		)	(22,753		)	9,567			(9,672		)	(5,883		)
Portion attributable to noncontrolling interests	671			(1,570		)	(1,822		)	528			(1,151		)	(1,042		)
Cash flow hedges, net of tax	(14,503		)	32,777			39,992			(10,975		)	25,489			21,802
Ending balance (2)	53,508			(511		)	93,500			(11,486		)	93,500			(11,486		)

Marketable securities
Beginning balance	(264		)	(1,561		)	—			(1,561		)	(264		)	(1,561		)
Unrealized gain	462			—
Unrealized gain (loss)							—			(170		)	462			(170		)
Income tax benefit (expense)	(183		)	—			—			67			(183		)	67
Portion attributable to noncontrolling interests	(15		)	—			—			5			(15		)	5
Marketable securities, net of tax	264			—			—			(98		)	264			(98		)
Ending balance	—			(1,561		)	—			(1,659		)	—			(1,659		)

Accumulated other comprehensive loss	$	(1,855,218	)	$	(1,489,473	)	$	(1,739,351	)	$	(1,521,633	)	$	(1,739,351	)	$	(1,521,633	)

_______________


(1)	Reclassifications into net periodic pension and post-retirement expense are recognized in Cost of services, Sales and marketing and General and administrative costs.


(2)	As of ~~November 30, 2016~~February 28, 2017, $~~42,555~~77,921 of net unrealized gains related to derivatives designated as cash flow hedges is expected to be reclassified into Cost of services in the next 12 months.

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

4. BUSINESS COMBINATIONS

During the ~~three~~six months ended ~~November 30, 2016,~~February 28, 2017, the Company completed several individually immaterial acquisitions for total consideration of ~~$540,219,~~$806,224, net of cash acquired. The pro forma effects of these acquisitions on the Company’s operations were not material.

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

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


	August 31, 2016		Additions/ Adjustments		Foreign Currency Translation			November 30, 2016		August 31, 2016		Additions/ Adjustments		Foreign Currency Translation			February 28, 2017
Communications, Media & Technology	$	546,566	$	62,433	$	(15,526	)	$	593,473	$	546,566	$	85,908	$	(11,541	)	$	620,933
Financial Services	854,376		66,771		(8,756		)	912,391		854,376		137,643		(4,804		)	987,215
Health & Public Service	715,849		33,577		(2,119		)	747,307		715,849		86,358		(2,525		)	799,682
Products	1,112,991		263,802		(22,649		)	1,354,144		1,112,991		307,043		(25,219		)	1,394,815
Resources	379,655		28,987		(7,197		)	401,445		379,655		46,322		(4,615		)	421,362
Total	$	3,609,437	$	455,570	$	(56,247	)	$	4,008,760	$	3,609,437	$	663,274	$	(48,704	)	$	4,224,007

Goodwill includes immaterial adjustments related to prior period acquisitions.

Intangible Assets

The Company’s definite-lived intangible assets by major asset class were as follows:


	November 30, 2016							August 31, 2016							February 28, 2017							August 31, 2016
Intangible Asset Class	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer-related	$	586,852	$	(173,160	)	$	413,692	$	532,753	$	(159,774	)	$	372,979	$	625,102	$	(184,679	)	$	440,423	$	532,753	$	(159,774	)	$	372,979
Technology	98,949		(51,108		)	47,841		100,363		(48,270		)	52,093		99,302		(55,751		)	43,551		100,363		(48,270		)	52,093
Patents	120,335		(58,974		)	61,361		118,906		(57,951		)	60,955		120,946		(60,196		)	60,750		118,906		(57,951		)	60,955
Other	44,360		(15,962		)	28,398		43,804		(19,680		)	24,124		45,122		(16,783		)	28,339		43,804		(19,680		)	24,124
Total	$	850,496	$	(299,204	)	$	551,292	$	795,826	$	(285,675	)	$	510,151	$	890,472	$	(317,409	)	$	573,063	$	795,826	$	(285,675	)	$	510,151

Total amortization related to the Company’s intangible assets was ~~$33,128~~$33,324 and ~~$27,724~~$66,452 for the three and six months ended ~~November 30,~~February 28, 2017, respectively. Total amortization related to the Company’s intangible assets was $29,640 and $57,364 for the three and six months ended February 29, 2016, ~~and 2015,~~ respectively. Estimated future amortization related to intangible assets held as of ~~November 30, 2016~~February 28, 2017 is as follows:


Fiscal Year	Estimated Amortization		Estimated Amortization
Remainder of 2017	$	97,060	$	73,159
2018	102,146		111,841
2019	82,201		87,690
2020	72,253		77,576
2021	62,938		67,851
Thereafter	134,694		154,946
Total	$	551,292	$	573,063

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

6. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS’ EQUITY

Dividends

The Company’s dividend activity during the ~~three~~six months ended ~~November 30, 2016~~February 28, 2017 was as follows:

Dividend Per
Share

Accenture plc Class A
Ordinary Shares

Accenture Holdings plc Ordinary
Shares and Accenture Canada Holdings
Inc. Exchangeable Shares

Total Cash
Outlay

Dividend Payment Date

Record Date

Cash Outlay

Record Date

Cash Outlay

November 15, 2016

1.21

October 21, 2016

750,137

October 18, 2016

34,990

785,127

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

Subsequent Event

On March 20, 2017, the Board of Directors of Accenture plc declared a semi-annual cash dividend of $1.21 per share on its Class A ordinary shares for shareholders of record at the close of business on April 13, 2017. On March 20, 2017, the Board of Directors of Accenture Holdings plc declared a semi-annual cash dividend of $1.21 per share on its ordinary shares for shareholders of record at the close of business on April 10, 2017. Both dividends are payable on May 15, 2017. The payment of the cash dividends will result in the issuance of an immaterial number of additional restricted share units to holders of restricted share units.

7. DERIVATIVE FINANCIAL INSTRUMENTS

In the normal course of business, the Company uses derivative financial instruments to manage foreign currency exchange rate risk. The Company’s derivative financial instruments consist of deliverable and non-deliverable foreign currency forward contracts.

Cash Flow Hedges

For a cash flow hedge, the effective portion of the change in estimated fair value of a hedging instrument is recorded in Accumulated other comprehensive loss as a separate component of Shareholders’ Equity and is reclassified into Cost of services in the Consolidated Income Statements during the period in which the hedged transaction is recognized. For information related to derivatives designated as cash flow hedges that were reclassified into Cost of services during the three and six months ended ~~November 30,~~February 28, 2017 and February 29, 2016, ~~and 2015,~~ as well as those expected to be reclassified into Cost of services in the next 12 months, see Note 3 (Accumulated Other Comprehensive Loss) to these Consolidated Financial Statements.

Other Derivatives

Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were a net gain of $19,780 and a net loss of ~~$138,094 and $72,977~~$118,313 for the three and six months ended ~~November 30,~~February 28, 2017, respectively, and a net gain of $15,578 and a net loss of $57,399 for the three and six months ended February 29, 2016, ~~and 2015,~~ respectively. Gains and losses on these contracts are recorded in Other income (expense), net in the Consolidated Income Statements and are offset by gains and losses on the related hedged items.

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

Fair Value of Derivative Instruments

The notional and fair values of all derivative instruments were as follows:


	November 30, 2016		August 31, 2016		February 28, 2017		August 31, 2016
Assets
Cash Flow Hedges
Other current assets	$	72,113	$	71,955	$	101,134	$	71,955
Other non-current assets	51,743		45,683		73,946		45,683
Other Derivatives
Other current assets	7,385		11,965		11,713		11,965
Total assets	$	131,241	$	129,603	$	186,793	$	129,603
Liabilities
Cash Flow Hedges
Other accrued liabilities	$	29,558	$	10,820	$	23,213	$	10,820
Other non-current liabilities	20,996		5,547		15,642		5,547
Other Derivatives
Other accrued liabilities	72,815		17,407		11,005		17,407
Total liabilities	$	123,369	$	33,774	$	49,860	$	33,774
Total fair value	$	7,872	$	95,829	$	136,933	$	95,829
Total notional value	$	7,629,568	$	7,604,486	$	7,652,299	$	7,604,486

The Company utilizes standard counterparty master agreements containing provisions for the netting of certain foreign currency transaction obligations and for the set-off of certain obligations in the event of an insolvency of one of the parties to the transaction. In the Consolidated Balance Sheets, the Company records derivative assets and liabilities at gross fair value. The potential effect of netting derivative assets against liabilities under the counterparty master agreements was as follows:


	November 30, 2016		August 31, 2016		February 28, 2017		August 31, 2016
Net derivative assets	$	103,039	$	114,785	$	145,904	$	114,785
Net derivative liabilities	95,167		18,956		8,971		18,956
Total fair value	$	7,872	$	95,829	$	136,933	$	95,829

8. RETIREMENT AND PROFIT SHARING PLANS

On March 18, 2016, Accenture plc’s Board of Directors approved an amendment to terminate the Company’s U.S. pension plan, effective May 30, 2016, for all active and former employees who are no longer accruing benefits in the pension plan (approximately 16,200 people). The amendment also provides for the creation of a separate defined benefit plan with substantially the same terms for approximately 600 active employees who are currently eligible to accrue benefits. The U.S. pension plan is expected to be settled in ~~12 to 18 months from~~ the ~~termination effective date,~~third quarter of fiscal 2017, subject to receipt of customary regulatory approvals.

