Delaware
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46-5743146
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(State or other jurisdiction of incorporation or
organization)
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(IRS Employer Identification No.)
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1950 Hassell Road, Hoffman Estates, IL
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60169
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Three Months Ended
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||||||
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September 30,
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||||||
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2015
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2014
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||||
Revenues
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$
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514.6
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$
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517.0
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||||
Expenses:
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Cost of revenues
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310.8
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311.5
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Selling, general and administrative expenses
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97.4
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110.5
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Restructuring expenses
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1.9
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—
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Separation costs
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—
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30.7
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Total expenses
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410.1
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452.7
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Operating earnings
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104.5
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64.3
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||||
Interest expense
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(9.3
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)
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(1.1
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)
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Other income, net
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0.6
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1.3
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Earnings before income taxes
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95.8
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64.5
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Provision for income taxes
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(34.6
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)
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(23.5
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)
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Net earnings
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61.2
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41.0
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Less: net earnings attributable to noncontrolling interest
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2.2
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2.0
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Net earnings attributable to CDK
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$
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59.0
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$
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39.0
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||||
Net earnings attributable to CDK per common share:
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Basic
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$
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0.37
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$
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0.24
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Diluted
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$
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0.37
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$
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0.24
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Weighted-average common shares outstanding:
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Basic
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159.2
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160.6
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Diluted
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160.7
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160.6
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Dividends declared per common share
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$
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0.12
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$
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—
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Three Months Ended
|
||||||
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September 30,
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||||||
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2015
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2014
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||||
Net earnings
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$
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61.2
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$
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41.0
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Other comprehensive (loss) income:
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||||
Currency translation adjustments
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(16.8
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)
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2.6
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Other comprehensive (loss) income
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(16.8
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)
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2.6
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Comprehensive income
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44.4
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43.6
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Less: comprehensive income attributable to noncontrolling interest
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2.2
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2.0
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Comprehensive income attributable to CDK
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$
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42.2
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$
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41.6
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September 30,
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June 30,
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||||
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2015
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2015
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||||
Assets
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Current assets:
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Cash and cash equivalents
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$
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359.6
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$
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408.2
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Accounts receivable, net of allowances of $7.2 and $6.8, respectively
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333.7
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314.6
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Other current assets
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185.4
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162.4
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Total current assets
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878.7
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885.2
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Property, plant and equipment, net
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99.7
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100.0
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Other assets
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220.0
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224.1
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Goodwill
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1,197.3
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1,209.9
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Intangible assets, net
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92.8
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99.3
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Total assets
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$
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2,488.5
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$
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2,518.5
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Liabilities and Equity
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Current liabilities:
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Current maturities of long-term debt and capital lease obligations
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$
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13.3
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$
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13.0
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Accounts payable
|
19.1
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21.7
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Accrued expenses and other current liabilities
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167.5
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154.4
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Accrued payroll and payroll-related expenses
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81.2
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123.2
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Short-term deferred revenues
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175.1
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186.1
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Total current liabilities
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456.2
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498.4
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Long-term debt and capital lease obligations
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968.6
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971.1
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Long-term deferred revenues
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158.1
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162.9
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Deferred income taxes
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59.2
