For the Year, Revenues Rise 1% With EPS
From Continuing Operations of $2.40 ($2.37 Excluding
Certain Items)
Forecasting 1% to
3% Growth in Fiscal 2011 Revenues and EPS Excluding Certain
Items
Automatic Data Processing, Inc. (Nasdaq:ADP) reported revenues of
$8.9 billion for the fiscal year ended June 30, 2010, Gary C.
Butler, president and chief executive officer, announced today.
Revenue growth of 1% included 0.8 percentage points from favorable
foreign exchange rates. As reported, pretax earnings from
continuing operations declined 2%, net earnings from continuing
operations declined 9%, and diluted earnings per share from
continuing operations of $2.40 declined 8% from $2.62 a year ago on
fewer shares outstanding. Fiscal 2010 and fiscal 2009 included
favorable tax items which reduced the provision for income taxes by
$12.2 million and $120.0 million, respectively. Excluding the
favorable tax items from both years, net earnings from continuing
operations declined 1% and diluted earnings per share from
continuing operations declined slightly to $2.37 from
$2.38.
For the fourth quarter of fiscal 2010, revenues increased 4% to
$2.2 billion compared with the fourth quarter of fiscal 2009.
Revenue growth benefited 0.6 percentage points from favorable
foreign exchange rates. As reported, pretax earnings from
continuing operations declined 15%, net earnings from continuing
operations declined 40%, and diluted earnings per share from
continuing operations of $0.42 declined 39%, from $0.69 per share a
year ago on fewer shares outstanding. Excluding last year's
fourth quarter favorable tax items of $120.0 million, net earnings
from continuing operations declined 9%, and diluted earnings per
share from continuing operations declined 7% to $0.42 from
$0.45.
ADP acquired 11.7 million shares of its stock for treasury at a
cost of about $485 million during the fourth quarter, and about
18.2 million shares at a cost of over $765 million during the
fiscal year. Cash and marketable securities were $1.8 billion
at June 30, 2010.
Fourth Quarter and Fiscal Year 2010 Discussion
Commenting on the results, Mr. Butler said, "Fiscal 2010 was a
challenging year. As the global economy began to stabilize and
recover, we increased our investments in sales and service as
demand grew for ADP's solutions. These investments pressured
fourth quarter margins but will enable strong execution against our
strategic growth program.
I am pleased that the trends in our key business metrics turned
positive as we exited the year. As anticipated, fourth quarter
new business sales growth for Employer Services and PEO Services
was strong on an absolute and comparable basis. Pays per
control turned slightly positive during the quarter, and client
revenue retention also improved from a year ago. Dealer
Services also exited the fiscal year with strong sales growth in
the fourth quarter.
We signed two strategic acquisitions during the fourth
quarter. These transactions have not yet closed and are
therefore not included in our forecasts for fiscal 2011, but I am
delighted that we have executed on this important part of ADP's
capital allocation strategy while continuing to return excess cash
to our shareholders through continued dividends and share
repurchases.
Employer Services
"Employer Services' revenues grew 4% for the fourth quarter,
nearly all organic, and were flat for the fiscal year. In the
United States, revenues from our traditional payroll and payroll
tax filing business grew slightly for the fourth quarter, and
declined 4% for the year. Beyond payroll revenues grew 9% for
the fourth quarter and 6% for the year. The number of
employees on our clients' payrolls in the United States grew 0.3%
for the fourth quarter and declined 3.4% for the year, as measured
on a same-store-sales basis for our clients on our Auto Pay
platform. Worldwide client retention improved 1.6 and 0.4
percentage points for the quarter and full year,
respectively. Employer Services' pretax margin declined 290
basis points for the fourth quarter and 60 basis points for the
year. The benefits from last year's restructuring were offset
by increased sales expense, investments in client service and
product along with higher benefits and compensation expense.
"Combined Employer Services and PEO Services worldwide new
business sales increased 25% for the quarter and 4% for the year.
New business sales represent annualized recurring revenues
anticipated from new orders, and were just over $1.0 billion for
the year.
PEO Services
"PEO Services' revenues increased 13% for the fourth quarter and
11% for the year, all organic. PEO Services' pretax margin
declined 40 basis points for the fourth quarter and 30 basis points
for the year primarily due to higher pass-through costs and
resulting overall price sensitivity. Average worksite
employees paid by PEO Services increased 8.5% for the fourth
quarter, and 5% for the year, to approximately 210,000 and 203,000,
respectively.
