For the Year, Revenues Rise 8%, 6% Organic;
EPS Up 12%, Up 9% Excluding Gain on Sale of
Assets
Forecasting Fiscal 2013 Revenue Growth of 5% to
7%
Forecasting EPS Growth of 5% to 7%, Compared With
Adjusted $2.74 in Fiscal 2012
Automatic Data Processing, Inc. (Nasdaq:ADP) reported revenue
growth of 8%, 6% organic, to $10.7 billion for the fiscal year
ended June 30, 2012, Carlos A. Rodriguez, president and chief
executive officer, announced today. Pretax earnings and net
earnings increased 10% and 11%, respectively, and included a pretax
gain recorded in the second quarter of fiscal 2012 of $66 million,
$41 million after tax, on the sale of assets related to rights and
obligations to resell a third-party expense management platform.
Diluted earnings per share of $2.82 increased 12% from $2.52 a year
ago on fewer shares outstanding, including $0.08 per share related
to the gain on the sale of assets. Excluding this gain, pretax
earnings and net earnings increased 6% and 7%, respectively, and
diluted earnings per share of $2.74 increased 9%.
For the fourth quarter of fiscal 2012, revenues increased 5%, 4%
organically, to $2.6 billion compared with the fourth quarter of
fiscal 2011. Excluding the negative impact of unfavorable foreign
exchange rates in the quarter compared with a year ago, revenues
increased 7%. Pretax earnings increased 11%, and net earnings
increased 7% on a higher effective tax rate compared with last
year's fourth quarter which included favorable tax
items. Diluted earnings per share of $0.53 increased 10%, from
$0.48 per share a year ago on fewer shares outstanding.
ADP acquired 6.4 million shares of its stock for treasury at a
cost of $342 million during the fourth quarter, and about 14.6
million shares at a cost of $747 million during the fiscal
year. Cash and marketable securities were $1.7 billion at June
30, 2012.
Fourth Quarter and Fiscal Year 2012 Discussion
Commenting on the results, Mr. Rodriguez said, "I am pleased
with ADP's results. Our sales execution in Employer Services
and PEO Services was strong in the fourth quarter with robust new
business sales growth of 20%. For the year, we achieved new
business sales growth of 13%, which was also above our
expectations. New business sales represent annualized
recurring revenues anticipated from new orders. Dealer
Services performed well as the North American automotive
marketplace showed continued strengthening. We are driving
good pretax margins in all of our business segments, and excluding
the drag from acquisitions, pretax margins improved in each
business segment. ADP's total pretax margin, however,
continued to be negatively impacted by the decline in high-margin
client interest revenues resulting from lower market interest
rates.
Employer Services
"Employer Services' revenues grew 7% for the fourth quarter, 5%
organically. Revenues grew 7% for the year, 6%
organically. The number of employees on our clients' payrolls
in the United States increased 3.2% for the quarter and 3.0% for
the year, as measured on a same-store-sales basis for our clients
on our AutoPay platform. Worldwide client retention declined
0.2 percentage points for the fourth quarter. For the year,
client retention was strong at 91.0%, ending the year 0.1
percentage points below last year's record high level.
Employer Services' pretax margin increased 40 basis points
for the quarter, and included a drag from acquisitions of 90 basis
points. Additionally, fourth quarter new business expenses
increased due to higher than anticipated new business sales and
negatively impacted the pretax margin about 20 basis
points. The quarter's pretax margin benefited from both
increased operating scale in the business as well as from easier
year-over-year comparisons. Employer Services' pretax margin
declined 30 basis points for the year and included a drag from
acquisitions of 80 basis points.
PEO Services
"PEO Services' revenues increased 12% for the fourth quarter and
15% for the year, all organic. PEO Services' pretax margin
increased 130 basis points for the quarter and 70 basis points for
the year. Average worksite employees paid by PEO Services
increased 11% for the quarter and 12% for the year to approximately
265,000 and 255,000, respectively.
