Accenture Reports First-Quarter Fiscal 2003 Results.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 9, 2003 Accenture (Accenture, Chicago, IL, www.accenture.com) The world's largest management and technology consulting firm, which was spun off of Arthur Andersen & Co. in 1989 as a separate entity known as Andersen Consulting. (NYSE NYSE See: New York Stock Exchange : ACN ACN Accenture (stock symbol) ACN Accenture ACN Australian Company Number ACN Automatic Collision Notification (US DOT) ACN Acetonitrile ACN Anglican Communion Network ) today reported results for the first quarter of fiscal 2003, ended Nov. 30, 2002, in line with the company's announcement on Dec. 20, 2002, in which it said it would exceed analysts' consensus projections at that time for net revenues and earnings per share. Revenues before reimbursements ("net revenues") for the first quarter were $2.93 billion, a decrease of 2 percent in U.S. dollars and 4 percent in local currency from net revenues in the first quarter last fiscal year. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the first quarter were $0.27. This compares with $0.20 on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, and $0.25 excluding investment write-downs and the related tax effect, for the first quarter last fiscal year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the first quarter was $429 million, representing 14.6 percent of net revenues, compared with $414 million, or 13.9 percent of net revenues, for the first quarter last fiscal year. Income before minority interest for the first quarter was $269 million, compared with $200 million on a GAAP basis, and $258 million excluding investment write-downs and the related tax effect, for the same quarter last fiscal year. In order to provide an additional perspective to investors, Accenture is presenting core earnings using Standard & Poor's Core Earnings methodology in addition to reporting earnings on a GAAP basis. Accenture's S&P Core Earnings(a) calculation principally reflects adjustments to add back minority interest, includes stock option and related compensation expense and excludes non-operational items such as net losses on investments. Accenture's core earnings were $224 million, or $0.22 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the three months ended Nov. 30, 2002, compared with $199 million, or $0.20 per fully diluted share, for the comparable period in the prior fiscal year. Accenture's core earnings per share of $0.22 compare to reported fully diluted earnings per share of $0.27, primarily reflecting the impact of stock options and the company's Employee Stock Purchase Plan. Accenture's core earnings were calculated in consultation with Standard & Poor's Corporate Value Consulting division to ensure consistency Consistency can refer to:
Accenture's balance sheet remains strong. The company ended the first quarter with nearly $1.5 billion in cash, up $157 million from the fourth quarter of fiscal 2002. Total debt at Nov. 30, 2002 was $62 million, down $5 million from the fourth quarter of fiscal 2002. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was $198 million for the first quarter compared with a cash outflow of $197 million for the first quarter of last fiscal year. Net revenues for Accenture's Communications & High Tech and Government operating groups increased by 12 percent and 7 percent, respectively, over the first quarter last fiscal year, to $830 million and $359 million, respectively. The Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. operating group reported net revenues of $602 million, a decrease of 7 percent. The Products operating group reported net revenues of $650 million, a decline of 9 percent, and the Resources operating group reported net revenues of $487 million, a decline of 10 percent. From a geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. perspective, net revenues in Accenture's Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Middle East, and Africa (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ) region were $1.33 billion, flat
in U.S. dollars and a decrease of 6 percent in local currency from the
same quarter last year. Net revenues in the Americas A·mer·i·cas , theSee America. region were $1.39 billion, a decrease of 3 percent in U.S. dollars and 1 percent in local currency. Net revenues in the Asia Pacific region were $207 million, a decrease of 6 percent in U.S. dollars and 8 percent in local currency. "While we continue to be cautious about the outlook because the economic and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. climate remains unstable unstable, adj 1. not firm or fixed in one place; likely to move. 2. capable of undergoing spontaneous change. A nuclide in an unstable state is called radioactive. An atom in an unstable state is called excited. , we are pleased with our first-quarter results," said Joe W. Forehand forehand the head, neck, shoulders, withers and forelimbs of the horse. , Accenture chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our success is due to our more than 75,000 employees around the world, whose continued commitment to help us run an extremely