Revenues Rise 7%, 6%
Organic;
EPS up 23%, up 10% Excluding Current
Quarter Gain on Sale of Assets
Automatic Data Processing, Inc. (Nasdaq:ADP) reported revenue
growth of 7%, 6% organic, to $2.6 billion for the second fiscal
quarter ended December 31, 2011, Carlos A. Rodriguez, president and
chief executive officer, announced today. Pretax earnings and net
earnings increased 20% and 21%, respectively, and included a pretax
gain of $66 million, $41 million after tax, on the sale of assets
related to rights and obligations to resell a third-party expense
management platform. Diluted earnings per share of $0.76 increased
23% from $0.62 a year ago on fewer shares outstanding, including
$0.08 per share related to the gain on the sale. Excluding this
gain, pretax earnings and net earnings increased 6% and 8%,
respectively, and diluted earnings per share of $0.68 increased
10%. ADP acquired 6.3 million shares of its stock for treasury at a
cost of about $305 million fiscal year-to-date. Cash and marketable
securities were $1.5 billion at December 31, 2011.
Second Quarter Discussion
Commenting on the results, Mr. Rodriguez said, "ADP's results
were solid for the second quarter. I am particularly pleased
with our sales execution that drove strong new business sales
growth for Employer Services and PEO Services for the
quarter. As anticipated, ADP's year-over-year pretax margin
comparison continued to be negatively impacted by the decline in
high-margin client interest revenues resulting from lower interest
rates, and the impact of recent acquisitions. New business
sales for Dealer Services were also strong and better than
anticipated during the quarter.
Employer Services
"Employer Services' revenues grew 7% for the second quarter, 5%
organically, compared to last year's second 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 our clients on our AutoPay platform. Worldwide
client retention remained at excellent levels, but declined 0.2
percentage points fiscal year-to-date through December 31, 2011
compared to the same period a year ago. Employer Services'
pretax margin declined 120 basis points for the quarter, primarily
due to a drag of about 80 basis points from
acquisitions. Additionally, pretax margin was pressured by
higher sales and implementation expense, as well as investments in
service and product innovation.
"Combined Employer Services and PEO Services worldwide new
business sales increased 14% for the quarter. New business sales
represent annualized recurring revenues anticipated from new
orders.
PEO Services
"PEO Services' revenues increased 16% for the second quarter,
all organic, compared to last year's second quarter. PEO
Services' pretax margin improved 20 basis points for the
quarter. Average worksite employees paid by PEO Services
increased 13% for the quarter to approximately 251,000.
Dealer Services
"Dealer Services' revenues grew 7% for the second quarter, all
organic, compared to last year's second quarter. Dealer
Services' pretax margin improved 220 basis points for the quarter
due in large part to easier year-over-year comparisons as well as a
favorable grow-over impact of last year's acquisition-related costs
of 70 basis points.
Interest on Funds Held for Clients
"The safety, liquidity, and diversification of our clients'
funds are the foremost objectives of our investment strategy.
Client funds are invested in accordance with ADP's prudent and
conservative investment guidelines and the credit quality of the
investment portfolio is predominantly AAA/AA.
"For the second quarter, interest on funds held for clients
declined $11.1 million, or 9%, from $129.0 million a year ago to
$117.9 million, due to a decline of 50 basis points in the average
interest yield to 3.0%, partially offset by an increase of 6% in
average client funds balances from $14.7 billion to $15.6
billion.
