UNITED
STATES
|
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
|
|
FORM
10-Q
|
|
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended March 31, 2007 | |
OR
|
|
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period From to |
Delaware
|
22-1467904
|
|
(State
or
other jurisdiction of incorporation or organization)
|
(IRS
Employer
Identification No.)
|
|
One
ADP Boulevard, Roseland, New Jersey
|
07068
|
|
(Address
of
principal executive offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code: (973)
974-5000
|
||
|
Large accelerated filer [X] | Accelerated filer [ ] | Non-accelerated filer [ ] |
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Revenues,
other than interest on funds
|
||||||||||||||||
held
for Employer Services' clients and
|
||||||||||||||||
PEO
revenues
|
$ |
1,741.9
|
$ |
1,563.2
|
$ |
4,729.5
|
$ |
4,211.7
|
||||||||
Interest
on
funds held for
|
||||||||||||||||
Employer
Services' clients
|
198.3
|
166.2
|
475.3
|
393.5
|
||||||||||||
PEO
revenues
(A)
|
249.1
|
197.6
|
649.5
|
516.9
|
||||||||||||
TOTAL
REVENUES
|
2,189.3
|
1,927.0
|
5,854.3
|
5,122.1
|
||||||||||||
EXPENSES:
|
||||||||||||||||
Costs
of
revenues
|
||||||||||||||||
Operating
expenses
|
899.4
|
781.8
|
2,536.8
|
2,160.5
|
||||||||||||
Systems
development and programming costs
|
122.2
|
120.5
|
355.7
|
343.2
|
||||||||||||
Depreciation
and amortization
|
54.0
|
42.3
|
155.8
|
122.9
|
||||||||||||
TOTAL
COST OF REVENUES
|
1,075.6
|
944.6
|
3,048.3
|
2,626.6
|
||||||||||||
Selling,
general and administrative expenses
|
554.1
|
495.3
|
1,570.5
|
1,376.4
|
||||||||||||
Interest
expense
|
7.0
|
7.0
|
74.8
|
51.3
|
||||||||||||
Other
income,
net
|
(25.2 | ) | (23.0 | ) | (175.4 | ) | (78.6 | ) | ||||||||
TOTAL
EXPENSES
|
1,611.5
|
1,423.9
|
4,518.2
|
3,975.7
|
||||||||||||
EARNINGS
FROM
CONTINUING OPERATIONS
|
||||||||||||||||
BEFORE
INCOME TAXES
|
577.8
|
503.1
|
1,336.1
|
1,146.4
|
||||||||||||
Provision
for
income taxes
|
213.5
|
188.5
|
495.7
|
430.1
|
||||||||||||
NET
EARNINGS
FROM CONTINUING OPERATIONS
|
$ |
364.3
|
$ |
314.6
|
$ |
840.4
|
$ |
716.3
|
||||||||
Earnings
from
discontinued operations, net of provision
|
||||||||||||||||
for
income taxes of $51.4 and $35.0 for the three months
|
||||||||||||||||
ended
March 31, 2007 and 2006, respectively, and
|
||||||||||||||||
$96.9
and $84.5 for the nine months ended March 31,
|
||||||||||||||||
2007
and 2006, respectively
|
24.6
|
56.0
|
103.6
|
134.0
|
||||||||||||
NET
EARNINGS
|
$ |
388.9
|
$ |
370.6
|
$ |
944.0
|
$ |
850.3
|
||||||||
Basic
Earnings
Per Share from Continuing Operations
|
$ |
0.66
|
$ |
0.54
|
$ |
1.52
|
$ |
1.24
|
||||||||
Basic
Earnings
Per Share from Discontinued Operations
|
0.04
|
0.10
|
0.19
|
0.23
|
||||||||||||
BASIC
EARNINGS
PER SHARE
|
$ |
0.70
|
$ |
0.64
|
$ |
1.71
|
$ |
1.47
|
||||||||
Diluted
Earnings Per Share from Continuing Operations
|
$ |
0.65
|
$ |
0.54
|
$ |
1.51
|
$ |
1.23
|
||||||||
Diluted
Earnings Per Share from Discontinued Operations
|
0.04
|
0.10
|
0.19
|
0.23
|
||||||||||||
DILUTED
EARNINGS PER SHARE
|
$ |
0.70
|
$ |
0.64
|
$ |
1.69
|
$ |
1.46
|
||||||||
Basic
weighted
average shares outstanding
|
552.1
|
577.5
|
551.6
|
577.0
|
||||||||||||
Diluted
weighted average shares outstanding
|
558.7
|
582.8
|
558.5
|
582.7
|
||||||||||||
Dividends
declared per common share
|
$ |
0.2300
|
$ |
0.1850
|
$ |
0.6450
|
$ |
0.5250
|
(A)
|
Professional
Employer Organization (“PEO”) revenues are net of direct pass-through
costs of $2,417.8 and $1,957.6 for the three months ended March 31,
2007
and 2006, respectively, and $6,763.1 and $5,167.5 for the nine months
ended March 31, 2007 and 2006,
respectively.
