ADP 2012 Annual Report Download - page 71

Components of intangible assets are as follows:
Other intangibles consist primarily of purchased rights, covenants, patents and trademarks (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 the intangible assets
is 8 years (4 years for software and software licenses, 10 years for customer contracts and lists, and 8 years for other intangibles). Amortization
of intangible assets was $176.4 million, $171.9 million, and $156.6 million for fiscal 2012, 2011, and 2010, respectively.
Estimated amortization expenses of the Company’s existing intangible assets for the next five fiscal years are as follows:
The Company has not incurred significant costs to renew or extend the term of acquired intangible assets during fiscal 2012.
NOTE 11. SHORT-TERM FINANCING
The Company has a $2.0 billion, 364-day credit agreement with a group of lenders that matures in June 2013. In addition, the Company has a
four-year $3.25 billion credit facility maturing in June 2015 that contains an accordion feature under which the aggregate commitment can be
increased by $500.0 million, subject to the availability of additional commitments. The Company also has a $1.5 billion five-
year credit facility
that matures in June 2017 that also contains an accordion feature under which the aggregate commitment can be increased by $500.0 million,
subject to the availability of additional commitments. The interest rate applicable to committed borrowings is tied to LIBOR, the federal funds
effective rate or the prime rate depending on the notification provided by the Company to the syndicated financial institutions prior to
borrowing. The Company is also required to pay facility fees on the credit agreements. The primary uses of the credit facilities are to provide
liquidity to the commercial paper program and funding for general corporate purposes, if necessary. The Company had no borrowings through
June 30, 2012 under the credit agreements.
The Company’s U.S. short-term funding requirements related to client funds are sometimes obtained through a short-term commercial paper
program, which provides for the issuance of up to $6.75 billion in aggregate maturity value of commercial paper. The Company’s commercial
paper program is rated A-1+ by Standard and Poor’s and Prime-1 by Moody’s. These ratings denote the highest quality commercial paper
securities. Maturities of commercial paper can range from overnight to up to 364 days. At June 30, 2012 and 2011, the Company had no
commercial paper outstanding. In fiscal 2012 and 2011, the Company’s average borrowings were $2.3 billion and $1.6 billion, at weighted
average interest rates of 0.1% and 0.2%. The weighted average maturity of the Company’s commercial paper in fiscal 2012 and 2011 was
approximately two days for both fiscal years.
64
June 30, 2012
2011
Intangibles:
Software and software licenses
$
1,423.7
$
1,322.4
Customer contracts and lists
863.1
821.0
Other intangibles
241.9
238.3
2,528.7
2,381.7
Less accumulated amortization:
Software and software licenses
(1,153.0
)
(1,062.1
)
Customer contracts and lists
(492.2
)
(443.7
)
Other intangibles
(172.3
)
(160.2
)
(1,817.5
)
(1,666.0
)
Intangible assets, net $
711.2
$
715.7
Amount
Twelve months ending June 30, 2013
$
159.4
Twelve months ending June 30, 2014 $
129.9
Twelve months ending June 30, 2015 $
99.3
Twelve months ending June 30, 2016 $
70.2
Twelve months ending June 30, 2017 $
61.2