Temporary working capital

ACCENTURE PLC ACCENTURE Management’s Discussion and Analysis 2022 FORM 10-K Statement and Results of Operations 32 (Form 10-K)

Item 7. Management report and analysis of the financial situation and operating results

The following discussion and analysis should be read in conjunction with our
Consolidated Financial Statements and related Notes included elsewhere in this
Annual Report on Form 10-K. This discussion and analysis also contains
forward-looking statements and should also be read in conjunction with the
disclosures and information contained in "Disclosure Regarding Forward-Looking
Statements" and "Risk Factors" in this Annual Report on Form 10-K.

We use the terms "Accenture," "we," the "Company," "our" and "us" in this report
to refer to Accenture plc and its subsidiaries. All references to years, unless
otherwise noted, refer to our fiscal year, which ends on August 31. For example,
a reference to "fiscal 2022" means the 12-month period that ended on August 31,
2022. 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.

Insight

Accenture plc is a leading global professional services company, providing a
broad range of services and solutions across Strategy & Consulting, Technology,
Operations, Industry X and Song. We serve clients in three geographic markets:
North America, Europe and Growth Markets (Asia Pacific, Latin America, Africa
and the Middle East). We combine our strength in technology with industry
experience, functional expertise and global delivery capability to help the
world's leading businesses, governments and other organizations build their
digital core, optimize their operations, accelerate revenue growth and enhance
citizen services-creating tangible value at speed and scale.

Our results of operations are affected by economic conditions, including
macroeconomic conditions, the overall inflationary environment and levels of
business confidence. There continues to be significant economic and geopolitical
uncertainty in many markets around the world, which has impacted and may
continue to impact our business, particularly with regard to wage inflation and
increased volatility in foreign currency exchange rates. During fiscal 2022, we
disposed of our business in Russia and recorded a non-operating loss of $96
million. We do not have a business in Ukraine or Belarus.

Key indicators

We have seen very strong demand across our business in fiscal 2022 as our customers continue their digital transformations. Key metrics for fiscal 2022 versus fiscal 2021 included:

•Income from $61.6 billionrepresenting a growth of 22% in WE dollars and 26% growth in local currency;

• New bookings of $71.7 billionan increase of 21% in WE dollars and 25% in local currency;

•Operating margin of 15.2%, up 10 basis points;

• Diluted earnings per share of $10.71an increase of 16.9% compared to $9.16 for the 2021 financial year, including one $0.15 per share or negative impact of 2% from the disposal of our business in Russia; and

• Cash returned to shareholders of $6.6 billionincluding purchases of shares of
$4.1 billion and the dividends of $2.5 billion.

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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                33


Revenues

                                                                                                                  Percent                 Percent
                                                                                 Fiscal               Increase (Decrease)     Increase (Decrease)
                                                                                                                     U.S.                   Local
(in billions of U.S. Dollars)                                                   2022         2021                 Dollars                Currency

Geographic Markets           North America                              $    29.1    $    23.7                      23  %                   23  %
                             Europe                                          20.3         16.7                      21                      29
                             Growth Markets                                  12.2         10.1                      21                      29
                             Total Revenues                             $    61.6    $    50.5                      22  %                   26  %

Industry Groups (1)          Communications, Media & Technology         $    12.2    $     9.8                      24  %                   28  %
                             Financial Services                              11.8          9.9                      19                      24
                             Health & Public Service                         11.2          9.5                      18                      20
                             Products                                        18.3         14.4                      27                      32
                             Resources                                        8.1          6.9                      18                      22
                             Total Revenues                             $    61.6    $    50.5                      22  %                   26  %

Type of Work                 Consulting                                 $    34.1    $    27.3                      25  %                   29  %
                             Outsourcing                                     27.5         23.2                      19                      22
                             Total Revenues                             $    61.6    $    50.5                      22  %                   26  %


(1)Effective June 1, 2022, we revised the reporting of our industry groups for
the movement of Aerospace & Defense from Communications, Media & Technology to
Products. Prior period amounts have been reclassified to conform with the
current period presentation.