Fiscal 2012 Forecast
"We moved into the second half of fiscal 2012 with solid
performance and good key business metrics in a somewhat mixed
economic environment. We anticipate that continued low
interest rates will further pressure margins and earnings
throughout the remainder of the fiscal year. Our forecasts
have been updated as noted below and exclude the gain realized in
the second quarter on the sale of assets, and reflect the
related lost revenue and earnings streams for the remainder of the
year:
- Total revenues – continue to anticipate 7% to 9% growth
- We continue to anticipate that the impact from foreign exchange
rates will become unfavorable during the second half of the year
and will be about neutral for the full year
- Diluted earnings per share – we anticipate an increase of 8% to
9% from $2.52 earnings per share in fiscal 2011, compared with our
prior forecasted range of an 8% to 10% increase. Our updated
forecast reflects $0.02 lost earnings per share for the remainder
of the year from the sale of assets
- Employer Services – continue to anticipate revenue growth of
about 7% with up to 30 basis points expansion in pretax margin
compared to our prior forecast of about 50 basis points expansion;
updated pretax margin expansion includes higher sales expense from
the increased sales growth forecast, slightly lower than
anticipated growth in average client funds balances as discussed
below, lost earnings from the sale of assets discussed above, and
the impact of acquisitions closed since our last update
- Pays per control – up about 2.5% for the year compared with our
prior estimate of up about 2%
- PEO Services – continue to anticipate revenue growth of about
17% with slight improvement in pretax margin compared to our prior
forecast for flat margins
- Employer Services and PEO Services new business sales – we
anticipate about 12% growth compared to $1.1 billion sold in fiscal
2011; this is up from our prior forecast of 8% to 10% growth
- Dealer Services – we anticipate revenue growth of 9% to 10%, up
from our prior forecast of 8% to 9% growth due to additional
revenues from the acquisition closed in the second quarter; about 3
percentage points of revenue growth is expected to result from
current year acquisitions and the full-year effect of last year's
acquisitions; we anticipate pretax margin expansion of at least 50
basis points compared to our prior forecast of about 50 basis
points.
"Interest on funds held for clients is expected to decline $45
to $55 million, or 8% to 10%, from $540.1 million in fiscal 2011,
and is based on 6% to 7% anticipated growth in average client funds
balances. This is updated from our previously forecasted decline of
$40 to $50 million, or 7% to 9%, which was based on 7% to 8% growth
in average client funds balances. Our forecast continues to
anticipate a decline of 40 to 50 basis points in the expected
average interest yield to 2.7% to 2.8%. The interest
assumptions in our forecasts are based on Fed Funds futures
contracts and forward yield curves as of January 23, 2012. The Fed
Funds futures contracts do not anticipate any changes during the
fiscal year in the Fed Funds target rate. The three-and-a-half
and five-year U.S. government agency rates based on the forward
yield curves as of January 23, 2012 were used to forecast new
purchase rates for the client extended and client long portfolios,
respectively.
"I am pleased with the strength in our key business metrics and
with our solid execution. Our business model is strong and we are
focused on enhancing our market leadership position by continuing
to invest in product innovation, as well as our distribution and
service capabilities. I am confident in our ability to achieve
our fiscal 2012 forecast and am optimistic about ADP's growth
opportunities," Mr. Rodriguez concluded.
Website Schedules
The schedules of quarterly and full-year revenue and pretax
earnings by reportable segment for fiscal years 2010, 2011, and
2012 have been updated for the second quarter of fiscal 2012 and
posted to the Investor Relations home page
(http://www.investquest.com/iq/a/adp/index.htm) of our website
www.ADP.com under Reportable Segments Financial Data.
An analyst conference call will be held today, Wednesday,
January 25 at 8:30 a.m. EST. A live webcast of the call
will be available to the public on a listen-only basis. To
listen to the webcast and view the slide presentation, go to ADP's
home page, www.ADP.com, or ADP's Investor Relations home page,
http://www.investquest.com/iq/a/adp/index.htm, and click on the
webcast icon. Please note, this webcast will be broadcast in
two streams: Windows Media and Flash. You may switch streams
by selecting "Windows Media" or "Flash" from the gear-setup symbol
located to the right-hand side of the volume control on the webcast
player. Please check your system 10 minutes prior to the
webcast. The presentation will be available to download and
print about 60 minutes before the webcast at the ADP Investor
Relations home page at
http://www.investquest.com/iq/a/adp/index.htm. ADP's news
releases, current financial information, SEC filings and Investor
Relations presentations are accessible at the same Web site.
About ADP
Automatic Data Processing, Inc. (Nasdaq:ADP), with about $10
billion in revenues and approximately 570,000 clients, is one of
the world's largest providers of business outsourcing solutions.
