Confirms Fiscal 2013 Revenue and EPS
Guidance
Revenues Rise 7%, 6%
Organic
EPS From Continuing Operations Declined
5%, Increased 7% Excluding Prior Year Gain
ADP® (Nasdaq:ADP) reported revenue growth of 7%,
6% organic, to $2.7 billion for the second fiscal quarter ended
December 31, 2012, Carlos Rodriguez, president and chief executive
officer, announced today. The second quarter of fiscal 2012
included a pretax gain of $66 million, $41 million after tax, on a
sale of assets. As reported, including the gain, pretax earnings
from continuing operations decreased 8% and pretax margin declined
320 basis points. Net earnings from continuing operations
decreased 6% and diluted earnings per share from continuing
operations of $0.72 decreased 5% from $0.76 a year ago on fewer
shares outstanding.
Excluding the prior year gain, pretax earnings from continuing
operations increased 4%, pretax margin declined 60 basis points,
net earnings from continuing operations increased 6%, and diluted
earnings per share from continuing operations of $0.72 increased 7%
from $0.67 a year ago. Fiscal year-to-date through February 1,
2013 ADP acquired 5.9 million shares of its stock for treasury at a
cost of $341 million. Cash and marketable securities were $1.5
billion at December 31, 2012.
Second Quarter Discussion
Commenting on the results, Mr. Rodriguez said, "I am pleased
with ADP's second quarter results. Our business
segments performed well driving solid revenue growth and pretax
margin expansion. Combined worldwide new business bookings for
Employer Services and PEO Services grew 5%. With 9% growth in
new business bookings through the first half of the fiscal year, we
are on track to achieve our full year outlook of 8% to 10%
growth.
"Previously communicated challenges and tough comparisons we
faced heading into the quarter affected the company's results,
including:
- The gain on a sale of assets in the prior year second quarter
negatively impacted growth in pretax earnings from continuing
operations 12%, pretax margin 260 basis points, and diluted
earnings per share from continuing operations $0.08, or 12%.
- Unfavorable foreign exchange rates negatively impacted revenue
growth 0.5% with minimal impact on earnings.
- The decline in high-margin interest revenues due to the lower
average yield on client funds balances negatively impacted revenue
growth 1%, partially offset by growth in average client funds
balances. The client funds extended investment strategy, which
is primarily driven by interest on client funds, negatively
impacted growth in pretax earnings from continuing operations 4%,
pretax margin 110 basis points, and diluted earnings per share from
continuing operations $0.03, or 4%.
- Foregone revenues and earnings related to the fiscal 2012
second quarter sale of assets and the expiration of certain
employment tax credits within our Tax Credit Services business
negatively impacted revenue growth 1%, growth in pretax earnings
from continuing operations 2%, pretax margin 30 basis points, and
diluted earnings per share nearly $0.02, or 3%.
- Fiscal 2012 acquisitions contributed 1% to total revenue growth
and negatively impacted pretax margins 20 basis points with minimal
impact on earnings.
Employer Services
"Employer Services' revenues grew 7% for the second quarter, 6%
organically, compared to last year's second quarter. The
number of employees on our clients' payrolls in the United States
increased 2.6% for the quarter as measured on a same-store-sales
basis for our clients on our AutoPay platform. Worldwide
client retention increased 0.8 percentage points compared with a
year ago. As anticipated, Employer Services' pretax margin
expanded 70 basis points for the quarter including a 50 basis point
drag from fiscal 2012 acquisitions. Increased operating scale
and sales efficiencies contributed to the pretax margin
improvement.
PEO Services
"PEO Services' revenues increased 13% for the second quarter,
all organic, compared to last year's second quarter. PEO
Services' pretax margin increased 40 basis points for the quarter
due to an easier year-over-year comparison and slower growth in
pass-through costs. Average worksite employees paid by PEO
Services increased 10% for the quarter to approximately
276,000.
Dealer Services
"Dealer Services' revenues grew 11% for the second quarter, 9%
organically, compared to last year's second quarter. Organic
revenues benefited from increased advertising in Digital Marketing
and increased software license fees in our international
business. Dealer Services' pretax margin improved 180 basis
points for the quarter benefiting from increased operating scale
and an increase in certain non-recurring high-margin revenues.