Revenues for fiscal 2022 increased 22% in U.S. dollars and 26% in local currency
compared to fiscal 2021. During fiscal 2022, revenue growth in local currency
was very strong across all geographic markets, industry groups and types of
work.

In our consulting business, revenues for fiscal 2022 increased 25% in U.S.
dollars and 29% in local currency compared to fiscal 2021. Consulting revenue
growth in local currency in fiscal 2022 was driven by very strong growth in
Europe, Growth Markets and North America. Our consulting revenue continues to be
driven by helping our clients accelerate their digital transformation, including
moving to the cloud, embedding security across the enterprise and adopting new
technologies. In addition, clients continue to be focused on initiatives
designed to deliver cost savings and operational efficiency, as well as projects
to accelerate growth and improve customer experiences.

In our outsourcing business, which we also refer to as our managed services
business, revenues for fiscal 2022 increased 19% in U.S. dollars and 22% in
local currency compared to fiscal 2021. Outsourcing revenue growth in local
currency in fiscal 2022 was driven by very strong growth in Growth Markets,
Europe and North America. We continue to experience growing demand to assist
clients with application modernization and maintenance, cloud enablement and
managed security services. In addition, clients continue to be focused on
transforming their operations through data and analytics, automation and
artificial intelligence to drive productivity and operational cost savings.

As we are a global company, our revenues are denominated in multiple currencies
and may be significantly affected by currency exchange rate fluctuations. While
a significant portion of our revenues are in U.S. dollars, the majority of our
revenues are denominated in other currencies, including the Euro, Japanese yen
and U.K. pound. There continues to be volatility in foreign currency exchange
rates. Unfavorable fluctuations in foreign currency exchange rates have had and
could in the future have a material effect on our financial results. 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. 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. The U.S. dollar strengthened
against various currencies during fiscal 2022, resulting in unfavorable currency
translation and U.S. dollar revenue growth that was approximately 4% lower than
our revenue growth in local currency for the year. Assuming that exchange rates
stay within recent ranges, we estimate that our fiscal 2023 revenue growth in
U.S. dollars will be approximately 6% lower than our revenue growth in local
currency.


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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                34


People Metrics

Utilization                             Workforce                               Annualized Voluntary Attrition
91%                                     721,000+                            

19%

down from 93% in fiscal 2021            compared to approximately 624,000   

compared to 14% in fiscal year 2021

                                        as of August 31, 2021


Utilization for fiscal 2022 was 91%, down from 93% in fiscal 2021. We hire to
meet current and projected future demand. We proactively plan and manage the
size and composition of our workforce and take actions as needed to address
changes in the anticipated demand for our services and solutions, given that
compensation costs are the most significant portion of our operating expenses.
Our workforce, the majority of which serves our clients, increased to
approximately 721,000 as of August 31, 2022, compared to approximately 624,000
as of August 31, 2021. The year-over-year increase in our workforce reflects an
overall increase in demand for our services and solutions, as well as people
added in connection with acquisitions.

During fiscal 2022, we experienced a competitive labor market with high demand
for the skills our people have, which contributed to elevated levels of
voluntary attrition. For fiscal 2022, attrition, excluding involuntary
terminations, was 19%, up from 14% in fiscal 2021. For the fourth quarter of
fiscal 2022, annualized attrition, excluding involuntary terminations, was 20%,
flat with 20% in the third quarter of fiscal 2022. 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 order to attract and retain appropriate
numbers of qualified employees. For the majority of our people, compensation
increases become effective December 1st of each fiscal year. Given the overall
inflationary environment, compensation has been and continues to increase faster
than in prior years. In fiscal 2022, we have improved pricing, which we define
as the contract profitability or margin on the work that we sell, across our
business. While we are increasing pricing, as well as changing the mix of people
and utilizing technology to reduce the impact of these compensation increases on
our margin, the impact of these actions did not in fiscal 2022, and may not in
the future, fully offset the impact of the compensation increases, resulting in
lower contract profitability.

Our ability to grow our revenues and maintain or increase our margin could be
adversely affected if we are unable to: match people and skills with the types
or amounts of services and solutions clients are demanding; recover or offset
increases in compensation; deploy our employees globally on a timely basis;
manage attrition; and/or effectively assimilate new employees.

