For the Year, Revenues Rise 8%, Nearly
all Organic EPS From Continuing Operations Up 11%, 9% as
Adjusted Forecasting Fiscal 2015
Revenue Growth of 7% to 8% Forecasting Fiscal 2015 EPS Growth of
11% to 13%, Compared With Adjusted $3.14 in Fiscal
2014
ADP® (Nasdaq:ADP), a leading global provider of
Human Capital Management (HCM) solutions, today announced its
fiscal 2014 financial results and provided its initial outlook for
fiscal 2015. Highlights below:
Fiscal 2014 Highlights
- ADP reported 8% growth in revenues, nearly all organic, to
$12.2 billion for the year.
- Pretax and net earnings from continuing operations increased
10% and 11%, respectively.
- As adjusted, pretax and net earnings from continuing operations
both increased 8%.
- Diluted earnings per share from continuing operations of $3.11
increased 11% from $2.79 a year ago.
- As adjusted, diluted earnings per share from continuing
operations of $3.14 increased 9% from adjusted $2.88 a year
ago.
- ADP acquired 9.0 million shares of its stock for treasury at a
cost of $679 million for the year.
Fourth Quarter Fiscal 2014 Highlights
- ADP reported 10% growth in revenues, 9% organic, to $3.1
billion for the quarter.
- Pretax and net earnings from continuing operations increased
24% and 29%, respectively.
- As adjusted, pretax and net earnings from continuing operations
increased 15% and 14%, respectively.
- Diluted earnings per share from continuing operations of $0.60
increased 30% from $0.46 a year ago.
- As adjusted, diluted earnings per share from continuing
operations of $0.63 increased 15% from adjusted $0.55 a year
ago.
- During the quarter, RUN Powered by ADP® for
small businesses crossed the 380,000 client mark, and ADP Workforce
Now® for mid-sized businesses surpassed the 50,000
client mark, bringing ADP clients who now enjoy cloud-based
solutions to over 430,000.
The above "As Adjusted" results exclude:
- Non-tax deductible costs totaling $15 million, or $0.03 per
share, recorded in the fourth quarter of fiscal 2014 related to the
planned spin-off of the Dealer Services business. These costs will
be reported in discontinued operations upon completion of the
spin-off; and
- A non-tax deductible $43 million, non-cash goodwill impairment
charge, or $0.09 per share, recorded in the fourth quarter of
fiscal 2013.
Please refer to the tables at the end of this release for a
reconciliation of the "As Reported" results to the "As Adjusted"
results that exclude these items. All comparisons throughout the
remainder of this release are on an "As Adjusted" basis.
"ADP reported solid results for fiscal 2014, and we have
demonstrated our focus and commitment to sustaining our position as
a global leader of Human Capital Management through our product
innovations and our decision to spin-off the Dealer Services
business into its own independent, publicly-traded company," said
Carlos Rodriguez, president and chief executive officer,
ADP. "New business bookings growth of 7% was slightly below
our expectations, but I am pleased that new business bookings
totaled over $1.4 billion for the year as these new recurring
revenues will contribute to future revenue
growth. Additionally, our Employer Services worldwide client
revenue retention improved to 91.4% for the year, which is an
all-time high. I believe that these results are evidence that
our cloud-based solutions are resonating in the market."
"Each of our business segments posted good results for the year,
driving solid revenue growth and particularly good pretax margin
expansion," said Jan Siegmund, chief financial officer,
ADP. "ADP returned over $1.5 billion in excess cash to
shareholders in fiscal 2014 through dividends and share buybacks,
and we remain committed to our shareholder friendly actions."
High-margin client interest revenues declined from a year ago
and negatively impacted fourth quarter and full year revenue growth
by 0.2 percentage points and 0.4 percentage points, respectively.
This impact was 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 in the fourth quarter
and the full year by 1% and 3%, respectively. Pretax margin was
negatively impacted 50 basis points in the fourth quarter and 80
basis points for the full year. Additionally, diluted earnings
per share from continuing operations was negatively impacted $0.01,
or 2% for the quarter, and $0.08, or 3% for the year.
