- Worldwide new business bookings grew 13% for the quarter
- Revenues increased 6% to $2.7 billion, 9% on a constant dollar
basis
- Diluted earnings per share from continuing operations increased
16% to $0.72, adjusted diluted earnings per share from continuing
operations increased 10% to $0.68, 11% on a constant dollar
basis
- ADP completed a $2.0 billion offering of senior notes during
the quarter and intends to use the proceeds to repurchase stock
over the next 12 to 24 month period, subject to market
conditions
- ADP acquired 4.2 million shares of its stock for treasury at a
cost of $334 million in the quarter
ADP® (Nasdaq:ADP), a leading global provider of Human Capital
Management (HCM) solutions, today announced its first quarter
fiscal 2016 financial results. Compared to last year's first
quarter, revenues grew 6% to $2.7 billion, 9% on a constant dollar
basis. Adjusted EBIT, which excludes a $29 million gain on the sale
of our AdvancedMD business, grew 6% to $477 million, or 8% on a
constant dollar basis. Adjusted EBIT margin expanded about 10 basis
points in the quarter to 17.6%. Diluted earnings per share from
continuing operations increased 16% to $0.72, and adjusted diluted
earnings per share from continuing operations increased 10% to
$0.68, 11% on a constant dollar basis, reflecting a lower effective
tax rate and fewer shares outstanding compared with last year's
first quarter.
Constant dollar, adjusted EBIT, adjusted EBIT margin, and
adjusted diluted earnings per share from continuing operations are
non-GAAP financial measures. ADP believes that the EBIT performance
measures best reflect the underlying operations of the business
model following the introduction of long-term debt to our capital
structure during the first quarter. For ADP's definition of EBIT,
see the paragraph "Non-GAAP Financial Information" at the end of
this release. Please refer to the accompanying financial tables for
a reconciliation of non-GAAP financial measures to their comparable
GAAP measures.
"ADP had a good start to fiscal 2016, and we continue to
experience very good momentum in new business bookings," said
Carlos Rodriguez, president and chief executive officer, ADP. "Our
new business bookings performance for the quarter reflects the
confidence our clients have in ADP's ability to assist them with
their HCM needs, including compliance with the Affordable Care Act.
As a result of this solid start, we now expect new business
bookings growth of at least 10% for fiscal 2016."
"Our business performed well in the quarter, posting solid
revenue growth despite continued headwinds from foreign currency
translation," said Jan Siegmund, chief financial officer, ADP.
"Because of the added expense pressure we expect from continued
strong new business bookings, along with investments required to
convert these bookings into new recurring revenue, we now expect
adjusted diluted earnings per share growth will be at the lower end
of our 12% to 14% range for the fiscal year. We believe these
investments will position ADP well for future growth."
First Quarter 2016 Segment Results
Employer Services – Employer Services offers a comprehensive
range of HCM and business outsourcing solutions.
- Employer Services revenues increased 3% compared to last year's
first quarter, 7% on a constant dollar basis.
- The number of employees on ADP clients' payrolls in the United
States increased 2.3% for the first quarter when measured on a
same-store-sales basis for a subset of clients ranging from small
to large businesses.
- Employer Services client revenue retention declined 160 basis
points compared to last year's first quarter from elevated losses
in legacy client platforms.
- Employer Services segment margin decreased approximately 50
basis points compared to last year's first quarter. This decrease
was primarily driven by increased selling expenses and anticipated
investments made in operational resources to support new
business.
PEO Services – PEO Services provides comprehensive employment
administration outsourcing solutions through a co-employment
relationship.
- PEO Services revenues increased 18% compared to last year's
first quarter.
- PEO Services segment margin increased approximately 130 basis
points compared to last year's first quarter, primarily driven by
lower selling expenses and operational efficiencies.
- Average worksite employees paid by PEO Services increased 13%
for the quarter to approximately 389,000.
Interest on Funds Held for Clients
The safety, liquidity and diversification of ADP clients' funds
are the foremost objectives of the company's 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 first quarter, interest on funds held for clients
decreased 3% to $88 million from $90 million a year ago.