Dealer Services
"Dealer Services' revenues were flat for the fourth quarter,
down 1% organically, and declined 3% for the year, 4% organically.
Dealer Services gained market share with continued strong
competitive win rates. However, revenues were negatively
impacted by the cumulative effect of ongoing dealership closings
and lower international software license fee revenues. Dealer
Services' pretax margin declined 310 basis points for the fourth
quarter and 60 basis points for the year. Lower headcount
levels and other cost containment measures were offset in both the
fourth quarter and full year by acquisition-related costs,
increased sales expense, and higher benefits and compensation
expense. Additionally, full-year pretax margin was negatively
impacted by a first-quarter intangible asset impairment charge of
$7 million relating to General Motors' announced closure of its
Saturn brand.
Interest on Funds Held for Clients, Interest Income on Corporate
Funds, and Interest Expense
"The safety and liquidity of our clients' funds are the foremost
objectives of our investment strategy. Client funds are invested in
accordance with ADP's prudent and conservative investment
guidelines and the credit quality of the investment portfolio is
predominantly AAA/AA.
"For the fourth quarter, interest on funds held for
clients declined $7.0 million, or 4.8%, from $146.3 million to
$139.3 million, due to a decline of 50 basis points in the average
interest yield to 3.4%, partially offset by an increase of 9.2% in
average client funds balances from $15.0 billion to $16.3
billion. Interest expense declined $1.7 million, or 49%, from
$3.5 million to $1.8 million.
"For the fiscal year, interest on funds held for clients
declined $67.0 million, or 11.0%, from $609.8 million to $542.8
million, due to a decline of 45 basis points in the average
interest yield to 3.6%. Average client funds balances of $15.2
billion were flat with last year. Interest expense declined
$24.7 million, or 74%, from $33.3 million to $8.6 million. The
decline in interest expense was primarily due to a decline of 80
basis points in average commercial paper borrowing rates to 0.2%,
and lower average daily commercial paper borrowings which decreased
$0.3 billion, from $1.9 billion to $1.6 billion. We utilize
our short-term financing arrangements to satisfy our short-term
funding requirements related to client funds obligations in order
to extend the maturities of our investment portfolio, thus
averaging our way through an interest rate cycle.
Fiscal 2011 Forecast
"Our fiscal 2011 forecasts anticipate no changes in the current
economic environment. We anticipate difficult expense and
earnings comparisons during the first half of fiscal 2011,
primarily as a result of increased sales and service investments
which we began during the second half of fiscal 2010. Our
current forecasts for fiscal 2011 are as follows:
- Total revenues – increase 1% to 3%
- Diluted earnings per share – increase 1% to 3%, compared with
$2.37 earnings per share from continuing operations in fiscal 2010
which excludes favorable tax items
- Employer Services – revenue growth of 1% to 3%; pretax margin
expansion of up to 50 basis points
- Pays per control – flat to up 0.5% for the year
- Client revenue retention – flat to up 0.4 percentage
points
- PEO Services – low double-digit revenue growth; pretax margin
decline due to increased benefits pass through revenues
- Employer Services and PEO Services new business sales – high
single-digit growth compared to $1.0 billion sold in fiscal
2010
- Dealer Services – revenues and pretax margin flat to slightly
up
"Interest on funds held for clients is expected to decline $25
to $30 million, or 5% to 6%, from $542.8 million in fiscal 2010.
This is based on an approximate 30 basis point decline in the
expected average interest yield to about 3.3%, and 2% to 3% growth
in average client funds balances. The interest assumptions in
our forecasts are based on Fed Funds futures contracts and forward
yield curves as of July 27, 2010. The Fed Funds futures contracts
do not anticipate any changes during the fiscal year in the Fed
Funds target rate. The three-and-a-half and five-year U.S.
government agency rates based on the forward yield curves as of
July 27, 2010 were used to forecast new purchase rates for the
client extended and client long portfolios, respectively.