Leveraging over 60 years of experience, ADP offers a wide range
of human resource, payroll, tax and benefits
administration solutions from a single source. ADP's
easy-to-use solutions for employers provide superior value to
companies of all types and sizes. ADP is also a leading provider of
integrated computing solutions to auto, truck, motorcycle,
marine, recreational vehicle, and heavy equipment
dealers throughout the world. For more information about
ADP or to contact a local ADP sales office, reach us at
1.800.225.5237 or visit the company's Web site
at www.ADP.com.
| Automatic Data Processing, Inc. and
Subsidiaries |
|
|
| Condensed Consolidated Balance
Sheets |
|
|
| (In millions) |
|
|
| (Unaudited) |
|
|
| |
December 31, |
June 30, |
| |
2011 |
2011 |
| Assets |
|
|
| Cash and cash equivalents/Short-term |
|
|
| marketable securities |
$ 1,355.2 |
$ 1,425.7 |
| Other current assets |
2,022.4 |
2,022.2 |
| Total current assets before funds held
for clients |
3,377.6 |
3,447.9 |
| |
|
|
| Funds held for clients |
23,349.5 |
25,135.6 |
| Total current assets |
26,727.1 |
28,583.5 |
| |
|
|
| Long-term marketable securities |
98.7 |
98.0 |
| Property, plant and equipment, net |
707.9 |
716.2 |
| Other non-current assets |
4,950.7 |
4,840.6 |
| Total assets |
$ 32,484.4 |
$ 34,238.3 |
| |
|
|
| Liabilities and Stockholders'
Equity |
|
|
| Other current liabilities |
2,107.3 |
2,195.7 |
| Client funds obligations |
22,690.2 |
24,591.1 |
| Total current liabilities |
24,797.5 |
26,786.8 |
| |
|
|
| Long-term debt |
25.5 |
34.2 |
| Other non-current liabilities |
1,479.0 |
1,406.9 |
| Total liabilities |
26,302.0 |
28,227.9 |
| |
|
|
| Total stockholders' equity |
6,182.4 |
6,010.4 |
| Total liabilities and stockholders'
equity |
$ 32,484.4 |
$ 34,238.3 |
| |
|
|
| |
|
|
| Automatic Data
Processing, Inc. and Subsidiaries |
|
|
| Statements of
Consolidated Earnings |
|
|
|
| (In millions, except per
share amounts) |
|
|
|
| (Unaudited) |
|
|
|
|
| |
|
|
| |
Three Months Ended |
Six Months Ended |
| |
December 31, |
December 31, |
| |
2011 |
2010 |
2011 |
2010 |
| Revenues: |
|
|
|
|
| Revenues, other than interest
on funds |
|
|
|
| held for clients and PEO revenues |
$ 2,054.0 |
$ 1,921.0 |
$ 4,056.7 |
$ 3,684.8 |
| Interest on funds held for clients |
117.9 |
129.0 |
239.8 |
255.8 |
| PEO revenues (A) |
411.1 |
355.7 |
809.0 |
694.6 |
| Total revenues |
2,583.0 |
2,405.7 |
5,105.5 |
4,635.2 |
| |
|
|
|
|
| Expenses: |
|
|
|
|
| Costs of revenues: |
|
|
|
|
| Operating expenses |
1,307.7 |
1,173.6 |
2,600.3 |
2,290.3 |
| Systems development & programming
costs |
149.1 |
142.1 |
298.8 |
277.0 |
| Depreciation & amortization |
63.1 |
64.6 |
126.9 |
124.9 |
| Total costs of revenues |
1,519.9 |
1,380.3 |
3,026.0 |
2,692.2 |
| |
|
|
|
|
| Selling, general & administrative
expenses |
577.5 |
570.1 |
1,166.7 |
1,085.7 |
| Interest expense |
2.1 |
2.8 |
4.2 |
5.6 |
| Total expenses |
2,099.5 |
1,953.2 |
4,196.9 |
3,783.5 |
| |
|
|
|
|
| Other income, net (B) |
(96.2) |
(32.1) |
(130.4) |
(69.3) |
| |
|
|
|
|
| Earnings before income
taxes |
579.7 |
484.6 |
1,039.0 |
921.0 |
| |
|
|
|
|
| Provision for income taxes |
204.7 |
174.5 |
361.3 |
332.4 |
| |
|
|
|
|