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58.2
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Other liabilities
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42.1
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43.8
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Total liabilities
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1,684.2
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1,734.4
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Equity:
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Preferred stock, $0.01 par value: Authorized, 50.0 shares; issued and outstanding, none
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—
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—
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Common stock, $0.01 par value: Authorized, 650.0 shares; issued, 160.3 and 161.3 shares, respectively; outstanding, 159.4 and 160.2 shares, respectively
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1.6
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1.6
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Additional paid-in-capital
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675.6
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686.5
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Retained earnings
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121.4
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81.2
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Treasury stock, at cost: 0.9 and 1.1 shares, respectively
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(45.2
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)
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(50.7
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)
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Accumulated other comprehensive income
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34.8
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51.6
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Total CDK stockholders' equity
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788.2
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770.2
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Noncontrolling interest
|
16.1
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13.9
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Total equity
|
804.3
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784.1
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Total liabilities and equity
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$
|
2,488.5
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$
|
2,518.5
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Three Months Ended
|
||||||
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September 30,
|
||||||
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2015
|
|
2014
|
||||
Cash Flows from Operating Activities:
|
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|
||||
Net earnings
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$
|
61.2
|
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$
|
41.0
|
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Adjustments to reconcile net earnings to cash flows provided by operating activities:
|
|
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Depreciation and amortization
|
14.0
|
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|
13.9
|
|
||
Deferred income taxes
|
17.9
|
|
|
4.4
|
|
||
Stock-based compensation expense
|
5.8
|
|
|
5.4
|
|
||
Pension expense
|
—
|
|
|
0.8
|
|
||
Other
|
(4.9
|
)
|
|
(4.4
|
)
|
||
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses:
|
|
|
|
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|
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Increase in accounts receivable
|
(21.6
|
)
|
|
(0.7
|
)
|
||
Increase in other assets
|
(21.4
|
)
|
|
(6.3
|
)
|
||
Decrease in accounts payable
|
(1.9
|
)
|
|
(1.5
|
)
|
||
Decrease in accrued expenses and other liabilities
|
(43.9
|
)
|
|
(31.7
|
)
|
||
Net cash flows provided by operating activities
|
5.2
|
|
|
20.9
|
|
||
|
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|
||||
Cash Flows from Investing Activities:
|
|
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|
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Capital expenditures
|
(8.1
|
)
|
|
(5.8
|
)
|
||
Capitalized software
|
(1.1
|
)
|
|
(1.1
|
)
|
||
Contributions to investments
|
(6.7
|
)
|
|
—
|
|
||
Proceeds from notes receivable from ADP and its affiliates
|
—
|
|
|
40.6
|
|
||
Net cash flows (used in) provided by investing activities
|
(15.9
|
)
|
|
33.7
|
|
||
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||
Repayments of notes payable to ADP and its affiliates
|
—
|
|
|
(21.9
|
)
|
||
Net transactions of parent company investment
|
—
|
|
|
(240.8
|
)
|
||
Proceeds from long-term debt
|
—
|
|
|
1,000.0
|
|
||
Repayments of long-term debt and capital lease obligations
|
(3.3
|
)
|
|
—
|
|
||
Dividend paid to ADP at spin-off
|
—
|
|
|
(825.0
|
)
|
||
Dividends paid to stockholders
|
(19.2
|
)
|
|
—
|
|
||
Repurchases of common stock
|
(11.0
|
)
|
|
—
|
|
||
Proceeds from exercises of stock options
|
1.5
|
|
|
—
|
|
||
Excess tax benefit from stock-based compensation awards
|
5.9
|
|
|
3.9
|
|
||
Withholding tax payment for stock-based compensation awards
|
(8.4
|
)
|
|
—
|
|
||
Dividend payments of CVR to noncontrolling owners
|
—
|
|
|
(5.4
|
)
|
||
Payment of deferred financing costs
|
—
|
|
|
(2.8
|
)
|
||
Recovery of dividends paid (Note 1E)
|
0.4
|
|
|
—
|
|
||
Net cash flows used in financing activities
|
(34.1
|
)
|
|
(92.0
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(3.8
|
)
|
|
(10.1
|
)
|
||
|
|
|
|
||||
Net change in cash and cash equivalents
|
(48.6
|
)
|
|
(47.5
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents, beginning of period
|
408.2
|
|
|
402.8
|
|
||
|
|
|
|
||||
Cash and cash equivalents, end of period
|
$
|
359.6
|
|
|
$
|
355.3
|
|
|
|
|
|
||||
Supplemental Disclosure:
|
|
|
|
||||
Cash paid for:
|
|
|
|
||||
Income taxes and foreign withholding taxes, net of refunds
|
$
|
37.4
|
|
|
$
|
3.3
|
|
Interest
|
1.0
|
|
|
1.1
|
|
|
Common Stock
|
|
Additional Paid-in-Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income
|
|
Total CDK Stockholders' Equity
|
|
Non-controlling Interest
|
|
Total Equity
|
|||||||||||||||||||
|
Shares Issued
|
|
Amount
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance as of June 30, 2015
|
161.3
|
|
|
$
|
1.6
|
|
|
$
|
686.5
|
|
|
$
|
81.2
|
|
|
$
|
(50.7
|
)
|
|
$
|
51.6
|
|
|
$
|
770.2
|
|
|
$
|
13.9
|
|
|
$
|
784.1
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
59.0
|
|
|
—
|
|
|
—
|
|
|
59.0
|
|
|
2.2
|
|
|
61.2
|
|
||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.8
|
)
|
|
(16.8
|
)
|
|
—
|
|
|
(16.8
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
|
—
|
|
|
5.9
|
|
||||||||
Common stock issued for the exercise and vesting of stock-based compensation awards, net
|
—
|
|
|
—
|
|
|
(22.7
|
)
|
|
—
|
|
|
15.8
|
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
(6.9
|
)
|
||||||||
Excess tax benefit from stock-based compensation awards
|
—
|
|
|
—
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
|
—
|
|
|
5.9
|
|
||||||||
Dividends paid to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.2
|
)
|
|
—
|
|
|
—
|
|
|
(19.2
|
)
|
|
—
|
|
|
(19.2
|
)
|
||||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.3
|
)
|
|
—
|
|
|
(10.3
|
)
|
|
—
|
|
|
(10.3
|
)
|
||||||||
Correction of common stock issued in connection with the spin-off and dividends paid (Note 1E)
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
||||||||
Balance as of September 30, 2015
|
160.3
|
|
|
$
|
1.6
|
|
|
$
|
675.6
|
|
|
$
|
121.4
|
|
|
$
|
(45.2
|
)
|
|
$
|
34.8
|
|
|
$
|
788.2
|
|
|
$
|
16.1
|
|
|
$
|
804.3
|
|
|
Three Months Ended September 30, 2014
|
||||||||||||||
|
|
|
Adjustments
|
|
|||||||||||
|
As Reported
|
|
Hardware
|
|
NCI
|
|
As Revised
|
||||||||
Revenues
|
$
|
516.0
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
517.0
|
|
Cost of revenues
|
309.8
|
|
|
1.7
|
|
|
—
|
|
|
311.5
|
|
||||
Selling, general and administrative
|
112.4
|
|
|
0.1
|
|
|
(2.0
|
)
|
|
110.5
|
|
||||
Total expenses
|
452.9
|
|
|
1.8
|
|
|
(2.0
|
)
|
|
452.7
|
|
||||
Operating earnings
|
63.1
|
|
|
(0.8
|
)
|
|
2.0
|
|
|
64.3
|
|
||||
Other income, net
|
0.7
|
|
|
0.6
|
|
|
—
|
|
|
1.3
|
|
||||
Earnings before income taxes
|
62.7
|
|
|
(0.2
|
)
|
|
2.0
|
|
|
64.5
|
|
||||
Provision for income taxes
|
(23.6
|
)
|
|
0.1
|
|
|
—
|
|
|
(23.5
|
)
|
||||
Net earnings
|
39.1
|
|
|
(0.1
|
)
|
|
2.0
|
|
|
41.0
|
|
||||
Less: net earnings attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
||||
Net earnings attributable to CDK
|
$
|
39.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
39.0
|
|
Basic and diluted earnings attributable to CDK per share
|
$
|
0.24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.24
|
|
|
Three Months Ended September 30, 2014
|
||||||||||||||
|
|
|
Adjustments
|
|
|
||||||||||
|
As Reported
|
|
Hardware
|
|
NCI
|
|
As Revised
|
||||||||
Net earnings
|
$
|
39.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.0
|
|
|
$
|
41.0
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments
|
2.6
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
||||
Other comprehensive income
|
2.6
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
||||
Comprehensive income
|
41.7
|
|
|
(0.1
|
)
|
|
2.0
|
|
|
43.6
|
|
||||
Less: comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
||||
Comprehensive income attributable to CDK
|
$
|
41.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
41.6
|
|
|
Three Months Ended September 30, 2014
|
|||||||||||||||||
|
|
|
Adjustments
|
|
|
|||||||||||||
|
As Reported
|
|
Hardware
|
|
NCI
|
|
Parent Investment
|
|
As Revised
|
|||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
$
|
39.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.0
|
|
|
—
|
|
|
$
|
41.0
|
|
Adjustments to reconcile net earnings to cash flows provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization
|
18.1
|
|
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
|
13.9
|
|
||||
Deferred income taxes
|
4.5
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||
Other
|
(2.6
|
)
|
|
0.2
|
|
|
(2.0
|
)
|
|
—
|
|
|
(4.4
|
)
|
||||
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses:
|
|
|
|
|
|
|
|
|
|
|||||||||
Increase in accounts receivable
|
(0.1
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
||||
Increase in other assets
|
(5.3
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(6.3
|
)
|
||||
(Decrease)/increase in accrued expenses and other liabilities
|
(37.1
|
)
|
|
—
|
|
|
5.4
|
|
|
—
|
|
|
(31.7
|
)
|
||||
Net cash flows provided by/(used in) operating activities
|
21.3
|
|
|
(5.8
|
)
|
|
5.4
|
|
|
—
|
|
|
20.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital expenditures
|
(11.6
|
)
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
(5.8
|
)
|
||||
Net transactions of parent company investment
|
(240.8
|
)
|
|
—
|
|
|
—
|
|
|
240.8
|
|
|
—
|
|
||||
Net cash flows (used in)/provided by investing activities
|
(212.9
|
)
|
|
5.8
|
|
|
—
|
|
|
240.8
|
|
|
33.7
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Net transactions of parent company investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(240.8
|
)
|
|
(240.8
|
)
|
||||
Dividend payment to noncontrolling owners
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
—
|
|
|
(5.4
|
)
|
||||
Net cash flows provided by/(used in) financing activities
|
154.2
|
|
|
—
|
|
|
(5.4
|
)
|
|
(240.8
|
)
|
|
(92.0
|
)
|
•
|
persuasive evidence of an arrangement exists;
|
•
|
delivery has occurred or services have been rendered;
|
•
|
fees are fixed or determinable; and
|
•
|
collection of the revenue is reasonably assured.
|
•
|
Bundled sales of DMS and integrated solutions.