Functionnary costs

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 people serving our clients, which consists mainly of
compensation, subcontractor and other payroll 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 people that are
non-client-facing, information systems, office space and certain
acquisition-related costs.

Gross margin (Revenues less Cost of services as a percentage of Revenues) for
fiscal 2022 was 32.0%, compared with 32.4% for fiscal 2021. The decrease in
gross margin for fiscal 2022 was due to higher labor costs, including increased
compensation and subcontractor costs, partially offset by a decrease in
non-payroll costs.

SG&A expense as a percentage of revenue was 16.8% for fiscal 2022 compared to 17.3% for fiscal 2021. For fiscal 2022 vs. In fiscal 2021, selling and marketing expenses decreased by 60 basis points, primarily due to lower sales and advertising expenses as a percentage of revenue. General and administrative expenses increased by 10 basis points as a percentage of revenue.

Operating margin (operating profit as a percentage of revenue) for fiscal 2022 was 15.2%, compared to 15.1% for fiscal 2021.

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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                35


Other Income (Expense), net

During fiscal 2021, we recorded gains of $271 million and tax expense of $41
million, related to our investment in Duck Creek Technologies. For additional
information, see Note 1 (Summary of Significant Accounting Policies) to our
Consolidated Financial Statements under Item 8, "Financial Statements and
Supplementary Data."

Effective tax rate

The effective tax rates for fiscal years 2022 and 2021 were 24.0% and 22.8%, respectively. Absent the investment gains and related tax expense, our effective tax rate for fiscal 2021 would have been 23.1%.

Diluted earnings per share

Diluted earnings per share were $10.71 for the 2022 financial year, including one $0.15
the negative impact of the disposal of our activities in Russiacompared to
$9.16 for fiscal year 2021. The $230 million investment gains, net of tax, increased diluted earnings per share by $0.36 in fiscal 2021. Excluding the impact of these gains, diluted earnings per share would have been $8.80 for fiscal year 2021.

Our operating income and diluted earnings per share are affected by currency
exchange rate fluctuations on revenues and costs. Most of our costs are incurred
in the same currency as the related revenues. Where practical, we seek to manage
foreign currency exposure for costs not incurred in the same currency as the
related revenues, such as the costs associated with our global delivery model,
by using currency protection provisions in our customer contracts and through
our hedging programs. We seek to manage our costs, taking into consideration the
residual positive and negative effects of changes in foreign exchange rates on
those costs. For more information on our hedging programs, see Foreign Currency
Risk under Item 7A, "Quantitative and Qualitative Disclosures About Market Risk"
and Note 9 (Financial Instruments) to our Consolidated Financial Statements
under Item 8, "Financial Statements and Supplementary Data."

Non-GAAP Financial Measures

We have presented our effective tax rate and diluted earnings per share for
fiscal 2021, excluding the impact of the investment gains, as we believe doing
so facilitates understanding as to the impact of these items and our performance
in comparison to the prior period.

New Bookings

                                                                                               Percent                 Percent
                                                              Fiscal               Increase (Decrease)     Increase (Decrease)
                                                                                                  U.S.                   Local
(in billions of U.S. dollars)                                2022         2021                 Dollars                Currency
Consulting                                           $    37.9    $    30.6                      24  %                   28  %
Outsourcing                                               33.9         28.7                      18                      23
Total New Bookings                                   $    71.7    $    59.3                      21  %                   25  %

Amounts shown in the table may not total due to rounding.

We provide information regarding our new bookings, which include new contracts,
including those acquired through acquisitions, as well as renewals, extensions
and changes to existing contracts, because we believe doing so provides useful
trend information regarding changes in the volume of our new business over time.
New bookings can vary significantly quarter to quarter depending in part on the
timing of the signing of a small number of large outsourcing contracts. The
types of services and solutions clients are demanding and the pace and level of
their spending may impact the conversion of new bookings to revenues. For
example, outsourcing bookings, which are typically for multi-year contracts,
generally convert to revenue over a longer period of time compared to consulting
bookings.