|
March
31,
|
June
30,
|
|||||||
Assets
|
2007
|
2006
|
||||||
Current
assets:
|
||||||||
Cash
and cash
equivalents
|
$ |
2,473.5
|
$ |
1,867.3
|
||||
Short-term
marketable securities
|
207.8
|
327.5
|
||||||
Accounts
receivable, net
|
915.0
|
765.0
|
||||||
Other
current
assets
|
455.5
|
400.4
|
||||||
Assets
of
discontinued operations
|
4.6
|
2,122.0
|
||||||
Total
current
assets
|
4,056.4
|
5,482.2
|
||||||
Long-term
marketable securities
|
105.9
|
333.7
|
||||||
Long-term
receivables, net
|
205.1
|
215.4
|
||||||
Property,
plant and equipment, net
|
710.1
|
701.5
|
||||||
Other
assets
|
840.1
|
772.3
|
||||||
Goodwill
|
2,317.5
|
1,985.8
|
||||||
Intangible
assets, net
|
717.0
|
515.3
|
||||||
Total
assets
before funds held for clients
|
8,952.1
|
10,006.2
|
||||||
Funds
held for
clients
|
23,970.8
|
17,483.9
|
||||||
Total
assets
|
$ |
32,922.9
|
$ |
27,490.1
|
||||
Liabilities
and Stockholders' Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ |
105.9
|
$ |
127.2
|
||||
Accrued
expenses and other current liabilities
|
1,413.5
|
1,373.9
|
||||||
Income
taxes
payable
|
220.3
|
202.2
|
||||||
Liabilities
of
discontinued operations
|
25.6
|
967.5
|
||||||
Total
current
liabilities
|
1,765.3
|
2,670.8
|
||||||
Long-term
debt
|
43.6
|
74.3
|
||||||
Other
liabilities
|
396.6
|
361.6
|
||||||
Deferred
income taxes
|
190.5
|
103.0
|
||||||
Deferred
revenues
|
479.9
|
481.4
|
||||||
Total
liabilities before client funds obligations
|
2,875.9
|
3,691.1
|
||||||
Client
funds
obligations
|
24,058.3
|
17,787.4
|
||||||
Total
liabilities
|
26,934.2
|
21,478.5
|
||||||
Stockholders'
equity:
|
||||||||
Preferred
stock, $1.00 par value:
|
||||||||
Authorized
0.3 shares; issued, none
|
-
|
-
|
||||||
Common
stock,
$0.10 par value:
|
||||||||
Authorized
1,000.0 shares; issued 638.7 shares
|
63.9
|
63.9
|
||||||
Capital
in
excess of par value
|
315.7
|
157.4
|
||||||
Retained
earnings
|
9,220.2
|
9,111.4
|
||||||
Treasury
stock
- at cost: 83.7 and 77.3
|
||||||||
shares,
respectively
|
(3,636.5 | ) | (3,194.8 | ) | ||||
Accumulated
other comprehensive income (loss)
|
25.4
|
(126.3 | ) | |||||
Total
stockholders’ equity
|
5,988.7
|
6,011.6
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