In the Automotive Retail North America and Automotive Retail International segments, the Company receives fees for product installation, fees for software licenses, ongoing software support and maintenance of DMS, and other integrated solutions that are either hosted by the Company or installed on-site at the client’s location. Revenues for term licenses are recognized ratably over the software license term, as vendor-specific objective evidence of the fair values of the individual elements in the sales arrangement does not exist. Revenue recognition commences at the installation dates, when client acceptance has occurred, and collectability of a determinable amount is probable. In the case of hosted applications, the client does not have the contractual right to take possession of the software and the items delivered at the outset of the contract (e.g., installation, training, etc.) do not have value to the client without the software license and ongoing support and maintenance. Any upfront fees charged in the case of hosted arrangements are recognized ratably over the expected benefit period of the arrangement, typically
five years
. The unrecognized portion of these revenue elements is recorded as deferred revenue.
|
•
|
Transactional revenues.
The Company receives revenues on a fee per transaction processed basis in connection with providing auto retailers interfaces with third parties to process credit reports, vehicle registrations, and data updates. Transactional revenues are recorded in accordance with ASC 605, "Revenue Recognition." Delivery occurs at the time the services are rendered. Transactional revenues are recorded in revenues gross of costs incurred for credit report processing and vehicle registrations as the Company is contractually responsible for providing the service, software, and/or connectivity to the clients, and therefore, the Company is the primary obligor under ASC 605, "Revenue Recognition."
|
•
|
Digital Marketing services.
The Company receives revenues from the placement of advertising for clients and providing websites and related advertising and marketing services. Digital marketing revenues are recorded in accordance with ASC 605, "Revenue Recognition" as delivery occurs at the time the services are rendered.
|
|
Employee-Related Costs
|
|
Contract Termination Costs
|
|
Total Costs
|
||||||
Balance as of June 30, 2015
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
2.4
|
|
Charges
|
1.9
|
|
|
0.4
|
|
|
2.3
|
|
|||
Cash payments
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
|||
Adjustments
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Foreign exchange
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of September 30, 2015
|
$
|
2.5
|
|
|
$
|
0.4
|
|
|
$
|
2.9
|
|
|
Three Months Ended
|
||||||
|
September 30,
|
||||||
|
2015
|
|
2014
|
||||
Net earnings attributable to CDK
|
$
|
59.0
|
|
|
$
|
39.0
|
|
|
|
|
|
|
|
||
Weighted-average shares outstanding:
|
|
|
|
|
|
||
Basic
|
159.2
|
|
|
160.6
|
|
||
Effect of employee stock options
|
0.7
|
|
|
—
|
|
||
Effect of employee restricted stock
|
0.8
|
|
|
—
|
|
||
Diluted
|
160.7
|
|
|
160.6
|
|
||
|
|
|
|
|
|
||
Basic earnings attributable to CDK per share
|
$
|
0.37
|
|
|
$
|
0.24
|
|
Diluted earnings attributable to CDK per share
|
$
|
0.37
|
|
|
$
|
0.24
|
|
|
Automotive Retail North America
|
|
Automotive Retail International
|
|
Digital Marketing
|
|
Total
|
||||||||
Balance as of June 30, 2015
|
$
|
430.3
|
|
|
$
|
403.5
|
|
|
$
|
376.1
|
|
|
$
|
1,209.9
|
|
Currency translation adjustments
|
(1.9
|
)
|
|
(10.7
|
)
|
|
—
|
|
|
(12.6
|
)
|
||||
Balance as of September 30, 2015
|
$
|
428.4
|
|
|
$
|
392.8
|
|
|
$
|
376.1
|
|
|
$
|
1,197.3
|
|
|
September 30, 2015
|
|
June 30, 2015
|
||||||||||||||||||||
|
Original Cost
|
|
Accumulated Amortization
|
|
Intangible Assets, net
|
|
Original Cost
|
|
Accumulated Amortization
|
|
Intangible Assets, net
|
||||||||||||
Software
|
$
|
115.9
|
|
|
$
|
(94.7
|
)
|
|
$
|
21.2
|
|
|
$
|
115.6
|
|
|
$
|
(92.0
|
)
|
|
$
|
23.6
|
|
Client lists
|
196.8
|
|
|
(127.4
|
)
|
|
69.4
|
|
|
199.1
|
|
|
(125.5
|
)
|
|
73.6
|
|
||||||
Trademarks
|
25.0
|
|
|
(23.0
|
)
|
|
2.0
|
|
|
25.0
|
|
|
(22.9
|
)
|
|
2.1
|
|
||||||
Other intangibles
|
3.0
|
|
|
(2.8
|
)
|
|
0.2
|
|
|
2.4
|
|
|
(2.4
|
)
|
|
—
|
|
||||||
|
$
|
340.7
|
|
|
$
|
(247.9
|
)
|
|
$
|
92.8
|
|
|
$
|
342.1
|
|
|
$
|
(242.8
|
)
|
|
$
|
99.3
|
|
|
Amount
|
||
Nine months ending June 30, 2016
|
$
|
19.4
|
|
Twelve months ending June 30, 2017
|
20.3
|
|
|
Twelve months ending June 30, 2018
|
15.5
|
|
|
Twelve months ending June 30, 2019
|
8.5
|
|
|
Twelve months ending June 30, 2020
|
6.9
|
|
|
Twelve months ending June 30, 2021
|
6.6
|
|
|
Thereafter
|
15.6
|
|
|
|
$
|
92.8
|
|
|
September 30, 2015
|
|
June 30, 2015
|
||||
Revolving credit facility
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility
|
237.5
|
|
|
240.6
|
|
||
3.30% senior notes, due 2019
|
250.0
|
|
|
250.0
|
|
||
4.50% senior notes, due 2024
|
500.0
|
|
|
500.0
|
|
||
Capital lease obligations
|
2.0
|
|
|
1.5
|
|
||
Unamortized debt financing costs
|
(7.6
|
)
|
|
(8.0
|
)
|
||
Total debt and capital lease obligations
|
981.9
|
|
|
984.1
|
|
||
Current maturities of long-term debt and capital lease obligations
|
13.3
|
|
|
13.0
|
|
||
Total long-term debt and capital lease obligations
|
$
|
968.6
|