The Company’s ultimate settlement obligation will depend upon both the nature and timing of participant settlements and prevailing market conditions. Upon settlement, the Company expects to recognize additional expense, consisting of unrecognized actuarial losses included in Accumulated other comprehensive loss that totaled approximately $467,000 as of August 31, 2016, adjusted for the difference between the ultimate settlement obligation and the Company’s accrued pension obligation. The Company does not expect the settlement of the U.S. pension plan obligations to have a material impact on its cash position.

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

9. INCOME TAXES

The Company applies an estimated annual effective tax rate to its year-to-date operating results to determine the interim provision for income tax expense. In addition, the Company recognizes taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior year as discrete items in the interim period in which the event occurs.

The Company’s effective tax rates for the three months ended ~~November 30,~~February 28, 2017 and February 29, 2016 were 20.7% and ~~2015 were 20.4% and 29.3%~~13.7%, respectively. The ~~lower~~Company’s effective tax rates for the six months ended February 28, 2017 and February 29, 2016 were 20.5% and 20.4%, respectively. Absent the gain on the Navitaire divestiture and related tax impact recorded during the three months ended February 29, 2016, the effective tax rates would have been 15.4% and 22.8% for the three and six months ended February 29, 2016, respectively. The effective tax rate for the ~~three~~six months ended ~~November 30, 2016 was primarily due to higher benefits~~February 28, 2017 benefited from ~~adjustments to~~the final determination of prior year U.S. taxes and the recognition of excess tax benefits from share based payments as a result of the early adoption of ~~FASB~~ ASU No. 2016-09. ~~For additional information, see Note 1 (Basis~~This was partially offset by a net increase to prior year non-U.S. tax liabilities. The effective tax rate for the six months ended February 29, 2016 also benefited from the final determination of ~~Presentation)~~prior year U.S. taxes.

As previously disclosed, on December 8, 2016, the Swiss Federal Tax Administration notified a subsidiary of Accenture that it has opened an investigation to ~~these Consolidated Financial Statements under Item 1, “Financial Statements.”~~examine the tax treatment of an August 2010 intercompany transfer of certain intellectual property. The tax treatment used in connection with the transfer was based on tax rulings we obtained from the relevant Swiss tax authorities and upon which we relied. The Swiss tax authorities have asserted that in connection with the transfer of the intellectual property, we underpaid income and withholding taxes. While we strongly disagree with the assertions made and will vigorously defend our position, we have been cooperating with the Swiss tax authorities. If the Swiss tax authorities were to prevail in this matter, taxes could be due, plus interest and possible penalties, which could be material.

10. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has the right to purchase or may also be required to purchase substantially all of the remaining outstanding shares of its Avanade Inc. subsidiary (“Avanade”) not owned by the Company at fair value if certain events occur. As of ~~November 30, 2016~~February 28, 2017 and August 31, 2016, the Company has reflected the fair value of ~~$52,703~~$50,500 and $54,221, respectively, related to Avanade’s redeemable common stock and the intrinsic value of the options on redeemable common stock in Other accrued liabilities in the Consolidated Balance Sheets.

Indemnifications and Guarantees

In the normal course of business and in conjunction with certain client engagements, the Company has entered into contractual arrangements through which it may be obligated to indemnify clients with respect to certain matters.

As of ~~November 30, 2016~~February 28, 2017 and August 31, 2016, the Company’s aggregate potential liability to its clients for expressly limited guarantees involving the performance of third parties was approximately ~~$607,000~~$569,000 and $749,000, respectively, of which all but approximately ~~$89,000~~$95,000 and $113,000, respectively, may be recovered from the other third parties if the Company is obligated to make payments to the indemnified parties as a consequence of a performance default by the other third parties. For arrangements with unspecified limitations, the Company cannot reasonably estimate the aggregate maximum potential liability, as it is inherently difficult to predict the maximum potential amount of such payments, due to the conditional nature and unique facts of each particular arrangement.

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

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ACCENTURE PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

Legal Contingencies

As of ~~November 30, 2016,~~February 28, 2017, the Company or its present personnel had been named as a defendant in various litigation matters. The Company and/or its personnel also from time to time are involved in investigations by various regulatory or legal authorities concerning matters arising in the course of its business around the world. Based on the present status of these matters, ~~except as provided below,~~ management believes the range of reasonably possible losses in addition to amounts accrued, net of insurance recoveries, will not have a material effect on the Company’s results of operations or financial condition.

~~On December 8, 2016, the Swiss Federal Tax Administration notified a subsidiary of Accenture that it has opened an investigation~~See also Note 9 (Income Taxes) to examine the tax treatment of an August 2010 intercompany transfer of certain intellectual property. The tax treatment used in connection with the transfer was based on tax rulings we obtained from the relevant Swiss tax authorities and upon which we relied. The Swiss tax authorities have asserted that in connection with the transfer of the intellectual property, we underpaid income and withholding taxes. If the Swiss tax authorities were to prevail in this matter, taxes could be due, plus interest and possible penalties, which could be material. We strongly disagree with the assertions made and while we intend to cooperate with the Swiss tax authorities, we will vigorously defend our position.these Consolidated Financial Statements under Item 1, “Financial Statements.”

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~~ACCENTURE PLC~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)~~

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

~~(Unaudited)~~

11. SEGMENT REPORTING

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


	Three Months Ended								Three Months Ended
	November 30, 2016				November 30, 2015				February 28, 2017				February 29, 2016
	Net Revenues		Operating Income		Net Revenues		Operating Income		Net Revenues		Operating Income		Net Revenues		Operating Income
Communications, Media & Technology	$	1,686,196	$	257,844	$	1,604,639	$	247,873	$	1,620,728	$	214,738	$	1,606,700	$	242,512
Financial Services	1,809,769		319,489		1,745,216		322,785		1,769,611		268,164		1,684,729		230,534
Health & Public Service	1,500,774		199,227		1,423,867		172,578		1,511,564		189,115		1,482,264		209,795
Products	2,320,169		408,699		1,990,123		291,223		2,264,828		363,762		1,994,530		286,336
Resources	1,194,858		146,700		1,245,084		186,801		1,144,725		102,874		1,173,997		118,867
Other	3,751		—		4,234		—		6,215		—		3,345		—
Total	$	8,515,517	$	1,331,959	$	8,013,163	$	1,221,260	$	8,317,671	$	1,138,653	$	7,945,565	$	1,088,044



	Six Months Ended
	February 28, 2017				February 29, 2016
	Net Revenues		Operating Income		Net Revenues		Operating Income
Communications, Media & Technology	$	3,306,924	$	472,582	$	3,211,339	$	490,385
Financial Services	3,579,380		587,653		3,429,945		553,319
Health & Public Service	3,012,338		388,342		2,906,131		382,373
Products	4,584,997		772,461		3,984,653		577,559
Resources	2,339,583		249,574		2,419,081		305,668
Other	9,966		—		7,579		—
Total	$	16,833,188	$	2,470,612	$	15,958,728	$	2,309,304

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

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended August 31, 2016, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended August 31, 2016.

We use the terms “Accenture,” “we,” the “Company,” “our” and “us” in this report to refer to Accenture plc 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 2017” means the 12-month period that will end on August 31, 2017. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.

We use the term “in local currency” so that certain financial results may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Financial results “in local currency” are calculated by restating current period activity into U.S. dollars using the comparable prior year period’s foreign currency exchange rates. This approach is used for all results where the functional currency is not the U.S. dollar.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 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,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to:

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

Our business depends on generating and maintaining ongoing, profitable client demand for our services and solutions, including through the adaptation and expansion of our services and solutions in response to ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to respond to the evolving technological environment could materially affect our results of operations.

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

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

We could have liability or our reputation could be damaged if we fail to protect client and/or Accenture data from security breaches or cyberattacks.