32,922.9
|
$ |
27,490.1
|
Nine
Months
Ended
|
||||||||
March
31,
|
||||||||
2007
|
2006
|
|||||||
Cash
Flows
from Operating Activities:
|
||||||||
Net
earnings
|
$ |
944.0
|
$ |
850.3
|
||||
Adjustments
to
reconcile net earnings to cash flows provided by
|
||||||||
operating
activities:
|
||||||||
Gain
on sale of cost-based investment
|
(38.6 | ) |
-
|
|||||
Depreciation
and amortization
|
214.4
|
181.9
|
||||||
Deferred
income taxes
|
(16.1 | ) | (61.7 | ) | ||||
Stock-based
compensation expense
|
103.9
|
106.6
|
||||||
Pension
expense
|
30.4
|
23.5
|
||||||
Net
realized (gain) loss from the sales of marketable
securities
|
(17.3 | ) |
16.8
|
|||||
Amortization
of premiums and discounts on available-for-sale securities
|
31.3
|
60.8
|
||||||
Gain
on sale of business
|
(24.4 | ) |
-
|
|||||
Impairment
of assets of discontinued operations businesses
|
-
|
18.6
|
||||||
Other
|
27.1
|
35.8
|
||||||
Changes
in
operating assets and liabilities, net of effects from acquisitions
and
|
||||||||
divestitures
of businesses:
|
||||||||
Increase
in receivables and other assets
|
(207.4 | ) | (46.6 | ) | ||||
(Decrease)
increase in accounts payable, accrued expenses and other
liabilities
|
(9.0 | ) | (11.5 | ) | ||||
Operating
activities of discontinued operations
|
73.7
|
299.6
|
||||||
Net
cash flows
provided by operating activities
|
1,112.0
|
1,474.1
|
||||||
Cash
Flows
from Investing Activities:
|
||||||||
Purchases
of
marketable securities
|
(3,347.7 | ) | (4,164.9 | ) | ||||
Proceeds
from
the sales and maturities of marketable securities
|
3,513.6
|
3,325.6
|
||||||
Net
purchases
of client funds securities
|
(6,065.1 | ) | (3,787.7 | ) | ||||
Change
in
client funds obligations
|
6,225.4
|
4,756.6
|
||||||
Capital
expenditures
|
(122.6 | ) | (189.6 | ) | ||||
Additions
to
intangibles
|
(138.4 | ) | (73.4 | ) | ||||
Proceeds
from
the sale of investment
|
38.6
|
-
|
||||||
Proceeds
from
the sale of business, net of cash divested
|
17.2
|
6.2
|
||||||
Acquisitions
of businesses, net of cash acquired
|
(433.0 | ) | (335.5 | ) | ||||
Dividend
received from Broadridge Financial Solutions, Inc.
|
690.0
|
-
|
||||||
Cash
retained
by Broadridge Financial Solutions, Inc.
