Delaware
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22-1467904
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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One ADP Boulevard, Roseland, New Jersey
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07068
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
973-974-5000
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Large accelerated filer [x]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [ ]
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Emerging growth company [ ]
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Page
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Statements of Consolidated Earnings
Three and nine months ended March 31, 2019 and 2018 |
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Statements of Consolidated Comprehensive Income
Three and nine months ended March 31, 2019 and 2018 |
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Consolidated Balance Sheets
At March 31, 2019 and June 30, 2018 |
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Statements of Consolidated Cash Flows
Nine months ended March 31, 2019 and 2018 |
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Item 5.
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Other Information
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Three Months Ended
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Nine Months Ended
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||||||||||||
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March 31,
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March 31,
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||||||||||||
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2019
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2018
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2019
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2018
|
||||||||
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*As Restated
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*As Restated
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||||||||||
REVENUES:
|
|
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||||||||
Revenues, other than interest on funds held
for clients and PEO revenues
|
$
|
2,546.9
|
|
|
$
|
2,495.2
|
|
|
$
|
7,084.7
|
|
|
$
|
6,764.5
|
|
Interest on funds held for clients
|
167.4
|
|
|
134.8
|
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|
415.0
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|
|
340.9
|
|
||||
PEO revenues (A)
|
1,133.1
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|
|
1,066.0
|
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3,176.8
|
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|
2,906.1
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||||
TOTAL REVENUES
|
3,847.4
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|
|
3,696.0
|
|
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10,676.5
|
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10,011.5
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EXPENSES:
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Costs of revenues:
|
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||||
Operating expenses
|
1,874.5
|
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|
1,845.2
|
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|
5,370.4
|
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|
5,185.0
|
|
||||
Systems development and programming costs
|
160.1
|
|
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163.9
|
|
|
474.2
|
|
|
481.5
|
|
||||
Depreciation and amortization
|
77.2
|
|
|
70.2
|
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221.5
|
|
|
202.1
|
|
||||
TOTAL COSTS OF REVENUES
|
2,111.8
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2,079.3
|
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6,066.1
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5,868.6
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||||||||
Selling, general, and administrative expenses
|
750.4
|
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750.1
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2,209.4
|
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2,149.0
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|
||||
Interest expense
|
21.7
|
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18.6
|
|
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96.2
|
|
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74.1
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||||
TOTAL EXPENSES
|
2,883.9
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2,848.0
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8,371.7
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8,091.7
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||||
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||||||||
Other income, net
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(21.0
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)
|
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(27.2
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)
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(67.5
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)
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(107.9
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)
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||||
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||||||||
EARNINGS BEFORE INCOME TAXES
|
984.5
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875.2
|
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2,372.3
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2,027.7
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||||
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||||||||
Provision for income taxes
|
230.8
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214.2
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554.9
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283.7
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||||
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||||||||
NET EARNINGS
|
$
|
753.7
|
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$
|
661.0
|
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$
|
1,817.4
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$
|
1,744.0
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||||||||
BASIC EARNINGS PER SHARE
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$
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1.74
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$
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1.50
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$
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4.17
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$
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3.95
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DILUTED EARNINGS PER SHARE
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$
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1.73
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$
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1.49
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$
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4.15
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$
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3.93
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||||||||
Basic weighted average shares outstanding
|
434.1
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441.0
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435.5
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441.5
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|
||||
Diluted weighted average shares outstanding
|
436.6
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443.4
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438.1
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444.1
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Three Months Ended
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Nine Months Ended
|
||||||||||||
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March 31,
|
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March 31,
|
||||||||||||
|
2019
|
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2018
|
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2019
|
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2018
|
||||||||
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*As Restated
|
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*As Restated
|
||||||||||
Net earnings
|
$
|
753.7
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$
|
661.0
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$
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1,817.4
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$
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1,744.0
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||||||||
Other comprehensive income/loss:
|
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|
||||||||
Currency translation adjustments
|
(2.3
|
)
|
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26.8
|
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(49.9
|
)
|
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81.8
|
|
||||
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||||||||
Unrealized net gains/(losses) on available-for-sale securities
|
259.0
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(240.4
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)
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377.0
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(400.6
|
)
|
||||
Tax effect
|
(58.0
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)
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53.4
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(84.8
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)
|
|
109.9
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|
||||
Reclassification of net (gain)/losses on available-for-sale securities to net earnings
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(0.1
|
)
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0.2
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1.4
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1.3
|
|
||||
Tax effect
|
—
|
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0.1
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(0.2
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)
|
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(0.2
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)
|
||||
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||||||||
Reclassification of pension liability adjustment to net earnings
|
6.1
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2.3
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32.5
|
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|
6.9
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|
||||
Tax effect
|
(1.6
|
)
|
|
(0.6
|
)
|
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(8.1
|
)
|
|
(2.3
|
)
|
||||
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|
||||||||
Other comprehensive income/(loss), net of tax
|
203.1
|
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|
(158.2
|
)
|
|
267.9
|
|
|
(203.2
|
)
|
||||
Comprehensive income
|
$
|
956.8
|
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$
|
502.8
|
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$
|
2,085.3
|
|
|
$
|
1,540.8
|
|
|
|
March 31,
|
|
June 30,
|
||||
|
|
|
2018
|
|||||
|
|
2019
|
|
*As Restated
|
||||
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|
||||
Assets
|
|
|
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|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
|
|
$
|
1,826.2
|
|
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$
|
2,170.0
|