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 second quarter, interest on funds held for
clients declined $16.2 million, or 14%, from $117.9 million a year
ago to $101.7 million, due to a decline of about 60 basis points in
the average interest yield to 2.4%, partially offset by an increase
of 9% in average client funds balances from $15.6 billion to $17.0
billion.
Discontinued Operations
"On December 17, 2012, ADP completed the sale of the Taxware
Enterprise Service business (Taxware) which was previously reported
within the Employer Services segment. Taxware generated $50
million in revenues and approximately $0.02 of earnings per share
in fiscal 2012. The results of operations for this business
are reported within discontinued operations in the fiscal 2013 and
2012 results within this release. ADP recorded a net gain on
the sale of $58.8 million, or $36.7 million after tax, within
discontinued operations in the second quarter of fiscal 2013.
Fiscal 2013 Forecast
"Our fiscal 2013 forecasts assume no changes in the current
economic environment. We have maintained our guidance for
total company revenue and earnings per share growth and we continue
to anticipate driving good pretax margins in the business segments,
although we anticipate a decline in total ADP pretax margin.
Our forecasts continue to be impacted by a lower expected
average yield on the client funds portfolio due to continued low
market interest rates, and tough year-over-year comparisons from
certain fiscal 2012 items as detailed in the tables below. We
continue to anticipate an improvement in the effective tax rate of
approximately 30 basis points from 34.5% last year. Our
forecasts exclude the results of discontinued operations.
Revenues - We continue to anticipate 5% - 7%
growth.
Impacts to Revenue Growth |
Fiscal 2013 Forecast |
Year-to-date through Q2 |
Q3 |
Q4 |
Client Funds Interest Revenues |
(1%) |
(1%) |
(1%) |
(1%) |
Foregone revenues related to Q2 FY12 sale of
assets & expiration of tax credits |
(0.5%) |
(1%) |
none |
none |
Foreign Exchange Rates |
up to (1%) |
~ (1%) |
minimal |
minimal |
Fiscal 2012 Acquisitions |
~1% |
~2% |
~1% |
none |
Pretax margins – We anticipate a decline of
about 30 to 40 basis points from 19.2% last year which excludes the
gain recorded in the second quarter of fiscal 2012.
Impacts to Pretax Margin Decline |
Fiscal 2013 Forecast |
Year-to-date through Q2 |
Q3 |
Q4 |
Client Funds Extended Investment
Strategy |
(110) bps |
~(100) bps |
~(100) bps |
~(120) bps |
Foregone revenues & earnings related to
Q2 FY12 sale of assets & expiration of tax credits |
(20) bps |
(40) bps |
none |
none |
Fiscal 2012 Acquisitions |
(20) bps |
(30) bps |
(20) bps |
none |
Diluted earnings per share from continuing operations
– We continue to anticipate 5% - 7% growth compared to
$2.72 in fiscal 2012, which excludes the gain recorded in the
second quarter of fiscal 2012.
Impacts to Diluted Earnings per Share
Growth |
Fiscal 2013 Forecast |
Year-to-date through Q2 |
Q3 |
Q4 |
Client Funds Extended Investment
Strategy |
($0.12) |
($0.06) |
~($0.03) |
~($0.03) |
Foregone earnings related to Q2 FY12 sale of
assets & expiration of tax credits |
($0.04) |
($0.04) |
none |
none |
Foreign Exchange Rates |
minimal |
minimal |
minimal |
minimal |
Fiscal 2012 Acquisitions |
minimal |
minimal |
minimal |
none |
"The impacts noted above from the expected drag from
fiscal 2012 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 – 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 – revenue growth of 12% to 13% with slight pretax
margin expansion
- Employer Services and PEO Services new business sales – 8% to
10% growth compared to over $1.2 billion sold in fiscal 2012
- Dealer Services – revenue growth of 8% to 9%, with pretax
margin expansion of over 100 basis points
"The interest assumptions in our forecasts are based on Fed
Funds futures contracts and forward yield curves as of February 1,
2013. The Fed Funds futures contracts used in the client short and
corporate cash interest income forecasts 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 February 1,
2013 were used to forecast new purchase rates for the client
extended, corporate extended, and client long portfolios,
respectively.
