UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended May 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number: 000-49713
ACCENTURE SCA
(Exact name of Registrant as specified in its charter)
| Luxembourg | 98-0351796 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
1 rue Guillaume Kroll
L – 1882 Luxembourg
(Address of principal executive offices)
(352) 26 42 35 00
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) Yes ¨ No x
The number of shares of the Registrant’s Class I common shares, par value €1.25 per share, outstanding as of June 13, 2003 was 906,820,941 (which number does not include 51,724,678 issued shares held by subsidiaries of the Registrant).
INDEX
| Page | ||||
| Part I. |
Financial Information | |||
| Item 1. |
Financial Statements (unaudited) | |||
| Consolidated Balance Sheets as of May 31, 2003 and August 31, 2002 | 3 | |||
| Consolidated Income Statements for the three and nine months ended May 31, 2003 and 2002 | 4 | |||
| Consolidated Shareholders’ Equity Statement for the nine months ended May 31, 2003 | 5 | |||
| Consolidated Cash Flows Statements for the nine months ended May 31, 2003 and 2002 | 6 | |||
| Notes to Consolidated Financial Statements | 7 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 | ||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 29 | ||
| Item 4. |
Controls and Procedures | 29 | ||
| Part II. |
Other Information | |||
| Item 1. |
Legal Proceedings | 31 | ||
| Item 2. |
Changes in Securities and Use of Proceeds | 31 | ||
| Item 6. |
Exhibits and Reports on Form 8-K | 31 | ||
| 32 | ||||
2
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACCENTURE SCA
May 31, 2003 and August 31, 2002
(In thousands of U.S. dollars, except share amounts)
| May 31, 2003 |
August 31, 2002 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | 1,962,194 | $ | 1,316,976 | ||||
| Restricted cash |
150,928 | 79,445 | ||||||
| Receivables from clients, net |
1,460,229 | 1,330,642 | ||||||
| Unbilled services |
941,164 | 774,214 | ||||||
| Due from related parties |
8,249 | 39,488 | ||||||
| Deferred income taxes, net |
197,529 | 189,976 | ||||||
| Other current assets |
252,252 | 330,347 | ||||||
| Total current assets |
4,972,545 | 4,061,088 | ||||||
| NON-CURRENT ASSETS: |
||||||||
| Unbilled services |
127,291 | 106,162 | ||||||
| Investments |
48,936 | 76,017 | ||||||
| Property and equipment, net |
664,699 | 716,504 | ||||||
| Goodwill |
189,031 | 167,603 | ||||||
| Deferred income taxes, net |
278,113 | 283,969 | ||||||
| Other non-current assets |
86,592 | 67,605 | ||||||
| Total non-current assets |
1,394,662 | 1,417,860 | ||||||
| TOTAL ASSETS |
$ | 6,367,207 | $ | 5,478,948 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: |
||||||||
| Short-term bank borrowings |
$ | 51,000 | $ | 57,922 | ||||
| Current portion of long-term debt |
4,602 | 5,177 | ||||||
| Accounts payable |
434,123 | 450,208 | ||||||
| Deferred revenue |
689,885 | 543,917 | ||||||
| Accrued payroll and related benefits |
1,107,806 | 1,139,887 | ||||||
| Income taxes payable |
693,465 | 459,836 | ||||||
| Deferred income taxes, net |
33,848 | 18,884 | ||||||
| Other accrued liabilities |
478,895 | 651,231 | ||||||
| Total current liabilities |
3,493,624 | 3,327,062 | ||||||
| NON-CURRENT LIABILITIES: |
||||||||
| Long-term debt |
13,240 | 3,428 | ||||||
| Retirement obligation |
413,751 | 382,180 | ||||||
| Deferred income taxes, net |
29,276 | 16,674 | ||||||
| Other non-current liabilities |
878,429 | 791,582 | ||||||
| Total non-current liabilities |
1,334,696 | 1,193,864 | ||||||
| MINORITY INTEREST |
44,952 | 31,972 | ||||||
| SHAREHOLDERS’ EQUITY: |
||||||||
| Class I common shares, par value 1.25 euros per share, 19,868,950,000 shares authorized, 753,843,192 issued as of May 31, 2003 and August 31, 2002 |
845,307 | 845,307 | ||||||
| Class I-A common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding |
5,435 | 5,435 | ||||||
| Class I-B common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding |
5,435 | 5,435 | ||||||
| Class I-C common shares, par value 1.25 euros per share, 10,000,000 shares authorized, issued and outstanding |
10,870 | 10,870 | ||||||
| Class I-D common shares, par value 1.25 euros per share, 10,000,000 shares authorized, issued and outstanding |
10,870 | 10,870 | ||||||
| Class I-E common shares, par value 1.25 euros per share, 15,000,000 shares authorized, issued and outstanding |
16,304 | 16,304 | ||||||
| Class I-F common shares, par value 1.25 euros per share, 15,000,000 shares authorized, issued and outstanding |
16,304 | 16,304 | ||||||
| Class I-G common shares, par value 1.25 euros per share, 20,000,000 shares authorized, issued and outstanding |
21,739 | 21,739 | ||||||