Our profitability could materially suffer if we are unable to obtain favorable pricing for our services and solutions, if we are unable to remain competitive, if our cost-management strategies are unsuccessful or if we experience delivery inefficiencies.

Changes in our level of taxes, as well as audits, investigations and tax proceedings, or changes in tax laws or in their interpretation or enforcement, could have a material adverse effect on our effective tax rate, results of operations, cash flows and financial condition.

Our results of operations could be materially adversely affected by fluctuations in foreign currency exchange rates.

Our business could be materially adversely affected if we incur legal liability.

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Our work with government clients exposes us to additional risks inherent in the government contracting environment.

We might not be successful at identifying, acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses.

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

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

Adverse changes to our relationships with key alliance partners or in the business of our key alliance partners could adversely affect our results of operations.

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.

If we are unable to protect our intellectual property rights from unauthorized use or infringement by third parties, our business could be adversely affected.

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

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

We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to those estimates and assumptions could adversely affect our financial results.

Many of our contracts include payments that link some of our fees to the attainment of performance or business targets and/or require us to meet specific service levels. This could increase the variability of our revenues and impact our margins.

Our results of operations and share price could be adversely affected if we are unable to maintain effective internal controls.

We are incorporated in Ireland 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 may also be subject to criticism and negative publicity related to our incorporation in Ireland.

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

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

For a more detailed discussion of these factors, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2016. Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to update any forward-looking statements.

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Overview

Revenues are driven by the ability of our executives to secure new contracts and to deliver services and solutions that add value relevant to our clients’ current needs and challenges. The level of revenues we achieve is based on our ability to deliver market-leading ~~service offerings~~services and solutions and to deploy skilled teams of professionals quickly and on a global basis.

Our results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. There continues to be significant volatility and economic and geopolitical uncertainty in many markets around the world, which may impact our business. We continue to monitor the impact of this volatility and uncertainty and seek to manage our costs in order to respond to changing conditions. There also continues to be significant volatility in foreign currency exchange rates. The majority of our net revenues are denominated in currencies other than the U.S. dollar, including the Euro and the U.K. pound. Unfavorable fluctuations in foreign currency exchange rates have had and could have in the future a material effect on our financial results.

Revenues before reimbursements (“net revenues”) for the ~~first~~second quarter of fiscal 2017 increased 5% in U.S. dollars and 6% in local currency compared to the second quarter of fiscal 2016. Net revenues for the six months ended February 28, 2017 increased 5% in U.S. dollars and 7% in local currency compared to the ~~first quarter of fiscal~~six months ended February 29, 2016. Demand for our services and solutions continued to be strong, resulting in growth across most areas of our business. During the ~~first~~second quarter of fiscal 2017, revenue growth in local currency was ~~significant~~very strong in Products and ~~solid~~strong in Financial Services, ~~and~~while there was slight growth in Health & Public ~~Service.~~Service and Communications, Media & Technology ~~revenue growth in local currency was modest, while~~and Resources had a slight decline. Revenue growth in local currency was strong in ~~both~~ outsourcing and solid in consulting during the ~~first~~second quarter of fiscal 2017. While the business environment remained competitive, we continued to experience pricing improvement in several areas of our business. We use the term “pricing” to mean the contract profitability or margin on the work that we sell.

In our consulting business, net revenues for the ~~first~~second quarter of fiscal 2017 increased 6%3% in U.S. dollars and 7%5% in local currency compared to the ~~first~~second quarter of fiscal 2016. Net consulting revenues for the six months ended February 28, 2017 increased 4% in U.S. dollars and 6% in local currency compared to the six months ended February 29, 2016. Consulting revenue growth in local currency in the ~~first~~second quarter of fiscal 2017 was led by ~~very~~ significant growth in Products, as well as ~~solid~~strong growth in Financial Services, partially offset by ~~a decline~~declines in ~~Resources. We continue~~Communications, Media & Technology, Resources and Health & Public Service. Our consulting revenue growth continues to ~~experience growing~~be driven by strong demand for digital-, cloud- and security-related services and assisting clients with the adoption of new technologies. In addition, clients continue to be focused on initiatives designed to deliver cost savings and operational efficiency, as well as projects to integrate their global operations and grow and transform their businesses.

In our outsourcing business, net revenues for the ~~first~~second quarter of fiscal 2017 increased 7% in ~~both~~ U.S. dollars and 8% in local currency compared to the ~~first~~second quarter of fiscal 2016. Net outsourcing revenues for the six months ended February 28, 2017 increased 7% in U.S. dollars and 8% in local currency compared to the six months ended February 29, 2016. Outsourcing revenue growth in local currency in the ~~first~~second quarter of fiscal 2017 was ~~driven~~led by very strong growth in Products, as well as strong growth in Financial Services and Health & Public Service ~~Products, Financial Services and~~while Communications, Media & Technology ~~as well as~~and Resources revenue had modest ~~growth in Resources.~~growth. We continue to experience growing demand to assist clients with cloud enablement and the operation and maintenance of digital-related services. In addition, clients continue to be focused on transforming their operations to improve effectiveness and cost efficiency.

As we are a global company, our revenues are denominated in multiple currencies and may be significantly affected by currency exchange rate fluctuations. If the U.S. dollar strengthens against other currencies, resulting in unfavorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be lower. If the U.S. dollar weakens against other currencies, resulting in favorable currency translation, our revenues, revenue growth and results of operations in U.S. dollars may be higher. ~~The~~When compared to the same periods in fiscal 2016, the U.S. dollar strengthened against many currencies during the ~~first quarter of fiscal~~three and six months ended February 28, 2017, ~~compared to the first quarter of fiscal 2016,~~ resulting in unfavorable currency translation and U.S. dollar revenue growth that was approximately 2% and 1% lower, respectively, than our revenue growth in local currency. Assuming that exchange rates stay within recent ranges for the remainder of fiscal 2017, we estimate that our full fiscal 2017 revenue growth will be approximately 2% lower in U.S. dollars than 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, subcontractor and other personnel costs, and non-payroll costs on outsourcing contracts. Cost of services includes a variety of activities such as: contract delivery; recruiting and training; software development; and integration of acquisitions. Sales and marketing costs are driven primarily by: compensation costs for business

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development activities; marketing- and advertising-related activities; and certain acquisition-related costs. General and administrative costs primarily include costs for non-client-facing personnel, information systems and office space.

Utilization for the second quarter of fiscal 2017 was 91%, down from 92% in the first quarter of fiscal 2017 ~~was 92%, flat with the fourth quarter of fiscal 2016~~ and up from 90% in the ~~first~~second quarter of fiscal 2016. We continue to hire to meet current and projected future demand. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services and solutions, given that compensation costs are the most significant portion of our operating expenses. Based on current and projected future demand, we have increased our headcount, the majority

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of which serve our clients, to approximately ~~394,000~~401,000 as of ~~November 30, 2016,~~February 28, 2017, compared to approximately 373,000 as of ~~November 30, 2015.~~February 29, 2016. The year-over-year increase in our headcount reflects an overall increase in demand for our services and solutions, as well as headcount added in connection with acquisitions. Annualized attrition, excluding involuntary terminations, for the ~~first~~second quarter of fiscal 2017 was 12%, ~~down from 16% in~~flat with the ~~fourth~~first quarter of fiscal ~~2016~~2017 and down from 13% in the ~~first~~second quarter of fiscal 2016. We evaluate voluntary attrition, adjust levels of new hiring and use involuntary terminations as means to keep our supply of skills and resources in balance with changes in client demand. In addition, we adjust compensation in certain skill sets and geographies in order to attract and retain appropriate numbers of qualified employees. For the majority of our personnel, compensation increases become effective December 1st of each fiscal year. We strive to adjust pricing and/or the mix of resources to reduce the impact of compensation increases on our gross margin. Our ability to grow our revenues and maintain or increase our margin could be adversely affected if we are unable to: keep our supply of skills and resources in balance with changes in the types or amounts of services and solutions clients are demanding; recover increases in compensation; deploy our employees globally on a timely basis; manage attrition; and/or effectively assimilate and utilize new employees.

Gross margin (Net revenues less Cost of services before reimbursable expenses as a percentage of ~~Net~~net revenues) for the ~~first~~second quarter of fiscal 2017 was ~~32.1%~~30.1%, compared with ~~32.0%~~29.8% for the ~~first~~second quarter of fiscal 2016. Gross margin for the six months ended February 28, 2017 was 31.1%, compared with 30.9% for the six months ended February 29, 2016.