- Interest on funds held for clients is expected to decline about
$75 million, or 15%, from $493.3 million in fiscal 2012 to about
$420 million. This forecast is based on a decline of about 60
basis points in the expected average interest yield to 2.2%,
partially offset by 5% to 7% anticipated growth in average client
funds balances to $18.8 to $19.1 billion.
- Interest income on corporate funds is expected to decline
approximately $20 million from $85.2 million in fiscal
2012. Included in interest income on corporate funds is
interest income related to the extended investment strategy, which
is expected to decline about $10 million to approximately $55
million.
- In combination, we expect the total impact related to the
client funds extended investment strategy to be a decline of $85 to
$90 million from $556 million in fiscal 2012. Our prior
forecast anticipated a decline of $80 to $85 million.
"I am cautious as economic growth continues to lag historic
levels, but I am pleased with our solid execution in our
businesses. I am confident that ADP is well positioned to
navigate the uncertainty of the global economy. As a leading
global Human Capital Management solutions provider we are focused
on successfully executing against our four strategic pillars for
growth. Driving product innovation and enhancing our
distribution and service capabilities are the right things to do to
continue 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 2011, 2012, and
2013 have been updated for the second quarter of fiscal 2013 and to
reflect the impact of discontinued operations. These schedules
also include a statement of consolidated earnings for fiscal 2012
and each quarter restated for discontinued operations and are
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, Tuesday, February
5 at 8:30 a.m. EST. 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
ADP ® (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 |
Statements of
Consolidated Earnings |
(In millions, except per
share amounts) |
(Unaudited) |
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|
December 31, |
December 31, |
|
2012 |
2011 |
2012 |
2011 |
Revenues: |
|
|
|
|
Revenues, other than interest on funds
held for clients and PEO revenues |
$ 2,183.4 |
$ 2,041.7 |
$ 4,265.3 |
$ 4,032.8 |
Interest on funds held for clients |
101.7 |
117.9 |
208.4 |
239.8 |
PEO revenues (A) |
462.7 |
411.1 |
911.6 |
809.0 |
Total revenues |
2,747.8 |
2,570.7 |
5,385.3 |
5,081.6 |
|
|
|
|
|
Expenses: |
|
|
|
|
Costs of revenues: |
|
|
|
|
Operating expenses |
1,401.6 |
1,304.2 |
2,769.1 |
2,593.9 |
Systems development & programming
costs |
159.9 |
147.3 |
316.2 |
295.2 |
Depreciation & amortization |
62.8 |
62.2 |
125.6 |
125.0 |
Total costs of revenues |
1,624.3 |
1,513.7 |
3,210.9 |
3,014.1 |
|
|
|
|
|
Selling, general & administrative
expenses |
624.7 |
574.9 |
1,236.1 |
1,161.8 |
Interest expense |
3.0 |
2.1 |
6.1 |
4.2 |
Total expenses |
2,252.0 |
2,090.7 |
4,453.1 |
4,180.1 |
|
|
|
|
|
Other income, net (B) |
(33.0) |
(96.2) |
(62.2) |
(130.4) |
|
|
|
|
|
Earnings from continuing operations
before income taxes |
528.8 |
576.2 |
994.4 |
1,031.9 |
|
|
|
|
|
Provision for income taxes |
176.8 |
203.4 |
340.0 |
358.7 |
|
|
|
|
|
Net earnings from continuing
operations |
$ 352.0 |
$ 372.8 |
$ 654.4 |
$ 673.2 |
|
|
|
|
|
Earnings from discontinued operations before
income taxes |
62.3 |