Employer Services
Employer Services' revenues grew 8% for the fourth quarter,
nearly all organic. For the year, revenues grew 8%, 7%
organically. Worldwide client retention was flat for the fourth
quarter compared with a year ago, but reached an all-time high for
the year, increasing 0.1 percentage points to 91.4%. The
number of employees on our clients' payrolls in the United States
increased for the fourth quarter and the full year by 2.9% and 2.8%
respectively, as measured on a same-store-sales basis for a subset
of our clients' payrolls ranging from small to large
businesses. Employer Services' pretax margin expanded 250
basis points for the fourth quarter and 150 basis points for the
year driven by increased operating and sales efficiencies.
Combined worldwide new business bookings for Employer Services
and PEO Services grew 5% for the fourth quarter and 7% for the full
year. New business bookings represent annualized recurring
revenues anticipated from new orders.
PEO Services
PEO Services' revenues increased 19% for the fourth quarter and
15% for the full year, all organic. PEO Services' pretax
margin increased 70 basis points for the quarter and 20 basis
points for the year driven primarily by increased operating and
sales efficiencies. Average worksite employees paid by PEO
Services increased 19% for the quarter to approximately 340,000,
and 15% for the year to approximately 319,000.
Dealer Services
Dealer Services' revenues grew 8% for the fourth quarter, 7%
organic. Revenues grew 7% for the year, nearly all
organic. For both the quarter and the year, revenues benefited
from an increase in new business installed and higher digital
advertising revenues. Dealer Services' pretax margin improved
210 basis points for the quarter and 130 basis points for the year
driven by increased operating efficiencies and the impact of
certain non-recurring items.
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 $5.5 million, or 5%, from $100.5 million a year ago to
$95.1 million, due to a decline of about 20 basis points in the
average interest yield to 1.7%, partially offset by an increase of
7% in average client funds balances from $20.4 billion to $21.8
billion.
For the full year, interest on funds held for clients declined
$47.2 million, or 11%, from $420.9 million a year ago to $373.7
million, due to a decline of about 40 basis points in the average
interest yield to 1.8%, partially offset by an increase of 8% in
average client funds balances from $19.2 billion to $20.7
billion.
Dealer Services Spin-off
As previously 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 by October of 2014. ADP expects to receive at
least $700 million in conjunction with the spin-off. ADP's "As
Adjusted" fourth quarter and full year fiscal 2014 results exclude
the impact of $15 million of spin-related costs incurred in
connection with this transaction. ADP expects to incur
additional spin-related expenses of approximately $40 to $50
million in fiscal 2015, which are excluded from the forecast
below. Spin-related costs will be reported in discontinued
operations upon completion of the spin-off.
Fiscal 2015 Forecast
No change to the current economic environment is assumed in this
forecast. Excluded from the comparisons to fiscal 2014 are the
results of discontinued operations from the sale of a business in
the third quarter of fiscal 2014. Also excluded are one-time
expenses incurred in 2014 and anticipated in 2015 in connection
with the Dealer Services spin-off. Any future share
repurchases from the proceeds ADP will receive from Dealer Services
in connection with the spin-off are excluded from the forecast.
Difficult expense and earnings comparisons are anticipated
during the first and second quarters of fiscal 2015. Increased
investments in innovation which accelerated in the second half of
fiscal 2014 that will continue into fiscal 2015, as well as higher
selling expenses because of the easier compare with last year's new
business bookings, are expected to result in additional expense of
about $30 million in each of the first two quarters of fiscal
2015.
Total ADP Fiscal 2015 Forecast
- Revenues – we anticipate 7% to 8% growth.
- Pretax Margins – we anticipate 75 to 100 basis points of pretax
margin expansion from the adjusted 18.8% in fiscal 2014.
- Effective Tax Rate – we anticipate an effective tax rate of
34.6% compared with the 33.7% in fiscal 2014.
- Diluted Earnings per Share from Continuing Operations – we
anticipate 11% to 13% growth compared to the adjusted $3.14 in
fiscal 2014.