Information regarding our new bookings is not comparable to, nor should it be
substituted for, an analysis of our revenues over time. New bookings involve
estimates and judgments. There are no third-party standards or requirements
governing the calculation of bookings. We do not update our new bookings for
material subsequent terminations or reductions related to bookings originally
recorded in prior fiscal years. New bookings are recorded using then-existing
foreign currency exchange rates and are not subsequently adjusted for foreign
currency exchange rate fluctuations.

The majority of our contracts are terminable by the client on short notice with
little or no termination penalties, and some without notice. Only the
non-cancelable portion of these contracts is included in our remaining
performance obligations disclosed in Note 2 (Revenues) to our Consolidated
Financial Statements under Item 8, "Financial Statements and Supplementary
Data." Accordingly, a significant portion of what we consider contract bookings
is not included in our remaining performance obligations.


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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                36

Significant Accounting Policies and Estimates

The preparation of our Consolidated Financial Statements in conformity with U.S.
generally accepted accounting principles requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the Consolidated
Financial Statements and the reported amounts of revenues and expenses. We
continually evaluate our estimates, judgments and assumptions based on available
information and experience. Because the use of estimates is inherent in the
financial reporting process, actual results could differ from those estimates.
Certain of our accounting policies require higher degrees of judgment than
others in their application. These include certain aspects of accounting for
revenue recognition and income taxes.

Revenue recognition

Determining the method and amount of revenue to recognize requires us to make
judgments and estimates. Specifically, complex arrangements with nonstandard
terms and conditions may require contract interpretation to determine the
appropriate accounting, including whether promised goods and services specified
in an arrangement are distinct performance obligations and should be accounted
for separately. Other judgments include determining whether performance
obligations are satisfied over time or at a point in time and the selection of
the method to measure progress towards completion.

We measure progress towards completion for technology integration consulting
services and some non-technology consulting services using costs incurred to
date relative to total estimated costs at completion. Revenues, including
estimated fees, are recorded proportionally as costs are incurred. The amount of
revenue recognized for these contracts in a period is dependent on our ability
to estimate total contract costs. We continually evaluate our estimates of total
contract costs based on available information and experience.

Additionally, the nature of our contracts gives rise to several types of
variable consideration, including incentive fees. Many contracts include
incentives or penalties related to costs incurred, benefits produced or
adherence to schedules that may increase the variability in revenues and margins
earned on such contracts. We conduct reviews prior to signing such contracts to
evaluate whether these incentives are reasonably achievable. Our estimates are
monitored over the lives of our contracts and are based on an assessment of our
anticipated performance, historical experience and other information available
at the time.

For more information, see Note 2 (Revenues) to our Consolidated Financial Statements in Section 8, “Financial Statements and Supplementary Data”.

Income taxes

Determining the consolidated provision for income tax expense, income tax
liabilities and deferred tax assets and liabilities involves judgment. Deferred
tax assets and liabilities, measured using enacted tax rates, are recognized for
the future tax consequences of temporary differences between the tax and
financial statement bases of assets and liabilities. As a global company, we
calculate and provide for income taxes in each of the tax jurisdictions in which
we operate. This involves estimating current tax exposures in each jurisdiction
as well as making judgments regarding the recoverability of deferred tax assets.
Tax exposures can involve complex issues and may require an extended period to
resolve. In assessing the realizability of deferred tax assets, we consider
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized and adjust the valuation allowances accordingly.
Factors considered in making this determination include the period of expiration
of the tax asset, planned use of the tax asset, tax planning strategies and
historical and projected taxable income as well as tax liabilities for the tax
jurisdiction in which the tax asset is located. Valuation allowances will be
subject to change in each future reporting period as a result of changes in one
or more of these factors. Changes in the geographic mix or estimated level of
annual income before taxes can affect the overall effective tax rate.

We apply an estimated annual effective tax rate to our quarterly operating
results to determine the interim provision for income tax expense. A change in
judgment that impacts the measurement of a tax position taken in a prior year is
recognized as a discrete item in the interim period in which the change occurs.
In the event there is a significant unusual or infrequent item recognized in our
quarterly operating results, the tax attributable to that item is recorded in
the interim period in which it occurs. We release stranded tax effects from
Accumulated other comprehensive loss using the specific identification approach
for our defined benefit plans and the portfolio approach for other items.

