Ladies and gentlemen, thank you for standing by, and welcome to Accenture's Second Quarter Fiscal 2012 Earnings Call. [Operator Instructions] As a reminder, today's conference is being recorded. I'd now like to turn the conference over to Senior Director of Investor Relations, KC McClure. Please go ahead.

Thank you, Ryan, and thanks, everyone, for joining us today on our Second Quarter Fiscal 2012 Earnings Announcement. As Ryan just mentioned, I'm KC McClure, Managing Director of Investor Relation. With me today are Pierre Nanterme, our Chief Executive Officer; and Pamela Craig, our Chief Financial Officer. We hope you've had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today's call. Pierre will begin with an overview of our results. Pam will take you through the financial details, including the income statement and balance sheet, along with some key operational metrics for the second quarter. Pierre will then provide a brief update on market positioning and progress against our growth strategy. Pam will then provide our business outlook for the third quarter and full fiscal year 2012, and then we will take your questions before Pierre provides a wrap-up at the end of the call. As a reminder, when we discuss revenues during today's call, we're talking about revenues before reimbursements or net revenues. Some of the matters we'll discuss on this call are forward looking, including the business outlook. You should keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements and that such statements are not a guarantee of our future performance. Such risks and uncertainties include, but are not limited to, general economic conditions and those factors set forth in today's news release and discussed under the Risk Factor section of our annual review on Form 10-K and quarterly reports on Form 10-Q and other SEC filings. During our call today, we will reference certain non-GAAP financial measures which we believe provide useful information for investors. We include reconciliations of those measures, where appropriate, to GAAP in our news release or on the Investor Relations section of our website at accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call. Now let me turn the call over to Pierre.

Thank you, KC. And thanks, everyone, for joining us today. Our excellent results for the second quarter, including strong top and bottom line growth, demonstrate that our strategy continues to resonate with our clients and that we are running our business with rigor and discipline. Here are a few highlights. We generated new bookings of nearly $8 billion. Revenues were $6.8 billion, up 13% in local currency, with all 5 operating groups and all 3 geographic regions delivering double-digit local currency growth. We delivered very strong earnings per share of $0.97, an increase of 29%. Operating income was $889 million, an increase of 15% over last year. And we continued to have a very strong balance sheet, ending the quarter with a cash balance of $5.6 billion. In addition, I'm very pleased that we just announced a semiannual cash dividend of $0.675 per share, which brings the total dividend payments for the year to $1.35 per share. And given our very strong results for the first half of fiscal year 2012, we are raising our outlook for revenue growth and EPS for the full year. Now let me hand over to Pam, who will review the numbers in greater details. Pam, over to you.

Thank you, Pierre, and thanks to all of you for listening today. I am pleased to share more about Accenture's excellent second quarter financial results for our fiscal '12. New bookings were again strong, just shy of $8 billion. Revenue came in at the top end of the range we guided to last quarter, and EPS for Q2 were very strong. Revenue growth was broad-based across our operating groups and geographic regions, with outsourcing growth higher than consulting for most of those dimensions. Our performance through the first half of the year and into calendar 2012 positions us well to achieve our targets for the full fiscal year. Now let's get to the numbers. Unless I state otherwise, all figures are U.S. GAAP, except the items that are not part of the financial statements or that are calculations. New bookings for the quarter were $7.94 billion and reflect a negative 1% foreign exchange impact compared with new bookings in the second quarter last year. Consulting bookings were $4.05 billion, and outsourcing bookings were $3.89 billion. Let me give you some color on new bookings in the quarter. In management consulting we continued to see strong bookings, reflecting an ongoing client demand for projects that deliver near-term and structural cost takeout, especially in the supply chain. We saw increased demand from clients seeking to drive new revenue through improved sales and marketing effectiveness, and demand also continued for services on large-scale business transformation programs. Turning to technology consulting, our bookings reflect the demand for network transformation, data center consolidation and IT rationalization for both driving cost savings and pushing up the business value from IT. Since its integration, bookings continued to reflect client demand to update and implement enterprise-wide ERP systems. We see growing demand for cloud, which is leading to…