Dealer Services
"Dealer Services' revenues grew 7% for the fourth quarter, 6%
organically. Revenues grew 10% for the year, 6%
organically. Dealer Services' pretax margin improved 70 basis
points for the quarter and 130 basis points for the
year. Excluding a drag from fiscal 2011 acquisitions of 20
basis points and the positive year-over-year impact of 50 basis
points from acquisition-related costs in the first half of fiscal
2011, Dealer Services' pretax margin improved 100 basis points for
the year.
Interest on Funds Held for Clients
"The safety, liquidity, and diversification 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 $15.4 million, or 11%, from $135.7 million a year
ago to $120.3 million, due to a decline of 40 basis points in the
average interest yield to 2.5%, partially offset by an increase of
4% in average client funds balances from $18.5 billion to $19.2
billion.
"For the year, interest on funds held for clients declined $46.8
million, or 9%, from $540.1 million a year ago to $493.3 million,
due to a decline of 40 basis points in the average interest yield
to 2.8%, partially offset by an increase of 6% in average client
funds balances from $16.9 billion to $17.9 billion.
Fiscal 2013 Forecast
"Our fiscal 2013 forecasts assume no changes in the current
economic environment. We anticipate year-over-year comparisons
to be negatively impacted, particularly in the first fiscal
quarter, by foreign exchange rates, an expected lower average yield
on the client funds portfolio due to continued low market interest
rates, and the year-over-year comparison from certain fiscal 2012
items as noted below.
- Total revenues – anticipate 5% to 7% growth which
includes:
- An anticipated headwind of about one percentage point from
unfavorable foreign exchange rates for the year, with nearly two
percentage points of drag in the first fiscal quarter;
- An anticipated $65 to $75 million decline in interest on client
funds resulting in one percentage point of negative impact from the
expected lower average yield, partially offset by anticipated
growth in balances; and
- The year-over-year comparison from the fiscal 2012 second
quarter sale of assets and the expiration of certain employment tax
credits within our Tax Credit Services business are expected to
negatively impact revenues about half a percentage point for the
full year, with about a point impact in both the first and second
quarters.
- We anticipate driving good pretax margins in the business
segments, although we anticipate a decline in total ADP pretax
margin of about 30 basis points due to:
- An anticipated drag of 90 to 100 basis points related to the
client funds extended investment strategy which is primarily driven
by the anticipated decline of $65 to $75 million in interest on
client funds;
- An expected drag from fiscal 2012 acquisitions of about 20
basis points for the year, with a 40 basis points drag in the first
quarter, and a drag of 20 basis points in both the second and third
quarters; and
- The year-over-year comparison from the fiscal 2012 second
quarter sale of assets and the expiration of certain employment tax
credits within our Tax Credit Services business are expected to
negatively impact pretax margin about 20 basis points for the full
year, with about 50 basis points negative impact in the first
quarter and about 30 basis points in the second quarter.
- Diluted earnings per share – anticipate an increase of 5% to 7%
from $2.74 earnings per share in fiscal 2012 which excludes the
gain from the sale of assets in the second quarter of fiscal
2012. This includes:
- An anticipated drag of $0.10 to $0.11 in earnings per share due
to the anticipated decline in pretax earnings related to the client
funds extended investment strategy which is primarily driven by the
anticipated decline of $65 to $75 million in interest on client
funds; and
- An expected decline of about $0.04 in earnings per share
related to the fiscal 2012 second quarter sale of assets and the
expiration of certain employment tax credits within our Tax Credit
Services business.
- Foreign exchange rates and fiscal 2012 acquisitions are
expected to have a minimal impact on earnings per share.
- The impacts noted above from the expected drag from recent
acquisitions as well as the negative year-over-year comparisons
from the fiscal 2012 second quarter sale of assets and the
expiration of certain employment tax credits within our Tax Credit
Services business are reflected in the segment forecasts provided
below.