No taxes have been provided on undistributed foreign earnings that are planned
to be indefinitely reinvested. If future events, including material changes in
estimates of cash, working capital and long-term investment requirements,
necessitate that these earnings be distributed, an additional provision for
taxes may apply, which could materially affect our future effective tax rate. We
currently do not foresee any event that would require us to distribute these
indefinitely reinvested earnings. For additional information, see Note 11
(Income Taxes) to our Consolidated Financial Statements under Item 8, "Financial
Statements and Supplementary Data."


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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                37


As a matter of course, we are regularly audited by various taxing authorities,
and sometimes these audits result in proposed assessments where the ultimate
resolution may result in us owing additional taxes. We establish tax liabilities
or reduce tax assets when, despite our belief that our tax return positions are
appropriate and supportable under local tax law, we believe we may not succeed
in realizing the tax benefit of certain positions if challenged. In evaluating a
tax position, we determine whether it is more likely than not that the position
will be sustained upon examination, including resolution of any related appeals
or litigation processes, based on the technical merits of the position. Our
estimate of the ultimate tax liability contains assumptions based on past
experiences, judgments about potential actions by taxing jurisdictions as well
as judgments about the likely outcome of issues that have been raised by taxing
jurisdictions. The tax position is measured at the largest amount of benefit
that is greater than 50 percent likely of being realized upon settlement. We
evaluate tax positions each quarter and adjust the related tax liabilities or
assets in light of changing facts and circumstances, such as the progress of a
tax audit or the expiration of a statute of limitations. We believe the
estimates and assumptions used to support our evaluation of tax positions are
reasonable. However, final determinations of prior-year tax liabilities, either
by settlement with tax authorities or expiration of statutes of limitations,
could be materially different from estimates reflected in assets and liabilities
and historical income tax provisions. The outcome of these final determinations
could have a material effect on our income tax provision, net income, or cash
flows in the period in which that determination is made. We believe our tax
positions comply with applicable tax law and that we have adequately accounted
for these positions.

Revenue by segment/geographic market

Our three reportable operating segments are our geographic markets, North
America, Europe and Growth Markets. In addition to reporting revenues by
geographic market and industry group, we also report revenues by two types of
work: consulting and outsourcing, which represent the services sold by our
geographic markets. Consulting revenues, which include strategy, management and
technology consulting and technology integration consulting, reflect a finite,
distinct project or set of projects with a defined outcome and typically a
defined set of specific deliverables. Outsourcing revenues typically reflect
ongoing, repeatable services or capabilities provided to transition, run and/or
manage operations of client systems or business functions.

From time to time, our geographic markets work together to sell and implement
certain contracts. The resulting revenues and costs from these contracts may be
apportioned among the participating geographic markets. Generally, operating
expenses for each geographic market have similar characteristics and are subject
to the same factors, pressures and challenges. However, the economic environment
and its effects on the industries served by our geographic markets affect
revenues and operating expenses within our geographic markets to differing
degrees. The mix between consulting and outsourcing is not uniform among our
geographic markets. Local currency fluctuations also tend to affect our
geographic markets differently, depending on the geographic concentrations and
locations of their businesses.

While we provide discussion about our results of operations below, we cannot
measure how much of our revenue growth in a particular period is attributable to
changes in price or volume. Management does not track standard measures of unit
or rate volume. Instead, our measures of volume and price are extremely complex,
as each of our services contracts is unique, reflecting a customized mix of
specific services that does not fit into standard comparability measurements.
Revenue for our services is a function of the nature of each service to be
provided, the skills required and the outcome sought, as well as estimated cost,
risk, contract terms and other factors.