3.5 |
66.8 |
7.1 |
|
|
|
|
|
Provision for income taxes |
23.4 |
1.3 |
25.1 |
2.6 |
|
|
|
|
|
Net earnings from discontinued
operations |
$ 38.9 |
$ 2.2 |
$ 41.7 |
$ 4.5 |
|
|
|
|
|
Net earnings |
$ 390.9 |
$ 375.0 |
$ 696.1 |
$ 677.7 |
|
|
|
|
|
Basic Earnings Per Share from Continuing
Operations |
$ 0.73 |
$ 0.77 |
$ 1.36 |
$ 1.38 |
Basic Earnings Per Share from
Discontinued Operations |
0.08 |
-- |
0.09 |
0.01 |
Basic Earnings Per Share |
$ 0.81 |
$ 0.77 |
$ 1.44 |
$ 1.39 |
|
|
|
|
|
Diluted Earnings Per Share from
Continuing Operations |
$ 0.72 |
$ 0.76 |
$ 1.34 |
$ 1.37 |
Diluted Earnings Per Share from
Discontinued Operations |
0.08 |
-- |
0.09 |
0.01 |
Diluted Earnings Per Share |
$ 0.80 |
$ 0.76 |
$ 1.43 |
$ 1.38 |
|
|
|
|
|
Dividends declared per common share |
$ 0.4350 |
$ 0.3950 |
$ 0.8300 |
$ 0.7550 |
|
|
|
|
|
(A) Professional Employer
Organization ("PEO") revenues are net of direct pass-through costs,
primarily consisting of payroll wages and payroll taxes, of
$5,410.9 and $4,810.4 for the three months ended December 31, 2012
and 2011, respectively, and $9,936.7 and $8,745.7 for the six
months ended December 31, 2012 and 2011, respectively. |
(B) The three and six months
ended December 31, 2011 include 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 |
Condensed Consolidated
Balance Sheets |
(In
millions) |
(Unaudited) |
|
December 31, |
June 30, |
|
2012 |
2012 |
Assets |
|
|
Cash and cash equivalents/Short-term
marketable securities (C) |
$ 1,434.8 |
$ 1,578.5 |
Other current assets |
2,358.6 |
2,030.0 |
Assets of discontinued operations |
-- |
125.0 |
Total current assets before funds held
for clients |
3,793.4 |
3,733.5 |
|
|
|
Funds held for clients |
23,759.0 |
21,539.1 |
Total current assets |
27,552.4 |
25,272.6 |
|
|
|
Long-term marketable securities |
82.4 |
86.9 |
Property, plant and equipment, net |
712.9 |
706.3 |
Other non-current assets |
4,982.3 |
4,751.6 |
Total assets |
$ 33,330.0 |
$ 30,817.4 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Other current liabilities |
$ 2,360.3 |
$ 2,367.5 |
Obligations under reverse repurchase
agreements |
13.5 |
-- |
Liabilities of discontinued operations |
-- |
29.0 |
Client funds obligations |
23,064.7 |
20,856.2 |
Total current liabilities |
25,438.5 |
23,252.7 |
|
|
|
Long-term debt |
15.8 |
16.8 |
Other non-current liabilities |
1,480.4 |
1,433.9 |
Total liabilities |
26,934.7 |
24,703.4 |
|
|
|
Total stockholders' equity |
6,395.3 |
6,114.0 |
Total liabilities and stockholders'
equity |
$ 33,330.0 |
$ 30,817.4 |
|
|
|
(C) As of December 31, 2012,
$13.4 million of Short-term marketable securities and $0.1 million
of Cash and cash equivalents have been pledged as collateral under
reverse repurchase agreements. |
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Consolidated Statement 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 six months ended December
31, 2011 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. |
|
|
|
|
|
|
Three Months Ended
December 31, 2011 |
|
Earnings from |
|
|
Diluted EPS from |
|
continuing operations |
Provision for |
Net earnings from |
continuing |
|
before income taxes |
income taxes |
continuing operations |
operations |
|
|
|
|
|
As Reported |
$ 576.2 |
$ 203.4 |
$ 372.8 |
$ 0.76 |
|
|
|
|
|
Less Adjustments: |
|
|
|
Gain on sale of assets |
66.0 |
24.8 |
41.2 |
0.08 |
|
|
|
|
|
As Adjusted |
$ 510.2 |
$ 178.6 |
