CDK Global, Inc. (Form: 10-Q, Received: 02/03/2016 16:48:33)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

______________

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 2015

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number 001-36486

______________

CDK Global, Inc.

(Exact name of registrant as specified in its charter)

______________



Delaware	46-5743146
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
1950 Hassell Road, Hoffman Estates, IL	60169
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (847) 397-1700

______________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer o	Accelerated filer o
Non-accelerated filer ý (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The number of shares outstanding of the registrant’s common stock as of January 29, 2016 was 155,276,390 .

Table of Contents



		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated and Combined Statements of Operations Three and six months ended December 31, 2015 and 2014	2

	Condensed Consolidated and Combined Statements of Comprehensive Income Three and six months ended December 31, 2015 and 2014	3

	Condensed Consolidated Balance Sheets As of December 31, 2015 and June 30, 2015	4

	Condensed Consolidated and Combined Statements of Cash Flows Six months ended December 31, 2015 and 2014	5

	Condensed Consolidated Statement of Equity Six months ended December 31, 2015	6

	Notes to the Condensed Consolidated and Combined Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51

Item 4.	Controls and Procedures	51

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54

Item 5.	Other Information	54

Item 6.	Exhibits	55

	Signatures	57

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

CDK Global, Inc.

Condensed Consolidated and Combined Statements of Operations

(In millions, except per share amounts)

(Unaudited)



	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
Revenues	$	520.1		$	517.0		$	1,034.7		$	1,034.0

Expenses:
Cost of revenues	301.2			323.3			612.0			634.8
Selling, general and administrative expenses	105.8			105.9			203.2			216.4
Restructuring expenses	1.8			—			3.7			—
Separation costs	—			3.3			—			34.0
Total expenses	408.8			432.5			818.9			885.2
Operating earnings	111.3			84.5			215.8			148.8

Interest expense	(9.5		)	(9.0		)	(18.8		)	(10.1		)
Other income, net	5.0			1.6			5.6			2.9

Earnings before income taxes	106.8			77.1			202.6			141.6

Provision for income taxes	(37.1		)	(32.7		)	(71.7		)	(56.2		)

Net earnings	69.7			44.4			130.9			85.4
Less: net earnings attributable to noncontrolling interest	1.5			2.0			3.7			4.0
Net earnings attributable to CDK	$	68.2		$	42.4		$	127.2		$	81.4

Net earnings attributable to CDK per common share:
Basic	$	0.43		$	0.26		$	0.80		$	0.51
Diluted	$	0.43		$	0.26		$	0.80		$	0.50

Weighted-average common shares outstanding:
Basic	158.7			160.7			158.9			160.7
Diluted	159.7			161.8			160.0			161.2

Dividends declared per common share	$	0.135		$	0.120		$	0.255		$	0.120

See notes to the condensed consolidated and combined financial statements.

CDK Global, Inc.

Condensed Consolidated and Combined Statements of Comprehensive Income

(In millions)

(Unaudited)



	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
Net earnings	$	69.7		$	44.4		$	130.9		$	85.4
Other comprehensive loss:
Currency translation adjustments	(15.0		)	(19.5		)	(31.8		)	(16.9		)
Other comprehensive loss	(15.0		)	(19.5		)	(31.8		)	(16.9		)
Comprehensive income	54.7			24.9			99.1			68.5
Less: comprehensive income attributable to noncontrolling interest	1.5			2.0			3.7			4.0
Comprehensive income attributable to CDK	$	53.2		$	22.9		$	95.4		$	64.5

See notes to the condensed consolidated and combined financial statements.

CDK Global, Inc.

Condensed Consolidated Balance Sheets

(In millions, except per share par value)

(Unaudited)



	December 31,			June 30,
	2015			2015
Assets
Current assets:
Cash and cash equivalents	$	347.5		$	408.2
Accounts receivable, net of allowances of $7.0 and $6.8, respectively	378.9			314.6
Other current assets	190.7			162.4
Total current assets	917.1			885.2
Property, plant and equipment, net	101.4			100.0
Other assets	223.3			224.1
Goodwill	1,187.3			1,209.9
Intangible assets, net	86.9			99.3
Total assets	$	2,516.0		$	2,518.5

Liabilities and Equity
Current liabilities:
Current maturities of long-term debt and capital lease obligations	$	26.4		$	13.0
Accounts payable	13.4			21.7
Accrued expenses and other current liabilities	159.2			154.4
Accrued payroll and payroll-related expenses	71.0			123.2
Short-term deferred revenues	173.4			186.1
Total current liabilities	443.4			498.4
Long-term debt and capital lease obligations	1,202.2			971.1
Long-term deferred revenues	157.7			162.9
Deferred income taxes	71.8			58.2
Other liabilities	45.1			43.8
Total liabilities	1,920.2			1,734.4

Equity:
Preferred stock, $0.01 par value: Authorized, 50.0 shares; issued and outstanding, none	—			—
Common stock, $0.01 par value: Authorized, 650.0 shares; issued, 160.3 and 161.3 shares, respectively; outstanding, 155.2 and 160.2 shares, respectively	1.6			1.6
Additional paid-in-capital	629.6			686.5
Retained earnings	167.8			81.2
Treasury stock, at cost: 5.1 and 1.1 shares, respectively	(240.6		)	(50.7		)
Accumulated other comprehensive income	19.8			51.6
Total CDK stockholders' equity	578.2			770.2
Noncontrolling interest	17.6			13.9
Total equity	595.8			784.1
Total liabilities and equity	$	2,516.0		$	2,518.5

See notes to the condensed consolidated and combined financial statements.

CDK Global, Inc.

Condensed Consolidated and Combined Statements of Cash Flows

(In millions)

(Unaudited)



	Six Months Ended
	December 31,
	2015			2014
Cash Flows from Operating Activities:
Net earnings	$	130.9		$	85.4
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization	28.7			43.4
Deferred income taxes	19.0			2.3
Stock-based compensation expense	12.8			13.4
Pension expense	—			1.0
Other	(5.0		)	(5.9		)
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses:
Increase in accounts receivable	(69.8		)	(27.7		)
Increase in other assets	(41.6		)	(18.0		)
Decrease in accounts payable	(7.8		)	(0.7		)
(Decrease) increase in accrued expenses and other liabilities	(41.4		)	11.8
Net cash flows provided by operating activities	25.8			105.0

Cash Flows from Investing Activities:
Capital expenditures	(18.1		)	(14.5		)
Proceeds from sale of property, plant and equipment	—			0.9
Capitalized software	(2.1		)	(2.0		)
Contributions to investments	(6.7		)	—
Proceeds from investments	7.7			—
Proceeds from notes receivable from ADP and its affiliates	—			40.6
Net cash flows (used in) provided by investing activities	(19.2		)	25.0

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	250.0			1,750.0
Repayments of long-term debt and capital lease obligations	(6.7		)	(753.1		)
Dividend paid to ADP at spin-off	—			(825.0		)
Dividends paid to stockholders	(40.8		)	(19.4		)
Repurchases of common stock	(261.0		)	—
Proceeds from exercises of stock options	2.9			3.1
Excess tax benefit from stock-based compensation awards	7.0			6.8
Withholding tax payments for stock-based compensation awards	(8.5		)	—
Dividend payments of CVR to noncontrolling owners	—			(5.4		)
Payment of deferred financing costs	(1.6		)	(9.0		)
Recovery of dividends paid (Note 1E)	0.4			—
Net cash flows used in financing activities	(58.3		)	(114.7		)

Effect of exchange rate changes on cash and cash equivalents	(9.0		)	(15.9		)

Net change in cash and cash equivalents	(60.7		)	(0.6		)

Cash and cash equivalents, beginning of period	408.2			402.8

Cash and cash equivalents, end of period	$	347.5		$	402.2

Supplemental Disclosure:
Cash paid for:
Income taxes and foreign withholding taxes, net of refunds	$	86.3		$	10.6
Interest	17.5			1.7

See notes to the condensed consolidated and combined financial statements.

CDK Global, Inc.

Condensed Consolidated Statement of Equity

(In millions)

(Unaudited)



	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		Additional Paid-in-Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income			Total CDK Stockholders' Equity			Non-controlling Interest		Total Equity
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	—		—		—			127.2			—			—			127.2			3.7		130.9
Foreign currency translation adjustments	—		—		—			—			—			(31.8		)	(31.8		)	—		(31.8		)
Stock-based compensation expense and related dividend equivalents	—		—		12.1			(0.2		)	—			—			11.9			—		11.9
Common stock issued for the exercise and vesting of stock-based compensation awards, net	—		—		(26.0		)	—			20.4			—			(5.6		)	—		(5.6		)
Excess tax benefit from stock-based compensation awards	—		—		7.0			—			—			—			7.0			—		7.0
Cash dividends paid to stockholders	—		—		—			(40.8		)	—			—			(40.8		)	—		(40.8		)
Repurchases of common stock	—		—		(50.0		)	—			(210.3		)	—			(260.3		)	—		(260.3		)
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 December 31, 2015	160.3		$	1.6	$	629.6		$	167.8		$	(240.6	)	$	19.8		$	578.2		$	17.6	$	595.8

See notes to the condensed consolidated and combined financial statements.

CDK Global, Inc.

Notes to the Condensed Consolidated and Combined Financial Statements

(Tabular amounts in millions, except per share amounts)

(Unaudited)

Note 1. Basis of Presentation

A. Spin-off

On April 9, 2014 , the board of directors of Automatic Data Processing, Inc. (“ADP”) approved the spin-off of the Dealer Services business of ADP. On September 30, 2014 , the spin-off became effective and ADP distributed 100% of the common stock of CDK Global, Inc. (the "Company" or "CDK") to the holders of record of ADP's common stock as of September 24, 2014 (the "spin-off").

Concurrent with the spin-off, the Company and ADP entered into several agreements providing for transition services and governing relationships between the Company and ADP. Refer to Notes 8 and 12 for further information.

B. Description of Business

The Company is a global provider of integrated technology solutions to the information technology and marketing/advertising markets of the automotive retail industry. The Company’s solutions enable automotive retailers and original equipment manufacturers (“OEMs”) to better manage, analyze, and grow their businesses. The Company classifies its operations into the following reportable segments: Automotive Retail North America, Automotive Retail International, and Digital Marketing. In addition, the Company has an “Other” segment, the primary components of which are corporate allocations and other expenses not recorded in the segment results. Refer to Note 13 for further information.

C. Basis of Preparation

The financial statements presented herein represent (i) the results of operations for the three months and six months ended December 31, 2015 and the three months ended December 31, 2014 and the balance sheets as of December 31, 2015 and June 30, 2015 with the Company reporting as a separate publicly-traded company (referred to as "consolidated financial statements") and (ii) the results of operations for the six months ended December 31, 2014 , which includes the period prior to the spin-off when the Company was a wholly owned subsidiary of ADP (referred to as "combined financial statements"). Throughout this Quarterly Report on Form 10-Q when we refer to the "financial statements," we are referring to the "condensed consolidated and combined financial statements," unless the context indicates otherwise.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect assets, liabilities, revenues, and expenses that are reported in the accompanying financial statements and footnotes thereto. Actual results may differ from those estimates. These financial statements present the consolidated and combined financial position and results of operations of the Company, which was under common control and common management by ADP until the spin-off. The historical financial results in the accompanying financial statements presented may not be indicative of the results that would have been achieved had the Company operated as a separate, stand-alone entity.

The accompanying financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. Interim financial results are not necessarily indicative of financial results for a full year. The financial statements in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated and combined financial statements and related notes of the Company as of and for the fiscal year ended June 30, 2015 included in the Annual Report on Form 10-K.

Prior to the spin-off, the financial statements in this Quarterly Report on Form 10-Q included costs for facilities, functions, and services used by the Company at shared ADP sites and costs for certain functions and services performed by centralized ADP organizations and directly charged to the Company based on revenue and headcount. Following the spin-off, the Company performs these functions using internal resources or purchased services, certain of which were provided by ADP during a transitional period that ended September 30, 2015 pursuant to the transition services agreement. Refer to Note 12 for further information on agreements entered into with ADP as a result of the spin-off. The expenses allocated to the Company for these services are not necessarily indicative of the expenses that would have been incurred if the Company had been a separate,

independent entity and had otherwise managed these functions. The Company’s financial statements include the following transactions with ADP or its affiliates:

Separation Costs. The financial statements of the Company include certain incremental costs that are directly attributable to the spin-off. Prior to the spin-off, separation costs were paid by ADP and allocated to the Company. These costs were related to professional services and amounted to $3.3 million and $34.0 million for the three and six months ended December 31, 2014 , respectively. The Company did not incur any separation costs during the three and six months ended December 31, 2015 .

Overhead Expenses. Prior to the spin-off, the financial statements of the Company included an allocation of certain general expenses of ADP and its affiliates, which were in support of the Company, including departmental costs for travel, procurement, treasury, tax, internal audit, risk management, real estate, benefits, and other corporate and infrastructure costs. The Company was allocated overhead costs related to ADP's shared functions of $7.1 million for the three and six months ended December 31, 2014 . The Company was not allocated any overhead costs related to ADP's shared functions during the three and six months ended December 31, 2015 . These costs were reported in selling, general, and administrative expenses on the consolidated and combined statements of operations. These allocations were based on a variety of factors. The allocation of the travel department costs was based on the estimated percentage of travel directly related to the Company. The allocation of benefits was based on the approximate benefit claims or payroll costs directly related to the Company as compared to ADP’s total claims and payroll costs. The allocation of real estate management costs was based on the estimated percentage of square footage of facilities for the Company's business that was managed by the ADP corporate real estate department in relation to ADP’s total managed facilities. All other allocations were based on an estimated percentage of support staff time or system utilization in comparison to ADP as a whole. Management believes that these allocations were made on a reasonable basis.

Royalty Fees. Prior to the spin-off, the financial statements included a trademark royalty fee charged by ADP to the Company based on revenues for licensing fees associated with the use of the ADP trademark. The Company was charged trademark royalty fees of $5.7 million for the three and six months ended December 31, 2014 . The Company was not charged trademark royalty fees for the three and six months ended December 31, 2015 . These charges were included in selling, general, and administrative expenses on the consolidated and combined statements of operations. Management believes that these allocations were made on a reasonable basis.

Services Received from Affiliated Companies. Prior to the spin-off, certain systems development functions were outsourced to an ADP shared services facility located in India. This facility provided services to the Company as well as to other ADP affiliates. The Company purchased services from this facility of $5.5 million for the three and six months ended December 31, 2014 . These functions were no longer outsourced to an ADP shared services facility for the three and six months ended December 31, 2015 . The charge for these services was included within cost of revenues on the consolidated and combined statements of operations.

Notes Receivable from ADP and its Affiliates and Notes Payable to ADP and its Affiliates. Prior to the spin-off, notes receivable from ADP and its affiliates and notes payable to ADP and its affiliates were settled; therefore, there were no outstanding notes receivable from or payable to ADP and its affiliates in the accompanying consolidated balance sheets as of December 31, 2015 and June 30, 2015 . Interest income on notes receivable from ADP and its affiliates was $0.2 million for the three and six months ended December 31, 2014 . The Company recorded interest income on notes receivable from ADP and its affiliates within other income, net on the consolidated and combined statements of operations. Interest expense on notes payable to ADP and its affiliates was $0.2 million for the three and six months ended December 31, 2014 . The Company recorded interest expense on notes payable to ADP and its affiliates within interest expense on the consolidated and combined statements of operations. There was no interest income or interest expense under similar arrangements for the three and six months ended December 31, 2015 .

Other Services. Prior to the spin-off, the Company received other services from ADP and its affiliates (e.g., payroll processing services). The Company was charged primarily at a fixed rate per employee per month for such payroll processing services. Expenses incurred for such services were $0.4 million for the three and six months ended December 31, 2014 . The Company did not incur expenses for such services during the three and six months ended December 31, 2015 . These expenses were included in selling, general, and administrative expenses on the consolidated and combined statements of operations.

D. Financial Statement Revisions

During the fiscal year ended June 30, 2015, the Company elected to make revisions to previously reported results of operations, financial condition, and cash flows as discussed below. The Company previously reported the revisions in its Quarterly Report on Form 10-Q for the three and nine months ended March 31, 2015 and its Registration Statement on Form S-4 and included the effects of the revisions in the quarterly financial results included in its Annual Report on Form 10-K for the year ended June 30, 2015. The nature of the revisions discussed below is consistent with the revisions reflected in those financial statements.

The Company previously reported the condensed consolidated and combined results of operations and comprehensive income for the three and six months ended December 31, 2014 and cash flows for the six months ended December 31, 2014 in its Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2014 . The Company assessed the materiality of the misstatements discussed below on prior period financial statements and concluded that while such revisions are immaterial to the condensed consolidated and combined results of operations and comprehensive income for the three and six months ended December 31, 2014 and cash flows for the six months ended December 31, 2014 , the condensed consolidated and combined financial statements should be revised to provide greater comparability to the financial statements for the periods occurring after the spin-off.

Historically, leases of certain hardware components included within Dealer Management Systems ("DMS") and integrated solutions were accounted for as operating leases and revenues were recognized in accordance with Accounting Standards Codification ("ASC") 840, "Leases." The Company has now determined that these hardware components should be reported as sales-type leases in accordance with ASC 840, "Leases." In accordance with sales-type lease accounting, revenues for leased hardware are recognized upon installation and receivables are recorded based on the present value of the minimum lease payments at the beginning of the lease term. The Company's consolidated and combined financial statements have been revised to reflect sales-type lease accounting for these hardware components as well as the related income tax effects. This revision impacted the Automotive Retail North America and Automotive Retail International segments and is immaterial. Segment revenues and earnings before income taxes in Note 13 for the three and six months ended December 31, 2014 include the effects of this revision.

The Company revised the presentation of the noncontrolling interest ("NCI") in CVR to comply with ASC 810, "Consolidations." Accordingly, earnings, comprehensive income, and net assets in CVR which are not attributable to the Company have been separately presented within the consolidated and combined financial statements. Historically, the NCI in CVR's earnings was included within selling, general, and administrative expenses in the consolidated and combined statements of operations, and the NCI in CVR's net assets was included within other liabilities in the consolidated and combined balance sheets. This revision impacted the Automotive Retail North America segment, and earnings before income taxes in Note 13 for the three and six months ended December 31, 2014 reflects this revision.

The Company revised the classification of net transactions of parent company investment from investing activities to financing activities in the consolidated and combined statement of cash flows for the six months ended December 31, 2014 due to the fact that amounts due to and from ADP were presented as parent company's net investment within equity on the balance sheet.

The following are selected line items from the Company's consolidated and combined financial statements illustrating the effect of these immaterial revisions:

Condensed Consolidated and Combined Statements of Operations



	Three Months Ended December 31, 2014
			Adjustments
	As Reported		Hardware			NCI			As Revised
Revenues	$	521.2	$	(4.2	)	$	—		$	517.0
Cost of revenues	326.9		(3.6		)	—			323.3
Selling, general and administrative	107.8		0.1			(2.0		)	105.9
Total expenses	438.0		(3.5		)	(2.0		)	432.5
Operating earnings	83.2		(0.7		)	2.0			84.5
Other income, net	1.0		0.6			—			1.6
Earnings before income taxes	75.2		(0.1		)	2.0			77.1
Net earnings	42.5		(0.1		)	2.0			44.4
Less: net earnings attributable to noncontrolling interest	—		—			2.0			2.0
Net earnings attributable to CDK	$	42.5	$	(0.1	)	$	—		$	42.4
Basic earnings attributable to CDK per share	$	0.26	$	—		$	—		$	0.26
Diluted earnings attributable to CDK per share	$	0.26	$	—		$	—		$	0.26



	Six Months Ended December 31, 2014
				Adjustments
	As Reported			Hardware			NCI			As Revised
Revenues	$	1,037.2		$	(3.2	)	$	—		$	1,034.0
Cost of revenues	636.7			(1.9		)	—			634.8
Selling, general and administrative	220.2			0.2			(4.0		)	216.4
Total expenses	890.9			(1.7		)	(4.0		)	885.2
Operating earnings	146.3			(1.5		)	4.0			148.8
Other income, net	1.7			1.2			—			2.9
Earnings before income taxes	137.9			(0.3		)	4.0			141.6
Provision for income taxes	(56.3		)	0.1			—			(56.2		)
Net earnings	81.6			(0.2		)	4.0			85.4
Less: net earnings attributable to noncontrolling interest	—			—			4.0			4.0
Net earnings attributable to CDK	$	81.6		$	(0.2	)	$	—		$	81.4
Basic earnings attributable to CDK per share	$	0.51		$	—		$	—		$	0.51
Diluted earnings attributable to CDK per share	$	0.51		$	—		$	—		$	0.50

Condensed Consolidated and Combined Statements of Comprehensive Income



	Three Months Ended December 31, 2014
				Adjustments
	As Reported			Hardware			NCI		As Revised
Net earnings	$	42.5		$	(0.1	)	$	2.0	$	44.4
Other comprehensive loss:
Currency translation adjustments	(19.4		)	(0.1		)	—		(19.5		)
Other comprehensive loss	(19.4		)	(0.1		)	—		(19.5		)
Comprehensive income	23.1			(0.2		)	2.0		24.9
Less: comprehensive income attributable to noncontrolling interest	—			—			2.0		2.0
Comprehensive income attributable to CDK	$	23.1		$	(0.2	)	$	—	$	22.9



	Six Months Ended December 31, 2014
				Adjustments
	As Reported			Hardware			NCI		As Revised
Net earnings	$	81.6		$	(0.2	)	$	4.0	$	85.4
Other comprehensive loss:
Currency translation adjustments	(16.8		)	(0.1		)	—		(16.9		)
Other comprehensive loss	(16.8		)	(0.1		)	—		(16.9		)
Comprehensive income	64.8			(0.3		)	4.0		68.5
Less: comprehensive income attributable to noncontrolling interest	—			—			4.0		4.0
Comprehensive income attributable to CDK	$	64.8		$	(0.3	)	$	—	$	64.5

Condensed Consolidated and Combined Statement of Cash Flows



	Six Months Ended December 31, 2014
				Adjustments
	As Reported			Hardware			NCI			Parent Investment		As Revised
Cash Flows from Operating Activities:
Net earnings	$	81.6		$	(0.2	)	$	4.0		—		$	85.4
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization	51.7			(8.3		)	—			—		43.4
Deferred income taxes	2.4			(0.1		)	—			—		2.3
Other	(1.7		)	(0.2		)	(4.0		)	—		(5.9		)
Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses:
Increase in accounts receivable	(27.5		)	(0.2		)	—			—		(27.7		)
(Increase)/decrease in other assets	(21.0		)	3.0			—			—		(18.0		)
(Decrease)/increase in accrued expenses and other liabilities	7.1			(0.7		)	5.4			—		11.8
Net cash flows provided by/(used in) operating activities	106.3			(6.7		)	5.4			—		105.0

Cash Flows from Investing Activities:
Capital expenditures	(21.2		)	6.7			—			—		(14.5		)
Net transactions of parent company investment	(240.8		)	—			—			240.8		—
Net cash flows (used in)/provided by investing activities	(222.5		)	6.7			—			240.8		25.0

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	131.5			—			(5.4		)	(240.8	)	(114.7		)

E. Spin-off Common Stock Issued

During the three months ended September 30, 2015, the Company became aware that 1.0 million shares of common stock were inadvertently issued and distributed to ADP at the spin-off with respect to certain unvested ADP equity awards. The Company previously reported that 160.6 million shares were issued in connection with the spin-off, which was overstated by 1.0 million shares. In addition, dividends paid to stockholders in fiscal 2015 were overstated by $0.4 million . The Company assessed the materiality and concluded that the impact was not material to previously reported results of operations, financial condition, or cash flows. During the three months ended September 30, 2015, the Company and ADP took corrective action to cancel the 1.0 million shares of common stock effective as of September 30, 2014 and the Company recovered the $0.4 million of cumulative dividends paid on such shares, thereby increasing the Company's retained earnings. The effects of these adjustments were reflected in the accompanying financial statements for the three and six months ended December 31, 2015 .

F. Significant Accounting Policies

Revenue Recognition. Revenues are generated from software licenses, hosting arrangements, hardware sales and leases, support and maintenance, professional services, advertising, and digital marketing, as well as certain transactional services.

The Company recognizes software related revenue (on-site) in accordance with the provisions of ASC 985-605, “Software-Revenue Recognition,” and non-software related revenues, upfront hardware sales, and software delivered under a hosted model in accordance with ASC 605, "Revenue Recognition."

In general, revenue is recognized when all of the following criteria have been met:


•	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.

The following are the Company’s major components of revenue:

•

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.

The Company also offers various hardware elements in connection with DMS and integrated solution sales, which in some instances are considered sales-type leases under ASC 840, "Leases." Revenues related to leased hardware are recognized upon installation and receivables are recorded based on the present value of the minimum lease payments at the beginning of the lease term. Effective July 1, 2015, for new arrangements, the Company offers hardware on a service basis, meaning no specific assets are identified or a substantive right of substitution exists. Hardware service revenues are recognized over the life of the arrangements. As a result, the legacy portfolio of sales-type lease receivables is expected to decline over time.

•

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, data updates, and automotive equity mining. 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, vehicle registrations, and automotive equity mining 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.

Taxes collected from customers and remitted to governmental authorities are presented on a net basis; that is, such taxes are excluded from revenues.

Deferred Costs. Costs to deliver services are expensed to cost of revenues as incurred with the exception of specific costs directly related to transition or installation activities, including the payroll-related costs for the Company's implementation and training teams, as well as commission costs for the sale. These costs are deferred and expensed proportionately over the same period that the deferred revenues are recognized as revenues. Deferred amounts are monitored regularly to ensure appropriate asset and expense recognition. Current deferred costs classified within other current assets on the consolidated balance sheets were $102.7 million and $105.3 million as of December 31, 2015 and June 30, 2015 , respectively. Long-term deferred costs classified within other assets on the consolidated balance sheets were $138.7 million and $144.7 million as of December 31, 2015 and June 30, 2015 , respectively.

Computer Software to be Sold, Leased, or Otherwise Marketed. The Company's policy provides for the capitalization of certain costs of computer software to be sold, leased, or otherwise marketed. The Company's policy provides for the capitalization of all software production costs upon reaching technological feasibility for a specific product. Technological feasibility is attained when software products have a completed working model whose consistency with the overall product design has been confirmed by testing. Costs incurred prior to the establishment of technological feasibility are expensed as

incurred. The establishment of technological feasibility requires judgment by management and in many instances is only attained a short time prior to the general release of the software. Maintenance-related costs are expensed as incurred.

Pursuant to this policy, the Company recognized expenses of $39.1 million and $41.7 million for the three months ended December 31, 2015 and 2014 , respectively, and $78.6 million and $83.9 million for the six months ended December 31, 2015 and 2014 , respectively. These expenses were classified within cost of revenues on the consolidated and combined statements of operations.

Stock-Based Compensation. Certain employees (a) have been granted stock options to purchase shares of the Company’s common stock and (b) have been granted restricted stock or restricted stock units under which shares of the Company's common stock vest based on the passage of time or achievement of performance conditions.

The Company recognizes stock-based compensation expense in net earnings based on the fair value of the award on the date of the grant. The Company determines the fair value of stock options issued using a binomial option pricing model. The binomial option-pricing model considers a range of assumptions related to volatility, dividend yield, risk-free interest rate, and employee exercise behavior. Expected volatilities utilized in the binomial option pricing model are based on a combination of implied market volatilities and historical volatilities of peer companies. Similarly, the dividend yield is based on historical experience and expected future dividend payments. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial option pricing model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of a stock option grant is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.

The grant date fair value of restricted stock and restricted stock units that vest upon achievement of service conditions is based on the closing price of the Company's common stock on the date of grant. The Company also grants performance-based awards that vest over a performance period. Certain performance-based awards are further subject to adjustment (increase or decrease) based on a market condition defined as total shareholder return of the Company’s common stock compared to a peer group of companies. The fair value of performance-based awards subject to a market condition is determined using a Monte Carlo simulation model. The principal variable assumptions utilized in determining the grant date fair value of performance-based awards subject to a market condition include the risk-free rate, stock volatility, dividend yield, and correlations between the Company's stock price and the stock prices of the peer group of companies.

Fair Value of Financial Instruments. The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Cash and cash equivalents, accounts receivable, other current assets, accounts payable, and other current liabilities are reflected in the consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments. The carrying value of the Company's term loan facilities (as described in Note 6), including accrued interest, approximates fair value based on the Company's current estimated incremental borrowing rate for similar types of arrangements. The approximate aggregate fair value of the Company's senior notes as of December 31, 2015 was $734.7 million based on quoted market prices for the same or similar instruments and the carrying value was $750.0 million . The term loan facilities and senior notes are considered Level 2 fair value measurements in the fair value hierarchy.

Note 2. New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes." ASU 2015-17 requires that deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this ASU. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted.

The Company elected to adopt ASU 2015-17 during the three months ended December 31, 2015 on a prospective basis. The Company concluded that the simplified presentation requirement permitted by ASU 2015-17 is preferable because the current and non-current classification does not necessarily reflect when the temporary difference will reverse and become a taxable or deductible item. As a result, deferred tax assets and liabilities are presented as long-term in the consolidated balance sheet as of December 31, 2015. Because ASU 2015-17 was adopted prospectively, the Company did not adjust the classification of deferred tax assets and liabilities in the consolidated balance sheet as of June 30, 2015. The consolidated

balance sheet as of June 30, 2015 includes current deferred tax assets of $13.0 million , which are included within other current assets, and current deferred tax liabilities of $1.4 million , which are included within accrued expenses and other current liabilities.

Recently Issued Accounting Pronouncements

In May 2015, the FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 requires that if the arrangement contains a software license, the customer would account for the fees related to the software license element in a manner consistent with how the acquisition of other software licenses is accounted for under ASC 350-40; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. ASU 2015-05 is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2015. The adoption of ASU 2015-05 will not have a material impact on the Company's consolidated and combined results of operations, financial condition, or cash flows.

In June 2014, the FASB issued ASU 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force)." ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU 2014-12 is effective for annual and interim periods within those annual periods beginning after December 15, 2015. The adoption of ASU 2014-12 will not have an impact on the Company's consolidated and combined results of operations, financial condition, or cash flows.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires an entity to recognize revenue depicting the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will also result in enhanced revenue related disclosures. In July 2015, the FASB decided to defer the effective date of ASU 2014-09 by one year and subsequently issued ASU 2015-14 "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date." As a result, this standard will be effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. The Company has not yet determined the impact of ASU 2014-09 on its consolidated and combined results of operations, financial condition, or cash flows.

Note 3. Restructuring

During the fiscal year ended June 30, 2015 , the Company initiated a three -year business transformation plan intended to increase operating efficiency and improve the Company's cost structure within its global operations. The business transformation plan is expected to produce significant benefits in the Company’s long-term business performance.

Restructuring expenses associated with the business transformation plan included employee-related costs, which represent severance and other termination-related benefits calculated based on long-standing benefit practices and local statutory requirements, and contract termination costs. The Company expects to incur total restructuring expenses under the business transformation plan of approximately $80.0 million through fiscal 2018. The Company will continue to evaluate its estimate of total restructuring expenses as it executes the business transformation plan. The Company recognized $1.8 million and $3.7 million of restructuring expenses for the three and six months ended December 31, 2015 , respectively. Since the inception of the business transformation plan in the fourth quarter of fiscal 2015, the Company has recognized cumulative restructuring expenses of $6.1 million . Restructuring expenses are presented separately on the consolidated and combined statement of operations. Restructuring expenses are recorded in the "Other" segment, as these initiatives are predominantly centrally directed and are not included in internal measures of segment operating performance.

