ADP
® (Nasdaq:ADP), a leading global provider of
Human Capital Management (HCM) solutions, today announced its third
quarter fiscal 2014 financial results ending March 31, 2014.
Highlights below:
- ADP reported 7% growth in revenues, nearly all organic, to $3.3
billion for the quarter.
- Pretax and net earnings from continuing operations both
increased 6%.
- Diluted earnings per share from continuing operations of $1.06
increased 7% from $0.99 a year ago.
- ADP acquired 0.5 million shares of its stock for treasury at a
cost of $42 million in the quarter.
- ADP announced the planned spin-off of its Dealer Services
business, which is expected to be completed in October of
2014.
"ADP posted results for the third quarter that reflect the
strength of our business model and demonstrate that our innovative
solutions resonate with the marketplace," said Carlos Rodriguez,
president and chief executive officer, ADP. "I am particularly
pleased with worldwide new business bookings growth of 14% for
Employer Services and PEO Services combined. During the last few
months, ADP showcased new product innovations targeted to both
mid-sized and large companies. We held an interactive virtual event
announcing enhancements to ADP Workforce Now® that
help simplify regulatory compliance and leverage analytics to
assist clients with managing their Human Capital Management needs.
In addition, at our ADP Meeting of the Minds conference for
up-market clients we previewed a new user experience."
"Each of our business segments performed well in the quarter,
driving good growth in both revenues and pretax earnings," said Jan
Siegmund, chief financial officer, ADP. "Share repurchases were
lower than in prior quarters as a result of ADP's decision to not
repurchase shares prior to the announcement of the planned spin-off
of Dealer Services. We remain committed to returning excess
cash to our shareholders over the long-term."
High-margin client interest revenues declined from a year ago
and negatively impacted third quarter revenue growth 0.4 percentage
points due to a lower yield on the client funds portfolio,
partially offset by growth in average client funds
balances. This decline in client interest revenues was the
primary driver of the lower contribution from the client funds
extended investment strategy, which negatively impacted growth in
pretax earnings from continuing operations 2% and pretax margin 60
basis points, offsetting the pretax margin expansion in the
business segments. The lower contribution from the client
funds extended investment strategy reduced diluted earnings per
share from continuing operations almost $0.02, or 2% for the
quarter.
Employer Services
Employer Services' revenues grew 6% for the third quarter,
nearly all organic, compared to last year's third quarter. The
number of employees on our clients' payrolls in the United States
increased 2.8% for the quarter as measured on a same-store-sales
basis for a subset of our clients' payrolls ranging from small to
large businesses. During this key retention period, worldwide
client retention increased 80 basis points compared to last year's
third quarter. Employer Services' pretax margin increased 70
basis points for the quarter benefiting from increased operating
efficiencies.
For the third quarter, combined worldwide new business bookings
for Employer Services and PEO Services grew 14%. New business
bookings represent annualized recurring revenues anticipated from
new orders.
PEO Services
PEO Services' revenues increased 15% for the third quarter, all
organic, compared to last year's third quarter. PEO Services'
pretax margin decreased 40 basis points for the quarter primarily
due to a higher level of expense related to increased new business
bookings. Average worksite employees paid by PEO Services
increased 18% for the quarter to approximately 328,000.
Dealer Services
Dealer Services' revenues grew 7% for the third quarter, nearly
all organic, compared to last year's third quarter. Dealer
Services' pretax margin improved 180 basis points benefiting from
non-recurring items in the quarter.
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 third quarter, interest on funds held for clients
declined $11.9 million, or 11%, from $112.0 million a year ago to
$100.1 million, due to a decline of about 30 basis points in the
average interest yield to 1.6%, partially offset by an increase of
9% in average client funds balances from $23.2 billion to $25.2
billion.