"We exited fiscal 2010 with strong sales momentum across our
business segments. Growth in new business sales is the most
important driver of future revenue growth and pretax margin
expansion. ADP's business model includes a high percentage of
recurring revenues, healthy margins, strong and consistent cash
flows and low capital expenditure requirements; this combined with
a strong balance sheet and a AAA credit rating have enabled us to
continually invest in our strategic growth program. I remain
optimistic about ADP's long-term growth opportunities," Mr. Butler
concluded.
Website Schedules
The schedules of quarterly and full-year revenue and pretax
earnings by reportable segment for fiscal years 2008, 2009, and
2010 have been updated for the fourth quarter and full-year fiscal
2010 results and posted to the Investor Relations home page
(http://www.investquest.com/iq/a/adp/index.htm) of our website
www.adp.com under Financial Data.
An analyst conference call will be held today, Thursday, July 29
at 8:30 a.m. EDT. A live webcast of the call will be
available to the public on a listen-only basis. To listen to
the webcast and view the slide presentation, go to ADP's home page,
www.adp.com, or ADP's Investor Relations home page,
http://www.investquest.com/InvestQuest/a/adp/, and click on the
webcast icon. The presentation will be available to download
and print about 60 minutes before the webcast at the ADP Investor
Relations home page at
http://www.investquest.com/iq/a/adp/index.htm. ADP's news
releases, current financial information, SEC filings and Investor
Relations presentations are accessible at the same Web site.
About ADP
Automatic Data Processing, Inc. (Nasdaq:ADP), with nearly $9
billion in revenues and about 570,000 clients, is one of the
world's largest providers of business outsourcing
solutions. Leveraging nearly 60 years of experience, ADP
offers a wide range of HR, payroll, tax and benefits administration
solutions from a single source. ADP's easy-to-use,
cost-effective solutions for employers provide superior value to
companies of all types and sizes. ADP is also a leading
provider of integrated computing solutions to auto, truck,
motorcycle, marine and recreational vehicle dealers throughout the
world. For more information about ADP or to contact a
local ADP sales office, reach us at 1.800.225.5237 or visit the
company's Web site at www.ADP.com.
Automatic Data Processing, Inc. and
Subsidiaries |
|
|
Condensed Consolidated Balance
Sheets |
|
|
(In millions) |
|
|
(Unaudited) |
|
|
|
June 30, 2010 |
June 30, 2009 |
|
|
|
Assets |
|
|
Cash and cash equivalents/Short-term
marketable securities (A) |
$ 1,671.2 |
$ 2,296.1 |
Other current assets |
1,812.9 |
1,981.7 |
Assets of discontinued operations |
-- |
8.5 |
Total current assets before funds held
for clients |
3,484.1 |
4,286.3 |
|
|
|
Funds held for clients |
18,832.6 |
16,419.2 |
Total current assets |
22,316.7 |
20,705.5 |
|
|
|
Long-term marketable securities |
104.3 |
92.4 |
Property, plant and equipment, net |
673.8 |
734.3 |
Other non-current assets |
3,767.4 |
3,819.5 |
Total assets |
$ 26,862.2 |
$ 25,351.7 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Obligation under commercial paper
borrowing |
$ -- |
$ 730.0 |
Liabilities of discontinued operations |
-- |
7.7 |
Other current liabilities |
1,915.5 |
2,033.1 |
Total current liabilities before client
funds obligations |
1,915.5 |
2,770.8 |
Client funds obligations |
18,136.7 |
15,992.6 |
Total current liabilities |
20,052.2 |
18,763.4 |
|
|
|
Long-term debt |
39.8 |
42.7 |
Other non-current liabilities |
1,291.3 |
1,223.0 |