Accruals for restructuring expenses were included within accrued expenses and other current liabilities on the consolidated balance sheets as of December 31, 2015 and June 30, 2015 . The following table summarizes the activity for the restructuring expenses and the related accruals for the six months ended December 31, 2015 :



	Employee-Related Costs			Contract Termination Costs			Total Costs
Balance as of June 30, 2015	$	2.4		$	—		$	2.4
Charges	3.3			0.8			4.1
Cash payments	(3.2		)	(0.1		)	(3.3		)
Adjustments	(0.4		)	—			(0.4		)
Foreign exchange	—			—			—
Balance as of December 31, 2015	$	2.1		$	0.7		$	2.8

The Company did not incur any restructuring expenses under a comparable business transformation plan during the three and six months ended December 31, 2014 .

Note 4. Earnings per Share

The numerator for both basic and diluted earnings per share is net earnings attributable to CDK. The denominator for basic and diluted earnings per share is based upon the weighted-average number of shares of the Company's common stock outstanding during the reporting periods. Diluted earnings per share also reflects the dilutive effect of unexercised in-the-money stock options and unvested restricted stock.

Holders of certain stock-based compensation awards are eligible to receive dividends as described in Note 7. Net earnings allocated to participating securities were not significant for the three and six months ended December 31, 2015 and 2014.

The following table summarizes the components of basic and diluted earnings per share:



	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2015		2014		2015		2014
Net earnings attributable to CDK	$	68.2	$	42.4	$	127.2	$	81.4

Weighted-average shares outstanding:
Basic	158.7		160.7		158.9		160.7
Effect of employee stock options	0.6		0.6		0.6		0.3
Effect of employee restricted stock	0.4		0.5		0.5		0.2
Diluted	159.7		161.8		160.0		161.2

Basic earnings attributable to CDK per share	$	0.43	$	0.26	$	0.80	$	0.51
Diluted earnings attributable to CDK per share	$	0.43	$	0.26	$	0.80	$	0.50

The weighted-average number of shares outstanding used in the calculation of diluted earnings per share does not include the effect of the following anti-dilutive securities.



	Three Months Ended		Six Months Ended
	December 31,		December 31,
	2015	2014	2015	2014
Stock-based awards	0.2	0.1	0.2	—

Note 5. Goodwill and Intangible Assets, Net

Changes in goodwill for the six months ended December 31, 2015 were as follows:



	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	(2.8		)	(19.8		)	—		(22.6		)
Balance as of December 31, 2015	$	427.5		$	383.7		$	376.1	$	1,187.3

Components of intangible assets, net were as follows:



	December 31, 2015							June 30, 2015
	Original Cost		Accumulated Amortization			Intangible Assets, net		Original Cost		Accumulated Amortization			Intangible Assets, net
Software	$	116.2	$	(96.6	)	$	19.6	$	115.6	$	(92.0	)	$	23.6
Client lists	195.3		(130.0		)	65.3		199.1		(125.5		)	73.6
Trademarks	25.0		(23.2		)	1.8		25.0		(22.9		)	2.1
Other intangibles	2.9		(2.7		)	0.2		2.4		(2.4		)	—
	$	339.4	$	(252.5	)	$	86.9	$	342.1	$	(242.8	)	$	99.3

In October 2014 following the separation from ADP, the Company evaluated its branding strategy and the trademark names under which each of its businesses will operate. The Company determined that the Cobalt trademark used by the Digital Marketing segment will no longer be used. Therefore, the Company revised the estimated useful life assigned to the Cobalt trademark. The Company recognized accelerated amortization on the trademark of $15.6 million in cost of revenues during the three and six months ended December 31, 2014. The effect of this change in estimate on both basic and diluted earnings per share, net of the related tax effect, was $0.06 for both the three and six months ended December 31, 2014.

Other intangibles consist primarily of purchased rights, covenants, and patents (acquired directly or through acquisitions). All of the intangible assets have finite lives and, as such, are subject to amortization. The weighted-average remaining useful life of intangible assets is 6 years ( 3 years for software and software licenses, 7 years for customer contracts and lists, and 3 years for trademarks). Amortization of intangible assets was $6.4 million and $22.9 million for the three months ended December 31, 2015 and 2014 , respectively, and $12.9 million and $30.5 million for the six months ended December 31, 2015 and 2014 , respectively.

Estimated amortization expenses of the Company's existing intangible assets as of December 31, 2015 were as follows:



	Amount
Six months ending June 30, 2016	$	14.0
Twelve months ending June 30, 2017	20.1
Twelve months ending June 30, 2018	15.3
Twelve months ending June 30, 2019	8.5
Twelve months ending June 30, 2020	6.9
Twelve months ending June 30, 2021	6.7
Thereafter	15.4
	$	86.9

Note 6. Debt

Debt comprised of the following as of December 31, 2015 and June 30, 2015 :



	December 31, 2015			June 30, 2015
Revolving credit facility	$	—		$	—
2019 term loan facility	234.4			240.6
2020 term loan facility	250.0			—
3.30% senior notes, due 2019	250.0			250.0
4.50% senior notes, due 2024	500.0			500.0
Capital lease obligations	3.5			1.5
Unamortized debt financing costs	(9.3		)	(8.0		)
Total debt and capital lease obligations	1,228.6			984.1
Current maturities of long-term debt and capital lease obligations	26.4			13.0
Total long-term debt and capital lease obligations	$	1,202.2		$	971.1

Revolving Credit Facility

The Company has a five -year senior unsecured revolving credit facility, which was undrawn as of December 31, 2015 . The revolving credit facility provides up to $300.0 million of borrowing capacity and includes a sub-limit of up to $100.0 million for loans in Euro and Sterling. In addition, the revolving credit facility contains an accordion feature that allows for an increase in the available borrowing capacity under the revolving credit facility of up to $100.0 million , subject to the agreement of lenders under the revolving credit facility or other financial institutions that become lenders to extend commitments as part of the increased revolving credit facility. Borrowings under the revolving credit facility are available for general corporate purposes. The revolving credit facility will mature on September 30, 2019 , subject to no more than two one -year extensions if lenders holding a majority of the revolving commitments approve such extensions.

The revolving credit facility is unsecured and loans thereunder bear interest, at the Company's option, at (a) the rate at which deposits in the applicable currency are offered in the London interbank market (or, in the case of borrowings in Euro, the European interbank market) plus margins varying from 1.125% to 2.000% per annum based on the Company's senior, unsecured non-credit-enhanced, long-term debt ratings from Standard & Poor's Ratings Group and Moody's Investors Services Inc. (the "Ratings") or (b) solely in the case of U.S. dollar loans, (i) the highest of (A) the prime rate of JPMorgan Chase Bank, N.A., (B) a rate equal to the average of the overnight federal funds rate with a maturity of one day plus a margin of 0.500% per annum and (C) the rate at which dollar deposits are offered in the London interbank market for a one-month interest period plus 1.000% plus (ii) margins varying from 0.125% to 1.000% per annum based on the Ratings. The unused portion of the revolving credit facility is subject to commitment fees ranging from 0.125% to 0.350% per annum based on the Ratings.

Term Loan Facilities

The Company has two five -year $250.0 million senior unsecured term loan facilities that mature on September 16, 2019 (the "2019 term loan facility") and December 14, 2020 (the "2020 term loan facility"), respectively. The Company entered into the 2020 term loan facility on December 14, 2015. Borrowings under the 2020 term loan facility were used for general corporate purposes, which included the repurchase of shares of the Company's common stock as part of the new return of capital plan and pursuant to the accelerated share repurchase ("ASR") discussed further in Note 11. The 2019 term loan facility and 2020 term loan facility are together referred to as the "term loan facilities." The term loan facilities are both subject to amortization in equal quarterly installments of 1.25% of the aggregate principal amount of the term loans made on the respective closing dates, with any unpaid principal amount to be due and payable on the maturity date.

The term loan facilities bear interest at the same calculations as are applicable to dollar loans under the revolving credit facility. The interest rate per annum on the 2019 term loan facility was 1.93% and 1.69% as of December 31, 2015 and June 30, 2015 , respectively. The interest rate per annum on the 2020 term loan facility was 1.84% as of December 31, 2015 .

Restrictive Covenants and Other Matters

The revolving credit facility and the term loan facilities are together referred to as the "credit facilities." The credit facilities contain various covenants and restrictive provisions that limit the Company's subsidiaries' ability to incur additional indebtedness; the Company's ability to consolidate or merge with other entities; and the Company's subsidiaries' ability to incur liens, enter into sale and leaseback transactions, and enter into agreements restricting the ability of the Company's subsidiaries to pay dividends. If the Company fails to perform the obligations under these and other covenants, the credit facilities could be terminated and any outstanding borrowings, together with accrued interest, under the credit facilities could be declared immediately due and payable. The credit facilities also has, in addition to customary events of default, an event of default triggered by the acceleration of the maturity of any other indebtedness the Company may have in an aggregate principal amount in excess of $75.0 million .

The credit facilities also contain financial covenants that provide that (i) the ratio of total consolidated indebtedness to consolidated EBITDA shall not exceed 3.50 to 1.00 and (ii) the ratio of consolidated EBITDA to consolidated interest expense shall be a minimum of 3.00 to 1.00 .

Senior Notes

On October 14, 2014 , the Company completed an offering of 3.30% senior notes with a $250.0 million aggregate principal amount due in 2019 (the "2019 notes") and 4.50% senior notes with a $500.0 million aggregate principal amount due in 2024 (the "2024 notes" and together with the 2019 notes, the "senior notes"). The issuance price of the senior notes was equal to the stated value. Interest is payable semi-annually on April 15 and October 15 of each year, and payment commenced on April 15, 2015 . The interest rate payable on each applicable series of senior notes is subject to adjustment from time to time if the credit ratings assigned to any series of senior notes by the rating agencies is downgraded (or subsequently upgraded). The 2019 notes will mature on October 15, 2019 and the 2024 notes will mature on October 15, 2024 . The senior notes are general unsecured obligations of the Company and are not guaranteed by any of the Company's subsidiaries.

The senior notes rank equally in right of payment with the Company's existing and future unsecured unsubordinated obligations, including the credit facilities. The senior notes contain covenants restricting the Company's ability to incur additional indebtedness secured by liens, engage in sale/leaseback transactions, and merge, consolidate, or transfer all or substantially all of the Company's assets.

The senior notes are redeemable at the Company's option prior to September 15, 2019 for the 2019 notes and prior to July 15, 2024 for the 2024 notes at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the senior notes to be redeemed, and (ii) the sum of the present value of the remaining scheduled payments (as defined in the agreement), plus in each case, accrued and unpaid interest thereon. Subsequent to September 15, 2019 and July 15, 2024, the redemption price for the 2019 notes and the 2024 notes, respectively, will equal 100% of the aggregate principal amount of the notes redeemed, plus accrued and unpaid interest thereon. The senior notes are also subject to a change of control provision whereby each holder of the senior notes has the right to require the Company to purchase all or a portion of such holder's senior notes at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest upon the occurrence of both a change of control and a decline in the rating of the senior notes.

Capital Lease Obligations

The Company has lease agreements for equipment, which are classified as capital lease obligations. The Company recognized the capital lease obligations and related leased equipment assets based on the present value of the minimum lease payments at lease inception.

Unamortized Debt Financing Costs

As of December 31, 2015 and June 30, 2015 , gross debt issuance costs related to debt instruments were $11.1 million and $9.2 million , respectively, net of accumulated amortization of $1.8 million and $1.2 million , respectively. Additional debt issuance costs of $1.9 million were capitalized for the 2020 term loan facility. Debt financing costs are amortized over the terms of the related debt instruments to interest expense on the consolidated and combined statements of operations.

The Company's aggregate scheduled maturities of the long-term debt and capital lease obligations as of December 31, 2015 were as follows:



	Amount
Twelve months ending December 31, 2016	$	26.4
Twelve months ending December 31, 2017	26.4
Twelve months ending December 31, 2018	25.7
Twelve months ending December 31, 2019	459.4
Twelve months ending December 31, 2020	200.0
Thereafter	500.0
Total debt and capital lease obligations	1,237.9
Unamortized deferred financing costs	(9.3		)
Total debt and capital lease obligations, net of unamortized deferred financing costs	$	1,228.6

Note 7. Stock-Based Compensation

Incentive Equity Awards Converted from ADP Awards

On October 1, 2014, ADP's outstanding equity awards for employees of the Company were converted into equity awards of CDK at a ratio of 2.757 CDK equity awards for every ADP equity award held prior to the spin-off. The converted equity awards have the same terms and conditions as the ADP equity awards. As a result, the Company issued 2.3 million stock options with a weighted-average exercise price of $19.64 , 0.7 million time-based restricted shares, and 0.2 million performance-based restricted shares upon completion of the conversion of existing ADP equity awards into the Company's equity awards. As the conversion was considered a modification of an award in accordance with ASC 718, "Compensation - Stock Compensation," the Company compared the fair value of the award immediately prior to the spin-off to the fair value immediately after the spin-off to measure the incremental compensation cost. The fair values immediately prior to and after spin-off were estimated using a binomial option pricing model. The conversion resulted in an increase in the fair value of the awards by $1.4 million , of which $1.3 million was recognized from the date of spin-off to December 31, 2015 and the remaining $0.1 million will be recognized in net earnings prospectively throughout the year ending June 30, 2016 .

Incentive Equity Awards Granted by the Company

The 2014 Omnibus Award Plan ("2014 Plan") provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, and performance compensation awards to employees, directors, officers, consultants, and advisors, and those of the Company's affiliates. The 2014 Plan provides for an aggregate of 12.0 million shares of the Company's common stock to be reserved for issuance and is effective for a period of ten years .

Prior to the spin-off, all employee equity awards (stock options and restricted stock) were granted by ADP. All subsequent awards were granted under the 2014 Plan. The Company recognizes stock-based compensation expense associated with employee equity awards in net earnings based on the fair value of the awards on the date of grant. Stock-based compensation primarily consisted of the following for the three and six months ended December 31, 2015 and 2014 :

Stock Options. Stock options are granted to employees at exercise prices equal to the fair market value of the Company's common stock on the date of grant. Stock options are issued under a graded vesting schedule and generally have a term of ten years . Compensation expense is measured based on the fair value of the stock option on the grant date and recognized over the requisite service period for each separately vesting portion of the stock option award. Stock options are forfeited if the employee ceases to be employed by the Company prior to vesting.

Time-Based Restricted Stock and Time-Based Restricted Stock Units. Time-based restricted stock and restricted stock units generally vest over a two - to five -year period. Awards are forfeited if the employee ceases to be employed by the Company prior to vesting.

Time-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of time-based restricted stock is measured based on the fair value of the award on the grant date and recognized on a

straight-line basis over the vesting period. Employees are eligible to receive dividends on the CDK shares awarded under the time-based restricted stock program.

Time-based restricted stock units are primarily settled in cash. Compensation expense relating to the issuance of time-based restricted stock units is recorded over the vesting period, is initially based on the fair value of the award on the grant date, and is subsequently remeasured at each reporting date during the vesting period to the current stock value. No dividend equivalents are paid on units awarded under the time-based restricted stock unit program during the restricted period.

Performance-Based Restricted Stock and Performance-Based Restricted Stock Units. Performance-based restricted stock generally vests over a one -year performance period and performance-based restricted stock units generally vest over a three -year performance period. Under these programs, the Company communicates "target awards" at the beginning of the performance period with possible payouts at the end of the performance period ranging from 0% to 250% of the "target awards." Certain performance-based awards are further subject to adjustment (increase or decrease) based on a market condition defined as total shareholder return of the Company's common stock compared to a peer group of companies. Awards are forfeited if the employee ceases to be employed by the Company prior to vesting.

Performance-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of performance-based restricted stock is measured based upon the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period, based upon the probability that the performance target will be met. After the performance period, if the performance targets are achieved, employees are eligible to receive dividends on the CDK shares awarded under the performance-based restricted stock program.

Performance-based restricted stock units are settled in either cash or stock, depending on the employee’s home country, and cannot be transferred during the vesting period. Compensation expense relating to the issuance of performance-based restricted stock units settled in cash is recorded over the vesting period, is initially based on the fair value of the award on the grant date, and is subsequently remeasured at each reporting date to the current stock value during the one -year performance period, based upon the probability that the performance target will be met. Compensation expense relating to the issuance of performance-based restricted stock units settled in stock is recorded over the vesting period based on the fair value of the award on the grant date. Dividend equivalents are paid on awards settled in stock under the performance-based restricted stock unit program.

The following table represents stock-based compensation expense and related income tax benefits for the three and six months ended December 31, 2015 and 2014 , respectively:



	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2015		2014		2015		2014
Cost of revenues	$	1.5	$	2.1	$	2.7	$	3.8
Selling, general and administrative expenses	5.5		5.9		10.1		9.6
Total pre-tax stock-based compensation expense	$	7.0	$	8.0	$	12.8	$	13.4

Income tax benefit	$	2.3	$	2.9	$	4.4	$	4.9

Stock-based compensation expense for the six months ended December 31, 2015 consisted of $11.9 million of expense related to equity classified awards and $0.9 million of expense related to liability classified awards. As of December 31, 2015 , the total unrecognized compensation cost related to non-vested stock options, restricted stock units, and restricted stock awards was $3.0 million , $27.7 million , and $16.1 million , respectively, which will be amortized over the weighted-average remaining requisite service periods of 1.9 years , 2.0 years , and 1.5 years , respectively.

The activity related to the Company's incentive equity awards from June 30, 2015 to December 31, 2015 consisted of the following:

Stock Options



	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	(189	)	15.92
Options canceled	(37	)	28.46
Options outstanding as of December 31, 2015	1,942		$	27.65

Time-Based Restricted Stock and Time-Based Restricted Stock Units



	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	240		88
Restricted shares/units vested	(453	)	(152	)
Restricted shares/units forfeited	(43	)	(8	)
Non-vested restricted shares/units as of December 31, 2015	711		228

Performance-Based Restricted Stock and Performance-Based Restricted Stock Units



	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	—		339
Dividend equivalents	—		2
Restricted shares/units vested	(70	)	(8	)
Restricted shares/units forfeited	—		(4	)
Non-vested restricted shares/units as of December 31, 2015	—		551

During the fiscal year ending June 30, 2016, the Company began reissuing treasury stock to satisfy exercises of stock options and issuances of vested restricted stock and restricted stock units.

The following table presents the assumptions used to determine the fair value of stock options granted during the six months ended December 31, 2015 :



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

Note 8. Income Taxes

Tax Matters Agreement

The Company and ADP entered into a tax matters agreement as part of the spin-off that governs the rights and obligations of both parties after the spin-off with respect to taxes for both pre and post spin-off periods. Under this agreement, ADP is generally required to indemnify the Company for any income taxes attributable to ADP's operations or the Company's operations and for any non-income taxes attributable to ADP's operations, in each case for all pre spin-off periods as well as any taxes arising from transactions effected to consummate the spin-off, and the Company generally is required to indemnify ADP for any non-income taxes attributable to the Company's operations for all pre spin-off periods and for any income taxes attributable to the Company's operations for post spin-off periods.

The Company is generally required to indemnify ADP against any tax resulting from the spin-off (and against any claims made against ADP in respect of any tax imposed on its stockholders), in each case if that tax results from (i) an issuance of a significant amount of the Company's equity securities, a redemption of a significant amount of the Company's equity securities or the Company's involvement in other significant acquisitions of the Company's equity securities (excluding the spin-off), (ii) other actions or failures to act by the Company, or (iii) any of the Company's representations or undertakings referred to in the tax matters agreement being incorrect or violated. ADP will generally be required to indemnify the Company for any tax resulting from the spin-off if that tax results from (a) ADP's issuance of its equity securities, redemption of its equity securities or involvement in other acquisitions of its equity securities, (b) other actions or failures to act by ADP, or (c) any of ADP's representations or undertakings referred to in the tax matters agreement being incorrect or violated.

The Company recognized receivables from ADP of $0.3 million and $0.5 million as of December 31, 2015 and June 30, 2015 , respectively, and payables to ADP of $1.8 million and $3.7 million as of December 31, 2015 and June 30, 2015 , respectively, under the tax matters agreement.

Valuation Allowance

The Company had valuation allowances of $33.3 million and $33.4 million as of December 31, 2015 and June 30, 2015 , respectively. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will expire unutilized. At the end of each reporting period, the Company reviews the realizability of its deferred tax assets. During the six months ended December 31, 2015 , the valuation allowance balance was adjusted for current year activity and currency exchange fluctuations.

Unrecognized Income Tax Benefits

As of December 31, 2015 and June 30, 2015 , the Company had unrecognized income tax benefits of $2.2 million and $1.9 million , respectively, of which $1.8 million and $1.6 million , respectively, would impact the effective tax rate if recognized. During the six months ended December 31, 2015 , the Company increased its unrecognized income tax benefits related to current and prior year tax positions by $0.3 million based on information that indicates the extent to which certain tax positions are more likely than not of being sustained.

Provision for Income Taxes

The effective tax rate for the three months ended December 31, 2015 and 2014 was 34.7% and 42.4% , respectively. The effective tax rate for the three months ended December 31, 2015 was favorably impacted by a non-taxable indemnification gain of $2.6 million recorded in other income and a tax benefit associated with pre spin-off tax refunds. The effective tax rate for the three months ended December 31, 2014 was unfavorably impacted by $4.6 million of tax expense associated with the tax law change for bonus depreciation. The tax law change partially related to pre-distribution tax periods for which ADP was entitled under the tax law and in accordance with the tax matters agreement to claim additional tax depreciation for assets associated with the Company's business.

The effective tax rate for the six months ended December 31, 2015 and 2014 was 35.4% and 39.7% , respectively. The effective tax rate for the six months ended December 31, 2015 was favorably impacted by a non-taxable indemnification gain recorded in other income and a tax benefit associated with pre spin-off tax refunds. The effective tax rate for the six months ended December 31, 2014 was unfavorably impacted by certain separation costs that were not tax deductible and tax expense associated with the tax law change for bonus depreciation, partially offset by tax benefits associated with a valuation allowance adjustment and the resolution of certain tax matters.

Note 9. Commitments and Contingencies

The Company is subject to various claims and litigation in the normal course of business. When a loss is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. There can be no assurance that these matters will be resolved in a manner that is not adverse to the Company.

In the normal course of business, the Company may enter into contracts in which it makes representations and warranties that relate to the performance of the Company’s services and products. The Company does not expect any material losses related to such representations and warranties.

Note 10. Accumulated Other Comprehensive Income ("AOCI")

Comprehensive income is a measure of income that includes both net earnings and other comprehensive income (loss). Other comprehensive income (loss) results from items deferred on the consolidated balance sheets in CDK stockholders' equity. The Company's other comprehensive income (loss) for the three and six months ended December 31, 2015 and 2014 and AOCI balances as of December 31, 2015 and June 30, 2015 were comprised solely of currency translation adjustments. Other comprehensive income (loss) was $(15.0) million and $(19.5) million for the three months ended December 31, 2015 and 2014 , respectively, and was $(31.8) million and $(16.9) million for the six months ended December 31, 2015 and 2014 , respectively. The accumulated balances reported in AOCI on the consolidated balance sheets for currency translation adjustments were $19.8 million and $51.6 million as of December 31, 2015 and June 30, 2015 , respectively.

Note 11. Share Repurchase Transactions

In December 2015, the Board of Directors authorized the Company to repurchase up to $1.0 billion of its common stock. Under the authorization for the stock repurchase program, the Company may purchase its common stock in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The actual timing, number, and price of any shares to be repurchased will be determined at management's discretion and will depend on a number of factors, which may include the market price of the shares, general market and economic conditions, and other potential uses for free cash flow. This authorization superseded and replaced the prior authorization by the Board of Directors which was approved on January 20, 2015 and had authorized the Company to repurchase up to 10.0 million shares of its common stock. The Company repurchased a total of approximately 1.2 million shares of its common stock under the prior authorization.

On December 14, 2015 , the Company entered into an ASR agreement to purchase $250.0 million of the Company's common stock. Under the terms of the ASR, the Company made a $250.0 million payment on December 15, 2015 and received an initial delivery of approximately 4.3 million shares of the Company's common stock. The payment was recorded as a reduction to stockholders' equity, consisting of a $200.0 million increase to treasury stock, which reflects the value of the 4.3 million shares received upon initial settlement, and a $50.0 million decrease in additional paid-in-capital, which reflects the value of stock held back. The final number of shares to be purchased will be calculated based on the average of the daily volume-weighted average price of the Company's common stock during the term of the ASR transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreement. The final settlement of the ASR is expected to occur no later than the end of the Company's fiscal year ending June 30, 2016 and may result in the receipt or delivery of additional shares of common stock.

Note 12. Transactions with ADP

Prior to the spin-off, the Company entered into a transition services agreement with ADP to provide for an orderly transition to being an independent company. Among the principal services to be provided by ADP to the Company were operational and administrative infrastructure-related services, such as use of the e-mail domain “adp.com,” facilities sharing, procurement support, tax, human resources administrative services and services related to back office support, and software development in ADP's Indian facilities. Among the principal services to be provided by the Company to ADP were operational and administrative infrastructure-related services, such as facilities sharing, and human resources administrative services. The agreement expired and services under it ceased on September 30, 2015, the one year anniversary of the spin-off.

The Company entered into a data services agreement with ADP prior to the spin-off under which ADP will provide the Company with certain data center sharing services relating to the provision of information technology, platform support, hosting, and network services. The term of the agreement will expire two years after the spin-off date.

The Company entered into an intellectual property transfer agreement with ADP prior to the spin-off under which ADP assigned to the Company certain patents, trademarks, copyrights, and other intellectual property developed or owned by ADP or certain of its subsidiaries and with respect to which the Company is the primary or exclusive user today or the anticipated primary or exclusive user in the future. The term of the agreement is perpetual after the spin-off date.

The Company also entered into an employee matters agreement with ADP prior to the spin-off pursuant to which certain employee benefit matters will be addressed, such as the treatment of ADP options held by Company employees after the spin-off and the treatment of benefits for Company management employees who participate in and have accrued benefits under the ADP Supplemental Officers Retirement Plan. The agreement also, to the extent provided therein, delineates the benefit plans and programs in which the Company's employees participate following the spin-off. ADP will remain responsible for the payment of all benefits under the ADP plans.

For the three and six months ended December 31, 2015 , the Company recorded $0.8 million and $1.7 million , respectively, of expense related to the transition services agreement and $2.3 million and $4.5 million , respectively, of expense related to the data services agreement in the accompanying financial statements. For the three and six months ended December 31, 2014, the Company recorded $6.8 million of expense related to the transition services agreement and $3.3 million of expense related to the data services agreement in the accompanying financial statements related to these agreements. As of December 31, 2015 and June 30, 2015 , the Company had amounts payable to ADP under the transition services and data services agreements of $0.3 million and $7.8 million , respectively.

Note 13. Interim Financial Data by Segment

The Company manages its business operations through strategic business units. The Company's reportable segments represent its strategic business units, or operating segments, which include: Automotive Retail North America, Automotive Retail International, and Digital Marketing. The primary components of the Other segment are corporate allocations and other expenses not recorded in the segment results, such as stock-based compensation expense, corporate costs, separation costs, interest expense, costs attributable to the business transformation plan, the trademark royalty fee charged by ADP prior to the spin-off, and certain unallocated expenses. Certain expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility.

During the three months ended September 30, 2015, the Company began to report segment revenues and earnings before income taxes using actual foreign exchange rates. Previously, the Company's revenues and earnings before income taxes for each segment were adjusted to reflect budgeted foreign exchange rates, which resulted in a reconciling item for foreign exchange so as to present segment results on a consistent basis without the impact of fluctuations in foreign currency exchange rates. Segment information for the three and six months ended December 31, 2014 has been updated to conform to the new presentation and the effect of foreign exchange now resides within each reportable segment's revenues and earnings before income taxes.

Segment results:



	Revenues
	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2015		2014		2015		2014
Automotive Retail North America	$	333.6	$	329.0	$	665.8	$	656.7
Automotive Retail International	78.8		82.9		157.0		168.6
Digital Marketing	107.7		105.1		211.9		208.7
Total	$	520.1	$	517.0	$	1,034.7	$	1,034.0



	Earnings before Income Taxes
	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2015			2014			2015			2014
Automotive Retail North America	$	109.7		$	91.8		$	212.1		$	186.3
Automotive Retail International	15.9			15.4			30.1			28.0
Digital Marketing ⁽¹⁾	11.6			(4.4		)	22.1			3.7
Other ⁽²⁾	(30.4		)	(25.7		)	(61.7		)	(76.4		)
Total	$	106.8		$	77.1		$	202.6		$	141.6

(1) Digital Marketing includes $15.6 million of accelerated amortization during the three and six months ended December 31, 2014 attributable to the Cobalt trademark.

(2) Other includes $3.3 million and $34.0 million of separation costs for the three and six months ended December 31, 2014 , respectively.

Note 14. Subsequent Event

On February 1, 2016, the Company acquired certain assets of RedBumper, LLC and NewCarIQ, LLC, providers of technology solutions for new and used car pricing. The Company had a pre-existing relationship with these entities in which CDK was a reseller of their products. The acquisition was made pursuant to asset purchase agreements, which contain customary representations, warranties, covenants, and indemnities by the sellers and the Company. The Company will pay an initial cash price of $19.6 million and an additional amount of at least $14.7 million , which represents the minimum contingent consideration payable in installments over a four -year period. The final purchase price will be impacted by the fair value of contingent consideration, contributions of professional services, and other related matters. The Company funded the initial payment with cash on hand. The Company is still gathering information necessary to perform the allocation of the purchase price to the fair value of assets acquired and liabilities assumed; therefore, disclosure of this information is impracticable at this time.

On December 11, 2015, the Company announced a leadership transition plan in which Brian P. MacDonald, who serves on the Board of Directors, will succeed Steven J. Anenen as Chief Executive Officer. Mr. MacDonald entered into an employment agreement with the Company on December 11, 2015. The terms and conditions of his employment agreement provide for stock-based compensation awards. The Company granted Mr. MacDonald performance-based restricted stock units in January 2016 and expects to grant restricted stock units during the three months ended March 31, 2016. On February 2, 2016, the Company entered into a Transition and Release Agreement (the “Transition Agreement”) with Mr. Anenen, the Company’s former President and its current Chief Executive Officer and a member of the Company’s Board of Directors. The Transition Agreement sets forth the terms of Mr. Anenen’s separation of service from the Company and his service during a transition period, including, among other things, his ongoing compensation and his rights to certain other payments in connection with his separation of service, the treatment of his outstanding equity awards and certain non-competition, non-solicitation and confidentiality undertakings. The Company has estimated that it will incur incremental salary and benefit costs during the transition in the second half of fiscal 2016 of approximately $1.0 million , and expense associated with the Transition Agreement for cash payments to be made after Mr. Anenen’s employment with CDK ends of approximately $4.0 million and incremental stock-based compensation expense for awards that have been modified or expense recognition has been accelerated of approximately $4.0 million which will be recognized during the three months ended March 31, 2016.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

(Tabular amounts in millions, except per share amounts)

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and other written or oral statements made from time to time by CDK Global, Inc. ("CDK" or the "Company") may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature, and which may be identified by the use of words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could,” and other words of similar meaning, are forward-looking statements. In particular, information appearing under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes forward-looking statements. These statements are based on management's expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include:


•	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 advertising and related industry changes;


•	employment and wage levels;


•	changes in regulation;


•	changes in technology, security breaches, interruptions, failures, and other errors involving our systems;


•	availability of capital for the payment of debt service obligations or 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.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. You should carefully read the factors described in the “Risk Factors” under “Item 1A. Risk Factors” of our Annual Report on Form 10-K (the “Form 10-K”) and in this Quarterly Report on Form 10-Q under “Item 1A. Risk Factors,” for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.

All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K. We disclaim any obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.