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Accounts receivable, net of allowance for doubtful accounts of $50.8 and $51.3, respectively
|
|
2,485.2
|
|
|
1,984.2
|
|
||
Other current assets
|
|
534.4
|
|
|
531.3
|
|
||
Total current assets before funds held for clients
|
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4,845.8
|
|
|
4,685.5
|
|
||
Funds held for clients
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|
36,078.2
|
|
|
27,137.8
|
|
||
Total current assets
|
|
40,924.0
|
|
|
31,823.3
|
|
||
Long-term receivables, net of allowance for doubtful accounts of $0.5 and $0.5, respectively
|
|
25.6
|
|
|
25.5
|
|
||
Property, plant and equipment, net
|
|
765.8
|
|
|
793.7
|
|
||
Deferred contract costs
|
|
2,361.6
|
|
|
2,377.4
|
|
||
Other assets
|
|
740.3
|
|
|
699.3
|
|
||
Goodwill
|
|
2,316.1
|
|
|
2,243.5
|
|
||
Intangible assets, net
|
|
1,062.9
|
|
|
886.4
|
|
||
Total assets
|
|
$
|
48,196.3
|
|
|
$
|
38,849.1
|
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
156.3
|
|
|
$
|
135.4
|
|
Accrued expenses and other current liabilities
|
|
1,678.7
|
|
|
1,547.6
|
|
||
Accrued payroll and payroll-related expenses
|
|
607.4
|
|
|
667.7
|
|
||
Dividends payable
|
|
340.0
|
|
|
298.9
|
|
||
Short-term deferred revenues
|
|
228.3
|
|
|
225.7
|
|
||
Income taxes payable
|
|
99.7
|
|
|
43.9
|
|
||
Total current liabilities before client funds obligations
|
|
3,110.4
|
|
|
2,919.2
|
|
||
Client funds obligations
|
|
36,055.6
|
|
|
27,493.5
|
|
||
Total current liabilities
|
|
39,166.0
|
|
|
30,412.7
|
|
||
Long-term debt
|
|
2,002.3
|
|
|
2,002.4
|
|
||
Other liabilities
|
|
759.8
|
|
|
728.0
|
|
||
Deferred income taxes
|
|
615.8
|
|
|
522.0
|
|
||
Long-term deferred revenues
|
|
406.2
|
|
|
448.1
|
|
||
Total liabilities
|
|
42,950.1
|
|
|
34,113.2
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
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 at March 31, 2019 and June 30, 2018;
outstanding, 435.5 and 438.8 shares at March 31, 2019 and June 30, 2018, respectively |
|
63.9
|
|
|
63.9
|
|
||
Capital in excess of par value
|
|
1,140.2
|
|
|
1,014.8
|
|
||
Retained earnings
|
|
17,368.6
|
|
|
16,546.6
|
|
||
Treasury stock - at cost: 203.2 and 199.9 shares at March 31, 2019 and June 30, 2018, respectively
|
|
(12,914.6
|
)
|
|
(12,209.6
|
)
|
||
Accumulated other comprehensive loss
|
|
(411.9
|
)
|
|
(679.8
|
)
|
||
Total stockholders’ equity
|
|
5,246.2
|
|
|
4,735.9
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
48,196.3
|
|
|
$
|
38,849.1
|
|
|
|
Nine Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
*As Restated
|
|||||
Cash Flows from Operating Activities:
|
|
|
|
|
||||
Net earnings
|
|
$
|
1,817.4
|
|
|
$
|
1,744.0
|
|
Adjustments to reconcile net earnings to cash flows provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
299.6
|
|
|
278.3
|
|
||
Amortization of deferred contract costs
|
|
655.2
|
|
|
623.5
|
|
||
Deferred income taxes
|
|
4.1
|
|
|
(145.5
|
)
|
||
Stock-based compensation expense
|
|
122.2
|
|
|
119.4
|
|
||
Net pension expense
|
|
41.0
|
|
|
8.2
|
|
||
Net amortization of premiums and accretion of discounts on available-for-sale securities
|
|
38.9
|
|
|
55.6
|
|
||
Impairment of intangible assets
|
|
12.1
|
|
|
—
|
|
||
Other
|
|
21.2
|
|
|
22.0
|
|
||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
||
Increase in accounts receivable
|
|
(526.7
|
)
|
|
(239.3
|
)
|
||
Increase in other assets
|
|
(748.9
|
)
|
|
(696.1
|
)
|
||
Increase / (decrease) in accounts payable
|
|
25.4
|
|
|
(31.1
|
)
|
||
Increase in accrued expenses and other liabilities
|
|
194.5
|
|
|
71.0
|
|
||
Net cash flows provided by operating activities
|
|
1,956.0
|
|
|
1,810.0
|
|
||
|
|
|
|
|
||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
||
Purchases of corporate and client funds marketable securities
|
|
(2,725.8
|
)
|
|
(3,692.7
|
)
|
||
Proceeds from the sales and maturities of corporate and client funds marketable securities
|
|
2,090.6
|
|
|
2,702.5
|
|
||
Capital expenditures
|
|
(120.3
|
)
|
|
(159.6
|
)
|
||
Additions to intangibles
|
|
(329.9
|
)
|
|
(195.8
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
|
(120.4
|
)
|
|
(612.4
|
)
|
||
Proceeds from the sale of property, plant, and equipment
|
|
7.9
|
|
|
—
|
|
||
Net cash flows used in investing activities
|
|
(1,197.9
|
)
|
|
(1,958.0
|
)
|
||
|
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
||
Net increase in client funds obligations
|
|
8,612.0
|
|
|
6,700.2
|
|
||
Payments of debt
|
|
(1.6
|
)
|
|
(6.8
|
)
|
||
Repurchases of common stock
|
|
(760.6
|
)
|
|
(596.2
|
)
|
||
Net proceeds from stock purchase plan and stock-based compensation plans
|
|
50.5
|
|
|
46.1
|
|
||
Dividends paid
|
|
(949.6
|
)
|
|
(785.1
|
)
|
||
Other
|
|
(5.3
|
)
|
|
—
|
|
||
Net cash flows provided by financing activities
|
|
6,945.4
|
|
|
5,358.2
|
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(34.1
|
)
|
|
53.1
|
|
||
|
|
|
|
|
||||
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
7,669.4
|
|
|
5,263.3
|
|
||
|
|
|
|
|
||||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period
|
|
6,542.1
|
|
|
8,181.6
|
|
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period
|
|
$
|
14,211.5
|
|
|
$
|
13,444.9
|
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,826.2
|
|
|
$
|
2,293.6
|
|
Restricted cash and restricted cash equivalents included in funds held for clients (A)
|
|
12,385.3
|
|
|
11,151.3
|
|
||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
$
|
14,211.5
|
|
|
$
|
13,444.9
|
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
108.6
|
|
|
$
|
86.5
|
|
Cash paid for income taxes, net of income tax refunds
|
|
$
|
437.7
|
|
|
$
|
423.0
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2018
|
||||||||||||||
|
As reported
|
|
Adjustments
ASC 606 |
|
Adjustments
ASU 2017-07 |
|
As restated
|
||||||||
Revenues, other than interest on funds held for clients and PEO revenues
|
$
|
2,492.9
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
2,495.2
|
|
Interest on funds held for clients
|
134.8
|
|
|
—
|
|
|
—
|
|
|
134.8
|
|
||||
PEO revenues
|
1,065.3
|
|
|
0.7
|
|
|
—
|
|
|
1,066.0
|
|
||||
TOTAL REVENUES
|
3,693.0
|
|
|
3.0
|
|
|
—
|
|
|
3,696.0
|
|
||||
Operating expenses
|
1,844.7
|
|
|
(8.8
|
)
|
|
9.3
|
|
|
1,845.2
|
|
||||
Systems development and programming costs
|
162.5
|
|
|
—
|
|
|
1.4
|
|
|
163.9
|
|
||||
Depreciation and amortization
|
70.2
|
|
|
—
|
|
|
—
|
|
|
70.2
|
|
||||
Selling, general, and administrative expenses
|
755.1
|
|
|
(10.8
|
)
|
|
5.8
|
|
|
750.1
|
|
||||
Interest expense
|
18.6
|
|
|
—
|
|
|
—
|
|
|
18.6
|
|
||||
Total Expenses
|
2,851.1
|
|
|
(19.6
|
)
|
|
16.5
|
|
|
2,848.0
|
|
||||
Other income, net
|
(10.7
|
)
|
|
—
|
|
|
(16.5
|
)
|
|
(27.2
|
)
|
||||
EARNINGS BEFORE INCOME TAXES
|
852.6
|
|
|
22.6
|
|
|
—
|
|
|
875.2
|
|
||||
Provision for income taxes
|
209.5
|
|
|
4.7
|
|
|
—
|
|
|
214.2
|
|
||||
NET EARNINGS
|
$
|
643.1
|
|
|
$
|
17.9
|
|
|
$
|
—
|
|
|
$
|
661.0
|
|
|
Nine Months Ended
|
||||||||||||||
|
March 31, 2018
|
||||||||||||||
|
As reported
|
|
Adjustments
ASC 606 |
|
Adjustments
ASU 2017-07 |
|
As restated
|
||||||||
Revenues, other than interest on funds held for clients and PEO revenues
|
$
|
6,762.7
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
6,764.5
|
|
Interest on funds held for clients
|
340.9
|
|
|
—
|
|
|
—
|
|
|
340.9
|
|
||||
PEO revenues
|
2,903.6
|
|
|
2.5
|
|
|
—
|
|
|
2,906.1
|
|
||||
TOTAL REVENUES
|
10,007.2
|
|
|
4.3
|
|
|
—
|
|
|
10,011.5
|
|
||||
Operating expenses
|
5,210.6
|
|
|
(53.6
|
)
|
|
28.0
|
|
|
5,185.0
|
|
||||
Systems development and programming costs
|
477.6
|
|
|
—
|
|
|
3.9
|
|
|
481.5
|
|
||||
Depreciation and amortization
|
202.1
|
|
|
—
|
|
|
—
|
|
|
202.1
|
|
||||
Selling, general, and administrative expenses
|
2,134.8
|
|
|
(3.3
|
)
|
|
17.5
|
|
|
2,149.0
|
|
||||
Interest expense
|
74.1
|
|
|
—
|
|
|
—
|
|
|
74.1
|
|
||||
Total Expenses
|
8,099.2
|
|
|
(56.9
|
)
|
|
49.4
|
|
|
8,091.7
|
|
||||
Other income, net
|
(58.5
|
)
|
|
—
|
|
|
(49.4
|
)
|
|
(107.9
|
)
|
||||
EARNINGS BEFORE INCOME TAXES
|
1,966.5
|
|
|
61.2
|
|
|
—
|
|
|
2,027.7
|
|
||||
Provision / (benefit) for income taxes
|
454.4
|
|
|
(170.7
|
)
|
|
—
|
|
|
283.7
|
|
||||
NET EARNINGS
|
$
|
1,512.1
|
|
|
$
|
231.9
|
|
|
$
|
—
|
|
|
$
|
1,744.0
|
|
|
|
June 30,
|
|
|
|
June 30,
|
||||||
|
|
2018
|
|
Adjustments
ASC 606
|
|
2018
|
||||||
|
|
As reported
|
|
|
As restated
|
|||||||
Assets
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||||||
Other current assets
|
|
$
|
758.0
|
|
|
$
|
(226.7
|
)
|
|
$
|
531.3
|
|
Total current assets
|
|
32,050.0
|
|
|
(226.7
|
)
|
|
31,823.3
|
|
|||
Deferred contract costs
|
|
—
|
|
|
2,377.4
|
|
|
2,377.4
|
|
|||
Other assets
|
|
1,089.6
|
|
|
(390.3
|
)
|
|
699.3
|
|
|||
Total assets
|
|
$
|
37,088.7
|
|
|
$
|
1,760.4
|
|
|
$
|
38,849.1
|
|
|
|
|
|
|
|
|
||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Short-term deferred revenues
|
|
226.5
|
|
|
(0.8
|
)
|
|
225.7
|
|
|||
Total current liabilities
|
|
30,413.6
|
|
|
(0.8
|
)
|
|
30,412.7
|
|
|||
Deferred income taxes
|
|
107.3
|
|
|
414.7
|
|
|
522.0
|
|
|||
Long-term deferred revenues
|
|
377.8
|
|
|
70.2
|
|
|
448.1
|
|
|||
Total liabilities
|
|
33,629.1
|
|
|
484.1
|
|
|
34,113.2
|
|
|||
|
|
|
|
|
|
|
||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|||
Retained earnings
|
|
15,271.3
|
|
|
1,275.3
|
|
|
16,546.6
|
|
|||
Total stockholders’ equity
|
|
3,459.6
|
|
|
1,276.3
|
|
|
4,735.9
|
|
|||
Total liabilities and stockholders’ equity
|
|
$
|
37,088.7
|
|
|
$
|
1,760.4
|
|
|
$
|
38,849.1
|
|
|
|
Nine Months Ended
|
||||||||||
|
|
March 31,
|
||||||||||
|
|
2018
|
|
Adjustments
ASC 606 |
|
2018
|
||||||
|
|
As reported
|
|
|
As restated
|
|||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
1,512.1
|
|
|
$
|
231.9
|
|
|
$
|
1,744.0
|
|
Adjustments to reconcile net earnings to cash flows provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Amortization of deferred contract costs
|
|
—
|
|
|
623.5
|
|
|
623.5
|
|
|||
Deferred income taxes
|
|
18.0
|
|
|
(163.5
|
)
|
|
(145.5
|
)
|
|||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|
|||
Increase in other assets
|
|
(38.6
|
)
|
|
(657.5
|
)
|
|
(696.1
|
)
|
|||
Increase in accrued expenses and other liabilities
|
|
105.4
|
|
|
(34.4
|
)
|
|
71.0
|
|
|||
Net cash flows provided by operating activities
|
|
$
|
1,810.0
|
|
|
$
|
—
|
|
|
$
|
1,810.0
|
|
Standard
|
Description
|
Effective Date
|
Effect on Financial Statements or Other Significant Matters
|
|
ASU 2016-02
Leases (Topic 842) |
This update amends the existing accounting standards for lease accounting and requires lessees to recognize most lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. In July 2018, the FASB issued Accounting Standards Update 2018-10-Codification Improvements to Topic 842 (Leases), and Accounting Standards Update 2018-11-Leases (Topic 842)-Targeted Improvements, which (i) narrows amendments to clarify how to apply certain aspects of the new lease standard, (ii) provides entities with an additional transition method to adopt the new standard, and (iii) provides lessors with a practical expedient for separating components of a contract. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) to be more general and/or to correct unintended application of guidance.
|
July 1, 2019 (“Fiscal 2020”)
|
The Company has been assessing the impacts of the new standard. The Company anticipates using the optional transition method with a cumulative adjustment to retained earnings. The Company has reached a decision as to the systems it will use to manage the accounting for leases, determined the contracts that are considered leases under the new guidance and is currently in the process of implementing the systems and establishing the appropriate controls and procedures. The Company will utilize the transition package of practical expedients permitted within the new guidance which, among other things, will allow the Company to carry forward the historical lease classification.