Thank you, Pam. Our strong results again this quarter demonstrate that our growth strategy is well aligned with the needs of our clients and that we are leveraging marketplace opportunities to drive growth and gain market share across all the key dimensions of our business. Of course, we are watching macroeconomic trends very closely. And despite the slowdown in the forecast for global economic growth, especially in Europe, there are some positive developments such as early signs of improvement in the U.S. economy as well as progress to stabilize the eurozone sovereign debt situation. In my recent conversations with the CEOs of our clients, it is clear that the marketplace foresees driving the need for large-scale transformation are still here. And in this context, our growth strategy continues to be extremely relevant to our clients. Talking about clients. Over the last 6 months, we have increased the number of Diamond Clients, which are our largest client relationships, across all 5 operating groups. We continue to operate at the heart of our clients' businesses and to increase not only the number of clients we serve, but also the kinds of services we are providing to them. Operational efficiency continues to be a key area of focus for our clients and is driving significant demand for our services. Let me give you 2 examples. We are helping one of the world's leading insurance companies reduce cost through implementation of a large multiyear network transformation program, which includes a cloud-based Voice-over-IP solution. Our services span 25 countries and include infrastructure expense management, service delivery and security services. In health, which is one of our priority industries, we are using our care management BPO services to help one of the largest U.S. health insurers manage their review and authorization of medical services for patients.…

Thank you, Pierre. As we head into the second half of our fiscal '12, we are positioned very well. We are pleased with how we have navigated the macro environment, which, as Pierre mentioned, continues to have significant challenges as well as some brighter spots. We continue to be very focused on overall profitable growth in our broad-based global business and on building market share in the markets we are focused on. I'll now provide our outlook for the next quarter's revenue and an update to our annual outlook for the full fiscal year. So here's how we see it shaping up. For the third quarter, we expect revenues to be in the range of $7.05 billion to $7.25 billion, which assumes a foreign exchange impact of negative 3% for the quarter. For the full fiscal year, we continue to assume a foreign exchange impact of negative 1%. This reflects the rates we've experienced over the past couple of weeks, which have remained consistent with the assumption we provided last quarter. Turning to revenues. Based on the strong delivery and our year-to-date results of almost 14% growth in local currency and how we see the year as a whole, we now expect our fiscal year 2012 revenue to be in the range of 10% to 12% growth in local currency. We expect continued strong growth in outsourcing and continued moderation in consulting growth. We continue to expect bookings to fall within our annual new bookings range of $28 billion to $31 billion for the fiscal year, although we now expect to be in the top half of that range. We continue to expect operating margin to be in the range of 13.7% to 13.9%, a 10 to 30 basis point expansion over last fiscal year. You should expect some fluctuations…

Thanks, Pam. [Operator Instructions] Ryan, would you provide instructions for those in the call, please?

[Operator Instructions] Our first question comes from the line of Tien-Tsin Huang for JPMorgan. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: I guess I'll ask something on the outsourcing front. You mentioned, I guess last quarter to us that you're not seeing a shift from consulting to outsourcing and that outsourcing is not growing at the expense of consulting. Is that still the case? I'm just trying to get a better sense of how long this interplay between the 2 might persist. Do you follow my question, Pam and Pierre?

Yes, I think. Just, you do the math, right? The outsourcing is marginally a little bit greater proportion of our business right now, and we see that particularly happening in Financial Services and Communications, Media & Technology. It's been a trend and we expect it to continue to be a trend. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Right, okay. The -- now that makes sense. And the -- I guess, just on the outsourcing growth, as my follow-up: Is it pretty broad-based or driven by certain large deals? And how would you characterize the risk profile, I would ask, on the outsourcing side versus maybe 2, 3 years ago?

Well, it's quite broad-based. We see strong outsourcing growth virtually around the world and pretty much across the operating groups, so this is clearly very good growth. I think in terms of the risk profile, I'll just comment a little bit on our capital committee, it is something that we take very, very seriously in all these deals. I think it's fair to say we're getting better and better at it, and I do not see an increase in the risk profile of our outsourcing work.

