ADP 2013 Annual Report Download - page 75

software and associated services to physicians and medical practice managers infringe a patent owned by athenahealth, Inc. The parties are
currently engaged in the discovery process. The Company believes that it has meritorious defenses to this lawsuit and continues to vigorously
defend itself against the allegations.
In June 2011, the Company received a Commissioner’s Charge from the U.S. Equal Employment Opportunity Commission (“EEOC”) alleging
that the Company has violated Title VII of the Civil Rights Act of 1964 by refusing to recruit, hire, transfer and promote certain persons on the
basis of their race, in the State of Illinois from at least the period of January 1, 2007 to the present. The Company continues to investigate the
allegations set forth in the Commissioner’s Charge and is cooperating with the EEOC’s investigation.
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. At this time the Company is unable to estimate
any reasonably possible loss, or range of reasonably possible loss, with respect to the matters described above. This is primarily because these
matters involve complex issues subject to inherent uncertainty. There can be no assurance that these matters will be resolved in a manner that is
not adverse to the Company.
It is not the Company’s business practice to enter into off-balance sheet arrangements. 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 13. ACCUMULATED OTHER COMPREHENSIVE INCOME
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 stockholders' equity. Other comprehensive (loss) income was
$(214.8) million , $(136.9) million , and $157.6 million in fiscal 2013 , 2012 , and 2011 , respectively. The accumulated balances reported in
accumulated other comprehensive income on the Consolidated Balance Sheets for each component of other comprehensive income (loss) are as
follows:
NOTE 14. FINANCIAL DATA BY SEGMENT AND GEOGRAPHIC AREA
Based upon similar economic characteristics and operational characteristics, the Company’s strategic business units have been aggregated into
the following three reportable segments: Employer Services, PEO Services, and Dealer Services. The primary components of the “Other”
segment are the results of operations of ADP Indemnity (a wholly-owned captive insurance company that provides workers’ compensation and
employer’s liability deductible reimbursement insurance protection for PEO Services worksite employees), non-recurring gains and losses,
miscellaneous processing services, such as customer financing transactions, and certain charges and expenses that have not been allocated to the
reportable segments, such as stock-based compensation expense and the goodwill impairment charge. Certain revenues and expenses are
charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management
responsibility. The prior year reportable segments’
revenues and earnings from continuing operations before income taxes have been adjusted to
reflect updated fiscal 2013 budgeted foreign exchange rates. In addition, there is a reconciling item for the difference between actual interest
income earned on invested funds held for clients and interest credited to Employer Services and PEO Services at a standard rate of 4.5% . The
reportable segments’ results also include an internal cost of capital charge related to the funding of acquisitions and other investments. All of
these adjustments/charges are reconciling items to the Company’s reportable segments’ revenues and/or earnings from continuing operations
before income taxes and result in the elimination of these adjustments/charges in consolidation. Reportable segments' assets from continuing
operations include funds held for clients, but exclude corporate cash, corporate marketable securities, and goodwill.
66
June 30,
2013 2012 2011
Currency translation adjustments
$
39.6
$
42.0
$
183.1
Unrealized net gain on available-for-sale
securities, net of tax
186.7
461.3
369.8
Pension liability adjustment, net of tax
(210.9
)
(273.1
)
(185.8
)
Accumulated other comprehensive income
$
15.4
$
230.2
$
367.1