Dealer Services Spin-off
As announced on April 10, 2014, ADP plans to spin-off its Dealer
Services business into an independent publicly-traded
company. The transaction is structured as a tax-free spin-off
of 100% of Dealer Services to ADP shareholders and is expected to
be completed in October of 2014. ADP expects to receive at
least $700 million in conjunction with the spin-off. Following
the spin-off, ADP intends to increase the dividend annually,
subject to board approval, keeping intact its 39-year track record
of dividend increases. However, ADP expects to grow the dividend at
a slower rate than earnings to allow the company to return to its
pre-separation target dividend payout ratio of 55% to 60% in about
two years. ADP expects to incur spin-related expenses of
approximately $20 million in the fourth quarter of fiscal 2014,
which are excluded from the forecast below.
Discontinued Operations
During the quarter, ADP sold a business that generated
approximately $23 million in revenues and approximately $0.01 of
earnings per share in fiscal 2013. The results of operations
and the gain of $10.5 million on the sale of this business are
reported within discontinued operations in the fiscal 2014 and 2013
results within this release.
Fiscal 2014 Forecast
Our updated fiscal 2014 forecasts exclude any one-time expenses
anticipated in connection with the Dealer Services spin-off and the
results of discontinued operations.
Total ADP Fiscal 2014 Forecast
Revenues – about 8% growth, compared with our prior forecast
range of 7% to 8% growth
- Includes approximately 0.5 percentage points of anticipated
drag for the year related to the decline in interest on client
funds from a continued low interest rate environment, partially
offset by the forecasted growth in average client funds
balances.
Pretax Margins – slight improvement in pretax margin from the
adjusted 18.8% in fiscal 2013, consistent with our prior
forecast
- Includes an anticipated drag of about 80 basis points for the
year from the lower contribution from the client funds extended
investment strategy.
Effective Tax Rate – about flat with the adjusted 33.9% in
fiscal 2013, consistent with our prior forecast
Diluted Earnings per Share from Continuing Operations – about 9%
growth compared to the adjusted $2.88 in fiscal 2013, compared with
our prior forecast of 8% to 10%
- The lower contribution from the client funds extended
investment strategy is expected to reduce earnings per share growth
$0.08, or about 3%.
Reportable Segments Fiscal 2014 Forecast
- Employer Services – consistent with our prior forecast
- Revenue growth of 7%
- Pretax margin expansion of about 100 basis points
- Pays per control – up 2.0% to 3.0%
- PEO Services –
- About 14% revenue growth, which is an increase from our prior
forecast range of 12% to 13% growth
- Slight pretax margin expansion, consistent with our prior
forecast
- Combined Employer Services and PEO Services new business
bookings – about 8%, consistent with our prior forecast
- Dealer Services – consistent with our prior forecast
- Revenue growth of about 8%
- Pretax margin expansion of about 100 basis points
Interest on Funds Held for Clients, Interest Income on Corporate
Funds Fiscal 2014 Forecast
The interest assumptions in our forecasts are based on Fed Funds
futures contracts and forward yield curves as of April 28, 2014.
The Fed Funds futures contracts used in the client short and
corporate cash interest income forecasts do not anticipate any
changes during fiscal 2014 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 April 28, 2014 were used to
forecast new purchase rates for the client and corporate extended,
and client long portfolios, respectively.
- Interest on funds held for clients is expected to decline $45
to $50 million, or 11% to 12%, based on a decline of about 40 basis
points in the expected average interest yield to 1.8%. This is
partially offset by anticipated growth in average client funds
balances of approximately 8%, which is an increase from our prior
forecast of approximately 6% to 7% growth.
- Interest income on corporate funds is expected to decline
approximately $10 million primarily due to a decline in interest
income related to the client funds extended investment strategy,
which is included in interest income on corporate funds.
- In combination, the total contribution from the client funds
extended investment strategy is expected to be $55 to $60 million
lower than a year ago.
Web Site Schedules
The schedules of quarterly and full year revenues and pretax
earnings by reportable segment for fiscal years 2012 and 2013, and
the first, second and third quarters of fiscal 2014 are posted to
the ADP Investor Relations Web site
(http://investors.adp.com) under the Financials
section.