Reportable Segments Fiscal 2015 Forecast
- Employer Services – we anticipate revenue growth of 6% to 7%
with pretax margin expansion of about 100 basis points.
- Pays per control – up 2.0% to 3.0% for the year.
- PEO Services – we anticipate 13% to 15% revenue growth with
pretax margin expansion of up to 50 basis points.
- Employer Services and PEO Services new business bookings – we
anticipate about 8% growth compared to over $1.4 billion sold in
fiscal 2014.
- Dealer Services – we anticipate revenue growth of 7% to 8%,
with pretax margin expansion of about 50 basis points.
Interest on Funds Held for Clients, Interest Income on Corporate
Funds Fiscal 2015 Forecast
The interest assumptions in our forecasts are based on Fed Funds
futures contracts and forward yield curves as of July 29,
2014. The Fed Funds futures contracts used in the client short
and corporate cash interest income forecasts anticipate increases
in the Fed Funds target rate beginning in the second half of the
fiscal year. The three-and-a-half and five-year U.S.
government agency rates based on the forward yield curves as of
July 29, 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 increase $5
to $15 million, or 1% to 4%. This is based on anticipated
growth in average client funds balances of 5% to 7% to $21.8 to
$22.2 billion, partially offset by a decrease of up to 10 basis
points in the expected average interest yield to 1.7% to 1.8%.
- Short term interest rates are expected to increase
approximately 10 basis points in the second half of the fiscal
year. As a result, we anticipate an increase of about $5
million in interest expense on our short-term financing related to
our ongoing client funds extended investment strategy, partially
offset by a slight increase in interest income on corporate
funds.
- In combination, the total contribution from the client funds
extended investment strategy is expected to increase $5 to $15
million compared with a year ago.
Web Site Schedules
The schedules of quarterly and full year revenues and pretax
earnings by reportable segment for fiscal years 2012, 2013, and
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, Thursday, July
31, 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 $12 billion in revenues and 65 years of
experience, ADP® (Nasdaq: ADP) serves approximately 637,000 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 June
30, |
Twelve Months Ended June
30, |
|
|
|
|
|
|
2014 |
2013 |
2014 |
2013 |
Revenues: |
|
|
|
|
Revenues, other than interest
on funds held for clients and PEO revenues |
$ 2,398.0 |
$ 2,215.4 |
$ 9,575.2 |
$ 8,906.0 |
Interest on funds held for
clients |
95.1 |
100.5 |
373.7 |
420.9 |
PEO revenues (A) |
580.6 |
486.9 |
2,257.6 |
1,960.7 |
Total
revenues |
3,073.7 |
2,802.8 |
12,206.5 |
11,287.6 |
|
|
|
|
|
Expenses: |
|
|
|
|
Costs of revenues: |
|
|
|
|
Operating expenses |
1,593.2 |
1,452.3 |
6,248.6 |
5,731.5 |
Systems development &
programming costs |
186.3 |
173.9 |
718.0 |
654.3 |
Depreciation &
amortization |
66.1 |
63.7 |
254.8 |
252.7 |
Total costs of revenues |
1,845.6 |
1,689.9 |
7,221.4 |
6,638.5 |
|
|
|
|
|
Selling, general &
administrative expenses |
776.5 |
729.4 |
2,762.4 |
2,617.4 |
Separation Costs |
14.9 |
-- |
14.9 |
-- |
Goodwill Impairment |
-- |
42.7 |
-- |
42.7 |
Interest expense |