- Average client funds balances increased 3% in the first quarter
to $19.4 billion compared to $18.7 billion a year ago. On a
constant dollar basis, average client funds balances increased
6%.
- The average interest yield on client funds declined about 10
basis points in the first quarter to 1.8% compared to 1.9% a year
ago.
Other Notable First Quarter Items
In September, ADP issued $2.0 billion in debt securities
comprised of $1.0 billion of 2.250% senior notes due September 2020
and $1.0 billion of 3.375% senior notes due September 2025. ADP
intends to use the proceeds of this debt offering to repurchase
shares of its common stock over the next 12 to 24 month time
period, subject to market conditions.
Also in September, ADP completed the sale of its AdvancedMD
business for a gain of $29 million as part of its strategy to
become fully focused on HCM. The results of operations of this
business have been restated from the Employer Services segment to
the "Other" segment to best reflect the performance of the Employer
Services business for comparable periods. The restated segment
financials are available in the supplemental schedules on ADP's
investor relations website at investors.adp.com.
Fiscal 2016 Outlook
ADP's fiscal 2016 outlook excludes the impact of the gain on
sale of the AdvancedMD business.
Reflecting strong first quarter new business bookings results,
ADP now anticipates growth in worldwide new business bookings of at
least 10% over $1.6 billion sold in fiscal 2015, compared to our
prior forecast of 8% to 10%.
Due to the divestiture of the AdvancedMD business, ADP now
anticipates revenue growth of 7% to 8%, compared to our prior
forecast of 7% to 9%. This forecast includes an anticipated
negative impact of one to two percentage points due to unfavorable
foreign currency translation.
Revenue growth for fiscal 2016 is expected to be lower in the
first half of the fiscal year due to continued negative impacts
expected from foreign currency translation, as well as the expected
timing of starts that will convert to new recurring revenue from
new business bookings sold during the fourth quarter of fiscal
2015. Therefore, ADP anticipates revenue growth to be below the
full year guidance range of 7% to 8% in the second quarter of
fiscal 2016, and above the full year guidance range of 7% to 8% in
the third and fourth quarters of fiscal 2016. On a constant dollar
basis, revenue growth is anticipated to be 8% to 9% for the full
year.
The full-year fiscal 2016 forecast for adjusted diluted earnings
per share growth remains unchanged at 12% to 14%, or 13% to 15% on
a constant dollar basis. ADP now expects this growth to be at the
lower end of the range as a result of expected additional selling
expenses due to an increased forecast for new business bookings
growth, as well as expected investments in operational resources to
support additional new business sold. This forecast includes about
$43 million in additional net interest expense from the $2.0
billion in senior notes issued during the quarter and the expected
impact of share repurchases that will occur during the fiscal year,
which together are not expected to have a material impact on fiscal
2016 adjusted diluted earnings per share. These share repurchases
are assumed to be completed ratably over the 24 month period
beginning on October 1, 2015. No further share repurchases are
contemplated beyond the debt funded share repurchases and those
intended to offset future dilution related to employee benefit
plans.
ADP's earnings growth forecast assumes adjusted EBIT margin
expansion of about 50 basis points from 18.8% in fiscal 2015. ADP
expects additional expense in the second quarter of the fiscal year
resulting from investments in operational resources to support
higher-than-anticipated new business bookings in the fourth quarter
of fiscal 2015. This additional expense, combined with the expected
lower revenue growth in the second quarter, is anticipated to
result in EBIT that is flat compared to the prior year's second
quarter.
ADP still anticipates an adjusted effective tax rate of 33.7%
compared with 33.5% in fiscal 2015.
Reportable Segments Fiscal 2016 Forecast
- For the Employer Services segment, ADP still anticipates
revenue growth of 5% to 6%, or 6% to 7% on a constant dollar basis.
ADP still expects segment margin expansion of about 100 basis
points for Employer Services.
- ADP still expects pays per control to increase 2.0% to 3.0% for
the year.
- For the PEO Services segment, ADP continues to anticipate 15%
to 17% revenue growth with segment margin expansion of about 50
basis points.