An analyst conference call will be held today, Wednesday, April
30, 2014 at 8:30 a.m. EDT. A live webcast of the call will be
available on a listen-only basis. To listen to the webcast go
to ADP's Investor Relations Web site, http://investors.adp.com, 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 at
least 10 minutes prior to the webcast. A presentation will be
available to download and print about 60 minutes before the webcast
at the ADP Investor Relations Web site at
http://investors.adp.com. ADP's news releases, current
financial information, SEC filings and Investor Relations
presentations are accessible at the same Web site.
About ADP
With more than $11 billion in revenues and more than 60 years of
experience, ADP® (Nasdaq:ADP) serves approximately 620,000 clients
in more than 125 countries. As one of the world's largest
providers of business outsourcing and Human Capital Management
solutions, ADP offers a wide range of human resource, payroll,
talent management, tax and benefits administration solutions from a
single source, and helps clients comply with regulatory and
legislative changes, such as the Affordable Care Act (ACA).
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,
visit the company's Web site at www.ADP.com.
Automatic Data
Processing, Inc. and Subsidiaries |
Statements of
Consolidated Earnings |
(In millions, except per
share amounts) |
(Unaudited) |
|
Three Months Ended |
Nine Months Ended |
|
March 31, |
March 31, |
|
|
|
|
|
|
2014 |
2013 |
2014 |
2013 |
Revenues: |
|
|
|
|
Revenues, other than interest on funds
held for clients and PEO revenues |
$ 2,572.5 |
$ 2,435.1 |
$ 7,177.1 |
$ 6,690.6 |
Interest on funds held for clients |
100.1 |
112.0 |
278.6 |
320.4 |
PEO revenues (A) |
647.4 |
562.2 |
1,677.0 |
1,473.8 |
Total revenues |
3,320.0 |
3,109.3 |
9,132.7 |
8,484.8 |
|
|
|
|
|
Expenses: |
|
|
|
|
Costs of revenues: |
|
|
|
|
Operating expenses |
1,640.5 |
1,515.5 |
4,655.5 |
4,279.3 |
Systems development & programming
costs |
180.5 |
164.1 |
531.7 |
480.3 |
Depreciation & amortization |
63.4 |
63.6 |
188.7 |
189.0 |
Total costs of revenues |
1,884.4 |
1,743.2 |
5,375.9 |
4,948.6 |
|
|
|
|
|
Selling, general & administrative
expenses |
673.2 |
653.6 |
1,986.0 |
1,888.0 |
Interest expense |
0.9 |
1.2 |
4.7 |
7.3 |
Total expenses |
2,558.5 |
2,398.0 |
7,366.6 |
6,843.9 |
|
|
|
|
|
Other income, net |
(8.3) |
(12.0) |
(59.1) |
(74.2) |
|
|
|
|
|
Earnings from continuing operations
before income taxes |
769.8 |
723.3 |
1,825.2 |
1,715.1 |
|
|
|
|
|
Provision for income taxes |
259.4 |
241.7 |
611.4 |
581.0 |
|
|
|
|
|
Net earnings from continuing
operations |
$ 510.4 |
$ 481.6 |
$ 1,213.8 |
$ 1,134.1 |
|
|
|
|
|
Earnings from discontinued operations before
income taxes |
16.6 |
1.5 |
19.5 |
70.9 |
|
|
|
|
|
Provision for income taxes |
5.4 |
0.4 |
6.2 |
26.2 |
|
|
|
|
|
Net earnings from discontinued
operations |
$ 11.2 |
$ 1.1 |
$ 13.3 |
$ 44.7 |
|
|
|
|
|
Net earnings |
$ 521.6 |
$ 482.7 |
$ 1,227.1 |
$ 1,178.8 |
|
|
|
|
|
Basic Earnings Per Share from Continuing
Operations |
$ 1.07 |
$ 1.00 |
$ 2.53 |
$ 2.35 |
Basic Earnings Per Share from
Discontinued Operations |
0.02 |
-- |
0.03 |
0.09 |
Basic Earnings Per Share |
$ 1.09 |
$ 1.00 |
$ 2.56 |
$ 2.44 |
|
|
|
|
|
Diluted Earnings Per Share from
Continuing Operations |
$ 1.06 |