The following discussion should be read in conjunction with our condensed consolidated and combined financial statements and accompanying notes thereto included elsewhere herein. In this Quarterly Report on Form 10-Q, all references to "we," "our," and "us" refer collectively to CDK and its consolidated subsidiaries.

RESULTS OF OPERATIONS

Executive Overview

We are the largest global provider, both in terms of revenues and geographic reach, of integrated technology and digital marketing/advertising solutions to the automotive retail industry. We have a 43 year history of providing innovative solutions to automotive retailers and original equipment manufacturers ("OEMs") to better manage, analyze and grow their businesses. Our solutions automate and integrate critical workflow processes from pre-sale targeted advertising and marketing campaigns to the sale, financing, insurance, parts supply, repair, and maintenance of vehicles, with an increasing focus on utilizing big data analytics and predictive intelligence. We believe the breadth of our integrated solutions allows us to more comprehensively address the varied needs of automotive retailers than any other single competitor in our industry.

Our solutions address the entire automotive retailers’ value chain. Our automotive retail solutions offer technology that helps manage and generate additional efficiency on the supply side of the retail value chain. These solutions were built through decades of innovation and experience in helping our clients with all aspects of the automotive retail process. We also offer digital marketing solutions to enable our clients to create demand for their products by designing and managing complete digital marketing and advertising strategies for their businesses. These solutions allow our clients to plan and automate sophisticated marketing campaigns, gather comprehensive data on these campaigns, and further refine their strategies to maximize the effectiveness of their advertising spend. Our common stock is listed on the NASDAQ Global Select Market ® under the symbol "CDK."

We are organized into three reportable segments: Automotive Retail North America (“ARNA”), Automotive Retail International (“ARI”), and Digital Marketing (“DM”). A brief description of each of these three segments’ operations is provided below.

Automotive Retail North America

Through our ARNA segment, we provide technology-based solutions that help automotive retailers, OEMs, and other industry participants manage the sale, financing, insurance, parts supply, repair, and maintenance of vehicles. Our solutions help our clients streamline their operations, better target and serve their customers, and enhance the financial performance of their retail operations. In addition to providing solutions to retailers and manufacturers of automobiles, we also provide solutions to retailers and manufacturers of heavy trucks, construction equipment, agricultural equipment, motorcycles, boats and other marine vehicles, and recreational vehicles.

Automotive Retail International

Through our ARI segment, we provide technology-based solutions similar to those provided in our ARNA segment in approximately 100 countries outside of the United States and Canada. The solutions provided to our clients within the ARI segment of our business help streamline operations for their businesses and enhance the financial performance of their operations within their local marketplace, and in some cases where we deal directly with OEMs, across international borders. Clients of our ARI segment include automotive retail dealers and OEMs across Europe, the Middle East, Asia, Africa, and Latin America.

Digital Marketing

Through our DM segment, we provide a suite of integrated digital marketing solutions for OEMs and automotive retailers, including websites and management of their digital advertising spend. These solutions provide a coordinated offering across multiple digital marketing channels to help achieve client marketing and sales objectives, and coordinate execution between OEMs and their retailer networks. Our solutions are currently provided in the United States, Canada, Mexico, Australia, and New Zealand.

Business Transformation Plan

During the fiscal year ended June 30, 2015 , we initiated a three-year business transformation plan that is intended to increase operating efficiency and improve the cost structure within our global operations. The business transformation plan is expected to produce significant benefits in our long-term business performance and is built on three pillars:


•	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.

We believe that the successful execution of our business transformation plan will result in a strong, go-forward financial profile as listed below:


•	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. 70-80% of this free cash flow, along with additional borrowings, is estimated to be returned to stockholders through dividends and share repurchases or other available mechanisms.

We expect to incur expenses in connection with the execution of our business transformation plan of approximately $150.0 million . These expenses are comprised of restructuring expenses of approximately $80.0 million and other expenses to implement the business transformation plan of $70.0 million . We expect to incur these expenses through fiscal 2018. As we execute the business transformation plan, we will evaluate total estimated expenses and the allocation of total expenses between restructuring and other business transformation plan expenses.

Restructuring expenses associated with the business transformation plan included employee-related costs, which represent severance and other termination-related benefits, and contract termination costs. The Company recognized $1.8 million and $3.7 million of restructuring expenses for the three and six months ended December 31, 2015 , respectively. Since the inception of the business transformation plan in the fourth quarter of fiscal 2015, the Company has recognized cumulative restructuring expenses of $6.1 million . Restructuring expenses are presented separately on the consolidated statement of operations. Restructuring expenses are recorded in the "Other" segment, as these initiatives are predominantly centrally directed and are not included in internal measures of segment operating performance.

Accruals for restructuring expenses were included within accrued expenses and other current liabilities on the consolidated balance sheets as of December 31, 2015 and June 30, 2015. The following table summarizes the activity for the restructuring related accruals for the six months ended December 31, 2015 :



	Employee-Related Costs			Contract Termination Costs			Total Costs
Balance as of June 30, 2015	$	2.4		$	—		$	2.4
Charges	3.3			0.8			4.1
Cash payments	(3.2		)	(0.1		)	(3.3		)
Adjustments	(0.4		)	—			(0.4		)
Foreign exchange	—			—			—
Balance as of December 31, 2015	$	2.1		$	0.7		$	2.8

In addition to the restructuring expenses discussed above, we expect to incur additional costs to implement the business transformation plan, including consulting, training, and other transition costs. We may also incur accelerated depreciation and/or amortization expenses if the expected useful life of our assets is adjusted. While these costs are directly

attributable to our business transformation plan, they were not included in restructuring expenses on our consolidated and combined statement of operations. The Company recognized $5.1 million and $6.8 million of other business transformation expenses for the three and six months ended December 31, 2015 , respectively. Since the inception of the business transformation plan in the fourth quarter of fiscal 2015, the Company has recognized cumulative other business transformation expenses of $8.7 million . Other business transformation expenses incurred for the three and six months ended December 31, 2015 include $0.5 million and $0.6 million of accelerated depreciation expense, respectively. Other business transformation expenses incurred for the three and six months ended December 31, 2015 were recorded in the Other segment, and were included within cost of revenues and selling, general and administrative expenses on our consolidated and combined statement of operations.

Sources of Revenues and Expenses

Revenues. We generally receive fee-based revenues by providing services to clients. In our ARNA and ARI segments (together, our “Automotive Retail segments”), we receive fees for software licenses, ongoing software support and maintenance of Dealer Management Systems (“DMSs”), and other integrated solutions that are either hosted or installed on-site at the client’s location. We also receive revenues for installing on-site and hosted DMS solutions and for training and consulting with clients, in addition to monthly fees related to hosting DMS solutions in cases where clients outsource their information technology management activities to the Company. In our ARNA segment, we also receive revenues on a fee per transaction processed basis, where we provide automotive retailers, primarily in the United States, solutions with third parties to process credit reports, vehicle registrations, data updates, and automotive equity mining. In our DM segment, revenues are primarily earned for advertising, search marketing, websites, and reputation management services delivered to automotive retailers and OEMs. We receive monthly recurring fees for services provided and we receive revenues for placement of automotive retail advertising. We also receive revenues for customization services and for training and consulting services.

Expenses. Expenses generally relate to the cost of providing the services to clients in the three business segments. In the Automotive Retail segments, significant expenses include employee payroll and other labor related costs, the cost of hosting customer systems, third-party costs for transaction based solutions and licensed software utilized in our solution offerings, computer hardware, software, telecommunications, transportation and distribution costs, and other general overhead items. In the DM segment, significant expenses include third-party content for website and other Internet-based offerings such as advertising placements, employee payroll and other labor-related costs, the cost of hosting customer websites, computer hardware, software, and other general overhead items. We also have some company-wide expenses attributable to management compensation and corporate overhead.

Factors Affecting Comparability of Financial Results

Our Spin-Off from ADP

On April 9, 2014 , the board of directors of Automatic Data Processing, Inc. ("ADP") approved the spin-off of the Dealer Services business of ADP. On September 30, 2014 , the spin-off became effective and ADP distributed 100% of our common stock to the holders of record of ADP's common stock as of September 24, 2014 (the "spin-off").

Historical ADP Cost Allocations Versus CDK as a Stand-alone Company

Our historical combined financial statements were prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These financial statements include the combined financial condition and results of operations of the Dealer Services business of ADP, which was the subject of the spin-off. The combined financial statements include allocated costs for facilities, functions and services used by the Company at shared ADP sites and costs for certain functions and services performed by centralized ADP organizations and directly charged to the Company based on usage.

Specifically, these costs were allocated by ADP to the Company as follows:


•	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.

Although we believe these allocation methods are reasonable, we also believe, for the reasons discussed below, that the historical allocation of ADP's expenses to the Company may be significantly less than the actual costs we will incur as an independent public company.

Size and influence of ADP. We generally benefited from the size of ADP in negotiating many of our overhead costs and were able to leverage the ADP business as a whole in obtaining favorable pricing. ADP is a larger company than we are and, as such, is capable of negotiating large volume discounts. As a stand-alone company, we have sought and continue to seek discounts, but our discounts may be less favorable because of lower volumes.

Shared corporate overhead. As a division of ADP, we were historically managed by the senior management of ADP. Moreover, ADP performed all public company obligations, including:


•	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.

As an independent public company, these obligations are ours and we bear all of these expenses directly. The historical allocation of ADP’s expenses to the Company may be significantly less than the actual costs we will incur as an independent public company. In addition to public company expenses, other general overhead transactions were handled for us by ADP, such as data center services, which, after the spin-off will still be provided by ADP, but will be transitioned to us by the end of the second year following the spin-off date based on the terms of agreements entered into with ADP.

Debt Financing

At the time of the spin-off, we borrowed $250.0 million under our 2019 term loan facility and $750.0 million under our bridge loan facility, the proceeds of which were used to pay ADP a cash dividend. Additionally, we entered into a $300.0 million revolving credit facility, which was undrawn as of December 31, 2015 . On October 14, 2014 , we completed an offering of 3.30% senior notes with a $250.0 million aggregate principal amount due in 2019 (the "2019 notes") and 4.50% senior notes with a $500.0 million aggregate principal amount due in 2024 (the "2024 notes" and together with the 2019 notes, the "notes"). The issuance price of the senior notes was equal to the stated value. We used net proceeds from the senior notes, together with cash on hand, to repay all outstanding borrowings under the bridge loan facility.

On December 14, 2015, we borrowed an additional $250.0 million under our 2020 term loan facility. Borrowings under the term loan facility were used for general corporate purposes, which included the repurchase of shares of our common stock as part of a new return of capital plan and pursuant to an accelerated share repurchase ("ASR").

Acquisitions and Divestiture

On April 2, 2015, Computerized Vehicle Registration, Inc. (“CVR”), our majority owned subsidiary, acquired AVRS, Inc. ("AVRS"), a provider of electronic vehicle registration software in California. CVR acquired all of the outstanding stock of AVRS under an agreement of merger. The results of operations of the acquired business are included in our consolidated and combined statements of operations since the acquisition date.

We evaluate our businesses periodically in order to improve efficiencies in our operations and focus on the more profitable lines of business. On May 21, 2015, we sold our Internet sales leads business, which was comprised of Dealix Corporation and Autotegrity, Inc. and operated in the ARNA segment, to a third party. The results of operations of the Internet sales leads business were not included in our consolidated and combined statement of operations subsequent to the disposal date.

Key Performance Measures

We regularly review the following key performance measures in evaluating our business results, identifying trends affecting our business, and making operating and strategic decisions:

Dealer Management System Client Sites. We track the number of client sites that have an active DMS. Consistent with our strategy of growing our Automotive Retail client base, we view the number of client sites purchasing our DMS solutions as an indicator of market penetration for our Automotive Retail segments. Our DMS client site count includes retailers with an active DMS that sell vehicles in the automotive and adjacent markets. Adjacent markets include heavy truck dealerships that provide vehicles to the over-the-road trucking industry; recreation dealerships in the motorcycle, marine, and recreational vehicle industries, and heavy equipment dealerships in the agriculture and construction equipment industries. We consider a DMS to be active if we have billed a subscription fee for that solution during the most recently ended calendar month.

Average Revenue Per DMS Client Site. Average revenue per Automotive Retail DMS client site is an indicator of the adoption of our solutions by DMS clients, and we monitor changes in this metric to measure the effectiveness of our strategy to deepen our relationships with our current client base through upgrading and expanding solutions and increasing transaction volumes. We calculate average revenue per DMS client site by dividing the monthly applicable revenue generated from our solutions in a period by the average number of DMS client sites in the period. Revenue underlying this metric is based on budgeted foreign exchange rates. When we discuss growth in average revenue per DMS client site, revenue for the comparable prior period has been adjusted to reflect budgeted foreign exchange rates for the current period.

Websites. For the DM segment, we track the number of websites that we host and develop for our OEM and automotive retail clients as an indicator of business activity. The number of websites as of a specified date is the total number of full function dealer websites or portals that are currently accessible as of the end of the most recent calendar month.

Average Revenue Per Website. We monitor changes in our average revenue per website as an indicator of the relative depth of our relationships in our DM segment. We calculate average revenue per website by dividing the monthly revenue generated from our DM solutions in a period, excluding OEM advertising revenues, by the average number of client websites in the period. Revenue underlying this metric is based on budgeted foreign exchange rates. When we discuss growth in average revenue per website, revenue for the comparable prior period has been adjusted to reflect budgeted foreign exchange rates for the current period.

OEM Advertising. For the DM segment, we track the amount of advertising revenue generated from OEMs on either a national or regional scale as a measure of our effectiveness in delivering advertising services to the OEM market.

Results of Operations

The following is a discussion of the results of our consolidated and combined operations for the three and six months ended December 31, 2015 and 2014 . For a discussion of our operations by segment, see "Analysis of Reportable Segments" below.

Our consolidated and combined results of operations, non-GAAP measures, segment revenues, and segment earnings before income taxes for the three and six months ended December 31, 2014 have been revised to reflect sales-type lease accounting for certain hardware components of our DMS and integrated solutions and to reflect the revised presentation of the noncontrolling interest in the earnings of CVR. Refer to Note 1 - Basis of Presentation in the accompanying Notes to the unaudited condensed consolidated and combined financial statements.

The table below presents consolidated and combined results of operations for the periods indicated and the dollar change and percentage change between periods.



	Three Months Ended											Six Months Ended
	December 31,						Change					December 31,						Change
	2015			2014			$			%		2015			2014			$			%
Revenues	$	520.1		$	517.0		$	3.1		1	%	$	1,034.7		$	1,034.0		$	0.7		—	%
Cost of revenues	301.2			323.3			(22.1		)	(7	)%	612.0			634.8			(22.8		)	(4	)%
Selling, general, and administrative costs	105.8			105.9			(0.1		)	—	%	203.2			216.4			(13.2		)	(6	)%
Restructuring expenses	1.8			—			1.8			n/m		3.7			—			3.7			n/m
Separation costs	—			3.3			(3.3		)	(100	)%	—			34.0			(34.0		)	(100	)%
Total expenses	408.8			432.5			(23.7		)	(5	)%	818.9			885.2			(66.3		)	(7	)%
Operating earnings	111.3			84.5			26.8			32	%	215.8			148.8			67.0			45	%
Interest expense	(9.5		)	(9.0		)	(0.5		)	6	%	(18.8		)	(10.1		)	(8.7		)	86	%
Other income, net	5.0			1.6			3.4			n/m		5.6			2.9			2.7			93	%
Earnings before income taxes	106.8			77.1			29.7			39	%	202.6			141.6			61.0			43	%
Margin %	20.5		%	14.9		%						19.6		%	13.7		%
Provision for income taxes	(37.1		)	(32.7		)	(4.4		)	13	%	(71.7		)	(56.2		)	(15.5		)	28	%
Effective tax rate	34.7		%	42.4		%						35.4		%	39.7		%
Net earnings	69.7			44.4			25.3			57	%	130.9			85.4			45.5			53	%
Less: net earnings attributable to noncontrolling interest	1.5			2.0			(0.5		)	(25	)%	3.7			4.0			(0.3		)	(8	)%
Net earnings attributable to CDK	$	68.2		$	42.4		$	25.8		61	%	$	127.2		$	81.4		$	45.8		56	%

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Revenues. Revenues for the three months ended December 31, 2015 were $520.1 million , an increase of $3.1 million , as compared to $517.0 million for the three months ended December 31, 2014 . The ARNA segment contributed $4.6 million and the DM segment contributed $2.6 million of revenue growth, offset by a decrease in revenues in the ARI segment of $4.1 million . See the discussion below for drivers of each segment's revenue growth.

We also review revenues on a constant currency basis to understand underlying business trends. We computed constant currency by translating results for the three months ended December 31, 2015 using the average monthly exchange rates for the three months ended December 31, 2014 . Revenues for the three months ended December 31, 2015 increased by 3% on a constant currency basis as shown in the table below.



	Three Months Ended
	December 31,				Change
	2015		2014		$		%
Revenues	$	520.1	$	517.0	$	3.1	1	%
Impact of exchange rates	12.5		—		12.5
Constant currency revenues	$	532.6	$	517.0	$	15.6	3	%

The foreign exchange rate impact was primarily due to the strength of the U.S. dollar against the Canadian dollar, the Euro, and the Pound Sterling.

Cost of Revenues. Cost of revenues for the three months ended December 31, 2015 decreased by $22.1 million , or 7% , as compared to the three months ended December 31, 2014 . The constant currency impact of foreign exchange rates on cost of revenues was a decrease of $6.4 million . In addition, cost of revenues was impacted by $15.6 million of accelerated amortization recognized in the DM segment for the Cobalt trademark during the three months ended December 31, 2014, lower expenses as a result of the sale of the Internet sales leads business, and lower labor-related costs attributable to ongoing initiatives under our business transformation plan primarily related to lower headcount and geographic labor mix. The favorable effects of these items was offset by increased direct operating expenses as a function of new products, revenue growth, and the acquisition of AVRS and increased costs associated with the migration of hosting facilities that support the ARNA and DM segments. Cost of revenues also included expenses to research, develop, and deploy new and enhanced

solutions for our clients of $39.1 million and $41.7 million for the three months ended December 31, 2015 and 2014, respectively, representing 7.5% and 8.1% of revenues, respectively.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended December 31, 2015 decreased by $0.1 million as compared to the three months ended December 31, 2014 . The constant currency impact of foreign exchange rates on selling, general and administrative expenses was a decrease of $2.8 million . In addition, selling, general and administrative expenses were impacted by lower labor-related costs attributable to ongoing initiatives under our business transformation plan primarily related to lower headcount and geographic labor mix, a vendor-related contractual obligation in the ARNA segment established during the three months ended December 31, 2014, and lower expenses as a result of the sale of the Internet sales leads business. The favorable effects of these items was partially offset by costs incurred related to the formation of corporate departments as a stand-alone public company and other business transformation expenses.

Restructuring Expenses. Restructuring expenses represent employee-related costs and contract termination costs incurred in connection with the business transformation plan we initiated in the fiscal year ended June 30, 2015 . Restructuring expenses for the three months ended December 31, 2015 were $1.8 million ; there were no restructuring expenses for the three months ended December 31, 2014 as there was no comparable business transformation plan.

Separation Costs. Separation costs represent costs directly attributable to our spin-off from ADP and were primarily related to professional services. Separation costs for the three months ended December 31, 2014 were $3.3 million ; there were no comparable costs incurred for the three months ended December 31, 2015 .

Interest Expense. Interest expense for the three months ended December 31, 2015 increased by $0.5 million as compared to the three months ended December 31, 2014 due to borrowings under our new 2020 term loan facility and our senior notes, which were issued during the three months ended December 31, 2014.

Other Income, net. Other income, net for the three months ended December 31, 2015 increased by $3.4 million as compared to the three months ended December 31, 2014 due primarily to a net gain associated with an indemnification receivable from ADP for pre spin-off tax periods in accordance with the tax matters agreement.

Provision for Income Taxes. The effective tax rate for the three months ended December 31, 2015 was 34.7% as compared to 42.4% for the three months ended December 31, 2014 . The effective tax rate for the three months ended December 31, 2015 was favorably impacted by a non-taxable indemnification gain of $2.6 million recorded in other income and a tax benefit associated with pre spin-off tax refunds. The effective tax rate for the three months ended December 31, 2014 was unfavorably impacted by $4.6 million of tax expense associated with the tax law change for bonus depreciation.

Net Earnings Attributable to CDK. Net earnings attributable to CDK for the three months ended December 31, 2015 was $68.2 million , an increase of $25.8 million , or 61% , as compared to $42.4 million for the three months ended December 31, 2014 . The increase in net earnings attributable to CDK was primarily due to the factors previously discussed.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Revenues. Revenues for the six months ended December 31, 2015 were $1,034.7 million , an increase of $0.7 million , as compared to $1,034.0 million for the six months ended December 31, 2014 . The ARNA segment contributed $9.1 million and the DM segment contributed $3.2 million of revenue growth, offset by a decrease in revenues in the ARI segment of $11.6 million .

Revenues for the six months ended December 31, 2015 increased by 3% on a constant currency basis as shown in the table below.



	Six Months Ended
	December 31,				Change
	2015		2014		$		%
Revenues	$	1,034.7	$	1,034.0	$	0.7	—	%
Impact of exchange rates	28.2		—		28.2
Constant currency revenues	$	1,062.9	$	1,034.0	$	28.9	3	%

The foreign exchange rate impact was primarily due to the strength of the U.S. dollar against the Canadian dollar, the Euro, and the Pound Sterling.

Cost of Revenues. Cost of revenues for the six months ended December 31, 2015 decreased by $22.8 million , or 4% , as compared to the six months ended December 31, 2014 . The constant currency impact of foreign exchange rates on cost of revenues was a decrease of $15.1 million . In addition, cost of revenues was impacted by $15.6 million of accelerated amortization recognized in the DM segment for the Cobalt trademark during the three months ended December 31, 2014, lower expenses as a result of the sale of the Internet sales leads business, and lower labor-related costs attributable to ongoing initiatives under our business transformation plan primarily related to lower headcount and geographic labor mix. The favorable effects of these items was offset by increased direct operating expenses as a function of new products, revenue growth, and the acquisition of AVRS and increased costs associated with the migration of hosting facilities that support the ARNA and DM segments. Cost of revenues also included expenses to research, develop, and deploy new and enhanced solutions for our clients of $78.6 million and $83.9 million for the six months ended December 31, 2015 and 2014, respectively, representing 7.6% and 8.1% of revenues.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the six months ended December 31, 2015 decreased by $13.2 million , or 6% , as compared to the six months ended December 31, 2014 . The constant currency impact of foreign exchange rates on selling, general and administrative expenses was a decrease of $6.4 million . In addition, selling, general and administrative expenses were impacted by trademark royalty expense incurred during the six months ended December 31, 2014 prior to the spin-off, lower labor-related costs attributable to ongoing initiatives under our business transformation plan primarily related to lower headcount and geographic labor mix, a vendor-related contractual obligation in the ARNA segment established during the three months ended December 31, 2014 and extinguished during the first quarter of fiscal 2016, lower expenses as a result of the sale of the Internet sales leads business, and a prior year non-recurring severance accrual in the ARNA segment. The favorable effects of these items was partially offset by costs incurred related to the formation of corporate departments as a stand-alone public company and other business transformation expenses.

Restructuring Expenses. Restructuring expenses represent employee-related costs and contract termination costs incurred in connection with the business transformation plan we initiated in the fiscal year ended June 30, 2015 . Restructuring expenses for the six months ended December 31, 2015 were $3.7 million ; there were no restructuring expenses for the six months ended December 31, 2014 as there was no comparable business transformation plan.

Separation Costs. Separation costs represent costs directly attributable to our spin-off from ADP and were primarily related to professional services. Separation costs for the six months ended December 31, 2014 were $34.0 million ; there were no comparable costs incurred for the six months ended December 31, 2015 .

Interest Expense. Interest expense for the six months ended December 31, 2015 increased by $8.7 million as compared to the six months ended December 31, 2014 due to borrowings under our term loan facilities and senior notes, revolving credit facility commitment fees, and amortization of deferred financing costs.

Other Income, net. Other income, net for the six months ended December 31, 2015 increased by $2.7 million as compared to the six months ended December 31, 2014 due primarily to a net gain associated with an indemnification receivable from ADP for pre spin-off tax periods in accordance with the tax matters agreement.

Provision for Income Taxes. The effective tax rate for the six months ended December 31, 2015 was 35.4% as compared to 39.7% for the six months ended December 31, 2014 . The effective tax rate for the six months ended December 31, 2015 was favorably impacted by a non-taxable indemnification gain recorded in other income and a tax benefit associated with pre spin-off tax refunds. The effective tax rate for the six months ended December 31, 2014 was unfavorably impacted by certain separation costs that were not tax deductible and tax expense associated with the tax law change for bonus depreciation, partially offset by tax benefits associated with a valuation allowance adjustment and the resolution of certain tax matters.

Net Earnings Attributable to CDK. Net earnings attributable to CDK for the six months ended December 31, 2015 was $127.2 million , an increase of $45.8 million , or 56% , as compared to $81.4 million for the six months ended December 31, 2014 . The decrease in net earnings attributable to CDK was primarily due to the factors previously discussed.

Non-GAAP Measures

We use certain adjusted results to evaluate our operating performance. In addition, we use adjusted EBITDA, among other measures, as an input to determine incentive-based compensation. Our non-GAAP adjustments principally relate to expenses and benefits that impact comparability of the underlying GAAP measures. We believe our non-GAAP measures provide relevant and useful information for users of the financial statements because they provide insight into our ongoing operating results. Because non-GAAP measures are not measures of performance that are calculated in accordance with GAAP, they should not be considered in isolation from, or as a substitute for, other metrics that are calculated in accordance with GAAP.

We also review certain non-GAAP measures, namely adjusted revenues and adjusted earnings before income taxes, on a constant currency basis to understand underlying business trends. To present these results on a constant currency basis, current period results for entities reporting in currencies other than the U.S. dollar were translated into U.S. dollar using the average monthly exchange rate for the comparable prior period. As a result, constant currency results neutralize the the effects of foreign currency.

The tables below present the reconciliation of the most directly comparable GAAP measure to adjusted revenues, adjusted earnings before income taxes, adjusted provision for income taxes, adjusted net earnings attributable to CDK, and adjusted net earnings attributable to CDK per common share.



	Three Months Ended											Six Months Ended
	December 31,						Change					December 31,						Change
	2015			2014			$			%		2015			2014			$			%
Revenues	$	520.1		$	517.0		$	3.1		1	%	$	1,034.7		$	1,034.0		$	0.7		—	%
Internet sales leads revenues ⁽¹⁾	—			(12.7		)	12.7					—			(26.8		)	26.8
Adjusted revenues	$	520.1		$	504.3		$	15.8		3	%	$	1,034.7		$	1,007.2		$	27.5		3	%
Impact of exchange rates	12.5			—			12.5					28.2			—			28.2
Constant currency adjusted revenues	$	532.6		$	504.3		$	28.3		6	%	$	1,062.9		$	1,007.2		$	55.7		6	%

Earnings before income taxes	$	106.8		$	77.1		$	29.7		39	%	$	202.6		$	141.6		$	61.0		43	%
Separation costs ⁽²⁾	—			3.3			(3.3		)			—			34.0			(34.0		)
Accelerated trademark amortization ⁽³⁾	—			15.6			(15.6		)			—			15.6			(15.6		)
Stand-alone public company costs ⁽⁴⁾	—			(3.4		)	3.4					—			(13.7		)	13.7
Trademark royalty fee ⁽⁵⁾	—			—			—					—			5.7			(5.7		)
Stock-based compensation ⁽⁴⁾	—			—			—					—			(0.4		)	0.4
Interest expense ⁽⁴⁾	—			—			—					—			(8.2		)	8.2
Restructuring expenses ⁽⁶⁾	1.8			—			1.8					3.7			—			3.7
Other business transformation expenses ⁽⁶⁾	5.1			—			5.1					6.8			—			6.8
Tax matters indemnification gain, net ⁽⁷⁾	(2.6		)	—			(2.6		)			(2.6		)	—			(2.6		)
Internet sales leads earnings ⁽¹⁾	—			(0.5		)	0.5					—			(1.5		)	1.5
Adjusted earnings before income taxes	$	111.1		$	92.1		$	19.0		21	%	$	210.5		$	173.1		$	37.4		22	%
Adjusted margin %	21.4		%	18.3		%	310 bps					20.3		%	17.2		%	310 bps
Impact of exchange rates	3.4			—			3.4					7.1			—			7.1
Constant currency adjusted earnings before income taxes	$	114.5		$	92.1		$	22.4		24	%	$	217.6		$	173.1		$	44.5		26	%

Provision for income taxes	$	37.1		$	32.7		$	4.4		13	%	$	71.7		$	56.2		$	15.5		28	%
Income tax effect of pre-tax adjustments ⁽⁸⁾	2.1			5.0			(2.9		)			3.3			6.7			(3.4		)
Income tax expense due to bonus depreciation law change ⁽⁹⁾	—			(4.6		)	4.6					—			(4.6		)	4.6
Pre spin-off filed tax return adjustment ⁽¹⁰⁾	0.4			—			0.4					0.4			—			0.4
Adjusted provision for income taxes	$	39.6		$	33.1		$	6.5		20	%	$	75.4		$	58.3		$	17.1		29	%
Adjusted effective tax rate	35.6		%	35.9		%						35.8		%	33.7		%



	Three Months Ended											Six Months Ended
	December 31,						Change					December 31,						Change
	2015			2014			$			%		2015			2014			$			%
Net earnings attributable to CDK	$	68.2		$	42.4		$	25.8		61	%	$	127.2		$	81.4		$	45.8		56	%
Separation costs ⁽²⁾	—			3.3			(3.3		)			—			34.0			(34.0		)
Accelerated trademark amortization ⁽³⁾	—			15.6			(15.6		)			—			15.6			(15.6		)
Stand-alone public company costs ⁽⁴⁾	—			(3.4		)	3.4					—			(13.7		)	13.7
Trademark royalty fee ⁽⁵⁾	—			—			—					—			5.7			(5.7		)
Stock-based compensation ⁽⁴⁾	—			—			—					—			(0.4		)	0.4
Interest expense ⁽⁴⁾	—			—			—					—			(8.2		)	8.2
Restructuring expenses ⁽⁶⁾	1.8			—			1.8					3.7			—			3.7
Other business transformation expenses ⁽⁶⁾	5.1			—			5.1					6.8			—			6.8
Tax matters indemnification gain, net ⁽⁷⁾	(2.6		)	—			(2.6		)			(2.6		)	—			—
Internet sales leads earnings ⁽¹⁾	—			(0.5		)	0.5					—			(1.5		)	1.5
Income tax effect of pre-tax adjustments ⁽⁸⁾	(2.1		)	(5.0		)	2.9					(3.3		)	(6.7		)	3.4
Income tax expense due to bonus depreciation law change ⁽⁹⁾	—			4.6			(4.6		)			—			4.6			(4.6		)
Pre spin-off filed tax return adjustment ⁽¹⁰⁾	(0.4		)	—			(0.4		)			(0.4		)	—			(0.4		)
Adjusted net earnings attributable to CDK	$	70.0		$	57.0		$	13.0		23	%	$	131.4		$	110.8		$	20.6		19	%

Adjusted net earnings attributable to CDK per common share:
Basic	$	0.44		$	0.35					26	%	$	0.83		$	0.69					20	%
Diluted	$	0.44		$	0.35					26	%	$	0.82		$	0.69					19	%

Weighted-average common shares outstanding:
Basic ⁽¹¹⁾	158.7			160.7								158.9			160.7
Diluted ⁽¹¹⁾	159.7			161.8								160.0			161.2

(1) Elimination of revenues and earnings before income taxes related to the Internet sales leads business, which was part of the ARNA segment and was sold on May 21, 2015.