Yes, just to add a word on this. I mean definitely, outsourcing is a very relevant response to the clients who have challenges in improving their operational efficiency and their overall performance. And this is true across the patch for all our industries. That's why you can see the kind of acceleration of the demand in outsourcing across the board.

Our next question comes from the line of Rod Bourgeois with Bernstein. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: First question on demand and then a quick question on the margin front. On the demand front, Pam, you mentioned in your guidance commentary that your outlook assumes moderation in consulting. Is that moderation in the year-over-year growth rate as comparisons get tougher? Or is that moderation in the actual demand environment and seeing some incremental softening there? Can you kind of clarify whether that's a year-over-year growth rate commentary or a demand trend commentary?

It's a year-over-year growth rate commentary. We are expecting that the consulting year-over-year growth rate will be more in the mid-single-digits kind of range next quarter, and so it is very much that. We continue to see very good demand, as you can see in the bookings, being over $4 billion. And the demand environment is -- continues to be robust in most parts of the world. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: Okay, great, that's very helpful. And then on the margin front, I want to focus on the Financial Services vertical there. And I guess there's 2 parts to my question here. Are you seeing any meaningful pricing issues contributing to the margin decline in Financial Services? And did you have any write-off on troubled contracts during the quarter that caused the meaningful drop in the Financial Services margin?

I would say, Rod, that it is more due to the things that I mentioned a few minutes ago in the sense that we did have a couple of nice-sized acquisitions that came online, and so we planned to have some impact from those. We also did have higher selling costs in Financial Services, and I think that's, in large part, due to there is significant transformation going on in that industry, as you know, and so some of that was planned. And we did have, lastly, some delivery inefficiencies, which would probably go into the category of "we need to work on that a bit more" that also contributed. But the first 2 were more of a planned nature. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: Does that mean, looking forward, that the margin should recover after you get past the acquisition cost and then some upfront selling costs on some transformational work?

We do expect that the Financial Services profitability will tick back up.

We will be jumping on this, Rod, because I'm historically Mr. FX, so I still have some personal stake on this. And indeed, as you know and as we communicated, banking, insurance and health are industries where we decided to invest because we see the potential on those industries. So it's not a surprise that you can see the impact of our investments in some of the margin. And so far, we are very pleased with the results of those investments in the term of the acquisitions we made and we announced recently with Duck Creek and with Zenta to form Accenture Credit Services. And of course, the other data point is we're pleased to announce that this quarter, in Q2, Financial Services bookings were $2.1 billion, the highest booking ever in the Financial Services history.

Next question comes from the line of Julio Quinteros, Goldman Sachs.

Just to pick up on Rod's question there but maybe from a different perspective on the contribution. Because you guys are calling out the acquired impact to the margins, is there a way to think about how much is actually helping on the revenue growth side as well?

It did have a good contribution to the revenue growth in Financial Services. I'm not going to give you the exact number, but it was meaningful to that growth.

Okay, got it. And just have a quick follow-up. When we look at the results, hard to argue with 13% to 14% first half growth and mid-teens trailing 12-month bookings at this point in time. But when you look at the implied growth into the back half of the year at their midpoint of the range, it looks like you guys are implying 8.5%. What would -- I mean, at this point, just given where the growth is right now, especially with bookings as strong as they are, why would you guys expect to decelerate in the back half of the year?

Well, it's just more how we see the -- how it's shaping up. And when you think about it, it's more like a 7% to 10%, which is, I think, how we saw the business when we started the year and then consulting was running hotter. And now we see it coming back closer to that level, which is a very, very good level. So the moderation is primarily in consulting, and outsourcing continues to be strong.

Next question comes from the line of Bryan Keane, Deutsche Bank.

I just wanted to drill down on the consulting business, maybe your outlook by region. It sounded like Americas and Asia might have been accelerating, but maybe a little bit of a decel in Europe is expected? Maybe you can just break it down further.

