ADP 2008 Annual Report Download - page 26

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Cash flows used in financing in fiscal 2008 totaled $5,270.7 million as compared to $1,176.7 million in fiscal 2007. The increase in cash
flows used was due to a $4,188.0 million decrease in client funds obligations and a $87.6 million increase in the amount of dividends paid in
fiscal 2008 compared to fiscal 2007. Additionally, there was a decrease in proceeds from stock purchase plan and exercises of stock options of
$104.5 million. The increase in cash flows used was offset by a decrease in cash paid for the repurchases of common stock of $395.6 million.
We purchased 32.9 million shares of our common stock at an average price per share of $44.44 during fiscal 2008. As of June 30, 2008, we had
remaining Board of Director’ s authorization to purchase up to 10.8 million additional shares. In August 2008, the Company received the Board
of Directors’ approval to purchase up to 50 million additional shares of the Company’ s common stock.
In June 2008, we entered into a $2.25 billion, 364-day credit agreement with a group of lenders. The 364-day facility replaced the
Company’ s prior $1.75 billion 364-day facility. We also have a $1.5 billion credit facility and a $2.25 billion credit facility that mature in June
2010 and June 2011, respectively. The five-year facilities contain accordion features under which the aggregate commitments can each be
increased by $500 million, subject to the availability of additional commitments. The interest rate applicable to the borrowings is tied to
LIBOR or prime rate depending on the notification provided by the Company to the syndicated financial institutions prior to borrowing. We are
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 to provide funding for general corporate purposes, if necessary. There were no borrowings through June 30, 2008 under the
credit agreements.
We maintained a U.S. short-term commercial paper program, which provided for the issuance of up to $5.5 billion in aggregate maturity
value of commercial paper at the Company’ s discretion. In July 2008, we increased the U.S. short-term commercial paper program to provide
for the issuance of up to $6.0 billion in aggregate maturity value. Our 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, 2008 and 2007, there was no commercial paper outstanding. In fiscal 2008 and 2007, the Company’ s
average borrowings were $1.4 billion and $1.5 billion, respectively, at a weighted average interest rate of 4.2% and 5.3%, respectively. The
weighted average maturity of the Company’ s commercial paper was less than two days in both fiscal 2008 and fiscal 2007.
Our U.S. and Canadian short-term funding requirements related to client funds obligations are sometimes obtained on a secured basis
through the use of reverse repurchase agreements, which are collateralized principally by government and government agency securities. These
agreements generally have terms ranging from overnight to up to five business days. At June 30, 2008, we had an $11.8 million obligation
outstanding related to reverse repurchase agreements. The term of the reverse repurchase transaction matured on July 2, 2008 and the
outstanding obligation was repaid. At June 30, 2007, there were no outstanding obligations under reverse repurchase agreements. In fiscal 2008
and 2007, the Company had average outstanding balances under reverse repurchase agreements of $360.4 million and $141.6 million,
respectively, at a weighted average interest rate of 3.4% and 4.4%, respectively.
Capital expenditures for continuing operations in fiscal 2008 were $186.4 million, as compared to $169.7 million in fiscal 2007 and $252.8
million in fiscal 2006. The capital expenditures in fiscal 2008 related to data center and other facility improvements to support our operations.
We expect capital expenditures in fiscal 2009 to be approximately $220 million.
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