Upon adoption, the Company anticipates a material impact to its Consolidated Balance Sheets but expects no impact to the Statements of Consolidated Earnings or Statements of Consolidated Cash Flows. The most significant impact will be the recognition of the right-of-use (“ROU”) assets and lease liabilities for operating leases. We estimate the adoption of the guidance will result in the recognition and presentation of total operating lease ROU assets to be approximately $600 million to $700 million and total operating lease liabilities to be approximately $500 million to $600 million, upon the adoption date. |
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
Types of Revenues
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
HCM
|
$
|
1,771.4
|
|
|
$
|
1,759.4
|
|
|
$
|
4,886.1
|
|
|
$
|
4,696.4
|
|
HRO, excluding PEO benefits pass-throughs
|
678.7
|
|
|
661.7
|
|
|
1,855.4
|
|
|
1,713.6
|
|
||||
PEO benefits pass-throughs
|
684.5
|
|
|
626.4
|
|
|
2,011.1
|
|
|
1,828.7
|
|
||||
Global
|
545.4
|
|
|
513.7
|
|
|
1,508.9
|
|
|
1,431.9
|
|
||||
Interest on funds held for clients
|
167.4
|
|
|
134.8
|
|
|
415.0
|
|
|
340.9
|
|
||||
Total Revenues
|
$
|
3,847.4
|
|
|
$
|
3,696.0
|
|
|
$
|
10,676.5
|
|
|
$
|
10,011.5
|
|
Types of Revenues
|
Employer Services
|
|
PEO
|
|
Other
|
|
Total
|
||||||||
HCM
|
$
|
1,774.7
|
|
|
$
|
—
|
|
|
$
|
(3.3
|
)
|
|
$
|
1,771.4
|
|
HRO, excluding PEO benefits pass-throughs
|
233.2
|
|
|
448.6
|
|
|
(3.1
|
)
|
|
678.7
|
|
||||
PEO benefits pass-throughs
|
—
|
|
|
684.5
|
|
|
—
|
|
|
684.5
|
|
||||
Global
|
545.4
|
|
|
—
|
|
|
—
|
|
|
545.4
|
|
||||
Interest on funds held for clients
|
165.8
|
|
|
1.6
|
|
|
—
|
|
|
167.4
|
|
||||
Total Segment Revenues
|
$
|
2,719.1
|
|
|
$
|
1,134.7
|
|
|
$
|
(6.4
|
)
|
|
$
|
3,847.4
|
|
Types of Revenues
|
Employer Services
|
|
PEO
|
|
Other
|
|
Total
|
||||||||
HCM
|
$
|
1,756.3
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
1,759.4
|
|
HRO, excluding PEO benefits pass-throughs
|
225.1
|
|
|
439.5
|
|
|
(2.9
|
)
|
|
661.7
|
|
||||
PEO benefits pass-throughs
|
—
|
|
|
626.4
|
|
|
—
|
|
|
626.4
|
|
||||
Global
|
513.7
|
|
|
—
|
|
|
—
|
|
|
513.7
|
|
||||
Interest on funds held for clients
|
133.4
|
|
|
1.4
|
|
|
—
|
|
|
134.8
|
|
||||
Total Segment Revenues
|
$
|
2,628.5
|
|
|
$
|
1,067.3
|
|
|
$
|
0.2
|
|
|
$
|
3,696.0
|
|
Types of Revenues
|
Employer Services
|
|
PEO
|
|
Other
|
|
Total
|
||||||||
HCM
|
$
|
4,891.1
|
|
|
$
|
—
|
|
|
$
|
(5.0
|
)
|
|
$
|
4,886.1
|
|
HRO, excluding PEO benefits pass-throughs
|
696.6
|
|
|
1,165.7
|
|
|
(6.9
|
)
|
|
1,855.4
|
|
||||
PEO benefits pass-throughs
|
—
|
|
|
2,011.1
|
|
|
—
|
|
|
2,011.1
|
|
||||
Global
|
1,508.9
|
|
|
—
|
|
|
—
|
|
|
1,508.9
|
|
||||
Interest on funds held for clients
|
411.1
|
|
|
3.9
|
|
|
—
|
|
|
415.0
|
|
||||
Total Segment Revenues
|
$
|
7,507.7
|
|
|
$
|
3,180.7
|
|
|
$
|
(11.9
|
)
|
|
$
|
10,676.5
|
|
Types of Revenues
|
Employer Services
|
|
PEO
|
|
Other
|
|
Total
|
||||||||
HCM
|
$
|
4,694.1
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
4,696.4
|
|
HRO, excluding PEO benefits pass-throughs
|
642.2
|
|
|
1,077.4
|
|
|
(6.0
|
)
|
|
1,713.6
|
|
||||
PEO benefits pass-throughs
|
—
|
|
|
1,828.7
|
|
|
—
|
|
|
1,828.7
|
|
||||
Global
|
1,431.9
|
|
|
—
|
|
|
—
|
|
|
1,431.9
|
|
||||
Interest on funds held for clients
|
337.5
|
|
|
3.4
|
|
|
—
|
|
|
340.9
|
|
||||
Total Segment Revenues
|
$
|
7,105.7
|
|
|
$
|
2,909.5
|
|
|
$
|
(3.7
|
)
|
|
$
|
10,011.5
|
|
Contract Liability
|
|
||
Contract liability, July 1, 2018
|
$
|
607.5
|
|
Recognition of revenue included in beginning of year contract liability
|
(136.7
|
)
|
|
Contract liability, net of revenue recognized on contracts during the period
|
119.3
|
|
|
Currency adjustments
|
(10.9
|
)
|
|
Contract liability, March 31, 2019
|
$
|
579.2
|
|
|
March 31,
|
||
|
2019
|
||
Deferred costs to obtain a contract
|
$
|
919.8
|
|
Deferred costs to fulfill a contract
|
1,441.8
|
|
|
Total deferred contract costs (1)
|
$
|
2,361.6
|
|
Goodwill
|
$
|
406.1
|
|
Identifiable intangible assets
|
132.5
|
|
|
Other assets
|
0.8
|
|
|
Total assets acquired
|
$
|
539.4
|
|
|
|
||
Total liabilities assumed
|
$
|
48.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Cumulative amount from inception through
|
||||||||||||||
|
March 31,
|
|
March 31,
|
|
March 31,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
||||||||||
Employee separation benefits (a)
|
$
|
(8.2
|
)
|
|
$
|
11.8
|
|
|
$
|
(16.7
|
)
|
|
$
|
8.9
|
|
|
$
|
82.8
|
|
Other initiative costs (b)
|
0.5
|
|
|
1.3
|
|
|
2.2
|
|
|
4.2
|
|
|
13.2
|
|
|||||
Gain on sale of assets (c)
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
|||||
Total (d)
|
$
|
(7.7
|
)
|
|
$
|
13.1
|
|
|
$
|
(18.6
|
)
|
|
$
|
13.1
|
|
|
$
|
91.9
|
|
|
Employee
separation benefits
|
|
Other initiative costs
|
|
Total
|
||||||
Balance at June 30, 2018
|
$
|
54.0
|
|
|
$
|
0.5
|
|
|
$
|
54.5
|
|
Charged to expense
|
4.1
|
|
|
2.2
|
|
|
6.3
|
|
|||
Reversals
|
(20.8
|
)
|
|
—
|
|
|
(20.8
|
)
|
|||
Cash payments
|
(18.0
|
)
|
|
(2.3
|
)
|
|
(20.3
|
)
|
|||
Balance at March 31, 2019
|
$
|
19.3
|
|
|
$
|
0.4
|
|
|
$
|
19.7
|
|
|
|
|
|
|
|
||||||
Balance at June 30, 2017
|
$
|
73.9
|
|
|
$
|
0.5
|
|
|
$
|
74.4
|
|
Charged to expense
|
21.8
|
|
|
4.2
|
|
|
26.0
|
|
|||
Reversals
|
(12.9
|
)
|
|
—
|
|
|
(12.9
|
)
|
|||
Cash payments
|
(25.9
|
)
|
|
(3.4
|
)
|
|
(29.3
|
)
|
|||
Non-cash utilization
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|||
Balance at March 31, 2018
|
$
|
56.9
|
|
|
$
|
0.6
|
|
|
$
|
57.5
|
|
|
|
Basic
|
|
Effect of Employee Stock Option Shares
|
|
Effect of
Employee
Restricted
Stock
Shares
|
|
Diluted
|
||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net earnings
|
|
$
|
753.7
|
|
|
|
|
|
|
|
|
$
|
753.7
|
|
Weighted average shares (in millions)
|
|
434.1
|
|
|
1.2
|
|
|
1.3
|
|
|
436.6
|
|
||
EPS
|
|
$
|
1.74
|
|
|
|
|
|
|
|
|
$
|
1.73
|
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net earnings
|
|
$
|
661.0
|
|
|
|
|
|
|
|
|
$
|
661.0
|
|
Weighted average shares (in millions)
|
|
441.0
|
|
|
1.0
|
|
|
1.4
|
|
|
443.4
|
|
||
EPS
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
1,817.4
|
|
|
|
|
|
|
|
|
$
|
1,817.4
|
|
Weighted average shares (in millions)
|
|
435.5
|
|
|
1.3
|
|
|
1.3
|
|
|
438.1
|
|
||
EPS
|
|
$
|
4.17
|
|
|
|
|
|
|
|
|
$
|
4.15
|
|
Nine Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net earnings
|
|
$
|
1,744.0
|
|
|
|
|
|
|
|
|
$
|
1,744.0
|
|
Weighted average shares (in millions)
|
|
441.5
|
|
|
1.1
|
|
|
1.5
|
|
|
444.1
|
|
||
EPS
|
|
$
|
3.95
|
|
|
|
|
|
|
|
|
$
|
3.93
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest income on corporate funds
|
$
|
(15.0
|
)
|
|
$
|
(11.0
|
)
|
|
$
|
(71.6
|
)
|
|
$
|
(59.4
|
)
|
Realized gains on available-for-sale securities
|
(0.6
|
)
|
|
(1.3
|
)
|
|
(1.2
|
)
|
|
(1.9
|
)
|
||||
Realized losses on available-for-sale securities
|
0.5
|
|
|
1.6
|
|
|
2.6
|
|
|
3.2
|
|
||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
12.1
|
|
|
—
|
|
||||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
(0.4
|
)
|
||||
Non-service components of pension expense, net (see Note 2)
|
(5.9
|
)
|
|
(16.5
|
)
|
|
(5.3
|
)
|
|
(49.4
|
)
|
||||
Other income, net
|
$
|
(21.0
|
)
|
|
$
|
(27.2
|
)
|
|
$
|
(67.5
|
)
|
|
$