$ 0.99 |
$ 2.51 |
$ 2.33 |
Diluted Earnings Per Share from
Discontinued Operations |
0.02 |
-- |
0.03 |
0.09 |
Diluted Earnings Per Share |
$ 1.08 |
$ 0.99 |
$ 2.54 |
$ 2.42 |
|
|
|
|
|
Dividends declared per common share |
$ 0.480 |
$ 0.435 |
$ 1.395 |
$ 1.265 |
|
|
|
|
|
|
|
|
|
|
Components of other income,
net: |
|
|
|
|
Interest income on corporate funds |
$ (6.7) |
$ (6.0) |
$ (42.4) |
$ (51.3) |
Realized gains on available-for-sale
securities |
(2.2) |
(6.7) |
(19.7) |
(21.3) |
Realized losses on available-for-sale
securities |
0.7 |
0.7 |
3.2 |
1.5 |
Gains on sales of buildings |
-- |
-- |
-- |
(2.2) |
Other, net |
(0.1) |
-- |
(0.2) |
(0.9) |
Total other income, net |
$ (8.3) |
$ (12.0) |
$ (59.1) |
$ (74.2) |
|
|
|
|
|
|
|
|
|
|
(A) Professional Employer
Organization ("PEO") revenues are net of direct pass-through costs,
primarily consisting of payroll wages and payroll taxes, of
$6,396.8 and $5,317.8 for the three months ended March 31, 2014 and
2013, respectively, and $17,484.4 and $15,254.5 for the nine months
ended March 31, 2014 and 2013, respectively. |
|
Automatic Data
Processing, Inc. and Subsidiaries |
Condensed Consolidated
Balance Sheets |
(In
millions) |
(Unaudited) |
|
March 31, |
June 30, |
|
2014 |
2013 |
Assets |
|
|
Cash and cash equivalents/Short-term
marketable securities (B) |
$ 1,693.9 |
$ 1,727.1 |
Other current assets |
2,594.9 |
2,241.9 |
Assets of discontinued operations |
-- |
16.7 |
Total current assets before funds
held for clients |
4,288.8 |
3,985.7 |
Funds held for clients |
26,243.8 |
22,228.8 |
Total current assets |
30,532.6 |
26,214.5 |
|
|
|
Long-term marketable securities (B) |
54.3 |
314.0 |
Property, plant and equipment, net |
767.5 |
728.6 |
Other non-current assets |
5,242.1 |
5,011.0 |
Total assets |
$ 36,596.5 |
$ 32,268.1 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Other current liabilities |
$ 2,585.9 |
$ 2,526.4 |
Obligations under reverse repurchase
agreements (B) |
-- |
245.9 |
Liabilities of discontinued operations |
-- |
4.2 |
Client funds obligations |
25,992.3 |
21,956.3 |
Total current
liabilities |
28,578.2 |
24,732.8 |
|
|
|
Long-term debt |
12.1 |
14.7 |
Other non-current liabilities |
1,390.1 |
1,330.7 |
Total liabilities |
29,980.4 |
26,078.2 |
|
|
|
Total stockholders' equity |
6,616.1 |
6,189.9 |
Total liabilities and stockholders'
equity |
$ 36,596.5 |
$ 32,268.1 |
|
|
|
|
|
|
(B) As of June 30, 2013, $245.2
million of long-term marketable securities and $0.7 million of cash
and cash equivalents have been pledged as collateral under the
Company's reverse repurchase agreements. |
Automatic Data
Processing, Inc. and Subsidiaries |
Other Selected Financial
Data |
(Dollars in millions,
except per share amounts) |
(Unaudited) |
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
Change |
% Change |
Revenues from continuing operations (C) |
|
|
|
|
Employer Services |
$ 2,350.9 |
$ 2,223.2 |
$ 127.7 |
6% |
PEO Services |
650.8 |
565.5 |
85.3 |
15% |
Dealer Services |
494.9 |
463.3 |
31.6 |
7% |
Other |
(176.6) |
(142.7) |
(33.9) |
n/m |
Total revenues from continuing
operations |
$ 3,320.0 |
$ 3,109.3 |
$ 210.7 |
7% |
|
|
|
|
|
Pre-tax earnings from continuing operations
(C) |
|
|
|
|
Employer Services |
$ 840.5 |
$ 780.2 |
$ 60.3 |
8% |
PEO Services |
60.5 |
54.6 |
5.9 |
11% |
Dealer Services |