- Employer Services – anticipate revenue growth of 6% to 7% with
pretax margin expansion of at least 50 basis points
- Pays per control – up 2.0% to 3.0% for the year
- PEO Services – anticipate revenue growth of 13% to 15% with
flat to slight pretax margin expansion
- Employer Services and PEO Services new business sales –
anticipate 8% to 10% growth compared to over $1.2 billion sold in
fiscal 2012
- Dealer Services – anticipate revenue growth of 7% to 9%, with
pretax margin expansion of at least 50 basis points
"Interest on funds held for clients is expected to decline $65
to $75 million, or 13% to 15%, from $493.3 million in fiscal
2012. This forecast is based on a decline of 50 to 60 basis
points in the expected average interest yield to 2.2% to 2.3%, and
anticipated growth in average client funds balances of 5% to
7%. The interest assumptions in our forecasts are based on Fed
Funds futures contracts and forward yield curves as of July 30,
2012. 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 30, 2012 were used to
forecast new purchase rates for the client extended and client long
portfolios, respectively.
"We exited fiscal 2012 with good sales momentum. We are
focused on successfully executing against our four strategic
pillars for growth to maintain our position as a leading global
Human Capital Management solutions provider. Driving product
innovation and enhancing our distribution and service capabilities
are the right things to grow the business long-term," Mr. Rodriguez
concluded.
Website Schedules
The schedules of quarterly and full-year revenue and pretax
earnings by reportable segment for fiscal years 2010, 2011, and
2012 have been updated for the fourth quarter of fiscal 2012 and
posted to the Investor Relations home page
(http://www.investquest.com/iq/a/adp/index.htm) of our website
www.ADP.com under Reportable Segments Financial Data.
An analyst conference call will be held today, Wednesday, August
1 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/iq/a/adp/index.htm, and click on the
webcast icon. Please note, this webcast will be broadcast in
two streams: Windows Media and Flash. You may switch streams
by selecting "Windows Media" or "Flash" from the gear-setup symbol
located to the right-hand side of the volume control on the webcast
player. Please check your system 10 minutes prior to the
webcast. 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 website.
About ADP
Automatic Data Processing, Inc. (Nasdaq:ADP), with more than $10
billion in revenues and approximately 600,000 clients, is one of
the world's largest providers of business outsourcing solutions.
Leveraging over 60 years of experience, ADP offers a wide range
of human resource, payroll, tax and benefits
administration solutions from a single source. ADP's
easy-to-use 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, recreational vehicle, and heavy equipment
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 website
at www.ADP.com.
|
Automatic Data
Processing, Inc. and Subsidiaries |
Condensed Consolidated
Balance Sheets |
(In
millions) |
(Unaudited) |
|
June 30, |
June 30, |
|
2012 |
2011 |
Assets |
|
|
Cash and cash
equivalents/Short-term marketable securities |
$ 1,578.5 |
$ 1,425.7 |
Other current assets |
2,038.0 |
2,022.2 |
Total current assets before funds held
for clients |
3,616.5 |
3,447.9 |
|
|
|
Funds held for clients |
21,539.1 |
25,135.6 |
Total current assets |
25,155.6 |
28,583.5 |
|
|
|
Long-term marketable securities |
86.9 |
98.0 |
Property, plant and equipment, net |
706.3 |
716.2 |
Other non-current assets |
4,866.7 |
4,840.6 |