Total liabilities |
21,383.3 |
20,029.1 |
|
|
|
Total stockholders' equity |
5,478.9 |
5,322.6 |
Total liabilities and stockholders'
equity |
$ 26,862.2 |
$ 25,351.7 |
|
|
|
(A) As of June 30, 2009, cash and
cash equivalents / short-term marketable securities include cash
and cash equivalents related to a commercial paper borrowing of
$730.0 million, which was repaid on July 1, 2009. |
|
|
|
|
|
Automatic Data Processing, Inc. and
Subsidiaries |
|
|
|
|
Statements of Consolidated
Earnings |
|
|
|
|
(In millions, except per share
amounts) |
|
|
|
|
(Unaudited) |
|
|
|
|
|
Three Months Ended June
30, |
Twelve Months Ended June
30, |
|
2010 |
2009 |
2010 |
2009 |
REVENUES: |
|
|
|
|
Revenues, other than interest on
funds held for clients and PEO revenues |
$ 1,722.6 |
$ 1,664.4 |
$ 7,077.7 |
$ 7,051.7 |
Interest on funds held for clients |
139.3 |
146.3 |
542.8 |
609.8 |
PEO revenues (A) |
328.4 |
290.1 |
1,307.2 |
1,176.9 |
TOTAL REVENUES |
2,190.3 |
2,100.8 |
8,927.7 |
8,838.4 |
|
|
|
|
|
EXPENSES: |
|
|
|
|
Costs of revenues: |
|
|
|
|
Operating expenses |
1,086.5 |
1,004.9 |
4,277.2 |
4,087.0 |
Systems development and programming
costs |
137.7 |
127.1 |
513.9 |
498.3 |
Depreciation and amortization |
58.0 |
61.0 |
238.6 |
237.4 |
TOTAL COSTS OF REVENUES |
1,282.2 |
1,193.0 |
5,029.7 |
4,822.7 |
|
|
|
|
|
Selling, general and administrative
expenses |
611.9 |
574.3 |
2,127.4 |
2,190.3 |
Interest expense |
1.8 |
3.5 |
8.6 |
33.3 |
TOTAL EXPENSES |
1,895.9 |
1,770.8 |
7,165.7 |
7,046.3 |
|
|
|
|
|
Other income, net |
(11.1) |
(30.8) |
(101.2) |
(108.0) |
|
|
|
|
|
EARNINGS FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES |
305.5 |
360.8 |
1,863.2 |
1,900.1 |
|
|
|
|
|
Provision for income taxes |
97.9 |
13.4 |
655.9 |
575.0 |
|
|
|
|
|
NET EARNINGS FROM CONTINUING OPERATIONS |
$ 207.6 |
$ 347.4 |
$ 1,207.3 |
$ 1,325.1 |
|
|
|
|
|
Earnings from discontinued operations, net of
(benefit) provision for income taxes of ($1.6) for the three months
ended June 30, 2009 and $7.0 and $0.7 for the twelve months ended
June 30, 2010 and 2009, respectively |
0.3 |
5.4 |
4.1 |
7.5 |
|
|
|
|
|
NET EARNINGS |
$ 207.9 |
$ 352.8 |
$ 1,211.4 |
$ 1,332.6 |
|
|
|
|
|
Basic Earnings Per Share from Continuing
Operations |
$ 0.42 |
$ 0.69 |
$ 2.41 |
$ 2.63 |
Basic Earnings Per Share from Discontinued
Operations |
-- |
0.01 |
0.01 |
0.01 |
Basic Earnings Per Share |
$ 0.42 |
$ 0.70 |
$ 2.42 |
$ 2.65 |
|
|
|
|
|
Diluted Earnings Per Share from Continuing
Operations |
$ 0.42 |
$ 0.69 |
$ 2.40 |
$ 2.62 |
Diluted Earnings Per Share from Discontinued
Operations |
-- |
0.01 |
0.01 |
0.01 |
DILUTED EARNINGS PER SHARE |
$ 0.42 |
$ 0.70 |
$ 2.40 |
$ 2.63 |
|
|
|
|
|
Dividends declared per common share |
$ 0.3400 |
$ 0.3300 |
$ 1.3500 |
$ 1.2800 |
|
|
|
|
|
(A) Professional Employer
Organization ("PEO") revenues are net of direct pass-through costs,
primarily consisting of payroll wages and payroll taxes, of
$3,224.6 and $2,868.6 for the three months ended June 30, 2010 and
2009, respectively, and $13,318.7 and $12,310.4 for the twelve
months ended June 30, 2010 and 2009, respectively. |
Other Selected Financial
Data |
|
|
|
|
(Dollars in millions, except per
share amounts) |
|
|
|
|
(Unaudited) |
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2010 |
2009 |
Change |
% Change |
Revenues (A) |
|
|
|
|
Employer Services |
$ 1,592.4 |
$ 1,528.9 |
$ 63.5 |
4% |
PEO Services |
330.9 |
292.4 |
38.5 |
13% |
Dealer Services |
307.2 |
307.9 |
(0.7) |
0% |
Other |
(40.2) |
(28.4) |
(11.8) |
(42)% |
|
$ 2,190.3 |
$ 2,100.8 |
$ 89.5 |
4% |
Pre-tax earnings from continuing
operations (A) |