| Class I-H common shares, par value 1.25 euros per share, 25,000,000 shares authorized, issued and outstanding |
27,174 | 27,174 | ||||||
| Class I-I common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding |
5,435 | 5,435 | ||||||
| Class I-J common shares, par value 1.25 euros per share, 5,000,000 shares authorized, issued and outstanding |
5,435 | 5,435 | ||||||
| Class I-K common shares, par value 1.25 euros per share, 16,050,000 shares authorized, issued and outstanding |
18,074 | 18,074 | ||||||
| Class I-L common shares, par value 1.25 euros per share, 5,025,720, shares authorized, issued and outstanding |
5,540 | 5,540 | ||||||
| Class I-M common shares, par value 1.25 euros per share, 68,626,707, shares authorized, issued and outstanding |
78,398 | 78,398 | ||||||
| Class II common shares, par value 1.25 euros per share, 20,000,000,000 shares authorized, 470,958,308 shares issued and outstanding |
529,281 | 529,281 | ||||||
| Restricted share units (related to Class A common shares) 40,900,437 and 58,265,829 units issued and outstanding as of May 31, 2003 and August 31, 2002, respectively |
596,400 | 848,218 | ||||||
| Additional paid-in capital |
2,712,490 | 2,944,678 | ||||||
| Treasury shares, at cost, 49,779,454 and 54,276,582 shares at May 31, 2003 and August 31, 2002, respectively |
(938,126 | ) | (1,052,900 | ) | ||||
| Investment in Accenture Ltd Class A common shares, at cost, 4,869,801 and 13,726,885 shares at May 31, 2003 and August 31, 2002, respectively |
(82,233 | ) | (315,486 | ) | ||||
| Accenture Ltd Class A common shares owned by Share Employee Compensation Trust, at cost, 17,757,100 and 12,562,300 shares at May 31, 2003 and August 31, 2002, respectively |
(305,204 | ) | (221,110 | ) | ||||
| Retained deficit |
(2,008,209 | ) | (2,798,519 | ) | ||||
| Accumulated other comprehensive loss |
(82,784 | ) | (80,432 | ) | ||||
| Total shareholders’ equity |
1,493,935 | 926,050 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 6,367,207 | $ | 5,478,948 | ||||
The accompanying notes are an integral part of these financial statements.
3
ACCENTURE SCA
CONSOLIDATED INCOME STATEMENTS
For the Three and Nine Months Ended May 31, 2003 and 2002
(In thousands of U.S. dollars)
(Unaudited)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| May 31, 2003 |
May 31, 2002 |
May 31, 2003 |
May 31, 2002 |
|||||||||||||
| REVENUES: |
||||||||||||||||
| Revenues before reimbursements |
$ | 3,044,836 | $ | 2,980,678 | $ | 8,800,990 | $ | 8,882,597 | ||||||||
| Reimbursements |
373,593 | 369,982 | 1,133,909 | 1,137,822 | ||||||||||||
| Revenues |
3,418,429 | 3,350,660 | 9,934,899 | 10,020,419 | ||||||||||||
| OPERATING EXPENSES: |
||||||||||||||||
| Cost of services: |
||||||||||||||||
| Cost of services before reimbursable expenses |
1,939,075 | 1,752,922 | 5,529,978 | 5,267,211 | ||||||||||||
| Reimbursable expenses |
373,593 | 369,982 | 1,133,909 | 1,137,822 | ||||||||||||
| Cost of services |
2,312,668 | 2,122,904 | 6,663,887 | 6,405,033 | ||||||||||||
| Sales and marketing |
362,930 | 413,897 | 1,088,394 | 1,173,032 | ||||||||||||
| General and administrative costs |
338,709 | 378,873 | 981,478 | 1,204,832 | ||||||||||||
| Total operating expenses |
3,014,307 | 2,915,674 | 8,733,759 | 8,782,897 | ||||||||||||
| OPERATING INCOME |
404,122 | 434,986 | 1,201,140 | 1,237,522 | ||||||||||||
| Gain (loss) on investments, net |
2,286 | (918 | ) | 7,556 | (306,606 | ) | ||||||||||
| Interest income |
10,681 | 9,510 | 30,598 | 33,550 | ||||||||||||
| Interest expense |
(5,232 | ) | (12,712 | ) | (16,269 | ) | (36,256 | ) | ||||||||
| Other income |
112 | 13,170 | 25,722 | 14,926 | ||||||||||||
| Equity in gains (losses) of affiliates |
682 | (2,425 | ) | 143 | (8,888 | ) | ||||||||||
| INCOME BEFORE TAXES |
412,651 | 441,611 | 1,248,890 | 934,248 | ||||||||||||
| Provision for taxes |
135,576 | 167,813 | 453,347 | 435,535 | ||||||||||||
| INCOME BEFORE MINORITY INTEREST |
277,075 | 273,798 | 795,543 | 498,713 | ||||||||||||
| Minority interest |
(4,230 | ) | 793 | (6,940 | ) | 216 | ||||||||||
| NET INCOME |
$ | 272,845 | $ | 274,591 | $ | 788,603 | $ | 498,929 | ||||||||
The accompanying notes are an integral part of these financial statements.
4
ACCENTURE SCA
CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT
For the Nine Months Ended May 31, 2003
(U.S. dollars and share amounts in thousands)
(Unaudited)
| Class I Common Shares |
Class II Common Shares |
Restricted Share Units Common Shares |
Additional Paid-in Capital |
Treasury Shares |
Investment in Accenture Ltd |
Investment in Accenture Ltd— SECT |
Retained Earnings (Deficit) |
Accumulated Other Compre- hensive Income (Loss) |
Total |
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