113.5 |
98.0 |
15.5 |
16% |
Other |
(244.7) |
(209.5) |
(35.2) |
n/m |
Total pre-tax earnings from
continuing operations |
$ 769.8 |
$ 723.3 |
$ 46.5 |
6% |
|
|
|
|
|
Pre-tax margin (C) |
|
|
|
|
Employer Services |
35.8% |
35.1% |
0.7% |
|
PEO Services |
9.3% |
9.7% |
(0.4)% |
|
Dealer Services |
22.9% |
21.2% |
1.8% |
|
Other |
n/m |
n/m |
n/m |
|
Total pre-tax margin |
23.2% |
23.3% |
(0.1)% |
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
Change |
% Change |
Revenues from continuing operations (C) |
|
|
|
|
Employer Services |
$ 6,396.1 |
$ 5,950.4 |
$ 445.7 |
7% |
PEO Services |
1,686.9 |
1,483.1 |
203.8 |
14% |
Dealer Services |
1,452.0 |
1,355.9 |
96.1 |
7% |
Other |
(402.3) |
(304.6) |
(97.7) |
n/m |
Total revenues from continuing
operations |
$ 9,132.7 |
$ 8,484.8 |
$ 647.9 |
8% |
|
|
|
|
|
Pre-tax earnings from continuing operations
(C) |
|
|
|
|
Employer Services |
$ 1,956.0 |
$ 1,747.3 |
$ 208.7 |
12% |
PEO Services |
171.9 |
150.9 |
21.0 |
14% |
Dealer Services |
315.0 |
280.1 |
34.9 |
12% |
Other |
(617.7) |
(463.2) |
(154.5) |
n/m |
Total pre-tax earnings from
continuing operations |
$ 1,825.2 |
$ 1,715.1 |
$ 110.1 |
6% |
|
|
|
|
|
Pre-tax margin (C) |
|
|
|
|
Employer Services |
30.6% |
29.4% |
1.2% |
|
PEO Services |
10.2% |
10.2% |
0.0% |
|
Dealer Services |
21.7% |
20.7% |
1.0% |
|
Other |
n/m |
n/m |
n/m |
|
Total pre-tax margin |
20.0% |
20.2% |
(0.2)% |
|
|
|
|
|
|
(C) Effective July 1, 2013, the
Company no longer allocates a cost of capital charge to its
reportable segments and no longer adjusts the operating results of
its reportable segments on a constant exchange rate basis. As
a result of these changes, all prior-period amounts have been
reclassified to conform to the current period presentation. |
n/m - not meaningful |
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 510.4 |
$ 481.6 |
$ 28.8 |
6% |
Net earnings |
$ 521.6 |
$ 482.7 |
$ 38.9 |
8% |
|
|
|
|
|
Basic weighted average shares
outstanding |
478.9 |
482.7 |
(3.8) |
(1)% |
Basic earnings per share from continuing
operations |
$ 1.07 |
$ 1.00 |
$ 0.07 |
7% |
Basic earnings per share |
$ 1.09 |
$ 1.00 |
$ 0.09 |
9% |
|
|
|
|
|
Diluted weighted average shares
outstanding |
483.0 |
486.5 |
(3.5) |
(1)% |
Diluted earnings per share from continuing
operations |
$ 1.06 |
$ 0.99 |
$ 0.07 |
7% |
Diluted earnings per share |
$ 1.08 |
$ 0.99 |
$ 0.09 |
9% |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 1,213.8 |
$ 1,134.1 |
$ 79.7 |
7% |
Net earnings |
$ 1,227.1 |
$ 1,178.8 |
$ 48.3 |
4% |
|
|
|
|
|
Basic weighted average shares
outstanding |
479.1 |
482.8 |
(3.7) |
(1)% |
Basic earnings per share from continuing
operations |
$ 2.53 |
$ 2.35 |
$ 0.18 |
8% |
Basic earnings per share |
$ 2.56 |
$ 2.44 |
$ 0.12 |
5% |
|
|
|
|
|
Diluted weighted average shares
outstanding |
483.4 |
487.1 |
(3.7) |
(1)% |
Diluted earnings per share from continuing
operations |
$ 2.51 |
$ 2.33 |
$ 0.18 |
8% |
Diluted earnings per share |
$ 2.54 |
$ 2.42 |
$ 0.12 |
5% |
|
|
|
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Other Selected Financial
Data |
(Dollars in millions,
except per share amounts) |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
Key Statistics: |
2014 |
2013 |
|
|
Internal revenue growth: |
|
|
|
|
Employer Services (D) |
6% |
6% |
|
|
PEO Services |
15% |