|
|
|
|
Employer Services |
$ 335.8 |
$ 366.3 |
$ (30.5) |
(8)% |
PEO Services |
29.4 |
27.1 |
2.3 |
8% |
Dealer Services |
44.8 |
54.5 |
(9.7) |
(18)% |
Other |
(104.5) |
(87.1) |
(17.4) |
(20)% |
|
$ 305.5 |
$ 360.8 |
$ (55.3) |
(15)% |
Pre-tax margin (A) |
|
|
|
|
Employer Services |
21.1% |
24.0% |
(2.9)% |
|
PEO Services |
8.9% |
9.3% |
(0.4)% |
|
Dealer Services |
14.6% |
17.7% |
(3.1)% |
|
Other |
n/m |
n/m |
n/m |
|
|
13.9% |
17.2% |
(3.2)% |
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2010 |
2009 |
Change |
% Change |
Revenues (A) |
|
|
|
|
Employer Services |
$ 6,442.6 |
$ 6,438.9 |
$ 3.7 |
0% |
PEO Services |
1,316.8 |
1,185.8 |
131.0 |
11% |
Dealer Services |
1,229.4 |
1,267.9 |
(38.5) |
(3)% |
Other |
(61.1) |
(54.2) |
(6.9) |
(13)% |
|
$ 8,927.7 |
$ 8,838.4 |
$ 89.3 |
1% |
Pre-tax earnings from continuing
operations (A) |
|
|
|
|
Employer Services |
$ 1,722.4 |
$ 1,758.7 |
$ (36.3) |
(2)% |
PEO Services |
126.6 |
117.6 |
9.0 |
8% |
Dealer Services |
201.0 |
214.3 |
(13.3) |
(6)% |
Other |
(186.8) |
(190.5) |
3.7 |
2% |
|
$ 1,863.2 |
$ 1,900.1 |
$ (36.9) |
(2)% |
Pre-tax margin (A) |
|
|
|
|
Employer Services |
26.7% |
27.3% |
(0.6)% |
|
PEO Services |
9.6% |
9.9% |
(0.3)% |
|
Dealer Services |
16.4% |
16.9% |
(0.6)% |
|
Other |
n/m |
n/m |
n/m |
|
|
20.9% |
21.5% |
(0.6)% |
|
|
|
|
|
|
(A) Prior year's segment results
were adjusted to reflect fiscal year 2010 budgeted foreign exchange
rates. |
|
|
|
|
|
|
n/m - not meaningful |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2010 |
2009 |
Change |
|
Components of other income, net: |
|
|
|
|
Interest income on corporate funds |
$ (20.6) |
$ (27.6) |
$ 7.0 |
|
Realized gains on available-for-sale
securities |
(3.3) |
(6.0) |
2.7 |
|
Realized losses on available-for-sale
securities |
0.5 |
3.4 |
(2.9) |
|
Impairment losses on available-for-sale
securities |
9.1 |
-- |
9.1 |
|
Loss on sales of buildings |
3.8 |
-- |
3.8 |
|
Other, net |
(0.6) |
(0.6) |
-- |
|
Total other income, net |
$ (11.1) |
$ (30.8) |
$ 19.7 |
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2010 |
2009 |
Change |
|
Components of other income, net: |
|
|
|
|
Interest income on corporate funds |
$ (98.8) |
$ (134.2) |
$ 35.4 |
|
Realized gains on available-for-sale
securities |
(15.0) |
(11.4) |
(3.6) |
|
Realized losses on available-for-sale
securities |
13.4 |
23.8 |
(10.4) |
|
Realized (gain) loss on investment in Reserve
Fund |
(15.2) |
18.3 |
(33.5) |
|
Impairment losses on available-for-sale
securities |
14.4 |
-- |
14.4 |
|
Net loss (gain) on sales of buildings |
2.3 |
(2.2) |
4.5 |
|
Other, net |
(2.3) |
(2.3) |
-- |
|
Total other income, net |
$ (101.2) |
$ (108.0) |
$ 6.8 |
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2010 |
2009 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 207.6 |
$ 347.4 |
$ (139.8) |
(40)% |
Net earnings |
$ 207.9 |
$ 352.8 |
$ (144.9) |
(41)% |
Basic weighted average shares
outstanding |
496.2 |
500.9 |
(4.7) |
(1)% |
Basic earnings per share from continuing
operations |
$ 0.42 |
$ 0.69 |
$ (0.27) |
(39)% |
Basic earnings per share |
$ 0.42 |
$ 0.70 |
$ (0.28) |
(40)% |
|
|
|
|
|
Diluted net earnings from continuing
operations |
$ 207.6 |
$ 347.4 |
$ (139.8) |
(40)% |
Diluted net earnings |
$ 207.9 |
$ 352.8 |
$ (144.9) |
(41)% |
Diluted weighted average shares
outstanding |
499.7 |
502.8 |
(3.1) |
(1)% |
Diluted earnings per share from continuing
operations |
$ 0.42 |
$ 0.69 |
$ (0.27) |
(39)% |
Diluted earnings per share |
$ 0.42 |
$ 0.70 |
$ (0.28) |
(40)% |
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2010 |