| Net earnings |
$ 375.0 |
$ 310.1 |
$ 677.7 |
$ 588.6 |
| |
|
|
|
|
| Basic earnings per share |
$ 0.77 |
$ 0.63 |
$ 1.39 |
$ 1.20 |
| |
|
|
|
|
| Diluted earnings per share |
$ 0.76 |
$ 0.62 |
$ 1.38 |
$ 1.19 |
| |
|
|
|
|
| Dividends declared per common share |
$ 0.3950 |
$ 0.3600 |
$ 0.7550 |
$ 0.7000 |
| |
|
|
|
|
| (A) Professional Employer
Organization ("PEO") revenues are net of direct pass-through costs,
primarily consisting of payroll wages and payroll taxes, of
$4,810.4 and $4,231.3 for the three months ended December 31, 2011
and 2010, respectively, and $8,745.7 and $7,582.7 for the six
months ended December 31, 2011 and 2010, respectively. |
| (B) Includes a gain of $66.0
in the three and six months ended December 31, 2011 on the sale of
assets related to rights and obligations to resell a third-party
expense management platform. |
| |
|
|
|
|
| |
|
|
|
|
| Automatic Data Processing, Inc. and
Subsidiaries |
|
|
|
|
| Other Selected Financial
Data |
|
|
|
|
| (Dollars in millions, except per
share amounts) |
|
|
|
|
| (Unaudited) |
|
|
|
|
| |
Three Months Ended |
|
|
| |
December 31, |
|
|
|
| |
2011 |
2010 |
Change |
% Change |
| Revenues (A) |
|
|
|
|
| Employer Services |
$ 1,827.1 |
$ 1,707.2 |
$ 119.9 |
7% |
| PEO Services |
413.8 |
358.2 |
55.6 |
16% |
| Dealer Services |
412.6 |
386.0 |
26.6 |
7% |
| Other |
(70.5) |
(45.7) |
(24.8) |
(54)% |
| |
$ 2,583.0 |
$ 2,405.7 |
$ 177.3 |
7% |
| Pre-tax earnings from continuing
operations (A) |
|
|
|
|
| Employer Services |
$ 447.0 |
$ 438.0 |
$ 9.0 |
2% |
| PEO Services |
42.4 |
35.9 |
6.5 |
18% |
| Dealer Services |
70.5 |
57.5 |
13.0 |
23% |
| Other (B) |
19.8 |
(46.8) |
66.6 |
n/m |
| |
$ 579.7 |
$ 484.6 |
$ 95.1 |
20% |
| Pre-tax margin (A) |
|
|
|
|
| Employer Services |
24.5% |
25.7% |
(1.2)% |
|
| PEO Services |
10.2% |
10.0% |
0.2% |
|
| Dealer Services |
17.1% |
14.9% |
2.2% |
|
| Other |
n/m |
n/m |
n/m |
|
| |
22.4% |
20.1% |
2.3% |
|
| |
|
|
|
|
| |
Six Months Ended |
|
|
| |
December 31, |
|
|
| |
2011 |
2010 |
Change |
% Change |
| Revenues (A) |
|
|
|
|
| Employer Services |
$ 3,577.5 |
$ 3,306.5 |
$ 271.0 |
8% |
| PEO Services |
814.4 |
699.5 |
114.9 |
16% |
| Dealer Services |
820.4 |
732.2 |
88.2 |
12% |
| Other |
(106.8) |
(103.0) |
(3.8) |
(4)% |
| |
$ 5,105.5 |
$ 4,635.2 |
$ 470.3 |
10% |
| Pre-tax earnings from continuing
operations (A) |
|
|
|
|
| Employer Services |
$ 857.0 |
$ 820.4 |
$ 36.6 |
4% |
| PEO Services |
78.9 |
64.0 |
14.9 |
23% |
| Dealer Services |
133.6 |
107.2 |
26.4 |
25% |
| Other (B) |
(30.5) |
(70.6) |
40.1 |
57% |
| |
$ 1,039.0 |
$ 921.0 |
$ 118.0 |
13% |
| Pre-tax margin (A) |
|
|
|
|
| Employer Services |
24.0% |
24.8% |
(0.9)% |
|
| PEO Services |
9.7% |
9.1% |
0.5% |
|
| Dealer Services |
16.3% |
14.6% |
1.6% |
|
| Other |
n/m |
n/m |
n/m |
|
| |
20.4% |
19.9% |
0.5% |
|
| |
|
|
|
|
| (A) Prior year's segment results
were adjusted to reflect fiscal year 2012 budgeted foreign exchange
rates. |
| (B) Includes a gain of $66.0
in the three and six months ended December 31, 2011 on the sale of
assets related to rights and obligations to resell a third-party
expense management platform. |
| n/m - not meaningful |
| |
|
|
|
|
| |
Three Months Ended |
|
|
| |