Sales and marketing and General and administrative costs as a percentage of net revenues were 16.4% for both the ~~first~~second quarter of fiscal 2017 and the six months ended February 28, 2017, compared with ~~16.7%~~16.1% for the ~~first~~second quarter of fiscal 2016 and 16.4% for the six months ended February 29, 2016. We continuously monitor these costs and implement cost-management actions, as appropriate. For the ~~first~~second quarter ~~of fiscal~~and six months ended February 28, 2017 compared to the ~~first quarter of~~same periods in fiscal 2016, Sales and marketing costs as a percentage of net revenues was flat and decreased 5020 basis points, ~~principally due to improved operational efficiency in our business development activities,~~respectively, and General and administrative costs as a percentage of net revenues increased 20 and 30 basis ~~points.~~points, respectively, principally due to higher technology and facilities costs.

Operating margin (Operating income as a percentage of Net revenues) for the ~~first~~second quarter of fiscal 2017 was ~~15.6%~~13.7%, ~~compared~~flat with ~~15.2% for~~ the ~~first~~second quarter of fiscal 2016.

~~New Bookings~~

~~New bookings~~ Operating margin for the ~~first~~six months ended February 28, 2017 was 14.7%, compared with 14.5% for the six months ended February 29, 2016.

During the second quarter of fiscal 2016, we recorded a $554 million gain on sale of business and $58 million in taxes related to the divestiture of our Navitaire business. We have presented the prior year effective tax rate and diluted earnings per share excluding this gain, as we believe doing so facilitates understanding as to both the impact of this gain and our operating performance in comparison to the current period.

The effective tax rates for the second quarter of fiscal 2017 and six months ended February 28, 2017 were ~~$8.32 billion,~~20.7% and 20.5%, respectively. The effective tax rates for the second quarter of fiscal 2016 and six months ended February 29, 2016 were 13.7% and 20.4%, respectively. Absent the gain on the Navitaire divestiture and related taxes recorded in the second quarter of fiscal 2016, our effective tax rates for the second quarter of fiscal 2016 and six months ended February 29, 2016 would have been 15.4% and 22.8%, respectively. For additional information see Note 9 (Income Taxes) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Diluted earnings per share were $1.33 for the second quarter of fiscal 2017, compared with ~~consulting bookings~~$2.08 for the second quarter of ~~$4.88 billion~~fiscal 2016. Diluted earnings per share were $2.91 for the six months ended February 28, 2017, compared with $3.36 for the six months ended February 29, 2016. The gain on sale of business, net of taxes, from the Navitaire divestiture recorded during the second quarter of fiscal 2016 increased diluted earnings per share by $0.74 in both the second quarter of fiscal 2016 and ~~outsourcing bookings~~six months ended February 29, 2016. Excluding the impact of ~~$3.44 billion.~~this gain, diluted earnings per share would have been $1.34 for the second quarter of fiscal 2016 and $2.62 for the six months ended February 29, 2016.

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New Bookings

New bookings for the second quarter of fiscal 2017 were $9.19 billion, with consulting bookings of $4.63 billion and outsourcing bookings of $4.56 billion. New bookings for the six months ended February 28, 2017 were $17.51 billion, with consulting bookings of $9.51 billion and outsourcing bookings of $8.00 billion.

Results of Operations for the Three Months Ended ~~November 30, 2016~~February 28, 2017 Compared to the Three Months Ended ~~November 30, 2015~~February 29, 2016

Our five reportable operating segments are our operating groups, which are Communications, Media & Technology; Financial Services; Health & Public Service; Products; and Resources. Net revenues (by operating group, geographic region and type of work) and reimbursements were as follows:


	Three Months Ended				Percent Increase (Decrease) U.S. Dollars			Percent Increase (Decrease) Local Currency		Percent of Total Net Revenues for the Three Months Ended					Three Months Ended						Percent Increase (Decrease) U.S. Dollars		Percent Increase (Decrease) Local Currency			Percent of Total Net Revenues for the Three Months Ended
	November 30, 2016		November 30, 2015				November 30, 2016			November 30, 2015		February 28, 2017				February 29, 2016				February 28, 2017			Percent Increase (Decrease) Local Currency		February 29, 2016
	(in millions of U.S. dollars)				Percent Increase (Decrease) U.S. Dollars												(in millions of U.S. dollars)
OPERATING GROUPS								Percent Increase (Decrease) Local Currency													Percent Increase (Decrease) U.S. Dollars
Communications, Media & Technology	$	1,686	$	1,605	5	%		4	%	20	%		20	%	$	1,621		$	1,607		1	%	1	%		20	%	20	%
Financial Services	1,810		1,745		4			6		21			22		1,770			1,685			5		8			21		21
Health & Public Service	1,501		1,424		5			5		18			18		1,512			1,482			2		2			18		19
Products	2,320		1,990		17			17		27			25		2,265			1,995			14		15			27		25
Resources	1,195		1,245		(4	)		(2	)	14			15		1,145			1,174			(2	)	(1	)		14		15
Other	4		4		n/m			n/m		—			—		6			3			n/m		n/m			—		—
TOTAL NET REVENUES	8,516		8,013		6	%		7	%	100	%		100	%	8,318			7,946			5	%	6	%		100	%	100	%
Reimbursements	490		453		8										445			451			(2	)
TOTAL REVENUES	$	9,006	$	8,466	6	%									$	8,762		$	8,397		4	%
GEOGRAPHIC REGIONS
North America	$	3,981	$	3,763	6	%		6	%	47	%		47	%	$	3,956		$	3,791		4	%	4	%		48	%	48	%
Europe	2,942		2,885		2			7		34			36		2,827			2,785			2		7			34		35
Growth Markets	1,593		1,365		17			10		19			17		1,535			1,370			12		9			18		17
TOTAL NET REVENUES	$	8,516	$	8,013	6	%		7	%	100	%		100	%	$	8,318		$	7,946		5	%	6	%		100	%	100	%
TYPE OF WORK
Consulting	$	4,593	$	4,346	6	%		7	%	54	%		54	%	$	4,406		$	4,293		3	%	5	%		53	%	54	%
Outsourcing	3,922		3,667		7			7		46			46		3,912			3,653			7		8			47		46
TOTAL NET REVENUES	$	8,516	$	8,013	6	%		7	%	100	%		100	%	$	8,318		$	7,946		5	%	6	%		100	%	100	%

_______________

n/m = not meaningful

Amounts in table may not total due to rounding.

Net Revenues

Effective December 1, 2016, we changed the structure of our Communications, Media & Technology operating group to reflect the continued convergence of the communications, media and entertainment industries, as well as the opportunity we are seeing in the software and platform sectors. The new structure includes the following industry groups: Communications & Media (Telecommunications, Cable, Broadcasting and Content & Publishing); Software & Platforms (Internet & Social and Software); and Electronics & High Tech (Network Equipment Providers, Aerospace & Defense, Consumer Technology, Semiconductor, Medical Equipment and Enterprise Markets). The following net revenues commentary discusses local currency net revenue changes for the ~~first~~second quarter of fiscal 2017 compared to the ~~first~~second quarter of fiscal 2016:

Operating Groups

Communications, Media & Technology net revenues increased 4%1% in local currency, ~~driven~~led by ~~Media~~Software & ~~Entertainment~~Platforms in North America, as well as growth across all industry groups in Growth Markets and Electronics & High Tech ~~growth~~ in ~~both~~ North ~~America and Growth Markets.~~America. This growth was partially offset by a decline in Communications & Media in Europe, as disruptions in the market continue to impact demand, and we expect this trend to ~~continue in the near term.~~continue.

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Financial Services net revenues increased 6%8% in local currency, driven by growth in both industry groups in ~~Europe. In~~Europe and Banking & Capital Markets ~~strong growth~~ in ~~Europe and~~ Growth ~~Markets was partially offset by a decline in North America.~~Markets.

Health & Public Service net revenues increased 5%2% in local currency, driven by Public Service in Growth Markets and Europe, as well as Health in North America.

Products net revenues increased ~~17%~~15% in local currency, driven by very strong growth across all industry groups and geographic regions, led by Consumer Goods, Retail & Travel Services, as well as Life Sciences in North America and Industrial in Europe.

Resources net revenues decreased 1% in local currency, as very strong growth in Utilities in Europe and Growth Markets was more than offset by declines in Energy across all geographic regions and Chemicals & Natural Resources in North America and Europe. We have experienced negative revenue growth in Chemicals & Natural Resources and Energy, principally due to continued challenging market conditions in these industries, and we expect this trend to continue in the near term.

Geographic Regions

North America net revenues increased 4% in local currency, driven by the United States.

Europe net revenues increased 7% in local currency, driven by the United Kingdom, Germany, Switzerland, Sweden and Spain.

Growth Markets net revenues increased 9% in local currency, led by Japan, as well as Australia, Singapore and China.