(2) Incremental costs incurred for the three and six months ended December 31, 2014 that were directly attributable to the spin-off from ADP.

(3) Accelerated amortization recognized during the three and six months ended December 31, 2014 in the DM segment for the Cobalt trademark related to the change in useful life.

(4) Incremental costs associated with the formation of corporate departments as a stand-alone public company, incremental stock-based compensation expenses incurred for staff additions to build out corporate functions and director compensation costs, and interest expense related to indebtedness incurred with the spin-off. These costs were incurred in the three and six months ended December 31, 2015 and have been reflected as adjustments in the three and six months ended December 31, 2014 to present these periods on a comparable basis.

(5) Elimination of the royalty paid to ADP for the utilization of the ADP trademark during the six months ended December 31, 2014 prior to our spin-off from ADP, as there was no comparable royalty after the spin-off.

(6) Restructuring expense recognized in connection with our business transformation plan for the three and six months ended December 31, 2015 . Other business transformation expenses were included within cost of revenues and selling, general and administrative expenses and were incurred in connection with our business transformation plan for the three and six months ended December 31, 2015 .

(7) Net gain recorded within other income, net associated with an indemnification receivable from ADP for pre spin-off tax periods in accordance with the tax matters agreement.

(8) Income tax effect of pre-tax adjustments including separation costs for the three and six months ended December 31, 2014 , which were partially tax deductible, and the tax effect of the Internet sales leads business.

(9) Adjustment recognized during the three and six months ended December 31, 2014 to deferred taxes related to the bonus depreciation to which ADP is entitled under the tax law and in accordance with the tax matters agreement to claim additional tax depreciation for assets associated with our business for tax periods prior to our spin-off from ADP.

(10) Net income tax benefit to adjust the liability for pre spin-off tax returns related to the gain in (7) above.

(11) During the three months ended September 30, 2015, we became aware that 1.0 million shares of common stock were inadvertently issued and distributed at the spin-off to ADP with respect to certain unvested ADP equity awards. The Company previously reported that 160.6 million shares were issued in connection with the spin-off, which was overstated by 1.0 million. During the three months ended September 30, 2015, the Company and ADP took corrective action to cancel the 1.0 million shares of common stock effective as of September 30, 2014. The effect of this correction is reflected in weighted-average common shares outstanding for the three and six months ended December 31, 2015 . For additional information on this matter, refer to Note 1 - Basis of Presentation in the accompanying unaudited condensed consolidated and combined financial statements in this Quarterly Report on Form 10-Q.

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Adjusted Revenues. Adjusted revenues for the three months ended December 31, 2015 were $520.1 million , an increase of $15.8 million , or 3% , as compared to $504.3 million for the three months ended December 31, 2014 . Adjusted revenues were unfavorably impacted by the same currencies discussed above in revenues, which contributed a decrease of $12.5 million . Adjusted revenues were favorably impacted by increased revenues in the underlying operations of all of our segments, excluding the effect of revenues related to the Internet sales leads business in ARNA and including the effect of revenues contributed by the acquisition of AVRS.

Adjusted Earnings Before Income Taxes. Adjusted earnings before income taxes for the three months ended December 31, 2015 were $111.1 million , an increase of $19.0 million , or 21% , as compared to $92.1 million for the three months ended December 31, 2014 . Margin increased from 18.3% to 21.4% . The constant currency impact of foreign exchange rates on adjusted earnings before income taxes was a decrease of $3.4 million . Adjusted earnings before income taxes were favorably impacted by operating efficiencies inclusive of revenue growth in our segments and benefits obtained from ongoing initiatives under our business transformation plan, primarily related to lower-headcount and geographic mix, and a vendor-related contractual obligation in the ARNA segment established during the three months ended December 31, 2014. The favorable effects of these items were partially offset by increased costs associated with the migration of hosting facilities that support the ARNA and DM segments.

Adjusted Provision for Income Taxes. The adjusted effective tax rate for the three months ended December 31, 2015 was 35.6% as compared to 35.9% for the three months ended December 31, 2014 .

Adjusted Net Earnings Attributable to CDK. Adjusted net earnings attributable to CDK for the three months ended December 31, 2015 were $70.0 million , an increase of $13.0 million , or 23% , as compared to $57.0 million for the three months ended December 31, 2014 . The increase in adjusted net earnings attributable to CDK was primarily due to the items discussed above in adjusted earnings before income taxes partially offset by the associated tax effect.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Adjusted Revenues. Adjusted revenues for the six months ended December 31, 2015 were $1,034.7 million , an increase of $27.5 million , or 3% , as compared to $1,007.2 million for the six months ended December 31, 2014 . Adjusted revenues were unfavorably impacted by the same currencies discussed above in revenues, which contributed a decrease of $28.2 million . Adjusted revenues were favorably impacted by increased revenues in the underlying operations of all of our segments, excluding the effect of revenues related to the Internet sales leads business in ARNA and including the effect of revenues contributed by the acquisition of AVRS.

Adjusted Earnings Before Income Taxes. Adjusted earnings before income taxes for the six months ended December 31, 2015 were $210.5 million , a decrease of $37.4 million , or 22% , as compared to $173.1 million for the six months ended December 31, 2014 . Margin decreased from 17.2% to 20.3% . The constant currency impact of foreign exchange rates on adjusted earnings before income taxes was a decrease of $7.1 million . Adjusted earnings before income taxes were favorably impacted by operating efficiencies inclusive of revenue growth in our segments and benefits obtained from ongoing initiatives

under our business transformation plan, primarily related to lower-headcount and geographic mix, a vendor-related contractual obligation in the ARNA segment established during the three months ended December 31, 2014 and extinguished during the first quarter of fiscal 2016, and a prior year non-recurring severance accrual in the ARNA segment. The favorable effects of these items were partially offset by increased costs associated with the migration of hosting facilities that support the ARNA and DM segments.

Adjusted Provision for Income Taxes. The adjusted effective tax rate for the six months ended December 31, 2015 was 35.8% as compared to 33.7% for the six months ended December 31, 2014 . The adjusted effective tax rate for the six months ended December 31, 2014 was favorably impacted by a tax benefit associated with a valuation allowance adjustment.

Adjusted Net Earnings Attributable to CDK. Adjusted net earnings attributable to CDK for the six months ended December 31, 2015 were $131.4 million , an increase of $20.6 million , or 19% , as compared to $110.8 million for the six months ended December 31, 2014 . The decrease in adjusted net earnings attributable to CDK was primarily due to the items discussed above in adjusted earnings before income taxes partially offset by the associated tax effect.

The table below presents the reconciliation of earnings before income taxes to adjusted EBITDA.



	Three Months Ended											Six Months Ended
	December 31,						Change					December 31,						Change
	2015			2014			$			%		2015			2014			$			%
Earnings before income taxes	$	106.8		$	77.1		$	29.7		39	%	$	202.6		$	141.6		$	61.0		43	%
Interest expense ⁽¹⁾	9.5			9.0			0.5					18.8			10.1			8.7
Depreciation and amortization ⁽²⁾	14.7			29.5			(14.8		)			28.7			43.4			(14.7		)
Separation costs ⁽³⁾	—			3.3			(3.3		)			—			34.0			(34.0		)
Stand-alone public company costs ⁽⁴⁾	—			(3.4		)	3.4					—			(13.7		)	13.7
Trademark royalty fee ⁽⁵⁾	—			—			—					—			5.7			(5.7		)
Total stock-based compensation ⁽⁶⁾	7.0			8.0			(1.0		)			12.8			13.4			(0.6		)
Restructuring expenses ⁽⁷⁾	1.8			—			1.8					3.7			—			3.7
Other business transformation expenses ⁽⁷⁾	4.6			—			4.6					6.2			—			6.2
Tax matters indemnification gain, net ⁽⁸⁾	(2.6		)	—			(2.6		)			(2.6		)	—			(2.6		)
Internet sales leads earnings ⁽⁹⁾	—			(0.5		)	0.5					—			(1.5		)	1.5
Adjusted EBITDA	$	141.8		$	123.0		$	18.8		15	%	$	270.2		$	233.0		$	37.2		16	%
Adjusted margin %	27.3		%	24.4		%	290 bps					26.1		%	23.1		%	300 bps

(1) Interest expense included within the financial statements for the periods presented.

(2) Depreciation and amortization included within the financial statements for the periods presented, including the accelerated amortization attributable to the Cobalt trademark recognized during the three and six months ended December 31, 2014.

(3) Incremental costs incurred for the three and six months ended December 31, 2014 that were directly attributable to the spin-off from ADP.

(4) Incremental costs associated with the formation of corporate departments as a stand-alone public company.

(6) Total stock-based compensation expense recognized for the periods presented.

(7) Restructuring expense recognized in connection with our business transformation plan for the three and six months ended December 31, 2015 . Other business transformation expenses were included within cost of revenues and selling, general and administrative expenses and were incurred in connection with our business transformation plan for the three and six months ended December 31, 2015 . Other business transformation expenses exclude $0.5 million and $0.6 million of accelerated depreciation expense for the three and six months ended December 31, 2015 , respectively.

(8) Net gain recorded within other income, net associated with an indemnification receivable from ADP for pre spin-off tax periods in accordance with the tax matters agreement.

(9) Elimination of earnings before income taxes related to the Internet sales leads business, which was part of the ARNA segment and was sold on May 21, 2015.

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Adjusted EBITDA . Adjusted EBITDA for the three months ended December 31, 2015 was $141.8 million , an increase of $18.8 million , or 15% , as compared to $123.0 million for the three months ended December 31, 2014 . Adjusted margin increased from 24.4% to 27.3% . The increase in adjusted EBITDA was favorably impacted by operating efficiencies inclusive of revenue growth in our segments and benefits obtained from ongoing initiatives under our business transformation plan, primarily related to lower-headcount and geographic mix, and a vendor-related obligation established during the three months ended December 31, 2014. The favorable effects of these items were partially offset by increased costs associated with the migration of hosting facilities that support the ARNA and DM segments and fluctuations in foreign currency exchange rates.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Adjusted EBITDA . Adjusted EBITDA for the six months ended December 31, 2015 was $270.2 million , an increase of $37.2 million , or 16% , as compared to $233.0 million for the six months ended December 31, 2014 . Adjusted margin increased from 23.1% to 26.1% . The increase in adjusted EBITDA was favorably impacted by operating efficiencies inclusive of revenue growth in our segments and benefits obtained from ongoing initiatives under our business transformation plan, primarily related to lower-headcount and geographic mix, a vendor-related obligation established during the three months ended December 31, 2014 and extinguished in the first quarter of fiscal 2016, and a prior year non-recurring severance accrual in the ARNA segment. The favorable effects of these items were partially offset by increased costs associated with the migration of hosting facilities that support the ARNA and DM segments and fluctuations in foreign currency exchange rates.

Analysis of Reportable Segments

The following is a discussion of the results of our operations by reportable segment for the three and six months ended December 31, 2015 and 2014 . Certain expenses are charged to the reportable segments at a standard rate for management reporting purposes. Other costs are charged to the reportable segments based on management’s responsibility for the applicable costs.

During the three months ended September 30, 2015, the Company began to report segment revenues and earnings before income taxes using actual foreign exchange rates. Previously, the Company's revenues and earnings before income taxes for each segment were adjusted to reflect budgeted foreign exchange rates, which resulted in a reconciling item for foreign exchange so as to present segment results on a consistent basis without the impact of fluctuations in foreign currency exchange rates. Segment information for the three and six months ended December 31, 2014 has been updated to conform to the new presentation and the effect of foreign exchange now resides within reportable segment revenues and earnings before income taxes.

Adjusted revenues and adjusted earnings before income taxes by reportable segment are included throughout this section. Since adjusted revenues and adjusted earnings before income taxes by reportable segment are not measures of performance that are calculated in accordance with GAAP, they should not be considered in isolation from, or as a substitute for, other metrics that are calculated in accordance with GAAP.

We also review segment results on a constant currency basis to understand underlying business trends. To present these results on a constant currency basis, current period results for entities reporting in currencies other than the U.S. dollar were translated into U.S. dollar using the average monthly exchange rate for the comparable prior period. As a result, constant currency results neutralize the the effects of foreign currency.

Segment Financial Data

The table below presents revenues and earnings before income taxes by segment for the periods indicated and the dollar change and percentage change between periods.



	Three Months Ended											Six Months Ended
	December 31,						Change					December 31,						Change
	2015			2014			$			%		2015			2014			$			%
Segment Revenues
Automotive Retail North America	$	333.6		$	329.0		$	4.6		1	%	$	665.8		$	656.7		$	9.1		1	%
Automotive Retail International	78.8			82.9			(4.1		)	(5	)%	157.0			168.6			(11.6		)	(7	)%
Digital Marketing	107.7			105.1			2.6			2	%	211.9			208.7			3.2			2	%
Total Revenues	$	520.1		$	517.0		$	3.1		1	%	$	1,034.7		$	1,034.0		$	0.7		—	%

Segment Earnings before Income Taxes
Automotive Retail North America	$	109.7		$	91.8		$	17.9		19	%	$	212.1		$	186.3		$	25.8		14	%
Margin %	32.9		%	27.9		%						31.9		%	28.4		%
Automotive Retail International	15.9			15.4			0.5			3	%	30.1			28.0			2.1			8	%
Margin %	20.2		%	18.6		%						19.2		%	16.6		%
Digital Marketing	11.6			(4.4		)	16.0			n/m		22.1			3.7			18.4			n/m
Margin %	10.8		%	(4.2		)%						10.4		%	1.8		%
Other	(30.4		)	(25.7		)	(4.7		)	18	%	(61.7		)	(76.4		)	14.7			(19	)%
Total Earnings before Income Taxes	$	106.8		$	77.1		$	29.7		39	%	$	202.6		$	141.6		$	61.0		43	%
Margin %	20.5		%	14.9		%						19.6		%	13.7		%

Automotive Retail North America Segment

The tables below present the reconciliation of revenues to adjusted revenues and earnings before income taxes to adjusted earnings before income taxes for the ARNA segment. Refer to the footnotes in "Non-GAAP Measures" for additional information on the adjustments presented below.



	Three Months Ended									Six Months Ended
	December 31,					Change				December 31,					Change
	2015		2014			$		%		2015		2014			$		%
Revenues	$	333.6	$	329.0		$	4.6	1	%	$	665.8	$	656.7		$	9.1	1	%
Internet sales leads revenues	—		(12.7		)	12.7				—		(26.8		)	26.8
Adjusted revenues	$	333.6	$	316.3		$	17.3	5	%	$	665.8	$	629.9		$	35.9	6	%
Impact of exchange rates	3.9		—			3.9				8.3		—			8.3
Constant currency adjusted revenues	$	337.5	$	316.3		$	21.2	7	%	$	674.1	$	629.9		$	44.2	7	%

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Revenues. ARNA revenues increased by $4.6 million , or 1% , to $333.6 million for the three months ended December 31, 2015 as compared to $329.0 million for the three months ended December 31, 2014 . ARNA revenues were unfavorably impacted by the strength of the U.S. dollar against the Canadian dollar on a constant currency basis, which contributed to a decrease of $3.9 million , or approximately 2 percentage points. In addition, ARNA revenues were unfavorably impacted by the Internet sales leads business, which was sold on May 21, 2015 and contributed $12.7 million in revenues during the three months ended December 31, 2014 . The impact of the Internet sales leads business on revenues was a decrement of approximately 4 percentage points.

Favorable contributions to revenue growth included the following. DMS client site count as of December 31, 2015 was 14,388 sites, an increase of approximately 3% , as compared to 13,963 sites as of December 31, 2014 . In addition, we experienced 5% growth in average revenue per DMS client site, which resulted from a combination of increased sales of new or expanded solutions to our existing client base and pricing. On a combined basis, the increase in DMS client sites and average revenue per DMS client site contributed $17.0 million of revenue growth, or approximately 5 percentage points. Transaction related revenues due to vehicle registrations, which include the effect of revenues contributed by the AVRS acquisition,

contributed $7.2 million of revenue growth, or approximately 2 percentage points. Other revenue items such as hardware sales, consulting, and data aggregation services contributed a decrease in revenues of $2.5 million .

Organic revenue growth excluding the effect of revenues contributed by the AVRS acquisition and the Internet sales leads business was approximately 4% .

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Revenues. ARNA revenues increased by $9.1 million , or 1% , to $665.8 million for the six months ended December 31, 2015 as compared to $656.7 million for the six months ended December 31, 2014 . The ARNA revenues were impacted by the same currency discussed above, which contributed to a decrease of $8.3 million , or approximately 1 percentage point. In addition, ARNA revenues were unfavorably impacted by the Internet sales leads business, which was sold on May 21, 2015 and contributed $26.8 million in revenues during the six months ended December 31, 2014 . The impact of the Internet sales leads business on revenues was a decrement of approximately 5 percentage points.

Favorable contributions to revenue growth included the following. DMS client site count as of December 31, 2015 was 14,388 sites, an increase of approximately 3% , as compared to 13,963 sites as of December 31, 2014 . In addition, we experienced 5% growth in average revenue per DMS client site, which resulted from a combination of increased sales of new or expanded solutions to our existing client base and pricing. On a combined basis, the increase in DMS client sites and average revenue per DMS client site contributed $34.9 million of revenue growth, or approximately 6 percentage points. Transaction related revenues due to vehicle registrations, which include the effect of revenues contributed by the AVRS acquisition, contributed $12.2 million of revenue growth, or approximately 2 percentage points. Other revenue items such as hardware sales, consulting, and data aggregation services contributed a decrease in revenues of $2.4 million .

Organic revenue growth excluding the effect of revenues contributed by the AVRS acquisition and the Internet sales leads business was approximately 4% .



	Three Months Ended										Six Months Ended
	December 31,						Change				December 31,						Change
	2015			2014			$		%		2015			2014			$		%
Earnings before income taxes	$	109.7		$	91.8		$	17.9	19	%	$	212.1		$	186.3		$	25.8	14	%
Margin %	32.9		%	27.9		%	500 bps				31.9		%	28.4		%	350 bps
Stand-alone public company costs	—			—			—				—			(2.1		)	2.1
Internet sales leads earnings	—			(0.5		)	0.5				—			(1.5		)	1.5
Adjusted earnings before income taxes	$	109.7		$	91.3		$	18.4	20	%	$	212.1		$	182.7		$	29.4	16	%
Adjusted margin %	32.9		%	28.9		%	400 bps				31.9		%	29.0		%	290 bps
Impact of exchange rates	1.5			—			1.5				3.3			—			3.3
Constant currency adjusted earnings before income taxes	$	111.2		$	91.3		$	19.9	22	%	$	215.4		$	182.7		$	32.7	18	%

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Earnings Before Income Taxes. ARNA earnings before income taxes increased by $17.9 million , or 19% , to $109.7 million for the three months ended December 31, 2015 as compared to $91.8 million for the three months ended December 31, 2014 . Margin increased from 27.9% to 32.9% . The constant currency impact of foreign exchange rates on ARNA earnings before income taxes was a decrease of $1.5 million , or approximately 2 percentage points. The effect of the Internet sales leads business on earnings before income taxes contributed to a decrease of approximately 1 percentage point.

ARNA earnings before income taxes were favorably impacted by operating efficiencies inclusive of revenue growth as discussed above and benefits obtained from ongoing initiatives under our business transformation plan, primarily related to lower headcount and geographic labor mix, the sale of the Internet sales leads business, which was a lower margin business, and a vendor-related contractual obligation established during the three months ended December 31, 2014. The favorable effects of these items were partially offset by increased costs associated with the migration of hosting facilities.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Earnings Before Income Taxes. ARNA earnings before income taxes increased by $25.8 million , or 14% , to $212.1 million for the six months ended December 31, 2015 as compared to $186.3 million for the six months ended December 31, 2014 . Margin increased from 28.4% to 31.9% . The constant currency impact of foreign exchange rates on ARNA earnings before income taxes was a decrease of $3.3 million , or approximately 2 percentage points. The effect of the Internet sales leads business and stand-alone public company costs on earnings before income taxes contributed to a decrease of approximately 2 percentage points.

ARNA earnings before income taxes were favorably impacted by operating efficiencies inclusive of revenue growth as discussed above and benefits obtained from ongoing initiatives under our business transformation plan, primarily related to lower headcount and geographic labor mix, a vendor-related contractual obligation established during the three months ended December 31, 2014 and extinguished in the first quarter of fiscal 2016, a prior year non-recurring severance accrual, and the sale of the Internet sales leads business, which was a lower margin business. The favorable effects of these items were partially offset by increased costs associated with the migration of hosting facilities and stand-alone public company costs.

Automotive Retail International Segment

There were no non-GAAP adjustments to the ARI segment for the three and six months ended December 31, 2015 and 2014 . The tables below present the reconciliation of revenues and earnings before income taxes for the ARI segment on a constant currency basis.



	Three Months Ended									Six Months Ended
	December 31,				Change					December 31,				Change
	2015		2014		$			%		2015		2014		$			%
Revenues	$	78.8	$	82.9	$	(4.1	)	(5	)%	$	157.0	$	168.6	$	(11.6	)	(7	)%
Impact of exchange rates	8.2		—		8.2					19.0		—		19.0
Constant currency revenues	$	87.0	$	82.9	$	4.1		5	%	$	176.0	$	168.6	$	7.4		4	%

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Revenues. ARI revenues decreased by $4.1 million , or 5% , to $78.8 million for the three months ended December 31, 2015 as compared to $82.9 million for the three months ended December 31, 2014 . ARI revenues were impacted by the strength of the U.S. dollar against the Euro and the Pound Sterling, which contributed to a decline of $8.2 million , or 10 percentage points. ARI experienced growth in revenues on a constant currency basis primarily due to increased average revenue per client site.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Revenues. ARI revenues decreased by $11.6 million , or 7% , to $157.0 million for the six months ended December 31, 2015 as compared to $168.6 million for the six months ended December 31, 2014 . ARI revenues were impacted by the same currencies as discussed above, which contributed to a decline of $19.0 million , or 11 percentage points. ARI experienced growth in revenues on a constant currency basis primarily due to increased average revenue per client site.



	Three Months Ended										Six Months Ended
	December 31,						Change				December 31,						Change
	2015			2014			$		%		2015			2014			$		%
Earnings before income taxes	$	15.9		$	15.4		$	0.5	3	%	$	30.1		$	28.0		$	2.1	8	%
Margin %	20.2		%	18.6		%	160 bps				19.2		%	16.6		%	260 bps
Impact of exchange rates	1.6			—			1.6				3.2			—			3.2
Constant currency earnings before income taxes	$	17.5		$	15.4		$	2.1	14	%	$	33.3		$	28.0		$	5.3	19	%

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Earnings Before Income Taxes. ARI earnings before income taxes increased by $0.5 million , or 3% , to $15.9 million for the three months ended December 31, 2015 as compared to $15.4 million for the three months ended December 31, 2014 . Margin increased from 18.6% to 20.2% . The constant currency impact of foreign exchange rates on ARI earnings before income taxes was a decrease of $1.6 million , or 11 percentage points. ARI earnings before income taxes were favorably impacted by operating efficiencies, which resulted from increased average revenue per client and benefits obtained from ongoing initiatives under our business transformation plan. These benefits were partially offset by the effect of accrual adjustments during the three months ended December 31, 2014 that did not repeat during the three months ended December 31, 2015.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Earnings Before Income Taxes. ARI earnings before income taxes increased by $2.1 million , or 8% , to $30.1 million for the six months ended December 31, 2015 as compared to $28.0 million for the six months ended December 31, 2014 . Margin increased from 16.6% to 19.2% . The constant currency impact of foreign exchange rates on ARI earnings before income taxes was a decrease of $3.2 million , or 11 percentage points. ARI earnings before income taxes were favorably impacted by operating efficiencies, which resulted from increased average revenue per client and benefits obtained from ongoing initiatives under our business transformation plan.

Digital Marketing Segment

There were no non-GAAP adjustments to the DM segment for the three months ended December 31, 2015 and 2014 . The tables below present the reconciliation of revenues and earnings (loss) before income taxes for the DM segment on a constant currency basis.



	Three Months Ended								Six Months Ended
	December 31,				Change				December 31,				Change
	2015		2014		$		%		2015		2014		$		%
Revenues	$	107.7	$	105.1	$	2.6	2	%	$	211.9	$	208.7	$	3.2	2	%
Impact of exchange rates	0.4		—		0.4				0.9		—		0.9
Constant currency revenues	$	108.1	$	105.1	$	3.0	3	%	$	212.8	$	208.7	$	4.1	2	%

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Revenues. DM revenues increased by $2.6 million , or 2% , to $107.7 million for the three months ended December 31, 2015 as compared to $105.1 million for the three months ended December 31, 2014 . The constant currency impact of foreign exchange rates on DM revenues was a decrease of $0.4 million . The overall increase was due to an increase in average monthly revenue per website of 11% , which contributed $7.5 million , or 7 percentage points, of revenue growth and was attributable to increased advertising per website. OEM advertising revenues increased 5% , which contributed $1.6 million , or 2 percentage points, of revenue growth. We experienced a decrease in website count resulting from changes to certain OEM programs of 12% , which contributed $8.8 million , or 8 percentage points, of revenue decrement.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Revenues. DM revenues increased by $3.2 million , or 2% , to $211.9 million for the six months ended December 31, 2015 as compared to $208.7 million for the six months ended December 31, 2014 . The constant currency impact of foreign exchange rates on DM revenues was a decrease of $0.9 million . The overall increase was due to an increase in average monthly revenue per website of 11% , which contributed $12.3 million , or 6 percentage points, of revenue growth and was attributable to increased advertising per website. OEM advertising revenues increased 6% , which contributed $3.5 million , or 2 percentage points, of revenue growth. We experienced a decrease in website count resulting from changes to certain OEM programs of 12% , which contributed $14.2 million , or 7 percentage points, of revenue decrement.



	Three Months Ended											Six Months Ended
	December 31,						Change					December 31,						Change
	2015			2014			$			%		2015			2014			$			%
Earnings (loss) before income taxes	$	11.6		$	(4.4	)	$	16.0		n/m		$	22.1		$	3.7		$	18.4		n/m
Margin %	10.8		%	(4.2		)%	1500 bps					10.4		%	1.8		%	860 bps
Accelerated trademark amortization	—			15.6			(15.6		)			—			15.6			(15.6		)
Adjusted earnings before income taxes	$	11.6		$	11.2		$	0.4		4	%	$	22.1		$	19.3		$	2.8		15	%
Adjusted margin %	10.8		%	10.7		%	10 bps					10.4		%	9.2		%	120 bps
Impact of exchange rates	0.4			—			0.4					0.6			—			0.6
Constant currency earnings before income taxes	$	12.0		$	11.2		$	0.8		7	%	$	22.7		$	19.3		$	3.4		18	%

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Earnings (Loss) Before Income Taxes. DM earnings before income taxes increased by $16.0 million to $11.6 million for the three months ended December 31, 2015 as compared to a loss of $4.4 million for the three months ended December 31, 2014 . Margin increased from a decrement of 4.2% to 10.8% . The constant currency impact of foreign exchange rates on DM earnings before income taxes was a decrease of $0.4 million , or 3 percentage points. The effect of the accelerated trademark amortization during the three months ended December 31, 2014 contributed a significant increase in earnings before taxes. DM earnings before income taxes were also favorably impacted by operating efficiencies from lower expenses as a result of lower full-time equivalent headcount and labor-related costs and benefits obtained from ongoing initiatives under our business transformation plan, partially offset by increased costs associated with the migration of hosting facilities and a higher mix of lower margin advertising revenues.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Earnings Before Income Taxes. DM earnings before income taxes increased by $18.4 million to $22.1 million for the six months ended December 31, 2015 as compared to $3.7 million for the six months ended December 31, 2014 . Margin increased from 1.8% to 10.4% . The constant currency impact of foreign exchange rates on DM earnings before income taxes was a decrease of $0.6 million , or 3 percentage points. The effect of the accelerated trademark amortization during the three months ended December 31, 2014 contributed a significant increase in earnings before taxes. DM earnings before income taxes were also favorably impacted by operating efficiencies from lower expenses as a result of lower full-time equivalent headcount and labor-related costs and benefits obtained from ongoing initiatives under our business transformation plan, partially offset by increased costs associated with the migration of hosting facilities and a higher mix of lower margin advertising revenues.

Other

The table below presents the reconciliation of loss before income taxes to adjusted loss before income taxes for the Other segment. Refer to the footnotes in "Non-GAAP Measures" for additional information on the adjustments presented below.



	Three Months Ended											Six Months Ended
	December 31,						Change					December 31,						Change
	2015			2014			$			%		2015			2014			$			%
Loss before income taxes	$	(30.4	)	$	(25.7	)	$	(4.7	)	18	%	$	(61.7	)	$	(76.4	)	$	14.7		(19	)%
Separation costs	—			3.3			(3.3		)			—			34.0			(34.0		)
Stand-alone public company costs	—			(3.4		)	3.4					—			(11.6		)	11.6
Trademark royalty fee	—			—			—					—			5.7			(5.7		)
Stock-based compensation	—			—			—					—			(0.4		)	0.4
Interest expense	—			—			—					—			(8.2		)	8.2
Restructuring expenses	1.8			—			1.8					3.7			—			3.7
Other business transformation expenses	5.1			—			5.1					6.8			—			6.8
Tax matters indemnification gain, net	(2.6		)	—			(2.6		)			(2.6		)	—			(2.6		)
Adjusted loss before income taxes	$	(26.1	)	$	(25.8	)	$	(0.3	)	1	%	$	(53.8	)	$	(56.9	)	$	3.1		(5	)%
Impact of exchange rates	(0.1		)	—								—			—
Constant currency loss before income taxes	$	(26.2	)	$	(25.8	)	$	(0.4	)	2	%	$	(53.8	)	$	(56.9	)	$	3.1		(5	)%

The primary components of the Other loss before income taxes are certain costs that are not allocated to our reportable segments, such as interest expense, stock-based compensation expense, stand-alone public company costs, costs that are directly attributable to our spin-off from ADP, costs attributable to the business transformation plan, the trademark royalty fee charged by ADP prior to the spin-off, and certain unallocated expenses.

Three Months Ended December 31, 2015 Compared to the Three Months Ended December 31, 2014

Loss Before Income Taxes. The Other loss before income taxes increased by $4.7 million , or 18% , to $30.4 million for the three months ended December 31, 2015 as compared to $25.7 million for the three months ended December 31, 2014 . The Other loss before income taxes was unfavorably impacted by increased stand-alone public company costs and expenses associated with our business transformation plan, partially offset by the separation costs incurred during the three months ended December 31, 2014 and the net tax matters indemnification gain. Excluding the effects of these items, the Other loss before income taxes was generally consistent year-over-year.

Six Months Ended December 31, 2015 Compared to the Six Months Ended December 31, 2014

Loss Before Income Taxes. The Other loss before income taxes decreased by $14.7 million , or 19% , to $61.7 million for the six months ended December 31, 2015 as compared to $76.4 million for the six months ended December 31, 2014 . The Other loss before income taxes was favorably impacted by the separation costs incurred and the trademark royalty fee charged by ADP during the six months ended December 31, 2014 and the net tax matters indemnification gain. The favorable effects of these items were partially offset by increased stand-alone public company costs, expenses associated with our business transformation plan, and increased interest expense associated with our indebtedness. Excluding the effects of these items, the Other loss before income taxes was impacted by an adjustment to certain employee-related accruals, the realization of a gain on foreign currency denominated transactions with our shared services facility in India, and a decrease in stock-based compensation expense.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Capital Structure Overview

Our principal source of liquidity is derived from cash generated through operations. At present, and in future periods, we expect cash generated by our operations, together with existing cash, cash equivalents, and borrowings from the capital markets, to be sufficient to cover our cash needs for working capital, capital expenditures, strategic acquisitions, anticipated quarterly dividends, and stock repurchases.