1.3 |
1.8 |
6.1 |
9.1 |
Total
expenses |
2,638.3 |
2,463.8 |
10,004.8 |
9,307.7 |
|
|
|
|
|
Other income, net |
(13.9) |
(22.0) |
(72.9) |
(96.2) |
|
|
|
|
|
Earnings from continuing operations
before income taxes |
449.3 |
361.0 |
2,274.6 |
2,076.1 |
|
|
|
|
|
Provision for income taxes |
160.6 |
137.0 |
772.0 |
718.0 |
|
|
|
|
|
Net earnings from continuing
operations |
$ 288.7 |
$ 224.0 |
$ 1,502.6 |
$ 1,358.1 |
|
|
|
|
|
Earnings from discontinued operations before
income taxes |
-- |
4.1 |
19.5 |
75.0 |
|
|
|
|
|
Provision for income taxes |
-- |
1.1 |
6.2 |
27.3 |
|
|
|
|
|
Net earnings from discontinued
operations |
$ -- |
$ 3.0 |
$ 13.3 |
$ 47.7 |
|
|
|
|
|
Net earnings |
$ 288.7 |
$ 227.0 |
$ 1,515.9 |
$ 1,405.8 |
|
|
|
|
|
Basic Earnings Per Share from
Continuing Operations |
$ 0.60 |
$ 0.46 |
$ 3.14 |
$ 2.81 |
Basic Earnings Per Share from
Discontinued Operations |
-- |
0.01 |
0.03 |
0.10 |
Basic Earnings Per Share |
$ 0.60 |
$ 0.47 |
$ 3.17 |
$ 2.91 |
|
|
|
|
|
Diluted Earnings Per Share from
Continuing Operations |
$ 0.60 |
$ 0.46 |
$ 3.11 |
$ 2.79 |
Diluted Earnings Per Share from
Discontinued Operations |
-- |
0.01 |
0.03 |
0.10 |
Diluted Earnings Per Share |
$ 0.60 |
$ 0.47 |
$ 3.14 |
$ 2.89 |
|
|
|
|
|
Dividends declared per common
share |
$ 0.480 |
$ 0.435 |
$ 1.875 |
$ 1.700 |
|
|
|
|
|
|
|
|
|
|
Components of other income,
net: |
|
|
|
|
Interest income on corporate
funds |
$ (13.8) |
$ (13.2) |
$ (56.2) |
$ (64.5) |
Realized gains on
available-for-sale securities |
(0.7) |
(10.8) |
(20.4) |
(32.1) |
Realized losses on
available-for-sale securities |
0.7 |
2.0 |
3.9 |
3.5 |
Gains on sales of
buildings |
-- |
-- |
-- |
(2.2) |
Other, net |
(0.1) |
-- |
(0.2) |
(0.9) |
Total other income, net |
$ (13.9) |
$ (22.0) |
$ (72.9) |
$ (96.2) |
|
|
|
|
|
|
|
|
|
|
(A) Professional Employer
Organization ("PEO") revenues are net of direct pass-through costs,
primarily consisting of payroll wages and payroll taxes, of
$5,707.8 and $4,701.7 for the three months ended June 30, 2014 and
2013, respectively, and $23,192.2 and $19,956.2 for the twelve
months ended June 30, 2014 and 2013, respectively. |
Automatic Data
Processing, Inc. and Subsidiaries |
Condensed Consolidated
Balance Sheets |
(In
millions) |
(Unaudited) |
|
|
|
|
June 30, 2014 |
June 30, 2013 |
Assets |
|
|
Cash and cash equivalents/Short-term
marketable securities (B) (C) |
$ 4,015.8 |
$ 1,727.1 |
Other current assets |
2,559.6 |
2,241.9 |
Assets of discontinued operations |
-- |
16.7 |
Total current assets before
funds held for clients |
6,575.4 |
3,985.7 |
Funds held for clients |
19,258.0 |
22,228.8 |
Total current assets |
25,833.4 |
26,214.5 |
|
|
|
Long-term marketable securities (C) |
54.1 |
314.0 |
Property, plant and equipment, net |
777.4 |
728.6 |
Other non-current assets |
5,386.8 |
5,011.0 |
Total assets |
$ 32,051.7 |
$ 32,268.1 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Obligations under commercial paper borrowings
(B) |
$ 2,173.0 |
$ -- |
Other current liabilities |
2,771.6 |
2,526.4 |
Obligations under reverse repurchase
agreements (C) |
-- |
245.9 |
Liabilities of discontinued operations |
-- |
4.2 |
Client funds obligations |
18,963.4 |
21,956.3 |
Total current liabilities |
23,908.0 |
24,732.8 |
|
|
|
Long-term debt |
11.5 |
14.7 |
