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~~February 3028, ~~2016~~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: 000-55501

Accenture Holdings plc

(Exact name of registrant as specified in its charter)




Ireland	98-1254718
(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 ¨	Accelerated filer ¨	Non-accelerated filer þ	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 ordinary shares, par value €0.000001 per share, outstanding as of ~~December~~March 129, ~~2016~~2017 was 1,020,207,101 (which number includes ~~992~~993,~~905~~166,~~759~~063 issued shares held by the registrant or its controlling shareholder).

Table of Contents

ACCENTURE HOLDINGS PLC

INDEX

	Page
Part I. Financial Information	3
Item 1. Financial Statements	3
Consolidated Balance Sheets as of November 30, 2016 (Unaudited) and August 31, 2016	3
Consolidated Balance Sheets as of February 28, 2017 (Unaudited) and August 31, 2016	3
Consolidated Income Statements (Unaudited) for the three months ended November 30, 2016 and 2015	4
Consolidated Income Statements (Unaudited) for the three and six months ended February 28, 2017 and February 29, 2016	4
Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended November 30, 2016 and 2015	5
Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended February 28, 2017 and February 29, 2016	5
Consolidated Shareholders’ Equity Statement (Unaudited) for the three months ended November 30, 2016	6
Consolidated Shareholders’ Equity Statement (Unaudited) for the six months ended February 28, 2017	6
Consolidated Cash Flows Statements (Unaudited) for the three months ended November 30, 2016 and 2015	7
Consolidated Cash Flows Statements (Unaudited) for the six months ended February 28, 2017 and February 29, 2016	7
Notes to Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2527
Item 4. Controls and Procedures	2527
Part II. Other Information	2528
Item 1. Legal Proceedings	2528
Item 1A. Risk Factors	2628
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2628
Item 3. Defaults Upon Senior Securities	2729
Item 4. Mine Safety Disclosures	2730
Item 5. Other Information	2830
Item 6. Exhibits	2830
Signatures	2931

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCENTURE HOLDINGS PLC

CONSOLIDATED BALANCE SHEETS

~~November~~February 3028, ~~2016~~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)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	43,~~077~~238,~~058~~862		$	4,905,609
Short-term investments	2,~~511~~502			2,875
Receivables from clients, net	4,~~298~~452,~~605~~252			4,072,180
Unbilled services, net	2,~~170~~111,~~403~~641			2,150,219
Other current assets	~~819~~958,~~829~~745			845,339
Total current assets	1110,~~368~~764,~~406~~002			11,976,222
NON-CURRENT ASSETS:
Unbilled services, net	5152,~~370~~898			68,145
Investments	~~239~~190,~~470~~358			198,633
Property and equipment, net	~~928~~968,~~900~~433			956,542
Goodwill	4,~~008~~224,~~760~~007			3,609,437
Deferred contract costs	~~725~~737,~~717~~354			733,219
Deferred income taxes, net	2,~~079~~030,~~881~~673			2,077,312
Other non-current assets	1,~~041~~111,~~237~~048			989,494
Total non-current assets	9,~~075~~314,~~335~~771			8,632,782
TOTAL ASSETS	$	20,~~443~~078,~~741~~773		$	20,609,004
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings	$	2,~~773~~944		$	2,773
Accounts payable	1,~~163~~212,~~348~~800			1,280,821
Deferred revenues	2,~~079~~458,~~897~~524			2,364,728
Accrued payroll and related benefits	43,~~461~~292,~~239~~768			4,040,751
Accrued consumption taxes	~~340~~334,~~325~~538			358,359
Income taxes payable	~~606~~665,~~771~~125			362,963
Other accrued liabilities	~~515~~386,~~729~~074			468,529
Total current liabilities	98,~~170~~352,~~082~~773			8,878,924
NON-CURRENT LIABILITIES:
Long-term debt	24,~~562~~546			24,457
Deferred revenues	~~734~~740,~~465~~919			754,812
Retirement obligation	1,~~467~~483,~~268~~978			1,494,789
Deferred income taxes, net	4853,~~606~~452			111,020
Income taxes payable	~~664~~516,~~434~~839			850,709
Other non-current liabilities	~~300~~291,~~173~~117			304,917
Total non-current liabilities	3,~~239~~110,~~508~~851			3,540,704
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Deferred shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of November 30, 2016 and August 31, 2016	46			46
Deferred shares, par value 1.00 euros per share, 40,000 shares authorized and issued as of February 28, 2017 and August 31, 2016	46			46
Ordinary shares, par value .000001 euros per share, 40,000,000,000 shares authorized, 1,020,207,101 shares issued as of November 30, 2016 and August 31, 2016	1			1
Ordinary shares, par value .000001 euros per share, 40,000,000,000 shares authorized, 1,020,207,101 shares issued as of February 28, 2017 and August 31, 2016	1			1
Restricted share units (related to Accenture plc Class A ordinary shares)	~~994~~875,~~449~~148			1,004,128
Additional paid-in capital	7,~~256~~081,~~223~~392			7,393,195
Treasury shares, at cost: 358,210,732 and 357,832,987 ordinary shares as of November 30, 2016 and August 31, 2016, respectively	(18,607,978		)	(18,560,302		)
Treasury shares, at cost: 359,234,575 and 357,832,987 ordinary shares as of February 28, 2017 and August 31, 2016, respectively	(18,742,274		)	(18,560,302		)
Investment in Accenture plc shares, at cost, 13,816,959 shares as of November 30, 2016 and August 31, 2016	(456,864		)	(456,864		)
Investment in Accenture plc shares, at cost, 13,816,959 shares as of February 28, 2017 and August 31, 2016	(456,864		)	(456,864		)
Retained earnings	2021,~~449~~325,~~596~~866			20,204,932
Accumulated other comprehensive loss	(1,~~892~~772,~~936~~246		)	(1,690,982		)
Total Accenture Holdings plc shareholders’ equity	78,~~742~~311,~~537~~069			7,894,154
Noncontrolling interests	~~291~~304,~~614~~080			295,222
Total shareholders’ equity	8,~~034~~615,~~151~~149			8,189,376
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	20,~~443~~078,~~741~~773		$	20,609,004

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

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ACCENTURE HOLDINGS PLC

CONSOLIDATED INCOME STATEMENTS

For the Three and Six Months Ended ~~November~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016

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

(Unaudited)