efficient organization and stay focused on delivering value to our clients has enabled us to perform well and gain market share in this difficult business environment." As it has previously stated, Accenture anticipates earnings per share for the second quarter, ending Feb. 28, 2003, to be in the range of $0.21 to $0.25 and net revenues for the second quarter to decline 1 to 6 percent from the same quarter of fiscal 2002. For the full fiscal year 2003, Accenture continues to target earnings per share of $1.05 and net revenue growth of 0 to 2 percent over fiscal 2002 net revenues. Accenture will host a conference call at 8:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy today to discuss its first-quarter fiscal 2003 financial results. To participate, please dial +1 (877) 531-2986 (+1 (651) 291-0344 outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 15 minutes before the scheduled start of the call. The conference call will also be accessible live on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Accenture Web site at www.accenture.com. A replay of the conference call will be available online at www.accenture.com and via telephone by dialing +1 (800) 475-6701 (+1 (320) 365-3844 outside the United States, Puerto Rico and Canada) and entering the passcode 665329 from 1:15 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. Thursday Thursday: see week. , Jan. 9 through 11:59 p.m. EST Thursday, Jan. 23. About Accenture Accenture is the world's leading management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects and technology services company. Committed to delivering innovation, Accenture collaborates with its clients to help them realize their visions and create tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. value. With deep industry expertise, broad global resources and proven experience in consulting and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. , Accenture can mobilize mo·bi·lize v. 1. To make mobile or capable of movement. 2. To restore the power of motion to a joint. 3. To release into the body, as glycogen from the liver. the right people, skills, alliances and technologies. With more than 75,000 people in 47 countries, the company generated net revenues of $11.6 billion for the fiscal year ended August 31, 2002. Its home page is www.accenture.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , the accuracy of which is necessarily subject to risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. include general economic conditions and the factors discussed under the "Risk Factors" heading in the Business section of our most recent annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission.
ACCENTURE LTD
CONSOLIDATED INCOME STATEMENT
For the Three Months Ended November 30, 2002 and 2001
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
2002 2001
-------------------- --------------------
% of Net % of Net
Revenues Revenues
-------- --------
REVENUES:
Revenues before reimbursements (Net revenues) $2,929,958 100% $2,988,630 100%
Reimbursements 397,489 14% 352,692 12%
----------- -------- ----------- --------
Revenues 3,327,447 114% 3,341,322 112%
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 1,774,197 61% 1,806,181 60%
Reimbursable expenses 397,489 14% 352,692 12%
----------- -------- ----------- --------
Cost of services 2,171,686 74% 2,158,873 72%
Sales and marketing 355,833 12% 360,235 12%
General and administrative costs 370,731 13% 407,957 14%
----------- -------- ----------- --------
Total operating expenses 2,898,250 99% 2,927,065 98%
----------- -------- ----------- --------
OPERATING INCOME 429,197 15% 414,257 14%
Gain (loss) on investments, net 3,805 0% (94,737 ) (3%)
Interest income 9,093 0% 14,785 0%
Interest expense (6,536 ) 0% (9,770 ) 0%
Other income (expense) (1,775 ) 0% (7,933 ) 0%
Equity in (losses) gains of affiliates (530 ) 0% 6,201 0%
----------- -------- ----------- --------
INCOME BEFORE TAXES 433,254 15% 322,803 11%
Provision for taxes 164,637 6% 122,665 4%
----------- -------- ----------- --------
INCOME BEFORE MINORITY INTEREST 268,617 9% 200,138 7%
Minority interest (141,746 ) (5%) (118,462 ) (4%)
----------- -------- ----------- --------
NET INCOME $126,871 4% $81,676 3%
=========== ======== =========== ========
EARNINGS PER SHARE:
- Basic $0.27 $0.20
=========== ===========
- Diluted $0.27 $0.20
=========== ===========
ADJUSTED TO EXCLUDE LOSS ON INVESTMENTS, NET
INCOME BEFORE MINORITY INTEREST AS REPORTED $268,617 $200,138
Add Back: Loss on investments, net of tax -- 58,037
ADJUSTED INCOME BEFORE MINORITY INTEREST $268,617 $258,175
============== ==============
ADJUSTED EARNINGS PER SHARE:
- Basic $0.27 $0.26
============== ==============
- Diluted $0.27 $0.25
============== ==============
WEIGHTED AVERAGE SHARES:
- Basic 468,119,491 410,488,771
- Diluted 1,000,572,365 1,014,448,500
ACCENTURE LTD
SUMMARY OF REVENUES
For the Three Months Ended November 30, 2002 and 2001
(In thousands of U.S. dollars)
(Unaudited)
Percent
Percent increase/ Percent of
Three Months Ended increase/ (decrease) Total 2002
November 30, (decrease) Local Net
2002 2001 US$ currency Revenues