Other non-current liabilities |
1,462.0 |
1,330.7 |
Total liabilities |
25,381.5 |
26,078.2 |
|
|
|
Total stockholders' equity |
6,670.2 |
6,189.9 |
Total liabilities and
stockholders' equity |
$ 32,051.7 |
$ 32,268.1 |
|
|
|
|
|
|
(B) As of June 30, 2014, $2,015.8
million of short-term marketable securities and $183.8 million of
cash and cash equivalents are related to the Company's outstanding
commercial paper borrowings. |
(C) 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 June
30, |
|
|
|
2014 |
2013 |
Change |
% Change |
Revenues from continuing operations (D) |
|
|
|
|
Employer Services |
$ 2,139.1 |
$ 1,974.5 |
$ 164.6 |
8% |
PEO Services |
584.0 |
490.1 |
93.9 |
19% |
Dealer Services |
499.4 |
464.3 |
35.1 |
8% |
Other (E) |
(148.8) |
(126.1) |
(22.7) |
n/m |
Total revenues from continuing
operations |
$ 3,073.7 |
$ 2,802.8 |
$ 270.9 |
10% |
|
|
|
|
|
Pre-tax earnings from continuing operations
(D) |
|
|
|
|
Employer Services |
$ 561.8 |
$ 469.5 |
$ 92.3 |
20% |
PEO Services |
62.4 |
48.8 |
13.6 |
28% |
Dealer Services |
113.1 |
95.2 |
17.9 |
19% |
Other (E) |
(288.0) |
(252.5) |
(35.5) |
n/m |
Total pre-tax earnings from
continuing operations |
$ 449.3 |
$ 361.0 |
$ 88.3 |
24% |
|
|
|
|
|
Adjusted total pre-tax earnings
from continuing operations (F) |
$ 464.2 |
$ 403.7 |
$ 60.5 |
15% |
|
|
|
|
|
Pre-tax margin (D) |
|
|
|
|
Employer Services |
26.3% |
23.8% |
2.5% |
|
PEO Services |
10.7% |
10.0% |
0.7% |
|
Dealer Services |
22.6% |
20.5% |
2.1% |
|
Other |
n/m |
n/m |
n/m |
|
Total pre-tax margin |
14.6% |
12.9% |
1.7% |
|
|
|
|
|
|
Adjusted total pre-tax margin
from continuing operations (F) |
15.1% |
14.4% |
0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2014 |
2013 |
Change |
% Change |
Revenues from continuing operations (D) |
|
|
|
|
Employer Services |
$ 8,535.2 |
$ 7,924.9 |
$ 610.3 |
8% |
PEO Services |
2,270.9 |
1,973.2 |
297.7 |
15% |
Dealer Services |
1,951.4 |
1,820.2 |
131.2 |
7% |
Other (E) |
(551.0) |
(430.7) |
(120.3) |
n/m |
Total revenues from continuing
operations |
$ 12,206.5 |
$ 11,287.6 |
$ 918.9 |
8% |
|
|
|
|
|
Pre-tax earnings from continuing operations
(D) |
|
|
|
|
Employer Services |
$ 2,517.8 |
$ 2,216.8 |
$ 301.0 |
14% |
PEO Services |
234.3 |
199.7 |
34.6 |
17% |
Dealer Services |
428.1 |
375.3 |
52.8 |
14% |
Other (E) |
(905.6) |
(715.7) |
(189.9) |
n/m |
Total pre-tax earnings from
continuing operations |
$ 2,274.6 |
$ 2,076.1 |
$ 198.5 |
10% |
|
|
|
|
|
Adjusted total pre-tax earnings
from continuing operations (F) |
$ 2,289.5 |
$ 2,118.8 |
$ 170.7 |
8% |
|
|
|
|
|
Pre-tax margin (D) |
|
|
|
|
Employer Services |
29.5% |
28.0% |
1.5% |
|
PEO Services |
10.3% |
10.1% |
0.2% |
|
Dealer Services |
21.9% |
20.6% |
1.3% |
|
Other |
n/m |
n/m |
n/m |
|
Total pre-tax margin |
18.6% |
18.4% |
0.2% |
|
|
|
|
|
|
Adjusted total pre-tax margin
from continuing operations (F) |
18.8% |
18.8% |
0.0% |
|
|
|
|
|
|
(D) 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. |
(E) The three and twelve months
ended June 30, 2014 include $14.9 of non tax-deductible costs
directly attributable to the Company's proposed separation of its
Dealer Services business, and the three and twelve months ended
June 30, 2013 include a non tax-deductible goodwill impairment
charge of $42.7. |
(F) The three and twelve months