|
(29.9 | ) |
-
|
|||||
Other
|
16.3
|
12.9
|
||||||
Investing
activities of discontinued operations
|
(28.2 | ) | (56.1 | ) | ||||
Net
cash flows
provided by (used in) investing activities
|
336.2
|
(505.9 | ) | |||||
Cash
Flows
from Financing Activities:
|
||||||||
Proceeds
from
issuance of notes
|
0.4
|
0.4
|
||||||
Payments
of
debt
|
(1.6 | ) | (0.5 | ) | ||||
Repurchases
of
common stock
|
(906.3 | ) | (545.2 | ) | ||||
Proceeds
from
stock purchase plan and exercises of stock options
|
224.5
|
175.9
|
||||||
Dividends
paid
|
(334.0 | ) | (286.9 | ) | ||||
Financing
activities of discontinued operations
|
134.1
|
55.0
|
||||||
Net
cash flows
used in financing activities
|
(882.9 | ) | (601.3 | ) | ||||
Effect
of
exchange rate changes on cash and cash equivalents
|
7.5
|
(5.1 | ) | |||||
Net
change in
cash and cash equivalents
|
572.8
|
361.8
|
||||||
Cash
and cash
equivalents, beginning of period
|
1,900.7
|
975.4
|
||||||
Cash
and cash
equivalents, end of period
|
$ |
2,473.5
|
$ |
1,337.2
|
||||
Less
cash and
cash equivalents of discontinued operations, end of period
|
-
|
217.5
|
||||||
Cash
and cash
equivalents of continuing operations, end of period
|
$ |
2,473.5
|
$ |
1,119.7
|
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenues
|
$ |
558.5
|
$ |
625.6
|
$ |
1,444.9
|
$ |
1,652.1
|
||||||||
Earnings
from
discontinued operations before income taxes
|
64.8
|
91.0
|
176.1
|
218.5
|
||||||||||||
Provision
for
income taxes
|
47.1
|
35.0
|
92.0
|
84.5
|
||||||||||||
Net
earnings
from discontinued operations before gain on
|
||||||||||||||||
disposal
of discontinued operations
|
17.7
|
56.0
|
84.1
|
134.0
|
||||||||||||
Gain
on
disposal of discontinued operations, net of provision
|
||||||||||||||||
for
income taxes of $4.3 for the three months ended March 31,
|
||||||||||||||||
2007
and $4.9 for the nine months ended March 31, 2007
|
6.9
|
-
|
19.5
|
-
|
||||||||||||
Net
earnings
from discontinued operations
|
$ |
24.6
|
$ |
56.0
|
$ |
103.6
|
$ |
134.0
|
March
31,
|
June
30,
|
|||||||
2007
|
2006
|
|||||||
Assets:
|
||||||||
Cash
|
$ |
-
|
$ |
33.4
|
||||
Short-term
marketable securities
|
-
|
40.3
|
||||||
Accounts
receivable, net
|
4.6
|
437.3
|
||||||
Securities
clearing receivables
|
-
|
836.8
|
||||||
Property,
plant and equipment, net
|
-
|
80.9
|
||||||
Goodwill
|
-
|
480.4
|
||||||
Intangible
assets, net
|
-
|
102.7
|
||||||
Other
assets
|
-
|
110.2
|
||||||
Total
|
$ |
4.6
|
$ |
2,122.0
|
||||
Liabilities:
|
||||||||
Accounts
payable
|
$ |
-
|
$ |
80.1
|
||||
Accrued
expenses
|
4.8
|
210.1
|
||||||
Securities
clearing payables
|
-
|
613.6
|
||||||
Income
taxes payable
|
20.8
|
18.1
|
||||||
Deferred
revenue
|
-
|
45.6
|
||||||
Total
|
$ |
25.6
|
$ |
967.5
|
Years
ending
June 30,
|
2006
|
2005
|
2004
|
|||||||||
Operating
expenses
|
$ |
2,997.9
|
$ |
2,621.4
|
$ |
2,271.5
|
||||||
Systems
development and programming costs
|
472.6
|
426.9
|
402.8
|
|||||||||
Depreciation
and amortization
|
166.0
|
156.1
|
159.6
|
|||||||||
Cost
of revenues
|
$ |
3,636.5
|
$ |
3,204.4
|
$ |
2,833.9
|
For
the three
months ended March 31,
|
||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||
Net
|
EPS
|
Net
|
EPS
|
|||||||||||||||||||||
Earnings
from
|
Weighted
|
from
|
Earnings
from
|
Weighted
|
from
|
|||||||||||||||||||
Continuing
|
Average
|
Continuing
|
Continuing
|