------------------------------------ ------------ ------------ ------------
OPERATING GROUPS
Communication & High Tech $830,007 $743,215 12 % 28 %
Financial Services (A) 601,922 649,367 (7) % 21 %
Government 358,938 336,519 7 % 12 %
Products (A) 649,618 717,169 (9) % 22 %
Resources 487,268 540,908 (10) % 17 %
Other 2,205 1,452 52 % 0 %
-------------- -------------- ------------
TOTAL Net Revenues 2,929,958 2,988,630 (2) % 100%
============
Reimbursements 397,489 352,692 13 %
-------------- --------------
TOTAL REVENUES $3,327,447 $3,341,322 (0) %
============== ==============
GEOGRAPHY
Americas $1,392,295 $1,441,338 (3) % (1) % 48 %
EMEA 1,330,627 1,326,446 0 % (6) % 45 %
Asia Pacific 207,036 220,846 (6) % (8) % 7 %
-------------- -------------- ------------
TOTAL Net Revenues 2,929,958 2,988,630 (2) % (4) % 100%
============
Reimbursements 397,489 352,692 13 %
-------------- --------------
TOTAL REVENUES $3,327,447 $3,341,322 (0) %
============== ==============
(A) Accenture transitioned the Health Services industry group from the
Financial Services operating group to the Products operating group as
of September 1, 2002. Numbers shown above reflect this transition.
ACCENTURE LTD
CONSOLIDATED BALANCE SHEETS
November 30, 2002 and August 31, 2002
(In thousands of U.S. dollars)
November 30, August 31,
2002 2002
------------- -----------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,473,643 $1,316,976
Restricted cash 14,656 79,445
Receivables from clients, net 1,377,302 1,330,642
Unbilled services 905,921 774,214
Other current assets 503,629 559,811
------------- -----------
Total current assets 4,275,151 4,061,088
------------- -----------
NON-CURRENT ASSETS:
Investments 46,874 76,017
Property and equipment, net 658,122 716,504
Other non-current assets 667,869 625,339
------------- -----------
Total non-current assets 1,372,865 1,417,860
------------- -----------
TOTAL ASSETS $5,648,016 $5,478,948
============= ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term debt $57,467 $63,099
Accounts payable 378,815 450,208
Deferred revenue 538,634 543,917
Accrued payroll and related benefits 1,072,633 1,139,887
Other accrued liabilities 1,150,972 1,129,951
------------- -----------
Total current liabilities 3,198,521 3,327,062
------------- -----------
NON-CURRENT LIABILITIES:
Long-term debt 4,215 3,428
Other non-current liabilities 1,188,722 1,190,436
------------- -----------
Total non-current liabilities 1,192,937 1,193,864
------------- -----------
MINORITY INTEREST 673,998 519,396
------------- -----------
EQUITY:
Shareholders' equity 582,560 438,626
------------- -----------
Total equity 582,560 438,626
------------- -----------
TOTAL LIABILITIES AND EQUITY $5,648,016 $5,478,948
============= ===========
ACCENTURE LTD
CORE EARNINGS CALCULATION USING STANDARD & POOR'S CORE EARNINGS* METHODOLOGY
For the Three Months Ended November 30, 2002 and 2001
(In thousands of U.S. dollars)
(Unaudited)
2002 2001 Notes
-------------- --------------- -----------
Net Income $126,871 $81,676
S&P Core Earnings(a) Adjustments
Minority interest relating to Accenture SCA
and Accenture Canada Holdings, Inc. (net of tax) 142,266 118,462 (A)
-------------- ---------------
269,137 200,138
Include:
---------------------------------------------------------------------
Employee stock option and share purchase plan expense (59,784) (84,788) (B)
Pension adjustments (5,441) (5,923) (C)
Exclude:
---------------------------------------------------------------------
(Gain) loss on investments, net, excluding SFAS 133 (3,771) 86,485 (D)
Losses on disposal of property and equipment 4,237 8,582 (E)
-------------- ---------------
S&P Core Earnings(a) Adjustments before taxes (64,759) 4,356
Tax effect 19,676 (5,764) (F)
-------------- ---------------
S&P Core Earnings(a) Adjustments, net (45,083) (1,408)
-------------- ---------------
S&P Core Earnings(a) $224,054 $198,730
============== ===============
EPS, S&P Core Earnings(a) (Diluted) $0.22 $0.20
============== ===============
EPS, GAAP (Diluted) $0.27 $0.20
============== ===============
Weighted Average Diluted Shares Outstanding 1,000,572,365 1,014,448,500 (G)
NOTES TO STANDARD & POOR'S CORE EARNINGS* ADJUSTMENTS
(Unaudited)
(A) Some of our partners and former partners and their permitted
transferees own shares in our subsidiary Accenture SCA and in our
subsidiary Accenture Canada Holdings, Inc., which are non transferable
except by exchange for shares in Accenture Ltd (or for cash at the
Company's option). The shareholders of Accenture SCA and Accenture
Canada Holdings, Inc. have substantially the same rights and economic
interests as Accenture Ltd shareholders and are subject to the same
restrictions. In addition, we view and operate the business as a
single enterprise. We similarly focus on the results of Accenture as a
whole as we believe that this better reflects the substance of the
overall Accenture corporate structure. Therefore, the minority
interest related to these shareholders is added back. Net income
before Minority interest is also consistent with diluted shares, which
assume the conversion of all minority Accenture SCA and Accenture
Canada Holdings Inc. shares on a one for one basis.