|
(107.9
|
)
|
|
March 31, 2019
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Market Value (A)
|
||||||||
Type of issue:
|
|
|
|
|
|
|
|
||||||||
Money market securities, cash and other cash equivalents
|
$
|
14,211.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,211.5
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
10,116.6
|
|
|
86.3
|
|
|
(39.8
|
)
|
|
10,163.1
|
|
||||
Asset-backed securities
|
4,572.8
|
|
|
13.1
|
|
|
(22.7
|
)
|
|
4,563.2
|
|
||||
U.S. Treasury securities
|
2,932.2
|
|
|
8.1
|
|
|
(33.4
|
)
|
|
2,906.9
|
|
||||
U.S. government agency securities
|
2,671.4
|
|
|
8.2
|
|
|
(18.4
|
)
|
|
2,661.2
|
|
||||
Canadian government obligations and Canadian government agency obligations
|
1,117.3
|
|
|
4.6
|
|
|
(8.0
|
)
|
|
1,113.9
|
|
||||
Canadian provincial bonds
|
777.0
|
|
|
8.2
|
|
|
(1.5
|
)
|
|
783.7
|
|
||||
Municipal bonds
|
600.7
|
|
|
11.4
|
|
|
(0.3
|
)
|
|
611.8
|
|
||||
Other securities
|
892.7
|
|
|
9.7
|
|
|
(2.8
|
)
|
|
899.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total available-for-sale securities
|
23,680.7
|
|
|
149.6
|
|
|
(126.9
|
)
|
|
23,703.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total corporate investments and funds held for clients
|
$
|
37,892.2
|
|
|
$
|
149.6
|
|
|
$
|
(126.9
|
)
|
|
$
|
37,914.9
|
|
|
June 30, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Market Value (B)
|
||||||||
Type of issue:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market securities, cash and other cash equivalents
|
$
|
6,542.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,542.1
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|||||||
Corporate bonds
|
9,819.4
|
|
|
20.3
|
|
|
(160.9
|
)
|
|
9,678.8
|
|
||||
Asset-backed securities
|
4,555.5
|
|
|
0.3
|
|
|
(64.1
|
)
|
|
4,491.7
|
|
||||
U.S. Treasury securities
|
2,678.9
|
|
|
0.4
|
|
|
(76.9
|
)
|
|
2,602.4
|
|
||||
US government agency securities
|
2,787.0
|
|
|
4.0
|
|
|
(47.7
|
)
|
|
2,743.3
|
|
||||
Canadian government obligations and Canadian government agency obligations
|
1,109.0
|
|
|
0.4
|
|
|
(20.6
|
)
|
|
1,088.8
|
|
||||
Canadian provincial bonds
|
724.5
|
|
|
5.1
|
|
|
(7.4
|
)
|
|
722.2
|
|
||||
Municipal bonds
|
584.6
|
|
|
3.2
|
|
|
(4.3
|
)
|
|
583.5
|
|
||||
Other securities
|
873.0
|
|
|
3.0
|
|
|
(10.5
|
)
|
|
865.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total available-for-sale securities
|
23,131.9
|
|
|
36.7
|
|
|
(392.4
|
)
|
|
22,776.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total corporate investments and funds held for clients
|
$
|
29,674.0
|
|
|
$
|
36.7
|
|
|
$
|
(392.4
|
)
|
|
$
|
29,318.3
|
|
|
March 31, 2019
|
||||||||||||||||||||||
|
Securities in Unrealized Loss Position Less Than 12 Months
|
|
Securities in Unrealized Loss Position Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Gross
Unrealized Losses |
|
Fair Market
Value
|
|
Gross
Unrealized Losses |
|
Fair Market
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Market Value
|
||||||||||||
Corporate bonds
|
$
|
(0.7
|
)
|
|
$
|
117.3
|
|
|
$
|
(39.1
|
)
|
|
$
|
5,048.6
|
|
|
$
|
(39.8
|
)
|
|
$
|
5,165.9
|
|
Asset-backed securities
|
(0.1
|
)
|
|
25.0
|
|
|
(22.6
|
)
|
|
3,430.9
|
|
|
(22.7
|
)
|
|
3,455.9
|
|
||||||
U.S. Treasury securities
|
—
|
|
|
—
|
|
|
(33.4
|
)
|
|
2,340.9
|
|
|
(33.4
|
)
|
|
2,340.9
|
|
||||||
U.S. government agency securities
|
—
|
|
|
—
|
|
|
(18.4
|
)
|
|
2,153.4
|
|
|
(18.4
|
)
|
|
2,153.4
|
|
||||||
Canadian government obligations and Canadian government agency obligations
|
(7.9
|
)
|
|
667.1
|
|
|
(0.1
|
)
|
|
51.0
|
|
|
(8.0
|
)
|
|
718.1
|
|
||||||
Canadian provincial bonds
|
(0.4
|
)
|
|
80.4
|
|
|
(1.1
|
)
|
|
220.2
|
|
|
(1.5
|
)
|
|
300.6
|
|
||||||
Municipal bonds
|
—
|
|
|
4.7
|
|
|
(0.3
|
)
|
|
46.1
|
|
|
(0.3
|
)
|
|
50.8
|
|
||||||
Other securities
|
—
|
|
|
12.1
|
|
|
(2.8
|
)
|
|
354.5
|
|
|
(2.8
|
)
|
|
366.6
|
|
||||||
|
$
|
(9.1
|
)
|
|
$
|
906.6
|
|
|
$
|
(117.8
|
)
|
|
$
|
13,645.6
|
|
|
$
|
(126.9
|
)
|
|
$
|
14,552.2
|
|
|
June 30, 2018
|
||||||||||||||||||||||
|
Securities in Unrealized Loss Position Less Than 12 Months
|
|
Securities in Unrealized Loss Position Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Gross
Unrealized Losses |
|
Fair Market
Value
|
|
Gross
Unrealized Losses |
|
Fair Market
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Market Value
|
||||||||||||
Corporate bonds
|
$
|
(118.2
|
)
|
|
$
|
7,132.9
|
|
|
$
|
(42.7
|
)
|
|
$
|
994.2
|
|
|
$
|
(160.9
|
)
|
|
$
|
8,127.1
|
|
Asset-backed securities
|
(47.4
|
)
|
|
3,515.9
|
|
|
(16.7
|
)
|
|
867.7
|
|
|
(64.1
|
)
|
|
4,383.6
|
|
||||||
U.S. Treasury securities
|
(46.9
|
)
|
|
1,676.8
|
|
|
(30.0
|
)
|
|
864.0
|
|
|
(76.9
|
)
|
|
2,540.8
|
|
||||||
U.S. government agency securities
|
(31.2
|
)
|
|
2,013.8
|
|
|
(16.5
|
)
|
|
431.1
|
|
|
(47.7
|
)
|
|
2,444.9
|
|
||||||
Canadian government obligations and Canadian government agency obligations
|
(20.6
|
)
|
|
1,020.3
|
|
|
—
|
|
|
—
|
|
|
(20.6
|
)
|
|
1,020.3
|
|
||||||
Canadian provincial bonds
|
(6.3
|
)
|
|
387.7
|
|
|
(1.1
|
)
|
|
50.4
|
|
|
(7.4
|
)
|
|
438.1
|
|
||||||
Municipal bonds
|
(3.6
|
)
|
|
285.8
|
|
|
(0.7
|
)
|
|
16.0
|
|
|
(4.3
|
)
|
|
301.8
|
|
||||||
Other securities
|
(9.2
|
)
|
|
573.3
|
|
|
(1.3
|
)
|
|
33.4
|
|
|
(10.5
|
)
|
|
606.7
|
|
||||||
|
$
|
(283.4
|
)
|
|
$
|
16,606.5
|
|
|
$
|
(109.0
|
)
|
|
$
|
3,256.8
|
|
|
$
|
(392.4
|
)
|
|
$
|
19,863.3
|
|
|
|
March 31,
|
|
June 30,
|
||||
|
|
2019
|
|
2018
|
||||
Corporate investments:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,826.2
|
|
|
$
|
2,170.0
|
|
Short-term marketable securities (a)
|
|
7.3
|
|
|
3.3
|
|
||
Long-term marketable securities (b)
|
|
3.2
|
|
|
7.2
|
|
||
Total corporate investments
|
|
$
|
1,836.7
|
|
|
$
|
2,180.5
|
|
|
|
March 31,
|
|
June 30,
|
||||
|
|
2019
|
|
2018
|
||||
Funds held for clients:
|
|
|
|
|
||||
Restricted cash and cash equivalents held to satisfy client funds obligations
|
|
$
|
12,385.3
|
|
|
$
|
4,372.1
|
|
Restricted short-term marketable securities held to satisfy client funds obligations
|
|
4,556.2
|
|
|
2,521.4
|
|
||
Restricted long-term marketable securities held to satisfy client funds obligations
|
|
19,136.7
|
|
|
20,244.3
|
|
||
Total funds held for clients
|
|
$
|
36,078.2
|
|
|
$
|
27,137.8
|
|
One year or less
|
$
|
4,563.5
|
|
One year to two years
|
5,733.7
|
|
|
Two years to three years
|
4,493.0
|
|
|
Three years to four years
|
4,327.5
|
|
|
After four years
|
4,585.7
|
|
|
Total available-for-sale securities
|
$
|
23,703.4
|
|
|
Employer
Services
|
|
PEO
Services
|
|
Total
|
||||||
Balance at June 30, 2018
|
$
|
2,238.7
|
|
|
$
|
4.8
|
|
|
$
|
2,243.5
|
|
Additions and other adjustments
|
89.1
|
|
|
—
|
|
|
89.1
|
|
|||
Currency translation adjustments
|
(16.5
|
)
|
|
—
|
|
|
(16.5
|
)
|
|||
Balance at March 31, 2019
|
$
|
2,311.3
|
|
|
$
|
4.8
|
|
|
$
|
2,316.1
|
|
|
|
March 31,
|
|
June 30,
|
||||
|
|
2019
|
|
2018
|
||||
Intangible assets:
|
|
|
|
|
||||
Software and software licenses
|
|
$
|
2,459.6
|
|
|
$
|
2,292.9
|
|
Customer contracts and lists
|
|
855.5
|
|
|
708.6
|
|
||
Other intangibles
|
|
237.9
|
|
|
236.5
|
|
||
|
|
3,553.0
|
|
|
3,238.0
|
|
||
Less accumulated amortization:
|
|
|
|
|
|
|
||
Software and software licenses
|
|
(1,722.4
|