Client Funds Extended Investment Strategy Fiscal 2016
Forecast
The interest assumptions in our forecasts are based on Fed Funds
futures contracts and forward yield curves as of October 26,
2015. The Fed Funds futures contracts used in the client short
and corporate cash interest income forecasts assumes a moderate
increase in the Fed Funds toward the end 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 October 26,
2015 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 up
to $5 million with up to 1% growth compared with our prior forecast
of an increase of $5 to $15 million or 1% to 4%. This change
is due to lower expected short-term and fixed income new purchase
rates and is based on anticipated growth in average client funds
balances of 3% to 5%, to $22.5 to $22.9 billion, and an average
yield of 1.7%, which is anticipated to be flat compared to the
fiscal 2015 average yield of 1.7%.
- The total contribution from the client funds extended
investment strategy is expected to be about flat compared to last
year, compared to our prior forecast of an increase of up to $10
million.
Investor Webcast Today
ADP will host a conference call for financial analysts today,
Wednesday, October 28, 2015 at 8:30 a.m. EDT. The conference
call will be webcast live on ADP's website at investors.adp.com and
will be available for replay following the call. A slide
presentation will be available shortly before the webcast.
Supplemental financial information including schedules of
quarterly and full year reportable segment revenues and earnings
for fiscal years 2014 and 2015, as well as details of the first
quarter fiscal 2016 results from the client funds extended
investment strategy, are posted to ADP's website at
investors.adp.com. ADP news releases, current financial
information, SEC filings and Investor Relations presentations are
accessible at the same website.
Non-GAAP Financial Information
The company has presented certain financial data that are
considered non-GAAP financial measures and are reconciled to their
comparable GAAP measures in the accompanying financial tables.
The EBIT performance measures include interest income earned
on investments associated with our client funds extended investment
strategy and interest expense on borrowings related to our client
funds extended investment strategy. ADP believes these amounts
to be fundamental to the underlying operations of our business
model. ADP's calculation of EBIT may differ from similarly
titled measures used by other companies.
The presentation of growth rates on a constant dollar basis
represent a non-GAAP measure and are calculated by restating
current period results into U.S. dollars using the comparable prior
period's exchange rates.
About ADP (Nasdaq:ADP)
Powerful technology plus a human touch. Companies of all
types and sizes around the world rely on ADP's cloud software and
expert insights to help unlock the potential of their people.
HR. Talent. Benefits. Payroll.
Compliance. Working together to build a better
workforce. For more information, visit ADP.com.
|
Automatic Data
Processing, Inc. and Subsidiaries |
Statements of
Consolidated Earnings |
(In millions, except per
share amounts) |
(Unaudited) |
|
Three Months Ended |
|
September 30, |
|
2015 |
2014 |
|
|
Revenues: |
|
|
|
|
Revenues, other than interest on funds
held for clients and PEO revenues |
$ 1,928.7 |
$ 1,884.4 |
|
|
Interest on funds held for clients |
87.8 |
90.2 |
|
|
PEO revenues (A) |
697.5 |
591.5 |
|
|
Total revenues |
2,714.0 |
2,566.1 |
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
Costs of revenues: |
|
|
|
|
Operating expenses |
1,439.8 |