Well, I'm probably -- I'm not going to break it down in terms of numbers, but I think your characterization is fair. Although, we expect moderation to be in the Americas and Asia-Pacific as well as we go forward. But Europe is the one that's lowest in terms of a growth rate right now.

And did Europe deteriorate during the quarter, or it's just -- it's kind of happening to plan? And then just lastly on headcount growth, I noticed sequentially headcount growth didn't grow as much, but you've kept your guidance for at least 60,000 heads for gross hires. So just curious on, is there a timing issue for headcount with this quarter and we should expect it to pick up in the next 2?

All right, so the first question, okay, the headcount was the -- that's the question I've got here. So there's nothing unusual going on with headcount, Bryan. I mean, it's pretty much -- as you know, we manage supply and demand around the world and that's really all that's going on. So the utilization was at 87%. I think we're being tight and rigorous about that, as we always are, and there's nothing unusual there.

Then from a consulting standpoint, I am going to jump on that one. I don't think there is anything in Q2 that was not expected or took us by surprise from a consulting standpoint. I think Pam mentioned in prior quarters that indeed, if you're looking at the world macroeconomic environment, it's public knowledge that Europe is more softer from an economic standpoint compared to the rest of the world. We're watching carefully what's happening especially in the Financial Services sector in some part of Europe. It's not the same story if you are looking at the different countries in Europe. And so what's happening there is more happening as planned, and I don't think there is anything that was unexpected.

Right. And just what's interesting, though, is that the outsourcing demand is quite strong in Europe. So as you can imagine, we're responding to that.

Next question comes from the line of Nate Rozof, Morgan Stanley.

My first question for you is related to the pipeline. I think, after 2 very strong bookings quarter -- last quarter, Pam, you made the comment that there was going to be some work needed to be done in terms of replenishing the pipeline. And now, here we are again with another strong bookings quarter. So I wanted to get your sense on, had you been able to replenish the pipeline? And what was the philosophy of deals moving to the pipeline relative to maybe a quarter ago?

Yes, I -- it's a great question and, as you can imagine, something we are very focused on. And I think we have made some good progress in building the pipeline. We do have some more work to do. And again, with the strong bookings, it was, I think, overall very good. One thing I'll just mention because sometimes this relates a little bit to disability, and I've given you this in the past, is that when we look at revenue under contract, we do have 13% more than we did at this time last year both for the next 2 quarters of the fiscal year, but also for the next 4 quarters. So I think that shows you that we're -- that that's building as well.

Okay, that's terrific. It's good to hear about the visibility. Can you provide any insight in terms of just breaking down into the bookings number a little bit more? Any insight in terms of new wins in that strong bookings number versus renewals and/or any change relative to what's kind of normal at this time of the year?

I don't think there's anything major to point out there, Nate. I mean, I think one of the things that we were of course looking at last year -- sorry, last quarter, was how the calendar year turn was going to go. And we haven't seen anything notably changed that much in terms of clients' budgets and sort of all of that. So I don't think there's really anything big to point out with respect to that.

Our next question comes from the line of Darrin Peller, Barclays.

Pierre, I think you mentioned earlier that, in Europe, you were seeing more outsourcing and I think it's well received, especially just given the historical trends there. So do you think now clients continue to focus on cost takeout? Those historical barriers around cultural factors and labor laws and language are actually really becoming less of a hurdle and you're actually seeing it hit the numbers now, first of all?

Yes, I mean, if you look at this, at the demand, I mean, clearly, operational efficiency is extremely important for all the reasons we know. And again, we feel we are extremely well positioned to provide the right answer to that particular agenda. From a consulting standpoint, from an outsourcing standpoint, we have, I think, all the tools, techniques and offerings to tackle that agenda. But at the same time, we see a growing demand for more innovation and using more the technology innovation to drive either more efficiency but, as well, more the revenue agenda of our clients. And what's interesting to see in the marketplace is, indeed, those 2 activities, and it's not a surprise, are picking up at the same time, and clients are investing to be more efficient as well as they're investing to capture more growth opportunities. And we're very pleased, if you will, with those 2 engines for growth.

And just one follow-up to that. Is it market share also, are you seeing your win rates increase?