Average
|
Continuing
|
|||||||||||||||||||
Operations
|
Shares
|
Operations
|
Operations
|
Shares
|
Operations
|
|||||||||||||||||||
Basic
|
$ |
364.3
|
552.1
|
$ |
0.66
|
$ |
314.6
|
577.5
|
$ |
0.54
|
||||||||||||||
Effect
of zero
coupon
|
||||||||||||||||||||||||
subordinated
notes
|
0.3
|
0.9
|
0.2
|
1.1
|
||||||||||||||||||||
Effect
of
employee
|
||||||||||||||||||||||||
compensation
|
||||||||||||||||||||||||
related
shares
|
-
|
5.7
|
-
|
4.2
|
||||||||||||||||||||
Diluted
|
$ |
364.6
|
558.7
|
$ |
0.65
|
$ |
314.8
|
582.8
|
$ |
0.54
|
For
the nine
months ended March 31,
|
||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||
Net
|
EPS
|
Net
|
EPS
|
|||||||||||||||||||||
Earnings
from
|
Weighted
|
from
|
Earnings
from
|
Weighted
|
from
|
|||||||||||||||||||
Continuing
|
Average
|
Continuing
|
Continuing
|
Average
|
Continuing
|
|||||||||||||||||||
Operations
|
Shares
|
Operations
|
Operations
|
Shares
|
Operations
|
|||||||||||||||||||
Basic
|
$ |
840.4
|
551.6
|
$ |
1.52
|
$ |
716.3
|
577.0
|
$ |
1.24
|
||||||||||||||
Effect
of zero
coupon
|
||||||||||||||||||||||||
subordinated
notes
|
1.1
|
1.0
|
0.8
|
1.2
|
||||||||||||||||||||
Effect
of
employee
|
||||||||||||||||||||||||
compensation
|
||||||||||||||||||||||||
related
shares
|
-
|
5.9
|
-
|
4.5
|
||||||||||||||||||||
Diluted
|
$ |
841.5
|
558.5
|
$ |
1.51
|
$ |
717.1
|
582.7
|
$ |
1.23
|
·
|
Stock
Options.
Stock options are granted to employees at exercise prices equal
to the
fair market value of the Company’s common stock on the dates of grant.
Stock options are issued under a grade vesting schedule, generally
vest
ratably over five years and have a term of 10
years. Compensation expense for stock options is recognized
over the requisite service period for each separately vesting portion
of
the stock option award. In fiscal 2007, the Company has reduced
the number of stock options issued to employees and replaced these
awards
with the issuance of performance-based restricted
stock.
|
·
|
Employee
Stock
Purchase Plan. Prior to November 2005, the Company offered an employee
stock purchase plan that allowed eligible employees to purchase
shares of
common stock at 85% of the lower of market value as of the date
the
purchase price for an offering was determined or as of the end
of such
offering. In November 2005, the Company revised the employee
stock purchase plan offering beginning on January 1, 2006, whereby
eligible employees can purchase shares of common stock at 85% of
the
market value at the date the purchase price for the offering is
determined. Compensation expense for the employee stock
purchase plan is recognized over the vesting period of 24 months
on a
straight-line basis.
|
·
|
Restricted
Stock. The Company has a restricted stock program under which shares
of
common stock have been issued to certain key employees. These shares
are
restricted as to transfer and in certain circumstances must be
returned to
the Company at the original purchase price. The Company records
stock
compensation expense relating to the issuance of restricted stock
over the
period during which the transfer restrictions exist, which is up
to five
years from the date of grant. The value of the Company’s restricted stock,
based on market prices, is recognized as compensation expense over
the
restriction period on a straight-line
basis.