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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                38

Operating results for fiscal year 2022 compared to fiscal year 2021

Revenues by geographic market, industry group and type of work are as follows:


                                                                                      Percent                 Percent
                                                                                     Increase                Increase                Percent of Total
                                                                                   (Decrease)              (Decrease)                    Revenues
                                                  Fiscal                                 U.S.                   Local                   for Fiscal
(in millions of U.S. dollars)                 2022              2021                  Dollars                Currency                  2022                2021
Geographic Markets
North America                          $ 29,121          $ 23,701                       23  %                   23  %                 47  %               47  %
Europe                                   20,264            16,749                       21                      29                    33                  33
Growth Markets                           12,209            10,083                       21                      29                    20                  20
Total Revenues                         $ 61,594          $ 50,533                       22  %                   26  %                100  %              100  %
Industry Groups (1)
Communications, Media & Technology     $ 12,200          $  9,801                       24  %                   28  %                 20  %               19  %
Financial Services                       11,811             9,933                       19                      24                    19                  20
Health & Public Service                  11,226             9,498                       18                      20                    18                  19
Products                                 18,275            14,439                       27                      32                    30                  29
Resources                                 8,082             6,863                       18                      22                    13                  14
Total Revenues                         $ 61,594          $ 50,533                       22  %                   26  %                100  %              100  %
Type of Work
Consulting                             $ 34,076          $ 27,338                       25  %                   29  %                 55  %               54  %
Outsourcing                              27,518            23,196                       19                      22                    45                  46
Total Revenues                         $ 61,594          $ 50,533                       22  %                   26  %                100  %              100  %

Amounts shown in the table may not total due to rounding.

(1)Effective June 1, 2022, we revised the reporting of our industry groups for
the movement of Aerospace & Defense from Communications, Media & Technology to
Products. Prior period amounts have been reclassified to conform with the
current period presentation.

Revenue

The following revenue commentary discusses changes in local currency revenue for fiscal year 2022 compared to fiscal year 2021:

Geographic markets

•North America revenues increased 23% in local currency, driven by growth in utilities, consumer goods, retail and travel services, and software and platforms. Revenue growth was driven by United States.

•Europe revenues increased 29% in local currency, led by growth in Industrial,
Consumer Goods, Retail & Travel Services and Banking & Capital Markets. Revenue
growth was driven by Germany, the United Kingdom, France and Italy.

•Growth Markets revenues increased 29% in local currency, led by growth in
Consumer Goods, Retail & Travel Services, Banking & Capital Markets and Public
Service. Revenue growth was driven by Japan, Australia and Brazil.

Functionnary costs

Operating expenses for fiscal 2022 increased $9,315 million, or 22%, over fiscal
2021, and decreased as a percentage of revenues to 84.8% from 84.9% during this
period.

Operating expenses by category are as follows:

                                                         Fiscal
                                                                                               Increase
(in millions of U.S. dollars)               2022                       2021                  (Decrease)
Operating Expenses                 $ 52,227        84.8  %    $ 42,912        84.9  %    $      9,315
Cost of services                     41,893        68.0         34,169        67.6              7,724
Sales and marketing                   6,108         9.9          5,288        10.5                820

General and administrative expenses 4,226 6.9 3,454

    6.8                772


Amounts shown in the table may not total due to rounding.

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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                39


Cost of Services

Cost of services for fiscal 2022 increased $7,724 million, or 23%, over fiscal
2021, and increased as a percentage of revenues to 68.0% over 67.6% during this
period. Gross margin for fiscal 2022 decreased to 32.0% from 32.4% in fiscal
2021. The decrease in gross margin for fiscal 2022 was primarily due to higher
labor costs, including increased compensation and subcontractor costs, partially
offset by a decrease in non-payroll costs.

Sales and Marketing

Sales and marketing expense for fiscal 2022 increased $820 million, or 16%, over
fiscal 2021, and decreased as a percentage of revenues to 9.9% from 10.5% during
this period. The decrease was primarily due to lower selling and advertising
costs.

General and administrative costs

General and administrative costs for fiscal 2022 increased $772 million, or 22%,
over fiscal 2021, and increased as a percentage of revenues to 6.9% over 6.8%
during this period.

Operating profit and operating margin

Operating income for fiscal 2022 increased $1,746 million, or 23%, over fiscal
2021. Operating margin for fiscal 2022 was 15.2%, compared with 15.1% for fiscal
2021.

