ADP 2004 Annual Report Download - page 40

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Automatic Data Processing, Inc. and Subsidiaries
The Company believes that the available-for-sale securities
which have fair values that are below cost are not other-than-tem-
porarily impaired since it is probable that principal and interest
will be collected in accordance with the applicable contractual
terms and the Company has the ability to hold the available-for-
sale securities until maturity.
Expected maturities of available-for-sale securities at June
30, 2004 are as follows:
Maturity Dates:
Due in one year or less $ 3,241,891
Due after one year through two years 3,834,349
Due after two years through three years 3,153,773
Due after three years through four years 932,779
Due after four years through ten years 930,032
Total available-for-sale securities $12,092,824
NOTE 5 Receivables
Accounts receivable is net of an allowance for doubtful accounts
of $51 million and $55 million at June 30, 2004 and 2003,
respectively.
The Company’s receivables for the financing of the sale of
computer systems, most of which are due from automobile and
truck dealerships, are reflected in the Consolidated Balance Sheets
as follows:
June 30, 2004 2003
Current Long-term Current Long-term
Receivables $151,774 $222,073 $167,328 $209,177
Less:
Allowance for
doubtful accounts (5,303) (8,578) (7,337) (11,103)
Unearned income (18,093) (16,667) (20,563) (17,720)
$128,378 $196,828 $139,428 $180,354
Long-term receivables at June 30, 2004 mature as follows:
2006 $108,284
2007 67,731
2008 33,926
2009 11,822
2010 283
Thereafter 27
$222,073
NOTE 6 Goodwill and Intangible Assets, Net
Changes in goodwill for the year ended June 30, 2004 are as
follows:
Employer Brokerage Dealer
Services Services Services Other Total
Balance as of
June 30,
2003 $1,287,128 $366,775 $215,134 $112,094 $1,981,131
Additions 19,221 6,948 109,080 81,124 216,373
Other 1,646 (6,455) — — (4,809)
Sale of
businesses (1,315) (2,152) — (1,088) (4,555)
Cumulative
translation
adjustments 7,899 1,183 (103) (1,580) 7,399
Balance as of
June 30,
2004 $1,314,579 $366,299 $324,111 $190,550 $2,195,539
No impairment losses were recognized during the year. Dur-
ing fiscal 2004, 2003 and 2002, the Company performed the
required impairment tests of goodwill and determined that there
was no impairment.
Gross unrealized gains and losses on the available-for-sale securities are as follows:
Gross Gross Unrealized
As of June 30, unrealized gains unrealized losses gains, net
2004 $125,585 $(65,716) $ 59,869
2003 $376,494 $ (561) $ 375,933
Available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as
of June 30, 2004 are as follows:
Unrealized Fair market Unrealized Fair market Total
losses value— losses value— Total gross fair
less than less than greater than greater than unrealized market
12 months 12 months 12 months 12 months losses value
U.S. Treasury and direct obligations of
U.S. government agencies $(29,133) $2,614,784 — — $(29,133) $2,614,784
Asset backed securities (11,745) 1,200,598 $(124) $15,571 (11,869) 1,216,169
Corporate bonds (15,998) 1,413,116 (54) 3,256 (16,052) 1,416,372
Canadian government obligations and
Canadian government agency obligations (2,894) 355,748 — — (2,894) 355,748
Other debt securities (5,768) 467,819 — — (5,768) 467,819
$(65,538) $6,052,065 $(178) $18,827 $(65,716) $6,070,892
Notes to Consolidated Financial Statements