1,361.2 |
|
|
Systems development & programming
costs |
156.1 |
145.6 |
|
|
Depreciation & amortization |
50.6 |
51.5 |
|
|
Total costs of revenues |
1,646.5 |
1,558.3 |
|
|
|
|
|
|
|
Selling, general & administrative
expenses |
605.3 |
576.0 |
|
|
Interest expense |
4.9 |
1.9 |
|
|
Total expenses |
2,256.7 |
2,136.2 |
|
|
|
|
|
|
|
Other income, net |
(47.7) |
(20.5) |
|
|
|
|
|
|
|
Earnings from continuing operations
before income taxes |
505.0 |
450.4 |
|
|
|
|
|
|
|
Provision for income taxes |
167.5 |
153.8 |
|
|
|
|
|
|
|
Net earnings from continuing
operations |
$ 337.5 |
$ 296.6 |
|
|
|
|
|
|
|
Earnings from discontinued operations before
income taxes |
(1.4) |
67.7 |
|
|
|
|
|
|
|
Provision for income taxes |
(0.5) |
69.1 |
|
|
|
|
|
|
|
Net earnings from discontinued
operations |
$ (0.9) |
$ (1.4) |
|
|
|
|
|
|
|
Net earnings |
$ 336.6 |
$ 295.2 |
|
|
|
|
|
|
|
Basic Earnings Per Share from Continuing
Operations |
$ 0.73 |
$ 0.62 |
|
|
Basic Earnings Per Share from
Discontinued Operations |
— |
— |
|
|
Basic Earnings Per Share |
$ 0.73 |
$ 0.62 |
|
|
|
|
|
|
|
Diluted Earnings Per Share from
Continuing Operations |
$ 0.72 |
$ 0.62 |
|
|
Diluted Earnings Per Share from
Discontinued Operations |
— |
— |
|
|
Diluted Earnings Per Share |
$ 0.72 |
$ 0.61 |
|
|
|
|
|
|
|
Dividends declared per common share |
$ 0.490 |
$ 0.480 |
|
|
|
|
|
|
|
Components of other income,
net: |
|
|
|
|
Interest income on corporate funds |
$ (18.6) |
$ (18.3) |
|
|
Realized gains on available-for-sale
securities |
(0.9) |
(1.0) |
|
|
Realized losses on available-for-sale
securities |
0.9 |
0.2 |
|
|
Gain on sale of notes receivable |
— |
(1.4) |
|
|
Gain on sale of business |
(29.1) |
— |
|
|
Total other income, net |
$ (47.7) |
$ (20.5) |
|
|
|
(A) Professional Employer
Organization ("PEO") revenues are net of direct pass-through costs,
primarily consisting of payroll wages and payroll taxes, of
$6,865.3 million and $5,736.2 million for the three months ended
September 30, 2015 and 2014, respectively. |
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Condensed Consolidated
Balance Sheets |
(In
millions) |
(Unaudited) |
|
September 30, |
June 30, |
|
|
|
2015 |
2015 |
|
|
Assets |
|
|
|
|
Cash and cash equivalents/Short-term
marketable securities |
$ 3,211.9 |
$ 1,665.9 |
|
|
Other current assets |
2,455.5 |
2,278.0 |
|
|
Total current assets before funds held
for clients |
5,667.4 |
3,943.9 |
|
|
Funds held for clients |
24,508.7 |
24,865.3 |
|
|
Total current assets |
30,176.1 |
28,809.2 |
|
|
|
|
|
|
|
Long-term marketable securities |
21.3 |
28.9 |
|
|
Property, plant and equipment, net |
680.3 |
672.7 |
|
|
Other non-current assets |
3,502.6 |
3,599.7 |
|
|
Total assets |
$ 34,380.3 |
$ 33,110.5 |
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
Other current liabilities |
2,347.1 |
2,463.2 |
|
|
Client funds obligations |
24,240.2 |
24,650.5 |
|
|
Total current liabilities |
26,587.3 |
27,113.7 |
|
|
|
|
|
|
|
Long-term debt |
1,995.2 |
9.2 |
|
|
Other non-current liabilities |
1,167.6 |
1,179.1 |
|
|
Total liabilities |
29,750.1 |
28,302.0 |
|
|
|
|
|
|
|
Total stockholders' equity |
4,630.2 |
4,808.5 |
|
|
Total liabilities and stockholders'
equity |
$ 34,380.3 |
$ 33,110.5 |
|
|
|
|
Automatic Data
Processing, Inc. and Subsidiaries |
Condensed Statements of
Consolidated Cash Flows |
(In
millions) |
(Unaudited) |
Three Months Ended |
|
September 30, |
|
2015 |
2014 |
|
|
Cash Flows from Operating
Activities: |
|
|
|
|
Net earnings |
$ 336.6 |
$ 295.2 |
|
|
Adjustments to reconcile net earnings to cash
flows provided by operating activities |
129.5 |
95.7 |
|
|