December 31, |
Change in other |
|
| |
2011 |
2010 |
income, net |
|
| Components of other income, net: |
|
|
|
|
| Interest income on corporate funds |
$ (27.2) |
$ (27.9) |
$ (0.7) |
|
| Realized gains on available-for-sale
securities |
(14.8) |
(5.4) |
9.4 |
|
| Realized losses on available-for-sale
securities |
6.6 |
1.8 |
(4.8) |
|
| Impairment losses on available-for-sale
securities |
5.8 |
-- |
(5.8) |
|
| Gain on sale of assets |
(66.0) |
-- |
66.0 |
|
| Other, net |
(0.6) |
(0.6) |
-- |
|
| Total other income, net |
$ (96.2) |
$ (32.1) |
$ 64.1 |
|
| |
|
|
|
|
| |
Six Months Ended |
|
|
| |
December 31, |
Change in other |
|
| |
2011 |
2010 |
income, net |
|
| Components of other income, net: |
|
|
|
|
| Interest income on corporate funds |
$ (56.8) |
$ (58.7) |
$ (1.9) |
|
| Realized gains on available-for-sale
securities |
(19.1) |
(17.6) |
1.5 |
|
| Realized losses on available-for-sale
securities |
6.9 |
2.2 |
(4.7) |
|
| Impairment losses on available-for-sale
securities |
5.8 |
-- |
(5.8) |
|
| Impairment losses on assets held for
sale |
-- |
8.6 |
8.6 |
|
| Gain on disposal of intangible assets |
(66.0) |
-- |
66.0 |
|
| Gain on sale of assets |
-- |
(1.8) |
(1.8) |
|
| Other, net |
(1.2) |
(2.0) |
(0.8) |
|
| Total other income, net |
$ (130.4) |
$ (69.3) |
$ 61.1 |
|
| |
|
|
|
|
| |
|
|
|
|
| Automatic Data Processing, Inc. and
Subsidiaries |
|
|
|
|
| Other Selected Financial Data,
Continued |
|
|
|
|
| (Dollars in millions,
except per share amounts or where otherwise stated) |
|
|
|
| (Unaudited) |
|
|
|
|
| |
|
|
|
|
| |
Three Months Ended |
|
|
| |
December 31, |
|
|
| |
2011 |
2010 |
Change |
% Change |
| Earnings per share information: |
|
|
|
|
| Net earnings |
$ 375.0 |
$ 310.1 |
$ 64.9 |
21% |
| Basic weighted average shares
outstanding |
486.7 |
492.0 |
(5.3) |
(1)% |
| Basic earnings per share |
$ 0.77 |
$ 0.63 |
$ 0.14 |
22% |
| |
|
|
|
|
| Net earnings |
$ 375.0 |
$ 310.1 |
$ 64.9 |
21% |
| Diluted weighted average shares
outstanding |
492.4 |
496.9 |
(4.5) |
1% |
| Diluted earnings per share |
$ 0.76 |
$ 0.62 |
$ 0.14 |
23% |
| |
|
|
|
|
| |
Six Months Ended |
|
|
| |
December 31, |
|
|
|
| |
2011 |
2010 |
Change |
% Change |
| Earnings per share information: |
|
|
|
|
| Net earnings |
$ 677.7 |
$ 588.6 |
$ 89.1 |
15% |
| Basic weighted average shares
outstanding |
487.3 |
491.7 |
(4.4) |
(1)% |
| Basic earnings per share |
$ 1.39 |
$ 1.20 |
$ 0.19 |
16% |
| |
|
|
|
|
| Net earnings |
$ 677.7 |
$ 588.6 |
$ 89.1 |
15% |
| Diluted weighted average shares
outstanding |
492.8 |
495.9 |
(3.1) |
(1)% |
| Diluted earnings per share |
$ 1.38 |
$ 1.19 |
$ 0.19 |
16% |
| |
|
|
|
|
| |
|
|
|
|
| |
Three Months Ended |
|
|
| |
December 31, |
|
|
| |
2011 |
2010 |
|
|
| Key Statistics: |
|
|
|
|
| Internal revenue growth: |
|
|
|
|
| Employer Services |
5% |
5% |
|
|
| PEO Services |
16% |
15% |
|
|
| Dealer Services |
7% |
4% |
|
|
| |
|
|
|
|
| Employer Services: |
|
|
|
|
| Change in pays per control - AutoPay
product |
2.8% |
2.4% |
|
|
| Change in client revenue retention
percentage - worldwide |
(0.5) pts |
0.8 pts |
|
|
| Employer Services/PEO new business sales
growth - worldwide |
14% |
16% |
|
|
| |
|
|
|
|
| PEO Services: |
|
|
|
|