|
|
$
|
971.1
|
|
|
Amount
|
||
Twelve months ending September 30, 2016
|
$
|
13.3
|
|
Twelve months ending September 30, 2017
|
13.3
|
|
|
Twelve months ending September 30, 2018
|
12.9
|
|
|
Twelve months ending September 30, 2019
|
200.0
|
|
|
Twelve months ending September 30, 2020
|
250.0
|
|
|
Thereafter
|
500.0
|
|
|
Total debt and capital lease obligations
|
989.5
|
|
|
Unamortized deferred financing costs
|
(7.6
|
)
|
|
Total debt and capital lease obligations, net of unamortized deferred financing costs
|
$
|
981.9
|
|
|
Three Months Ended
|
||||||
|
September 30,
|
||||||
|
2015
|
|
2014
|
||||
Cost of revenues
|
$
|
1.2
|
|
|
$
|
1.7
|
|
Selling, general and administrative expenses
|
4.6
|
|
|
3.7
|
|
||
Total pre-tax stock-based compensation expense
|
$
|
5.8
|
|
|
$
|
5.4
|
|
|
|
|
|
||||
Income tax benefit
|
$
|
2.1
|
|
|
$
|
2.0
|
|
|
Number
of Options
(in thousands)
|
|
Weighted
Average Exercise Price
(in dollars)
|
|||
Options outstanding as of June 30, 2015
|
2,021
|
|
|
$
|
24.88
|
|
Options granted
|
147
|
|
|
50.80
|
|
|
Options exercised
|
(93
|
)
|
|
16.64
|
|
|
Options canceled
|
(6
|
)
|
|
25.39
|
|
|
Options outstanding as of September 30, 2015
|
2,069
|
|
|
$
|
27.09
|
|
|
Number of Shares
(in thousands)
|
|
Number of Units
(in thousands)
|
||
Non-vested restricted shares/units as of June 30, 2015
|
967
|
|
|
300
|
|
Restricted shares/units granted
|
233
|
|
|
64
|
|
Restricted shares/units vested
|
(447
|
)
|
|
(114
|
)
|
Restricted shares/units forfeited
|
(9
|
)
|
|
(7
|
)
|
Non-vested restricted shares/units as of September 30, 2015
|
744
|
|
|
243
|
|
|
Number of Shares
(in thousands)
|
|
Number of Units
(in thousands)
|
||
Non-vested restricted shares/units as of June 30, 2015
|
70
|
|
|
222
|
|
Restricted shares/units granted
|
—
|
|
|
12
|
|
Dividend equivalents
|
—
|
|
|
1
|
|
Restricted shares/units vested
|
(70
|
)
|
|
(8
|
)
|
Restricted shares/units forfeited
|
—
|
|
|
—
|
|
Non-vested restricted shares/units as of September 30, 2015
|
—
|
|
|
227
|
|
Risk-free interest rate
|
1.8
|
%
|
|
Dividend yield
|
0.9
|
%
|
|
Weighted-average volatility factor
|
24.7
|
%
|
|
Weighted-average expected life (in years)
|
6.3
|
|
|
Weighted-average fair value (in dollars)
|
$
|
12.55
|
|
|
Revenues
|
||||||
|
Three Months Ended
|
||||||
|
September 30,
|
||||||
|
2015
|
|
2014
|
||||
Automotive Retail North America
|
$
|
332.2
|
|
|
$
|
327.7
|
|
Automotive Retail International
|
78.2
|
|
|
85.7
|
|
||
Digital Marketing
|
104.2
|
|
|
103.6
|
|
||
Total
|
$
|
514.6
|
|
|
$
|
517.0
|
|
|
Earnings before Income Taxes
|
||||||
|
Three Months Ended
|
||||||
|
September 30,
|
||||||
|
2015
|
|
2014
|
||||
Automotive Retail North America
|
$
|
102.4
|
|
|
$
|
94.5
|
|
Automotive Retail International
|
14.2
|
|
|
12.6
|
|
||
Digital Marketing
|
10.5
|
|
|
8.1
|
|
||
Other
(1)
|
(31.3
|
)
|
|
(50.7
|
)
|
||
Total
|
$
|
95.8
|
|
|
$
|
64.5
|
|
•
|
the Company's success in obtaining, retaining and selling additional services to clients;
|
•
|
the pricing of our products and services;
|
•
|
overall market and economic conditions, including interest rate and foreign currency trends;
|
•
|
competitive conditions;
|
•
|
auto sales and related industry changes;
|
•
|
employment and wage levels;
|
•
|
changes in regulation;
|
•
|
changes in technology;
|
•
|
availability of capital for the payment of debt service obligations, dividends, or the repurchase of shares;
|
•
|
availability of skilled technical employees/labor/personnel;
|
•
|
the impact of new acquisitions and divestitures;
|
•
|
our ability to timely and effectively implement our business transformation plan, which is intended to increase operating efficiency and improve our global cost structure, while limiting or mitigating business disruption; and
|
•
|
the ability of significant stockholders of the Company and their affiliates to significantly influence our decisions.
|
•
|
Drive operational excellence by streamlining our organization, simplifying our business and pricing, and engaging clients more efficiently;
|
•
|
Deliver organic growth by increasing our revenues annually in order to protect our market leadership position and enhance long-term value; and
|
•
|
Maintain disciplined capital allocation by preserving our strong balance sheet and debt ratios, financial flexibility, and a target cash balance.
|
•
|
Revenues estimated to grow 4% to 5% annually on average for the next three fiscal years, and 5% to 7% thereafter;
|
•
|
Additional EBITDA of $250 to $275 million estimated to be generated over the next three fiscal years resulting in significant margin expansion, with a targeted consolidated adjusted EBITDA margin for fiscal 2018 of 35%;
|
•
|
Targeted adjusted pre-tax margins for fiscal 2018 by segment is as follows: ARNA - 45%, ARI - 25%, and DM - 20%;
|
•
|
Adjusted pre-tax earnings estimated to grow more than 25% annually on average for the next three fiscal years; and
|
•
|
Increased earnings expected to drive free cash flow (the amount of cash generated from operating activities less capital expenditures and capitalized software) of approximately $1 billion over the next three fiscal years. 70% to 80% of this free cash flow, along with any additional borrowings, is estimated to be returned to stockholders through dividends and share repurchases or other available mechanisms.