Total assets |
$ 30,815.5 |
$ 34,238.3 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Other current liabilities |
2,383.2 |
2,195.7 |
Client funds obligations |
20,856.2 |
24,591.1 |
Total current liabilities |
23,239.4 |
26,786.8 |
|
|
|
Long-term debt |
16.8 |
34.2 |
Other non-current liabilities |
1,445.3 |
1,406.9 |
Total liabilities |
24,701.5 |
28,227.9 |
|
|
|
Total stockholders' equity |
6,114.0 |
6,010.4 |
Total liabilities and stockholders'
equity |
$ 30,815.5 |
$ 34,238.3 |
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Statements of
Consolidated Earnings |
(In millions, except per
share amounts) |
(Unaudited) |
|
|
Three Months Ended |
Twelve Months Ended |
|
June 30, |
June 30, |
|
2012 |
2011 |
2012 |
2011 |
Revenues: |
|
|
|
|
Revenues, other than interest on
funds held for clients and PEO revenues |
$ 2,075.9 |
$ 1,977.3 |
$ 8,411.7 |
$ 7,805.5 |
Interest on funds held for clients |
120.3 |
135.7 |
493.3 |
540.1 |
PEO revenues (A) |
440.4 |
394.1 |
1,760.2 |
1,533.9 |
Total revenues |
2,636.6 |
2,507.1 |
10,665.2 |
9,879.5 |
|
|
|
|
|
Expenses: |
|
|
|
|
Costs of revenues: |
|
|
|
|
Operating expenses |
1,365.7 |
1,310.4 |
5,380.1 |
4,900.9 |
Systems development & programming
costs |
155.8 |
144.3 |
599.9 |
577.2 |
Depreciation & amortization |
67.7 |
64.0 |
260.0 |
253.4 |
Total costs of revenues |
1,589.2 |
1,518.7 |
6,240.0 |
5,731.5 |
|
|
|
|
|
Selling, general & administrative
expenses |
677.4 |
660.3 |
2,466.2 |
2,323.3 |
Interest expense |
2.3 |
1.7 |
7.7 |
8.6 |
Total expenses |
2,268.9 |
2,180.7 |
8,713.9 |
8,063.4 |
|
|
|
|
|
Other income, net (B) |
(29.8) |
(32.3) |
(170.8) |
(116.6) |
|
|
|
|
|
Earnings before income
taxes |
397.5 |
358.7 |
2,122.1 |
1,932.7 |
|
|
|
|
|
Provision for income taxes |
139.1 |
116.9 |
733.6 |
678.5 |
|
|
|
|
|
Net earnings |
$ 258.4 |
$ 241.8 |
$ 1,388.5 |
$ 1,254.2 |
|
|
|
|
|
Basic earnings per share |
$ 0.53 |
$ 0.49 |
$ 2.85 |
$ 2.54 |
|
|
|
|
|
Diluted earnings per share |
$ 0.53 |
$ 0.48 |
$ 2.82 |
$ 2.52 |
|
|
|
|
|
Dividends declared per common share |
$ 0.3950 |
$ 0.3600 |
$ 1.5450 |
$ 1.4200 |
|
|
|
|
|
(A) Professional Employer
Organization ("PEO") revenues are net of direct pass-through costs,
primarily consisting of payroll wages and payroll taxes, of
$4,460.6 and $4,004.7 for the three months ended June 30, 2012 and
2011, respectively, and $17,792.2 and $15,765.3 for the twelve
months ended June 30, 2012 and 2011, respectively. |
(B) The twelve months ended
June 30, 2012 includes a $66.0 gain on the sale of assets related
to rights and obligations to resell a third-party expense
management platform. |
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
|
Other Selected Financial
Data |
|
(Dollars in millions,
except per share amounts) |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2012 |
2011 |
Change |
% Change |
Revenues (A) |
|
|
|
|
Employer Services |
$ 1,881.6 |
$ 1,762.9 |
$ 118.7 |
7% |
PEO Services |
443.3 |
396.6 |
46.7 |
12% |
Dealer Services |
431.4 |
401.8 |
29.6 |
7% |
Other |
(119.7) |
(54.2) |
(65.5) |
(100+)% |
|
$ 2,636.6 |
$ 2,507.1 |
$ 129.5 |
5% |
Pre-tax earnings (A) |
|
|
|
|
Employer Services |
$ 415.9 |
$ 382.4 |
$ 33.5 |
9% |
PEO Services |
45.3 |
35.5 |
9.8 |
28% |
Dealer Services |
65.8 |
58.7 |
7.1 |
12% |
Other |
(129.5) |
(117.9) |
(11.6) |
(10)% |
|
$ 397.5 |
$ 358.7 |
$ 38.8 |
11% |
Pre-tax margin (A) |
|
|
|
|
Employer Services |
22.1% |
21.7% |
0.4% |
|
PEO Services |
10.2% |
8.9% |
1.3% |
|
Dealer Services |
15.3% |
14.6% |
0.7% |
|
Other |
n/m |
n/m |
n/m |
|
|
15.1% |
14.3% |
0.8% |
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