Operating Expenses

Operating expenses for the second quarter of fiscal 2017 increased $315 million, or 4%, over the second quarter of fiscal 2016, and remained flat as a percentage of revenues at 87.0%. Operating expenses before reimbursable expenses for the second quarter of fiscal 2017 increased $321 million, or 5%, over the second quarter of fiscal 2016, and remained flat as a percentage of net revenues at 86.3%.

Cost of Services

Cost of services for the second quarter of fiscal 2017 increased $231 million, or 4%, over the second quarter of fiscal 2016, and decreased as a percentage of revenues to 71.4% from 71.8% during this period. Cost of services before reimbursable expenses for the second quarter of fiscal 2017 increased $238 million, or 4%, over the second quarter of fiscal 2016, and decreased as a percentage of net revenues to 69.9% from 70.2% during this period. Gross margin for the second quarter of fiscal 2017 increased to 30.1% from 29.8% during this period. The increase in gross margin for the second quarter of fiscal 2017 was principally due to lower labor costs as a percentage of net revenues, compared to the second quarter of fiscal 2016.

Sales and Marketing

Sales and marketing expense for the second quarter of fiscal 2017 increased $41 million, or 5%, over the second quarter of fiscal 2016, and remained flat as a percentage of net revenues at 10.5%.

General and Administrative Costs

General and administrative costs for the second quarter of fiscal 2017 increased $43 million, or 9%, over the second quarter of fiscal 2016, and increased as a percentage of net revenues to 5.9% from 5.7% during this period. The increase as a percentage of net revenues was principally due to higher technology and facilities costs.

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Operating Income and Operating Margin

Operating income for the second quarter of fiscal 2017 increased $51 million, or 5%, over the second quarter of fiscal 2016. Operating income and operating margin for each of the operating groups were as follows:



	Three Months Ended
	February 28, 2017				February 29, 2016
	Operating Income		Operating Margin		Operating Income		Operating Margin		Increase (Decrease)
	(in millions of U.S. dollars)
Communications, Media & Technology	$	215	13	%	$	243	15	%	$	(28	)
Financial Services	268		15		231		14		$	38
Health & Public Service	189		13		210		14		$	(21	)
Products	364		16		286		14		$	77
Resources	103		9		119		10		$	(16	)
Total	$	1,139	13.7	%	$	1,088	13.7	%	$	51

_______________

Amounts in table may not total due to rounding.

We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income during the second quarter of fiscal 2017 was similar to that disclosed for net revenue. The commentary below provides insight into other factors affecting operating group performance and operating margin for the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016:

Communications, Media & Technology operating income decreased primarily due to lower consulting contract profitability.

Financial Services operating income increased primarily due to revenue growth and higher contract profitability.

Health & Public Service operating income decreased primarily due to a decline in consulting revenues.

Products operating income increased due to very strong revenue growth and higher contract profitability.

Resources operating income decreased due to a decline in consulting revenue and lower consulting contract profitability.

Gain (Loss) on Sale of Businesses

We recorded a gain from the Navitaire divestiture of $554 million during the second quarter of fiscal 2016.

Provision for Income Taxes

The effective tax rate for the second quarter of fiscal 2017 was 20.7%, compared with 13.7% for the second quarter of fiscal 2016. Absent the gain on the Navitaire divestiture and related $58 million in taxes recorded during the second quarter of fiscal 2016, the effective tax rate for the second quarter of fiscal 2016 would have been 15.4%. The effective tax rate for the second quarter of fiscal 2017 benefited from the final determination of prior year U.S. taxes as well as the recognition of excess tax benefits from share based payments as a result of the early adoption of ASU No. 2016-09. This was offset by an increase to prior year non-U.S. tax liabilities. The effective tax rate in the second quarter of fiscal 2016 also benefited from the final determination of prior year U.S. taxes.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests for the second quarter of fiscal 2017 decreased $25 million, or 34%, from the second quarter of fiscal 2016. The decrease was due to lower net income of $513 millionduring the second quarter of fiscal 2017, primarily driven by the gain on sale of business from the Navitaire divestiture during the second quarter of fiscal 2016.

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Earnings Per Share

Diluted earnings per share were $1.33 for the second quarter of fiscal 2017, compared with $2.08 for the second quarter of fiscal 2016. The $0.75 decrease in our diluted earnings per share included the impact of the gain on sale of business, net of taxes, from the Navitaire divestiture, which increased diluted earnings per share for the second quarter of fiscal 2016 by $0.74. Excluding the impact of this gain, diluted earnings per share for the second quarter of fiscal 2017 decreased $0.01 compared with the second quarter of fiscal 2016, due to a decrease of $0.09 from a higher effective tax rate, partially offset by increases of $0.07 from higher revenues and operating results and $0.01 from lower weighted average shares outstanding. For information regarding our earnings per share calculations, see Note 2 (Earnings Per Share) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Results of Operations for the Six Months Ended February 28, 2017 Compared to the Six Months Ended February 29, 2016



	Six Months Ended				Percent Increase(Decrease) U.S. Dollars		Percent Increase (Decrease) Local Currency		Percent of Total Net Revenues for the Six Months Ended
	February 28, 2017		February 29, 2016		Percent Increase(Decrease) U.S. Dollars		Percent Increase (Decrease) Local Currency		February 28, 2017		February 29, 2016
	(in millions of U.S. dollars)
OPERATING GROUPS
Communications, Media & Technology	$	3,307	$	3,211	3	%	3	%	20	%	20	%
Financial Services	3,579		3,430		4		7		21		22
Health & Public Service	3,012		2,906		4		4		18		18
Products	4,585		3,985		15		16		27		25
Resources	2,340		2,419		(3	)	(2	)	14		15
Other	10		8		n/m		n/m		—		—
TOTAL NET REVENUES	16,833		15,959		5	%	7	%	100	%	100	%
Reimbursements	935		904		3
TOTAL REVENUES	$	17,768	$	16,863	5	%
GEOGRAPHIC REGIONS
North America	$	7,937	$	7,554	5	%	5	%	47	%	47	%
Europe	5,769		5,669		2		7		34		36
Growth Markets	3,127		2,735		14		10		19		17
TOTAL NET REVENUES	$	16,833	$	15,959	5	%	7	%	100	%	100	%
TYPE OF WORK
Consulting	$	8,999	$	8,639	4	%	6	%	53	%	54	%
Outsourcing	7,834		7,320		7		8		47		46
TOTAL NET REVENUES	$	16,833	$	15,959	5	%	7	%	100	%	100	%

_______________

n/m = not meaningful

Amounts in table may not total due to rounding.

Net Revenues

Effective December 1, 2016, we changed the structure of our Communications, Media & Technology operating group to reflect the continued convergence of the communications, media and entertainment industries, as well as the opportunity we are seeing in the software and platform sectors. The new structure includes the following industry groups: Communications & Media (Telecommunications, Cable, Broadcasting and Content & Publishing); Software & Platforms (Internet & Social and Software); and Electronics & High Tech (Network Equipment Providers, Aerospace & Defense, Consumer Technology, Semiconductor, Medical Equipment and Enterprise Markets). The following net revenues commentary discusses local currency net revenue changes for the six months ended February 28, 2017 compared to the six months ended February 29, 2016:

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Operating Groups

Communications, Media & Technology net revenues increased 3% in local currency, led by Software & Platforms in North America, as well as growth across all industry groups in Growth Markets and Electronics & High Tech in North America. This growth was partially offset by a decline in Communication & Media in Europe, as disruptions in the market continue to impact demand, and we expect this trend to continue.

Financial Services net revenues increased 7% in local currency, driven by growth in both industry groups in Europe and Banking & Capital Markets in Growth Markets.

Health & Public Service net revenues increased 4% in local currency, driven by Public Service in Growth Markets and Europe, as well as Health in North America.

Products net revenues increased 16% in local currency, driven by very strong growth across all industry groups and geographic regions, led by Consumer Goods, Retail & Travel Services, as well as Life Sciences in North America and Industrial in Europe.

Resources net revenues decreased 2% in local currency, as significant growth in Utilities in Europe and Growth Markets was more than offset by declines in Chemicals & Natural Resources and Energy across all geographic regions. We have experienced negative revenue growth in Chemicals & Natural Resources and Energy, principally due to continued challenging market conditions in these industries, and we expect this trend to continue in the near term.

Geographic Regions

North America net revenues increased 6%5% in local currency, driven by the United States.

Europe net revenues increased 7% in local currency, driven by the United Kingdom, Germany, Switzerland, Spain and Belgium.

Growth Markets net revenues increased 10% in local currency, led by Japan, as well as ~~China~~Australia and ~~Australia.~~

China.