Changes in operating assets and liabilities,
net of effects from acquisitions and divestitures of
businesses |
(372.9) |
(218.1) |
|
|
Proceeds from the sale of notes
receivable |
— |
207.2 |
|
|
Operating activities of discontinued
operations |
— |
(1.8) |
|
|
Net cash flows provided by operating
activities |
93.2 |
378.2 |
|
|
|
|
|
|
|
Cash Flows from Investing
Activities: |
|
|
|
|
Purchases and proceeds from corporate and
client funds marketable securities |
395.5 |
(299.0) |
|
|
Net (increase) / decrease in restricted cash
and cash equivalents held to satisfy client funds obligations |
(137.8) |
1.5 |
|
|
Capital expenditures |
(55.6) |
(36.1) |
|
|
Additions to intangibles |
(45.4) |
(43.9) |
|
|
Dividend received from CDK Global, Inc., net
of cash retained |
— |
645.0 |
|
|
Other investing activities |
162.5 |
15.5 |
|
|
Investing activities of discontinued
operations |
— |
(15.9) |
|
|
Net cash flows provided by investing
activities |
319.2 |
267.1 |
|
|
|
|
|
|
|
Cash Flows from Financing
Activities: |
|
|
|
|
Net (decrease) / increase in client funds
obligations |
(275.1) |
47.3 |
|
|
Proceeds from debt issuance |
1,986.4 |
— |
|
|
Repurchases of common stock |
(308.1) |
(61.2) |
|
|
Dividends paid |
(229.0) |
(229.8) |
|
|
Net repayments of commercial paper
borrowings |
— |
(236.0) |
|
|
Other financing activities |
(30.1) |
60.1 |
|
|
Financing activities of discontinued
operations |
— |
1.6 |
|
|
Net cash flows provided by / (used
in) financing activities |
1,144.1 |
(418.0) |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and
cash equivalents |
(11.1) |
(35.2) |
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
1,545.4 |
192.1 |
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of
period |
1,639.3 |
1,983.6 |
|
|
Cash and cash equivalents, end of period |
3,184.7 |
2,175.7 |
|
|
Less cash and cash equivalents of
discontinued operations, end of period |
— |
2.2 |
|
|
Cash and cash equivalents of continuing
operations, end of period |
$ 3,184.7 |
$ 2,173.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Automatic Data Processing, Inc. and
Subsidiaries |
|
|
|
|
Other Selected Financial
Data |
|
|
|
|
(Dollars in millions, except per
share amounts) |
|
|
|
|
(Unaudited) |
Three Months Ended |
|
|
|
September 30, |
% Change |
|
|
|
As |
Constant |
|
2015 |
2014 |
Reported |
Dollar Basis |
Segment revenues from continuing
operations |
|
|
|
|
Employer Services |
$ 2,130.8 |
$ 2,071.9 |
3 % |
7 % |
PEO Services |
701.5 |
594.9 |
18 % |
18 % |
Other |
(118.3) |
(100.7) |
n/m |
n/m |
Total revenues from continuing
operations |
$ 2,714.0 |
$ 2,566.1 |
6 % |
9 % |
|
|
|
|
|
Segment earnings from continuing
operations |
|
|
|
|
Employer Services |
$ 587.2 |
$ 580.8 |
1 % |
3 % |
PEO Services |
88.4 |
67.0 |
32 % |
32 % |
Other |
(170.6) |
(197.4) |
n/m |
n/m |
Total pretax earnings from continuing
operations |
$ 505.0 |
$ 450.4 |
12 % |
14 % |
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
|
|
Segment margin |
2015 |
2014 |
Change |
|
Employer Services |
27.6 % |
28.0 % |
(0.5)% |
|
PEO Services |
12.6 % |
11.3 % |
1.3 % |
|
Other |
n/m |
n/m |
n/m |
|
Total pretax margin |
18.6 % |
17.6 % |
1.1 % |
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
% Change |
|
|
|
As |
Constant |
Earnings per share information: |
2015 |
2014 |
Reported |
Dollar Basis |
Net earnings from continuing operations |
$ 337.5 |
$ 296.6 |
14 % |
16 % |
Net earnings |
$ 336.6 |
$ 295.2 |
14 % |
16 % |
|
|
|
|
|
Basic weighted average shares
outstanding |
462.4 |
478.4 |
(3)% |
n/a |
Basic earnings per share from continuing
operations |
$ 0.73 |
$ 0.62 |
18 % |
19 % |
Basic earnings per share |