I don't think -- I mean, our win rates have been up, as I think back over the last year. And I don't think we saw a significant change this quarter in that.

Okay, but it's been -- it's pretty stable, Pam?

Yes.

Next question comes from the line of Jason Kupferberg, Jefferies. Jason Kupferberg - Jefferies & Company, Inc., Research Division: So I just wanted to ask a question regarding SG&A. I mean, you guys have done such a great job over a long period of time there managing the SG&A cost base. And I wanted to get an idea of how much more upside, if you will, remains there to the extent you see opportunity for further cost takeout, what specific areas that might be in. And part of the reason I ask the question is, the gross margins continue to go down year-over-year, I think it's been about 6 straight quarters. But obviously, you managed the business to operating margins and you've been hitting your goals there, but the SG&A piece of the equation obviously becomes even more important if the gross margins continue to slide. So any color you can give us there would be great.

Yes. I mean, I think you're right, right. I mean, I think philosophically, we are looking to manage SG&A to grow slower than revenue, right? And so that's sort of part of our culture that we're really careful with our cost and really manage all that, manage our cost structure with a lot of rigor and discipline. And so I was pleased to see the improvement in the selling cost. You do know that when we invest in the business, that's typically on the sales and marketing line as well. That's where we have our offerings and our initiatives, so we want to make sure that we can do some things there as well and look to do as much as we can but all within this overall framework of, in the end, delivering modest margin expansion.

And all of this is -- I'm going to jump on this one because it's a kind of mindset, if you will. And probably, you've been hearing me and Pam using a lot "rigor and discipline," which is coming back and coming back. But if we are mentioning that sort, it's only because we mean it. And at the end of the day, rigor and discipline is what you need as a mindset for proper execution. And I think, in that organization, there is a relentless focus on improving productivity and efficiency in everything we do. And there is no reason that will not apply to SG&A as to the rest of our business. Jason Kupferberg - Jefferies & Company, Inc., Research Division: Okay. And let me just ask a follow-up on your latest thoughts regarding non-linear growth opportunities at Accenture. You guys now have about 0.25 million employees. And are there some goals you can share with us just in terms of size for your non-linear businesses such as on the Accenture Software side or BPO or other types of IP-based solutions you have in your portfolio? I know you'd talked a bit about this at a past analyst meetings. I wanted to see if there was any update there you could share.

Yes. I mean, at the high level, we are a people-based organization. We will grow our headcount and we love that. We love our people, we love growing base, we're used to that. We know how to hire, train, develop, deploy, and that's part of something we will do and we will continue to do. That being said, it is part of our plan to bring more IPs in our system, if you will, to be more differentiated. That we will continue to be a people-based business and grow that way. From an IP standpoint, indeed, we are pleased with the progress we are making either by leveraging the good technologies from our alliance partners. And we are doing that every day to bring our unit industry expertise or by making some focused investments and strategic investments. I mentioned a few we are doing in each and every industry. So we will continue to be more IP-based and to grow indeed that part of our business as well. But the people-based part will remain important.

Our next question comes from the line of Ashwin Shirvaikar with Citi.

My question is related to the bookings. In the next few quarters, you have obviously very significant ramps related to the contracts that you're signing. You also have a lot of increased headcount coming up, given the relatively flattish headcount this quarter. Are there marginal cash implications in the back half of the year or even slightly beyond that as we look at those ramps?

What do you mean by marginal cash applications?

Is it going to -- because you're obviously ramping your -- ramping large contracts, there is an initial cost involved. Does it have a negative implication for your gross margins...

Yes, I mean, I guess sort of this giant portfolio, thousands of contracts, right. We always have some in their early stages. And that's part of what each operating group manages as they look to deliver each year. So there's nothing unusual there, Ashwin.

Okay, so nothing out of the ordinary, okay. The second question is on Nokia. I guess it's sort of client-specific, and let me take a shot at it even though I know you historically don't answer client-specific questions. You're making buyout offers to the Belgian employees. Is that sort of too early in the process? Is that consistent with your expectations? How's the project growing? I mean, it is Symbian support and we kind of know how Symbian is doing in the market, so a little bit concerned there.