Operating Expenses

Operating expenses for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased ~~$429~~$743 million, or 6%5%, over the ~~first quarter of fiscal~~six months ended February 29, 2016, and decreased as a percentage of revenues to ~~85.2%~~86.1% from ~~85.6%~~86.3% during this period. Operating expenses before reimbursable expenses for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased ~~$392~~$713 million, or 6%5%, over the ~~first quarter of fiscal~~six months ended February 29, 2016, and decreased as a percentage of net revenues to ~~84.4%~~85.3% from ~~84.8%~~85.5% during this period.

Cost of Services

Cost of services for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased ~~$372~~$603 million, or 6%5%, over the ~~first quarter of fiscal~~six months ended February 29, 2016, and ~~remained flat~~decreased as a percentage of revenues ~~at 69.7%~~to 70.5% from 70.8% during this period. Cost of services before reimbursable expenses for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased ~~$335~~$573 million, or 6%5%, over the ~~first quarter of fiscal~~six months ended February 29, 2016, and decreased as a percentage of net revenues to ~~67.9%~~68.9% from ~~68.0%~~69.1% during this period. Gross margin for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased to ~~32.1%~~31.1% from ~~32.0%~~30.9% during this period.

Sales and Marketing

Sales and marketing expense for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased ~~$13~~$54 million, or 1%3%, over the ~~first quarter of fiscal~~six months ended February 29, 2016, and decreased as a percentage of net revenues to ~~10.4%~~10.5% from ~~10.9%~~10.7% during this period. ~~The decrease as a percentage of net revenues was principally due to improved operational efficiency in our business development activities.~~

General and Administrative Costs

General and administrative costs for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased ~~$44~~$86 million, or 9%, ~~from~~over the ~~first quarter of fiscal~~six months ended February 29, 2016, and increased as a percentage of net revenues to 6.0% from ~~5.8%~~5.7% during this period. The increase as a percentage of net revenues was principally due to higher technology and facilities costs.

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Operating Income and Operating Margin

Operating income for the ~~first quarter of fiscal~~six months ended February 28, 2017 increased ~~$111~~$161 million, or 9%7%, over the ~~first quarter of fiscal~~six months ended February 29, 2016. Operating income and operating margin for each of the operating groups were as follows:

Three Months Ended
November 30, 2016 November 30, 2015
Operating
Income Operating
Margin Operating
Income Operating
Margin Increase
(Decrease)
(in millions of U.S. dollars)
Communications, Media & Technology $ 258
15 % $ 248
15 % $ 10
Financial Services 319
18
323
18
$ (3 )
Health & Public Service 199
13
173
12
$ 27
Products 409
18
291
15
$ 117
Resources 147
12
187
15
$ (40 )
Total $ 1,332
15.6 % $ 1,221
15.2 % $ 111

~~_______________~~

~~Amounts in table may not total due to rounding.~~

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	Six Months Ended
	February 28, 2017				February 29, 2016
	Operating Income		Operating Margin		Operating Income		Operating Margin		Increase (Decrease)
	(in millions of U.S. dollars)
Communications, Media & Technology	$	473	14	%	$	490	15	%	$	(18	)
Financial Services	588		16		553		16		$	34
Health & Public Service	388		13		382		13		$	6
Products	772		17		578		14		$	195
Resources	250		11		306		13		$	(56	)
Total	$	2,471	14.7	%	$	2,309	14.5	%	$	161

We estimate that the aggregate percentage impact of foreign currency exchange rates on our ~~Operating~~operating income during the ~~first quarter of fiscal~~six months ended February 28, 2017 was similar to that disclosed for ~~Net~~net revenue. The commentary below provides insight into other factors affecting operating group performance and operating margin for the ~~first quarter of fiscal~~six months ended February 28, 2017 compared with the ~~first quarter of fiscal~~six months ended February 29, 2016:

Communications, Media & Technology operating income ~~increased primarily due to higher outsourcing revenue growth.~~

~~Financial Services operating income~~ decreased primarily due to lower ~~outsourcing~~consulting contract profitability.

Financial Services operating income increased primarily due to revenue growth.

Health & Public Service operating income ~~increased due to higher consulting contract profitability and outsourcing revenue growth.~~was relatively flat year-over-year.

Products operating income increased due to ~~significant~~very strong revenue growth, higher consulting contract profitability and lower sales and marketing costs as a percentage of net revenues.

Resources operating income decreased due to a decline in consulting revenue and lower consulting contract profitability.

Gain (Loss) on Sale of Businesses

We recorded a gain from the Navitaire divestiture of $554 million during the six months ended February 29, 2016.

Provision for Income Taxes

The effective tax rate for the ~~first~~six months ended February 28, 2017 was 20.5%, compared with 20.4% for the six months ended February 29, 2016. Absent the gain on the Navitaire divestiture and related $58 million in taxes recorded during the second quarter of fiscal ~~2017 was 20.4%, compared with 29.3% for~~2016, the ~~first quarter of fiscal 2016. The lower~~ effective tax rate infor the ~~first quarter~~six months ended February 29, 2016 would have been 22.8%.The effective tax rate for the six months ended February 28, 2017 benefited from the final determination of ~~fiscal 2017 was primarily due to higher benefits from adjustments to~~ prior year U.S. taxes and the recognition of excess tax benefits from share based payments as a result of the early adoption of ASU No. 2016-09. ~~For more information, see Note 1 (Basis~~This was partially offset by a net increase to prior year non-U.S. tax liabilities. The effective tax rate for the six months ended February 29, 2016 also benefited from the final determination of ~~Presentation) to our Consolidated Financial Statements under Item 1, “Financial Statements.”~~prior year U.S. taxes.

Our provision for income taxes is based on many factors and subject to volatility year to year. ~~We expect the fiscal 2017 annual effective tax rate to be in the range of 22% to 24%.~~ The effective tax rate for a quarter can vary ~~outside of the range~~ because of the timing of when certain events occur during the year.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests for the ~~first quarter of fiscal~~six months ended February 28, 2017 ~~increased $5~~decreased $19 million, or ~~11%~~16%, from the ~~first quarter of fiscal~~six months ended February 29, 2016. The ~~increase~~decrease was due to ~~higher Net~~lower net income of ~~$191~~$322 million during the ~~first quarter~~six months ended February 28, 2017, primarily driven by the gain on sale of ~~fiscal 2017.~~business from the Navitaire divestiture during the six months ended February 29, 2016.

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Earnings Per Share

Diluted earnings per share were $2.91 for the six months ended February 28, 2017, compared with $3.36 for the six months ended February 29, 2016. The $0.45 decrease in our diluted earnings per share included the impact of the gain on sale of business, net of taxes, from the Navitaire divestiture, which increased ~~$0.30~~diluted earnings per share for the six months ended February 29, 2016 by $0.74. Excluding the impact of this gain, diluted earnings per share for the six months ended February 28, 2017 increased $0.29 compared with the ~~first quarter of fiscal~~six months ended February 29, 2016, due to increases of ~~$0.18~~$0.19 from higher revenues and operating results, $0.08 from a lower effective tax rate ~~$0.11 from higher revenues~~ and ~~operating results and $0.02~~$0.03 from lower weighted average shares outstanding. These increases were partially offset by a decrease of $0.01 from higher non-operating expense. For information regarding our earnings per share calculations, see Note 2 (Earnings Per Share) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

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Liquidity and Capital Resources

As of ~~November 30, 2016,~~February 28, 2017, Cash and cash equivalents was ~~$4.1~~$3.2 billion, compared with $4.9 billion as of August 31, 2016.

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


	Three Months Ended									Six Months Ended
	November 30, 2016			November 30, 2015			Change			February 28, 2017			February 29, 2016			Change
	(in millions of U.S. dollars)									(in millions of U.S. dollars)
Net cash provided by (used in):
Operating activities	$	1,084		$	643		$	441		$	1,239		$	1,007		$	231
Investing activities	(690		)	(706		)	17			(1,034		)	(371		)	(663		)
Financing activities	(1,163		)	(1,196		)	33			(1,844		)	(1,916		)	72
Effect of exchange rate changes on cash and cash equivalents	(60		)	(28		)	(32		)	(27		)	(47		)	19
Net increase (decrease) in cash and cash equivalents	$	(829	)	$	(1,288	)	$	459		$	(1,667	)	$	(1,326	)	$	(341	)

_______________

Amounts in table may not total due to rounding.

Operating activities: The year-over-year increase in operating cash flow was due to higher net income during the first half of fiscal 2017, excluding the impact of the gain on sale of business in fiscal 2016, and changes in operating assets and liabilities, including higher tax payments during the ~~three~~six months ended ~~November 30, 2015~~February 29, 2016 related to withholding taxes on undistributed earnings of the Company’s U.S. subsidiaries. These increases were partially offset by lower collections on net client balances (receivables from clients, current and non-current unbilled services and deferred revenues).