|
|
Employee-Related Costs
|
|
Contract Termination Costs
|
|
Total Costs
|
||||||
Balance as of June 30, 2015
|
$
|
2.4
|
|
|
$
|
—
|
|
|
$
|
2.4
|
|
Charges
|
1.9
|
|
|
0.4
|
|
|
2.3
|
|
|||
Cash payments
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
|||
Adjustments
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
Foreign exchange
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of September 30, 2015
|
$
|
2.5
|
|
|
$
|
0.4
|
|
|
$
|
2.9
|
|
•
|
cost of certain systems, such as for procurement and expense management, which were supported by ADP’s corporate information technology group, were allocated based on the approximate usage of information technology systems by the Company in relation to ADP’s total usage;
|
•
|
corporate human resources costs were allocated based on the estimated percentage of usage by the Company, including benefits, recruiting, global learning and development, employee relocation services, and other human resources shared services;
|
•
|
travel department costs were allocated based on the estimated percentage of travel directly related to the Company;
|
•
|
security department costs were allocated based on the estimated percentage of usage of security for the Company in relation to ADP’s total security usage;
|
•
|
real estate department costs were allocated based on the estimated percentage of square footage of facilities for the Company that were managed by the ADP corporate real estate department in relation to ADP’s total managed facilities; and
|
•
|
all other allocations were based on an estimated percentage of support staff time related to the Company in comparison to ADP as a whole.
|
•
|
compensation of corporate headquarters management and of directors;
|
•
|
corporate finance functions including accounting, treasury, internal audit, investor relations, and tax;
|
•
|
annual meetings of stockholders;
|
•
|
board of directors and committee meetings;
|
•
|
Exchange Act annual, quarterly, and current report preparation and filing, including reports to stockholders;
|
•
|
SEC and stock exchange corporate governance compliance;
|
•
|
stock exchange listing fees and transfer agent fees; and
|
•
|
directors and officers insurance.
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
514.6
|
|
|
$
|
517.0
|
|
|
$
|
(2.4
|
)
|
|
—
|
%
|
Cost of revenues
|
310.8
|
|
|
311.5
|
|
|
(0.7
|
)
|
|
—
|
%
|
|||
Selling, general, and administrative costs
|
97.4
|
|
|
110.5
|
|
|
(13.1
|
)
|
|
(12
|
)%
|
|||
Restructuring expenses
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
n/m
|
|
|||
Separation costs
|
—
|
|
|
30.7
|
|
|
(30.7
|
)
|
|
(100
|
)%
|
|||
Total expenses
|
410.1
|
|
|
452.7
|
|
|
(42.6
|
)
|
|
(9
|
)%
|
|||
Operating earnings
|
104.5
|
|
|
64.3
|
|
|
40.2
|
|
|
63
|
%
|
|||
Interest expense
|
(9.3
|
)
|
|
(1.1
|
)
|
|
(8.2
|
)
|
|
n/m
|
|
|||
Other income, net
|
0.6
|
|
|
1.3
|
|
|
(0.7
|
)
|
|
(54
|
)%
|
|||
Earnings before income taxes
|
95.8
|
|
|
64.5
|
|
|
31.3
|
|
|
49
|
%
|
|||
Margin %
|
18.6
|
%
|
|
12.5
|
%
|
|
|
|
|
|||||
Provision for income taxes
|
(34.6
|
)
|
|
(23.5
|
)
|
|
(11.1
|
)
|
|
47
|
%
|
|||
Effective tax rate
|
36.1
|
%
|
|
36.4
|
%
|
|
|
|
|
|||||
Net earnings
|
61.2
|
|
|
41.0
|
|
|
20.2
|
|
|
49
|
%
|
|||
Less: net earnings attributable to noncontrolling interest
|
2.2
|
|
|
2.0
|
|
|
0.2
|
|
|
10
|
%
|
|||
Net earnings attributable to CDK
|
$
|
59.0
|
|
|
$
|
39.0
|
|
|
$
|
20.0
|
|
|
51
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
514.6
|
|
|
$
|
517.0
|
|
|
$
|
(2.4
|
)
|
|
—
|
%
|
Impact of exchange rates
|
15.7
|
|
|
—
|
|
|
15.7
|
|
|
|
||||
Constant currency revenues
|
$
|
530.3
|
|
|
$
|
517.0
|
|
|
$
|
13.3
|
|
|
3
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
514.6
|
|
|
$
|
517.0
|
|
|
$
|
(2.4
|
)
|
|
—
|
%
|
Internet sales leads revenues
(1)
|
—
|
|
|
(14.1
|
)
|
|
14.1
|
|
|
|
||||
Adjusted revenues
|
$
|
514.6
|
|
|
$
|
502.9
|
|
|
$
|
11.7
|
|
|
2
|
%
|
Impact of exchange rates
|
15.7
|
|
|
—
|
|
|
15.7
|
|
|
|
||||
Constant currency adjusted revenues
|
$
|
530.3
|
|
|
$
|
502.9
|
|
|
$
|
27.4
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Earnings before income taxes
|
$
|
95.8
|
|
|
$
|
64.5
|
|
|
$
|
31.3
|
|
|
49
|
%
|
Separation costs
(2)
|
—
|
|
|
30.7
|
|
|
(30.7
|
)
|
|
|
||||
Stand-alone public company costs
(3)
|
—
|
|
|
(10.3
|
)
|
|
10.3
|
|
|
|
||||
Trademark royalty fee
(4)
|
—
|
|
|
5.7
|
|
|
(5.7
|
)
|
|
|
||||
Stock-based compensation
(3)
|
—
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
|
||||
Interest expense
(3)
|
—
|
|
|
(8.2
|
)
|
|
8.2
|
|
|
|
||||
Restructuring expenses
(5)
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
|
||||
Other business transformation expenses
(5)
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
|
||||
Internet sales leads earnings
(1)
|
—
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
|
||||
Adjusted earnings before income taxes
|
$
|
99.4
|
|
|
$
|
81.0
|
|
|
$
|
18.4
|
|
|
23
|
%
|
Adjusted margin %
|
19.3
|
%
|
|
16.1
|
%
|
|
320 bps
|
|
|
|
||||
Impact of exchange rates
|
3.6
|
|
|
—
|
|
|
3.6
|
|
|
|
||||
Constant currency adjusted earnings before income taxes
|
$
|
103.0
|
|
|
$
|
81.0
|
|
|
$
|
22.0
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|||||||
Provision for income taxes
|
$
|
34.6
|
|
|