June 30, |
|
|
|
2012 |
2011 |
Change |
% Change |
Revenues (A) |
|
|
|
|
Employer Services |
$ 7,567.7 |
$ 7,042.9 |
$ 524.8 |
7% |
PEO Services |
1,771.4 |
1,543.9 |
227.5 |
15% |
Dealer Services |
1,683.7 |
1,536.0 |
147.7 |
10% |
Other |
(357.6) |
(243.3) |
(114.3) |
(47)% |
|
$ 10,665.2 |
$ 9,879.5 |
$ 785.7 |
8% |
Pre-tax earnings (A) |
|
|
|
|
Employer Services |
$ 1,972.3 |
$ 1,856.5 |
$ 115.8 |
6% |
PEO Services |
170.2 |
137.3 |
32.9 |
24% |
Dealer Services |
277.1 |
233.3 |
43.8 |
19% |
Other (B) |
(297.5) |
(294.4) |
(3.1) |
(1)% |
|
$ 2,122.1 |
$ 1,932.7 |
$ 189.4 |
10% |
Pre-tax margin (A) |
|
|
|
|
Employer Services |
26.1% |
26.4% |
(0.3)% |
|
PEO Services |
9.6% |
8.9% |
0.7% |
|
Dealer Services |
16.5% |
15.2% |
1.3% |
|
Other |
n/m |
n/m |
n/m |
|
|
19.9% |
19.6% |
0.3% |
|
|
|
|
|
|
(A) Prior year's segment results
were adjusted to reflect fiscal year 2012 budgeted foreign exchange
rates. |
(B) The twelve months ended
June 30, 2012 includes a $66.0 gain on the sale of assets related
to rights and obligations to resell a third-party expense
management platform. |
n/m - not meaningful |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
Change in other |
|
|
2012 |
2011 |
income, net |
|
Components of other income, net: |
|
|
|
|
Interest income on corporate funds |
$ (19.9) |
$ (20.1) |
$ (0.2) |
|
Realized gains on available-for-sale
securities |
(9.0) |
(15.0) |
(6.0) |
|
Realized losses on available-for-sale
securities |
0.4 |
0.3 |
(0.1) |
|
Impairment losses on assets held for
sale |
-- |
3.1 |
3.1 |
|
Other, net |
(1.3) |
(0.6) |
0.7 |
|
Total other income, net |
$ (29.8) |
$ (32.3) |
$ (2.5) |
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
June 30, |
Change in other |
|
|
2012 |
2011 |
income, net |
|
Components of other income, net: |
|
|
|
|
Interest income on corporate funds |
$ (85.2) |
$ (88.8) |
$ (3.6) |
|
Realized gains on available-for-sale
securities |
(32.1) |
(38.0) |
(5.9) |
|
Realized losses on available-for-sale
securities |
7.7 |
3.6 |
(4.1) |
|
Realized gain on investment in Reserve
Fund |
-- |
(0.9) |
(0.9) |
|
Impairment losses on available-for-sale
securities |
5.8 |
-- |
(5.8) |
|
Impairment losses on assets held for
sale |
2.2 |
11.7 |
9.5 |
|
Gain on sale of assets |
(66.0) |
-- |
66.0 |
|
Gains on sales of buildings |
-- |
(1.8) |
(1.8) |
|
Other, net |
(3.2) |
(2.4) |
0.8 |
|
Total other income, net |
$ (170.8) |
$ (116.6) |
$ 54.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2012 |
2011 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings |
$ 258.4 |
$ 241.8 |
$ 16.6 |
7% |
Basic weighted average shares
outstanding |
485.9 |
494.5 |
(8.6) |
(2)% |
Basic earnings per share |
$ 0.53 |
$ 0.49 |
$ 0.04 |
8% |
|
|
|
|
|
Net earnings |
$ 258.4 |
$ 241.8 |
$ 16.6 |
7% |
Diluted weighted average shares
outstanding |
490.6 |
500.6 |
(10.0) |
(2)% |
Diluted earnings per share |
$ 0.53 |
$ 0.48 |
$ 0.05 |
10% |
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
June 30, |
|
|
|
2012 |
2011 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings |
$ 1,388.5 |
$ 1,254.2 |
$ 134.3 |
11% |
Basic weighted average shares
outstanding |
487.3 |
493.5 |
(6.2) |
(1)% |
Basic earnings per share |
$ 2.85 |
$ 2.54 |
$ 0.31 |
12% |
|
|
|
|
|
Net earnings |
$ 1,388.5 |
$ 1,254.2 |
$ 134.3 |
11% |
Diluted weighted average shares
outstanding |
492.2 |
498.3 |
(6.1) |
(1)% |
Diluted earnings per share |
$ 2.82 |
$ 2.52 |
$ 0.30 |
12% |
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2012 |
2011 |
|
|
Key Statistics: |
|
|
|
|
Internal revenue growth: |
|
|
|
|
Employer Services |