	2016			2015
	Three Months Ended						Six Months Ended
REVENUES:
	February 28, 2017			February 29, 2016			February 28, 2017			February 29, 2016
Revenues before reimbursements (“Net revenues”)	$	8,515,517		$	8,013,163
REVENUES:
Reimbursements	490,086			452,821
Revenues before reimbursements (“Net revenues”)	$	8,317,671		$	7,945,565		$	16,833,188		$	15,958,728
Revenues	9,005,603			8,465,984
Reimbursements	444,511			451,488			934,597			904,309
OPERATING EXPENSES:
Revenues	8,762,182			8,397,053			17,767,785			16,863,037
Cost of services:
OPERATING EXPENSES:
Cost of services before reimbursable expenses	5,785,485			5,450,644
Cost of services:
Reimbursable expenses	490,086			452,821
Cost of services before reimbursable expenses	5,813,515			5,575,749			11,599,000			11,026,393
Cost of services	6,275,571			5,903,465
Reimbursable expenses	444,511			451,488			934,597			904,309
Sales and marketing	888,827			875,793
Cost of services	6,258,026			6,027,237			12,533,597			11,930,702
General and administrative costs	509,246			465,466
Sales and marketing	871,489			830,332			1,760,316			1,706,125
Total operating expenses	7,673,644			7,244,724
General and administrative costs	494,014			451,440			1,003,260			916,906
OPERATING INCOME	1,331,959			1,221,260
Total operating expenses	7,623,529			7,309,009			15,297,173			14,553,733
Interest income	8,297			7,126
OPERATING INCOME	1,138,653			1,088,044			2,470,612			2,309,304
Interest expense	(3,048		)	(4,052		)
Interest income	8,728			6,727			17,025			13,853
Other income (expense), net	(6,087		)	4,029
Interest expense	(3,976		)	(4,543		)	(7,024		)	(8,595		)
INCOME BEFORE INCOME TAXES	1,331,121			1,228,363
Other income (expense), net	(12,546		)	(21,213		)	(18,633		)	(17,184		)
Provision for income taxes	271,372			359,682
Gain (loss) on sale of businesses	(12,349		)	553,577			(12,349		)	553,577
NET INCOME	1,059,749			868,681
INCOME BEFORE INCOME TAXES	1,118,510			1,622,592			2,449,631			2,850,955
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc.	(1,751		)	(1,537		)
Provision for income taxes	231,302			222,734			502,674			582,416
Net income attributable to noncontrolling interests – other	(8,821		)	(10,206		)
NET INCOME	887,208			1,399,858			1,946,957			2,268,539
NET INCOME ATTRIBUTABLE TO ACCENTURE HOLDINGS PLC	$	1,049,177		$	856,938
Net income attributable to noncontrolling interests in Accenture Canada Holdings Inc.	(1,342		)	(2,482		)	(3,093		)	(4,019		)
Cash dividends per share	$	1.21		$	1.10
Net income attributable to noncontrolling interests – other	(10,495		)	(9,959		)	(19,316		)	(20,165		)
NET INCOME ATTRIBUTABLE TO ACCENTURE HOLDINGS PLC	$	875,371		$	1,387,417		$	1,924,548		$	2,244,355
Cash dividends per share	$	—		$	—		$	1.21		$	1.10

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

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ACCENTURE HOLDINGS PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended ~~November~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016

(In thousands of U.S. dollars)

(Unaudited)

	2016			2015
	Three Months Ended						Six Months Ended
NET INCOME	$	1,059,749		$	868,681
	February 28, 2017			February 29, 2016			February 28, 2017			February 29, 2016
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
NET INCOME	$	887,208		$	1,399,858		$	1,946,957		$	2,268,539
Foreign currency translation	(199,024		)	(110,004		)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Defined benefit plans	11,941			4,289
Foreign currency translation	86,150			(26,934		)	(112,874		)	(136,938		)
Cash flow hedges	(15,149		)	34,286
Defined benefit plans	(7,208		)	3,708			4,733			7,997
Marketable securities	278			—
Cash flow hedges	41,748			(11,483		)	26,599			22,803
OTHER COMPREHENSIVE INCOME (LOSS ) ATTRIBUTABLE TO ACCENTURE HOLDINGS PLC	(201,954		)	(71,429		)
Marketable securities	—			(103		)	278			(103		)
Other comprehensive income (loss) attributable to noncontrolling interests	(3,853		)	(4,762		)
OTHER COMPREHENSIVE INCOME (LOSS ) ATTRIBUTABLE TO ACCENTURE HOLDINGS PLC	120,690			(34,812		)	(81,264		)	(106,241		)
COMPREHENSIVE INCOME	$	853,942		$	792,490
Other comprehensive income (loss) attributable to noncontrolling interests	(3,095		)	575			(6,948		)	(4,187		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE HOLDINGS PLC	$	847,223		$	785,509
COMPREHENSIVE INCOME	$	1,004,803		$	1,365,621		$	1,858,745		$	2,158,111
Comprehensive income attributable to noncontrolling interests	6,719			6,981
COMPREHENSIVE INCOME ATTRIBUTABLE TO ACCENTURE HOLDINGS PLC	$	996,061		$	1,352,605		$	1,843,284		$	2,138,114
COMPREHENSIVE INCOME	$	853,942		$	792,490
Comprehensive income attributable to noncontrolling interests	8,742			13,016			15,461			19,997
COMPREHENSIVE INCOME	$	1,004,803		$	1,365,621		$	1,858,745		$	2,158,111

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

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ACCENTURE HOLDINGS PLC

CONSOLIDATED SHAREHOLDERS’ EQUITY STATEMENT

For the ~~Three~~Six Months Ended ~~November~~February 3028, ~~2016~~2017

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

(Unaudited)

	Deferred Shares			Ordinary Shares			RestrictedShareUnits(relatedtoAccentureplc ClassAordinaryshares)						Treasury Shares					Investment inAccenture plc								AccumulatedOtherComprehensiveLoss			TotalAccentureHoldings plcShareholders’Equity
	$		No. Shares	$		No. Shares				AdditionalPaid-inCapital			$			No.Shares		$			No.Shares		RetainedEarnings									NoncontrollingInterests			TotalShareholders’Equity
Balance as of August 31, 2016	$	46	40	$	1	1,020,207	$	1,004,128		$	7,393,195		$	(18,560,302	)	(357,833	)	$	(456,864	)	(13,817	)	$	20,204,932		$	(1,690,982	)	$	7,894,154		$	295,222		$	8,189,376
Net income																							1,~~049~~924,~~177~~548						1,~~049~~924,~~177~~548			1022,~~572~~409			1,~~059~~946,~~749~~957
Other comprehensive income (loss)																										(~~201~~81,~~954~~264		)	(~~201~~81,~~954~~264		)	(36,~~853~~948		)	(~~205~~88,~~807~~212		)
Share-based compensation expense							~~135~~375,~~998~~571			1326,~~798~~752																			~~149~~402,~~796~~323			—			~~149~~402,~~796~~323
Purchases/redemptions of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares										(1514,~~525~~576		)	(~~470~~1,~~707~~098,385		)	(49,~~040~~389	)												(~~486~~1,~~232~~112,961		)	(~~812~~1,772		)	(~~487~~1,~~044~~114,733		)
Issuances of Accenture Holdings plc ordinary shares related to employee share programs							(~~169~~527,~~873~~848		)	(~~141~~326,~~524~~624		)	~~423~~916,~~031~~413			37,~~662~~897													~~111~~61,~~634~~941			~~186~~110			~~111~~62,~~820~~051
Dividends							2423,~~196~~297																(807,~~949~~050		)				(783,753		)	(1,374		)	(785,127		)
Other, net										62,~~279~~645													3,436						96,~~715~~081			(83,~~327~~567		)	12,~~388~~514
Balance as of November 30, 2016	$	46	40	$	1	1,020,207	$	994,449		$	7,256,223		$	(18,607,978	)	(358,211	)	$	(456,864	)	(13,817	)	$	20,449,596		$	(1,892,936	)	$	7,742,537		$	291,614		$	8,034,151
Balance as of February 28, 2017	$	46	40	$	1	1,020,207	$	875,148		$	7,081,392		$	(18,742,274	)	(359,325	)	$	(456,864	)	(13,817	)	$	21,325,866		$	(1,772,246	)	$	8,311,069		$	304,080		$	8,615,149