$ 331.6 |
$ 0.67 |
|
|
|
|
|
|
|
|
|
|
|
Six months ended December
31, 2011 |
|
Earnings from |
|
|
Diluted EPS from |
|
continuing operations |
Provision for |
Net earnings from |
continuing |
|
before income taxes |
income taxes |
continuing operations |
operations |
|
|
|
|
|
As Reported |
$ 1,031.9 |
$ 358.7 |
$ 673.2 |
$ 1.37 |
|
|
|
|
|
Less Adjustments: |
|
|
|
Gain on sale of assets |
66.0 |
24.8 |
41.2 |
0.08 |
|
|
|
|
|
As Adjusted |
$ 965.9 |
$ 333.9 |
$ 632.0 |
$ 1.28 |
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Other Selected Financial
Data |
(Dollars in millions,
except per share amounts) |
(Unaudited) |
|
Three Months Ended |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
Change |
% Change |
Revenues from continuing operations (D) |
|
|
|
|
Employer Services |
$ 1,907.7 |
$ 1,782.0 |
$ 125.7 |
7% |
PEO Services |
465.7 |
413.8 |
51.9 |
13% |
Dealer Services |
449.8 |
406.9 |
42.9 |
11% |
Other |
(75.4) |
(32.0) |
(43.4) |
n/m |
|
$ 2,747.8 |
$ 2,570.7 |
$ 177.1 |
7% |
Pre-tax earnings from continuing operations
(D) |
|
|
|
|
Employer Services |
$ 485.0 |
$ 441.0 |
$ 44.0 |
10% |
PEO Services |
49.8 |
42.5 |
7.3 |
17% |
Dealer Services |
86.2 |
70.7 |
15.5 |
22% |
Other (E) |
(92.2) |
22.0 |
(114.2) |
n/m |
|
$ 528.8 |
$ 576.2 |
$ (47.4) |
(8)% |
Pre-tax margin (D) |
|
|
|
|
Employer Services |
25.4% |
24.7% |
0.7% |
|
PEO Services |
10.7% |
10.3% |
0.4% |
|
Dealer Services |
19.2% |
17.4% |
1.8% |
|
Other |
n/m |
n/m |
n/m |
|
|
19.2% |
22.4% |
(3.2)% |
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
Change |
% Change |
Revenues (D) |
|
|
|
|
Employer Services |
$ 3,726.7 |
$ 3,490.9 |
$ 235.8 |
7% |
PEO Services |
917.6 |
814.4 |
103.2 |
13% |
Dealer Services |
889.6 |
809.5 |
80.1 |
10% |
Other |
(148.6) |
(33.2) |
(115.4) |
n/m |
|
$ 5,385.3 |
$ 5,081.6 |
$ 303.7 |
6% |
Pre-tax earnings (D) |
|
|
|
|
Employer Services |
$ 906.8 |
$ 848.2 |
$ 58.6 |
7% |
PEO Services |
96.0 |
79.1 |
16.9 |
21% |
Dealer Services |
162.2 |
134.1 |
28.1 |
21% |
Other (E) |
(170.6) |
(29.5) |
(141.1) |
n/m |
|
$ 994.4 |
$ 1,031.9 |
$ (37.5) |
(4)% |
Pre-tax margin (D) |
|
|
|
|
Employer Services |
24.3% |
24.3% |
0.0% |
|
PEO Services |
10.5% |
9.7% |
0.7% |
|
Dealer Services |
18.2% |
16.6% |
1.7% |
|
Other |
n/m |
n/m |
n/m |
|
|
18.5% |
20.3% |
(1.8)% |
|
|
|
|
|
|
(D) Prior year's segment results
were adjusted to reflect fiscal year 2013 budgeted foreign exchange
rates. |
|
|
(E) The three and six months
ended December 31, 2011 include 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 |
|
|
|
December 31, |
Change in other |
|
|
2012 |
2011 |
income, net |
|
Components of other income, net: |
|
|
|
|
Interest income on corporate funds |
$ (21.5) |
$ (27.2) |
$ (5.7) |
|
Realized gains on available-for-sale
securities |
(9.8) |
(14.8) |
(5.0) |
|
Realized losses on available-for-sale
securities |
0.5 |
6.6 |
6.1 |
|
Impairment losses on available-for-sale
securities |
-- |
5.8 |
5.8 |
|
Gains on sales of buildings |
(2.2) |
-- |
2.2 |
|
Gain on sale of assets |
-- |
(66.0) |
(66.0) |
|
Other, net |
-- |
(0.6) |
(0.6) |
|
Total other income, net |
$ (33.0) |
$ (96.2) |
$ (63.2) |
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
December 31, |
Change in other |
|
|
2012 |
2011 |
income, net |
|
Components of other income, net: |
|
|
|
|
Interest income on corporate funds |
$ (45.3) |
$ (56.8) |
$ (11.5) |