As of December 31, 2015 , cash and cash equivalents were $347.5 million , total CDK stockholders' equity was $578.2 million , and total debt was $1,228.6 million , which is net of unamortized financing costs of $9.3 million . Working capital at December 31, 2015 was $500.1 million , as compared to $399.8 million as of June 30, 2015 . Working capital as presented herein excludes current maturities of long-term debt.

Our borrowings consist of two term loan facilities with initial principals of $250.0 million , 3.30% senior notes with a $250.0 million aggregate principal amount due in 2019 and 4.50% senior notes with a $500.0 million aggregate principal amount due in 2024. Additionally, we have a $300.0 million revolving credit facility, which was undrawn as of December 31, 2015 .

Of the $347.5 million of cash and cash equivalents held as of December 31, 2015 , $148.7 million was held by our foreign subsidiaries. Amounts held by foreign subsidiaries, if repatriated to the U.S., would generally be subject to foreign withholding and U.S. income taxes, adjusted for foreign tax credits. A minimal amount of U.S. income tax has been accrued on the undistributed foreign earnings since our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not demonstrate a need to repatriate them to fund our U.S. operations. If circumstances change and it becomes apparent that some or all of the permanently reinvested earnings will be remitted to the U.S. in the foreseeable future, an additional income tax charge may be necessary. Given the uncertain time and manner of repatriation, it is not practicable to estimate the amount of any additional income tax charge on permanently reinvested earnings.

Dividends to Common Stockholders

In November 2015, the Board of Directors approved a $0.015 increase in the quarterly cash dividend to an annual rate of $0.54 per share. The Board of Directors declared a quarterly cash dividend of $0.135 per share payable on December 30, 2015 to shareholders of record at the close of business on December 1, 2015. We paid dividends of $21.6 million and $40.8 million during the three and six months ended December 31, 2015 , respectively, and $19.4 million during the three and six months ended December 31, 2014 .

Stock Repurchase Program

In December 2015, the Board of Directors authorized us to repurchase up to $1.0 billion of our common stock. Under the authorization for the stock repurchase program, we may purchase our common stock in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The actual timing, number, and price of any shares to be repurchased will be determined at management's discretion and will depend on a number of factors, which may include the market price of the shares, general market and economic conditions, and other potential uses for free cash flow. This authorization superseded and replaced the prior authorization by the Board of Directors which was approved on January 20, 2015 and had authorized us to repurchase up to 10.0 million shares of our common stock. We repurchased a total of approximately 1.2 million shares of our common stock under the prior authorization.

On December 14, 2015, we entered into an ASR agreement to purchase $250.0 million of our common stock. Under the terms of the ASR, we made a $250.0 million payment on December 15, 2015 and received an initial delivery of approximately 4.3 million shares of our common stock. The final number of shares to be purchased will be calculated based on the average of the daily volume-weighted average price of our common stock during the term of the ASR transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreement. The final settlement of the ASR is expected to occur no later than the end of our fiscal year ending June 30, 2016 and may result in the receipt or delivery of additional shares of common stock.

Cash Flows

Our consolidated and combined cash flows for the six months ended December 31, 2014 have been revised to reflect sales-type lease accounting for certain hardware components of our DMS and integrated solutions, the revised presentation of the noncontrolling interest in the earnings of CVR, and the reclassification of net advances of parent company investment from investing activities to financing activities. Refer to Note 1 - Basis of Presentation in the accompanying Notes to the unaudited condensed consolidated and combined financial statements.

Our cash flows from operating, investing, and financing activities, as reflected in the consolidated and combined statements of cash flows for the six months ended December 31, 2015 and 2014 , are summarized as follows:



	Six Months Ended
	December 31,
	2015			2014			$ Change
Cash provided by (used in):
Operating activities	$	25.8		$	105.0		$	(79.2	)
Investing activities	(19.2		)	25.0			(44.2		)
Financing activities	(58.3		)	(114.7		)	56.4
Effect of exchange rate changes on cash and cash equivalents	(9.0		)	(15.9		)	6.9
Net change in cash and cash equivalents	$	(60.7	)	$	(0.6	)	$	(60.1	)

Net cash flows provided by operating activities were $25.8 million for the six months ended December 31, 2015 as compared to $105.0 million for the six months ended December 31, 2014 . This $79.2 million decrease was primarily due to a comparative increase of $126.0 million in net working capital components, which was due to the timing of cash payments made to our vendors, employees, and the tax authorities and cash payments received from our clients in the normal course of business in all of our segments. Net earnings adjusted for non-cash items increased by $46.8 million when compared to the six months ended December 31, 2014 due to earnings growth in our business.

Net cash flows used in investing activities were $ 19.2 million for the six months ended December 31, 2015 as compared to net cash flows provided by investing activities of $ 25.0 million for the six months ended December 31, 2014 . This $44.2 million increase in cash used in investing activities was primarily due to $40.6 million of proceeds from notes receivable from ADP and its affiliates during the six months ended December 31, 2014 , which did not recur following the spin-off. In addition, there was an increase in capital expenditures and capitalized software of $3.7 million during the six months ended December 31, 2015 .

Net cash flows used in financing activities were $ 58.3 million for the six months ended December 31, 2015 as compared to $ 114.7 million for the six months ended December 31, 2014 . This $56.4 million decrease in cash used in financing activities is primarily due to cash used in connection with our spin-off from ADP. During the six months ended December 31, 2015 , our primary cash outflows consisted of dividend payments to our stockholders of $40.8 million , the repurchase of common stock for $261.0 million , and the repayment of debt and capital lease obligations of $6.7 million . We entered into a new term loan facility for $250.0 million and used the proceeds for the repurchase of common stock under our ASR. During the six months ended December 31, 2014 , cash used in financing activities was primarily impacted by proceeds from long-term debt of $1.8 billion , offset by outflows related to the dividend paid to ADP in connection with our spin-off of $825.0 million , repayments of long-term debt of $753.1 million, net transactions of parent company investment of $240.8 million , and repayments of notes payable to ADP and its affiliates of $21.9 million .

Related Party Agreements

We entered into a tax matters agreement with ADP as part of the spin-off that governs the rights and obligations of both parties after the spin-off with respect to taxes for both pre and post spin-off periods. Under this agreement, ADP is generally required to indemnify us for any income taxes attributable to its operations or our operations and for any non-income taxes attributable to its operations, in each case for all pre spin-off periods as well as any taxes arising from transactions effected to consummate the spin-off, and we are generally required to indemnify ADP for any non-income taxes attributable to our operations for all pre spin-off periods and for any taxes attributable to our operations for post spin-off periods.

We are generally required to indemnify ADP against any tax resulting from the spin-off (and against any claims made against ADP in respect of any tax imposed on its stockholders), in each case if that tax results from (i) an issuance of a significant amount of our equity securities, a redemption of a significant amount of our equity securities or our involvement in other significant acquisitions of our equity securities (excluding the spin-off), (ii) other actions or failures to act by us or (iii) any of our representations or undertakings referred to in the tax matters agreement being incorrect or violated. ADP is generally required to indemnify us for any tax resulting from the spin-off if that tax results from (a) ADP's issuance of its equity securities, redemption of its equity securities or involvement in other acquisitions of its equity securities, (b) other actions or failures to act by ADP, or (c) any of ADP's representations or undertakings referred to in the tax matters agreement being incorrect or violated.

Prior to the spin-off, we entered into a transition services agreement with ADP to provide for an orderly transition to being an independent company. Among the principal services to be provided by ADP to us were operational and administrative infrastructure-related services, such as use of the e-mail domain “adp.com,” facilities sharing, procurement support, tax, human resources, administrative services and services related to back office support, and software development in our Indian facilities. Among the principal services to be provided by us to ADP were operational and administrative infrastructure-related services, such as facilities sharing and human resources administrative services. The agreement expired and services under it ceased on September 30, 2015, the one-year anniversary of the spin-off.

We entered into a data services agreement with ADP prior to the spin-off under which ADP provides us with certain data center sharing services relating to the provision of information technology, platform support, hosting and network services. The term of the agreement will expire two years after the spin-off date.

We entered into an intellectual property transfer agreement with ADP prior to the spin-off under which ADP assigned us certain patents, trademarks, copyrights, and other intellectual property developed or owned by ADP or certain of its subsidiaries and with respect to which we are the primary or exclusive user today or the anticipated primary or exclusive user in the future. The assignment is perpetual after the spin-off date of the agreement.

We also entered into an employee matters agreement with ADP prior to the spin-off pursuant to which certain employee benefit matters are addressed, such as the treatment of ADP options held by our employees after the spin-off and the treatment of benefits for Company management employees who participate in and have accrued benefits under the ADP Supplemental Officers Retirement Plan. The agreement also, to the extent provided therein, delineates the benefit plans and programs in which our employees participate following the spin-off. ADP will remain responsible for the payment of all benefits under the ADP plans.

In the normal course of business, we also enter into contracts in which we make representations and warranties that relate to the performance of our services and products. We do not expect any material losses related to such representations and warranties.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to interest rate risk related to our revolving credit facility and term loan facilities as those arrangements contain interest rates that are not fixed. As of December 31, 2015 , our revolving credit facility was undrawn. The interest rates per annum on the 2019 term loan facility and the 2020 term loan facility were 1.93% and 1.84% as of December 31, 2015 , respectively. A hypothetical increase in this interest rate of 25 basis points would have resulted in an immaterial impact on earnings before income taxes for the six months ended December 31, 2015 .

We operate and transact business in various foreign jurisdictions and are therefore exposed to market risk from changes in foreign currency exchange rates that could impact our financial position, results of operations, and cash flows. We have not been materially impacted by fluctuations in foreign currency exchange rates as a significant portion of our business is transacted in U.S. dollars, and is expected to continue to be transacted in U.S. dollars or U.S. dollar-based currencies. As of December 31, 2015 , operations in foreign jurisdictions were principally transacted in Canadian dollars, Euro, Pound Sterling, and Renminbi. A hypothetical change in all foreign currency exchange rates of 10% would have resulted in an increase or decrease in consolidated operating earnings of approximately $4.5 million for the six months ended December 31, 2015 .

We manage our exposure to these market risks through our regular operating and financing activities. We may in the future use derivative financial instruments as risk management tools.

CRITICAL ACCOUNTING POLICIES

Our condensed consolidated and combined financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. We continually evaluate the accounting policies and estimates used to prepare the condensed consolidated and combined financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in our Form 10-K in the Critical Accounting Policies section of Management's Discussion and Analysis of Financial Condition and Results of Operations. With the exception of our stock-based compensation policy, which has been updated below, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply since the date of the Form 10-K.

Stock-Based Compensation

Certain employees (a) have been granted stock options to purchase shares of CDK’s common stock and (b) have been granted restricted stock or restricted stock units under which shares of our common stock vest based on the passage of time or achievement of performance conditions.

We recognize stock-based compensation expense in net earnings based on the fair value of the award on the date of the grant. We determine the fair value of stock options issued using a binomial option pricing model. The binomial option-pricing model considers a range of assumptions related to volatility, dividend yield, risk-free interest rate, and employee exercise behavior. Expected volatilities utilized in the binomial option pricing model are based on a combination of implied market volatilities and historical volatilities of peer companies. We use a peer group of companies to determine volatility due to the limited trading history associated with our common stock. Inclusion of our stock volatility in the valuation of future stock option grants may impact stock-based compensation expense recognized. Similarly, the dividend yield is based on historical experience and expected future dividend payments. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial option pricing model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of a stock option grant is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.

The grant date fair value of restricted stock and restricted stock units that vest upon achievement of service conditions is based on the closing price of our common stock on the date of grant. We also grant performance-based awards that vest over a performance period. Under these programs, we communicate “target awards” at the beginning of the performance period with possible payouts at the end of the performance period ranging from 0% to 250% of the target awards. Certain of our performance-based awards are further subject to adjustment (increase or decrease) based on a market condition defined as total shareholder return of our common stock compared to a peer group of companies. The fair value of performance-based awards subject to a market condition is determined using a Monte Carlo simulation model. The principal variable assumptions utilized in determining the grant date fair value of performance-based awards subject to a market condition include the risk-free rate, stock volatility, dividend yield, and correlations between our stock price and the stock prices of the peer group of companies. The probability associated with the achievement of performance conditions affects the vesting of our performance-based awards. Expense is only recognized for those shares expected to vest. We adjust stock-based compensation expense (increase or decrease) when it becomes probable that actual performance will differ from our estimate.

For all of our stock-based compensation awards, we estimate the likelihood that the award will ultimately vest upon grant and use an estimated forfeiture rate to recognize stock-based compensation expense. We recognize additional stock-based compensation expense if the actual forfeiture rate is lower than estimated, and we recognize a recovery of previously recognized stock-based compensation expense if the actual forfeiture rate is higher than estimated. If the actual forfeiture rate differs from our estimate, we may need to revise our estimate.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2015, the FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 requires that if the arrangement contains a software license, the customer would account for the fees related to the software license element in a manner consistent with how the acquisition of other software licenses is accounted for under ASC 350-40; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. ASU 2015-05 is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. The adoption of ASU 2015-05 will not have a material impact on our consolidated and combined results of operations, financial condition, or cash flows.

In June 2014, the FASB issued ASU 2014-12, "Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force)." ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU 2014-12 is effective for annual and interim periods within those annual periods beginning after December 15, 2015. The adoption of ASU 2014-12 will not have an impact on our consolidated and combined results of operations, financial condition, or cash flows.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires an entity to recognize revenue depicting the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will also result in enhanced revenue related disclosures. In July 2015, the FASB decided to defer the effective date of ASU 2014-09 by one year and subsequently issued ASU 2015-14 "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date." As a result, this standard will be effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017. We have not yet determined the impact of ASU 2014-09 on the consolidated and combined results of operations, financial condition, or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is provided under the caption "Quantitative and Qualitative Disclosures about Market Risk" under Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 4. Controls and Procedures

Management's Evaluation of Disclosure Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the "evaluation"). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of December 31, 2015 in ensuring that (i) information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure, and (ii) such information is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission's rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2015 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Except as noted below, all other items are either inapplicable or would result in negative responses and, therefore, have been omitted.

Item 1. Legal Proceedings

From time to time, we are involved in legal, regulatory, and arbitration proceedings concerning matters arising in connection with the conduct of our business activities. We do not expect that an adverse outcome in one or more of these proceedings will have a material adverse effect on our business, results of operations, financial condition, or liquidity.

Item 1A. Risk Factors

In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the "Risk Factors" disclosed under "Item 1A. Risk Factors" of our Annual Report on Form 10-K filed with the SEC. You should be aware that these risk factors and other information may not describe every risk facing our Company. Other than as set forth below, there have been no material changes to the risk factors we have disclosed in the "Risk Factors" section of our Form 10-K filed with the SEC.

We have clients in over 100 countries, where we are subject to country-specific risks that could negatively impact our business, results of operations, and financial condition.

During the six months ended December 31, 2015 , we generated approximately 20% of our revenues outside of the United States, and we expect revenues from other countries to continue to represent a significant part of our total revenues in the future. Business and operations in individual countries are subject to changes in local government regulations and policies, including those related to tariffs and trade barriers, investments, taxation, currency exchange controls, and repatriation of earnings. Our results are also subject to the difficulties of coordinating our activities across the countries in which we are active. In addition, our operations in each country are vulnerable to changes in socio-economic conditions and monetary and fiscal policies, intellectual property protection disputes, the settlement of legal disputes through foreign legal systems, the collection of receivables through foreign legal systems, exposure to possible expropriation or other governmental actions, unsettled political conditions, possible terrorist attacks, and pandemic disease. These and other factors relating to our international operations may have a material adverse effect on our business, results of operations, and financial condition.

Our indebtedness could negatively impact our ability to raise additional capital to fund our operations and limit our ability to react to changes in the economy or our industry.

In connection with our spin-off from ADP, we entered into debt financing arrangements and borrowed $250.0 million under our 2019 term loan facility and $750.0 million under our bridge loan facility. Additionally, we entered into a $300.0 million revolving credit facility, which was undrawn as of December 31, 2015. On October 14, 2014 , we completed an offering of 3.30% senior notes with a $250.0 million aggregate principal amount due in October 2019 and 4.50% senior notes with a $500.0 million aggregate principal amount due in October 2024, the net proceeds of which, together with cash on hand, were use to repay the bridge loan facility. On December 14, 2015, we borrowed an additional $250.0 million under our 2020 term loan facility. Borrowings under the 2020 term loan facility were used for general corporate purposes, which included the repurchase of shares of the Company's common stock as part of the new return of capital plan and pursuant to the ASR. Our indebtedness could have important consequences, including the following:


•	the ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions, or other purposes may be impaired or the financing may not be available on favorable terms, or at all;


•	any failure to comply with the obligations of any of our debt instruments could result in an event of default under the agreements governing such indebtedness;


•	a portion of cash flows will be required to make payment of principal of, and interest on, our indebtedness, reducing the funds that would otherwise be available for operations, future business opportunities, and potential dividends to our stockholders;


•	our indebtedness will make us more vulnerable to competitive pressures or a downturn in our business or the economy generally; and


•	our indebtedness may limit our flexibility in responding to changing business and economic conditions.

Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If operating results are not sufficient to service our current or future indebtedness, we may be forced to take actions such as reducing or delaying business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing debt, reducing or discontinuing dividends we may pay in the future, or seeking additional equity capital. These actions may not be effected on satisfactory terms, or at all.

We are dependent on our key management, direct sales force, and technical personnel for continued success.

Our global senior management team is concentrated in a small number of key members, and our future success depends to a meaningful extent on the services of our executive officers and other key team members, including members of our direct sales force and technology staff. Generally, our executive officers and employees can terminate their employment relationship at any time. The loss of any key employees or our inability to attract or retain other qualified personnel could materially harm our business and prospects.

Effective succession planning is important to our long-term success. On December 11, 2015, we announced a leadership transition plan in which Brian P. MacDonald, who currently serves on our Board of Directors, will succeed Steven J. Anenen as Chief Executive Officer by June 30, 2016. Effective January 1, 2016, Mr. MacDonald assumed the role of President. Mr. Anenen will remain our Chief Executive Officer and a member of the Board during the transition. Failure to effectively complete the leadership transition plan and the uncertainty associated with the transition could have a material adverse effect on our business, results of operations, and financial condition and could adversely affect our ability to attract and retain other key executives.

We rely primarily on our direct sales force to sell our products and services to automotive retailers and OEMs. We expect that we will need to hire additional sales, customer service, integration and training personnel in the near-term and beyond if we are to achieve revenue growth in the future. If we fail to attract qualified and productive sales and service personnel, or if we suffer unanticipated losses of such personnel, it could have a material adverse effect on our business, results of operations, and financial condition.

Competition for qualified personnel in the technology industry is intense, and we compete for technical personnel with other technology companies that have greater financial and other resources than we do. Our future success will depend in large part on our ability to attract, retain and motivate highly qualified technical personnel, and there can be no assurance that we are able to do so. Any difficulty in hiring or retaining needed personnel, or increased costs related thereto, could have a material adverse effect on our business, results of operations, and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents a summary of common stock repurchases made during the three months ended December 31, 2015 .



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 (or Approximate Dollar Value) that May Yet Be Purchased Under the Program ⁽²⁾⁽³⁾
October 1 - 31, 2015	448	$	48.01	—	8,750,584
November 1 - 30, 2015	1,748	$	47.96	—	8,750,584
December 1 - 31, 2015	4,337,690	$	46.11	4,337,690	$	750,000,000
Total	4,339,886	$	46.11	4,337,690

(1) Pursuant to the Company's 2014 Omnibus Award Plan, shares of our common stock were withheld upon vesting of restricted stock to satisfy tax withholdings. Shares withheld for such purpose have been included within the total number of shares purchased.

(2) In December 2015, the Board of Directors authorized us to repurchase up to $1.0 billion of our common stock under a program. This authorization superseded and replaced the prior authorization by the Board of Directors which was approved on January 20, 2015 and had authorized us to repurchase up to 10.0 million shares of our common stock. We repurchased a total of approximately 1.2 million shares of our common stock under the prior authorization.

(3) The table includes the maximum numbers of shares that could have been repurchased under the prior authorization for the monthly periods ending October 31, 2015 and November 30, 2015. The dollar value of shares that may yet be purchased under the current authorization is shown for the monthly period ending December 31, 2015. This dollar value excludes shares repurchased under the ASR we entered into under the new authorization.

Item 5. Other Information

On February 2, 2016, the Company entered into a Transition and Release Agreement (the “Transition Agreement”) with Steven J. Anenen, the Company’s former President and its current Chief Executive Officer and a member of the Company’s Board of Directors. The Company and Mr. Anenen have agreed that his employment with the Company is scheduled to terminate effective as of June 30, 2016, or such earlier date as mutually agreed by the Company and Mr. Anenen and that Mr. Anenen will assist in the smooth transition of his functions as directed by the Board, including the continued transition of his former functions as President to Brian MacDonald, the Company’s newly appointed President. The Transition Agreement sets forth the terms of Mr. Anenen’s separation of service from the Company and his service during a transition period, including, among other things, his ongoing compensation and his rights to certain other payments in connection with his separation of service, the treatment of his outstanding equity awards and certain non-competition, non-solicitation and confidentiality undertakings. The foregoing is qualified in its entirety by reference to the Transition Agreement, which is filed as Exhibit 10.6 hereto and incorporated by reference herein.

Effective February 2, 2016, the Company adopted the Corporate Officer Severance Plan (the “Severance Plan”) for purposes of providing severance protections for certain officers and other key employees in the event of an involuntary termination in the absence of a change in control, other than for cause. As of February 2, 2016, there were 10 eligible participants in the Severance Plan. The Severance Plan sets forth what a participant will receive who is involuntarily terminated by the Company without cause (other than during the two-year period following the occurrence of a change in control), including the payment of base salary, annual bonus, the continued vesting of stock options, time-vested restricted stock and restricted stock units and the number of shares of stock (or cash, in the case of cash-settled awards) that the participant would have been eligible to receive based on the actual achievement of the applicable performance goals in each of the then-ongoing performance-based restricted unit programs. The foregoing is qualified in its entirety by reference to the Severance Plan, which is filed as Exhibit 10.7 hereto and incorporated by reference herein.

Item 6. Exhibits

The following exhibits are filed with this Quarterly Report on Form 10-Q or incorporated herein by reference to the document set forth next to the exhibit in the list below:

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

10.1

2014 Omnibus Award Plan

DEF 14A

1-36486

Appendix A

9/22/15

10.2

Form of Restricted Stock Unit Award Agreement under the 2014 Omnibus Award Plan (Form for Non-Employee Director)

10-Q

1-36486

10.7

11/3/2015

10.3

Form of Stock Option Grant Agreement under the 2014 Omnibus Award Plan (Form for Non-Employee Director)

10-Q

1-36486

10.8

11/3/2015

10.4

Employment Agreement, dated December 11, 2015, between CDK Global, Inc. and Brian P. MacDonald (Management Compensatory Plan)

8-K

1-36486

10.1

12/11/2015

10.5

Credit Agreement, dated December 14, 2015, between CDK Global, Inc. and Bank of America, N.A.

8-K

1-36486

10.1

12/14/2015

10.6

Transition and Release Agreement dated February 2, 2016, between CDK Global, Inc. and Steven J. Anenen

10.7

CDK Global, Inc. Corporate Officer Severance Plan (Management Compensatory Plan)

10.8

Form of Stock Option Grant Agreement under the 2014 Omnibus Award Plan (Form for Corporate Officers) (Management Compensatory Plan)

10.9

UK Tax Advantaged Sub-Plan Form of Stock Option Grant Agreement under the 2014 Omnibus Award Plan (Form for Corporate Officers) (Management Compensatory Plan)

10.10

Form of Restricted Unit Award Agreement under the 2014 Omnibus Award Plan (Form for Corporate Officers) (Management Compensatory Plan)

10.11

Form of Restricted Stock Award Agreement under the 2014 Omnibus Award Plan (Form for Corporate Officers) (Management Compensatory Plan)

10.12

Form of Performance Stock Unit Award Agreement under the 2014 Omnibus Award Plan (Form for Corporate Officers) (Management Compensatory Plan)

31.1

Certification by Steven J. Anenen pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

31.2

Certification by Alfred A. Nietzel pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

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

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

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		CDK Global, Inc. (Registrant)

Date:	February 3, 2016	/s/ Alfred A. Nietzel Alfred A. Nietzel

		Vice President, Chief Financial Officer (principal financial and accounting officer) (Title)

Exhibit 10.6

TRANSITION AND RELEASE AGREEMENT

This Transition and Release Agreement (this “ Agreement ”), by and between CDK Global, Inc., a Delaware corporation (the “ Company ”), and Steven J. Anenen (the “ Executive ”), is entered into as of February 2, 2016 (the “ Effective Date ”).

RECITALS

A. On December 10, 2015, the Executive resigned as the Company’s President, effective as of January 1, 2016.

B. The Executive continues to serve the Company as its Chief Executive Officer and is a member of the Company’s Board of Directors (the “ Board ”).

C. The Company and the Executive have agreed that the Executive’s employment with the Company is scheduled to terminate effective as of June 30, 2016, or such earlier date as mutually agreed by the parties and that the Executive shall assist in the smooth transition of the Executive’s functions as directed by the Board, including the continued transition of the Executive’s former functions as President to the Company’s newly appointed President.

D. On or before June 29, 2016, the Executive shall resign as Chief Executive Officer of the Company and shall cease to be an executive officer of the Company.

E. In connection with the Executive’s termination of employment, the Executive and the Company desire to enter into a mutually satisfactory arrangement concerning, among other things, the terms of the Executive’s separation from service with the Company, the terms of the Executive’s service during a transition period and other matters related thereto.

F. This Agreement contains a general release of claims that the Executive may have against the Company and its affiliates, and by delivery hereof, the Executive is hereby notified and acknowledges his understanding that the Executive’s execution of this Agreement is required for the Executive to receive any of the payments and benefits set forth herein.

G. The parties intend for this Agreement to supersede all prior agreements that the Executive has with the Company.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the parties hereto agree as follows:

Section 1. Employment Status.

(a) General. The Company and the Executive hereby agree that, on or before June 29, 2016, as and when requested by the Company, the Executive shall resign as Chief Executive

Officer of the Company and shall cease to be an executive officer of the Company. The Executive hereby acknowledges and agrees that his separation from service from the Company and from any other position he holds as an officer, director, committee member, or other service provider of the Company and its subsidiaries will become effective as of the close of business on June 30, 2016 (the “ Anticipated Date of Termination ”); provided , that such separation from service may occur earlier upon the Executive’s death, a termination due to his Disability, as defined in the Company’s 2014 Omnibus Award Plan (the “ Omnibus Plan ”), a termination by mutual agreement of the parties, or a termination by the Company for Cause, as defined in the Omnibus Plan (in any case, an “ Early Termination ,” and the Executive’s ultimate date of such separation from service, the “ Termination Date ”). Except as otherwise expressly set forth herein, the Executive shall not represent himself after the Termination Date as being an employee, officer, director, agent, or representative of the Company or any of its subsidiaries for any purpose. The Termination Date shall be the termination date of the Executive’s employment for purposes of participation in and coverage under all benefit plans and programs sponsored by or through the Company, except as otherwise provided herein. The terms and conditions set forth herein shall exclusively govern the Executive’s continued employment with the Company from and after the Effective Date.

(b) Duties. During the period commencing on the Effective Date and ending on the Termination Date (the “ Transition Period ”), the Executive shall continue to perform such duties as assigned by the Company consistent with his then-current position, including without limitation transitional matters relating to the transition of his duties to his successor.

(c) Compensation and Benefits. During the Transition Period, the Executive will continue to receive his current base salary, to be eligible to participate in the health insurance, deferred compensation, and other benefit plans of the Company in which he is currently eligible to participate, and to receive the perquisites and other personal benefits currently provided to him, subject in all cases to the discretion of the Company to amend or terminate any or all of such plans or arrangements at any time and from time to time in accordance with the terms thereof. The Executive will also remain eligible to earn an annual cash bonus for fiscal year 2016 in accordance with the terms and conditions of the Company’s bonus program that are applicable to the Executive for such year (the “ FY16 Bonus ”).

(d) Post-Employment Cooperation. Upon reasonable request and notice following the Termination Date, the Executive shall cooperate with the Company to answer, to the extent of his best knowledge and information, any questions or provide any information that the Company reasonably requires, and to cooperate in any other manner reasonably requested by the Company, including in preparing for any trials, hearings, or other proceedings, and providing truthful testimony in connection therewith, in each case relating to his time of employment with the Company and the business of the Company. The Company shall reimburse him for any reasonable, out-of-pocket expenses incurred by him in connection with his compliance with this Section 1(d) pursuant to the Company’s expense reimbursement policy. The Company agrees that the Executive’s obligations in this Section 1(d) shall not unreasonably interfere with his ongoing business and personal activities. The Executive’s obligations hereunder shall survive either (i) in perpetuity with respect to cooperation in connection with litigations (or similar out-of-court disputes) or governmental or quasi-governmental audits, investigations, or other similar proceedings, or (ii) for

twenty-four (24) months following the Termination Date with respect to cooperation in connection with any other matter.

Section 2. Separation Payments.

(a) Severance Payments. In consideration for and subject to the Executive’s (i) timely execution and non-revocation of this Agreement and the release and waiver of claims set forth on Exhibit A hereto and made a part hereof (the “ Second General Release ”), (ii) continued service to the Company through the earlier to occur of the Anticipated Date of Termination and an Early Termination by the Company without Cause or due to the Executive’s death or Disability, and (iii) continued compliance with all of his obligations to the Company hereunder (including under the Restrictive Covenants Agreement (as defined below) attached hereto and made a part hereof) and under all applicable Company policies, the Company will pay or provide the Executive the following severance benefits: (I) a cash severance benefit equal to two (2) times the sum of (x) the Executive’s current annual base salary and (y) the average of the Executive’s annual cash bonuses for the two most recently completed fiscal years ending on or prior to the Termination Date, such severance benefit to be paid in substantially equal installments in accordance with the Company’s regular payroll practices during the twenty-four (24) month period commencing on the Termination Date (the “ Severance Period ”), (II) subject to the Executive’s timely election and continuation of continuation coverage under the Company’s health insurance benefit plans, pursuant to the statutory scheme commonly known as “COBRA,” the Company will pay to the Executive a monthly cash payment during his period of COBRA continuation coverage in an amount equal to the same percentage of the Executive’s health insurance premium that the Company pays or provides to active employees of Company in respect of health insurance premiums for the same level of coverage under the Company’s health insurance benefit plans; provided, that the Company’s obligation to provide such cash payments will terminate if the Executive becomes eligible for health insurance coverage under another employer’s plans, (III) continued eligibility to vest during the Severance Period in the Executive’s performance stock unit awards currently outstanding under the Omnibus Plan in accordance with their terms, without regard to any provision for the proration of such awards upon a retirement, (IV) continued vesting in the Executive’s stock options currently outstanding under the Omnibus Plan (other than any such stock options granted during fiscal year 2016, which shall be forfeited for no consideration in accordance with their terms), in accordance with Section 1(f) of the Company’s form of Stock Option Grant Agreement (as filed with the Securities and Exchange Commission on November 13, 2014, as an exhibit to the Company’s Quarterly Report on Form 10-Q), and the extended exercise period set forth in Section 2(e) of such form of grant agreement shall apply to such stock options, and (V) reimbursement of the reasonable, documented legal fees incurred by the Executive in connection with the negotiation, drafting, and execution of this Agreement (including exhibits), which reimbursement shall not exceed twenty-five hundred dollars ($2,500), provided that the Executive timely submits for reimbursement within thirty (30) days following the Termination Date, and which reimbursement shall be paid within thirty (30) days following the Company’s receipt of such submission.