ended June 30, 2014 have been adjusted to exclude $14.9 of non
tax-deductible costs directly attributable to the Company's
proposed separation of its Dealer Services business, and the three
and twelve months ended June 30, 2013 have been adjusted to exclude
a non tax-deductible goodwill impairment charge of $42.7. |
n/m - not meaningful |
|
|
|
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Other Selected Financial
Data |
(Dollars in millions,
except per share amounts) |
(Unaudited) |
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
2014 |
2013 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 288.7 |
$ 224.0 |
$ 64.7 |
29% |
Adjusted net earnings from continuing
operations (G) |
$ 303.6 |
$ 266.7 |
$ 36.9 |
14% |
Net earnings |
$ 288.7 |
$ 227.0 |
$ 61.7 |
27% |
|
|
|
|
|
Basic weighted average shares
outstanding |
478.5 |
482.5 |
(4.0) |
(1)% |
Basic earnings per share from continuing
operations |
$ 0.60 |
$ 0.46 |
$ 0.14 |
30% |
Adjusted basic earnings per share from
continuing operations (G) |
$ 0.63 |
$ 0.55 |
$ 0.08 |
15% |
Basic earnings per share |
$ 0.60 |
$ 0.47 |
$ 0.13 |
28% |
|
|
|
|
|
Diluted weighted average shares
outstanding |
482.7 |
486.7 |
(4.0) |
(1)% |
Diluted earnings per share from continuing
operations |
$ 0.60 |
$ 0.46 |
$ 0.14 |
30% |
Adjusted diluted earnings per share from
continuing operations (G) |
$ 0.63 |
$ 0.55 |
$ 0.08 |
15% |
Diluted earnings per share |
$ 0.60 |
$ 0.47 |
$ 0.13 |
28% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2014 |
2013 |
Change |
% Change |
Earnings per share information: |
|
|
|
|
Net earnings from continuing operations |
$ 1,502.6 |
$ 1,358.1 |
$ 144.5 |
11% |
Adjusted net earnings from continuing
operations (G) |
$ 1,517.5 |
$ 1,400.8 |
$ 116.7 |
8% |
Net earnings |
$ 1,515.9 |
$ 1,405.8 |
$ 110.1 |
8% |
|
|
|
|
|
Basic weighted average shares
outstanding |
478.9 |
482.7 |
(3.8) |
(1)% |
Basic earnings per share from continuing
operations |
$ 3.14 |
$ 2.81 |
$ 0.33 |
12% |
Adjusted basic earnings per share from
continuing operations (G) |
$ 3.17 |
$ 2.90 |
$ 0.27 |
9% |
Basic earnings per share |
$ 3.17 |
$ 2.91 |
$ 0.26 |
9% |
|
|
|
|
|
Diluted weighted average shares
outstanding |
483.1 |
487.1 |
(4.0) |
(1)% |
Diluted earnings per share from continuing
operations |
$ 3.11 |
$ 2.79 |
$ 0.32 |
11% |
Adjusted diluted earnings per share from
continuing operations (G) |
$ 3.14 |
$ 2.88 |
$ 0.26 |
9% |
Diluted earnings per share |
$ 3.14 |
$ 2.89 |
$ 0.25 |
9% |
|
|
|
|
|
(G) The three and twelve months
ended June 30, 2014 have been adjusted to exclude $14.9 of non
tax-deductible costs directly attributable to the Company's
proposed separation of its Dealer Services business and the three
and twelve months ended June 30, 2013 have been adjusted to exclude
a non tax-deductible goodwill impairment charge of $42.7. |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
Key Statistics: |
2014 |
2013 |
|
|
Internal revenue growth: |
|
|
|
|
Employer Services (H) |
8% |
7% |
|
|
PEO Services |
19% |
11% |
|
|
Dealer Services (H) |
7% |
9% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control -
U.S. |
2.9% |
2.8% |
|
|
Change in client revenue
retention percentage - worldwide |
0.0 pts |
0.8 pts |
|
|
Employer Services/PEO new
business bookings growth - worldwide |
5% |
14% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at
end of period |
341,000 |
290,000 |
|
|
Average paid PEO worksite
employees during the period |
340,000 |
286,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
Key Statistics: |
2014 |
2013 |
|
|
Internal revenue growth: |
|
|
|
|
Employer Services (H) |
7% |
6% |
|
|
PEO Services |
15% |
11% |
|
|
Dealer Services (H) |
7% |
8% |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control -
U.S. |
2.8% |
2.8% |
|
|
Change in client revenue
retention percentage - worldwide |
0.1 pt |
0.4 pts |
|
|
Employer Services/PEO new
business bookings growth - worldwide |
7% |
11% |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at
end of period |
341,000 |
290,000 |
|
|
Average paid PEO worksite
employees during the period |
319,000 |
277,000 |
|
|
|
|
|
|
|
(H) 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 June
30, |
|
|
|
2014 |
2013 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.8 |
$ 1.8 |
$ (0.0) |
(2)% |
Corporate extended |
2.3 |
2.5 |
(0.2) |
(6)% |
Total corporate |
4.1 |
4.3 |
(0.2) |
(4)% |
Funds held for clients |
21.8 |
20.4 |
1.4 |
7% |
Total |
$ 25.9 |
$ 24.7 |
$ 1.2 |
5% |
|
|
|
|
|
Average interest rates earned exclusive
of |
|
|
|
|
realized losses (gains)
on: |
|
|
|
|
Corporate, other than corporate
extended |
0.9% |
0.6% |
|
|
Corporate extended |
1.7% |
1.7% |
|
|
Total corporate |
1.4% |
1.2% |
|
|
Funds held for clients |
1.7% |
2.0% |
|
|
Total |
1.7% |
1.8% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 324.4 |
$ 287.4 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper
borrowings |
$ 2.0 |
$ 2.1 |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.3 |
0.4 |
|
|
|
$ 2.3 |
$ 2.5 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper
borrowings |
0.1% |
0.1% |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.5% |
0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 95.1 |
$ 100.5 |
$ (5.5) |
(5)% |
Corporate extended interest income (I) |
9.9 |
10.3 |
(0.4) |
(4)% |
Corporate interest expense-short-term
financing (I) |
(1.0) |
(1.3) |
0.3 |
24% |
|
$ 104.0 |
$ 109.6 |
$ (5.6) |
(5)% |
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2014 |
2013 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.5 |
$ 1.4 |
$ 0.0 |
3% |
Corporate extended |
2.6 |
2.8 |
(0.2) |
(6)% |
Total corporate |
4.1 |
4.2 |
(0.1) |
(3)% |
Funds held for clients |
20.7 |
19.2 |
1.6 |
8% |
Total |
$ 24.8 |
$ 23.4 |
$ 1.4 |
6% |
|
|
|
|
|
Average interest rates earned exclusive
of |
|
|
|
|
realized losses (gains)
on: |
|
|
|
|
Corporate, other than corporate
extended |
0.9% |
0.7% |
|
|
Corporate extended |
1.7% |
1.9% |
|
|
Total corporate |
1.4% |
1.5% |
|
|
Funds held for clients |
1.8% |
2.2% |
|
|
Total |
1.7% |
2.1% |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 324.4 |
$ 287.4 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper
borrowings |
$ 2.3 |
$ 2.4 |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.4 |
0.4 |
|
|
|
$ 2.6 |
$ 2.8 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper
borrowings |
0.1% |
0.2% |
|
|
U.S. & Canadian reverse
repurchase agreement borrowings |
0.5% |
0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 373.7 |
$ 420.9 |
$ (47.2) |
(11)% |
Corporate extended interest income (I) |
43.2 |
54.3 |
(11.1) |
(20)% |