$
|
23.5
|
|
|
$
|
11.1
|
|
|
47
|
%
|
Income tax effect of pre-tax adjustments
(6)
|
1.2
|
|
|
1.7
|
|
|
(0.5
|
)
|
|
|
||||
Adjusted provision for income taxes
|
$
|
35.8
|
|
|
$
|
25.2
|
|
|
$
|
10.6
|
|
|
42
|
%
|
Adjusted effective tax rate
|
36.0
|
%
|
|
31.1
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Net earnings attributable to CDK
|
$
|
59.0
|
|
|
$
|
39.0
|
|
|
$
|
20.0
|
|
|
51
|
%
|
Separation costs
(2)
|
—
|
|
|
30.7
|
|
|
(30.7
|
)
|
|
|
||||
Stand-alone public company costs
(3)
|
—
|
|
|
(10.3
|
)
|
|
10.3
|
|
|
|
||||
Trademark royalty fee
(4)
|
—
|
|
|
5.7
|
|
|
(5.7
|
)
|
|
|
||||
Stock-based compensation
(3)
|
—
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
|
||||
Interest expense
(3)
|
—
|
|
|
(8.2
|
)
|
|
8.2
|
|
|
|
||||
Restructuring expenses
(5)
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
|
||||
Other business transformation expenses
(5)
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
|
||||
Internet sales leads earnings
(1)
|
—
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
|
||||
Income tax effect of pre-tax adjustments
(6)
|
(1.2
|
)
|
|
(1.7
|
)
|
|
0.5
|
|
|
|
||||
Adjusted net earnings attributable to CDK
|
$
|
61.4
|
|
|
$
|
53.8
|
|
|
$
|
7.6
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|||||||
Adjusted net earnings attributable to CDK per common share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
0.39
|
|
|
$
|
0.33
|
|
|
|
|
18
|
%
|
||
Diluted
|
$
|
0.38
|
|
|
$
|
0.33
|
|
|
|
|
15
|
%
|
||
|
|
|
|
|
|
|
|
|||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
(7)
|
159.2
|
|
|
160.6
|
|
|
|
|
|
|||||
Diluted
(7)
|
160.7
|
|
|
160.6
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Earnings before income taxes
|
$
|
95.8
|
|
|
$
|
64.5
|
|
|
$
|
31.3
|
|
|
49
|
%
|
Interest expense
(1)
|
9.3
|
|
|
1.1
|
|
|
8.2
|
|
|
|
||||
Depreciation and amortization
(2)
|
14.0
|
|
|
13.9
|
|
|
0.1
|
|
|
|
||||
Separation costs
(3)
|
—
|
|
|
30.7
|
|
|
(30.7
|
)
|
|
|
||||
Stand-alone public company costs
(4)
|
—
|
|
|
(10.3
|
)
|
|
10.3
|
|
|
|
||||
Trademark royalty fee
(5)
|
—
|
|
|
5.7
|
|
|
(5.7
|
)
|
|
|
||||
Total stock-based compensation
(6)
|
5.8
|
|
|
5.4
|
|
|
0.4
|
|
|
|
||||
Restructuring expenses
(7)
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
|
||||
Other business transformation expenses
(7)
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
|
||||
Internet sales leads earnings
(8)
|
—
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
|
||||
Adjusted EBITDA
|
$
|
128.4
|
|
|
$
|
110.0
|
|
|
$
|
18.4
|
|
|
17
|
%
|
Adjusted margin %
|
25.0
|
%
|
|
21.9
|
%
|
|
310 bps
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Segment Revenues
|
|
|
|
|
|
|
|
|||||||
Automotive Retail North America
|
$
|
332.2
|
|
|
$
|
327.7
|
|
|
$
|
4.5
|
|
|
1
|
%
|
Automotive Retail International
|
78.2
|
|
|
85.7
|
|
|
(7.5
|
)
|
|
(9
|
)%
|
|||
Digital Marketing
|
104.2
|
|
|
103.6
|
|
|
0.6
|
|
|
1
|
%
|
|||
Total Revenues
|
$
|
514.6
|
|
|
$
|
517.0
|
|
|
$
|
(2.4
|
)
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|||||||
Segment Earnings before Income Taxes
|
|
|
|
|
|
|
|
|||||||
Automotive Retail North America
|
$
|
102.4
|
|
|
$
|
94.5
|
|
|
$
|
7.9
|
|
|
8
|
%
|
Margin %
|
30.8
|
%
|
|
28.8
|
%
|
|
|
|
|
|||||
Automotive Retail International
|
14.2
|
|
|
12.6
|
|
|
1.6
|
|
|
13
|
%
|
|||
Margin %
|
18.2
|
%
|
|
14.7
|
%
|
|
|
|
|
|||||
Digital Marketing
|
10.5
|
|
|
8.1
|
|
|
2.4
|
|
|
30
|
%
|
|||
Margin %
|
10.1
|
%
|
|
7.8
|
%
|
|
|
|
|
|||||
Other
|
(31.3
|
)
|
|
(50.7
|
)
|
|
19.4
|
|
|
(38
|
)%
|
|||
Total Earnings before Income Taxes
|
$
|
95.8
|
|
|
$
|
64.5
|
|
|
$
|
31.3
|
|
|
49
|
%
|
Margin %
|
18.6
|
%
|
|
12.5
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
332.2
|
|
|
$
|
327.7
|
|
|
$
|
4.5
|
|
|
1
|
%
|
Internet sales leads revenues
|
—
|
|
|
(14.1
|
)
|
|
14.1
|
|
|
|
||||
Adjusted revenues
|
$
|
332.2
|
|
|
$
|
313.6
|
|
|
$
|
18.6
|
|
|
6
|
%
|
Impact of exchange rates
|
4.4
|
|
|
—
|
|
|
4.4
|
|
|
|
||||
Constant currency adjusted revenues
|
$
|
336.6
|
|
|
$
|
313.6
|
|
|
$
|
23.0
|
|
|
7
|
%
|
|
Three Months Ended
|
|
|
|
|
|
|
||||||||||
|
September 30,
|
|
Change
|
||||||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|
Basis Points
|
||||||||
Earnings before income taxes
|
$
|
102.4
|
|
|
$
|
94.5
|
|
|
$
|
7.9
|
|
|
8
|
%
|
|
|
|
Margin %
|
30.8
|
%
|
|
28.8
|
%
|
|
|
|
|
|
200
|
|
|||||
Stand-alone public company costs
|
—
|
|
|
(2.1
|
)
|
|
2.1
|
|
|
|
|
|
|||||
Internet sales leads earnings
|
—
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
|
|
|
|||||
Adjusted earnings before income taxes
|
$
|
102.4
|
|
|
$
|
91.4
|
|
|
$
|
11.0
|
|
|
12
|
%
|
|
|
|
Adjusted margin %
|
30.8
|
%
|
|
29.1
|
%
|
|
|
|
|
|
170
|
|
|||||
Impact of exchange rates
|
1.8
|
|
|
—
|
|
|
1.8
|
|
|
|
|
|
|||||
Constant currency adjusted earnings before income taxes
|
$
|
104.2
|
|
|
$
|
91.4
|
|
|
$
|
12.8
|
|
|
14
|
%
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
78.2
|
|
|
$
|
85.7
|
|
|
$
|
(7.5
|
)
|
|
(9
|
)%
|
Impact of exchange rates
|
10.8
|
|
|
—
|
|
|
10.8
|
|
|
|
||||
Constant currency revenues
|
$
|
89.0
|
|
|
$
|
85.7
|
|
|
$
|
3.3
|
|
|
4
|
%
|
|
Three Months Ended
|
|
|
|
|
|
Basis Point
|
||||||||||
|
September 30,
|
|
Change
|
|
Change
|
