ADP 2005 Annual Report Download - page 38

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Notes to Consolidated Financial Statements AUTOMATIC DATA PROCESSING, INC. AND SUBSIDIARIES
of the acquired business. The acquisition of the U.S. Clearing
and BrokerDealer Business enables the Company to provide
execution, clearing, and customer financing (such as margin
lending); securities borrowing to facilitate customer short sales
to clearing clients; and outsourcing services for a variety of
clearing and custody-related functions.
The Company acquired six businesses in fiscal 2004 for approxi-
mately $270.3 million, net of cash acquired. These acquisitions
resulted in approximately $185.7 million of goodwill. Intangible
assets acquired, which totaled approximately $88.3 million, con-
sist primarily of software, and customer contracts and lists that
are being amortized over a weighted average life of 9 years. In
addition, the Company made contingent payments totaling $25.4
million (including $0.5 million in common stock) relating to pre-
viously consummated acquisitions.
On June 20, 2003, the Company acquired all of the outstanding
common and preferred stock of ProBusiness Services, Inc.
(“ProBusiness”) for $17 per common share and $26 per pre-
ferred share. The transaction was consummated in cash for
approximately $516.9 million, net of cash acquired. ProBusiness
was a leading provider of comprehensive payroll and human
resource processing solutions to larger employers within the
United States. The acquisition resulted in approximately $421.7
million of goodwill. Intangible assets acquired, which totaled
approximately $79.8 million, consist of software, customer
contracts and lists, and other intangible assets that are being
amortized over a weighted average life of 8 years.
In addition to the acquisition of ProBusiness in fiscal 2003, the
Company also acquired ten other businesses for approximately
$118.3 million, net of cash acquired. These acquisitions resulted
in approximately $90.0 million of goodwill. Intangible assets
acquired of $27.9 million, which consist of software, customer
contracts and lists, and other intangible assets, are being amor-
tized over a weighted average life of 5 years.
The acquisitions discussed above for fiscal 2005, 2004 and 2003
were not material, either individually or in the aggregate, to the
Company’s operations, financial position or cash flows.
The Company divested two, five and two businesses in fiscal 2005,
2004 and 2003, respectively, for $17.2 million, $26.9 million and
$4.1 million, respectively. The divestitures of these businesses
were not material, either individually or in the aggregate, to the
Company’s operations, financial position or cash flows in fiscal
2005, 2004 and 2003.
NOTE 4. CORPORATE INVESTMENTS AND FUNDS HELD FOR CLIENTS
Corporate investments and funds held for clients at June 30, 2005 and 2004 are as follows:
2005 2004
Gross Gross Gross Gross
Unrealized Unrealized Fair Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value
Type of issue:
Money market securities and other cash
equivalents $ 6,810.4 $ — $ — $ 6,810.4 $ 2,903.3 $ — $ — $ 2,903.3
Trading securities:
U.S. Treasury and direct obligations
of U.S. government agencies 204.7 — — 204.7 ————
Available-for-sale securities:
U.S. Treasury and direct obligations
of U.S. government agencies 6,573.3 48.2 (30.3) 6,591.2 5,449.7 65.0 (29.1) 5,485.6
Asset backed securities 1,815.2 8.6 (11.3) 1,812.5 2,570.4 22.1 (11.9) 2,580.6
Corporate bonds 2,684.8 8.7 (15.3) 2,678.2 2,342.0 15.1 (16.1) 2,341.0
Canadian government obligations and
Canadian government agency
obligations 894.3 20.5 (0.3) 914.5 765.9 11.9 (2.9) 774.9
Other debt securities 999.5 8.5 (3.8) 1,004.2 899.2 7.1 (5.7) 900.6
Other equity securities 1.5 — (0.6) 0.9 5.7 4.4 — 10.1
Total available-for-sale securities 12,968.6 94.5 (61.6) 13,001.5 12,032.9 125.6 (65.7) $12,092.8
Total corporate investments
and funds held for clients $19,983.7 $94.5 $(61.6) $20,016.6 $14,936.2 $125.6 $(65.7) $14,996.1