Investing activities: ~~The $17~~Cash used in investing activities increased $663 million ~~decrease in cash used was due to decreased~~as spending on business acquisitions and investments ~~and property and equipment.~~in the first half of fiscal 2016 was largely offset by proceeds from the Navitaire divestiture.

Financing activities: The ~~$33~~$72 million decrease in cash used was primarily due to a decrease in the net purchases of shares, partially offset by an increase in cash dividends paid. For additional information, see Note 6 (Material Transactions Affecting Shareholders’ Equity) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

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

Substantially all of our cash is held in jurisdictions where there are no regulatory restrictions or material tax effects on the free flow of funds. Domestic cash inflows for our Irish parent, principally dividend distributions from lower-tier subsidiaries, have been sufficient to meet our historic cash requirements, and we expect this to continue into the future.

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Borrowing Facilities

As of ~~November 30, 2016,~~February 28, 2017, we had the following borrowing facilities, including the issuance of letters of credit, to support general working capital purposes:


	Facility Amount		Borrowings Under Facilities		Facility Amount		Borrowings Under Facilities
	(in millions of U.S. dollars)				(in millions of U.S. dollars)
Syndicated loan facility	$	1,000	$	—	$	1,000	$	—
Separate, uncommitted, unsecured multicurrency revolving credit facilities	501		—		500		—
Local guaranteed and non-guaranteed lines of credit	157		—		209		—
Total	$	1,658	$	—	$	1,709	$	—

Under the borrowing facilities described above, we had an aggregate of ~~$168~~$177 million of letters of credit outstanding as of ~~November 30, 2016.~~

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February 28, 2017.

Share Purchases and Redemptions

The Board of Directors of Accenture plc has authorized funding for our publicly announced open-market share purchase program for acquiring Accenture plc Class A ordinary shares and for purchases and redemptions of Accenture plc Class A ordinary shares, Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares held by current and former members of Accenture Leadership and their permitted transferees.

Our share purchase activity during the ~~three~~six months ended ~~November 30, 2016~~February 28, 2017 was as follows:


	Accenture plc Class A Ordinary Shares			Accenture Holdings plc Ordinary Shares and Accenture Canada Holdings Inc. Exchangeable Shares			Accenture plc Class A Ordinary Shares			Accenture Holdings plc Ordinary Shares and Accenture Canada Holdings Inc. Exchangeable Shares
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
	(in millions of U.S. dollars, except share amounts)						(in millions of U.S. dollars, except share amounts)
Open-market share purchases (1)	3,895,212	$	453	—	$	—	9,071,029	$	1,061	—	$	—
Other share purchase programs	—	—		285,288	34		—	—		457,683	54
Other purchases (2)	868,630	101		—	—		2,475,459	289		—	—
Total	4,763,842	$	554	285,288	$	34	11,546,488	$	1,350	457,683	$	54

_______________


(1)	We conduct a publicly announced open-market share purchase program for Accenture plc Class A ordinary shares. These shares are held as treasury shares by Accenture plc and may be utilized to provide for select employee benefits, such as equity awards to our employees.

(2)

During the ~~three~~six months ended ~~November 30, 2016~~February 28, 2017, as authorized under our various employee equity share plans, we acquired Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares under those plans. These purchases of shares in connection with employee share plans do not affect our aggregate available authorization for our publicly announced open-market share purchase and the other share purchase programs.

We intend to continue to use a significant portion of cash generated from operations for share repurchases during the remainder of fiscal 2017. The number of shares ultimately repurchased under our open-market share purchase program may vary depending on numerous factors, including, without limitation, share price and other market conditions, our ongoing capital allocation planning, the levels of cash and debt balances, other demands for cash, such as acquisition activity, general economic and/or business conditions, and board and management discretion. Additionally, as these factors may change over the course of the year, the amount of share repurchase activity during any particular period cannot be predicted and may fluctuate from time to time. Share repurchases may be made from time to time through open-market purchases, in respect of purchases and redemptions of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares, through the use of Rule 10b5-1 plans and/or by other means. The repurchase program may be accelerated, suspended, delayed or discontinued at any time, without notice.

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Other Share Redemptions

During the ~~three~~six months ended ~~November 30, 2016,~~February 28, 2017, we issued ~~403,340~~491,349 Accenture plc Class A ordinary shares upon redemptions of an equivalent number of Accenture Holdings plc ordinary shares pursuant to our registration statement on Form S-3 (the “registration statement”). The registration statement allows us, at our option, to issue freely tradable Accenture plc Class A ordinary shares in lieu of cash upon redemptions of Accenture Holdings plc ordinary shares held by current and former members of Accenture Leadership and their permitted transferees.

For a complete description of all share purchase and redemption activity for the ~~first~~second quarter of fiscal 2017, see Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds.”

Off-Balance Sheet Arrangements

In the normal course of business and in conjunction with some client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients with respect to certain matters.

To date, we have not been required to make any significant payment under any of the arrangements described above. For further discussion of these transactions, see Note 10 (Commitments and Contingencies) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

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Recently Adopted and New Accounting ~~Pronouncement~~Pronouncements

~~On September~~See Note 1 ~~2016, we early adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-09, Improvements~~(Basis of Presentation) to Employee Share-Based Payment Accounting, which simplifies the accounting for share-based payment transactions. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. The standard clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flows statement and provides an accounting policy election to account for forfeitures as they occur. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows.

~~The primary impact of the adoption of the ASU on our~~these Consolidated Financial Statements was the recognition of excess tax benefits in the provision for income taxes rather than Additional paid-in capital, which reduced income tax expense by $31 million for the three months ended November 30, 2016. We elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. We also elected to retrospectively apply the presentation requirements for cash flows related to excess tax benefits for all periods presented, which resulted in an increase to both net cash provided by operating activities and net cash used in financing activities of $32 million for the three months ended November 30, 2015. The presentation requirement for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in our consolidated cash flows statements since these cash flows have historically been presented as a financing activity.

~~New Accounting Pronouncements~~

On October 24, 2016, the FASB issued ASU No. 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of intra-entity transfers, other than inventory, when the transfer occurs. Under current guidance in U.S. GAAP, in the case of depreciable or amortizable assets, the income tax consequences are deferred at the time of the intra-entity transfer and recognized as the assets are depreciated or amortized. The ASU will be effective for us beginning Septemberunder Item 1, 2018, including interim periods in our fiscal year 2019, and requires modified retrospective transition with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. We are assessing the impact of this ASU on our Consolidated Financial“Financial Statements.

On August 26, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU will be effective for us beginning September 1, 2018, including interim periods in our fiscal year 2019, and requires the retrospective method of adoption unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. We are assessing the impact of this ASU on our Consolidated Financial Statements.

On March 15, 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement to retrospectively apply equity method accounting when an entity increases ownership or influence in a previously held investment. The ASU will be effective for us beginning September 1, 2017, including interim periods in our fiscal year 2018. We do not expect the adoption of this ASU to have a material impact on our Consolidated Financial Statements.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. The ASU will be effective for us beginning September 1, 2019, including interim periods in our fiscal year 2020, and allows for a modified retrospective method upon adoption. We are assessing the impact of this ASU on our Consolidated Financial Statements.

On January 5, 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The ASU will be effective for us beginning September 1, 2018, including interim periods in our fiscal year 2019. We do not expect the adoption of this ASU to have a material impact on our Consolidated Financial Statements.

~~Table of Contents~~

On May 28, 2014, the FASB issued ASU No. 2014-09 (Accounting Standard Codification 606), Revenue from Contracts with Customers, which will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU will be effective for us beginning September 1, 2018, including interim periods in our fiscal year 2019, and allows for both retrospective and modified retrospective methods of adoption. We will adopt the guidance on September 1, 2018 and apply the modified retrospective method. We are assessing the impact of this ASU on our Consolidated Financial Statements.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the ~~three~~six months ended ~~November 30, 2016,~~February 28, 2017, there were no material changes to the information on market risk exposure disclosed in our Annual Report on Form 10-K for the year ended August 31, 2016. For a discussion of our market risk associated with foreign currency risk, interest rate risk and equity price risk as of August 31, 2016, see “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended August 31, 2016.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the ~~first~~second quarter of fiscal 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under “Legal Contingencies” in Note 10 (Commitments and Contingencies) to our Consolidated Financial Statements under Part I, Item 1, “Financial Statements,” is incorporated herein by reference.