)
|
|
(1,606.6
|
)
|
||
Customer contracts and lists
|
|
(551.5
|
)
|
|
(533.4
|
)
|
||
Other intangibles
|
|
(216.2
|
)
|
|
(211.6
|
)
|
||
|
|
(2,490.1
|
)
|
|
(2,351.6
|
)
|
||
Intangible assets, net
|
|
$
|
1,062.9
|
|
|
$
|
886.4
|
|
|
Amount
|
||
Three months ending June 30, 2019
|
$
|
70.8
|
|
Twelve months ending June 30, 2020
|
$
|
255.7
|
|
Twelve months ending June 30, 2021
|
$
|
206.5
|
|
Twelve months ending June 30, 2022
|
$
|
161.1
|
|
Twelve months ending June 30, 2023
|
$
|
131.3
|
|
Twelve months ending June 30, 2024
|
$
|
94.6
|
|
Debt instrument
|
|
Effective Interest Rate
|
|
March 31, 2019
|
|
June 30,
2018
|
||||
Fixed-rate 2.25% notes due September 15, 2020
|
|
2.37%
|
|
$
|
1,000.0
|
|
|
$
|
1,000.0
|
|
Fixed-rate 3.375% notes due September 15, 2025
|
|
3.47%
|
|
1,000.0
|
|
|
1,000.0
|
|
||
Other
|
|
|
|
11.5
|
|
|
13.0
|
|
||
|
|
|
|
2,011.5
|
|
|
2,013.0
|
|
||
Less: current portion
|
|
|
|
(2.5
|
)
|
|
(2.5
|
)
|
||
Less: unamortized discount and debt issuance costs
|
|
|
|
(6.7
|
)
|
|
(8.1
|
)
|
||
Total long-term debt
|
|
|
|
$
|
2,002.3
|
|
|
$
|
2,002.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating expenses
|
$
|
4.1
|
|
|
$
|
4.8
|
|
|
$
|
12.9
|
|
|
$
|
15.4
|
|
Selling, general and administrative expenses
|
36.1
|
|
|
31.8
|
|
|
94.6
|
|
|
87.9
|
|
||||
System development and programming costs
|
5.0
|
|
|
5.1
|
|
|
14.7
|
|
|
16.1
|
|
||||
Total stock-based compensation expense
|
$
|
45.2
|
|
|
$
|
41.7
|
|
|
$
|
122.2
|
|
|
$
|
119.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost – benefits earned during the period
|
$
|
14.9
|
|
|
$
|
18.7
|
|
|
$
|
44.9
|
|
|
$
|
55.9
|
|
Interest cost on projected benefits
|
19.7
|
|
|
16.4
|
|
|
59.0
|
|
|
49.0
|
|
||||
Expected return on plan assets
|
(32.9
|
)
|
|
(34.4
|
)
|
|
(98.9
|
)
|
|
(103.0
|
)
|
||||
Net amortization and deferral
|
—
|
|
|
2.1
|
|
|
0.1
|
|
|
6.3
|
|
||||
Settlement charges and special termination benefits
|
7.8
|
|
|
—
|
|
|
35.9
|
|
|
—
|
|
||||
Net pension expense
|
$
|
9.5
|
|
|
$
|
2.8
|
|
|
$
|
41.0
|
|
|
$
|
8.2
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2019
|
||||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
Retained Earnings
|
|
Treasury Stock
|
|
AOCI
|
|
Total
|
||||||||||||
Balance at December 31, 2018
|
$
|
63.9
|
|
|
$
|
1,076.1
|
|
|
$
|
16,959.1
|
|
|
$
|
(12,720.2
|
)
|
|
$
|
(615.0
|
)
|
|
$
|
4,763.9
|
|
Net earnings
|
—
|
|
|
—
|
|
|
753.7
|
|
|
—
|
|
|
—
|
|
|
753.7
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
203.1
|
|
|
203.1
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
35.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.8
|
|
||||||
Issuances relating to stock compensation plans
|
—
|
|
|
28.3
|
|
|
—
|
|
|
33.6
|
|
|
—
|
|
|
61.9
|
|
||||||
Treasury stock acquired (1.6 shares)
|
—
|
|
|
—
|
|
|
—
|
|
|
(228.0
|
)
|
|
—
|
|
|
(228.0
|
)
|
||||||
Dividends declared ($0.79 per share)
|
—
|
|
|
—
|
|
|
(344.2
|
)
|
|
—
|
|
|
—
|
|
|
(344.2
|
)
|
||||||
Balance at March 31, 2019
|
$
|
63.9
|
|
|
$
|
1,140.2
|
|
|
$
|
17,368.6
|
|
|
$
|
(12,914.6
|
)
|
|
$
|
(411.9
|
)
|
|
$
|
5,246.2
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2018
|
||||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
Retained Earnings
|
|
Treasury Stock
|
|
AOCI
|
|
Total
|
||||||||||||
Balance at December 31, 2017
|
$
|
63.9
|
|
|
$
|
903.5
|
|
|
$
|
16,285.0
|
|
|
$
|
(11,663.7
|
)
|
|
$
|
(428.2
|
)
|
|
$
|
5,160.5
|
|
Net earnings
|
—
|
|
|
—
|
|
|
661.0
|
|
|
—
|
|
|
—
|
|
|
661.0
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(158.2
|
)
|
|
(158.2
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
35.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.5
|
|
||||||
Issuances relating to stock compensation plans
|
—
|
|
|
25.1
|
|
|
—
|
|
|
39.9
|
|
|
—
|
|
|
65.0
|
|
||||||
Treasury stock acquired (1.7 shares)
|
—
|
|
|
—
|
|
|
—
|
|
|
(202.3
|
)
|
|
—
|
|
|
(202.3
|
)
|
||||||
Dividends declared ($0.63 per share)
|
—
|
|
|
—
|
|
|
(279.2
|
)
|
|
—
|
|
|
—
|
|
|
(279.2
|
)
|
||||||
Other (A)
|
—
|
|
|
—
|
|
|
42.3
|
|
|
—
|
|
|
(42.3
|
)
|
|
—
|
|
||||||
Balance at March 31, 2018
|
$
|
63.9
|
|
|
$
|
964.1
|
|
|
$
|
16,709.1
|
|
|
$
|
(11,826.1
|
)
|
|
$
|
(628.7
|
)
|
|
$
|
5,282.3
|
|
|
Nine Months Ended
|
||||||||||||||||||||||
|
March 31, 2019
|
||||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
Retained Earnings
|
|
Treasury Stock
|
|
AOCI
|
|
Total
|
||||||||||||
Balance at June 30, 2018
|
$
|
63.9
|
|
|
$
|
1,014.8
|
|
|
$
|
16,546.6
|
|
|
$
|
(12,209.6
|
)
|
|
$
|
(679.8
|
)
|
|
$
|
4,735.9
|
|
Net earnings
|
—
|
|
|
—
|
|
|
1,817.4
|
|
|
—
|
|
|
—
|
|
|
1,817.4
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
267.9
|
|
|
267.9
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
105.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105.4
|
|
||||||
Issuances relating to stock compensation plans
|
—
|
|
|
20.0
|
|
|
—
|
|
|
117.1
|
|
|
—
|
|
|
137.1
|
|
||||||
Treasury stock acquired (5.4 shares)
|
—
|
|
|
—
|
|
|
—
|
|
|
(822.1
|
)
|
|
—
|
|
|
(822.1
|
)
|
||||||
Dividends declared ($2.27 per share)
|
—
|
|
|
—
|
|
|
(995.4
|
)
|
|
—
|
|
|
—
|
|
|
(995.4
|
)
|
||||||
Balance at March 31, 2019
|
$
|
63.9
|
|
|
$
|
1,140.2
|
|
|
$
|
17,368.6
|
|
|
$
|
(12,914.6
|
)
|
|
$
|
(411.9
|
)
|
|
$
|
5,246.2
|
|
|
Nine Months Ended
|
||||||||||||||||||||||
|
March 31, 2018
|
||||||||||||||||||||||
|
Common Stock
|
|
Capital in Excess of Par Value
|
|
Retained Earnings
|
|
Treasury Stock
|
|
AOCI
|
|
Total
|
||||||||||||
Balance at June 30, 2017
|
$
|
63.9
|
|
|
$
|
867.8
|
|
|
$
|
15,739.3
|
|
|
$
|
(11,303.7
|
)
|
|
$
|
(383.2
|
)
|
|
$
|
4,984.1
|
|
Net earnings
|
—
|
|
|
—
|
|
|
1,744.0
|
|
|
—
|
|
|
—
|
|
|
1,744.0
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(203.2
|
)
|
|
(203.2
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
101.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101.7
|
|
||||||
Issuances relating to stock compensation plans
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
132.4
|
|
|
—
|
|
|
127.0
|
|
||||||
Treasury stock acquired (5.3 shares)
|
—
|
|
|
—
|
|
|
—
|
|
|
(654.8
|
)
|
|
—
|
|
|
(654.8
|
)
|
||||||
Dividends declared ($1.83 per share)
|
—
|
|
|
—
|
|
|
(816.5
|
)
|
|
—
|
|
|
—
|
|
|
(816.5
|
)
|
||||||
Other (A)
|
—
|
|
|
—
|
|
|
42.3
|
|
|
—
|
|
|
(42.3
|
)
|
|
—
|
|
||||||
Balance at March 31, 2018
|
$
|
63.9
|
|
|
$
|
964.1
|
|
|
$
|
16,709.1
|
|
|
$
|
(11,826.1
|
)
|
|
$
|
(628.7
|
)
|
|
$
|
5,282.3
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2019
|
||||||||||||||
|
Currency Translation Adjustment
|
|
Net Gains/Losses on Available-for-sale Securities
|
|
Pension Liability
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance at December 31, 2018
|
$
|
(274.6
|
)
|
|
$
|
(181.5
|
)
|
|
$
|
(158.9
|
)
|
|
$
|
(615.0
|
)
|
Other comprehensive income/(loss) before reclassification adjustments
|
(2.3
|
)
|
|
259.0
|
|
|
—
|
|
|
256.7
|
|
||||
Tax effect
|
—
|
|
|
(58.0
|
)
|
|
—
|
|
|
(58.0
|
)
|
||||
Reclassification adjustments to
net earnings |
—
|
|
|
(0.1
|
)
|
(A)
|
6.1
|
|
(B)
|
6.0
|
|
||||
Tax effect
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
||||
Balance at March 31, 2019
|
$
|
(276.9
|
)
|
|
$
|
19.4
|
|
|
$
|
(154.4
|
)
|
|
$
|
(411.9
|
)