Operating income and operating margin for each of the geographic markets are as
follows:

                                                          Fiscal
                                           2022                           2021
                                   Operating      Operating       Operating      Operating         Increase
(in millions of U.S. dollars)         Income         Margin          Income         Margin       (Decrease)
North America                   $    4,977            17  %    $    3,908            16  %    $     1,069
Europe                               2,437            12            2,236            13               201
Growth Markets                       1,953            16            1,477            15               476
Total                           $    9,367          15.2  %    $    7,622          15.1  %    $     1,746

Amounts shown in the table may not total due to rounding.

We estimate that the aggregate percentage impact of foreign currency exchange
rates on our operating income during fiscal 2022 was similar to that disclosed
for revenue for each geographic market. The commentary below provides insight
into other factors affecting geographic market performance and operating income
for fiscal 2022 compared with fiscal 2021:

•North America operating profit increased primarily due to revenue growth, partially offset by lower contract profitability.

•Operating profit in Europe increased primarily due to revenue growth, partially offset by lower contract profitability and higher acquisition-related costs.

•Growing Markets operating income increased primarily due to revenue growth, partially offset by lower contract profitability.

Other income (expenses), net

Other income (expense), net primarily consists of foreign currency gains and
losses, non-operating components of pension expense, as well as gains and losses
associated with our investments. During fiscal 2022, Other income (expense)
decreased $238 million from fiscal 2021, primarily due to lower gains on
investments. For additional information on investments, see Note 1 (Summary of
Significant Accounting Policies) to our Consolidated Financial Statements under
Item 8, "Financial Statements and Supplementary Data."

Loss on sale of activities in Russia

We recorded a loss on the disposal of our business in Russia of $96 million
in fiscal year 2022.

Income Tax Expense

The effective tax rate for fiscal 2022 was 24.0%, compared with 22.8% for fiscal
2021. Absent the $271 million investment gains and related $41 million in tax
expense, our effective tax rate for fiscal 2021 would have been 23.1%. The
higher effective tax rate for fiscal 2022 was primarily due to lower benefits
from final determinations of prior year taxes. For


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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                40

for more information, see Note 11 (Income Taxes) to our Consolidated Financial Statements in Section 8, “Financial Statements and Supplementary Data”.

Net income attributable to non-controlling interests

Net income attributable to noncontrolling interests reflects the income earned
or expense incurred attributable to the equity interest that some current and
former members of Accenture Leadership and their permitted transferees have in
our Accenture Canada Holdings Inc. subsidiary. See "Business-Organizational
Structure." Noncontrolling interests also includes amounts primarily
attributable to noncontrolling shareholders in our Avanade Inc. subsidiary. Net
income attributable to Accenture plc represents the income attributable to the
shareholders of Accenture plc.

Earnings per share

Diluted earnings per share were $10.71 for fiscal 2022, including a $0.15
negative impact from the disposition of our business in Russia, compared with
$9.16 for fiscal 2021. The $230 million investment gains, net of taxes,
increased diluted earnings per share by $0.36 in fiscal 2021. Excluding the
impact of these gains, diluted earnings per share would have been $8.80 for
fiscal 2021. For information regarding our earnings per share calculations, see
Note 3 (Earnings Per Share) to our Consolidated Financial Statements under Item
8, "Financial Statements and Supplementary Data."

The increase in diluted earnings per share is due to the following factors:

Earnings Per Share                                                                  Fiscal 2022
FY21 As Reported                                                                $       9.16
Higher revenue and operating results                                                    2.08

Decrease in non-operating expenses (excluding loss on disposal of Russia company) 0.06 Decrease in the number of shares

                                                                       0.05
Higher net income attributable to noncontrolling interests                             (0.03)

Higher effective tax rate (excluding loss on disposal of Russia Company)

           (0.10)
Loss on disposition of Russia business                                                 (0.15)
Lower gains on an investment, net of tax                                               (0.36)
FY22 As Reported                                                                $      10.71

Operating results for fiscal year 2021 compared to fiscal year 2020

Our annual report on Form 10-K for the year ended August 31, 2021
includes a discussion and analysis of our financial condition and results of operations for the year ended August 31, 2020 in Section 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

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                                          Item 7. Management's Discussion and Analysis of Financial
ACCENTURE 2022 FORM 10-K                  Condition and Results of Operations                                41

Cash and capital resources

Our primary sources of liquidity are cash flows from operations, available cash
reserves and debt capacity available under various credit facilities. We could
raise additional funds through other public or private debt or equity
financings. We may use our available or additional funds to, among other things:

•facilitate purchases, redemptions and exchanges of shares and payment of dividends;

•acquiring complementary companies or technologies;

•seize opportunities, including faster expansion; Where

•develop new services and solutions.

