ADP 2012 Annual Report Download - page 57

NOTE 2. OTHER INCOME, NET
Other income, net consists of the following:
Proceeds from sales and maturities of available-for-sale securities were $3,962.2 million, $3,305.1 million, and $3,406.9 million for fiscal
2012, 2011, and 2010, respectively.
During fiscal 2012, the Company sold assets related to rights and obligations to resell a third party expense management platform and, as a
result, recorded a gain of $66.0 million in other income, net, on the Statements of Consolidated Earnings.
During fiscal 2011 and 2010, the Company received distributions from the Reserve Fund in excess of what was previously recorded in short-
term marketable securities and, as such, recorded gains of $0.9 million and $15.2 million, respectively, to other income, net on the Statements
of Consolidated Earnings.
In fiscal 2012 and 2010, the Company concluded it had the intent to sell certain securities for which unrealized losses of $5.8 million and $14.4
million, respectively, were previously recorded in accumulated other comprehensive income on the Consolidated Balance Sheets. As such, the
Company recorded an impairment charge of $5.8 million and $14.4 million in other income, net on the Statements of Consolidated Earnings
during fiscal 2012 and 2010. As of June 30, 2012, all such securities had been sold.
In fiscal 2012, the Company completed the sale of two buildings for their combined carrying value of $6.9 million, net of selling costs. The
Company had previously classified these assets as assets held for sale on the Consolidated Balance Sheets and recognized impairment losses
within other income, net on the Statements of Consolidated Earnings of $2.2 million and $11.7 million in fiscal 2012 and 2011, respectively.
During fiscal years 2011 and 2010, the Company sold buildings that were previously classified as assets held for sale on the Consolidated
Balance Sheets and, as a result, recorded net gains/(losses) of $1.8 million and ($2.3) million, respectively, in other income, net on the
Statements of Consolidated Earnings.
The Company had an outsourcing agreement with Broadridge Financial Solutions, Inc. (“Broadridge”) pursuant to which the Company
provided data center outsourcing services, which principally consisted of information technology services and service delivery network
services. As a result of this agreement, the Company recognized income of $112.0 million, $113.0 million and $104.8 million in fiscal 2012,
2011, and 2010, respectively, which was offset by expenses associated with providing such services of $109.8 million, $110.8 million and
$102.6 million, respectively, both of which were recorded in other income, net on the Statements of Consolidated Earnings. The Company had
a receivable on the Consolidated Balance Sheets from Broadridge for the services under this agreement of $7.6 million and $9.5 million on
June 30, 2012 and 2011, respectively. In fiscal 2010, Broadridge notified the Company that it would not extend the outsourcing agreement
beyond its current expiration date of June 30, 2012. The expiration of the outsourcing agreement did not have a material impact on the
Company’s results of operations.
51
Years ended June 30,
2012 2011 2010
Interest income on corporate funds
$
(85.2
)
$
(88.8
)
$
(98.8
)
Realized gains on available-for-sale securities
(32.1
)
(38.0
)
(15.0
)
Realized losses on available-for-sale securities
7.7
3.6
13.4
Realized gains on investment in Reserve Fund -
(0.9
)
(15.2
)
Impairment losses on available-for-sale securities
5.8
-
14.4
Impairment losses on assets held for sale
2.2
11.7
-
Gain on sale of assets
(66.0
)
- -
Net (gains) losses on sales of buildings
-
(1.8
)
2.3
Other, net
(3.2
)
(2.4
)
(2.3
)
Other income, net $
(170.8
)
$
(116.6
)
$
(101.2
)