|
Realized gains on available-for-sale
securities |
(14.6) |
(19.1) |
(4.5) |
|
Realized losses on available-for-sale
securities |
0.8 |
6.9 |
6.1 |
|
Impairment losses on available-for-sale
securities |
-- |
5.8 |
5.8 |
|
Gains on sales of buildings |
(2.2) |
-- |
2.2 |
|
Gain on sale of assets |
-- |
(66.0) |
(66.0) |
|
Other, net |
(0.9) |
(1.2) |
(0.3) |
|
Total other income, net |
$ (62.2) |
$ (130.4) |
$ (68.2) |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 352.0 |
$ 372.8 |
$ (20.8) |
(6)% |
Net earnings |
$ 390.9 |
$ 375.0 |
$ 15.9 |
4% |
Basic weighted average shares
outstanding |
482.1 |
486.7 |
(4.6) |
(1)% |
Basic earnings per share from continuing
operations |
$ 0.73 |
$ 0.77 |
$ (0.04) |
(5)% |
Basic earnings per share |
$ 0.81 |
$ 0.77 |
$ 0.04 |
5% |
|
|
|
|
|
Net earnings from continuing operations |
$ 352.0 |
$ 372.8 |
$ (20.8) |
(6)% |
Net earnings |
$ 390.9 |
$ 375.0 |
$ 15.9 |
4% |
Diluted weighted average shares
outstanding |
486.8 |
492.4 |
(5.6) |
(1)% |
Diluted earnings per share from continuing
operations |
$ 0.72 |
$ 0.76 |
$ (0.04) |
(5)% |
Diluted earnings per share |
$ 0.80 |
$ 0.76 |
$ 0.04 |
5% |
|
|
|
|
|
|
Six Months Ended |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 654.4 |
$ 673.2 |
$ (18.8) |
(3)% |
Net earnings |
$ 696.1 |
$ 677.7 |
$ 18.4 |
3% |
Basic weighted average shares
outstanding |
482.8 |
487.3 |
(4.5) |
(1)% |
Basic earnings per share from continuing
operations |
$ 1.36 |
$ 1.38 |
$ (0.02) |
(1)% |
Basic earnings per share |
$ 1.44 |
$ 1.39 |
$ 0.05 |
4% |
|
|
|
|
|
Net earnings from continuing operations |
$ 654.4 |
$ 673.2 |
$ (18.8) |
(3)% |
Net earnings |
$ 696.1 |
$ 677.7 |
$ 18.4 |
3% |
Diluted weighted average shares
outstanding |
487.7 |
492.8 |
(5.1) |
(1)% |
Diluted earnings per share from continuing
operations |
$ 1.34 |
$ 1.37 |
$ (0.03) |
(2)% |
Diluted earnings per share |
$ 1.43 |
$ 1.38 |
$ 0.05 |
4% |
|
|
|
|
|
|
Three Months Ended |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
|
|
Key Statistics: |
|
|
|
|
Internal revenue growth: |
|
|
|
|
Employer Services |
6% |
5% |
|
|
PEO Services |
13% |
16% |
|
|
Dealer Services |
9% |
7% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control - AutoPay
product |
2.6% |
2.8% |
|
|
Change in client revenue retention
percentage - worldwide |
0.8 pts |
(0.5) pts |
|
|
Employer Services/PEO new business sales
growth - worldwide |
5% |
14% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end of
period |
278,000 |
253,000 |
|
|
Average paid PEO worksite employees
during the period |
276,000 |
251,000 |
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
|
|
Key Statistics: |
|
|
|
|
Internal revenue growth: |
|
|
|
|
Employer Services |
5% |
6% |
|
|
PEO Services |
13% |
16% |
|
|
Dealer Services |
8% |
6% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control - AutoPay
product |
2.9% |
2.8% |
|
|
Change in client revenue retention
percentage - worldwide |
0.2 pts |
(0.2) pts |
|
|
Employer Services/PEO new business sales
growth - worldwide |
9% |
11% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end of
period |
278,000 |
253,000 |
|
|
Average paid PEO worksite employees
during the period |
272,000 |
247,000 |
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.1 |
$ 1.3 |
$ (0.1) |
(11)% |
Corporate extended |
4.2 |
3.6 |
0.6 |
16% |
Total corporate |
5.3 |
4.8 |
0.4 |
9% |
Funds held for clients |