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

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ACCENTURE HOLDINGS PLC

CONSOLIDATED CASH FLOWS STATEMENTS

For the ~~Three~~Six Months Ended ~~November~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016

(In thousands of U.S. dollars)

(Unaudited)

	2016			2015
	February 28, 2017			February 29, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,~~059~~946,~~749~~957		$	~~868~~2,~~681~~268,539
Adjustments to reconcile Net income to Net cash provided by operating activities —
Depreciation, amortization and asset impairments	~~187~~375,~~433~~240			~~181~~354,~~882~~627
Share-based compensation expense	~~149~~402,~~796~~323			~~129~~357,~~183~~715
Deferred income taxes, net	(86,013		)	(19,850		)
(Gain) loss on sale of business	12,349			(553,577		)
Other, net	(141,184		)	(78,868		)
Deferred income taxes, net	(60,273		)	(62,810		)
Other, net	(124,788		)	(52,964		)
Change in assets and liabilities, net of acquisitions —
Receivables from clients, net	(~~279~~362,~~151~~416		)	(~~244~~172,~~126~~884		)
Unbilled services, current and non-current, net	~~(64~~58,~~113~~006		)	(~~135~~155,~~917~~667		)
Other current and non-current assets	(71263,~~564~~458		)	(~~224~~383,~~933~~309		)
Accounts payable	(~~103~~73,~~390~~976		)	(6475,~~504~~286		)
Deferred revenues, current and non-current	~~(207~~110,~~437~~105		)	~~(127~~329,~~712~~608		)
Accrued payroll and related benefits	~~488~~(716,~~615~~926		)	~~418~~(641,~~471~~903		)
Income taxes payable, current and non-current	86(2,~~551~~658		)	(~~122~~184,~~926~~712		)
Other current and non-current liabilities	64(61,~~590~~900		)	63(19,~~876~~925		)
Net cash provided by (used in) operating activities	1,~~083~~238,~~882~~585			~~643~~1,~~257~~007,452
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property and equipment	1,238			951
Purchases of property and equipment	(188,962		)	(242,845		)
Purchases of property and equipment	(84,553		)	(94,777		)
Purchases of businesses and investments, net of cash acquired	(829,198		)	(747,637		)
Purchases of businesses and investments, net of cash acquired	(599,107		)	(612,666		)
Proceeds from the sale of businesses and investments, net of cash transferred	(22,921		)	618,310
Proceeds from the sale of businesses and investments, net of cash transferred	(7,200		)	—
Proceeds from sales of property and equipment	7,293			1,539
Net cash provided by (used in) investing activities	(~~689~~1,~~622~~033,788		)	(~~706~~370,~~492~~633		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary and deferred shares	~~111~~62,~~820~~051			8016,~~536~~146
Purchases of shares	(~~487~~1,~~044~~114,733		)	(~~556~~1,~~062~~199,740		)
Proceeds from (repayments of) long-term debt, net	~~138~~361			~~219~~378
Cash dividends paid	(785,127		)	(720,676		)
Other, net	(26,~~562~~647		)	(212,313		)
Net cash provided by (used in) financing activities	(1,~~162~~844,~~775~~095		)	(1,~~195~~916,~~985~~205		)
Effect of exchange rate changes on cash and cash equivalents	(6027,~~036~~449		)	(2846,~~353~~721		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(~~828~~1,~~551~~666,747		)	(1,~~287~~326,~~573~~107		)
CASH AND CASH EQUIVALENTS, beginning of period	4,905,609			4,360,766
CASH AND CASH EQUIVALENTS, end of period	$	43,~~077~~238,~~058~~862		$	3,~~073~~034,~~193~~659

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

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ACCENTURE HOLDINGS 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 Holdings 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 “we,” the “Company” and “our” in the Notes to Consolidated Financial Statements to refer to Accenture Holdings 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~~February 3028, ~~2016~~2017 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2017.

Accenture plc (“Accenture”) is a holding company incorporated in Ireland with no material assets other than Accenture Holdings plc ordinary and deferred shares. Accenture is the controlling shareholder of the Company.

Allowances for Client Receivables and Unbilled Services

As of ~~November~~February 3028, ~~2016~~2017 and August 31, 2016, total allowances recorded for client receivables and unbilled services were $7975,~~281~~885 and $79,440, respectively.

Accumulated Depreciation

As of ~~November~~February 3028, ~~2016~~2017 and August 31, 2016, total accumulated depreciation was $1,~~752~~832,~~468~~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 $3057,~~598~~489 and $88,087 for the three and six months ended ~~November~~February 3028, ~~2016~~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 $3178,~~952~~801 for the ~~three~~six months ended ~~November~~February 3029, ~~2015~~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

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ACCENTURE HOLDINGS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

asNew ~~the~~Accounting 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 catch-up adjustment to opening retained earnings in the period of adoption. The Company is assessing the impact of this ASU on its Consolidated Financial Statements.Pronouncements

OnThe ~~August~~following 26standards, ~~2016, the FASB~~ issued ~~ASU~~by ~~No.~~the ~~2016-15~~FASB, ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~will, ~~which~~or ~~addresses how cash receipts and cash payments~~ are ~~presented~~expected ~~and~~to, ~~classified~~result in ~~the~~a ~~statement~~change ~~of cash flows. The ASU will be effective for the Company beginning September 1, 2018, including interim periods~~ in ~~its~~practice ~~fiscal year 2019,~~ and/or ~~requires~~have ~~the~~a ~~retrospective~~financial ~~method~~impact ~~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’s ~~is assessing the impact of this ASU 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.