(b) No Further Benefits. The Executive hereby acknowledges and agrees that the payments provided pursuant to this Section 2 are in full discharge of any and all liabilities and obligations of the Company to him, monetarily or with respect to employee benefits or otherwise,

including but not limited to any and all obligations arising under any written or oral employment agreement, policy, plan, or procedure of the Company (including without limitation any severance plan of the Company) or any understanding or arrangement between the Executive and the Company. Notwithstanding the foregoing, the Executive shall receive as soon as reasonably practicable following the Termination Date the following accrued benefits: (i) any base salary earned but unpaid through the Termination Date, payable on the next regular payroll date of the Company following the Termination Date, (ii) a payment in full satisfaction of the Executive’s accrued but unused paid time off through the Termination Date, payable on the next regular payroll date of the Company following the Termination Date, (iii) reimbursement for all unreimbursed business expenses properly incurred by the Executive in accordance with Company policy prior to the Termination Date and timely submitted for reimbursement in accordance with the Company’s business expense reimbursement policy, and (iv) all benefits accrued and vested up to the Termination Date under all other employee benefit plans of the Company in which the Executive participates (except for any plan that provides for severance, separation pay, or termination benefits) in accordance with the terms of such plans, including, for the avoidance of doubt, his rights to fully vest, as of the Date of Termination, in the 33,189 restricted stock units granted to him pursuant to the Omnibus Plan on November 18, 2014, which shall settle in accordance with their terms (collectively, the “ Accrued Benefits ”).

(c) Taxes. The payments referenced herein, including the severance benefits set forth in Section 2, shall be subject to reduction for all amounts required or authorized to be withheld by law, including all applicable U.S. federal, state, and local withholding taxes.

(d) Early Termination. In the event of an Early Termination by the Company for Cause or by the Executive for any reason, then following such Early Termination, other than the Accrued Benefits, the Executive shall not be entitled to any further payments or benefits from the Company, including without limitation any compensation and benefits in Section 1(c) and the payments and benefits payable pursuant to Section 2(a) above. For the avoidance of doubt, upon an Early Termination by the Company without Cause or due to the Executive’s death or Disability, the Executive shall remain entitled to the severance payments and benefits set forth in Section 2(a) above, subject to the conditions set forth therein, and shall, subject to the same conditions for severance benefits provided in Section 2(a) above, be entitled to receive either (i) in the case of an Early Termination by the Company without Cause (other than due to death or Disability), all compensation and benefits to which he would have been entitled pursuant to Section 1(c) above had he remained employed through the Anticipated Date of Termination, or (ii) in the case of an Early Termination due to death or Disability, the FY16 Bonus, prorated to reflect the portion of the fiscal year worked through the Termination Date.

Section 3. Release and Waiver of Claims.

(a) Definitions. As used in this Agreement, the term “claims” will include all claims, covenants, warranties, promises, undertakings, actions, suits, causes of action, obligations, debts, accounts, attorneys’ fees, judgments, losses, and liabilities, of whatsoever kind or nature, in law, equity, or otherwise.

(b) Release. For and in consideration of the payments and benefits described in Section 2 above, and other good and valuable consideration, the Executive, for and on behalf of himself and his heirs, administrators, executors, and assigns, effective the date hereof, does fully and forever release, remise, and discharge the Company and its successors and assigns, together with their respective officers, directors, partners, shareholders, employees, agents, subsidiaries, and affiliates (collectively, the “ Releasees ”) from any and all claims whatsoever up to the date hereof that the Executive had, may have had, or now has against the Releasees, whether known or unknown, for or by reason of any matter, cause, or thing whatsoever, including any claim arising out of or attributable to his employment or the termination of his employment with the Company, whether for tort, breach of express or implied employment contract, intentional infliction of emotional distress, wrongful termination, unjust dismissal, defamation, libel, or slander, or under any federal, state, or local law dealing with discrimination based on age, race, sex, national origin, handicap, religion, disability, or sexual orientation, and any claim for money, damages, attorneys’ fees, costs, and injunctive or other relief. This release of claims includes, but is not limited to, all claims arising under Title VII of the Civil Rights Act, the Rehabilitation Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Family Medical Leave Act, the Equal Pay Act, the Labor Management Relations Act, the Sarbanes Oxley Act, the Health Insurance Portability and Accountability Act, the Occupational Safety and Health Act, the Employee Retirement Income Security Act, the Illinois Human Rights Act (775 ILCS § 5/1 et seq. ), the Illinois Wage Payment and Collection Act (820 ILCS § 115/1 et seq. ), the Illinois Whistleblower Act (740 ILCS § 174/1 et seq. ), the retaliation provisions of the Illinois Workers’ Compensation Act (820 ILCS § 305/1 et seq. ), the Cook County Human Rights Ordinance, the Illinois Human Rights Act (775 ILCS 5/1 et seq. ), the Right to Privacy in the Workplace Act, the Illinois Health and Safety Act (820 ILCS § 55/1 et seq. ), the Illinois Worker Adjustment and Retraining Notification Act (820 ILCS § 65/1 et seq .), the Illinois One Day Rest in Seven Act (820 ILCS § 140/1 et seq. ), the Illinois Employment Contract Act (820 ILCS § 15/1 et seq .), the Illinois Labor Dispute Act (820 ILCS § 5/1 et seq. ), and the Victims’ Economic Security and Safety Act (820 ILCS § 180/1 et seq .), each as may be amended from time to time, and all other federal, state, local laws, and non–U.S. laws, the common law, and any other purported restriction on an employer’s right to terminate the employment of employees. The Executive intends that the release contained herein shall constitute a general release of any and all claims that he may have against the Releasees to the fullest extent permissible by law, including any rights to participate in, or collect damages in connection with, a collective action brought in respect of any such released claims.

(c) No Claims. The Executive acknowledges and agrees that as of the date he executes this Agreement, he has no knowledge of any facts or circumstances that give rise or could give rise to any claims under any of the laws listed in the preceding paragraph, and that except as provided in Section 2(b), the Company owes him no other wages, commissions, bonuses, vacation pay, or other compensation or payments of any nature.

(d) Preservation of Rights. Notwithstanding the foregoing, nothing in this Agreement shall be a waiver of (i) the Executive’s rights with respect to payment of amounts under this Agreement or (ii) any claims that cannot be waived by law including, without limitation, the right bring an administrative charge with, or to participate in an investigation conducted by, or to participate in a proceeding involving, the Equal Employment Opportunity Commission or other

comparable state or local administrative agency, although the Executive waives any right to monetary relief related to such a claim, and claims under the Illinois Workers’ Compensation Act (820 ILCS § 305/1 et seq. ) (other than the retaliation provisions thereof), the Illinois Workers’ Occupational Diseases Act (820 ILCS § 310/1 et seq. ), the Employee Credit Privacy Act (820 ILCS § 70/1 et seq .), or the Illinois Unemployment Insurance Act (820 ILCS § 405/1 et seq .).

(e) Acknowledgement of Full and Final Release. The Executive acknowledges and agrees that by virtue of the foregoing, he has waived any relief available to him (including without limitation, monetary damages, equitable relief, and reinstatement) under any of the claims or causes of action waived in this Section 3. The Executive agrees, therefore, that he will not accept any award or settlement from any source or proceeding (including but not limited to any proceeding brought by any other person or by any government agency) with respect to any claim or right waived in this Agreement. The Executive agrees further that this Agreement may be pleaded as a full defense to any action, suit, arbitration, or other proceeding covered by the terms hereof that is or may be initiated, prosecuted or maintained by the Executive or his descendants, dependents, heirs, executors, administrators, or permitted assigns.

(f) Rights to Indemnification. Notwithstanding anything to the contrary herein, following the Termination Date, Executive shall continue to enjoy rights of indemnification from the Company against third-party claims consistent with the indemnification protections available from time to time to active officers and directors of the Company as if he continued to be an active officer of the Company. For the avoidance of doubt and without limiting any other exclusions from such policy, such rights to indemnification shall not protect Executive against damages or losses incurred by him in connection with any claims arising from his acts of gross negligence, willful misconduct, fraud, or concealment.

Section 4. Knowing and Voluntary Waiver.

The Executive expressly acknowledges and agrees that he—

(a) Is able to read the language, and understand the meaning and effect, of this Agreement;

(b) Has no physical or mental impairment of any kind that has interfered with his ability to read and understand the meaning of this Agreement or its terms, and that he is not acting under the influence of any medication, drug, or chemical of any type in entering into this Agreement;

(c) Is agreeing to the terms of the release contained in this Agreement because the Company has agreed to provide him with the severance payments and benefits provided by this Agreement, which the Company has agreed to provide because of his agreement to accept it in full settlement of all possible claims that he might have or ever have had that are released hereunder;

(d) Acknowledges that, but for his execution of this Agreement, he would not be entitled to the severance payments and benefits provided by this Agreement;

(e) Was advised to consult with his attorney regarding the terms and effect of this Agreement; and

(f) Has signed this Agreement knowingly and voluntarily.

Section 5. No Suit.

The Executive represents and warrants that he has not previously filed, and to the maximum extent permitted by law agrees that he will not file, a complaint, charge, or lawsuit against any of the Releasees regarding any of the claims released herein. If, notwithstanding this representation and warranty, the Executive has filed or files such a complaint, charge, or lawsuit, the Executive agrees that he shall cause such complaint, charge, or lawsuit to be dismissed with prejudice and shall pay any and all costs required in obtaining dismissal of such complaint, charge, or lawsuit, including without limitation the attorneys’ fees of any of the Releasees against whom the Executive has filed such a complaint, charge, or lawsuit.

Section 6. Non-Admission.

Nothing contained in this Agreement will be deemed or construed as an admission of wrongdoing or liability on the part of the Executive or the Company.

Section 7. No Re-Employment.

The Executive hereby agrees to waive any and all claims to re-employment with the Company. The Executive affirmatively agrees not to seek further employment with the Company.

Section 8. Confidentiality.

The terms and conditions of this Agreement are and shall be deemed to be confidential, and shall not be disclosed by the Executive to any person or entity without the prior written consent of the Company, except if required by law, and to the Executive’s accountants, attorneys, and immediate family, provided that, to the maximum extent permitted by applicable law, rule, code, or regulation, they agree to maintain the confidentiality of the Agreement.

Section 9. Restrictive Covenants.

(a) Restrictive Covenants Agreement. The Executive hereby acknowledges and reaffirms his continuing obligations to the Company and its affiliates pursuant to that certain Restrictive Covenants Agreement previously entered into by the Executive and attached hereto as Exhibit B , which agreement is incorporated herein and made a part hereof (the “ Restrictive Covenants Agreement ”). The Restrictive Covenants Agreement shall continue to apply and remain in effect following the Effective Date (and following the Termination Date) in accordance with its terms; provided, however, that (i) the Executive’s covenant not to compete, as set forth in Section 3 of the Restrictive Covenants Agreement, shall survive until, and shall expire upon, the earlier of (x) the twenty-four (24) month anniversary of the Termination Date and (y) a Change in Control (as defined in the Omnibus Plan), and (ii) the Executive’s covenants not to solicit clients or employees or to interfere with clients, business partners, and vendors, as set forth in Sections 4 and

5 of the Restrictive Covenants Agreement shall survive until, and shall expire upon, the twenty-four (24) month anniversary of the Termination Date.

(b) Non-Disparagement. The Executive hereby agrees not to defame, disparage, or criticize the Company or any of its affiliates, or any of their respective products, services, finances, financial condition, or capabilities, or any other aspect of or any of their respective businesses, or any of their respective former or existing employees, managers, directors, officers, shareholders, or agents, in any medium to any person or entity, without limitation in time; provided, that the Executive may confer in confidence with his legal representative and make truthful statements as required by law. The Company shall instruct its directors and officers to not disparage the Executive, in any medium to any person or entity, without limitation in time; provided, that the Company shall not be required to instruct its directors and officers to refrain from conferring in confidence with their respective legal representatives or the Company’s legal representatives or making truthful statements as required by law.

(c) Acknowledgement. The Executive acknowledges and agrees that his continued compliance with the terms of the Restrictive Covenants Agreement, as modified hereby, and Section 9(b) is a condition to receiving the Severance Benefits hereunder.

Section 10. Successors and Assigns.

The parties acknowledge and agree that this Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors, and permitted assigns.

Section 11. Severability.

If any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void, or unenforceable, such provision shall be of no force and effect. The illegality or unenforceability of such provision, however, shall have no effect upon and shall not impair the enforceability of any other provision of this Agreement.

Section 12. Construction.

This Agreement shall be deemed drafted equally by both of the parties hereto. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections, or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary: (a) the plural includes the singular, and the singular includes the plural; (b) “and” and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”; (d) “includes” and “including” are each “without limitation”; and (e) “herein,” “hereof,” “hereunder,” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section, or subsection.

Section 13. Notices. Any notice, request, claim, demand, document, and other communication hereunder to any party hereto shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or sent by nationally recognized overnight courier, or certified or registered mail, postage prepaid, to the following address (or at any other address as any party hereto shall have specified by notice in writing to the other party hereto):

(a) If to the Company:

CDK Global, Inc.

1950 Hassell Road

Hoffman Estates, IL 60169

Fax: (847) 839-2604

Attention: General Counsel

and a copy to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
Fax: (212) 757-3990
Attention: Lawrence I. Witdorchic

(b) If to the Executive, at his most recent address on the payroll records of the Company.

and a copy to:

Schuyler, Roche & Crisham, P.C.
Two Prudential Plaza
180 North Stetson Avenue
Suite 3700
Chicago, IL 60601
Fax: (312) 565-8300
Attention: Thomas G. Draths

Section 14. Entire Agreement.

This Agreement constitutes the entire understanding and agreement between the Executive and the Company regarding the termination of the Executive’s employment. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings, and agreements between the Executive and the Company relating to the subject matter of this Agreement.

Section 15. Amendments; Waivers.

This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by the Executive and a duly authorized officer of Company (other than the Executive) that expressly identifies the amended provision of this Agreement. By an instrument in writing similarly executed and similarly identifying the waived compliance, the Executive or a duly authorized officer of the Company may waive compliance by the other party or parties with any provision of this Agreement that such other party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure to comply or perform. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

Section 16. Governing Law.

This Agreement shall be governed, construed, interpreted, and enforced in accordance with the substantive laws of the State of Illinois, without reference to the principles of conflicts of law of Illinois or any other jurisdiction, and where applicable, the laws of the United States.

Section 17. Dispute Resolution.

Except with respect to claims for injunctive relief to enforce the terms of the Restrictive Covenants Agreement or Section 9(b) hereof, or to enter judgment on an arbitration award pursuant to this Section 17, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted in Chicago, Illinois, before a single arbitrator, in accordance with the rules of JAMS that are then in effect. Such arbitration shall be undertaken in accordance with the JAMS Expedited Procedures, to the extent applicable. Following the conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law. It is mutually agreed that the written decision of the arbitrator shall be valid, binding, final, and non-appealable; provided, however, that the parties hereto agree that the arbitrator shall not be empowered to award punitive damages against any party to such arbitration. Unless and only to the extent prohibited by applicable law, the parties agree to preserve the confidentiality of all aspects of any arbitration proceedings, findings, and decisions (whether by arbitrator or court). To the extent permitted by law, the arbitrator’s fees and expenses will be borne equally by each party. In the event that an action is brought to enforce the provisions of this Agreement pursuant to this Section 17, each party shall pay his or its own attorneys’ fees and expenses regardless of whether there is a prevailing party in the opinion of the arbitrator deciding such action or the court in which any such arbitration award is entered; provided, that the arbitrator may in its discretion award costs, including reasonable legal fees and expenses, to either party if it determines that to be appropriate, and in all events the Company shall reimburse the Executive for his reasonable legal fees and expenses if the Executive prevails on at least one material issue. The parties agree that any claims for injunctive relief to enforce the terms of the Restrictive Covenants Agreement or Section 9(b) hereof shall be brought, and any judgment may be entered for an arbitration award hereunder, solely in the U.S. District Court for the Northern District of Illinois. Each party expressly and irrevocably consents and submits to the jurisdiction and venue of each such court in connection with any such legal proceeding, including to enforce any settlement, order or award, and such party

agrees to accept service of process by the other party or any of its agents in connection with any such proceeding. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTY IN RESPECT OF HIS OR ITS RIGHTS OR OBLIGATIONS HEREUNDER.

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[Signatures to appear on following page]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below.

CDK GLOBAL, INC.

/s/ Lee J. Brunz

By: Lee J. Brunz

Its: Vice President

/s/ Steven J. Anenen

Steven J. Anenen

Dated: February 2, 2016

Exhibit A

SECOND GENERAL RELEASE

Section 1. Opportunity for Review; Acceptance.

The Executive shall have from the Effective Date until seventh (7 ^th ) day following the Termination Date, but in no event less than twenty-one (21) days following the Effective Date (the “ Second General Release Review Period ”), to review and consider this Second General Release. To accept this Second General Release and the terms and conditions contained herein, the Executive must execute and date this Second General Release where indicated below and return the executed copy of the Second General Release to the Company prior to the expiration of the Second General Release Review Period, but no earlier than the Termination Date, in accordance with the notice provisions set forth in Section 13 of the Agreement. Notwithstanding anything contained herein to the contrary, this Second General Release will not become effective or enforceable for a period of seven (7) calendar days following the date of its execution and delivery to the Company (the “ Second General Release Revocation Period ”), during which time the Executive may further review and consider the Second General Release and revoke his acceptance of this Second General Release by notifying the Company in writing. To be effective, such revocation must be received no later than 5:00 p.m., Central Time, on the last day of the Second General Release Revocation Period. Provided that the Second General Release is timely executed and the Executive has not timely revoked it, the eighth (8 ^th ) day following the date on which the Second General Release is executed and delivered to the Company shall be its effective date (the “ Second General Release Effective Date ”). In the event of the Executive’s failure to timely execute and deliver this Second General Release or his subsequent revocation of this Second General Release during the Second General Release Revocation Period, this Second General Release will be null and void and of no effect, and the Executive shall not be entitled to any payments or benefits under the Agreement that are conditioned upon the execution of a release of claims (which for purposes of clarification shall be any and all payments and benefits otherwise owing to the Executive thereunder following the Termination Date, other than Accrued Benefits).

Section 2. Release and Waiver of Claims.

(a) Definitions. As used in this Second General Release, the term “claims” will include all claims, covenants, warranties, promises, undertakings, actions, suits, causes of action, obligations, debts, accounts, attorneys’ fees, judgments, losses, and liabilities, of whatsoever kind or nature, in law, equity, or otherwise.

(b) Release. For and in consideration of the payments and benefits described in Section 2 of the Agreement, and other good and valuable consideration, the Executive, for and on behalf of himself and his heirs, administrators, executors, and assigns, effective the date hereof, does fully and forever release, remise, and discharge the Releasees from any and all claims whatsoever up to the date hereof that the Executive had, may have had, or now has against the Releasees, whether known or unknown, for or by reason of any matter, cause, or thing whatsoever, including any claim arising out of or attributable to his employment or the termination of his employment with the Company, whether for tort, breach of express or implied employment contract, intentional infliction of emotional distress, wrongful termination, unjust dismissal, defamation, libel, or slander, or under any federal, state, or local law dealing with discrimination based on age,

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race, sex, national origin, handicap, religion, disability, or sexual orientation, and any claim for money, damages, attorneys’ fees, costs, and injunctive or other relief. This release of claims includes, but is not limited to, all claims arising under the Age Discrimination in Employment Act (“ ADEA ”), Title VII of the Civil Rights Act, the Older Workers Benefit Protection Act, the Rehabilitation Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Family Medical Leave Act, and the Equal Pay Act the Labor Management Relations Act, the Sarbanes Oxley Act, the Health Insurance Portability and Accountability Act, the Occupational Safety and Health Act, the Employee Retirement Income Security Act, the Illinois Human Rights Act (775 ILCS § 5/1 et seq. ), the Illinois Wage Payment and Collection Act (820 ILCS § 115/1 et seq. ), the Illinois Whistleblower Act (740 ILCS § 174/1 et seq. ), the retaliation provisions of the Illinois Workers’ Compensation Act (820 ILCS § 305/1 et seq. ), the Cook County Human Rights Ordinance, the Illinois Human Rights Act (775 ILCS 5/1 et seq. ), the Right to Privacy in the Workplace Act, the Illinois Health and Safety Act (820 ILCS § 55/1 et seq. ), the Illinois Worker Adjustment and Retraining Notification Act (820 ILCS § 65/1 et seq .), the Illinois One Day Rest in Seven Act (820 ILCS § 140/1 et seq. ), the Illinois Employment Contract Act (820 ILCS § 15/1 et seq .), the Illinois Labor Dispute Act (820 ILCS § 5/1 et seq. ), and the Victims’ Economic Security and Safety Act (820 ILCS § 180/1 et seq .), each as may be amended from time to time, and all other non–U.S., federal, state, and local laws, the common law, and any other purported restriction on an employer’s right to terminate the employment of employees. The Executive intends that the release contained herein shall constitute a general release of any and all claims that he may have against the Releasees to the fullest extent permissible by law.

(c) No Claims. The Executive acknowledges and agrees that as of the date he executes this Second General Release, he has no knowledge of any facts or circumstances that give rise or could give rise to any claims under any of the laws listed in the preceding paragraph, and that except as provided in Section 2(b) of the Agreement, the Company owes him no other wages, commissions, bonuses, vacation pay, or other compensation or payments of any nature.

(d) ADEA Release. BY EXECUTING THIS SECOND GENERAL RELEASE, THE EXECUTIVE UNDERSTANDS THAT HE IS SPECIFICALLY RELEASING ALL CLAIMS RELATING TO HIS EMPLOYMENT AND ITS TERMINATION UNDER ADEA, A UNITED STATES FEDERAL STATUTE THAT, AMONG OTHER THINGS, PROHIBITS DISCRIMINATION ON THE BASIS OF AGE IN EMPLOYMENT AND EMPLOYEE BENEFIT PLANS.

(e) Preservation of Rights. Notwithstanding the foregoing, nothing in this Second General Release shall be a waiver of (i) the Executive’s rights with respect to payment of amounts under the Agreement or (ii) any claims that cannot be waived by law including, without limitation, the right bring an administrative charge with, or to participate in an investigation conducted by, or to participate in a proceeding involving, the Equal Employment Opportunity Commission or other comparable state or local administrative agency, although the Executive waives any right to monetary relief related to such a claim, and any claims under the Illinois Workers’ Compensation Act (820 ILCS § 305/1 et seq. ) (other than the retaliation provisions thereof), the Illinois Workers’ Occupational Diseases Act (820 ILCS § 310/1 et seq. ), the Employee Credit Privacy

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Act (820 ILCS § 70/1 et seq .), or the Illinois Unemployment Insurance Act (820 ILCS § 405/1 et seq .).

(f) Acknowledgement of Full and Final Release. The Executive acknowledges and agrees that by virtue of the foregoing, he has waived any relief available to him (including without limitation, monetary damages, equitable relief, and reinstatement) under any of the claims or causes of action waived in this Section 2. The Executive agrees, therefore, that he will not accept any award or settlement from any source or proceeding (including but not limited to any proceeding brought by any other person or by any government agency) with respect to any claim or right waived in the Agreement or this Second General Release. The Executive agrees further that the Agreement and this Second General Release may be pleaded as a full defense to any action, suit, arbitration, or other proceeding covered by the terms hereof that is or may be initiated, prosecuted or maintained by the Executive or his descendants, dependents, heirs, executors, administrators, or permitted assigns.

(g) Rights to Indemnification. Notwithstanding anything to the contrary herein, following the Termination Date, Executive shall continue to enjoy rights of indemnification from the Company against third-party claims consistent with the indemnification protections available from time to time to active officers and directors of the Company as if he continued to be an active officer of the Company. For the avoidance of doubt and without limiting any other exclusions from such policy, such rights to indemnification shall not protect Executive against damages or losses incurred by him in connection with any claims arising from his acts of gross negligence, willful misconduct, fraud, or concealment.

Section 3. Knowing and Voluntary Waiver.

The Executive expressly acknowledges and agrees that he—

(a) Is able to read the language, and understand the meaning and effect, of the Agreement and this Second General Release;

(c) Is agreeing to the terms of the release contained in the Agreement and this Second General Release because the Company has agreed to provide him with the severance payments and benefits provided by the Agreement, which the Company has agreed to provide because of his agreement to accept it in full settlement of all possible claims that he might have or ever have had that are released hereunder;

(d) Acknowledges that, but for his execution of the Agreement and this Second General Release, he would not be entitled to the severance payments and benefits provided by the Agreement;

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(e) Understands that, by entering into the Agreement and this Second General Release, he does not waive rights or claims under ADEA that may arise after the date on which he executes this Second General Release;

(f) Had or could have had the entire Second General Release Review Period in which to review and consider this Second General Release, and that if he executes this Second General Release prior to the end of the Second General Release Review Period, he has voluntarily and knowingly waived the remainder of the Second General Release Review Period;

(g) Has or had the entire Second General Release Revocation Period in which to revoke his execution of this Second General Release, and that if he does not revoke such execution prior to the Second General Release Effective Date, he has knowingly and voluntarily agreed to this Second General Release’s becoming effective;

(h) Was advised to consult with his attorney regarding the terms and effect of the Agreement and this Second General Release; and

(i) Has signed the Agreement and this Second General Release knowingly and voluntarily.

Section 4. No Suit.

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IN WITNESS WHEREOF, the Executive has executed this Second General Release as of the date set forth below.

Steven J. Anenen

Dated:

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Exhibit B

September 9, 2015

Restrictive Covenants Agreement

I am currently employed by CDK Global, LLC, or one of its subsidiaries or affiliated companies (collectively, “CDK”) as an executive employee who participates in policy decisions and enjoys substantial compensation and benefits from CDK, including participation in its 2014 Omnibus Award Plan, and I have had and will have access to CDK’s Confidential Information, proprietary information, and trade secrets about CDK’s operations, systems, techniques, software, and processes, its Clients, Business Partners, Vendors, and other unique trade and business methods, all of which are valuable assets of CDK that are developed at great effort and expense to CDK. I also have had or will have significant contact with CDK’s current and prospective Clients, Business Partners, and/or Vendors in order to develop CDK’s goodwill and client relations so that I can promote CDK’s interests and objectives, and I understand that CDK has invested and will invest a significant amount of time and financial resources to develop my skills to assist me in performing my job duties for CDK.

I understand that CDK is a profit-generating business operating in a highly competitive business environment and that it has a valid interest in protecting its valuable assets, including its Confidential Information, proprietary information and trade secrets, its goodwill and business relationships with its Clients, Vendors, and employees, the specialized training of its employees, and I recognize that my use of CDK’s valuable assets, directly or indirectly, against or in competition with CDK, during and after my employment, will result in irreparable harm to CDK. Accordingly, I understand that this Agreement is meant to limit reasonably and fairly my competition during employment and following the end of my employment, and to define the corresponding obligations between me and CDK regarding: (1) unfair competition, (2) the solicitation of Clients for or on behalf of CDK’s competitors, (3) the solicitation of CDK’s employees, and (4) the treatment of CDK’s proprietary information, Confidential Information, and trade secrets.

NOW, THEREFORE, in consideration of my continuing employment with CDK, CDK’s disclosure to me of its proprietary information, Confidential Information, and trade secrets to allow me to perform my duties for CDK, my inclusion in CDK’s 2014 Omnibus Award Plan, the mutual benefits conferred herein, and for other good and valuable consideration (the receipt and sufficiency of all of which I hereby acknowledge), I agree as follows:


1.	Definitions.

a. “Business of CDK” CDK is a global provider of technology-based solutions and related products and services (including, without limitation, integrated dealer management systems, digital advertising and marketing services, network and telephony solutions, implementation and training services, and other business management solutions) to auto, truck, motorcycle, marine, recreational vehicle, heavy equipment, and other motor vehicle manufacturers, distributors, and retailers.

b. “Business Partners” means any individual, corporation, limited liability company, partnership, joint venture, association, or other entity, regardless of form, that is or has been in a commercial or business relationship with CDK (excluding Clients and Vendors), including, without limitation, (i) referral partners, resellers, brokers, distributors, licensees, franchisees and marketing partners, (ii) implementation, integration and development partners, (iii) co-investors and joint venture partners, and (iv) any other individual or entity whose products or services CDK purchases, acquires or licenses for use with, or redistribution to, a third party (including Clients).

c. “Clients” means any individual, corporation, limited liability company, partnership, joint venture, association, or other entity, regardless of form, or government entity for whom CDK provided or provides products or services in connection with the Business of CDK or whom CDK has actively solicited in connection with the Business of CDK.

d. “Competing Business” means any individual (including me), corporation, limited liability company, partnership, joint venture, association, or other entity, regardless of form, that is engaged in any business or enterprise that is the same as, or substantially the same as, the Business of CDK for that part of the business in which I have worked or to which I have been exposed during my employment with CDK

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(regardless of whether I worked only for a particular segment of that part of the business in which I worked-for example, business segments based on the number of employees a Client has or a particular class of business using an CDK product or service).

e. “Confidential Information” means information and the compilation of information known by me because of my employment at CDK that is created, compiled, or gathered by CDK or its agents and is related to the Business of CDK, that is valuable to CDK, and which CDK endeavors to protect from disclosure or use by its competitors and others who could benefit from its use. Assuming the foregoing criteria are met, Confidential Information includes but is not limited to information about: CDK’s operations, products, and services; research and development of CDK products and services; CDK’s intellectual property; Creative Works, including all publications, products, applications, processes, and software in any stage of development; names and other listings of current or prospective Clients, Business Partners, and Vendors (including contact information that may be compiled in computer databases that are not owned or controlled by CDK such as address books, personal digital assistants, smart phones, and social and business websites); proposals made to current or prospective Clients, Business Partners, and Vendors or other information contained in offers or proposals to such Clients, Business Partners, and Vendors; the terms of any arrangements or agreements with Clients, Business Partners, and Vendors, including the amounts paid for such services or how pricing was developed by CDK, the implementation of Client-specific projects, the identity of Business Partners and Vendors, and Business Partner and Vendor pricing information, the composition or description of future services that are or may be provided by CDK; CDK’s financial, marketing, and sales information; and technical expertise and know-how developed by CDK, including the unique manner in which CDK conducts its business. Confidential Information shall also include any information disclosed to CDK by a third party (including, without limitation, current or prospective Clients, Business Partners, and Vendors) which I understand that CDK is reasonably obliged to treat as confidential. This definition of Confidential Information excludes information that is or becomes known or generally available in the public domain other than through my act or failure to act. This definition of Confidential Information and the use of the term Confidential Information in this Agreement are not meant to limit CDK’s rights under applicable trade secrets laws, and CDK specifically reserves all of its rights under all applicable laws concerning trade secrets.

f. “Creative Works” means any and all works of authorship including, for example, written documents, spreadsheets, graphics, designs, trademarks, service marks, algorithms, computer programs or code, protocols, formulas, mask works, brochures, presentations, photographs, music or compositions, manuals, reports, and compilations of various elements, whether or not patentable or registrable under copyright, trademark, or similar domestic and international laws.

g. “Vendors” means any individual, corporation, limited liability company, partnership, joint venture, association, or other entity, regardless of form, or government entity that supplies materials or services to CDK for internal use.