$ 0.73 |
$ 0.62 |
18 % |
19 % |
|
|
|
|
|
Diluted weighted average shares
outstanding |
465.7 |
481.7 |
(3)% |
n/a |
Diluted earnings per share from continuing
operations |
$ 0.72 |
$ 0.62 |
16 % |
19 % |
Diluted earnings per share |
$ 0.72 |
$ 0.61 |
18 % |
21 % |
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
|
|
Key Statistics: |
2015 |
2014 |
|
|
Internal revenue growth: |
|
|
|
|
Employer Services |
3 % |
7 % |
|
|
PEO Services |
18 % |
18 % |
|
|
|
|
|
|
|
Internal revenue growth - Constant Dollar
Basis: |
|
|
|
|
Employer Services |
7 % |
7 % |
|
|
PEO Services |
18 % |
18 % |
|
|
|
|
|
|
|
Employer Services: |
|
|
|
|
Change in pays per control - U.S. |
2.3 % |
3.1 % |
|
|
Change in client revenue retention
percentage - worldwide |
(1.6) pts |
.7 pts |
|
|
Employer Services/PEO new business
bookings growth - worldwide |
13 % |
11 % |
|
|
|
|
|
|
|
PEO Services: |
|
|
|
|
Paid PEO worksite employees at end of
period |
392,000 |
349,000 |
|
|
Average paid PEO worksite employees
during the period |
389,000 |
345,000 |
|
|
|
|
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 |
|
|
|
September 30, |
|
|
|
2015 |
2014 |
Change |
% Change |
Average investment balances at cost (in
billions): |
|
|
|
|
Corporate, other than corporate
extended |
$ 1.7 |
$ 1.6 |
$ — |
3 % |
Corporate extended |
4.0 |
3.7 |
0.3 |
8 % |
Total corporate |
5.7 |
5.3 |
0.3 |
7 % |
Funds held for clients |
19.4 |
18.7 |
0.7 |
3 % |
Total |
$ 25.0 |
$ 24.0 |
$ 1.0 |
4 % |
|
|
|
|
|
Average interest rates earned exclusive of
realized losses (gains) on: |
|
|
|
|
Corporate, other than corporate
extended |
0.5 % |
0.7 % |
|
|
Corporate extended |
1.7 % |
1.7 % |
|
|
Total corporate |
1.3 % |
1.4 % |
|
|
Funds held for clients |
1.8 % |
1.9 % |
|
|
Total |
1.7 % |
1.8 % |
|
|
|
|
|
|
|
Net unrealized gain position at end of
period |
$ 269.9 |
$ 229.5 |
|
|
|
|
|
|
|
Average short-term financing (in
billions): |
|
|
|
|
U.S. commercial paper borrowings |
$ 3.5 |
$ 3.1 |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.5 |
0.6 |
|
|
|
$ 4.0 |
$ 3.7 |
|
|
|
|
|
|
|
Average interest rates paid on: |
|
|
|
|
U.S. commercial paper borrowings |
0.2 % |
0.1 % |
|
|
U.S. & Canadian reverse repurchase
agreement borrowings |
0.4 % |
0.4 % |
|
|
|
|
|
|
|
Interest on funds held for clients |
$ 87.8 |
$ 90.2 |
$ (2.4) |
(3)% |
Corporate extended interest income (C) |
16.6 |
16.2 |
0.5 |
3 % |
Corporate interest expense-short-term
financing (C) |
(1.9) |
(1.5) |
(0.3) |
(23)% |
|
$ 102.6 |
$ 104.8 |
$ (2.2) |
(2)% |
|
|
|
|
|
|
|
|
|
|
(C) While "Corporate extended
interest income" and "Corporate interest expense-short-term
financing" are non-GAAP measures, management believes this
information is beneficial to reviewing the financial statements of
ADP. Management believes this information is beneficial as it
allows the reader to understand the extended investment strategy
for ADP's client funds assets, corporate investments and short-term
borrowings. A reconciliation of the non-GAAP measures to GAAP
measures is as follows: |
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
|
|
|
2015 |
2014 |
|
|
|
|
|
|
|
Corporate extended interest income |
$ 16.6 |
$ 16.2 |
|
|
All other interest income |
2.0 |
2.2 |
|
|
Total interest income on corporate
funds |
$ 18.6 |
$ 18.3 |
|
|
|
|
|
|
|
Corporate interest expense - short-term
financing |
$ 1.9 |
$ 1.5 |
|
|
All other interest expense |
3.0 |
0.4 |
|
|
Total interest expense |
$ 4.9 |
$ 1.9 |
|
|
|
|
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 months ended September 30, 2015
to adjusted results that exclude certain interest amounts and a