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2018
|
||||||||||||||
|
Currency Translation Adjustment
|
|
Net Gains/Losses on Available-for-sale Securities
|
|
Pension Liability
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance at December 31, 2017
|
$
|
(179.8
|
)
|
|
$
|
(34.6
|
)
|
|
$
|
(213.8
|
)
|
|
$
|
(428.2
|
)
|
Other comprehensive income/(loss) before reclassification adjustments
|
26.8
|
|
|
(240.4
|
)
|
|
—
|
|
|
(213.6
|
)
|
||||
Tax effect
|
—
|
|
|
53.4
|
|
|
—
|
|
|
53.4
|
|
||||
Reclassification adjustments to net earnings
|
—
|
|
|
0.2
|
|
(A)
|
2.3
|
|
(B)
|
2.5
|
|
||||
Tax effect
|
—
|
|
|
0.1
|
|
|
(0.6
|
)
|
|
(0.5
|
)
|
||||
Reclassification to retained earnings (C)
|
—
|
|
|
(7.1
|
)
|
|
(35.2
|
)
|
|
(42.3
|
)
|
||||
Balance at March 31, 2018
|
$
|
(153.0
|
)
|
|
$
|
(228.4
|
)
|
|
$
|
(247.3
|
)
|
|
$
|
(628.7
|
)
|
|
Nine Months Ended
|
||||||||||||||
|
March 31, 2019
|
||||||||||||||
|
Currency Translation Adjustment
|
|
Net Gains/Losses on Available-for-sale Securities
|
|
Pension Liability
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance at June 30, 2018
|
$
|
(227.0
|
)
|
|
$
|
(274.0
|
)
|
|
$
|
(178.8
|
)
|
|
$
|
(679.8
|
)
|
Other comprehensive income/(loss) before reclassification adjustments
|
(49.9
|
)
|
|
377.0
|
|
|
—
|
|
|
327.1
|
|
||||
Tax effect
|
—
|
|
|
(84.8
|
)
|
|
—
|
|
|
(84.8
|
)
|
||||
Reclassification adjustments to net earnings
|
—
|
|
|
1.4
|
|
(A)
|
32.5
|
|
(B)
|
33.9
|
|
||||
Tax effect
|
—
|
|
|
(0.2
|
)
|
|
(8.1
|
)
|
|
(8.3
|
)
|
||||
Balance at March 31, 2019
|
$
|
(276.9
|
)
|
|
$
|
19.4
|
|
|
$
|
(154.4
|
)
|
|
$
|
(411.9
|
)
|
|
Nine Months Ended
|
||||||||||||||
|
March 31, 2018
|
||||||||||||||
|
Currency Translation Adjustment
|
|
Net Gains/Losses on Available-for-sale Securities
|
|
Pension Liability
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance at June 30, 2017
|
$
|
(234.8
|
)
|
|
$
|
68.3
|
|
|
$
|
(216.7
|
)
|
|
$
|
(383.2
|
)
|
Other comprehensive income/(loss) before reclassification adjustments
|
81.8
|
|
|
(400.6
|
)
|
|
—
|
|
|
(318.8
|
)
|
||||
Tax effect
|
—
|
|
|
109.9
|
|
|
—
|
|
|
109.9
|
|
||||
Reclassification adjustments to net earnings
|
—
|
|
|
1.3
|
|
(A)
|
6.9
|
|
(B)
|
8.2
|
|
||||
Tax effect
|
—
|
|
|
(0.2
|
)
|
|
(2.3
|
)
|
|
(2.5
|
)
|
||||
Reclassification to retained earnings (C)
|
—
|
|
|
(7.1
|
)
|
|
(35.2
|
)
|
|
(42.3
|
)
|
||||
Balance at March 31, 2018
|
$
|
(153.0
|
)
|
|
$
|
(228.4
|
)
|
|
$
|
(247.3
|
)
|
|
$
|
(628.7
|
)
|
|
Revenues
|
||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Employer Services
|
$
|
2,719.1
|
|
|
$
|
2,628.5
|
|
|
$
|
7,507.7
|
|
|
$
|
7,105.7
|
|
PEO Services
|
1,134.7
|
|
|
1,067.3
|
|
|
3,180.7
|
|
|
2,909.5
|
|
||||
Other
|
(6.4
|
)
|
|
0.2
|
|
|
(11.9
|
)
|
|
(3.7
|
)
|
||||
|
$
|
3,847.4
|
|
|
$
|
3,696.0
|
|
|
$
|
10,676.5
|
|
|
$
|
10,011.5
|
|
|
Earnings before Income Taxes
|
||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Employer Services
|
$
|
962.1
|
|
|
$
|
870.1
|
|
|
$
|
2,333.0
|
|
|
$
|
1,988.4
|
|
PEO Services
|
155.7
|
|
|
147.1
|
|
|
458.6
|
|
|
403.6
|
|
||||
Other
|
(133.3
|
)
|
|
(142.0
|
)
|
|
(419.3
|
)
|
|
(364.3
|
)
|
||||
|
$
|
984.5
|
|
|
$
|
875.2
|
|
|
$
|
2,372.3
|
|
|
$
|
2,027.7
|
|
•
|
Employer Services New Business Bookings increased
6%
|
•
|
Average number of Worksite Employees increased
9%
to
542,000
|
•
|
Revenues grew
7%
|
•
|
EBIT Margin improved 200 basis points to
22.2%
and Adjusted EBIT Margin improved 200 basis points to
23.3%
|
•
|
Diluted earnings per share ("EPS")
increase
d from
$3.93
to
$4.15
; adjusted diluted earnings per share
increase
d from
$3.53
to
$4.31
|
•
|
Our shareholder friendly actions continued as we returned approximately $
950 million
via dividends and approximately $
760 million
via share repurchases
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
||||||||||||||||
|
March 31,
|
|
% Change
|
|
March 31,
|
|
% Change
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
As Reported
|
|
Constant Currency Basis
(Note 1)
|
|
2019
|
|
2018
|
|
As Reported
|
|
Constant Currency Basis
(Note 1)
|
||||||||||||
|
|
*As Restated
|
|
|
|
|
*As Restated
|
|
|
||||||||||||||||||
Total revenues
|
$
|
3,847.4
|
|
|
$
|
3,696.0
|
|
|
4
|
%
|
|
5
|
%
|
|
$
|
10,676.5
|
|
|
$
|
10,011.5
|
|
|
7
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Costs of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses
|
1,874.5
|
|
|
1,845.2
|
|
|
2
|
%
|
|
3
|
%
|
|
5,370.4
|
|
|
5,185.0
|
|
|
4
|
%
|
|
4
|
%
|
||||
Systems development and programming costs
|
160.1
|
|
|
163.9
|
|
|
(2
|
)%
|
|
—
|
%
|
|
474.2
|
|
|
481.5
|
|
|
(2
|
)%
|
|
1
|
%
|
||||
Depreciation and amortization
|
77.2
|
|
|
70.2
|
|
|
10
|
%
|
|
11
|
%
|
|
221.5
|
|
|
202.1
|
|
|
10
|
%
|
|
10
|
%
|
||||
Total costs of revenues
|
2,111.8
|
|
|
2,079.3
|
|
|
2
|
%
|
|
3
|
%
|
|
6,066.1
|
|
|
5,868.6
|
|
|
3
|
%
|
|
4
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative expenses
|
750.4
|
|
|
750.1
|
|
|
—
|
%
|
|
1
|
%
|
|
2,209.4
|
|
|
2,149.0
|
|
|
3
|
%
|
|
3
|
%
|
||||
Interest expense
|
21.7
|
|
|
18.6
|
|
|
n/m
|
|
|
n/m
|
|
|
96.2
|
|
|
74.1
|
|
|
n/m
|
|
|
n/m
|
|
||||
Total expenses
|
2,883.9
|
|
|
2,848.0
|
|
|
1
|
%
|
|
2
|
%
|
|
8,371.7
|
|
|
8,091.7
|
|
|
3
|
%
|
|
4
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other income, net
|
(21.0
|
)
|
|
(27.2
|
)
|
|
n/m
|
|
|
n/m
|
|
|
(67.5
|
)
|
|
(107.9
|
)
|
|
n/m
|
|
|
n/m
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earnings before income taxes
|
$
|
984.5
|
|
|
$
|
875.2
|
|
|
12
|
%
|
|
13
|
%
|
|
$
|
2,372.3
|
|
|
$
|
2,027.7
|
|
|
17
|
%
|
|
17
|
%
|
Margin
|
25.6
|
%
|
|
23.7
|
%
|
|
|
|
|
|
22.2
|
%
|
|
20.3
|
%
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for income taxes
|
$
|
230.8
|
|
|
$
|
214.2
|
|
|
8
|
%
|
|
8
|
%
|
|
$
|
554.9
|
|
|
$
|
283.7
|
|
|
96
|
%
|
|
96
|
%
|
Effective tax rate
|
23.4
|
%
|
|
24.5
|
%
|
|
|
|
|
|
23.4
|
%
|
|
14.0
|
%
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net earnings
|
$
|
753.7
|
|
|
$
|
661.0
|
|
|
14
|
%
|
|
14
|
%
|
|
$
|
1,817.4
|
|
|
$
|
1,744.0
|
|
|
4
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per share
|
$
|
1.73
|
|
|
$
|
1.49
|
|
|
16
|
%
|
|
16
|
%
|
|
$
|
4.15
|
|
|
$
|
3.93
|
|
|
6
|
%
|
|
6
|
%
|
Adjusted Financial Measure
|
U.S. GAAP Measures
|
Adjusted EBIT
|
Net earnings
|
Adjusted provision for income taxes
|
Provision for income taxes
|
Adjusted net earnings
|
Net earnings
|
Adjusted diluted earnings per share
|
Diluted earnings per share
|
Adjusted effective tax rate
|
Effective tax rate
|
Constant Currency Basis
|
U.S. GAAP P&L line items
|
|
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
||||||||||||||||
|
|
March 31,
|
|
% Change
|
|
March 31,
|
|
% Change
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
As Reported
|
|
Constant Currency Basis
(g) |
|
2019
|
|
2018
|
|
As Reported
|
|
Constant Currency Basis
(g)
|
||||||||||||
|
|
|
*As Restated
|
|
|
|
|
*As Restated
|
|
|
||||||||||||||||||
Net earnings
|
|
$
|
753.7
|
|
|
$
|
661.0
|
|
|
14
|
%
|
|
14
|
%
|
|
$
|
1,817.4
|
|
|
$
|
1,744.0
|
|
|
4
|
%
|
|
4
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for income taxes
|
|
230.8
|
|
|
214.2
|
|
|
|
|
|
|
554.9
|
|
|
283.7
|
|
|
|
|
|
||||||||