2009 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 1,207.3 |
$ 1,325.1 |
$ (117.8) |
(9)% |
Net earnings |
$ 1,211.4 |
$ 1,332.6 |
$ (121.2) |
(9)% |
Basic weighted average shares
outstanding |
500.5 |
503.2 |
(2.7) |
(1)% |
Basic earnings per share from continuing
operations |
$ 2.41 |
$ 2.63 |
$ (0.22) |
(8)% |
Basic earnings per share |
$ 2.42 |
$ 2.65 |
$ (0.23) |
(9)% |
|
|
|
|
|
Diluted net earnings from continuing
operations |
$ 1,207.3 |
$ 1,325.1 |
$ (117.8) |
(9)% |
Diluted net earnings |
$ 1,211.4 |
$ 1,332.6 |
$ (121.2) |
(9)% |
Diluted weighted average shares
outstanding |
503.7 |
505.8 |
(2.1) |
0% |
Diluted earnings per share from continuing
operations |
$ 2.40 |
$ 2.62 |
$ (0.22) |
(8)% |
Diluted earnings per share |
$ 2.40 |
$ 2.63 |
$ (0.23) |
(9)% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2010 |
2009 |
|
|
Key Statistics: |
|
|
|
|
Internal revenue growth: |
|
|
|
|
Employer Services |
4% |
0% |
|
|
PEO Services |
13% |
7% |
|
|
Dealer Services |
(1)% |
(10)% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control - AutoPay
product |
0.3% |
(5.7)% |
|
|
Change in client revenue retention
percentage - worldwide |
1.6 pts |
(1.8) pts |
|
|
Employer Services/PEO new business sales
growth - worldwide |
25% |
(29)% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end of
period |
211,000 |
193,000 |
|
|
Average paid PEO worksite employees
during the period |
210,000 |
194,000 |
|
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2010 |
2009 |
|
|
Key Statistics: |
|
|
|
|
Internal revenue growth: |
|
|
|
|
Employer Services |
0% |
3% |
|
|
PEO Services |
11% |
12% |
|
|
Dealer Services |
(4)% |
(4)% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control - AutoPay
product |
(3.4)% |
(2.5)% |
|
|
Change in client revenue retention
percentage - worldwide |
0.4 pts |
(1.2) pts |
|
|
Employer Services/PEO new business sales
growth - worldwide |
4% |
(15)% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end of
period |
211,000 |
193,000 |
|
|
Average paid PEO worksite employees
during the period |
203,000 |
193,000 |
|
|
|
|
|
|
|
Automatic Data Processing, Inc. and
Subsidiaries |
|
|
|
|
Other Selected Financial Data,
Continued |
|
|
|
|
(Dollars in millions,
except per share amounts or where otherwise stated) |
|
|
|
(Unaudited) |
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2010 |
2009 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 2.1 |
$ 1.5 |
$ 0.6 |
43% |
Corporate extended |
1.7 |
2.1 |
(0.4) |
(19)% |
Total corporate |
3.8 |
3.6 |
0.2 |
6% |
Funds held for clients |
16.3 |
15.0 |
1.4 |
9% |
Total |
$ 20.1 |
$ 18.5 |
$ 1.6 |
9% |
|
|
|
|
|
Average interest rates earned
exclusive of realized losses (gains) on: |
|
|
|
Corporate, other than corporate
extended |
0.7% |
1.2% |
|
|
Corporate extended |
4.0% |
4.4% |
|
|
Total corporate |
2.2% |
3.1% |
|
|
Funds held for clients |
3.4% |
3.9% |
|
|
Total |
3.2% |
3.8% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 710.9 |
$ 436.6 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper borrowings |
$ 1.1 |
$ 1.6 |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.6 |
0.5 |
|
|
|
$ 1.7 |
$ 2.1 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper borrowings |
0.3% |
0.3% |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.3% |
0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 139.3 |
$ 146.3 |
$ (7.0) |
(5)% |
Corporate extended interest income (B) |
16.8 |
22.9 |
(6.1) |
(27)% |
Corporate interest expense-short-term
financing (B) |
(1.1) |
(1.4) |
0.3 |
22% |
|
$ 155.0 |
$ 167.9 |
$ (12.9) |
(8)% |
|
|
|
|
|
|
Twelve Months Ended
June 30, |
|
|
|
2010 |