(B) As we elect to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," in accounting for employee
share options and purchase plans rather than the alternative fair
value accounting provided for under SFAS 123, "Accounting for
Stock-Based Compensation," in which stock options and purchase plans
are expensed, we have deducted the amount as computed under SFAS 123
in accordance with the S&P Core Earnings* methodology. The impact of
income taxes and minority interests is shown in the following table:
2002 2001
-------------- -------------
Employee stock option and purchase plan expense
before tax and minority interest $59,784 $84,788
Income tax benefit (17,935) (25,436)
Minority interest (22,121) (35,131)
-------------- -------------
Employee stock option and purchase plan expense
net of tax and minority interest $19,728 $24,221
============== =============
(C) Under the S&P Core Earnings* methodology, pension service costs
and interest costs (to the extent that interest cost exceeds actual
returns on assets) are included in the Company's core earnings. Other
items like expected returns on plan assets and amortization of prior
service costs are not included in the S&P Core Earnings* methodology.
Actual returns were not positive and the pension expense computed
under generally accepted accounting principles has been adjusted to
reflect service and interest costs.
(D) Under the S&P Core Earnings* methodology, investment gains and
losses are not considered a part of the Company's normal, or core,
business. As such, these items are excluded from S&P Core Earnings(a).
No adjustment is required for SFAS 133 items for purposes of
calculating S&P Core Earnings(a). The adjustment represents Gain
(loss) on investments, net as reported under generally accepted
accounting principles adjusted for a SFAS No. 133 gain of $34 for the
three months ended November 30, 2002 and a SFAS No. 133 loss of $8,252
for the same period last year.
(E) Under the S&P Core Earnings(a) methodology, gains and losses on
disposal of property, plant and equipment are excluded from core
earnings.
(F) Under the S&P Core Earnings(a) methodology, we have applied the
statutory federal tax rate of 35% to the S&P Core Earnings(a)
adjustments with the exception of stock options and purchase plans.
Stock options and purchase plans are tax affected using a 30% tax
rate, which is consistent with the rate used in our financial
statement disclosures and represents our best estimate of the tax
benefit related to stock options and purchase plans.
(G) Diluted shares outstanding represent average shares outstanding
for purposes of computing Diluted Earnings Per Share under generally
accepted accounting standards, as well as Diluted Earnings Per Share
under S&P Core Earnings(a) methodology.
(a) Standard & Poor's Corporate Value Consulting ("S&P CVC") has
reviewed Accenture's calculation of Core Earnings for consistency with
Standard & Poor's Core Earnings methodology. This review was based
solely on financial information generated by Accenture; Standard &
Poor's has not conducted any review or undertaken to investigate or
verify, and is not responsible for, the basis, adequacy, accuracy or
completeness of the information used in Accenture's calculation of
Core Earnings. Standard & Poor's review has been limited solely to the
application of the Standard & Poor's Core Earnings methodology to the
specific financial information generated, prepared and provided by
Accenture; Standard & Poor's makes no representation as to the
adequacy or accuracy of Accenture's financial information used in the
calculation. Standard & Poor's has no duty to update its review of
Accenture's calculation of Core Earnings. Standard & Poor's Core
Earnings methodology is published on Standard & Poor's web site at
www.standardandpoors.com.
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