||||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|
|
||||||||
Earnings before income taxes
|
$
|
14.2
|
|
|
$
|
12.6
|
|
|
$
|
1.6
|
|
|
13
|
%
|
|
|
|
Margin %
|
18.2
|
%
|
|
14.7
|
%
|
|
|
|
|
|
350
|
|
|||||
Impact of exchange rates
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|
|
|
|
|||||
Constant currency earnings before income taxes
|
$
|
15.8
|
|
|
$
|
12.6
|
|
|
$
|
3.2
|
|
|
25
|
%
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
104.2
|
|
|
$
|
103.6
|
|
|
$
|
0.6
|
|
|
1
|
%
|
Impact of exchange rates
|
0.5
|
|
|
|
|
0.5
|
|
|
|
|||||
Constant currency revenues
|
$
|
104.7
|
|
|
$
|
103.6
|
|
|
$
|
1.1
|
|
|
1
|
%
|
|
Three Months Ended
|
|
|
|
|
|
|
||||||||||
|
September 30,
|
|
Change
|
|
Change
|
||||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|
Basis Points
|
||||||||
Earnings before income taxes
|
$
|
10.5
|
|
|
$
|
8.1
|
|
|
$
|
2.4
|
|
|
30
|
%
|
|
|
|
Margin %
|
10.1
|
%
|
|
7.8
|
%
|
|
|
|
|
|
230
|
|
|||||
Impact of exchange rates
|
0.2
|
|
|
|
|
0.2
|
|
|
|
|
|
||||||
Constant currency earnings before income taxes
|
$
|
10.7
|
|
|
$
|
8.1
|
|
|
$
|
2.6
|
|
|
32
|
%
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Loss before income taxes
|
$
|
(31.3
|
)
|
|
$
|
(50.7
|
)
|
|
$
|
19.4
|
|
|
(38
|
)%
|
Separation costs
|
—
|
|
|
30.7
|
|
|
(30.7
|
)
|
|
|
||||
Stand-alone public company costs
|
—
|
|
|
(8.2
|
)
|
|
8.2
|
|
|
|
||||
Trademark royalty fee
|
—
|
|
|
5.7
|
|
|
(5.7
|
)
|
|
|
||||
Stock-based compensation
|
—
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
|
||||
Interest expense
|
—
|
|
|
(8.2
|
)
|
|
8.2
|
|
|
|
||||
Restructuring expenses
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
|
||||
Other business transformation expenses
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
|
||||
Adjusted loss before income taxes
|
$
|
(27.7
|
)
|
|
$
|
(31.1
|
)
|
|
$
|
3.4
|
|
|
(11
|
)%
|
Impact of exchange rates
|
—
|
|
|
|
|
|
|
|
||||||
Constant currency loss before income taxes
|
$
|
(27.7
|
)
|
|
$
|
(31.1
|
)
|
|
$
|
3.4
|
|
|
(11
|
)%
|
|
Three Months Ended
|
|
|
||||||||
|
September 30,
|
|
|
||||||||
|
2015
|
|
2014
|
|
$ Change
|
||||||
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
5.2
|
|
|
$
|
20.9
|
|
|
$
|
(15.7
|
)
|
Investing activities
|
(15.9
|
)
|
|
33.7
|
|
|
(49.6
|
)
|
|||
Financing activities
|
(34.1
|
)
|
|
(92.0
|
)
|
|
57.9
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(3.8
|
)
|
|
(10.1
|
)
|
|
6.3
|
|
|||
Net change in cash and cash equivalents
|
$
|
(48.6
|
)
|
|
$
|
(47.5
|
)
|
|
$
|
(1.1
|
)
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares as Part of Publicly Announced Programs
(2)
|
|
Maximum Number that May Yet Be Purchased Under the Program
(2)
|
|||||
July 1 - 31, 2015
|
|
131,947
|
|
|
$
|
52.75
|
|
|
131,947
|
|
|
8,816,884
|
|
August 1 - 31, 2015
|
|
66,300
|
|
|
$
|
50.45
|
|
|
66,300
|
|
|
8,750,584
|
|
September 1 - 30, 2015
|
|
171,144
|
|
|
$
|
49.30
|
|
|
—
|
|
|
8,750,584
|
|
Total
|
|
369,391
|
|
|
$
|
50.74
|
|
|
198,247
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
10.1
|
|
Form of Stock Option Grant Agreement under the 2014 Omnibus Award Plan (Management Compensatory Plan)
|
|
8-K
|
|
1-36486
|
|
10.1
|
|
9/9/2015
|
|
|
10.2
|
|
Form of UK Sub-Plan Stock Option Grant Agreement under the 2014 Omnibus Award Plan (Management Compensatory Plan)
|
|
8-K
|
|
1-36486
|
|
10.2
|
|
9/9/2015
|
|
|
10.3
|
|
Form of Restricted Stock Unit Award Agreement under the 2014 Omnibus Award Plan (Management Compensatory Plan)
|
|
8-K
|
|
1-36486
|
|
10.3
|
|
9/9/2015
|
|
|
10.4
|
|
Form of Restricted Stock Award Agreement under the 2014 Omnibus Award Plan (Management Compensatory Plan)
|
|
8-K
|
|
1-36486
|
|
10.4
|
|
9/9/2015
|
|
|
10.5
|
|
Form of Performance Stock Unit Award Agreement under the 2014 Omnibus Award Plan (Management Compensatory Plan)
|
|
8-K/A
|
|
1-36486
|
|
10.5
|
|
9/22/2015
|
|
|
10.6
|
|
Amended and Restated Change in Control Severance Plan for Corporate Officers (Management Compensatory Plan)
|
|
8-K
|
|
1-36486
|
|
10.6
|
|
9/9/2015
|
|
|
10.7
|
|
Form of Restricted Stock Unit Award Agreement under the 2014 Omnibus Award Plan (Form for Non-Employee Director)
|
|
|
|
|
|
|
|
|
|
X
|
10.8
|
|
Form of Stock Option Grant Agreement under the 2014 Omnibus Award Plan (Form for Non-Employee Director)
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification by Steven J. Anenen pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification by Alfred A. Nietzel pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Certification by Steven J. Anenen pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
32.2
|
|
Certification by Alfred A. Nietzel pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
XBRL instance document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL taxonomy extension schema document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL taxonomy extension calculation linkbase document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL taxonomy label linkbase document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL taxonomy extension presentation linkbase document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL taxonomy extension definition linkbase document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
CDK Global, Inc.