2009 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.8 |
$ 1.4 |
$ 0.4 |
26% |
Corporate extended |
2.1 |
2.3 |
(0.3) |
(12)% |
Total corporate |
3.8 |
3.7 |
0.1 |
3% |
Funds held for clients |
15.2 |
15.2 |
-- |
0% |
Total |
$ 19.0 |
$ 18.9 |
$ 0.1 |
1% |
|
|
|
|
|
|
|
|
|
|
Average interest rates earned
exclusive of realized losses (gains) on: |
|
|
|
Corporate, other than corporate
extended |
0.8% |
2.4% |
|
|
Corporate extended |
4.1% |
4.3% |
|
|
Total corporate |
2.6% |
3.6% |
|
|
Funds held for clients |
3.6% |
4.0% |
|
|
Total |
3.4% |
3.9% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 710.9 |
$ 436.6 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper borrowings |
$ 1.6 |
$ 1.9 |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.4 |
0.4 |
|
|
|
$ 2.1 |
$ 2.3 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper borrowings |
0.2% |
1.0% |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.2% |
1.3% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 542.8 |
$ 609.8 |
$ (67.0) |
(11)% |
Corporate extended interest income (B) |
84.3 |
100.0 |
(15.8) |
(16)% |
Corporate interest expense-short-term
financing (B) |
(4.3) |
(25.3) |
21.0 |
83% |
|
$ 622.8 |
$ 684.6 |
$ (61.8) |
(9)% |
|
|
|
|
|
(B) While "Corporate
extended interest income" and "Corporate interest expense
-short-term financing" are non-GAAP disclosures, management
believes this information is beneficial to reviewing the financial
statements of ADP. Management believes this information is
beneficial as it allows the reader to understand the extended
investment strategy for ADP's client funds assets, corporate
investments and short-term borrowings. A reconciliation of the
non-GAAP measures to GAAP measures is as follows: |
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2010 |
2009 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 16.8 |
$ 22.9 |
|
|
All other interest income |
3.8 |
4.7 |
|
|
Total interest income on corporate
funds |
$ 20.6 |
$ 27.6 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 1.1 |
$ 1.4 |
|
|
All other interest expense |
0.7 |
2.1 |
|
|
Total interest expense |
$ 1.8 |
$ 3.5 |
|
|
|
|
|
|
|
|
Twelve Months
Ended June 30, |
|
|
|
2010 |
2009 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 84.3 |
$ 100.0 |
|
|
All other interest income |
14.5 |
34.2 |
|
|
Total interest income on corporate
funds |
$ 98.8 |
$ 134.2 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 4.3 |
$ 25.3 |
|
|
All other interest expense |
4.3 |
8.0 |
|
|
Total interest expense |
$ 8.6 |
$ 33.3 |
|
|
|
|
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
|
|
|
Consolidated Statements
of Adjusted / Non-GAAP Financial Information |
|
|
(In millions, except per
share amounts) |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
The following table reconciles
the Company's results for the three and twelve months ended June
30, 2010 and 2009 to adjusted results that exclude the impact of
favorable tax items. The Company uses certain adjusted results,
among other measures, to evaluate the Company's operating
performance in the absence of certain items and for planning and
forecasting of future periods. The Company believes that the
adjusted results provide relevant and useful information for
investors because it allows investors to view performance in a
manner similar to the method used by the Company's management,
improves their ability to understand the Company's operating
performance and makes it easier to compare the Company's results
with other companies. Since adjusted earnings from continuing
operations and adjusted diluted EPS are not measures of performance