All other interest expense (a)
|
|
14.8
|
|
|
14.8
|
|
|
|
|
|
|
44.8
|
|
|
44.8
|
|
|
|
|
|
||||||||
All other interest income (a)
|
|
(8.7
|
)
|
|
(6.1
|
)
|
|
|
|
|
|
(22.9
|
)
|
|
(16.7
|
)
|
|
|
|
|
||||||||
Transformation initiatives (b)
|
|
22.8
|
|
|
39.7
|
|
|
|
|
|
|
92.3
|
|
|
39.7
|
|
|
|
|
|
||||||||
Proxy contest matters (c)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
33.2
|
|
|
|
|
|
||||||||
Adjusted EBIT
|
|
$
|
1,013.4
|
|
|
$
|
923.6
|
|
|
10
|
%
|
|
10
|
%
|
|
$
|
2,486.5
|
|
|
$
|
2,128.7
|
|
|
17
|
%
|
|
17
|
%
|
Adjusted EBIT Margin
|
|
26.3
|
%
|
|
25.0
|
%
|
|
|
|
|
|
23.3
|
%
|
|
21.3
|
%
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for income taxes
|
|
$
|
230.8
|
|
|
$
|
214.2
|
|
|
8
|
%
|
|
8
|
%
|
|
$
|
554.9
|
|
|
$
|
283.7
|
|
|
96
|
%
|
|
96
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax benefit for transformation initiatives (d)
|
|
5.6
|
|
|
9.7
|
|
|
|
|
|
|
22.8
|
|
|
9.6
|
|
|
|
|
|
||||||||
Income tax benefit for proxy contest matters (d)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
10.4
|
|
|
|
|
|
||||||||
Tax Cuts and Jobs Act (e)
|
|
—
|
|
|
(4.5
|
)
|
|
|
|
|
|
0.5
|
|
|
228.1
|
|
|
|
|
|
||||||||
Adjusted provision for income taxes
|
|
$
|
236.4
|
|
|
$
|
219.4
|
|
|
8
|
%
|
|
8
|
%
|
|
$
|
578.2
|
|
|
$
|
531.8
|
|
|
9
|
%
|
|
9
|
%
|
Adjusted effective tax rate (f)
|
|
23.5
|
%
|
|
24.0
|
%
|
|
|
|
|
|
23.5
|
%
|
|
25.3
|
%
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net earnings
|
|
$
|
753.7
|
|
|
$
|
661.0
|
|
|
14
|
%
|
|
14
|
%
|
|
$
|
1,817.4
|
|
|
$
|
1,744.0
|
|
|
4
|
%
|
|
4
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transformation initiatives (b)
|
|
22.8
|
|
|
39.7
|
|
|
|
|
|
|
92.3
|
|
|
39.7
|
|
|
|
|
|
||||||||
Income tax benefit for transformation initiatives (d)
|
|
(5.6
|
)
|
|
(9.7
|
)
|
|
|
|
|
|
(22.8
|
)
|
|
(9.6
|
)
|
|
|
|
|
||||||||
Proxy contest matters (c)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
33.2
|
|
|
|
|
|
||||||||
Income tax benefit for proxy contest matters (d)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
(10.4
|
)
|
|
|
|
|
||||||||
Tax Cuts and Jobs Act (e)
|
|
—
|
|
|
4.5
|
|
|
|
|
|
|
(0.5
|
)
|
|
(228.1
|
)
|
|
|
|
|
||||||||
Adjusted net earnings
|
|
$
|
770.9
|
|
|
$
|
695.5
|
|
|
11
|
%
|
|
11
|
%
|
|
$
|
1,886.4
|
|
|
$
|
1,568.8
|
|
|
20
|
%
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted EPS
|
|
$
|
1.73
|
|
|
$
|
1.49
|
|
|
16
|
%
|
|
16
|
%
|
|
$
|
4.15
|
|
|
$
|
3.93
|
|
|
6
|
%
|
|
6
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transformation initiatives (b) (d)
|
|
0.04
|
|
|
0.07
|
|
|
|
|
|
|
0.16
|
|
|
0.07
|
|
|
|
|
|
||||||||
Proxy contest matters (c) (d)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
0.05
|
|
|
|
|
|
||||||||
Tax Cuts and Jobs Act (e)
|
|
—
|
|
|
0.01
|
|
|
|
|
|
|
—
|
|
|
(0.51
|
)
|
|
|
|
|
||||||||
Adjusted diluted EPS
|
|
$
|
1.77
|
|
|
$
|
1.57
|
|
|
13
|
%
|
|
13
|
%
|
|
$
|
4.31
|
|
|
$
|
3.53
|
|
|
22
|
%
|
|
22
|
%
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||
|
March 31,
|
|
|
|
March 31,
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
2019
|
|
2018
|
|
$ Change
|
||||||||||||
Interest income on corporate funds
|
$
|
(15.0
|
)
|
|
$
|
(11.0
|
)
|
|
$
|
4.0
|
|
|
$
|
(71.6
|
)
|
|
$
|
(59.4
|
)
|
|
$
|
12.2
|
|
Realized gains on available-for-sale securities
|
(0.6
|
)
|
|
(1.3
|
)
|
|
(0.7
|
)
|
|
(1.2
|
)
|
|
(1.9
|
)
|
|
(0.7
|
)
|
||||||
Realized losses on available-for-sale securities
|
0.5
|
|
|
1.6
|
|
|
1.1
|
|
|
2.6
|
|
|
3.2
|
|
|
0.6
|
|
||||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
|
—
|
|
|
(12.1
|
)
|
||||||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
|
(0.4
|
)
|
|
3.7
|
|
||||||
Non-service components of pension expense, net
|
(5.9
|
)
|
|
(16.5
|
)
|
|
(10.6
|
)
|
|
(5.3
|
)
|
|
(49.4
|
)
|
|
(44.1
|
)
|
||||||
Other income, net
|
$
|
(21.0
|
)
|
|
$
|
(27.2
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
(67.5
|
)
|
|
$
|
(107.9
|
)
|
|
$
|
(40.4
|
)
|
|
Revenues
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
||||||||||||||||
|
March 31,
|
|
% Change
|
|
March 31,
|
|
% Change
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
As
Reported
|
|
Constant Currency Basis
|
|
2019
|
|
2018
|
|
As
Reported
|
|
Constant Currency Basis
|
||||||||||||
Employer Services
|
$
|
2,719.1
|
|
|
$
|
2,628.5
|
|
|
3
|
%
|
|
5
|
%
|
|
$
|
7,507.7
|
|
|
$
|
7,105.7
|
|
|
6
|
%
|
|
7
|
%
|
PEO Services
|
1,134.7
|
|
|
1,067.3
|
|
|
6
|
%
|
|
6
|
%
|
|
3,180.7
|
|
|
2,909.5
|
|
|
9
|
%
|
|
9
|
%
|
||||
Other
|
(6.4
|
)
|
|
0.2
|
|
|
n/m
|
|
|
n/m
|
|
|
(11.9
|
)
|
|
(3.7
|
)
|
|
n/m
|
|
|
n/m
|
|
||||
|
$
|
3,847.4
|
|
|
$
|
3,696.0
|
|
|
4
|
%
|
|
5
|
%
|
|
$
|
10,676.5
|
|
|
$
|
10,011.5
|
|
|
7
|
%
|
|
7
|
%
|
|
Earnings before Income Taxes
|
||||||||||||||||||||||||||
|
Three Months Ended
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
||||||||||||||||
|
March 31,
|
|
% Change
|
|
March 31,
|
|
% Change
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
As Reported
|
|
Constant Currency Basis
|
|
2019
|
|
2018
|
|
As
Reported |
|
Constant Currency Basis
|
||||||||||||
Employer Services
|
$
|
962.1
|
|
|
$
|
870.1
|
|
|
11
|
%
|
|
11
|
%
|
|
$
|
2,333.0
|
|
|
$
|
1,988.4
|
|
|
17
|
%
|
|
17
|
%
|
PEO Services
|
155.7
|
|
|
147.1
|
|
|
6
|
%
|
|
6
|
%
|
|
458.6
|
|
|
403.6
|
|
|
14
|
%
|
|
14
|
%
|
||||
Other
|
(133.3
|
)
|
|
(142.0
|
)
|
|
n/m
|
|
|
n/m
|
|
|
(419.3
|
)
|
|
(364.3
|
)
|
|
n/m
|
|
|
n/m
|
|
||||
|
$
|
984.5
|
|
|
$
|
875.2
|
|
|
12
|
%
|
|
13
|
%
|
|
$
|
2,372.3
|
|
|
$
|
2,027.7
|
|
|
17
|
%
|
|
17
|
%
|
|
|
Nine Months Ended
|
|
|
||||||||
|
|
March 31,
|
|
|
||||||||
|
|
2019
|
|
2018
|
|
$ Change
|
||||||
Cash provided by / (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
1,956.0
|
|
|
$
|
1,810.0
|
|
|
$
|
146.0
|
|
Investing activities
|
|
(1,197.9
|
)
|
|
(1,958.0
|
)
|
|
760.1
|
|
|||
Financing activities
|
|
6,945.4
|
|
|
5,358.2
|
|
|
1,587.2
|
|
|||
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(34.1
|
)
|
|
53.1
|
|
|
(87.2
|
)
|
|||
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
$
|
7,669.4
|
|
|
$
|
5,263.3
|
|
|
$
|
2,406.1
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Average investment balances at cost:
|
|
|
|
|
|
|
|
||||||||
Corporate investments
|
$
|
2,799.6
|
|
|
$
|
2,976.0
|
|
|
$
|
4,782.6
|
|
|
$
|
5,082.3
|
|
Funds held for clients
|
29,985.0
|
|
|
28,817.1
|
|
|
25,211.3
|
|
|
24,129.6
|
|
||||
Total
|
$
|
32,784.6
|
|
|
$
|
31,793.1
|
|
|
$
|
29,993.9
|
|
|
$
|
29,211.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average interest rates earned exclusive of realized
(gains)/losses on:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate investments
|
2.1
|
%
|
|
1.5
|
%
|
|
2.0
|
%
|
|
1.6
|
%
|
||||
Funds held for clients
|
2.2
|
%
|
|
1.9
|
%
|
|
2.2
|
%
|
|
1.9
|
%
|
||||
Total
|
2.2
|
%
|
|
1.8
|
%
|
|
2.2
|
%
|
|
1.8
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Realized gains on available-for-sale securities
|
$
|
(0.6
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(1.9
|
)
|
Realized losses on available-for-sale securities
|
0.5
|
|
|
1.6
|
|
|
2.6
|
|
|
3.2
|
|
||||
Net realized (gains)/losses on available-for-sale securities
|
$
|
(0.1
|
)
|
|
$
|
0.3
|
|
|