|
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Operating
expenses
|
$ |
6.3
|
$ |
5.7
|
$ |
18.0
|
$ |
18.2
|
||||||||
Selling,
general and administrative expenses
|
21.3
|
24.2
|
68.1
|
70.6
|
||||||||||||
System
development and
|
||||||||||||||||
programming
costs
|
5.8
|
5.7
|
17.8
|
17.8
|
||||||||||||
Total
pretax
stock-based compensation expense
|
||||||||||||||||
included
in continuing operations
|
$ |
33.4
|
$ |
35.6
|
$ |
103.9
|
$ |
106.6
|
||||||||
Total
pretax
stock-based compensation expense
|
||||||||||||||||
included
in discontinued operations
|
5.5
|
8.0
|
17.9
|
25.4
|
||||||||||||
Total
pretax
stock-based compensation expense
|
$ |
38.9
|
$ |
43.6
|
$ |
121.8
|
$ |
132.0
|
Number
|
Weighted
|
|||||||
of
Options
(a)
|
Average
Price
(a)
|
|||||||
(in
thousands)
|
(in
dollars)
|
|||||||
Options
outstanding at
|
||||||||
July
1, 2006
|
73,189
|
$ |
49
|
|||||
Options
granted
|
3,289
|
$ |
43
|
|||||
Options
exercised
|
(8,933 | ) | $ |
34
|
||||
Options
canceled (b)
|
(10,573 | ) | $ |
41
|
||||
Options
outstanding at
|
||||||||
March
31, 2007
|
56,972
|
$ |
40
|
(a) |
The
number of
options and weighted average price were adjusted to reflect the
impact of
the spin-off of Broadridge.
|
|||||||
(b) |
Includes
7.8
million of options held by Broadridge employees that were cancelled
or
forfeited as of the date of
spin-off.
|
Risk-free
interest rate
|
4.7%
-
5.0%
|
4.0%
-
4.6%
|
|
Dividend
yield
|
1.6%
-
1.7%
|
1.4%
-
1.7%
|
|
Weighted
average volatility factor
|
18.4%
-
24.7%
|
17.1%
-
24.7%
|
|
Weighted
average expected life (in years)
|
|
|
|
Stock
options
|
4.9
–
5.6
|
5.5
–
5.6
|
|
Stock
purchase plan
|
2.0
|
2.0
|
|
Weighted
average fair value (in dollars)
|
|
|
|
Stock
options
|
$11.82
|
$10.89
|
|
Stock
purchase plan
|
$12.34
|
$9.76
|
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Interest
income on corporate
|
||||||||||||||||
funds
|
$ | (25.7 | ) | $ | (23.8 | ) | $ | (119.5 | ) | $ | (95.4 | ) | ||||
Gain
on sale
of investment
|
-
|
-
|
(38.6 | ) |
-
|
|||||||||||
Realized
gains
on available-
|
||||||||||||||||
for-sale
securities
|
(0.4 | ) | (0.2 | ) | (20.5 | ) | (0.8 | ) | ||||||||
Realized
losses on available-
|
||||||||||||||||
for-sale
securities
|
0.9
|
1.0
|
3.2
|
17.6
|
||||||||||||
Other
income,
net
|
$ | (25.2 | ) | $ | (23.0 | ) | $ | (175.4 | ) | $ | (78.6 | ) |
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
earnings
|
$ |
388.9
|
$ |
370.6
|
$ |
944.0
|
$ |
850.3
|
||||||||
Other
comprehensive income (loss):
|
||||||||||||||||
Foreign
currency translation
|
||||||||||||||||
adjustments
|
(23.8 | ) |
15.0
|
8.1
|
(1.4 | ) | ||||||||||
Unrealized
net gain (loss) on
|
||||||||||||||||
available-for-sale
