ADP 2015 Annual Report Download - page 54

NOTE 2 . DIVESTITURES
A. Disposition
On September 1, 2015 , the Company completed the sale of its AMD business for a pre-tax gain of $29.1 million , less costs to sell, and recorded such
gain within Other income, net on the Statements of Consolidated Earnings. The Company determined that the disposition did not meet the criteria for reporting
discontinued operations under ASU 2014-08, which was adopted prospectively on July 1, 2015, as the disposition of this business does not represent a strategic
shift that has a major effect on the Company's operations or financial results. The historical results of AMD are being reported in the Other segment (see Note 13 ).
B. Discontinued Operations
On June 26, 2015 , the Company completed the sale of its Procure-to-Pay business ("P2P") for a pre-tax gain of $100.9 million , less costs to sell, and
recorded such gain within earnings from discontinued operations on the Statements of Consolidated Earnings.
On September 30, 2014 , the Company completed the tax free spin-off of its former Dealer Services business, which was a separate reportable segment,
into an independent publicly traded company called CDK Global, Inc. ("CDK"). As a result of the spin-off, ADP stockholders of record on September 24, 2014
(the "record date") received one share of CDK common stock on September 30, 2014, par value $0.01 per share, for every three shares of ADP common stock held
by them on the record date and cash for any fractional shares of CDK common stock. ADP distributed approximately 160.6 million shares of CDK common stock
in the distribution. During the first quarter of fiscal 2016 , the Company became aware that 1.0 million of the 160.6 million shares of CDK stock distributed at the
distribution date were inadvertently issued and distributed with respect to certain unvested Company equity awards. The 1.0 million shares were canceled during
the first quarter of fiscal 2016 . Such shares distributed as part of the spin-off did not have any impact to previously reported results of operations, financial
condition, or cash flows. The spin-off was made without the payment of any consideration or the exchange of any shares by ADP stockholders. The spin-off,
transitional, and on-going relationships between ADP and CDK are governed by the Separation and Distribution Agreement entered into between ADP and CDK
and certain other ancillary agreements.
Incremental costs associated with the spin-off of CDK and divestiture of P2P of $50.1 million for fiscal 2015 are included in discontinued operations on
the Statements of Consolidated Earnings.
On February 28, 2014 , the Company completed the sale of its Occupational Health and Safety services business ("OHS") for a pre-tax gain of $15.6
million , less costs to sell, and recorded such gain within earnings from discontinued operations on the Statements of Consolidated Earnings. In connection with the
disposal of OHS, the Company classified the results of this business as discontinued operations for all periods presented. OHS was previously reported in the
Employer Services segment.
Results for discontinued operations were as follows:
Years ended June 30,
2016
2015
2014
Revenues
$ —
$ 538.8
$ 1,993.1
Earnings from discontinued operations before income taxes
—
69.2
399.3
Provision for income taxes
—
71.6
136.5
Net (loss) / earnings from discontinued operations before gain on disposal of
discontinued operations
—
(2.4)
262.8
Gain on disposal of discontinued operations, less costs to sell
(1.4)
102.3
15.6
(Benefit) / provision for income taxes
(0.5)
23.9
5.1
Net gain on disposal of discontinued operations
(0.9)
78.4
10.5
Net (loss) / earnings from discontinued operations
$ (0.9)
$ 76.0
$ 273.3
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