| Paid PEO worksite employees at end of
period |
253,000 |
224,000 |
|
|
| Average paid PEO worksite employees
during the period |
251,000 |
221,000 |
|
|
| |
|
|
|
|
| |
Six Months Ended |
|
|
| |
December 31, |
|
|
|
| |
2011 |
2010 |
|
|
| Key Statistics: |
|
|
|
|
| Internal revenue growth: |
|
|
|
|
| Employer Services |
6% |
5% |
|
|
| PEO Services |
16% |
15% |
|
|
| Dealer Services |
6% |
2% |
|
|
| |
|
|
|
|
| Employer Services: |
|
|
|
|
| Change in pays per control - AutoPay
product |
2.8% |
2.1% |
|
|
| Change in client revenue retention
percentage - worldwide |
(0.2) pts |
1.2 pts |
|
|
| Employer Services/PEO new business sales
growth - worldwide |
11% |
8% |
|
|
| |
|
|
|
|
| PEO Services: |
|
|
|
|
| Paid PEO worksite employees at end of
period |
253,000 |
224,000 |
|
|
| Average paid PEO worksite employees
during the period |
247,000 |
218,000 |
|
|
| |
|
|
|
|
| |
|
|
|
|
| Automatic Data Processing, Inc. and
Subsidiaries |
|
|
|
|
| Other Selected Financial Data,
Continued |
|
|
|
|
| (Dollars in millions,
except per share amounts or where otherwise stated) |
|
|
|
| (Unaudited) |
|
|
|
|
| |
Three Months Ended |
|
|
| |
December 31, |
|
|
| |
2011 |
2010 |
Change |
% Change |
| Average investment balances at cost (in
billions): |
|
|
|
|
| Corporate, other than corporate
extended |
$ 1.3 |
$ 1.1 |
$ 0.1 |
11% |
| Corporate extended |
3.6 |
2.9 |
0.7 |
23% |
| Total corporate |
4.8 |
4.0 |
0.8 |
20% |
| Funds held for clients |
15.6 |
14.7 |
0.9 |
6% |
| Total |
$ 20.4 |
$ 18.7 |
$ 1.7 |
9% |
| |
|
|
|
|
| Average interest rates earned exclusive
of |
|
|
|
|
| realized losses (gains) on: |
|
|
|
|
| Corporate, other than corporate
extended |
0.9% |
1.0% |
|
|
| Corporate extended |
2.6% |
3.3% |
|
|
| Total corporate |
2.2% |
2.8% |
|
|
| Funds held for clients |
3.0% |
3.5% |
|
|
| Total |
2.8% |
3.4% |
|
|
| |
|
|
|
|
| Net unrealized gain position at end of
period |
$ 685.1 |
$ 557.9 |
|
|
| |
|
|
|
|
| Average short-term financing (in
billions): |
|
|
|
|
| U.S. commercial paper borrowings |
$ 3.3 |
$ 2.4 |
|
|
| U.S. & Canadian reverse repurchase
agreement borrowings |
0.3 |
0.5 |
|
|
| |
$ 3.6 |
$ 2.9 |
|
|
| |
|
|
|
|
| Average interest rates paid on: |
|
|
|
|
| U.S. commercial paper borrowings |
0.1% |
0.2% |
|
|
| U.S. & Canadian reverse repurchase
agreement borrowings |
0.7% |
0.5% |
|
|
| |
|
|
|
|
| |
|
|
|
|
| Interest on funds held for clients |
$ 117.9 |
$ 129.0 |
$ (11.1) |
(9)% |
| Corporate extended interest income (C) |
23.5 |
24.6 |
(1.1) |
(4)% |
| Corporate interest expense-short-term
financing (C) |
(1.4) |
(2.1) |
0.7 |
35% |
| |
$ 140.0 |
$ 151.5 |
$ (11.5) |
(8)% |
| |
|
|
|
|
| |
Six Months Ended |
|
|
| |
December 31, |
|
|
|
| |
2011 |
2010 |
Change |
% Change |
| Average investment balances at cost (in
billions): |
|
|
|
|
| Corporate, other than corporate
extended |
$ 1.3 |
$ 1.3 |
$ 0.0 |
3% |
| Corporate extended |
3.5 |
2.9 |
0.7 |
24% |
| Total corporate |
4.9 |
4.1 |
0.7 |
18% |
| Funds held for clients |
15.4 |
14.2 |
1.1 |
8% |
| Total |
$ 20.2 |
$ 18.4 |
$ 1.9 |
10% |
| |
|
|
|
|
| Average interest rates earned exclusive
of |
|
|
|
|
| realized losses (gains) on: |
|
|
|
|
| Corporate, other than corporate