Corporate interest expense-short-term
financing (I) |
(4.5) |
(6.9) |
2.4 |
35% |
|
$ 412.4 |
$ 468.3 |
$ (55.9) |
(12)% |
|
|
|
|
|
|
|
|
|
|
(I) 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, |
|
|
|
2014 |
2013 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 9.9 |
$ 10.3 |
|
|
All other interest income |
3.9 |
2.9 |
|
|
Total interest income on
corporate funds |
$ 13.8 |
$ 13.2 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 1.0 |
$ 1.3 |
|
|
All other interest expense |
0.4 |
0.5 |
|
|
Total interest expense |
$ 1.3 |
$ 1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June
30, |
|
|
|
2014 |
2013 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 43.2 |
$ 54.3 |
|
|
All other interest income |
13.0 |
10.2 |
|
|
|
$ 56.2 |
$ 64.5 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 4.5 |
$ 6.9 |
|
|
All other interest expense |
1.6 |
2.2 |
|
|
Total interest expense |
$ 6.1 |
$ 9.1 |
|
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Consolidated Statement of
Adjusted / Non-GAAP Financial Information |
(In millions, except per
share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
The following tables reconcile
the Company's results for the three and twelve months ended June
30, 2014 to adjusted results that exclude non tax-deductible costs
directly attributable to the Company's proposed separation of its
Dealer Services business, and for the three and 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. |
|
|
|
|
|
|
|
|
|
Three months ended June
30, 2014 |
|
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 |
$ 449.3 |
(J) |
$ 160.6 |
35.7% |
$ 288.7 |
$ 0.60 |
$ 0.60 |
|
|
|
|
|
|
|
|
Add Adjustment: |
|
|
|
|
|
|
|
Separation Costs |
14.9 |
|
-- |
|
14.9 |
0.03 |
0.03 |
|
|
|
|
|
|
|
|
As Adjusted |
$ 464.2 |
(J) |
$ 160.6 |
34.6% |
$ 303.6 |
$ 0.63 |
$ 0.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended June
30, 2014 |
|
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 |
$ 2,274.6 |
(K) |
$ 772.0 |
33.9% |
$ 1,502.6 |
$ 3.14 |
$ 3.11 |
|
|
|
|
|
|
|
|
Add Adjustment: |
|
|
|
|
|
|
|
Separation Costs |
14.9 |
|
-- |
|
14.9 |
0.03 |
0.03 |
|
|
|
|
|
|
|
|
As Adjusted |
$ 2,289.5 |
(K) |
$ 772.0 |
33.7% |
$ 1,517.5 |
$ 3.17 |
$ 3.14 |
|
|
|
|
|
|
|
|
(J) For the three months ended
June 30, 2014 the As Reported pre-tax margin was 14.6% and the As
Adjusted pre-tax margin was 15.1%. |
(K) For the twelve months ended
June 30, 2014 the As Reported pre-tax margin was 18.6% and the As
Adjusted pre-tax margin was 18.8%. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three 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 |
$ 361.0 |
(L) |
$ 137.0 |
38.0% |
$ 224.0 |
$ 0.46 |
$ 0.46 |
|
|
|
|
|
|
|
|
Add Adjustment: |
|
|
|
|
|
|
|
Goodwill impairment |
42.7 |
|
-- |
|
42.7 |
0.09 |
0.09 |
|
|
|
|
|
|
|
|
As Adjusted |
$ 403.7 |
(L) |
$ 137.0 |
33.9% |
$ 266.7 |
$ 0.55 |
$ 0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
(M) |
$ 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 |
(M) |
$ 718.0 |
33.9% |
$ 1,400.8 |
$ 2.90 |
$ 2.88 |
|
|
|
|
|
|
|
|
(L) For the three months ended
June 30, 2013 the As Reported pre-tax margin was 12.9% and the As
Adjusted pre-tax margin was 14.4%. |
(M) 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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