gain on the sale of our AdvancedMD business. 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 from continuing
operations before interest and income taxes ("adjusted EBIT"),
adjusted provision for income taxes, adjusted net earnings from
continuing operations, adjusted diluted earnings per share ("EPS")
from continuing operations and adjusted EBIT margin are not
measures of performance calculated in accordance with accounting
principles generally accepted in the United States of America
("U.S. GAAP"), they should not be considered in isolation from, or
as a substitute for, earnings from continuing operations before
income taxes, provision for income taxes, net earnings from
continuing operations, and diluted EPS from continuing operations,
and they may not be comparable to similarly titled measures used by
other companies. The adjusted EBIT performance measure
includes interest income earned on investments associated with our
client funds extended investment strategy and interest expense on
borrowings related to our client funds extended investment
strategy. We believe these amounts to be fundamental to the
underlying operations of our business model. |
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
% Change |
|
2015 |
2014 |
As Reported |
Constant Dollar Basis |
Earnings from continuing operations before
income taxes |
$ 505.0 |
$ 450.4 |
12 % |
14 % |
Adjustments: |
|
|
|
|
Interest expense |
3.0 |
0.4 |
|
|
Interest income |
(2.0) |
(2.2) |
|
|
Gain on sale of business |
(29.1) |
— |
|
|
Adjusted EBIT |
$ 476.9 |
$ 448.6 |
6 % |
8 % |
Adjusted EBIT Margin |
17.6 % |
17.5 % |
|
|
|
|
|
|
|
Provision for income taxes |
$ 167.5 |
$ 153.8 |
9 % |
11 % |
Adjustment: |
|
|
|
|
Gain on sale of business |
(7.3) |
— |
|
|
Adjusted provision for income
taxes |
$ 160.2 |
$ 153.8 |
4 % |
6 % |
|
|
|
|
|
Net earnings from continuing operations |
$ 337.5 |
$ 296.6 |
14 % |
16 % |
Adjustments: |
|
|
|
|
Gain on sale of business |
(29.1) |
— |
|
|
Provision for income taxes on gain on
sale of business |
7.3 |
— |
|
|
Adjusted net earnings from continuing
operations |
$ 315.7 |
$ 296.6 |
6 % |
8 % |
|
|
|
|
|
Diluted earnings per share from continuing
operations |
$ 0.72 |
$ 0.62 |
16 % |
19 % |
Adjustment: |
|
|
|
|
Gain on sale of business |
(0.05) |
— |
|
|
Adjusted diluted earnings per share
from continuing operations |
$ 0.68 |
$ 0.62 |
10 % |
11 % |
Safe Harbor Statement
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 and retaining clients, and selling additional
services to clients; the pricing of products and services;
compliance with existing or new legislation or regulations; changes
in, or interpretations of, existing legislation or regulations;
overall market, political and economic conditions, including
interest rate and foreign currency trends; competitive conditions;
our ability to maintain our current credit rating and the impact on
our funding costs and profitability; security or privacy breaches,
fraudulent acts, and system interruptions and failures; 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,
2015 should be considered in evaluating any forward-looking
statements contained herein.
The ADP logo, ADP, are registered trademarks of ADP, LLC.
ADP A more human resource. is a service mark of ADP, LLC. All
other marks are the property of their respective owners. Copyright
© 2015 ADP, LLC.
CONTACT: ADP-Investor Relations
Investor Relations Contacts:
Sara Grilliot
973.974.7834
Sara.Grilliot@ADP.com
Byron Stephen
973.974.7896
Byron.Stephen@ADP.com
Media Contact:
Andy Hilton
973.974.4462
Andy.Hilton@ADP.com
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