Duties and Best Efforts. I agree to provide to CDK and its Clients services related to the Business of CDK, as directed by CDK in its sole discretion. During employment, I agree to devote my full time and best efforts to CDK, not to provide to CDK’s Clients or CDK’s competitors the same or similar services or products as those provided to CDK other than on behalf of CDK, and not to engage in any other employment, consultant, or advisory relationship that is the same as, similar to, or related to my duties with CDK or the Business of CDK or that otherwise creates a conflict of interest with CDK. I also agree that I am prohibited from accessing any of CDK’s computer systems, servers, drives, or databases for any competitive or conflicting purpose and that any authorization for such access is revoked and prohibited by CDK once I engage in any competitive or conflicting activities or take any material steps towards accomplishing any competitive or conflicting activities.

Non-Competition. I agree that during my employment and for a period of twelve (12) months from the voluntary or involuntary termination of my employment for any reason and with or without cause, I will not, directly or indirectly, own, manage, operate, join, control, be employed by or with, or participate in any manner with a Competing Business where doing so will require me to provide the same or substantially similar services to a Competing Business as those which I provided to CDK while employed, or (ii) use or disclose CDK’s

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trade secrets. However, after my voluntary or involuntary termination of my employment for any reason and with or without cause, nothing shall prevent me from owning, as an inactive investor, securities of any competitor of CDK which is listed on a national securities exchange.


4.	Non-Solicitation of and Non-Interference with Clients, Business Partners, and Vendors.

a. Clients: I agree that during my employment and for a period of twelve (12) months following the voluntary or involuntary termination of my employment for any reason and with or without cause, I will not, either on my own behalf or for any Competing Business, directly or indirectly, solicit, divert, appropriate, or accept any business from, or attempt to solicit, divert, appropriate, or accept any business from any Client for the purposes of providing products or services that are the same as or substantially similar to those provided in the Business of CDK, for any Client: (i) whom I, either individually or as part of a team, provided products or services in connection with the Business of CDK; (ii) whom I have solicited, or from whom I have accepted business, in connection with the Business of CDK within the two (2) year period prior to my termination of employment from CDK; or (iii) about whom I have any trade secret information. I also agree that I will not wrongfully induce or encourage or attempt to wrongfully induce or encourage any Clients to cease doing business with CDK or materially alter their business relationship with CDK.

b. Business Partners: I agree that during my employment and for a period of twelve (12) months following the voluntary or involuntary termination of my employment for any reason and with or without cause, I will not, either on my own behalf or for any Competing Business, directly or indirectly engage, contract with, solicit, divert, appropriate or accept any business from, or attempt to engage, contract with, solicit, divert, appropriate or accept any business from any Business Partner to provide to me or any Competing Business any product or service that is (a) the same as or substantially similar to the product or service provided to CDK and which CDK uses for, uses for obtaining, or distributes to, its Clients or (b) specialized, customized or designed by the Business Partner for CDK. This provision applies only to any Business Partner: (i) with whom I, either individually or as part of a team, have had a commercial or business relationship in connection with the Business of CDK; (ii) whom I have solicited for a commercial or business relationship in connection with the Business of CDK within the two (2) year period prior to my termination of employment from CDK; or (iii) about whom I have any trade secret information. I also agree that I will not wrongfully induce or encourage or attempt to wrongfully induce or encourage any Business Partner to cease doing business with CDK or materially alter their business relationship with CDK.

c. Vendors: I agree that I will not wrongfully induce or encourage or attempt to wrongfully induce or encourage any Vendor to cease doing business with CDK or materially alter their business relationship with CDK.


5.	Non-Solicitation of Employees. I agree that during my employment with CDK and for a period of twelve (12) months following the voluntary or involuntary termination of my employment for any reason and with or without cause, I will not, directly or indirectly, hire, solicit, recruit, or encourage to leave CDK for a Competing Business, any current employees of CDK.

Non-Disclosure and Non-Use of Confidential Information and Trade Secrets. During my employment, except as authorized and required to perform my duties for CDK, and after the voluntary or involuntary termination of my employment for any reason and with or without cause, I will not disclose, use, reproduce, distribute, or otherwise disseminate CDK’s Confidential Information or trade secrets or take any action causing, or fail to take any action necessary, in order to prevent any such information to lose its character or cease to qualify as Confidential Information or a trade secret. I agree to inquire with CDK if I have any questions about whether particular information is Confidential Information or a trade secret before using or disclosing such information. I also agree to immediately return to CDK all property belonging to CDK such as keys, credit cards, telephones, tools, equipment, computers, and electronic storage devices, as well as all originals, copies, or other physical embodiments of CDK’s Confidential Information or trade secrets (regardless of whether it is in paper, electronic, or other form), including any such information in any programs, business forms, manuals, correspondence, files, databases, or on computer disks or any other storage medium, whether or not owned or controlled by me or CDK (e.g., social and business networking websites, web-based email servers, or cloud storage services), immediately upon termination of my employment or upon any earlier request by CDK, and I agree not to keep or distribute any copies, electronic or otherwise, of any of the foregoing. I also understand

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that my obligations under this paragraph, as well as the other covenants in this Agreement, extend to my activities on the internet, including my use of business oriented social networking sites such as LinkedIn and Facebook. Nothing in the foregoing is intended to or should be construed as limiting non-managerial employees’ rights to discuss the terms and conditions of employment with other non-managerial employees, or otherwise limiting any rights provided to employees by the National Labor Relations Act.

Prior Agreements and Disclosure of Agreement to Third Parties. I represent that I am not a party to any agreement with any former employer or any other person or entity containing any non-disclosure, non-compete, non-solicitation, non-recruitment, intellectual property assignment, or other covenants that will affect my ability to devote my full time and attention to the Business of CDK that has not already been disclosed to CDK in writing. I also agree to provide a copy of this Agreement to any subsequent employer, person, or entity to which I intend to provide services that may conflict with any of my obligations in this Agreement prior to engaging in any such activities and to provide CDK in writing the name and address of any such employer, person, or entity and a description of the services I intend to provide prior to engaging in any such activities. I agree that CDK may also provide a copy of this Agreement or a description of its terms to any Client, subsequent employer, or other third party at any time as it deems necessary to protect its interests, and I agree to indemnify CDK against any claims and hold CDK harmless from any losses, costs, fees, expenses, and damages arising out of my failure to comply with this paragraph.

Severability and Reformation. I agree if any particular paragraph, subparagraph, phrase, word, or other portion of this Agreement is determined by an appropriate court to be invalid or unenforceable as written, it shall be modified as necessary to be made valid or enforceable, and such modification shall not affect the remaining provisions of this Agreement, or if it cannot be modified to be made valid or enforceable, then it shall be severed from this Agreement, and all remaining terms and provisions shall remain enforceable.

Choice of Law, Venue, and Jurisdiction. The interpretation, validity, and enforcement of this Agreement will be governed by the laws of the State of Illinois, without regard to any conflicts of law principles that require the application of the law of another jurisdiction. I agree that any action by me to challenge the enforceability of this Agreement must be brought or litigated exclusively in the appropriate state or federal court located in the State of Illinois. I also agree that any action by CDK to enforce this Agreement, as well as any related disputes or litigation related to this Agreement, may, but do not have to, be brought in the appropriate state or federal court located in the State of Illinois. I agree and consent to the personal jurisdiction and venue of the federal or state courts of Illinois for resolution of any disputes or litigation arising under or in connection with this Agreement or any challenge to this Agreement and waive any objections or defenses to personal jurisdiction or venue in any such proceeding before any such court.

10.

Survival. All non-competition, non-solicitation, non-disclosure and non-use, non-recruiting, intellectual property, and Agreement disclosure obligations under paragraphs three (3) through seven (7) of this Agreement shall survive the voluntary or involuntary termination of my employment for any reason and with or without cause, and no dispute regarding any other provisions of this Agreement or regarding my employment or the termination of my employment shall prevent the operation and enforcement of these obligations.

11.

Relief, Remedies, and Enforcement. I acknowledge that CDK is engaged in a highly competitive business, and the covenants and restrictions contained in this Agreement, including the geographic and temporal restrictions, are reasonably designed to protect CDK’s legitimate business interests, including CDK goodwill and client relations, Confidential Information and trade secrets, and the specialized skills and knowledge gained by me and CDK’s other employees during our employment. I acknowledge and agree that a breach of any provision of this Agreement by me will cause serious and irreparable damage to CDK that will be difficult to quantify and for which a remedy at law for monetary damages alone may not be adequate. Accordingly, I agree that if CDK should bring an action to enforce its rights under this Agreement and CDK establishes that I have breached or threatened to breach any of my obligations under this Agreement, CDK shall be entitled to injunctive relief. I hereby waive any right to require CDK to obtain a bond in connection with any such equitable proceedings. I also agree that nothing in this Agreement shall be construed to prohibit CDK from pursuing any and all other legal or equitable remedies available to it for breach of any of the provisions of this

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Agreement, including the disgorgement of any profits, commissions, or fees realized by me, any subsequent employers, any business owned or operated by me, or any of my agents, heirs, or assigns. I agree that if CDK substantially prevails in any litigation arising out of or relating to this Agreement (including, without limitation, paragraph nine (9) above), CDK shall be entitled to recovery of its reasonable attorneys’ fees and associated costs, in addition to any other relief mentioned above. I also agree that that the knowledge, skills, and abilities I possess at the time of commencement of my employment are sufficient to permit me to earn a livelihood satisfactory to me without violating any provision of paragraphs three (3) through seven (7) above, for example, by using such knowledge, skills, and abilities, or some of them, in the service of business that is not competitive with CDK.

12.

Tolling. The restricted time periods in paragraphs three (3) through six (6) above shall be tolled during any time period that I am in violation of such covenants, as determined by a court of competent jurisdiction, so that CDK may realize the full benefit of its bargain. This tolling shall include any time period during which litigation is pending, but during which I have continued to violate such protective covenants and a court has declined to enjoin such conduct or I have failed to comply with any such injunction.

13.

Entire Agreement and Validity of Terms. I agree that I do not rely, and have not relied, upon any representation or statement not set forth herein by CDK or any of CDK’s agents, representatives, or attorneys, and that this Agreement may be changed only by a subsequent agreement in writing signed by both parties. I understand that I may have an existing agreement(s) with CDK, through acquisition of a prior employer or otherwise, that may include the same or similar covenants as those in this Agreement, and acknowledge that this Agreement is meant to supplement any such agreement(s) such that the covenants in the agreements that provide CDK with the greatest protection enforceable under applicable law shall control, and that the parties do not intend to create any ambiguity or conflict through the execution of this Agreement that would release me from the obligations I have assumed under the protective covenants in any of these agreements.


14.	Electronic Signature. I agree that CDK may enforce this Agreement with a copy for which I have provided an electronic signature.

15.

Assignment and Successorship. This Agreement and CDK’s rights and obligations hereunder may be assigned by CDK and shall inure to the benefit of and shall be enforceable by any such assignee, as well as any of CDK’s successors in interest. This Agreement and my rights and obligations may not be assigned by me, but are binding upon my heirs, administrators, executors, and personal representatives.


16.	Waiver. The waiver by CDK of any breach of this Agreement by me shall not be effective unless in writing signed by the President of CDK, and no such waiver with regards to me or any other person under a similar agreement shall operate or be construed as a waiver of the same type of breach or any other breach on a subsequent occasion by me or any other person or entity.


17.	Legal Counsel. I agree that I have read this Agreement before signing it, understand its terms, and that I have had the opportunity to have legal counsel review this agreement, prior to signing it, and I acknowledge that I have not been forced or coerced in any manner to sign this Agreement and do so of my own free will.

Signature:__ /s/ Steven J. Anenen __________________ Date:______ 9/9/15 _____________

B-5

Exhibit 10.7

CDK Global, Inc.
Corporate Officer Severance Plan

This Corporate Officer Severance Plan (the “ Plan ”) has been established by CDK Global, Inc. (the “ Company ”), to provide severance benefits for its “Eligible Executives,” as that term is defined below, and for the Eligible Executives of certain of its Affiliates that have adopted the Plan with the consent of the Administrator. The Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), is intended to be excepted from the definitions of “employee pension benefit plan” and “pension plan” set forth under Section 3(2) of ERISA, and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations §2510.3-2(b).

PLAN ADMINISTRATION

The Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “ Compensation Committee ”); provided, that the Compensation Committee may delegate all or some of its authority under the Plan from time to time to a committee designated by the Compensation Committee (such committee, to the extent so delegated authority hereunder, or the Compensation Committee, as applicable, the “ Administrator ”). As of the effective date of the Plan, such Administrator shall consist of (i) the General Counsel of the Company, (ii) the Chief Financial Officer of the Company and (iii) the principal human resources officer of the Company. The Administrator has the discretionary and final authority to make factual determinations, to construe and administer the Plan, to interpret any ambiguities, and to resolve any and all issues including, without limitation, determinations relating to the eligibility to participate or the right to any Severance Benefits.

ELIGIBILITY

An Eligible Executive will be entitled to the Severance Benefits described in the Plan provided that he or she (i) executes and returns a valid Severance Agreement, as discussed below, that is not revoked and becomes effective within sixty (60) days following his or her termination of employment, (ii) returns all Company Property, (iii) reimburses his or her Employer for any personal charges or cash advances, (iv) pays any and all personal expenses charged to his or her Company-issued credit card, (v) pays any amounts otherwise owed to the Company, including, without limitation, any tuition assistance and relocation repayments, and (vi) does not breach any obligations under the terms of the Severance Agreement or any non-competition, non-solicitation, non-disparagement, confidentiality, or similar obligations that are applicable to the Eligible Executive pursuant to any written agreement with the Company or its Affiliates, as amended by the Severance Agreement (collectively, the “ Conditions ”). Upon an Eligible Executive’s breach of the Conditions, such Eligible Executive’s rights to the Severance Benefits shall immediately cease.

COORDINATION WITH OTHER SEVERANCE ARRANGEMENTS AND RIGHTS

Except as otherwise provided herein, the Plan supersedes any severance or similar benefits under the provisions of any other severance plan, program, arrangement, policy, or practice of, or any employment, consulting, or similar agreement with, an Employer covering an Eligible Executive; provided , that if an Eligible Executive is entitled to any severance or similar benefits under the provisions of the CDK Global, Inc., Amended and Restated Change in Control Severance Plan for Corporate Officers, as

amended from time to time (the “ CIC Severance Plan ”), upon his or her termination of employment, such Eligible Executive shall remain entitled to the benefits provided under the CIC Severance Plan but will not be entitled to any Severance Benefits under this Plan.

If an Eligible Executive is entitled under law to receive severance pay, a termination indemnity, notice pay, or the like, or if an Eligible Executive is entitled under law to receive advance notice of separation, then any Severance Benefits payable hereunder shall be offset or reduced by the amount of any such severance pay, termination indemnity, notice pay, or the like, as applicable, and the Severance Period (as defined below) shall be reduced by the length of such notice period.

SEVERANCE BENEFITS

Subject to the Conditions, the following severance benefits (collectively, the “ Severance Benefits ”) shall be provided to each Eligible Executive under the Plan:

(a)

Severance Pay . The Eligible Executive will be entitled to receive an aggregate amount equal to 150% of his or her Base Salary (“ Severance Pay ”), payable in accordance with the Employer’s regular payroll practices during the eighteen (18) month period following the date of termination (the “ Severance Period ”), less withholdings as required by law; provided , that any payments otherwise payable prior to the first payroll date following the sixtieth (60 ^th ) day after the date of termination shall be deferred until, and paid in a lump sum upon, such payroll date.

The Employer may deduct (after all applicable withholdings have been deducted) from Severance Pay any indebtedness, obligation, or liability owed by the Eligible Executive to an Employer as of his or her termination date, as permitted under applicable law.


(b)	Prorated Bonus . The Eligible Executive will be entitled to receive a Prorated Bonus for the year of termination, payable when bonuses for such year would otherwise have generally been scheduled to be paid absent termination of employment.


(c)	Treatment of Equity Awards.

(i)

Options. The Eligible Executive’s outstanding, unvested options to purchase common stock of the Company (“ Options ”) shall continue to vest during the Severance Period as though the Eligible Executive’s employment had not been terminated, and the Eligible Executive shall have a period of sixty (60) days following the termination of the Severance Period in which to exercise any vested Options; provided , however , that if such Eligible Executive would have satisfied the Normal Retirement Criteria (or term of similar import), as defined in the award agreement underlying an award of Options to the Eligible Executive, had such Eligible Executive retired on the date of his or her termination, then the applicable Options shall be treated in accordance with their terms as though such Normal Retirement Criteria (or term of similar import) were in fact satisfied. For the avoidance of doubt, (i) in no event shall the Eligible Executive be permitted to exercise an Option following the date that is ten (10) years from the date such Option was granted, and (ii) subject to the proviso in the preceding sentence, any Option (or any portion thereof) that is unvested as of the end of the Severance Period shall be forfeited immediately for no consideration.


(ii)	Other Equity Awards . With respect to the Eligible Executive’s outstanding equity awards (other than Options), including, but not limited to, restricted stock awards, restricted unit awards, and performance stock units, (i) any time-based vesting requirements shall continue

to lapse during the Severance Period as though the Eligible Executive’s employment had not been terminated, and (ii) any performance-based vesting requirements shall remain eligible to be satisfied based on actual performance during the applicable performance period, but prorated for the number of days during the applicable performance period elapsed through the end of the Severance Period. Any such awards (or any portion thereof) as to which the vesting requirements do not lapse in accordance with the preceding sentence shall be immediately forfeited for no consideration.

Except as otherwise set forth in the Plan, each outstanding equity-based award held by the Eligible Executive shall be treated in accordance with its terms.

CLAWBACK

The Severance Benefits payable or provided hereunder shall be subject to a clawback, recoupment, or forfeiture action by the Company pursuant to the terms of any Company clawback policy or any other written agreement between the Company or its Affiliates and the Eligible Executive.

COORDINATION WITH SHORT-TERM DISABILITY OR OTHER APPROVED
LEAVES OF ABSENCE

If an Eligible Executive is on an approved leave of absence at the time of termination, the timing and amount of Severance Pay will depend on whether the Eligible Executive is receiving other forms of income protection. If the Eligible Executive is receiving short-term disability payments (or “ STD ”), then Severance Pay will be reduced by the amount of STD paid from the date of termination. Severance Pay will not be reduced, however, if the Eligible Executive is on an unpaid leave (such as an FMLA leave) at the time of termination.

SEVERANCE AGREEMENT

As a condition to receiving Severance Benefits under the Plan, an Eligible Executive will be required to execute a Severance Agreement in a form acceptable to the Employer. A Severance Agreement will contain a release of claims, which must become effective not later than sixty (60) days following the date of termination, and certain other provisions as the Company may deem appropriate, including, but not limited to, an Eligible Executive’s acknowledgement and affirmation that any then-existing non-competition, non-solicitation, non-disparagement, confidentiality, or similar obligations applicable to the Eligible Executive under the Company’s 2014 Omnibus Award Plan, any award agreements thereunder, or any other written agreement between the Eligible Executive and the Company or its Affiliates shall survive until the later of (i) the expiration of the Severance Period and (ii) the date on which such obligations would otherwise lapse according to their terms. The release will, to the extent permitted by law, waive and release any and all claims and actions an Eligible Executive might otherwise have against his or her Employer and its Affiliates, as well as any other related parties and entities the Company decides to include in the release. No Severance Benefits will be paid under the Plan if an Eligible Executive fails to timely execute (or revokes) a Severance Agreement.

Pursuant to a Severance Agreement, each Eligible Executive shall agree that after his or her employment by the Employer, he or she shall assist the Company and its Affiliates in the defense of any claims or potential claims that may be made or threatened to be made against the Company or any of its Affiliates in any action, suit, or proceeding, whether civil, criminal, administrative, investigative, or otherwise, that are not adverse to the Eligible Executive (an “ Action ”), and will assist the Company and its Affiliates in the prosecution of any claims that may be made by the Company or any of its Affiliates in any Action, to

the extent that such claims may relate to the Eligible Executive’s employment or the period of the Eligible Executive’s employment by the Company or any of its Affiliates. The Eligible Executive agrees, unless precluded by law, to inform the Company promptly if the Eligible Executive is asked to participate (or otherwise become involved) in any Action involving such claims or potential claims. The Eligible Executive also agrees, unless precluded by law, to inform the Company promptly if the Eligible Executive is asked to assist in any investigation (whether governmental or otherwise) of the Company or any of its Affiliates (or their actions) to the extent that such investigation may relate to the Eligible Executive’s employment or the period of the Eligible Executive’s employment by the Company, regardless of whether a lawsuit has then been filed against the Company or any of its Affiliates with respect to such investigation. The Company or one of its Affiliates shall reimburse the Eligible Executive for all of the Eligible Executive’s reasonable out-of-pocket expenses associated with such assistance. Any reimbursement that is taxable income to the Eligible Executive shall be subject to applicable withholding taxes.

DEFINITIONS OF KEY TERMS

Under the Plan, certain terms have special meanings and have already been defined. Other key terms are defined as follows:

“ Affiliate ” means a corporation or other entity controlled by, or under common control with, the Company.

“ Base Salary ” means an Eligible Executive’s annual base salary as in effect immediately prior to such Eligible Executive’s date of termination.

“ Cause ” means (A) the good faith determination by the Employer that the Eligible Executive has ceased to perform his or her duties to the Employer or an Affiliate (other than as a result of his or her incapacity due to physical or mental illness or injury), which failure amounts to an intentional and extended neglect of his or her duties to such party, provided that no such failure shall constitute Cause unless the Eligible Executive has been given notice of such failure and (if cure is reasonably possible) has not cured such act or omission within fifteen (15) days following receipt of such notice, (B) the Employer’s good faith determination that the Eligible Executive has engaged or is about to engage in conduct injurious to the Employer or an Affiliate, (C) the Eligible Executive's conviction of, or please of guilty or no contest to, a felony or any crime involving as a material element fraud or dishonesty, or (D) the consistent failure of the Eligible Executive to follow the lawful instructions of the Board of Directors of the Company or his or her direct supervisors, which failure amounts to an intentional and extended neglect of his or her duties to the Employer or an Affiliate thereof. Any determination of whether Cause exists shall be made by the Employer in its sole discretion.

“ Company Property ” means all business or financial information in any form or media, and any copies thereof (including, but not limited to, reports, customer lists, customer contracts, proprietary information, business plans, notes, maps, files, memoranda, manuals, or records) and all equipment (including, but not limited to, automobiles, credit cards, cardkey passes, door and file keys, software, computers, electronic files, printers, tablets, smartphones, or other hand-held devices) of, or leased to, the Company or any Affiliate.

“ Eligible Executive ” means an employee of the Company or any Affiliate who is designated by the Compensation Committee as an Eligible Executive for purposes of the Plan whose employment is involuntarily terminated by an Employer for any reason other than for Cause (and other than due to death or disability). A person shall not be considered to have been “involuntarily terminated” where:

(A) employment is terminated at the end of a leave of absence because of the person's failure to return to work; (B) employment is terminated at the end of a leave of absence because such person’s position was filled during the leave and the Employer does not offer such person another position; (C) the individual resigns, including as a result of an election to take early, normal, or deferred retirement; (D) employment is terminated after the individual gives oral or written notice of an intention to resign; or (E) employment is terminated in connection with the sale of equity interests in, or the sale or lease of all or part of the assets of a business of, the Employer where (I) the person is offered employment in a comparable position with comparable compensation with the purchaser or lessee, as the case may be, or (II) the person voluntarily elected not to participate in the selection process for the employment described in (I) above. An employee’s designation by the Compensation Committee as an Eligible Executive for purposes of the Plan may be revoked by the Compensation Committee at any time; provided , that any such revocation shall not be effective until the date that is twelve (12) months following its approval by the Compensation Committee.

“ Employer ” means the Company or any Affiliate of the Company that adopts the Plan with the consent of the Company.

“ Prorated Bonus ” means the product of (i) the annual cash bonus that the Eligible Executive would have earned for the fiscal year in which the date of termination occurs, based on actual performance for the full fiscal year, but assuming that all non-financial and other subjective and qualitative performance criteria are achieved at target levels, and (ii) a fraction, the numerator of which is the number of days during the fiscal year in which the date of termination occurs through the date of termination, and the denominator of which is the number of days in such year.

CLAIMS PROCEDURES

Applications for Benefits and Inquiries . Any application for benefits, inquiries about the Plan, or inquiries about present or future rights under the Plan must be submitted to the Administrator in writing, as follows:

CDK Global, Inc.

1950 Hassell Road

Hoffman Estates, IL 60169
Attn: Corporate Officer Severance Plan Administrator

Denial of Claims . In the event that any application for benefits is denied in whole or in part, the Administrator must notify the applicant, in writing, of the denial of the application, and of the applicant’s right to review the denial. The written notice of denial will be set forth in a manner designed to be understood by the employee, and will include specific reasons for the denial, specific references to the Plan provision upon which the denial is based, a description of any information or material that the Administrator needs to complete the review, and an explanation of the Plan’s review procedure.

This written notice will be given to the employee within ninety (90) days after the Administrator receives the application, unless special circumstances require an extension of time, in which case, the Administrator has up to an additional ninety (90) days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety (90) day period.

This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Administrator is to render its decision on the application. If

written notice of denial of the application for benefits is not furnished within the specified time, the application shall be deemed to be denied. The applicant will then be permitted to appeal the denial in accordance with the review procedure described below.

Request for a Review . Any person (or that person’s authorized representative) for whom an application for benefits is denied (or deemed denied), in whole or in part, may appeal the denial by submitting a request for a review to the Administrator within sixty (60) days after the application is denied (or deemed denied). The Administrator will give the applicant (or his or her representative) an opportunity to review pertinent documents in preparing a request for a review and submit written comments, documents, records, and other information relating to the claim. A request for a review shall be in writing and shall be addressed to:

CDK Global, Inc.

1950 Hassell Road

Hoffman Estates, IL 60169
Attn: Corporate Officer Severance Plan Administrator

A request for review must set forth all of the grounds on which it is based, all facts in support of the request, and any other matters that the applicant feels are pertinent. The Administrator may require the applicant to submit additional facts, documents, or other material as it may find necessary or appropriate in undertaking its review.

Decision on Review . The Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period. The Administrator will give prompt, written notice of its decision to the applicant. In the event that the Administrator confirms the denial of the application for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by the applicant, the specific Plan provisions upon which the decision is based. If written notice of the Administrator’s decision is not given to the applicant within the time prescribed herein, the application will be deemed denied on review.

Rules and Procedures . The Administrator may establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims. The Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits to do so at the applicant’s own expense.

Exhaustion of Remedies . No legal action for benefits under the Plan may be brought until the claimant (a) has submitted a written application for benefits in accordance with the procedures described above, (b) has been notified by the Administrator that the application is denied (or the application is deemed denied due to the Administrator’s failure to act on it within the established time period), (c) has filed a written request for a review of the application in accordance with the appeal procedure described above, and (d) has been notified in writing that the Administrator has denied the appeal (or the appeal is deemed to be denied due to the Administrator’s failure to take any action on the claim within the time prescribed above).

GENERAL PROVISIONS

Governing Law . The construction and administration of this Plan and any dispute, claim or controversy arising under, out of, in connection with, or in relation to this Plan, shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to any choice of law principles of such state that would require or permit the application of the laws of another jurisdiction. The Company (on behalf of itself and all Employers) and, by accepting Severance Benefits, each Eligible Executive, consent to the personal jurisdiction of and venue in any state or federal court located in the State of Illinois in the event of any dispute, claim, or controversy arising under, out of, in connection with, or in relation to this Plan, and each waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or venue and waives any objection to jurisdiction or venue based on improper jurisdiction or venue. EACH OF THE COMPANY AND EACH ELIGIBLE EXECUTIVE HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING A DISPUTE ARISING UNDER, OUT OF, IN CONNECTION WITH, OR IN RELATION TO THIS PLAN.

Effect on Other Benefits . Except as otherwise provided herein, Severance Benefits provided under the Plan shall be in addition to any compensation or benefits that may be due an Eligible Executive from the Company or an Affiliate (including, without limitation, any equity awards, that are governed by the terms of the applicable equity incentive plan and any individual award agreement except as otherwise provided herein).

No Right to Employment . The Plan (i) does not establish any right to continued employment of any person, nor any right to benefits under the Plan except according to its terms, and (ii) is not to be construed as interfering with either an Employer’s right to terminate the employment of any person at any time or the fact that each person is employed “at-will,” meaning employment is not for a specific period of time, and both the Employer and any person may terminate the employment relationship at any time, with or without notice, for any or no reason.

Severability. Should any provision of this Plan be deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the other provisions of this Plan unless such determination shall render impossible or impracticable the functioning of this Plan, and in such case, an appropriate provision or provisions shall be adopted so that this Plan may continue to function properly.

Plan Amendment or Termination . The Plan may be amended by the Compensation Committee or the Board of Directors of the Company or terminated by the Board of Directors of the Company at any time.

Tax Matters . All benefits hereunder shall be reduced by applicable tax withholdings and shall be subject to applicable tax reporting, as determined by the Administrator. It is the intention of the parties that no payment or entitlement pursuant to the Plan will give rise to any adverse tax consequences pursuant to Internal Revenue Code Section 409A. For purposes of Section 409A of the Code and the regulations and guidance promulgated thereunder (“ Section 409A ”), each of the payments that may be made under the Plan are designated as separate payments. It is intended that the provisions of the Plan comply with Section 409A, and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. Notwithstanding the foregoing, an Eligible Executive shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for his or her account in connection with the Plan (including any taxes and penalties under Section 409A), and neither the Company nor any Affiliate shall have any obligation to indemnify or otherwise hold the Eligible Executive (or any beneficiary) harmless from any

or all of such taxes or penalties. Notwithstanding anything in the Plan to the contrary, in the event that an Eligible Executive is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments that are “deferred compensation” subject to Section 409A that are made by reason of his or her “separation from service” within the meaning of Section 409A shall be made to the Eligible Executive prior to the date that is six (6) months after the date of his or her “separation from service” or, if earlier, his or her date of death. Immediately following any applicable six (6) month delay, all such delayed payments will be paid in a single lump sum. In addition, for purposes of the Plan, with respect to payments of any amounts that are considered to be “deferred compensation” subject to Section 409A, references to “termination of employment” (and substantially similar phrases) shall be interpreted and applied in a manner that is consistent with the requirements of Section 409A. Except as permitted under Section 409A, any deferred compensation that is subject to Section 409A and is payable to or for an Eligible Executive’s benefit under any Company-sponsored plan, program, agreement, or arrangement may not be reduced by, or offset against, any amount owing by such Eligible Executive to the Company or any Affiliate.

Source of Contributions . Benefits are provided by the Employer. All amounts are paid out of the general assets of the Employer and no special trust or fund has been set up to provide benefits under the Plan.

Type of Plan Administration; Plan Year . The Plan is administered by the Administrator. The Administrator can be contacted by mail c/o CDK Global, Inc., 1950 Hassell Road, Hoffman Estates, IL 60169, Attn: Corporate Officer Severance Plan Administrator. The Plan operates and keeps its records on a calendar-year basis.

Identification of Plan Sponsor . The Company is the Plan sponsor. The Company’s Taxpayer Identification Number is 46-5743146. The Company is also the agent for service of legal process.

If you have any questions about the Plan, you should contact your local Human Resources Representative.

Exhibit 10.8

Non-Qualified
XX/XX/20XX

CDK GLOBAL, INC. 2014 OMNIBUS AWARD PLAN
FORM OF STOCK OPTION GRANT AGREEMENT

CDK GLOBAL, INC. (the “Company”), pursuant to the 2014 Omnibus Award Plan (the “Plan”), hereby irrevocably grants to FirstName LastName (the “Participant”), on XXXX XX, 20XX the right and option to purchase XXXX shares of the Common Stock, par value $0.01 per share, of the Company subject to the restrictions, terms and conditions herein.

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it would be in the best interests of the Company and its stockholders to grant the award of options provided for herein to the Participant, on the terms and conditions described in this Stock Option Grant Agreement (this “Agreement”).