(Registrant)
|
|
|
|
Date:
|
November 3, 2015
|
/s/ Alfred A. Nietzel
Alfred A. Nietzel
|
|
|
|
|
|
Vice President, Chief Financial Officer (principal financial and accounting officer)
(Title)
|
1.
|
Terms and Conditions
.
|
1.
|
The option herein granted shall become exercisable in whole or in part as follows:
|
(a)
|
Exercisable in its entirety on the
second anniversary
of the grant date;
|
(b)
|
Exercisable in its entirety (
i
) upon the death of the Participant, or (
ii
) in the event of total and permanent disability of the Participant; and
|
(c)
|
Exercisable in its entirety immediately prior to the consummation of the Change in Control.
|
(d)
|
No portion of the option shall become exercisable following the cessation of the Participant’s membership on the Board.
|
2.
|
The unexercised portion of the option herein granted shall automatically and without notice terminate and become null and void at the time of the earliest of the following to occur:
|
(a)
|
the expiration of ten years from the date on which the option was granted;
|
(b)
|
the expiration of 60 days from the date the Participant ceases to be a member of the Board; provided, however, that
|
(
i
)
|
if the Participant ceases to be a member of the Board because of total and permanent disability, the provisions of sub-paragraph (c) shall apply,
|
(
ii
)
|
if the Participant shall die while a member of the Board or during the 60-day period following the date the Participant ceases to be a member of the Board, the provisions of sub-paragraph (d) below shall apply, and
|
(iii)
|
if the Participant shall retire from the Board, and satisfy the Accelerated Vesting Criteria at the time of such retirement, the provisions of sub-paragraph (e) below shall apply;
|
(c)
|
if Section 2(b)(i) applies, (i) if the Participant satisfied the Accelerated Vesting Criteria at the time of Participant’s total and permanent disability, the expiration of 36 months after the date the Participant ceases to be a member of the Board because of total and permanent disability, or (ii) if the Participant did not satisfy the Accelerated Vesting Criteria at the time of Participant’s total and permanent disability, the expiration of 12 months after the date the Participant ceases to be a member of the Board because of total and permanent disability; provided, however, that if the Participant shall die during the 36-month period specified in clause (i) of this Section 2(c) or the 12-month period specified in clause (ii) of this Section 2(c), as applicable, then the unexercised portion shall become null and void upon the expiration of 12 months after death of the Participant;
|
(d)
|
if Section 2(b)(ii) applies, (i) if the Participant satisfied the Accelerated Vesting Criteria at the time of death, the expiration of 36 months after death of the Participant, or (ii) if the Participant did not satisfy the Accelerated Vesting Criteria at the time of death, the expiration of 12 months after death of the Participant; and
|
(e)
|
if Section 2(b)(iii) applies, the expiration of 36 months after the retirement of the Participant from the Board;
provided
,
however
, that if such Participant shall die during the 36 month period following the date of such Participant’s retirement, then the unexercised portion shall become null and void on the later of (
i
) the expiration of 36 months after the retirement of the Participant, or (
ii
) 12 months after death of the Participant.
|
3.
|
Notwithstanding the foregoing, in the event that any unexercised portion of the option herein granted would terminate and become null and void in accordance with Section 2 and the Fair Market Value of the unexercised portion of the option herein granted exceeds the full price for each of the shares purchased pursuant to such option, the then-vested portion of the option herein granted shall be deemed to be automatically exercised by the Participant on such last trading day by means of a net exercise without any action by the Participant. Upon such automatic exercise, the Company shall deliver to the Participant the number of shares of Common Stock for which the option was deemed exercised less the number of shares of Common Stock having a Fair Market Value, as of such date, sufficient to (1) pay the full price for each of the shares of Common Stock purchased pursuant to the option herein granted and (2) satisfy all applicable required tax withholding obligations. Any fractional share shall be settled in cash. For the avoidance of doubt, and notwithstanding any provision (or interpretation) of Section 2 to the contrary, the unexercised portion of the option herein granted shall automatically and without notice terminate and become null and void upon the expiration of ten years from the date of this Agreement.
|
4.
|
The full price for each of the shares purchased pursuant to the option herein granted shall be $XX.XX.
|
5.
|
Full payment for shares purchased by the Participant shall be made at the time of the exercise of the option in whole or in part. No shares shall be issued until full payment therefore has been made, and the Participant shall have none of the rights of a shareholder with respect to any shares subject to this option until such shares shall have been issued.
|
6.
|
No option granted hereunder may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.
|
7.
|
In the event of one or more stock splits, stock dividends, stock changes, reclassifications, recapitalizations or combinations of shares prior to complete exercise of the option herein granted that change the character or number of the shares subject to the option, this option to the extent that it shall not have been exercised, shall entitle the Participant or the Participant’s executors or administrators to receive in substitution such number and kind of shares as he, she or they would have been entitled to receive if the Participant or the Participant’s executors or administrators had actually owned the shares subject to this option at the time of the occurrence of such change;
provided, however
that if the change is of such nature that the Participant or the Participant’s executors or administrators, upon exercise of the option, would receive property other than shares of stock, then the Board shall adjust the option so that he, she or they shall acquire only shares of stock upon exercise, making such adjustment in the number and kind of shares to be received as the Board shall, in its sole judgment, deem equitable;
provided
,
further
, that the foregoing shall not limit the Company’s ability to otherwise adjust the option in a manner consistent with Section 12 of the Plan.
|
8.
|
As used herein, the term “Accelerated Vesting Criteria” means being a member of the Board for at least ten years.
|
9.
|
Notwithstanding anything to the contrary contained herein, the option granted hereunder may be terminated and become null and void without consideration if the Participant, as determined by the Committee in its sole discretion (i) engages in an activity that is in conflict with or adverse to the interests of the Company or any Affiliate, including but not limited to fraud or conduct contributing to any financial restatements or irregularities, or (ii) without the consent of the Company, while providing services to the Company or any Affiliate or after termination of such service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement between the Participant and the Company or any Affiliate. If the Participant engages in any activity referred to in the preceding sentence, the Participant shall, at the sole discretion of the Committee, forfeit any gain realized in respect of the option granted hereunder (which gain shall be deemed to be an amount equal to the difference between the price for shares set forth in Section 4 above and the Fair Market Value (as defined in the Plan), on the applicable exercise date, of the shares of Common Stock of the Company delivered to the Participant), and repay such gain to the Company.
|
10.
|
The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan, and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan.
|
11.
|
Any right of the Company contained in this Agreement may be waived in writing by the Committee. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.
|
12.
|
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.
|
13.
|
The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant.
|
14.
|
This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless the same be in writing and signed by the parties hereto, except for any changes permitted without consent of the Participant under the Plan.
|
15.
|
This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of Delaware.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CDK Global, 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)) 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)
|
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
|
(c)
|
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:
|
November 3, 2015
|
/s/ Steven J. Anenen
|
|
|
Steven J. Anenen
|
|
|
President, Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of CDK Global, 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)) 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)
|
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
|
(c)
|
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:
|
November 3, 2015
|
/s/ Alfred A. Nietzel
|
|
|
Alfred A. Nietzel
|
|
|
Vice President, 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:
|
November 3, 2015
|
/s/ Steven J. Anenen
|
|
|
Steven J. Anenen
|
|
|
President, Chief Executive Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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Date:
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November 3, 2015
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/s/ Alfred A. Nietzel
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Alfred A. Nietzel
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Vice President, Chief Financial Officer
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