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 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 HOLDINGS 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. 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 Holdings plc:

	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	$	(~~902~~1,~~955~~101,979	)	$	(~~839~~949,~~479~~483	)	$	(902,955	)	$	(839,479	)
Foreign currency translation	~~(203~~84,~~725~~249		)	(~~113~~29,~~463~~210		)	(119,476		)	(142,673		)
Income tax benefit (expense)	~~852~~(1,247		)	(12,~~372~~865		)	(395		)	1,493
Portion attributable to noncontrolling interests	3,~~849~~148			~~4,831~~(589		)	6,997			4,242
Foreign currency translation, net of tax	~~(199~~86,~~024~~150		)	(~~110~~26,~~004~~934		)	(112,874		)	(136,938		)
Ending balance	(1,~~101~~015,~~979~~829		)	(~~949~~976,~~483~~417		)	(1,015,829		)	(976,417		)
Defined benefit plans
Beginning balance	(~~859~~847,~~030~~089		)	(~~560~~556,~~303~~014		)	(859,030		)	(560,303		)
Reclassifications into net periodic pension and post-retirement expense (1)	17(6,~~824~~794		)	6,~~633~~572			11,030			13,205
Income tax benefit (expense)	(~~5,863~~427		)	(2,~~336~~858		)	(6,290		)	(5,194		)
Portion attributable to noncontrolling interests	~~(20~~13		)	(86		)	(7		)	(14		)
Defined benefit plans, net of tax	11(7,~~941~~208		)	43,~~289~~708			4,733			7,997
Ending balance	(~~847~~854,~~089~~297		)	(~~556~~552,~~014~~306		)	(854,297		)	(552,306		)
Cash flow hedges
Beginning balance	7156,~~281~~132			(~~34,568~~282		)	71,281			(34,568		)
Unrealized (loss) gain	(6,106		)	48,347
Unrealized gain (loss)	89,886			(23,599		)	83,780			24,748
Reclassification adjustments into Cost of services	(2225,~~149~~319		)	12,~~450~~529			(47,468		)	3,979
Income tax benefit (expense)	13(22,~~081~~753		)	~~(15~~9,~~450~~567		)	(9,672		)	(5,883		)
Portion attributable to noncontrolling interests	25(66		)	~~(61~~20		)	(41		)	(41		)
Cash flow hedges, net of tax	~~(15~~41,~~149~~748		)	34(11,~~286~~483		)	26,599			22,803
Ending balance (2)	5697,~~132~~880			(~~282~~11,765		)	97,880			(11,765		)
Marketable securities
Beginning balance	~~(278~~—		)	(1,634		)	(278		)	(1,634		)
Unrealized gain	462			—
Unrealized gain (loss)	—			(170		)	462			(170		)
Income tax benefit (expense)	~~(183~~—		)	—67			(183		)	67
Portion attributable to noncontrolling interests	(1—		)	—			(1		)	—
Marketable securities, net of tax	~~278~~—			—(103		)	278			(103		)
Ending balance	—			(1,~~634~~737		)	—			(1,737		)
Accumulated other comprehensive loss	$	(1,~~892~~772,~~936~~246	)	$	(1,~~507~~542,~~413~~225	)	$	(1,772,246	)	$	(1,542,225	)

_______________


(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~~February 3028, ~~2016~~2017, $4277,~~555~~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 HOLDINGS 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. BUSINESS COMBINATIONS

During the ~~three~~six months ended ~~November~~February 3028, ~~2016~~2017, the Company completed several individually immaterial acquisitions for total consideration of $~~540~~806,~~219~~224, net of cash acquired. The pro forma effects of these acquisitions on the Company’s operations were not material.

4. 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		ForeignCurrencyTranslation			~~November~~February 3028, ~~2016~~2017
Communications, Media & Technology	$	546,566	$	6285,~~433~~908	$	(1511,~~526~~541	)	$	~~593~~620,~~473~~933
Financial Services	854,376		66137,~~771~~643		(84,~~756~~804		)	~~912~~987,~~391~~215
Health & Public Service	715,849		3386,~~577~~358		(2,~~119~~525		)	~~747~~799,~~307~~682
Products	1,112,991		~~263~~307,~~802~~043		(2225,~~649~~219		)	1,~~354~~394,~~144~~815
Resources	379,655		2846,~~987~~322		(74,~~197~~615		)	~~401~~421,~~445~~362
Total	$	3,609,437	$	~~455~~663,~~570~~274	$	(5648,~~247~~704	)	$	4,~~008~~224,~~760~~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
Customer-related	$	~~586~~625,~~852~~102	$	(~~173~~184,~~160~~679	)	$	~~413~~440,~~692~~423	$	532,753	$	(159,774	)	$	372,979
Technology	9899,~~949~~302		(5155,~~108~~751		)	4743,~~841~~551		100,363		(48,270		)	52,093
Patents	120,~~335~~946		(5860,~~974~~196		)	6160,~~361~~750		118,906		(57,951		)	60,955
Other	4445,~~360~~122		(1516,~~962~~783		)	28,~~398~~339		43,804		(19,680		)	24,124
Total	$	~~850~~890,~~496~~472	$	(~~299~~317,~~204~~409	)	$	~~551~~573,~~292~~063	$	795,826	$	(285,675	)	$	510,151

Total amortization related to the Company’s intangible assets was $33,~~128~~324 and $2766,~~724~~452 for the three and six months ended ~~November~~February 3028, ~~2016~~2017, respectively. Total amortization related to the Company’s intangible assets was $29,640 and ~~2015~~$57,364 for the three and six months ended February 29, 2016, respectively. Estimated future amortization related to intangible assets held as of ~~November~~February 3028, ~~2016~~2017 is as follows:

Fiscal Year	Estimated Amortization
Remainder of 2017	$	9773,~~060~~159
2018	~~102~~111,~~146~~841
2019	8287,~~201~~690
2020	7277,~~253~~576
2021	6267,~~938~~851
Thereafter	~~134~~154,~~694~~946
Total	$	~~551~~573,~~292~~063

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ACCENTURE HOLDINGS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

5. MATERIAL TRANSACTIONS AFFECTING SHAREHOLDERS’ EQUITY

Dividends

The Company’s dividend activity during the ~~three~~six months ended ~~November~~February 3028, ~~2016~~2017 was as follows:

Dividend Per
Share

Accenture Holdings plc Ordinary Shares

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 18, 2016

783,753

October 18, 2016

1,374

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.

6. 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~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016, as well as those expected to be reclassified into Cost of services in the next 12 months, see Note 2 (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 ~~loss~~gain of $~~138~~19,~~094~~780 and a net loss of $72118,~~977~~313 for the three and six months ended ~~November~~February 3028, ~~2016~~2017, respectively, and ~~2015~~a net gain of $15,578 and a net loss of $57,399 for the three and six months ended February 29, 2016, 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 HOLDINGS 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	$	72101,~~113~~134	$	71,955
Other non-current assets	5173,~~743~~946		45,683
Other Derivatives
Other current assets	711,~~385~~713		11,965
Total assets	$	~~131~~186,~~241~~793	$	129,603
Liabilities
Cash Flow Hedges
Other accrued liabilities	$	2923,~~558~~213	$	10,820
Other non-current liabilities	2015,~~996~~642		5,547
Other Derivatives
Other accrued liabilities	7211,~~815~~005		17,407
Total liabilities	$	~~123~~49,~~369~~860	$	33,774
Total fair value	$	7136,~~872~~933	$	95,829
Total notional value	$	7,~~629~~652,~~568~~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~~145,~~039~~904	$	114,785
Net derivative liabilities	958,~~167~~971		18,956
Total fair value	$	7136,~~872~~933	$	95,829

7. 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 12the tothird 18quarter ~~months~~of ~~from~~fiscal ~~the termination effective date~~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 HOLDINGS PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

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

(Unaudited)

8. 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~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016 were 20.47% and 2913.37%, respectively. The ~~lower~~Company’s effective tax ~~rate~~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 ~~November~~February 3029, 2016, ~~was~~the ~~primarily~~effective ~~due~~tax torates ~~higher~~would ~~benefits~~have been 15.4% and 22.8% for the three and six months ended February 29, 2016, respectively. The effective tax rate for the six months ended February 28, 2017 benefited from ~~adjustments~~the tofinal 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~~This ~~additional~~was ~~information,~~partially ~~see~~offset ~~Note~~by 1a ~~(Basis~~net ofincrease ~~Presentation)~~ to ~~these~~prior ~~Consolidated~~year ~~Financial~~non-U.S. ~~Statements~~tax ~~under~~liabilities. ~~Item~~The 1effective tax rate for the six months ended February 29, ~~“Financial~~2016 ~~Statements~~also benefited from the final determination of 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 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.