10% |
|
|
Dealer Services (D) |
6.4% |
8% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control -
U.S. |
2.8% |
2.7% |
|
|
Change in client revenue retention
percentage - worldwide |
0.8 pts |
0.4 pts |
|
|
Employer Services/PEO new business
bookings growth - worldwide |
14% |
9% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end
of period |
330,000 |
278,000 |
|
|
Average paid PEO worksite employees
during the period |
328,000 |
279,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
March 31, |
|
|
Key Statistics: |
2014 |
2013 |
|
|
Internal revenue growth: |
|
|
|
|
Employer Services (D) |
7% |
6% |
|
|
PEO Services |
14% |
12% |
|
|
Dealer Services (D) |
7% |
8% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control -
U.S. |
2.8% |
2.9% |
|
|
Change in client revenue retention
percentage - worldwide |
0.1 pt |
0.3 pts |
|
|
Employer Services/PEO new business
bookings growth - worldwide |
8% |
9% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end
of period |
330,000 |
278,000 |
|
|
Average paid PEO worksite employees
during the period |
312,000 |
275,000 |
|
|
|
|
|
|
|
(D) Current year segment results
reflect actual foreign exchange rates. Prior year segment
results were adjusted to reflect actual foreign exchange
rates. |
|
|
|
|
|
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 |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.4 |
$ 1.5 |
$ (0.0) |
(3)% |
Corporate extended |
0.8 |
0.7 |
0.1 |
17% |
Total corporate |
2.3 |
2.2 |
0.1 |
3% |
Funds held for clients |
25.2 |
23.2 |
2.1 |
9% |
Total |
$ 27.5 |
$ 25.4 |
$ 2.1 |
8% |
|
|
|
|
|
Average interest rates earned exclusive
of realized losses (gains) on: |
|
|
|
|
Corporate, other than corporate
extended |
0.9% |
0.7% |
|
|
Corporate extended |
1.6% |
1.8% |
|
|
Total corporate |
1.2% |
1.1% |
|
|
Funds held for clients |
1.6% |
1.9% |
|
|
Total |
1.6% |
1.9% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 254.8 |
$ 655.0 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper
borrowings |
$ 0.7 |
$ 0.6 |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.2 |
0.1 |
|
|
|
$ 0.8 |
$ 0.7 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper
borrowings |
0.1% |
0.2% |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.9% |
1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 100.1 |
$ 112.0 |
$ (11.9) |
(11)% |
Corporate extended interest income (E) |
3.4 |
3.4 |
0.0 |
1% |
Corporate interest expense-short-term
financing (E) |
(0.5) |
(0.6) |
0.1 |
6% |
|
$ 103.0 |
$ 114.8 |
$ (11.8) |
(10)% |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.3 |
$ 1.3 |
$ 0.1 |
6% |
Corporate extended |
2.7 |
2.9 |
(0.2) |
(6)% |
Total corporate |
4.1 |
4.2 |
(0.1) |
(3)% |
Funds held for clients |
20.4 |
18.7 |
1.6 |
9% |
Total |
$ 24.4 |
$ 22.9 |
$ 1.5 |
7% |
|
|
|
|
|
Average interest rates earned exclusive
of realized losses (gains) on: |
|
|
|
|
Corporate, other than corporate
extended |
0.9% |
0.8% |
|
|
Corporate extended |
1.6% |
2.0% |
|
|
Total corporate |
1.4% |
1.6% |
|
|
Funds held for clients |
1.8% |
2.3% |
|
|
Total |
1.8% |
2.2% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 254.8 |
$ 655.0 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper
borrowings |
$ 2.4 |
$ 2.5 |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.4 |
0.4 |
|
|
|
$ 2.7 |