NOW, THEREFORE, for and in consideration of the promises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, for themselves, and their permitted successors and assigns, hereby agree as follows:


1.	The option herein granted shall become exercisable in whole or in part as follows:


(a)	Exercisable as to 25% of the shares (rounded down to the nearest whole share) on the first anniversary of the grant date;


(b)	Exercisable as to an additional 25% of the shares (rounded down to the nearest whole share) on the second anniversary of the grant date;


(c)	Exercisable as to an additional 25% of the shares (rounded down to the nearest whole share) on the third anniversary of the grant date;


(d)	Exercisable in its entirety on and after the fourth anniversary of the grant date;


(e)	Exercisable in its entirety ( i ) upon the death of the Participant or ( ii ) in the event of Disability of the Participant; and

(f)

Exercisable in its entirety immediately prior to the consummation of the Change in Control, unless upon the Change in Control the option granted hereunder is continued, substituted or assumed (in accordance with Section 12 of the Plan) in a manner such that the securities underlying the option following the Change in Control are traded on a “liquid market” ( i.e. , the Nasdaq Global Market, the New York Stock Exchange or a comparable international market in which the Participant is able to readily and without administrative complexity sell shares underlying the option, as reasonably determined by the Board).

(g)

If the Participant retires from the Company at any time following the first anniversary of this Agreement and at such time satisfies the Normal Retirement Criteria, the option herein granted shall continue to become exercisable as set forth in clauses (b) through (d) of this Section 1. The Normal Retirement Criteria will be satisfied if the Participant shall ( i ) retire ( and satisfy the Company’s criteria for retirement at such time ) from the Company or any of its subsidiaries, divisions or business units, as the case may be, ( ii ) be at least 55 years of age at the time of such retirement, and ( iii ) have at least ten credited years of service with the Company or its subsidiaries at the time of such retirement.


(h)	If a Participant who at the time of retirement satisfies the Normal Retirement Criteria subsequently dies or becomes Disabled before such Participant’s option herein granted becomes exercisable in its entirety as set forth in clauses (b) through (d) of this Section 1, the option herein granted shall become exercisable as set forth in clause (e) of this Section 1.


(i)	If a Participant who at the time of retirement satisfies the criteria set forth in Section 2(b)(iv) subsequently dies or becomes Disabled before the expiration of 12 months after the retirement of the Participant, such Participant’s option herein granted shall become exercisable as set forth in clause (e) of this Section 1.

(j)

Except as provided in clauses (g) through (i) of this Section 1 or as the Committee may otherwise determine in its sole discretion, no option herein granted shall become exercisable following termination of the Participant’s employment from the Company or any of its subsidiaries (and no option herein granted shall become exercisable following the Company’s sale of the subsidiary, or the Company’s or a subsidiary’s sale of the division or business unit, that employs such Participant).


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 of termination of the Participant’s employment from the Company (including in connection with the sale of the subsidiary, division or business unit that employs such Participant) or any of its subsidiaries; provided, however , that


(i)	if the Participant’s employment from the Company or any of its subsidiaries terminates because of Disability, the provisions of sub-paragraph (c) shall apply,


(ii)	if the Participant shall die during employment by the Company or any of its subsidiaries or during the 60-day period following the date of termination of such employment, the provisions of sub-paragraph (d) below shall apply,


(iii)	if the Participant shall retire and satisfy the Normal Retirement Criteria, the provisions of sub-paragraph (e) below shall apply, and

(iv)

if the Participant shall ( I ) retire ( and satisfy the Company’s criteria for retirement at such time ) from the Company or any of its subsidiaries, divisions or business units, as the case may be, ( II ) be at least 55 years of age at the time of such retirement, and (III) have at least five (but less than ten) credited years of service with the Company and its subsidiaries at the time of such retirement, the provisions of sub-paragraph (f) below shall apply;

(c)

if Section 2(b)(i) applies, (i) if the Participant satisfied the Normal Retirement Criteria at the time of Participant’s Disability, the expiration of 36 months after termination of Participant’s employment from the Company or any of its subsidiaries because of Disability, or (ii) if the Participant did not satisfy the Normal Retirement Criteria at the time of Participant’s Disability, the expiration of 12 months after termination of Participant’s employment from the Company or any of its subsidiaries because of 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 the death of the Participant;


(d)	if Section 2(b)(ii) applies, ( i ) if the Participant satisfied the Normal Retirement Criteria at the time of death, the expiration of 36 months after the death of the Participant, or ( ii ) if the Participant did not satisfy the Normal Retirement Criteria at the time of death, 12 months after the death of the Participant;

(e)

if Section 2(b)(iii) applies, the expiration of 37 months after the retirement of the Participant; provided , however , that if such Participant shall die during the 37-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 37 months after the retirement of the Participant and ( ii ) 12 months after the death of the Participant; and


(f)	if Section 2(b)(iv) applies, the expiration of 12 months after the retirement of the Participant; provided , however , that if such Participant shall die during the 12 month period following the date of such Participant’s retirement, then the unexercised portion shall become null and void on the expiration of 12 months after the death of the Participant.

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.

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 judgement, 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.

The effectiveness of the option granted hereunder is conditioned upon ( i ) the Participant’s having executed and delivered to the Company in connection with previous stock option grants a restrictive covenant, or ( ii ) the execution and delivery by the Participant within six months from the date of this Agreement of the restrictive covenant furnished herewith. If the Company does not receive the signed (whether electronically or otherwise) restrictive covenant within such six-month period, this Agreement shall be terminable by the Company.

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 employed by or providing services to the Company or any Affiliate or after termination of such employment or 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. The option granted hereunder, and all incentive based compensation payable pursuant to the option granted hereunder, shall be subject to (i) the Company’s compensation recovery, “clawback” or similar policy, as may be in effect from time to time and (ii) any compensation recovery, “clawback” or similar policy made applicable by law including the provisions of Section 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Company’s equity securities may be listed.


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.

Nothing contained in this Agreement shall be construed as giving the Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge the Participant with or without cause at any time for any reason whatsoever. Although over the

course of employment terms and conditions of employment may change, the at-will term of employment will not change.


14.	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.

15.

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; provided, that neither this Agreement nor the Plan shall supersede any portion of any severance plan maintained by the Company from time to time in which the Participant is eligible for severance benefits that provides for vesting or continued survival of equity awards upon a severance-eligible termination of employment that is more favorable than as set forth herein or in the Plan. 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.


16.	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.

CDK GLOBAL, INC.

Lee J. Brunz
Vice President, General Counsel and Secretary

Signature Date

Print Name

Exhibit 10.9

UK Tax Advantaged
XX/XX/20XX

CDK GLOBAL, INC. 2014 OMNIBUS AWARD PLAN
UK TAX ADVANTAGED SUBPLAN
FORM OF STOCK OPTION GRANT AGREEMENT

CDK GLOBAL, INC. (the “Company”), pursuant to the 2014 Omnibus Award Plan – UK Tax Advantaged SubPlan (the “Plan”), hereby irrevocably grants to FirstName LastName (the “Participant”), on XXXX XX, 20XX the right and option to purchase XXXX shares of the Common Stock, par value $0.01 per share, of the Company subject to the restrictions, terms and conditions herein.

WHEREAS, the Compensation Committee of the Board of Directors of the Company has determined that it would be in the best interests of the Company and its stockholders to grant the award of options provided for herein to the Participant, on the terms and conditions described in this Stock Option Grant Agreement (this “Agreement”).


1.	The option herein granted shall become exercisable in whole or in part as follows:


(a)	Exercisable as to 25% of the shares (rounded down to the nearest whole share) on the first anniversary of the grant date;


(b)	Exercisable as to an additional 25% of the shares (rounded down to the nearest whole share) on the second anniversary of the grant date;


(c)	Exercisable as to an additional 25% of the shares (rounded down to the nearest whole share) on the third anniversary of the grant date;


(d)	Exercisable in its entirety on and after the fourth anniversary of the grant date; and

(e)

Exercisable in its entirety ( i ) upon the death of the Participant, ( ii ) in the event of the Participant ceasing to be an employee of the Company or any of its subsidiaries by reason of injury, Disability, redundancy or retirement of the Participant, ( iii ) in the event of the Participant ceasing to be an employee of the Company or any of its subsidiaries by reason of a qualifying sale of the employing company or business as provided by the Rules of the Plan, or ( iv ) in the event that the Committee, acting fairly and reasonably, determines within 60 days of the Participant ceasing to be an employee of the Company or any of its subsidiaries, that he may exercise his option. In the event of the death of a Participant, the Option shall remain exercisable by the

Participant’s personal representatives for a period of twelve months following the death and shall then lapse. On any other event giving rise to a right of early exercise under this paragraph, the option must be exercised within six months of giving or being given notice of termination of employment for a relevant reason and shall then lapse.

(f)

(g)

Other than as provided in clause (e) of this Section 1 above, no option herein granted shall become exercisable following termination of the Participant’s employment from the Company or any of its subsidiaries. Where the Participant’s employment is terminated other than as provided in clause (e)(i) to (iii) of this Section 1 above, no option shall become exercisable following termination of the Participant’s employment from the Company or any of its subsidiaries unless and until the Committee determines that the option shall become exercisable as provided in clause (iv) of this Section 1 above.


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 often years from the date on which the option was granted;


(b)	the expiration of 60 days from the date of termination of the Participant’s employment from the Company (including in connection with the sale of the subsidiary, division or business unit that employs such Participant) or any of its subsidiaries; provided, however , that

(i)

if the Participant’s employment from the Company or any of its subsidiaries terminates by reason of injury, Disability, redundancy or retirement of the Participant, or in the event of a qualifying sale of the employing company or business, or in the event that the Committee otherwise determines that his option shall become exercisable, as provided in sub paragraph 1(e) above, the provisions of sub paragraph (c) below shall apply,


(ii)	if the Participant shall die during employment by the Company or any of its subsidiaries or during the 60-day period following the date of termination of such employment, the provisions of subparagraph (d) below shall apply,


(c)	if Section 2(b)(i) applies, the expiration of 6 months after termination of the Participant’s employment from the Company or any of its subsidiaries;


(d)	if Section 2(b)(ii) applies, the expiration of 12 months after the death of the Participant.

For the purpose of this Section 2 termination of the Participant’s employment shall be deemed to occur on the date that the Participant gives or is given notice of termination of his employment such that he will no longer be an employee of any Group Company, provided that there are no arrangements for him to commence a new employment with any other Group Company. If employment terminates in other circumstances without notice, the Participant shall cease to be an employee of a Group Company on the date of termination.


3.	The full price for each of the shares purchased pursuant to the option herein granted shall be $ XX.XX .


4.	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.


5.	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.


6.	In the event of a variation in the share capital of the Company (as defined in Section 12 of the Plan) the Company’s may adjust the option in a manner consistent with Section 12 of the Plan.


7.	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.


9.	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.

10.

Nothing contained in this Agreement shall be construed as giving the Participant any right to be retained, in any position, as an employee or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge the Participant with or without cause at any time for any reason whatsoever. Although over the course of employment terms and conditions of employment may change, the at-will term of employment will not change.


11.	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.

12.


13.	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.

CDK GLOBAL, INC.

Lee J. Brunz
Vice President, General Counsel and Secretary

Signature Date

Print Name

Exhibit 10.10

CDK GLOBAL, INC. 2014 OMNIBUS AWARD PLAN

FORM OF RESTRICTED UNIT AWARD AGREEMENT

CDK GLOBAL, INC. (the “ Company ”), pursuant to the 2014 Omnibus Award Plan (the “ Plan ”), hereby irrevocably grants to FirstName LastName (the “ Participant ”), on XXXX XX , 20 XX a forfeitable Restricted Unit Award (the “ Restricted Unit Award ”), subject to the restrictions, terms and conditions herein.

WHEREAS, the Board of Directors of the Company (the “ Board ”) has determined that it would be in the best interests of the Company and its stockholders to grant the award provided for herein to the Participant, on the terms and conditions described in this Restricted Unit Award Agreement (this “ Agreement ”).


1.	Terms and Conditions.

(a) Grant . The Company hereby grants to the Participant XXXX Restricted Units, on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.

(b) Vesting . Subject to the other terms and conditions contained in this Agreement, the Restricted Period with respect to the Restricted Unit Award shall lapse, if at all, in three substantially equal installments on XXXX XX , 20 XX , XXXX XX , 20 XX , and XXXX XX , 20 XX , subject to the continued employment of the Participant by the Company or any Subsidiary thereof through each such vesting date.

(c) Change in Control . Notwithstanding the forgoing, the Restricted Period with respect to the Restricted Unit Award shall lapse immediately prior to the consummation of a Change in Control if the Participant is continuously employed by the Company until such time, unless, upon the Change in Control, the Restricted Unit Award is continued, substituted or assumed (in accordance with Section 12 of the Plan) in a manner such that the securities underlying the Restricted Unit Award following the Change in Control are traded on a “liquid market” ( i.e ., the Nasdaq Global Market, the New York Stock Exchange or a comparable international market in

which the Participant is able to readily and without administrative complexity sell shares underlying the Restricted Unit Award, as reasonably determined by the Board).

(d) Payment . Upon the lapsing of each installment of the Restricted Period the Restricted Unit Award will settle, not later than the 30th day following the date on which the lapse of the Restricted Period occurs with respect to any Restricted Stock Units, in a like number shares of the Common Stock, par value $0.01 per share, of the Company, subject to applicable withholding. Notwithstanding the foregoing, the settlement of the Restricted Unit Award shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code.

(e) Forfeiture of Restricted Stock Units . Except as otherwise determined by the Compensation Committee of the Board (the “ Committee ”) in its sole discretion, unvested Restricted Unit Awards shall be forfeited without consideration to the Participant upon the Participant’s termination of employment with the Company or its Affiliates for any reason.

(f) No Rights as a Stockholder . The Participant shall not have any rights as a stockholder of the Company with respect to any shares of Common Stock corresponding to the Restricted Stock Units granted hereby unless and until shares of Common Stock are issued to the Participant in respect thereof.


2.	Restrictive Covenant; Clawback; Incorporation by Reference .

(a) Restrictive Covenant . The effectiveness of the Restricted Unit Award granted hereunder is conditioned upon (i) the Participant’s having executed and delivered to the Company in connection with previous Restricted Unit grants a restrictive covenant, or (ii) the execution and delivery by the Participant within six months from the date of this Restricted Unit Award of the restrictive covenant furnished herewith. If the Company does not receive the signed (whether electronically or otherwise) restrictive covenant within such six-month period, this Restricted Unit Award shall be terminable by the Company.

(b) Clawback/Forfeiture . Notwithstanding anything to the contrary contained herein, the Restricted Stock Units shall be canceled if the Participant (i) engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion or, (ii) without the consent of the Company, while employed by or providing services to the Company or any Affiliate or after termination of such employment or

service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement between the Participant and the Company and/or any Affiliate. If the Participant engages in any activity referred to in the preceding sentence, the Participant shall forfeit any gain realized in respect of the Restricted Stock Units (which gain shall be deemed to be an amount equal to the Fair Market Value, on the date of distribution, of the shares of Common Stock delivered to the Participant, plus any cash paid to the Participant, upon settlement of the Restricted Stock Units), and must repay such gain to the Company. The Restricted Unit Award, and all incentive based compensation payable pursuant to the Restricted Unit Award, shall be subject to (i) the Company’s compensation recovery, “clawback” or similar policy, as may be in effect from time to time and (ii) any compensation recovery, “clawback” or similar policy made applicable by law including the provisions of Section 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Company’s equity securities may be listed.

(c) Incorporation by Reference, Etc . 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.


3.	Compliance with Legal Requirements . The granting and delivery of the Restricted Unit Award, and any other obligations of the Company under this Agreement, shall be subject to all applicable federal, state, local and foreign laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required.


4.	Transferability . The Restricted Unit Award may not 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.


5.	Miscellaneous.

(a) Waiver . 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.

(b) Severability . 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.

(c) No Right to Employment . Nothing contained in this Agreement shall be construed as giving the Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge the Participant with or without cause at any time for any reason whatsoever. Although over the course of employment terms and conditions of employment may change, the at-will term of employment will not change.

(d) Successors . 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.

(e) Entire Agreement . This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersedes all prior communications, representations and negotiations in respect thereto; provided, that neither this Agreement nor the Plan shall supersede any portion of any severance plan maintained by the Company from time to time in which the Participant is eligible for severance benefits that provides for vesting or continued survival of equity awards upon a severance-eligible termination of employment that is more favorable than as set forth herein or in the Plan. 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.

(f) Governing Law . 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.

(g) Headings . The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.

CDK GLOBAL, INC.

Lee J. Brunz
Vice President, General Counsel and Secretary

Signature Date

Print Name

Exhibit 10.11

CDK GLOBAL, INC. 2014 OMNIBUS AWARD PLAN
FORM OF RESTRICTED STOCK AWARD AGREEMENT

CDK GLOBAL, INC. (the “ Company ”), pursuant to the 2014 Omnibus Award Plan (the “ Plan ”), hereby irrevocably grants you (the “ Participant ”), on XXXX XX, 20XX a Restricted Stock Award (the “ Restricted Stock Award ”) of forfeitable shares of the Company’s Common Stock, par value $0.01 per share (“ Restricted Stock ”), subject to the restrictions, terms and conditions herein.

WHEREAS, the Board of Directors of the Company has determined that it would be in the best interests of the Company and its stockholders to grant the award of Restricted Stock provided for herein to the Participant, on the terms and conditions described in this Restricted Stock Award Agreement (this “ Agreement ”).


1.	Terms and Conditions .

(a) Vesting . Subject to the other terms and conditions contained in this Agreement, the Restricted Period with respect to the Participant’s shares of Restricted Stock shall lapse on XXXX.

(b) Change in Control . Notwithstanding the forgoing, the Restricted Period with respect to the Participant’s shares of Restricted Sock shall lapse immediately prior to the consummation of a Change in Control if the Participant is continuously employed by the Company until such time, unless, upon the Change in Control, the Restricted Stock Award is continued, substituted or assumed (in accordance with Section 12 of the Plan) in a manner such that the securities underlying the Restricted Stock Award following the Change in Control are traded on a “liquid market” ( i.e ., the Nasdaq Global Market, the New York Stock Exchange or a comparable international market in which the Participant is able to readily and without administrative complexity sell shares underlying the Restricted Stock Award, as reasonably determined by the Board of Directors).

(c) Book Entry . Upon the grant of Restricted Stock, the Company shall cause share(s) of Common Stock to be registered in the name of the Participant and held in book-entry form subject to the Company’s directions.

(d) Forfeiture of Restricted Stock . Except as otherwise determined by the Compensation Committee of the Board of Directors (the “ Committee ”) in its sole discretion, unvested Restricted Stock shall be forfeited without consideration to the Participant upon the Participant’s termination of employment with the Company or its Affiliates for any reason.


2.	Restrictive Covenant; Clawback; Incorporation by Reference .

(a) Restrictive Covenant . The effectiveness of the Restricted Stock Award granted hereunder is conditioned upon (i) the Participant’s having executed and delivered to the Company in connection with previous Restricted Stock grants a restrictive covenant, or (ii) the execution and delivery by the Participant within six months from the date of this Restricted Stock Award of the restrictive covenant furnished herewith. If the Company does not receive the signed (whether electronically or otherwise) restrictive covenant within such six-month period, this Restricted Stock Award shall be terminable by the Company.

(b) Clawback/Forfeiture . Notwithstanding anything to the contrary contained herein, the Restricted Stock may be forfeited 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 employed by or providing services to the Company or any Affiliate or after termination of such employment or 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 Restricted Stock (which gain shall be deemed to be an amount equal to the Fair Market Value, on the applicable vesting date, of the shares of Common Stock delivered to the Participant), and repay such gain to the Company. The Restricted Stock Award, and all incentive based compensation payable pursuant to the Restricted Stock Award, shall be subject to (i) the Company’s compensation recovery, “clawback” or similar policy, as may be in effect from time to time and (ii) any compensation recovery, “clawback” or similar policy made applicable by law including the provisions of Section 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Company’s equity securities may be listed.

3. Compliance with Legal Requirements . The granting and delivery of the Restricted Stock Award, and any other obligations of the Company under this Agreement, shall be subject to all applicable federal, state, local and foreign laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required.

4. Transferability . Until it has vested in accordance with Section 1, no share of Restricted Stock 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.


5.	Miscellaneous .

(e) Entire Agreement . 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; provided, that neither this Agreement nor the Plan shall supersede any portion of any severance plan maintained by the Company from time to time in which the Participant is eligible for severance benefits that provides for vesting or continued survival of equity awards upon a severance-eligible termination of employment that is more favorable than as set forth herein or in the Plan. 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.

CDK GLOBAL, INC.

Lee J. Brunz
Vice President, General Counsel and Secretary

Signature Date

Print Name

Exhibit 10.12

CDK GLOBAL, INC. 2014 OMNIBUS AWARD PLAN
FORM OF PERFORMANCE STOCK UNIT AWARD AGREEMENT

CDK GLOBAL, INC. (the “ Company ”), pursuant to the 2014 Omnibus Award Plan (the “ Plan ”), hereby irrevocably grants you (“ Participant ”), on XXXX XX, 20XX (the “ Grant Date ”), a Performance Stock Unit Award (the “ Award ”) of forfeitable performance stock units of the Company (“ PSUs ”), each PSU representing the right to receive one share of the Company’s common stock, par value $0.01 per share (“ Common Stock ”), subject to the restrictions, terms and conditions herein.

WHEREAS, Participant has been selected as a participant in the three-year performance stock unit program of the Company covering the Company’s 20XX, 20XX and 20XX fiscal years, as described in the letter previously provided to Participant (the “ PSU Award Letter ”); and

WHEREAS, the Board of Directors of the Company has determined that it would be in the best interests of the Company and its stockholders to grant the award provided for herein to Participant, on the terms and conditions described in this Performance Stock Unit Award Agreement (this “ Agreement ”).


1.	Terms and Conditions .

(a)

Award . Subject to the other terms and conditions contained in this Agreement, the actual number of PSUs that are earned, if any, pursuant to the terms and conditions of the Award will be determined by the Company (the “ Total Award ”) and shall be computed in accordance with Section 3 below, as a percentage of the sum of (i) the Target Number of PSUs set forth in the PSU Award Letter (the “ Target Award ”) plus (ii) any Dividend Equivalent PSUs (as defined below). The Total Award shall be a whole number of PSUs only.


(b)	Performance Period . Subject to the other terms and conditions contained in this Agreement, the performance period for the Award commenced on XXXX XX, 20XX and shall terminate on XXXX XX, 20XX (the “ Performance Period ”).

(c)

Dividend Equivalents . Until shares of Common Stock are delivered to Participant in respect of the settlement of the Award, at no time shall Participant be deemed for any purpose to be the owner of shares of Common Stock in connection with the Award and Participant shall have no right to dividends in respect of the Award; provided , however , that each time the Company pays a dividend with respect to a share of Common Stock during the period from the Grant Date to the Payout Date

(as defined below), Participant shall be credited with an additional number of PSUs (the “ Dividend Equivalent PSUs ”) equal to (i) the quotient obtained by dividing the amount of such dividend by the Fair Market Value (as defined in the Plan) of a share of Common Stock on such date, multiplied by (ii) the Total Award.

(d)

Settlement . For Participants whose home country is the United States, subject to the other terms and conditions contained in this Agreement, the Company shall settle the Award by causing one share of Common Stock for each PSU in the Total Award that is outstanding (and not previously forfeited) as of the Payout Date to be registered in the name of Participant and held in book-entry form on the Payout Date. For Participants whose home country is not the United States, subject to the other terms and conditions contained in this Agreement, the Company shall settle the Award by the payment to the Participant in cash (without interest) of an amount equal to the Fair Market Value of the PSUs (the U.S. dollar value of Participant’s PSUs will be converted into Participant’s local currency using the exchange rate determined by the Company) on the Payout Date subject to applicable withholding.


2.	Forfeiture of PSUs .

(a)

Termination of Employment Generally . Except as otherwise determined by the Company in its sole discretion or as provided in Section 2(b) below, all PSUs and Dividend Equivalent PSUs shall be forfeited without consideration to Participant upon Participant’s termination of employment with the Company or its Affiliates for any reason (and Participant shall forfeit any rights to receive shares of Common Stock or cash in respect of the Award).

(b)

Termination After XXXX XX, 20XX due to Death, Disability or Retirement . In the event that after the first anniversary of the commencement of the Performance Period and prior to completion of the Performance Period, Participant’s employment with the Company is terminated due to death, Disability (as defined in the Plan) or retirement (defined for purposes of this Agreement as voluntary termination of employment at or after age 65, or age 55 with 10 years of service with the Company or its Affiliates), Participant shall be entitled to receive a pro-rata portion of the Award determined in accordance with Section 3. For the avoidance of doubt, if a Participant’s employment is terminated prior to XXXX XX, 20XX, the Award and any rights to receive shares of Common Stock, cash and Dividend Equivalent PSUs with respect thereto, will be forfeited without consideration.


3.	Performance Determinations .

(a)

Following completion of the Performance Period (or, if Participant’s employment has terminated after the first anniversary of the commencement of the Performance Period due to death, Disability, or retirement, as soon as administratively feasible (in the Committee’s sole discretion) following such termination), the Company will determine the Total Award, calculated as the number (rounded down to the nearest whole PSU) equal to the product of (i) the Target Award plus any Dividend Equivalent

PSUs and (ii) the Final Payout Percentage; provided , that if Participant’s employment has terminated in the manner described in Section 2(b), the Total Award shall be calculated as the number (rounded down to the nearest whole PSU) equal to the product of (i) the Target Award plus any Dividend Equivalent PSUs, and (ii) the Pro-Rata Percentage.


(b)	In the event of a Change in Control:

(i)

if the Award is not continued, substituted or assumed (in accordance with Section 12 of the Plan) in a manner such that the securities underlying the Award following the Change in Control are traded on a “liquid market” ( i.e ., the Nasdaq Global Market, the New York Stock Exchange or a comparable international market in which the Participant is able to readily and without administrative complexity sell shares underlying the award, as reasonably determined by the Board) (a “ Permitted Assumption ”), then the Award shall become fully vested and the Payout Date shall be immediately prior to the Change in Control, with the Performance Goals deemed satisfied at the target level; or


(ii)	if the Award is subject to a Permitted Assumption in connection with the Change in Control, then the Performance Goals shall be deemed satisfied at the target level, and the service requirement shall continue in accordance with, and subject to, the terms of the award.


(c)	For purposes of this Agreement:


(i)	“ Final Payout Percentage ” is a number, expressed as a percentage, calculated by application of the Performance Formula to achievement of the Performance Goals over the Performance Period, as determined by the Committee.


(ii)	“ Payout Date ” shall be:


•	XXXX XX, 20XX or as soon as administratively feasible (but not later than 60 days) thereafter if Participant remains employed with the Company or its Affiliates until the end of the Performance Period;

•

XXXX XX, 20XX or as soon as administratively feasible (but not later than 60 days) thereafter if Participant’s employment with the Company and its Affiliates terminates due to retirement after the first anniversary of the commencement of the Performance Period; provided that if Participant subsequently dies or becomes Disabled during the Performance Period, the Payout Date shall be as soon as administratively feasible (but not later than 60 days) after Participant’s termination due to death or Disability;


•	as soon as administratively feasible (but not later than 60 days) after termination of employment if Participant’s employment with the Company and its Affiliates terminates due to death or Disability after the first anniversary of the commencement of the Performance Period; and


•	immediately prior to a Change in Control, if the Payment Date is accelerated pursuant to Section 3(b)(i) above.


(iii)	“ Pro-Rata Percentage ” is a number, expressed as a percentage, equal to the quotient of (i) the number of completed months from XXXX XX, 20XX until the date of Participant’s termination of employment, divided by (ii) 33.


(d)	All determinations with respect to the Award or this Agreement by the Company or Committee, including, without limitation, determinations of performance pursuant to the Performance Goals, the Final Payout Percentage, and timing of settlements, shall be within the Company’s absolute discretion and shall be final, binding and conclusive on Participant.


4.	Restrictive Covenant; Clawback; Incorporation by Reference .

(a)

Restrictive Covenant . The effectiveness of the Award granted hereunder is conditioned upon the execution and delivery by Participant within ninety (90) days from the date of the Award of any restrictive covenant furnished herewith. If the Company does not receive the signed (whether electronically or otherwise) restrictive covenant within such ninety (90) day period, the Award shall be terminable by the Company.

(b)

Clawback/Forfeiture . Notwithstanding anything to the contrary contained herein, the PSUs may be forfeited without consideration if 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 employed by or providing services to the Company or any Affiliate or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement between Participant and the Company or any Affiliate. If Participant engages in any activity referred to in the preceding sentence, Participant shall, at the sole discretion of the Committee, forfeit any gain realized in respect of the PSUs (which gain shall be deemed to be an amount equal to the Fair Market Value, on the applicable Payout Date, of the shares of Common Stock or cash delivered to Participant under this Award), and repay such gain to the Company. The PSU Award, and all incentive based compensation payable pursuant to the PSU Award, shall be subject to (i) the Company’s compensation recovery, “clawback” or similar policy, as may be in effect from time to time and (ii) any compensation recovery, “clawback” or similar policy made applicable by law including the provisions of Section 945 of

the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Company’s equity securities may be listed.


(c)	Incorporation by Reference, Etc . 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.

Compliance with Legal Requirements; Stockholder Approval . The granting and delivery of the Award, and any other obligations of the Company under this Agreement, shall be subject to all applicable federal, state, local and foreign laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. Notwithstanding anything herein to the contrary, the Award shall be contingent upon the approval of the Plan by the Company’s stockholders at the 2015 annual meeting of stockholders, and shall be null and void if such approval is not obtained.


6.	Transferability . No PSUs 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 an Affiliate.


7.	Miscellaneous .


(a)	No Other Rights as a Stockholder . Except as set forth herein, the Participant shall not have any rights as the owner of any shares of Common Stock subject to the PSUs until any such shares are delivered to the Participant upon settlement of the PSUs.

(b)

Waiver . 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.


(c)	Severability . 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.


(d)	No Right to Employment . Nothing contained in this Agreement shall be construed as giving Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which are hereby expressly

reserved, to remove, terminate or discharge Participant with or without cause at any time for any reason whatsoever. Although over the course of employment terms and conditions of employment may change, the at-will term of employment will not change.


(e)	Successors . The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, Participant and Participant’s beneficiaries, executors, administrators, heirs and successors.

(f)

Entire Agreement . 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; provided, that neither this Agreement nor the Plan shall supersede any portion of any severance plan maintained by the Company from time to time in which the Participant is eligible for severance benefits that provides for vesting or continued survival of equity awards upon a severance-eligible termination of employment that is more favorable than as set forth herein or in the Plan. 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 Participant under the Plan.


(g)	Governing Law . 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.


(h)	Headings . The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.

CDK GLOBAL, INC.

Lee J. Brunz
Vice President, General Counsel and Secretary

Signature Date

Print Name

EXHIBIT 31.1

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

I, Steven J. Anenen, certify that:


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:	February 3, 2016	/s/ Steven J. Anenen
		Steven J. Anenen
		Chief Executive Officer

EXHIBIT 31.2

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

I, Alfred A. Nietzel, certify that:


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:	February 3, 2016	/s/ Alfred A. Nietzel
		Alfred A. Nietzel
		Vice President, Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CDK Global, Inc. (the "Company") on Form 10-Q for the fiscal quarter ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven J. Anenen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:


(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:	February 3, 2016	/s/ Steven J. Anenen
		Steven J. Anenen
		Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CDK Global, Inc. (the "Company") on Form 10-Q for the fiscal quarter ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Alfred A. Nietzel, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:


(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:	February 3, 2016	/s/ Alfred A. Nietzel
		Alfred A. Nietzel
		Vice President, Chief Financial Officer