9. 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~~February 3028, ~~2016~~2017 and August 31, 2016, the Company has reflected the fair value of $5250,~~703~~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~~February 3028, ~~2016~~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~~569,000 and $749,000, respectively, of which all but approximately $8995,000 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.

Legal Contingencies

As of November 30, 2016, 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 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.

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ACCENTURE HOLDINGS 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 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, 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.

See also Note 8 (Income Taxes) to these Consolidated Financial Statements under Item 1, “Financial Statements.”

10. 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

November 30, 2016

November 30, 2015

February 28, 2017

February 29, 2016

NetRevenues

OperatingIncome

NetRevenues

OperatingIncome

Communications, Media & Technology

1,~~686~~620,~~196~~728

~~257~~214,~~844~~738

1,~~604~~606,~~639~~700

~~247~~242,~~873~~512

Financial Services

1,~~809,~~769,611

~~319~~268,~~489~~164

1,~~745~~684,~~216~~729

~~322~~230,~~785~~534

Health & Public Service

1,~~500~~511,~~774~~564

~~199~~189,~~227~~115

1,~~423~~482,~~867~~264

~~172~~209,~~578~~795

Products

2,~~320~~264,~~169~~828

~~408~~363,~~699~~762

1,~~990~~994,~~123~~530

~~291~~286,~~223~~336

Resources

1,~~194~~144,~~858~~725

~~146~~102,~~700~~874

1,~~245~~173,~~084~~997

~~186~~118,~~801~~867

Other

36,~~751~~215

—

43,~~234~~345

—

Total

8,~~515~~317,~~517~~671

1,~~331~~138,~~959~~653

87,~~013~~945,~~163~~565

1,~~221~~088,~~260~~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 “we,” the “Company,” “our” and “us” in this report to refer to Accenture Holdings plc and its subsidiaries. Accenture plc (“Accenture”) is the controlling shareholder of the Company. 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 (the “Securities Act”) 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 Company 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.

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


•	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 the share price of Accenture plc Class A ordinary shares 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~~services ~~offerings~~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 65% in U.S. dollars and 76% in local currency compared to the ~~first~~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 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. and Communications, Media & Technology ~~revenue~~and ~~growth in local currency was modest, while~~ 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 63% in U.S. dollars and 75% 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 adeclines ~~decline~~ in Communications, Media & Technology, Resources and Health & Public Service. WeOur ~~continue~~consulting revenue growth continues to ~~experience~~be ~~growing~~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 ~~Health~~Products, &as ~~Public~~well ~~Service,~~as ~~Products,~~strong growth in Financial Services and Health & Public Service while Communications, Media & Technology, asand ~~well~~Resources asrevenue had modest growth ~~in Resources~~. 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~~three ~~quarter~~and ofsix ~~fiscal~~months ~~2017~~ended ~~compared~~February to28, ~~the first quarter of fiscal 2016~~2017, 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 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.

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~~Utilization~~development ~~for~~activities; ~~the~~marketing- ~~first quarter of fiscal 2017 was 92%, flat with the fourth quarter of fiscal 2016~~ and upadvertising-related ~~from~~activities; ~~90% in the first quarter of fiscal 2016. We continue to hire to meet current~~ and ~~projected~~certain ~~future~~acquisition-related ~~demand~~costs. WeGeneral ~~proactively plan~~ and ~~manage~~administrative ~~the~~costs ~~size~~primarily ~~and~~include ~~composition~~costs ~~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 of which serve our clients, to approximately 394,000 as of November 30, 2016, compared to approximately 373,000 as of November 30, 2015. The yearnon-~~over~~client-~~year~~facing 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 quarter of fiscal 2017 was 12%, down from 16% in the fourth quarter of fiscal 2016 and 13% in the first 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~~information ~~increases~~systems ~~become effective December 1st of each fiscal year. We strive to adjust pricing~~ and~~/or~~ ~~the~~office ~~mix of resources to reduce the impact of compensation increases on our gross margin~~space. 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~~Utilization ~~margin~~for ~~(Net~~the ~~revenues~~second ~~less~~quarter ~~Cost~~of fiscal 2017 was 91%, down from 92% in the first quarter of fiscal 2017 and up from 90% in the 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 ~~before~~and ~~reimbursable~~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 of which serve our clients, to approximately 401,000 as aof ~~percentage~~February 28, 2017, compared to approximately 373,000 as of ~~Net~~February 29, ~~revenues)~~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 ~~32.1~~12%, ~~compared~~flat with ~~32.0~~the first quarter of fiscal 2017 and down from 13% ~~for~~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.

~~Sales~~Gross ~~and~~margin ~~marketing~~(Net ~~and~~revenues ~~General~~less ~~and~~Cost ~~administrative~~of ~~costs~~services before reimbursable expenses as a percentage of net revenues) ~~were 16.4%~~ for the ~~first~~second quarter of fiscal 2017 was 30.1%, compared with 1629.78% for the ~~first~~second quarter of fiscal 2016. WeGross ~~continuously~~margin ~~monitor~~for ~~these~~the ~~costs~~six ~~and~~months ~~implement~~ended ~~cost-management~~February ~~actions~~28, ~~as appropriate. For the first quarter of fiscal~~ 2017 ~~compared~~was ~~to the first quarter of fiscal 2016~~31.1%, ~~Sales~~compared ~~and~~with ~~marketing~~30.9% ~~costs~~for asthe asix ~~percentage~~months ofended ~~net~~February ~~revenues decreased 50 basis points principally due to improved operational efficiency in our business development activities~~29, ~~and General and administrative costs as a percentage of net revenues increased 20 basis points~~2016.

~~Operating~~Sales ~~margin~~and ~~(Operating~~marketing ~~income~~and General and administrative costs as a percentage of ~~Net~~net revenues) were 16.4% for both the ~~first~~second quarter of fiscal 2017 ~~was~~and ~~15.6%~~the six months ended February 28, 2017, compared with 1516.21% 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 second quarter and six months ended February 28, 2017 compared to the same periods in fiscal 2016, Sales and marketing costs as a percentage of net revenues was flat and decreased 20 basis points, respectively, and General and administrative costs as a percentage of net revenues increased 20 and 30 basis points, respectively, principally due to higher technology and facilities costs.