5% |
6% |
|
|
PEO Services |
12% |
20% |
|
|
Dealer Services |
6% |
4% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control -
AutoPay product |
3.2% |
2.6% |
|
|
Change in client revenue retention
percentage - worldwide |
(0.2) pts |
0.4 pts |
|
|
Employer Services/PEO new business
sales growth - worldwide |
20% |
8% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end
of period |
268,000 |
241,000 |
|
|
Average paid PEO worksite employees
during the period |
265,000 |
239,000 |
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
June 30, |
|
|
|
2012 |
2011 |
|
|
Key Statistics: |
|
|
|
|
Internal revenue growth: |
|
|
|
|
Employer Services |
6% |
6% |
|
|
PEO Services |
15% |
17% |
|
|
Dealer Services |
6% |
3% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control -
AutoPay product |
3.0% |
2.4% |
|
|
Change in client revenue retention
percentage - worldwide |
(0.1) pts |
1.2 pts |
|
|
Employer Services/PEO new business
sales growth - worldwide |
13% |
9% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end
of period |
268,000 |
241,000 |
|
|
Average paid PEO worksite employees
during the period |
255,000 |
227,000 |
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2012 |
2011 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.6 |
$ 1.5 |
$ 0.1 |
9% |
Corporate extended |
2.5 |
2.0 |
0.5 |
27% |
Total corporate |
4.1 |
3.4 |
0.7 |
19% |
Funds held for clients |
19.2 |
18.5 |
0.7 |
4% |
Total |
$ 23.3 |
$ 21.9 |
$ 1.4 |
6% |
|
|
|
|
|
Average interest rates earned exclusive
of realized losses (gains) on: |
|
|
|
|
Corporate, other than corporate
extended |
1.3% |
1.1% |
|
|
Corporate extended |
2.3% |
3.2% |
|
|
Total corporate |
1.9% |
2.3% |
|
|
Funds held for clients |
2.5% |
2.9% |
|
|
Total |
2.4% |
2.8% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 710.5 |
$ 571.0 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper borrowings |
$ 2.2 |
$ 1.3 |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.3 |
0.7 |
|
|
|
$ 2.5 |
$ 2.0 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper borrowings |
0.2% |
0.1% |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.7% |
0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 120.3 |
$ 135.7 |
$ (15.4) |
(11)% |
Corporate extended interest income (C) |
14.6 |
15.8 |
(1.1) |
(7)% |
Corporate interest expense-short-term
financing (C) |
(1.6) |
(0.9) |
(0.7) |
(76)% |
|
$ 133.4 |
$ 150.5 |
$ (17.2) |
(11)% |
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
June 30, |
|
|
|
2012 |
2011 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.5 |
$ 1.4 |
$ 0.1 |
7% |
Corporate extended |
2.6 |
2.1 |
0.5 |
22% |
Total corporate |
4.0 |
3.5 |
0.6 |
16% |
Funds held for clients |
17.9 |
16.9 |
1.0 |
6% |
Total |
$ 21.9 |
$ 20.3 |
$ 1.6 |
8% |
|
|
|
|
|
Average interest rates earned exclusive
of realized losses (gains) on: |
|
|
|
|
Corporate, other than corporate
extended |
1.2% |
1.0% |
|
|
Corporate extended |
2.7% |
3.5% |
|
|
Total corporate |
2.1% |
2.6% |
|
|
Funds held for clients |
2.8% |
3.2% |
|
|
Total |
2.6% |
3.1% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 710.5 |
$ 571.0 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper borrowings |
$ 2.3 |
$ 1.6 |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.3 |
0.5 |
|
|
|
$ 2.6 |
$ 2.1 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper borrowings |
0.1% |
0.2% |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.6% |
0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 493.3 |
$ 540.1 |
$ (46.8) |
(9)% |
Corporate extended interest income (C) |
68.0 |
73.7 |
(5.7) |
(8)% |