$
|
1.4
|
|
|
$
|
1.3
|
|
|
March 31, 2019
|
|
June 30,
2018
|
||||
Net unrealized pre-tax losses/(gains) on available-for-sale securities
|
$
|
22.7
|
|
|
$
|
(355.7
|
)
|
|
|
|
|
||||
Total available-for-sale securities at fair value
|
$
|
23,703.4
|
|
|
$
|
22,776.2
|
|
|
|
Total Number
of Shares Purchased (1)
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased
as Part of the
Publicly
Announced
Common Stock Repurchase Plan (2)
|
|
Maximum Number
of Shares that
may yet be
Purchased under
the Common Stock
Repurchase Plan (2)
|
|||||
Period
|
|
|
|
|
|||||||||
January 1 to 31, 2019
|
|
1,045,093
|
|
|
$
|
132.63
|
|
|
1,040,848
|
|
|
11,642,585
|
|
|
|
|
|
|
|
|
|
|
|||||
February 1 to 28, 2019
|
|
298,829
|
|
|
$
|
147.83
|
|
|
297,595
|
|
|
11,344,990
|
|
|
|
|
|
|
|
|
|
|
|||||
March 1 to 31, 2019
|
|
284,902
|
|
|
$
|
154.06
|
|
|
273,089
|
|
|
11,071,901
|
|
Total
|
|
1,628,824
|
|
|
|
|
1,611,532
|
|
|
|
|
Date of Approval
|
Shares
|
August 2015
|
25 million
|
Exhibit Number
|
Exhibit
|
Offer Letter, dated as of March 1, 2019, between Automatic Data Processing, Inc. and Kathleen Winters
|
|
Separation Agreement and Release, dated April 29, 2019, by and between Jan Siegmund and Automatic Data Processing, Inc.
|
|
Certification by Carlos A. Rodriguez pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
Certification by Kathleen A. Winters pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
Certification by Carlos A. Rodriguez pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Certification by Kathleen A. Winters pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101.INS
|
XBRL instance document
|
101.SCH
|
XBRL taxonomy extension schema document
|
101.CAL
|
XBRL taxonomy extension calculation linkbase document
|
101.LAB
|
XBRL taxonomy label linkbase document
|
101.PRE
|
XBRL taxonomy extension presentation linkbase document
|
101.DEF
|
XBRL taxonomy extension definition linkbase document
|
|
|
AUTOMATIC DATA PROCESSING, INC.
(Registrant)
|
|
|
|
Date:
|
May 3, 2019
|
/s/ Kathleen A. Winters
Kathleen A. Winters
|
|
|
|
|
|
Chief Financial Officer
(Title)
|
Automatic Data Processing, Inc.
One ADP Boulevard
Roseland, New Jersey 07068-1728
(973) 974-5000
|
|
Performance Stock Units (PSUs) & Stock Options:
|
Under the current equity guidelines, you are eligible to participate in ADP's equity program. Grants will be made in accordance with the program guidelines and governed by the terms and conditions of the ADP 2018 Omnibus Award Plan and the applicable award agreements.
Equity awards are granted annually on September 1st and you must be employed with the Company on the grant date in order to receive an award. For FY’20, your total target equity award value will be $3,000,000 and will have a mix aligned to the Officer equity mix which under the current guidelines is 70% performance stock units (PSUs) and 30% stock options.
Under the PSU program, if the performance objectives are achieved for the three-year performance period, you will receive shares of stock three years after the grant date, provided you are still employed at ADP. The actual number of PSUs is determined by dividing the grant value by the ADP closing stock price on the grant date. Stock options vest 25% on each of the first four anniversaries of the grant date provided you are employed at ADP on the vesting date. The actual number of stock options is determined by dividing the grant value by the fair value as determined by a third-party valuation firm using the binomial model.
ADP’s executive compensation program, including the equity program and its associated guidelines, inclusive of eligibility rules and target award values are subject to the review and discretion of ADP’s Compensation Committee |
Separation Pay:
|
In the event you are involuntarily terminated from ADP under a Qualifying Termination, you will receive benefits under the Corporate Officer Severance Plan which includes 18 months of salary continuation, a prorated bonus and continued vesting in unvested equity awards for the 18 month severance period. The terms of the Corporate Officer Severance Plan are summarized on page 65 of ADP’s 2018 proxy statement.
|
|
|
Change in Control:
|
In the event you terminate from ADP without Cause or for Good Reason during the two-year period following a Change in Control, you will receive benefits under the ADP Change in Control Severance Plan for Corporate Officers which includes 150% of your Total Annual Compensation as defined in the plan and the accelerated vesting of unvested equity awards. The terms of the Plan can be found on page 64 of ADP’s 2018 proxy statement and the current definition of “Change in Control” is available on page B-2 of the proxy statement.
|
|
|
ADP ERP:
|
Participation in ADP’s Executive Retirement Program (Plan summary is attached).
|
|
|
Stock Ownership Guidelines:
|
ADP believes that it is important that our Corporate Officers maintain a minimum level of ownership in the Company. As a grade B executive, this minimum level is equivalent to three-times your annual base rate of pay. Included in the calculation are any shares owned outright or beneficially owned by direct family members. Ownership status is measured as of July 1 of each fiscal year. Until you meet this level of ownership, you will be asked to retain at least 75% of post-tax net gains on stock option exercises and 75% of net shares received from the vesting of performance stock units and restricted stock until you achieve the minimum ownership level. All transactions in ADP securities are subject to the Company’s insider trading policy. In addition, ADP sponsors a 10b5-1 program for all Corporate Officers and strongly encourages participation in the program.
|
Other Corporate Officer Programs:
Other Compensation and Benefit Programs:
|
Participation in all other Corporate Officer programs (e.g., executive auto, matching gift program, executive retiree medical).
Participation in all other ADP programs that are generally available to other ADP executives including: 401(k), deferred compensation, medical and health, life, accident, disability and other insurance programs.
|
Vacation:
|
You will be entitled to four weeks of vacation plus an additional five personal days, each as accrued on a calendar year basis.
|
|
EXECUTIVE
By:
/s/ Jan Siegmund
|
|
AUTOMATIC DATA PROCESSING, INC.
By:
/s/ Michael A. Bonarti, VP
|
|
Signed:
/s/ Jan Siegmund
Printed Name:
Jan Siegmund
Date:
4/29/2019
|
|
Signed:
/s/ Jan Siegmund
Printed Name:
Jan Siegmund
Date:
4/29/2019
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Automatic Data Processing, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 3, 2019
|
/s/ Carlos A. Rodriguez
|
|
|
Carlos A. Rodriguez
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Automatic Data Processing, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 3, 2019
|
/s/ Kathleen A. Winters
|
|
|
Kathleen A. Winters
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Date:
|
May 3, 2019
|
/s/ Carlos A. Rodriguez
|
|
|
Carlos A. Rodriguez
|
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
Date:
|
May 3, 2019
|
/s/ Kathleen A. Winters
|
|
|
Kathleen A. Winters
|
|
|
Chief Financial Officer
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