Operating margin (Operating income as a percentage of Net revenues) for the second quarter of fiscal 2017 was 13.7%, flat with the second quarter of fiscal 2016. Operating margin for the 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 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 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 8 (Income Taxes) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

New Bookings

New bookings for the ~~first~~second quarter of fiscal 2017 were $89.3219 billion, with consulting bookings of $4.8863 billion and outsourcing bookings of $34.4456 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.

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Results of Operations for the Three Months Ended ~~November~~February 3028, ~~2016~~2017 Compared to the Three Months Ended ~~November~~February 3029, ~~2015~~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				PercentIncrease(Decrease)U.S. Dollars		PercentIncrease(Decrease)LocalCurrency		Percent of Total Net Revenuesfor 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		February 29, 2016
	(in millions of U.S. dollars)
OPERATING GROUPS
Communications, Media & Technology	$	1,~~686~~621	$	1,~~605~~607	51	%	41	%	20	%	20	%
Financial Services	1,~~810~~770		1,~~745~~685		45		68		21		2221
Health & Public Service	1,~~501~~512		1,~~424~~482		52		52		18		1819
Products	2,~~320~~265		1,~~990~~995		1714		1715		27		25
Resources	1,~~195~~145		1,~~245~~174		(42	)	(21	)	14		15
Other	46		43		n/m		n/m		—		—
TOTAL NET REVENUES	8,~~516~~318		87,~~013~~946		65	%	76	%	100	%	100	%
Reimbursements	~~490~~445		~~453~~451		8(2	)
TOTAL REVENUES	$	98,~~006~~762	$	8,~~466~~397	64	%
GEOGRAPHIC REGIONS
North America	$	3,~~981~~956	$	3,~~763~~791	64	%	64	%	4748	%	4748	%
Europe	2,~~942~~827		2,~~885~~785		2		7		34		3635
Growth Markets	1,~~593~~535		1,~~365~~370		1712		109		1918		17
TOTAL NET REVENUES	$	8,~~516~~318	$	87,~~013~~946	65	%	76	%	100	%	100	%
TYPE OF WORK
Consulting	$	4,~~593~~406	$	4,~~346~~293	63	%	75	%	5453	%	54	%
Outsourcing	3,~~922~~912		3,~~667~~653		7		78		4647		46
TOTAL NET REVENUES	$	8,~~516~~318	$	87,~~013~~946	65	%	76	%	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 41% in local currency, ~~driven~~led by ~~Media~~Software & ~~Entertainment~~Platforms ~~and~~in ~~Electronics~~North &America, ~~High~~as ~~Tech~~well as growth inacross ~~both~~all ~~North~~industry ~~America~~groups ~~and~~in Growth Markets and Electronics & High Tech in North 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~~.

• Financial Services net revenues increased 68% in local currency, driven by growth in both industry groups in Europe. Inand Banking & Capital Markets, ~~strong growth~~ in ~~Europe and~~ Growth Markets ~~was partially offset by a decline in North America~~.

• Health & Public Service net revenues increased 52% in local currency, driven by Public Service in Growth Markets and Europe, as well as Health in North America.

• Products net revenues increased 17% 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.

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• ~~Resources~~Products net revenues ~~decreased~~increased 215% in local currency, asdriven ~~significant growth in Utilities in Europe and Growth Markets was more than offset~~ by ~~declines~~very instrong ~~Chemicals~~growth &across ~~Natural~~all ~~Resources~~industry groups and ~~Energy across all~~ geographic regions., Weled ~~have~~by ~~experienced~~Consumer ~~negative~~Goods, ~~revenue~~Retail ~~growth in Chemicals~~ & ~~Natural~~Travel ~~Resources and Energy~~Services, ~~principally~~as ~~due~~well toas ~~continued~~Life ~~challenging~~Sciences ~~market conditions~~ in ~~these~~North ~~industries,~~America and weIndustrial ~~expect this trend to continue~~ in ~~the near term~~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 64% in local currency, driven by the United States.

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

• Growth Markets net revenues increased 109% in local currency, led by Japan, as well as ~~China~~Australia, Singapore and ~~Australia~~China.

Operating Expenses

Operating expenses for the ~~first~~second quarter of fiscal 2017 increased $~~429~~315 million, or 64%, over the ~~first~~second quarter of fiscal 2016, and ~~decreased~~remained flat as a percentage of revenues toat 8587.20% ~~from 85~~.6% ~~during this period.~~ Operating expenses before reimbursable expenses for the ~~first~~second quarter of fiscal 2017 increased $~~392~~321 million, or 65%, over the ~~first~~second quarter of fiscal 2016, and ~~decreased~~remained flat as a percentage of net revenues toat 8486.43% ~~from 84~~.8% ~~during this period.~~

Cost of Services

Cost of services for the ~~first~~second quarter of fiscal 2017 increased $~~372~~231 million, or 64%, over the ~~first~~second quarter of fiscal 2016, and ~~remained~~decreased ~~flat~~ as a percentage of revenues atto 6971.74% from 71.8% during this period. Cost of services before reimbursable expenses for the ~~first~~second quarter of fiscal 2017 increased $~~335~~238 million, or 64%, over the ~~first~~second quarter of fiscal 2016, and decreased as a percentage of net revenues to 6769.9% from 6870.02% during this period. Gross margin for the ~~first~~second quarter of fiscal 2017 increased to 3230.1% from 3229.08% 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 ~~first~~second quarter of fiscal 2017 increased $1341 million, or 15%, over the ~~first~~second quarter of fiscal 2016, and ~~decreased~~remained flat as a percentage of net revenues toat 10.45% ~~from 10~~.~~9% 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~~second quarter of fiscal 2017 increased $4443 million, or 9%, ~~from~~over the ~~first~~second quarter of fiscal 2016, and increased as a percentage of net revenues to 65.09% from 5.87% 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~~second quarter of fiscal 2017 increased $~~111~~51 million, or 95%, over the ~~first~~second quarter of fiscal 2016. Operating income and operating margin for each of the operating groups were as follows:

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

	Three Months Ended
	November 30, 2016				November 30, 2015
	OperatingIncome		OperatingMargin		OperatingIncome		OperatingMargin		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.

21We 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

Net income for the second quarter of fiscal 2017 decreased $513 million, or 37%, from the second quarter of fiscal 2016, primarily driven by the gain on sale of business from the Navitaire divestiture recorded during the second quarter of fiscal 2016, partially offset by higher revenues and operating results during the second quarter of fiscal 2017.

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WeResults ~~estimate that the aggregate percentage impact~~ of ~~foreign~~Operations ~~currency~~for ~~exchange rates on our Operating income during~~ the ~~first~~Six ~~quarter~~Months ofEnded ~~fiscal~~February 28, 2017 ~~was~~Compared ~~similar~~ to ~~that disclosed for Net revenue. The commentary below provides insight into other factors affecting operating group performance and operating margin for~~ the ~~first~~Six ~~quarter~~Months ofEnded ~~fiscal~~February ~~2017~~29, ~~compared with the first quarter of fiscal~~ 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 ~~income~~group, ~~increased~~geographic ~~primarily~~region ~~due~~and totype ~~higher~~of ~~outsourcing~~work) ~~revenue~~and ~~growth.~~reimbursements were as follows:

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



	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	%

~~• Health & Public Service operating income increased due to higher consulting contract profitability and outsourcing revenue growth.~~_______________

•n/m ~~Products~~= ~~operating~~not ~~income~~meaningful ~~increased due to significant revenue growth, higher consulting contract profitability and lower sales and marketing costs as a percentage of net revenues.~~

•Amounts ~~Resources~~in ~~operating~~table ~~income~~may ~~decreased~~not total due to ~~a decline in consulting revenue and lower contract profitability~~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:

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.