$ 2.9 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper
borrowings |
0.1% |
0.2% |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.6% |
0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 278.6 |
$ 320.4 |
$ (41.8) |
(13)% |
Corporate extended interest income (E) |
33.3 |
44.0 |
(10.7) |
(24)% |
Corporate interest expense-short-term
financing (E) |
(3.5) |
(5.6) |
2.1 |
38% |
|
$ 308.3 |
$ 358.7 |
$ (50.4) |
(14)% |
|
|
|
|
|
|
|
|
|
|
(E) 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 |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 3.4 |
$ 3.4 |
|
|
All other interest income |
3.3 |
2.6 |
|
|
Total interest income on corporate
funds |
$ 6.7 |
$ 6.0 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 0.5 |
$ 0.6 |
|
|
All other interest expense |
0.4 |
0.6 |
|
|
Total interest expense |
$ 0.9 |
$ 1.2 |
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
March 31, |
|
|
|
2014 |
2013 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 33.3 |
$ 44.0 |
|
|
All other interest income |
9.1 |
7.3 |
|
|
|
$ 42.4 |
$ 51.3 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 3.5 |
$ 5.6 |
|
|
All other interest expense |
1.2 |
1.7 |
|
|
Total interest expense |
$ 4.7 |
$ 7.3 |
|
|
|
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 twelve months ended June 30, 2013 to
adjusted results that exclude a non tax-deductible goodwill
impairment. 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, adjusted provision for income taxes, adjusted
EPS, and adjusted pre-tax margin 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,
provision for income taxes, EPS, and pre-tax margin, and they may
not be comparable to similarly titled measures employed by other
companies. |
|
|
|
|
|
|
|
|
|
Twelve months ended June
30, 2013 |
|
Earnings from continuing operations
before income taxes |
|
Provision for income taxes |
Effective Tax Rate |
Net earnings from continuing
operations |
Basic EPS from continuing
operations |
Diluted EPS from continuing
operations |
|
|
|
|
|
|
|
|
As Reported |
$ 2,076.1 |
(F) |
$ 718.0 |
34.6% |
$ 1,358.1 |
$ 2.81 |
$ 2.79 |
|
|
|
|
|
|
|
|
Add Adjustment: |
|
|
|
|
|
|
|
Goodwill impairment |
42.7 |
|
-- |
|
42.7 |
0.09 |
0.09 |
|
|
|
|
|
|
|
|
As Adjusted |
$ 2,118.8 |
(F) |
$ 718.0 |
33.9% |
$ 1,400.8 |
$ 2.90 |
$ 2.88 |
|
|
|
|
|
|
|
|
(F) For the twelve months ended
June 30, 2013 the As Reported pre-tax margin was 18.4% and the As
Adjusted pre-tax margin was 18.8%. |
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" 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. In addition, the proposed spin-off of the
Dealer Services business is subject to inherent risks and
uncertainties, including: risks that the spin-off will not be
consummated; increased demands on our management team to accomplish
the spin-off, significant transaction costs and risks from changes
in results of operations of our reportable segments. 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, 2013 should be
considered in evaluating any forward-looking statements contained
herein.
CONTACT: Investor Relations Contacts:
Elena Charles
973.974.4077
elena.charles@ADP.com
Sara Grilliot
973.974.7834
sara.grilliot@ADP.com
Media Contact:
Michael Schneider
973.567.1775
michael.schneider@ADP.com
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