From August 31, 2022Cash and cash equivalents were $7.9 billioncompared to $8.2 billion of the August 31, 2021.

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

                                                                          Fiscal
(in millions of U.S. dollars)                                      2022              2021             Change
Net cash provided by (used in):
Operating activities                                        $  9,541          $  8,975          $     566
Investing activities                                          (4,261)           (4,310)                49
Financing activities                                          (5,311)           (4,926)              (385)
Effect of exchange rate changes on cash and cash
equivalents                                                     (248)               14               (262)

Net increase (decrease) in cash and cash equivalents ($278)

($247) $ (31)

Amounts shown in the table may not total due to rounding.

Operational activities: The $566 million The increase in cash flow from operations is mainly attributable to the increase in net earnings, partially offset by changes in operating assets and liabilities, including trade receivables and contract assets.

Investing activities: The $49 million decrease in cash used was primarily due to
lower spending on business acquisitions, partially offset by lower proceeds from
the sale of businesses and investments and higher spending on purchases of
property and equipment. For additional information, see Note 6 (Business
Combinations and Dispositions) to our Consolidated Financial Statements under
Item 8, "Financial Statements and Supplementary Data."

Financing activities: The $385 million increase in cash used was primarily due
to an increase in the net purchases of shares as well as an increase in cash
dividends paid, partially offset by an increase in net proceeds from share
issuances. For additional information, see Note 14 (Shareholders' Equity) to our
Consolidated Financial Statements under Item 8, "Financial Statements and
Supplementary Data."

We estimate that our current and longer-term working capital, investments and other general business financing needs will be met over the next twelve months and thereafter from cash flow from operations and, in to the extent necessary, our borrowing facilities and our future capital markets 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. In
addition, 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.

Purchases and redemptions of shares

We intend to continue to use a significant portion of cash generated from
operations for share repurchases during fiscal 2023. The number of shares
ultimately repurchased under our open-market share purchase program may vary
depending on numerous factors, including, without limitation, share price and
other market conditions, our ongoing capital allocation planning, the levels of
cash and debt balances, other demands for cash, such as acquisition activity,
general economic and/or business conditions, and board and management
discretion. Additionally, as these factors may change over the course of the
year, the amount of share repurchase activity during any particular period
cannot be predicted and may fluctuate from time to time. Share repurchases may
be made from time to time through open-market purchases, in respect of purchases
and redemptions of Accenture 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.
For additional information, see Note 14 (Shareholders' Equity) to our
Consolidated Financial Statements under Item 8, "Financial Statements and
Supplementary Data."


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Subsequent Events

See Note 14 (Equity) to our Consolidated Financial Statements in Section 8, “Financial Statements and Supplementary Data”.

Obligations and Commitments

As of August 31, 2022, we had commitments of $2.8 billion related to cloud
hosting arrangements, software subscriptions, information technology services
and other obligations in the ordinary course of business that we cannot cancel
or where we would be required to pay a termination fee in the event of
cancellation. Payments under these commitments are estimated to be made as
follows:

(in millions of U.S. dollars)          Payments (1)
Less than 1 year                    $         774
1-3 years                                     931
3-5 years                                     665
More than 5 years                             467
Total                               $       2,837

(1) Amounts do not include any recourse we may have to recover termination fees or penalties from customers.

For information about borrowing facilities and leases, see Note 10 (Borrowings
and Indebtedness) and Note 8 (Leases) to our Consolidated Financial Statements
under Item 8, "Financial Statements and Supplementary Data."

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 these
arrangements. For further discussion of these transactions, see Note 15
(Commitments and Contingencies) to our Consolidated Financial Statements under
Item 8, "Financial Statements and Supplementary Data."

New accounting statements

See Note 1 (Summary of Significant Accounting Policies) to our Consolidated Financial Statements in Section 8, “Financial Statements and Supplementary Data”.

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