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•	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 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 Australia and China.

Operating Expenses

Operating expenses for the six months ended February 28, 2017 increased $743 million, or 5%, over the six months ended February 29, 2016, and decreased as a percentage of revenues to 86.1% from 86.3% during this period. Operating expenses before reimbursable expenses for the six months ended February 28, 2017 increased $713 million, or 5%, over the six months ended February 29, 2016, and decreased as a percentage of net revenues to 85.3% from 85.5% during this period.

Cost of Services

Cost of services for the six months ended February 28, 2017 increased $603 million, or 5%, over the six months ended February 29, 2016, and decreased as a percentage of revenues to 70.5% from 70.8% during this period. Cost of services before reimbursable expenses for the six months ended February 28, 2017 increased $573 million, or 5%, over the six months ended February 29, 2016, and decreased as a percentage of net revenues to 68.9% from 69.1% during this period. Gross margin for the six months ended February 28, 2017 increased to 31.1% from 30.9% during this period.

Sales and Marketing

Sales and marketing expense for the six months ended February 28, 2017 increased $54 million, or 3%, over the six months ended February 29, 2016, and decreased as a percentage of net revenues to 10.5% from 10.7% during this period.

General and Administrative Costs

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

Operating Income and Operating Margin

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



	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

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We estimate that the aggregate percentage impact of foreign currency exchange rates on our operating income during the six months ended February 28, 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 six months ended February 28, 2017 compared with the six months ended February 29, 2016:


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


•	Financial Services operating income increased primarily due to revenue growth.


•	Health & Public Service operating income was relatively flat year-over-year.


•	Products operating income increased due to 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 ~~quarter~~months ofended ~~fiscal~~February 28, 2017 was 20.45%, compared with 2920.34% for the ~~first~~six ~~quarter~~months ofended ~~fiscal~~February 29, 2016. ~~The~~Absent ~~lower~~the ~~effective~~gain ~~tax~~on ~~rate~~the Navitaire divestiture and related $58 million in taxes recorded during the ~~first~~second quarter of fiscal ~~2017~~2016, ~~was~~the ~~primarily~~effective ~~due~~tax torate ~~higher~~for ~~benefits~~the 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 ~~adjustments~~the tofinal 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 ASU No. 2016-09. ~~For~~This ~~more~~was ~~information,~~partially ~~see~~offset ~~Note~~by 1a ~~(Basis~~net ofincrease ~~Presentation)~~ to ~~our~~prior ~~Consolidated~~year ~~Financial~~non-U.S. ~~Statements~~tax ~~under~~liabilities. ~~Item~~The 1effective tax rate for the six months ended February 29, ~~“Financial~~2016 ~~Statements~~also benefited from the final determination of 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

Net income for the ~~first~~six ~~quarter~~months ofended ~~fiscal~~February 28, 2017 ~~increased~~decreased $~~191~~322 million, or 2214%, ~~over~~from the ~~first~~six ~~quarter~~months ofended ~~fiscal~~February 29, 2016., ~~The~~primarily ~~increase~~driven ~~was~~by ~~primarily~~the ~~due~~gain toon sale of business from the Navitaire divestiture recorded during the second quarter of fiscal 2016, partially offset by higher revenues and operating results ~~and~~during athe ~~lower~~six ~~effective~~months ~~tax~~ended ~~rate~~February 28, 2017.

Liquidity and Capital Resources

As of ~~November~~February 3028, ~~2016~~2017, Cash and cash equivalents was $43.12 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)
Net cash provided by (used in):
Operating activities	$	1,~~084~~239		$	~~643~~1,007		$	~~441~~231
Investing activities	(~~690~~1,034		)	(~~706~~371		)	17(663		)
Financing activities	(1,~~163~~844		)	(1,~~196~~916		)	3372
Effect of exchange rate changes on cash and cash equivalents	(6027		)	(2847		)	~~(32~~19		)
Net increase (decrease) in cash and cash equivalents	$	(~~829~~1,667	)	$	(1,~~288~~326	)	$	~~459~~(341	)

_______________

Amounts in table may not total due to rounding.

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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~~February 3029, ~~2015~~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~~Cash ~~$17~~used ~~million decrease~~ in ~~cash~~investing ~~used~~activities ~~was~~increased ~~due~~$663 tomillion ~~decreased~~as spending on business acquisitions and investments ~~and~~in ~~property~~the ~~and~~first ~~equipment~~half of fiscal 2016 was largely offset by proceeds from the Navitaire divestiture.

Financing activities: The $3372 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 5 (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.

Borrowing Facilities

As of ~~November~~February 3028, ~~2016~~2017, we had the following borrowing facilities, including the issuance of letters of credit, to support general working capital purposes:

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

Under the borrowing facilities described above, we had an aggregate of $~~168~~177 million of letters of credit outstanding as of ~~November~~February 3028, ~~2016~~2017.

Share Purchases and Redemptions

The Board of Directors of Accenture plc has authorized funding 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~~February 3028, ~~2016~~2017 was as follows:

	Shares	Amount
		(in millions of U.S. dollars)
Accenture Holdings plc ordinary shares	~~145~~317,~~253~~548	$	1737
Accenture Canada Holdings Inc. exchangeable shares	140,~~035~~135	16
Total	~~285~~457,~~288~~683	$	3454

_______________

Amounts in table may not total due to rounding.

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Accenture and 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 Accenture’s open-market share purchase program may vary depending on numerous factors, including, without limitation, share price and other market conditions, Accenture’s and 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.

Other Share Redemptions

During the ~~three~~six months ended ~~November~~February 3028, ~~2016~~2017, Accenture issued ~~403~~491,~~340~~349 Accenture plc Class A ordinary shares upon redemptions of an equivalent number of Accenture Holdings plc ordinary shares pursuant to Accenture’s registration statement on Form S-3 (the “registration statement”). The registration statement allows Accenture, at its 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 9 (Commitments and Contingencies) to our Consolidated Financial Statements under Item 1, “Financial Statements.”

Recently Adopted and New Accounting ~~Pronouncement~~Pronouncements

OnSee ~~September~~Note 1, ~~2016, we early adopted Financial Accounting Standards Board~~ (~~“FASB”)~~Basis ~~Accounting~~of ~~Standards Update (“ASU”~~Presentation) ~~No. 2016-09, Improvements~~ to ~~Employee~~these ~~Share-Based~~Consolidated ~~Payment~~Financial ~~Accounting,~~Statements ~~which~~under ~~simplifies~~Item 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 addition1, ~~cash~~“Financial ~~flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows~~Statements.”

The primary impact of the adoption of the ASU on our 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 September 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 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

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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.

