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44
Automatic Data Processing, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
have been adjusted to reflect updated fiscal year 2004 budgeted
foreign exchange rates. In addition, Employer Services’ prior
year’s revenues and earnings before income taxes were adjusted
to include interest income earned on funds held for clients at a
standard rate of 4.5%. Prior to fiscal year 2004, Employer Ser-
vices was credited with interest earned on client funds at 6.0%.
Given the decline in interest rates over recent years, the standard
rate has been changed to 4.5%. The business unit results also
include a cost of capital charge related to the funding of acquisi-
tions and other investments. All of these adjustments/charges are
eliminated in consolidation and as such represent a reconciling
item to earnings before income taxes. Business unit assets include
funds held for clients but exclude corporate cash, marketable
securities and goodwill.
Reconciling Items
Employer Brokerage Dealer Foreign Client Fund Cost of
(In millions) Services Services Services Other Exchange Interest Capital Charge Total
Year ended June 30, 2004
Revenues $ 4,809 $1,665 $ 890 $ 476 $ 55 $ (140) $— $ 7,755
Earnings before income taxes $ 993 $ 245 $ 144 $ 112 $ 7 $ (140) $ 134 $ 1,495
Assets $ 14,429 $ 611 $ 434 $ 5,647 — $—$— $21,121
Capital expenditures $ 97 $ 36 $ 34 $ 37 — $—$— $ 204
Depreciation and amortization $ 248 $ 86 $ 51 $ 56 $—$— $ (134) $ 307
Year ended June 30, 2003
Revenues $ 4,390 $1,610 $ 813 $ 462 $ (87) $ (41) $— $ 7,147
Earnings before income taxes $ 1,070 $ 232 $ 137 $ 153 $ (15) $ (41) $ 109 $ 1,645
Assets $ 13,278 $ 556 $ 351 $ 5,649 — $—$— $19,834
Capital expenditures $ 66 $ 24 $ 26 $ 18 — $—$— $ 134
Depreciation and amortization $ 193 $ 95 $ 50 $ 46 $—$— $ (109) $ 275
Year ended June 30, 2002
Revenues $ 4,176 $1,777 $ 732 $ 464 $ (195) $ 50 $— $ 7,004
Earnings before income taxes $ 995 $ 358 $ 120 $ 169 $ (27) $ 50 $ 122 $ 1,787
Assets $ 12,244 $ 566 $ 181 $ 5,286 — $—$— $18,277
Capital expenditures $ 71 $ 33 $ 21 $ 21 — $—$— $ 146
Depreciation and amortization $ 208 $ 108 $ 40 $ 45 $—$— $ (122) $ 279
Revenues and assets by geographic area are as follows:
United
(In millions) States Europe Canada Other Total
Year ended June 30, 2004
Revenues $ 6,449 $ 881 $ 354 $ 71 $ 7,755
Assets $ 17,591 $1,662 $1,719 $ 149 $21,121
Year ended June 30, 2003
Revenues $ 6,016 $ 775 $ 292 $ 64 $ 7,147
Assets $ 16,841 $1,476 $1,391 $ 126 $19,834
Year ended June 30, 2002
Revenues $ 5,978 $ 673 $ 270 $ 83 $ 7,004
Assets $ 16,055 $1,214 $ 843 $ 165 $18,277
NOTE 15 Quarterly Financial Results (Unaudited)
Summarized quarterly results of operations for the two years ended June 30, 2004 are as follows:
First Second Third Fourth
Quarter Quarter Quarter Quarter
Year ended June 30, 2004
Revenues $1,720,277 $1,827,400 $2,121,435 $2,085,830
Net earnings $ 194,850 $ 228,580 $ 300,250 $ 211,890
Basic earnings per share $ .33 $ .39 $ .51 $ .36
Diluted earnings per share $ .32 $ .38 $ .50 $ .36
Year ended June 30, 2003
Revenues $1,646,685 $1,682,995 $1,905,778 $1,911,559
Net earnings $ 210,400 $ 261,690 $ 329,390 $ 216,670
Basic earnings per share $ .35 $ .44 $ .55 $ .36
Diluted earnings per share $ .34 $ .43 $ .54 $ .36