ITEM 1A. RISK FACTORS

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2016. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended August 31, 2016.

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

Purchases and Redemptions of Accenture plc Class A Ordinary Shares and Class X Ordinary Shares

The following table provides information relating to our purchases of Accenture plc Class A ordinary shares and redemptions of Accenture plc Class X ordinary shares during the ~~first~~second quarter of fiscal 2017.


Period	Total Number of Shares Purchased	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)		Total Number of Shares Purchased	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
					(in millions of U.S. dollars)						(in millions of U.S. dollars)
September 1, 2016 — September 30, 2016
December 1, 2016 — December 31, 2016
Class A ordinary shares	1,694,784	$	113.81	1,346,366	$	5,324	2,082,376	$	119.50	1,389,572	$	4,728
Class X ordinary shares	—	$	0.0000225	—	—		8,645	$	0.0000225	—	—
October 1, 2016 — October 31, 2016
January 1, 2017 — January 31, 2017
Class A ordinary shares	1,704,895	$	117.19	1,293,574	$	5,066	2,891,782	$	115.83	2,186,362	$	4,466
Class X ordinary shares	307,548	$	0.0000225	—	—		37,615	$	0.0000225	—	—
November 1, 2016 — November 30, 2016
February 1, 2017 — February 28, 2017
Class A ordinary shares	1,364,163	$	118.52	1,255,272	$	4,899	1,808,488	$	117.08	1,599,883	$	4,272
Class X ordinary shares	288,658	$	0.0000225	—	—		275,488	$	0.0000225	—	—
Total
Class A ordinary shares (4)	4,763,842	$	116.37	3,895,212			6,782,646	$	117.29	5,175,817
Class X ordinary shares (5)	596,206	$	0.0000225	—			321,748	$	0.0000225	—

_______________


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

(2)

Since August 2001, the Board of Directors of Accenture plc has authorized and periodically confirmed a publicly announced open-market share purchase program for acquiring Accenture plc Class A ordinary shares. During the ~~first~~second quarter of fiscal 2017, we purchased ~~3,895,212~~5,175,817 Accenture plc Class A ordinary shares under this program for an aggregate price of ~~$453~~$608 million. The open-market purchase program does not have an expiration date.

(3)

As of ~~November 30, 2016,~~February 28, 2017, our aggregate available authorization for share purchases and redemptions was ~~$4,899~~$4,272 million, which management has the discretion to use for either our publicly announced open-market share purchase program or the other share purchase programs. Since August 2001 and as of ~~November 30, 2016,~~February 28, 2017, the Board of Directors of Accenture plc has authorized an aggregate of $30,100 million for purchases and redemptions of Accenture plc Class A ordinary shares, Accenture Holdings plc ordinary shares or Accenture Canada Holdings Inc. exchangeable shares.

(4)

During the ~~first~~second quarter of fiscal 2017, Accenture purchased ~~868,630~~1,606,829 Accenture plc Class A ordinary shares in transactions unrelated to publicly announced share plans or programs. These transactions consisted of acquisitions of Accenture plc Class A ordinary shares primarily via share withholding for payroll tax obligations due from employees and former employees in connection with the delivery of Accenture plc Class A ordinary shares under our various employee equity share plans. These purchases of shares in connection with employee share plans do not affect our aggregate available authorization for our publicly announced open-market share purchase and the other share purchase programs.


(5)	Accenture plc Class X ordinary shares are redeemable at their par value of $0.0000225 per share.

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Purchases and Redemptions of Accenture Holdings plc Ordinary Shares and Accenture Canada Holdings Inc. Exchangeable Shares

The following table provides additional information relating to our purchases and redemptions of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares for cash during the ~~first~~second quarter of fiscal 2017. We believe that the following table and footnotes provide useful information regarding the share purchase and redemption activity of Accenture. Generally, purchases and redemptions of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares for cash and employee forfeitures reduce shares outstanding for purposes of computing diluted earnings per share.

Period
Total Number
of Shares
Purchased (1)
Average
Price Paid
per Share (2)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the Plans or Programs (3)
Accenture Holdings plc

September 1, 2016 — September 30, 2016
—

$ —

—

—
October 1, 2016 — October 31, 2016
65,789

$ 117.95

—

—
November 1, 2016 — November 30, 2016
79,464

$ 119.20

—

—
Total
145,253

$ 118.64

—

—
Accenture Canada Holdings Inc.

September 1, 2016 — September 30, 2016
—

$ —

—

—
October 1, 2016 — October 31, 2016
76,035

$ 115.98

—

—
November 1, 2016 — November 30, 2016
64,000

$ 117.47

—

—
Total
140,035

$ 116.66

—

—



Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
Accenture Holdings plc
December 1, 2016 — December 31, 2016	42,625	$	117.62	—	—
January 1, 2017 — January 31, 2017	77,379	$	115.89	—	—
February 1, 2017 — February 28, 2017	52,291	$	117.09	—	—
Total	172,295	$	116.68	—	—
Accenture Canada Holdings Inc.
December 1, 2016 — December 31, 2016	100	$	117.66	—	—
January 1, 2017 — January 31, 2017	—	$	—	—	—
February 1, 2017 — February 28, 2017	—	$	—	—	—
Total	100	$	117.66	—	—

_______________

(1)

During the ~~first~~second quarter of fiscal 2017, we acquired a total of ~~145,253~~172,295 Accenture Holdings plc ordinary shares and ~~140,035~~100 Accenture Canada Holdings Inc. exchangeable shares from current and former members of Accenture Leadership and their permitted transferees by means of purchase or redemption for cash, or employee forfeiture, as applicable. In addition, during the ~~first~~second quarter of fiscal 2017, we issued ~~403,340~~88,009 Accenture plc Class A ordinary shares upon redemptions of an equivalent number of Accenture Holdings plc ordinary shares pursuant to a registration statement.


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

(3)

For a discussion of our aggregate available authorization for share purchases and redemptions through either our publicly announced open-market share purchase program or the other share purchase programs, see the “Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs” column of the “Purchases and Redemptions of Accenture plc Class A Ordinary Shares and Class X Ordinary Shares” table above and the applicable footnote.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) None.

(b) None.

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ITEM 6. EXHIBITS

Exhibit Index:



Exhibit Number		Exhibit
3.1		Amended and Restated Memorandum and Articles of Association of Accenture plc (incorporated by reference to Exhibit 3.1 to Accenture plc’s 8-K filed on February 3, ~~2016)~~2016)

10.1		Memorandum and Articles of Association and Deed Poll of Accenture Holdings plc (incorporated by reference to Exhibit 3.1 to Accenture Holdings plc’s 8-K12G3 filed on August 26, ~~2015)~~2015)

10.2*		Form of Key Executive Performance-Based Award Restricted Share Unit Agreement pursuant to the Amended and Restated Accenture plc 2010 Share Incentive Plan (filed herewith)

10.3*		Form of Accenture Leadership Performance Equity Award Restricted Share Unit Agreement pursuant to the Amended and Restated Accenture plc 2010 Share Incentive Plan (filed herewith)

10.4*		Form of Voluntary Equity Investment Program Matching Grant Restricted Share Unit Agreement pursuant to the Amended and Restated Accenture plc 2010 Share Incentive Plan (filed herewith)

31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ~~(filed herewith)~~(filed herewith)

31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ~~(filed herewith)~~(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 ~~(furnished herewith)~~(furnished 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 ~~(furnished herewith)~~(furnished herewith)

101		The following financial information from Accenture plc’s Quarterly Report on Form 10-Q for the quarterly period ended ~~November 30, 2016,~~February 28, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of ~~November 30, 2016~~February 28, 2017 (Unaudited) and August 31, 2016, (ii) Consolidated Income Statements (Unaudited) for the three and six months ended ~~November 30,~~February 28, 2017 and February 29, 2016, ~~and 2015,~~ (iii) Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended ~~November 30,~~February 28, 2017 and February 29, 2016, ~~and 2015,~~ (iv) Consolidated Shareholders’ Equity Statement (Unaudited) for the ~~three~~six months ended ~~November 30, 2016,~~February 28, 2017, (v) Consolidated Cash Flows Statements (Unaudited) for the ~~three~~six months ended ~~November 30,~~February 28, 2017 and February 29, 2016 ~~and 2015~~ and (vi) the Notes to Consolidated Financial Statements (Unaudited)

(*) Indicates management contract or compensatory plan or arrangement.

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SIGNATURES

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

Date: ~~December 21, 2016~~March 23, 2017



	ACCENTURE PLC

	By:	/s/ David P. Rowland
	Name:	David P. Rowland
	Title:	Chief Financial Officer
		(Principal Financial Officer and Authorized Signatory)

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