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~~February 3028, ~~2016~~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 Holdings 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.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under “Legal Contingencies” in Note 9 (Commitments and Contingencies) to our Consolidated Financial Statements under Part I, Item 1, “Financial Statements,” is incorporated herein by reference.

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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.

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

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

The following table provides information relating to purchases and redemptions by us of Accenture Holdings plc ordinary shares and Accenture Canada Holdings Inc. exchangeable shares for cash during the ~~first~~second quarter of fiscal 2017.

Period	Total Numberof SharesPurchased (1)	AveragePrice Paidper Share (2)		Total Number ofShares Purchased asPart of PubliclyAnnounced Plans orPrograms	Approximate Dollar Valueof Shares that May Yet BePurchased Under the Plans or Programs (3)
Accenture Holdings plc
September 1, 2016 — September 30, 2016	—	$	—
December 1, 2016 — December 31, 2016	42,625	$	117.62
October 1, 2016 — October 31, 2016	65,789	$	117.95
January 1, 2017 — January 31, 2017	77,379	$	115.89
November 1, 2016 — November 30, 2016	79,464	$	119.20
February 1, 2017 — February 28, 2017	52,291	$	117.09
Total	~~145~~172,~~253~~295	$	~~118~~116.6468
Accenture Canada Holdings Inc.
September 1, 2016 — September 30, 2016	—	$	—
December 1, 2016 — December 31, 2016	100	$	117.66
October 1, 2016 — October 31, 2016	76,035	$	115.98
January 1, 2017 — January 31, 2017	—	$	—
November 1, 2016 — November 30, 2016	64,000	$	117.47
February 1, 2017 — February 28, 2017	—	$	—
Total	~~140,035~~100	$	~~116~~117.66

_______________

(1) During the ~~first~~second quarter of fiscal 2017, we acquired a total of ~~145~~172,~~253~~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, Accenture issued ~~403~~88,~~340~~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 Accenture’s and our aggregate available authorization for share purchases and redemptions through either Accenture’s 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 below and the applicable footnote.

Other Transactions Related to Accenture Holdings plc Ordinary Shares

During the ~~first~~second quarter of fiscal 2017, we issued an aggregate of 4,~~066~~412,~~060~~278 Accenture Holdings plc ordinary shares to Accenture in connection with transactions related to the issuance of Accenture plc Class A ordinary shares delivered pursuant to outstanding options awards, grants of restricted share units and other issuances primarily related to equity compensation plans. In each case, the Accenture Holdings plc ordinary shares were issued in reliance on ~~the exemption from registration contained in Section 4(2) of the Securities Act on the basis that the transaction did not involve any public offering.~~

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the exemption from registration contained in Section 4(2) of the Securities Act on the basis that the transaction did not involve any public offering.

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

The following table provides additional information relating to the purchases by Accenture of Accenture plc Class A ordinary shares and redemptions of Accenture plc Class X ordinary shares during the ~~first~~second quarter of fiscal 2017. We believe the following table and footnotes provide useful information because the market value of Accenture Holdings plc ordinary shares is based on the share price of Accenture plc Class A ordinary shares, and purchases of these shares may affect the share price of Accenture plc Class A ordinary shares.

Period

Total Numberof SharesPurchased

AveragePrice Paidper Share (1)

Total Number ofShares Purchased asPart of PubliclyAnnounced Plans orPrograms (2)

Approximate Dollar Valueof Shares that May Yet BePurchased Under the Plans or Programs (3)

(in millions of U.S. dollars)

September 1, 2016 — September 30, 2016

December 1, 2016 — December 31, 2016

Class A ordinary shares

12,~~694~~082,~~784~~376

~~113~~119.8150

1,~~346~~389,~~366~~572

54,~~324~~728

Class X ordinary shares

—8,645

0.0000225

—

October 1, 2016 — October 31, 2016

January 1, 2017 — January 31, 2017

Class A ordinary shares

12,~~704~~891,~~895~~782

~~117~~115.1983

12,~~293~~186,~~574~~362

54,~~066~~466

Class X ordinary shares

~~307~~37,~~548~~615

0.0000225

—

November 1, 2016 — November 30, 2016

February 1, 2017 — February 28, 2017

Class A ordinary shares

1,~~364~~808,~~163~~488

~~118~~117.5208

1,~~255~~599,~~272~~883

4,~~899~~272

Class X ordinary shares

~~288~~275,~~658~~488

0.0000225

—

Total

Class A ordinary shares (4)

46,~~763~~782,~~842~~646

~~116~~117.3729

35,~~895~~175,~~212~~817

Class X ordinary shares (5)

~~596~~321,~~206~~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, Accenture purchased 35,~~895~~175,~~212~~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~~February 3028, ~~2016~~2017, Accenture’s and our aggregate available authorization for share purchases and redemptions was $4,~~899~~272 million, which management has the discretion to use for either Accenture’s publicly announced open-market share purchase program or the other share purchase programs. Since August 2001 and as of ~~November~~February 3028, ~~2016~~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~~1,~~630~~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 Accenture’s various employee equity share plans. These purchases of shares in connection with employee share plans do not affect our aggregate available authorization for Accenture’s and 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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

(a) None.

(b) None.

ITEM 6. EXHIBITS

Exhibit Index:

ExhibitNumber		Exhibit
2.1		Common Draft Terms of Merger by and between Accenture Holdings plc and Accenture SCA, dated May 18, 2015 (incorporated by reference to Exhibit 2.1 to Accenture Holdings plc’s 8-K filed on May 18, 2015)
3.1		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)
3.2		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)
10.1*		Form of Key Executive Performance-Based Award Restricted Share Unit Agreement pursuant to the Amended and Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.2 to the February 28, 2017 Accenture plc 10-Q)
10.2*		Form of Accenture Leadership Performance Equity Award Restricted Share Unit Agreement pursuant to the Amended and Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the February 28, 2017 Accenture plc 10-Q)
10.3*		Form of Voluntary Equity Investment Program Matching Grant Restricted Share Unit Agreement pursuant to the Amended and Restated Accenture plc 2010 Share Incentive Plan (incorporated by reference to Exhibit 10.4 to the February 28, 2017 Accenture plc 10-Q)
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)
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)
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)
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)
101		The following financial information from Accenture Holdings plc’s Quarterly Report on Form 10-Q for the quarterly period ended ~~November~~February 3028, ~~2016~~2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of ~~November~~February 3028, ~~2016~~2017 (Unaudited) and August 31, 2016, (ii) Consolidated Income Statements (Unaudited) for the three and six months ended ~~November~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016, (iii) Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended ~~November~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016, (iv) Consolidated Shareholders’ Equity Statement (Unaudited) for the ~~three~~six months ended ~~November~~February 3028, ~~2016~~2017, (v) Consolidated Cash Flows Statements (Unaudited) for the ~~three~~six months ended ~~November~~February 3028, ~~2016~~2017 and ~~2015~~February 29, 2016 and (vi) the Notes to Consolidated Financial Statements (Unaudited)

28(*) 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~~March 2123, ~~2016~~2017



	ACCENTURE HOLDINGS PLC

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

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