17.0 |
15.6 |
1.4 |
9% |
Total |
$ 22.3 |
$ 20.4 |
$ 1.9 |
9% |
|
|
|
|
|
Average interest rates earned
exclusive of realized losses (gains) on: |
|
|
|
Corporate, other than corporate
extended |
0.7% |
0.9% |
|
|
Corporate extended |
1.8% |
2.6% |
|
|
Total corporate |
1.6% |
2.2% |
|
|
Funds held for clients |
2.4% |
3.0% |
|
|
Total |
2.2% |
2.8% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 717.8 |
$ 685.1 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper borrowings |
$ 3.7 |
$ 3.3 |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.4 |
0.3 |
|
|
|
$ 4.2 |
$ 3.6 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper borrowings |
0.2% |
0.1% |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.7% |
0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 101.7 |
$ 117.9 |
$ (16.2) |
(14)% |
Corporate extended interest income (F) |
19.4 |
23.5 |
(4.1) |
(17)% |
Corporate interest expense-short-term
financing (F) |
(2.6) |
(1.4) |
(1.2) |
(90)% |
|
$ 118.5 |
$ 140.0 |
$ (21.6) |
(15)% |
|
|
|
|
|
|
Six Months Ended |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.2 |
$ 1.3 |
$ (0.1) |
(11)% |
Corporate extended |
4.0 |
3.5 |
0.4 |
12% |
Total corporate |
5.1 |
4.9 |
0.3 |
6% |
Funds held for clients |
16.5 |
15.4 |
1.2 |
8% |
Total |
$ 21.7 |
$ 20.2 |
$ 1.4 |
7% |
|
|
|
|
|
Average interest rates earned exclusive of
realized losses (gains) on: |
|
|
|
|
Corporate, other than corporate
extended |
0.8% |
0.9% |
|
|
Corporate extended |
2.0% |
2.8% |
|
|
Total corporate |
1.8% |
2.3% |
|
|
Funds held for clients |
2.5% |
3.1% |
|
|
Total |
2.3% |
2.9% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 717.8 |
$ 685.1 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper borrowings |
$ 3.5 |
$ 3.2 |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.5 |
0.4 |
|
|
|
$ 4.0 |
$ 3.5 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper borrowings |
0.2% |
0.1% |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.7% |
0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 208.4 |
$ 239.8 |
$ (31.4) |
(13)% |
Corporate extended interest income (F) |
40.6 |
49.1 |
(8.5) |
(17)% |
Corporate interest expense-short-term
financing (F) |
(5.1) |
(2.8) |
(2.3) |
(80)% |
|
$ 243.9 |
$ 286.1 |
$ (42.2) |
(15)% |
|
|
|
|
|
(F) 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 |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 19.4 |
$ 23.5 |
|
|
All other interest income |
2.1 |
3.7 |
|
|
Total interest income on corporate
funds |
$ 21.5 |
$ 27.2 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 2.6 |
$ 1.4 |
|
|
All other interest expense |
0.4 |
0.7 |
|
|
Total interest expense |
$ 3.0 |
$ 2.1 |
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
December 31, |
|
|
|
2012 |
2011 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 40.6 |
$ 49.1 |
|
|
All other interest income |
4.7 |
7.7 |
|
|
Total interest income on corporate
funds |
$ 45.3 |
$ 56.8 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 5.1 |
$ 2.8 |
|
|
All other interest expense |
1.0 |
1.4 |
|
|
Total interest expense |
$ 6.1 |
$ 4.2 |
|
|
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,
2012 should be considered in evaluating any forward-looking
statements contained herein.
CONTACT: ADP Investor Relations
Elena Charles, 973.974.4077
Debbie Morris, 973.974.7821
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