calculated in accordance with U.S. GAAP, they should not be
considered in isolation of, or as a substitute for, earnings from
continuing operations and diluted EPS from continuing operations,
respectively, and they may not be comparable to similarly
titled measures employed by other companies. |
|
|
Three months ended June
30, 2010 |
|
Earnings from continuing operations
before income taxes |
Provision for income taxes |
Net earnings from continuing
operations |
Diluted EPS from continuing
operations |
|
|
|
|
|
As Reported |
$ 305.5 |
$ 97.9 |
$ 207.6 |
$ 0.42 |
|
|
|
|
|
|
Three months ended June
30, 2009 |
|
Earnings from continuing operations
before income taxes |
Provision for income taxes |
Net earnings from continuing
operations |
Diluted EPS from continuing
operations |
|
|
|
|
|
As Reported |
$ 360.8 |
$ 13.4 |
$ 347.4 |
$ 0.69 |
|
|
|
|
|
Adjustments: |
|
|
|
|
Favorable tax items |
-- |
120.0 |
120.0 |
0.24 |
|
|
|
|
|
As Adjusted |
$ 360.8 |
$ 133.4 |
$ 227.4 |
$ 0.45 |
|
|
|
|
|
|
Twelve months ended June
30, 2010 |
|
Earnings from continuing operations
before income taxes |
Provision for income taxes |
Net earnings from continuing
operations |
Diluted EPS from continuing
operations |
|
|
|
|
|
As Reported |
$ 1,863.2 |
$ 655.9 |
$ 1,207.3 |
$ 2.40 |
|
|
|
|
|
Adjustments: |
|
|
|
|
Favorable tax items |
-- |
12.2 |
12.2 |
0.02 |
|
|
|
|
|
As Adjusted |
$ 1,863.2 |
$ 668.1 |
$ 1,195.1 |
$ 2.37 |
|
|
|
|
|
|
Twelve months ended June
30, 2009 |
|
Earnings from continuing operations
before income taxes |
Provision for income taxes |
Net earnings from continuing
operations |
Diluted EPS from continuing
operations |
|
|
|
|
|
As Reported |
$ 1,900.1 |
$ 575.0 |
$ 1,325.1 |
$ 2.62 |
|
|
|
|
|
Adjustments: |
|
|
|
|
Favorable tax items |
-- |
120.0 |
120.0 |
0.24 |
|
|
|
|
|
As Adjusted |
$ 1,900.1 |
$ 695.0 |
$ 1,205.1 |
$ 2.38 |
This document and other written or oral statements made from
time to time by ADP may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Statements that are not historical in nature and which may be
identified by the use of words like "expects," "assumes,"
"projects," "anticipates," "estimates," "we believe," "could be"
and other words of similar meaning, are forward-looking statements.
These statements are based on management's expectations and
assumptions and are subject to risks and uncertainties that may
cause actual results to differ materially from those expressed.
Factors that could cause actual results to differ materially from
those contemplated by the forward-looking statements include: ADP's
success in obtaining, retaining and selling additional services to
clients; the pricing of products and services; changes in laws
regulating payroll taxes, professional employer organizations and
employee benefits; overall market and economic conditions,
including interest rate and foreign currency trends; competitive
conditions; auto sales and related industry changes; employment and
wage levels; changes in technology; availability of skilled
technical associates and the impact of new acquisitions and
divestitures. ADP disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. These risks and uncertainties, along
with the risk factors discussed under "Item 1A. - Risk Factors" in
our Annual Report on Form 10-K for the fiscal year ended June 30,
2009 should be considered in evaluating any forward-looking
statements contained herein.
CONTACT: Automatic Data Processing, Inc.
ADP Investor Relations
Elena Charles
973.974.4077
Debbie Morris
973.974.7821
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