securities,
|
||||||||||||||||
net
of tax
|
32.5
|
(54.5 | ) |
143.6
|
(164.0 | ) | ||||||||||
Comprehensive
income
|
$ |
397.6
|
$ |
331.1
|
$ |
1,095.7
|
$ |
684.9
|
Revenues
|
||||||||||||||||
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Employer
Services
|
$ |
1,860.0
|
$ |
1,656.7
|
$ |
4,854.2
|
$ |
4,336.4
|
||||||||
Dealer
Services
|
310.6
|
286.6
|
908.0
|
780.1
|
||||||||||||
Other
|
(5.7 | ) | (1.2 | ) |
50.0
|
62.0
|
||||||||||
Reconciling
items:
|
||||||||||||||||
Foreign
exchange
|
20.6
|
(1.7 | ) |
50.3
|
(6.7 | ) | ||||||||||
Client
fund interest
|
3.8
|
(13.4 | ) | (8.2 | ) | (49.7 | ) | |||||||||
Total
|
$ |
2,189.3
|
$ |
1,927.0
|
$ |
5,854.3
|
$ |
5,122.1
|
Earnings
From
Continuing Operations Before Income Taxes
|
||||||||||||||||
Three
Months
Ended
|
Nine
Months
Ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Employer
Services
|
$ |
556.0
|
$ |
503.8
|
$ |
1,186.6
|
$ |
1,085.8
|
||||||||
Dealer
Services
|
51.2
|
37.5
|
143.5
|
117.5
|
||||||||||||
Other
|
(66.0 | ) | (51.6 | ) | (77.2 | ) | (81.8 | ) | ||||||||
Reconciling
items:
|
||||||||||||||||
Foreign
exchange
|
2.6
|
0.2
|
5.8
|
(0.7 | ) | |||||||||||
Client
fund interest
|
3.8
|
(13.4 | ) | (8.2 | ) | (49.7 | ) | |||||||||
Cost
of capital charge
|
30.2
|
26.6
|
85.6
|
75.3
|
||||||||||||
Total
|
$ |
577.8
|
$ |
503.1
|
$ |
1,336.1
|
$ |
1,146.4
|
March
31,
2007
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||||||||||||
Type
of
issue:
|
||||||||||||||||
Money
market
securities and other cash
|
||||||||||||||||
equivalents
|
$ |
13,162.3
|
-
|
-
|
$ |
13,162.3
|
||||||||||
Available-for-sale
securities:
|
||||||||||||||||
U.S.
Treasury and direct obligations of
|
||||||||||||||||
U.S.
government agencies
|
6,172.4
|
3.8
|
(62.1 | ) |
6,114.1
|
|||||||||||
Asset
backed securities
|
1,991.8
|
6.2
|
(12.3 | ) |
1,985.7
|
|||||||||||
Corporate
bonds
|
3,734.7
|
11.9
|
(24.6 | ) |
3,722.0
|
|||||||||||
Canadian
government obligations and
|
||||||||||||||||
Canadian
government agency obligations
|
971.8
|
0.2
|
(7.4 | ) |
964.6
|
|||||||||||
Other
securities
|
813.9
|
2.0
|
(6.6 | ) |
809.3
|
|||||||||||
Total
available-for-sale securities
|
13,684.6
|
24.1
|
(113.0 | ) |
13,595.7
|
|||||||||||
Total
corporate investments and funds
|
||||||||||||||||
held
for clients
|
$ |
26,846.9
|
$ |
24.1
|
$ | (113.0 | ) | $ |
26,758.0
|
June
30,
2006
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||||||||||||
Type
of
issue:
|
||||||||||||||||
Money
market
securities and other cash
|
||||||||||||||||
equivalents
|
$ |
6,399.6
|
-
|
-
|
$ |
6,399.6
|
||||||||||
Available-for-sale
securities:
|
||||||||||||||||
U.S.
Treasury and direct obligations of
|
||||||||||||||||
U.S.