Corporate interest expense-short-term
financing (C) |
(4.9) |
(5.7) |
0.8 |
14% |
|
$ 556.4 |
$ 608.1 |
$ (51.8) |
(9)% |
|
|
|
|
|
(C) 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: |
|
|
|
|
|
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, |
|
|
|
2012 |
2011 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 14.6 |
$ 15.8 |
|
|
All other interest income |
5.3 |
4.3 |
|
|
Total interest income on corporate
funds |
$ 19.9 |
$ 20.1 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 1.6 |
$ 0.9 |
|
|
All other interest expense |
0.7 |
0.8 |
|
|
Total interest expense |
$ 2.3 |
$ 1.7 |
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
June 30, |
|
|
|
2012 |
2011 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 68.0 |
$ 73.7 |
|
|
All other interest income |
17.2 |
15.1 |
|
|
Total interest income on corporate
funds |
$ 85.2 |
$ 88.8 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 4.9 |
$ 5.7 |
|
|
All other interest expense |
2.8 |
2.9 |
|
|
Total interest expense |
$ 7.7 |
$ 8.6 |
|
|
|
|
|
|
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 twelve months ended June 30, 2012 to
adjusted results that exclude the sale of assets related to rights
and obligations to resell a third-party expense management
platform. 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 and improves their ability to
understand the Company's operating performance. Since adjusted
earnings and adjusted diluted EPS are not measures of performance
calculated in accordance with U.S. GAAP, they should not be
considered in isolation from, or as a substitute for, earnings and
diluted EPS and they may not be comparable to similarly titled
measures employed by other companies. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June
30, 2012 |
|
|
Earnings before income taxes |
Provision for income taxes |
Net earnings |
Diluted EPS |
|
|
|
|
|
|
|
As Reported |
$ 2,122.1 |
$ 733.6 |
$ 1,388.5 |
$ 2.82 |
|
|
|
|
|
|
|
Less Adjustments: |
|
|
|
|
|
Gain on sale of assets (Q2) |
66.0 |
24.8 |
41.2 |
0.08 |
|
|
|
|
|
|
|
As Adjusted |
$ 2,056.1 |
$ 708.8 |
$ 1,347.3 |
$ 2.74 |
|
|
|
|
|
|
|
The following table reconciles
our revenue growth for the three months ended June 30, 2012 to
revenue growth that excludes the impact of changes in foreign
exchange rates. We use revenue growth excluding the impact of
foreign exchange, among other measures, to evaluate our operating
performance in the absence of certain items and for planning and
forecasting of future periods. We believe that revenue growth
excluding the impact of foreign exchange better reflects the
underlying growth from the ongoing activities of our business by
providing improved comparability of results, allowing investors to
view performance in a manner similar to the method used by us, and
improving our ability to understand our operating performance.
Since revenue growth excluding the impact of foreign exchange is
not a measure of performance calculated in accordance with U.S.
GAAP, it should not be considered in isolation from, or as a
substitute for, revenue growth as reported under U.S. GAAP and it
may not be comparable to similarly titled measures employed by
other companies. |
|
|
|
|
Three Months Ended |
|
|
|
|
|
June 30, 2012 |
|
|
|
Revenue Growth - As Reported |
|
5% |
|
|
|
Less Adjustment: |
|
|
|
|
|
(Unfavorable)/Favorable Foreign Exchange
Impact |
|
(2)% |
|
|
|
|
|
|
|
|
|
Revenue Growth - As Adjusted |
|
7% |
|
|
|
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,
2011 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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