extended |
0.9% |
1.0% |
|
|
| Corporate extended |
2.8% |
3.6% |
|
|
| Total corporate |
2.3% |
2.8% |
|
|
| Funds held for clients |
3.1% |
3.6% |
|
|
| Total |
2.9% |
3.4% |
|
|
| |
|
|
|
|
| Net unrealized gain position at end of
period |
$ 685.1 |
$ 557.9 |
|
|
| |
|
|
|
|
| Average short-term financing (in
billions): |
|
|
|
|
| U.S. commercial paper borrowings |
$ 3.2 |
$ 2.3 |
|
|
| U.S. & Canadian reverse repurchase
agreement borrowings |
0.4 |
0.6 |
|
|
| |
$ 3.5 |
$ 2.9 |
|
|
| |
|
|
|
|
| Average interest rates paid on: |
|
|
|
|
| U.S. commercial paper borrowings |
0.1% |
0.3% |
|
|
| U.S. & Canadian reverse repurchase
agreement borrowings |
0.5% |
0.4% |
|
|
| |
|
|
|
|
| |
|
|
|
|
| Interest on funds held for clients |
$ 239.8 |
$ 255.8 |
$ (16.0) |
(6)% |
| Corporate extended interest income (C) |
49.1 |
51.9 |
(2.8) |
(5)% |
| Corporate interest expense-short-term
financing (C) |
(2.8) |
(4.1) |
1.3 |
32% |
| |
$ 286.0 |
$ 303.6 |
$ (17.6) |
(6)% |
| |
|
|
|
|
| (C) While "Corporate
extended interest income" and "Corporate interest expense
-short-term financing" are non-GAAP disclosures, management
believes this information is beneficial to reviewing the financial
statements of ADP. Management believes this information is
beneficial as it allows the reader to understand the extended
investment strategy for ADP's client funds assets, corporate
investments and short-term borrowings. A reconciliation of the
non-GAAP measures to GAAP measures is as follows: |
| |
| |
|
|
|
|
| Automatic Data Processing, Inc. and
Subsidiaries |
|
|
|
|
| Other Selected Financial Data,
Continued |
|
|
|
|
| (Dollars in millions,
except per share amounts or where otherwise stated) |
|
|
|
| (Unaudited) |
|
|
|
|
| |
|
|
|
|
| |
Three Months Ended |
|
|
| |
December 31, |
|
|
| |
2011 |
2010 |
|
|
| |
|
|
|
|
| Corporate extended interest income |
$ 23.5 |
$ 24.6 |
|
|
| All other interest income |
3.7 |
3.3 |
|
|
| Total interest income on corporate
funds |
$ 27.2 |
$ 27.9 |
|
|
| |
|
|
|
|
| Corporate interest expense - short-term
financing |
$ 1.4 |
$ 2.1 |
|
|
| All other interest expense |
0.7 |
0.7 |
|
|
| Total interest expense |
$ 2.1 |
$ 2.8 |
|
|
| |
|
|
|
|
| |
Six Months Ended |
|
|
| |
December 31, |
|
|
| |
2011 |
2010 |
|
|
| |
|
|
|
|
| Corporate extended interest income |
$ 49.1 |
$ 51.9 |
|
|
| All other interest income |
7.7 |
6.8 |
|
|
| Total interest income on corporate
funds |
$ 56.8 |
$ 58.7 |
|
|
| |
|
|
|
|
| Corporate interest expense - short-term
financing |
$ 2.8 |
$ 4.1 |
|
|
| All other interest expense |
1.4 |
1.5 |
|
|
| Total interest expense |
$ 4.2 |
$ 5.6 |
|
|
| |
|
| |
|
| Automatic Data
Processing, Inc. and Subsidiaries |
|
| Consolidated Statements
of Adjusted / Non-GAAP Financial Information |
| (In millions, except per
share amounts) |
|
|
| (Unaudited) |
|
|
|
| |
|
|
|
|
| The following table reconciles
the Company's results for the three and six months ended December
31, 2011 to adjusted results that exclude the sale of assets
related to rights and obligations to resell a third-party expense
management platform. The Company uses certain adjusted results,
among other measures, to evaluate the Company's operating