government agencies
|
6,441.5
|
0.1
|
(165.0 | ) |
6,276.6
|
|||||||||||
Asset
backed securities
|
2,214.1
|
0.3
|
(40.8 | ) |
2,173.6
|
|||||||||||
Corporate
bonds
|
3,564.7
|
0.2
|
(75.9 | ) |
3,489.0
|
|||||||||||
Canadian
government obligations and
|
||||||||||||||||
Canadian
government agency obligations
|
838.1
|
0.1
|
(11.5 | ) |
826.7
|
|||||||||||
Other
securities
|
867.3
|
0.1
|
(20.5 | ) |
846.9
|
|||||||||||
Total
available-for-sale securities
|
13,925.7
|
0.8
|
(313.7 | ) |
13,612.8
|
|||||||||||
Total
corporate investments and funds
|
||||||||||||||||
held
for clients
|
$ |
20,325.3
|
$ |
0.8
|
$ | (313.7 | ) | $ |
20,012.4
|
March
31,
|
June
30,
|
|||||||
2007
|
2006
|
|||||||
Corporate
investments:
|
||||||||
Cash
and cash equivalents
|
$ |
2,473.5
|
$ |
1,867.3
|
||||
Short-term
marketable securities
|
207.8
|
327.5
|
||||||
Long-term
marketable securities
|
105.9
|
333.7
|
||||||
Total
corporate investments
|
2,787.2
|
2,528.5
|
||||||
Funds
held for
clients
|
23,970.8
|
17,483.9
|
||||||
Total
corporate investments and
|
||||||||
funds
held for clients
|
$ |
26,758.0
|
$ |
20,012.4
|
Due
in one
year or less
|
$ |
2,594.9
|
||
Due
after one
year to two years
|
2,742.9
|
|||
Due
after two
years to three years
|
2,729.1
|
|||
Due
after
three years to four years
|
2,475.0
|
|||
Due
after four
years to ten years
|
3,053.8
|
|||
Total
available-for-sale securities
|
$ |
13,595.7
|
Employer
|
Dealer
|
|||||||||||||||
Services
|
Services
|
Other
|
Total
|
|||||||||||||
Balance
as
of
|
||||||||||||||||
June
30, 2006
|
$ |
1,246.2
|
$ |
730.0
|
$ |
9.6
|
$ |
1,985.8
|
||||||||
Additions
and
other adjustments, net
|
294.7
|
12.3
|
-
|
307.0
|
||||||||||||
Currency
translation
|
||||||||||||||||
adjustments
|
10.8
|
13.6
|
0.3
|
24.7
|
||||||||||||
Balance
as
of
|
||||||||||||||||
March
31, 2007
|
$ |
1,551.7
|
$ |
755.9
|
$ |
9.9
|
$ |
2,317.5
|
March
31,
|
June
30,
|
|||||||
2007
|
2006
|
|||||||
Intangible
assets:
|
||||||||
Software
and software licenses
|
$ |
933.4
|
$ |
642.2
|
||||
Customer
contracts and lists
|
725.6
|
582.1
|
||||||
Other
intangibles
|
246.2
|
243.2
|
||||||
1,905.2
|
1,467.5
|
|||||||
Less
accumulated amortization:
|
||||||||
Software
and software licenses
|
(670.1 | ) | (474.1 | ) | ||||
Customer
contracts and lists
|
(347.0 | ) | (313.9 | ) | ||||
Other
intangibles
|
(171.1 | ) | (164.2 | ) | ||||
(1,188.2 | ) | (952.2 | ) | |||||
Intangible
assets, net
|
$ |
717.0
|
$ |
515.3
|
Amount
|
||||
2007
|
$ |
49.9
|
||
2008
|
$ |
158.5
|
||
2009
|
$ |
115.7
|
||
2010
|
$ |
88.8
|
||
2011
|
$ |
56.5
|
||
2012
|
$ |
45.7
|
Three
months
ended
|
Nine
months
ended
|
|||||||||||||||
March
31,
|
March
31,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Service
cost–
benefits
|
||||||||||||||||
earned
during the period
|
$ |
10.8
|
$ |
7.9
|
$ |
32.5
|
$ |
23.7
|
||||||||
Interest
cost
on projected
|
||||||||||||||||
benefits
|
12.1
|
9.9
|
36.3
|
29.6
|
||||||||||||
Expected
return on plan
|
||||||||||||||||
assets
|
(15.3 | ) | (14.0 | ) | (45.8 | ) | (41.9 | ) | ||||||||
Net
amortization and
|
||||||||||||||||
deferral
|
3.7
|
4.8
|
10.9
|
14.4
|
||||||||||||
Net
pension
expense
|
$ |
11.3
|
$ |
8.6
|
$ |
33.9
|
$ |
25.8
|