Yes, I mean, as you expected, I think when you asked the question, we're not going to comment specifically on a client contract.

Next question comes from the line of Arvind Ramnani with UBS.

Just a couple of quick questions. You're continuing to see strength in some of your end markets that are having pressures, specifically Financial Services and Europe. So do you feel like the ongoing pressure that your clients are seeing will continue to drive business your way? Or do you think at some point it will catch up with your overall revenue growth?

I think the thing that we see is continued robust demand for outsourcing and Financial Services. And we don't see that letting up.

Great, great. And you also attributed your gross margin pressure to contract profitability. Can you expand on that? Is that driven due to higher contractor costs or due to pressure on bill rates for the contract work?

Well, I mean I think, as I mentioned, it's in Financial Services and in Health & Public Service. And in those cases where there's things that we wish we do better is what we thought -- we referred to as delivery and efficiencies, and that's more where it takes more cost to deliver something than we thought it would.

And just one other quick one. Are you still planning on having your Analyst Day at the -- in April, or is it moved to the fall?

We are not planning to have it in April. And we, at this point, are looking to do it in the fall. And stay tuned, we'll have an update on that.

With results reflecting the cycle of our business, so that's why it's moving to the fall.

Okay, great.

Yes, we think it's better, from the standpoint of our fiscal year.

Great, great. And I mean, I guess -- would that mean you'll provide guidance only when you hold the Analyst Day for the following fiscal year?

Stay tuned on that.

And the final question comes from the line of Joseph Foresi with Janney.

I guess my -- I'm going to try and squeeze 2 even though it's the last 1. But any changes in the spending patterns by clients? Are wallets opening up a little bit here as there's been some macro stability? And what could cause those wallets to shut up?

I mean, as we said, we're looking carefully at the macroeconomic environment. We're talking to our clients every day. We're looking at the analysts' reports no later than this morning, and really, I'm reading all the reports from the economy coming from all around the world. And we are not seeing any significant changing in the current client environment. And we do not see much reason that why things would change, at least things we know.

Right.

Okay. And then lastly, I just want to go back to the first question because it looks like outsourcing is kind of outpacing consulting. Is this -- I mean, is there any linkage at all to the business cycle or [indiscernible] center a part of the cycle where maybe consulting moderates and outsourcing picks up? Or have you been converting those consulting engagements into outsourcing? I'm just trying to get a final feel for that.

Yes, I think there is some, what I would call catalyst effect of some of the consulting going into outsourcing, but we haven't really quantified that. But there's a lot of activity under what we've termed framework agreements in outsourcing. And I think that as we mentioned in the comments, right, this relentless focus on cost takeout and getting more operationally efficient, it just really lends itself to doing that kind of work and really helping clients get more fit. And of course, with the -- what's going on with technology, that's really supporting that, too, because there's opportunities through new -- through these new technologies to make some of these IT costs more variable, and that's, of course, very attractive to clients. I think that's it.

And again, I've seen -- I mean, a lot of your question concerning consulting and outsourcing, and they're all very valid. Again, just a reminder that we've been booking in the range of $4 billion this past 4 quarters in consulting. So we'd like to make sure everybody get, if you're on that call, that we're pleased with where we are with outsourcing, with consulting and we are extremely pleased with where we are in outsourcing. Okay, I think it's time to wrap up the call. Thanks again for joining us today. As you heard, we are very pleased with our strong results in the second quarter and the first half of the fiscal year. We are confident that we will continue to deliver profitable growth, and we are remaining focused on accelerating the execution of our growth strategy. We believe we are well positioned to see the opportunities we see in the marketplace and have raised our business outlook for revenue growth and EPS for the full year. And of course, our strong performance would not be possible without the incredibly talented team of Accenture women and men around the world. I would also like to thank our investors for your continued support. And we look forward to speaking with you again next quarter. In the meantime, if you have any questions, feel free to call KC to make arrangements for a follow-up. Thank you for participating, and all the best.

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