performance in the absence of certain items and for planning and
forecasting of future periods. The Company believes that the
adjusted results provide relevant and useful information for
investors because it allows investors to view performance in a
manner similar to the method used by the Company's management and
improves their ability to understand the Company's operating
performance. Since adjusted earnings and adjusted diluted EPS
are not measures of performance calculated in accordance with U.S.
GAAP, they should not be considered in isolation of, or as a
substitute for, earnings and diluted EPS and they may not be
comparable to similarly titled measures employed by other
companies. |
| |
|
|
|
|
| |
Three months ended
December 31, 2011 |
| |
Earnings before income taxes |
Provision for income taxes |
Net earnings |
Diluted EPS |
| |
|
|
|
|
| As Reported |
$ 579.7 |
$ 204.7 |
$ 375.0 |
$ 0.76 |
| |
|
|
|
|
| Less Adjustments: |
|
|
|
| Gain on sale of assets |
66.0 |
24.8 |
41.2 |
0.08 |
| |
|
|
|
|
| As Adjusted |
$ 513.7 |
$ 179.9 |
$ 333.8 |
$ 0.68 |
| |
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
| |
Six months ended December
31, 2011 |
| |
Earnings before income taxes |
Provision for income taxes |
Net earnings |
Diluted EPS |
| |
|
|
|
|
| As Reported |
$ 1,039.0 |
$ 361.3 |
$ 677.7 |
$ 1.38 |
| |
|
|
|
|
| Less Adjustments: |
|
|
|
| Gain on sale of assets |
66.0 |
24.8 |
41.2 |
0.08 |
| |
|
|
|
|
| As Adjusted |
$ 973.0 |
$ 336.5 |
$ 636.5 |
$ 1.29 |
This document and other written or oral statements made from
time to time by ADP may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Statements that are not historical in nature and which may be
identified by the use of words like "expects," "assumes,"
"projects," "anticipates," "estimates," "we believe," "could be"
and other words of similar meaning, are forward-looking statements.
These statements are based on management's expectations and
assumptions and are subject to risks and uncertainties that may
cause actual results to differ materially from those expressed.
Factors that could cause actual results to differ materially from
those contemplated by the forward-looking statements include: ADP's
success in obtaining, retaining and selling additional services to
clients; the pricing of products and services; changes in laws
regulating payroll taxes, professional employer organizations and
employee benefits; overall market and economic conditions,
including interest rate and foreign currency trends; competitive
conditions; auto sales and related industry changes; employment and
wage levels; changes in technology; availability of skilled
technical associates and the impact of new acquisitions and
divestitures. ADP disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. These risks and uncertainties, along
with the risk factors discussed under "Item 1A. - Risk Factors" in
our Annual Report on Form 10-K for the fiscal year ended June 30,
2011 should be considered in evaluating any forward-looking
statements contained herein.
CONTACT: Automatic Data Processing, Inc.
ADP Investor Relations
Elena Charles, 973.974.4077
Debbie Morris, 973.974.7821
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