ADP 2009 Annual Report Download - page 44

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The Company acquired four businesses in fiscal 2008 for approximately $45.9 million, net of cash acquired. These acquisitions resulted in
approximately $37.7 million of goodwill. Intangible assets acquired, which totaled approximately $11.6 million, consist 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 $51.4 million
of contingent payments in fiscal 2008 relating to previously consummated acquisitions.
The Company acquired eleven businesses in fiscal 2007 for approximately $434.4 million, net of cash acquired. These acquisitions resulted in
approximately $327.2 million of goodwill. Intangible assets acquired, which totaled approximately $157.9 million, consist 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
$12.5 million of contingent payments in fiscal 2007 relating to previously consummated acquisitions.
The acquisitions discussed above for fiscal 2009, 2008 and 2007 were not material, either individually or in the aggregate, to the Company’ s
operations, financial position or cash flows.
NOTE 4. DIVESTITURES
During fiscal 2009, the Company recorded a net gain of $2.8 million, net of taxes, within earnings from discontinued operations related to a
change in estimated taxes on the divestitures of business of $2.6 million and a change in professional fees incurred in connection with the
divestitures of businesses of $0.2 million. During fiscal 2008, the Company recorded a net gain of $10.2 million, net of taxes, within earnings
from discontinued operations related to a change in estimated taxes on the divestitures of businesses of $11.3 million, partially offset by
professional fees incurred in connection with the divestitures of businesses of $1.1 million.
On June 30, 2007, the Company entered into a definitive agreement to sell its Travel Clearing business for approximately $116.0 million in
cash. The Company completed the sale of its Travel Clearing business on July 6, 2007. The Travel Clearing business was previously reported
in the “Other” segment. In connection with the disposal of this business, the Company classified the results of this business as discontinued
operations for all periods presented. During fiscal 2008, the Company reported a gain of $95.8 million, or $62.2 million after taxes, within
earnings from discontinued operations on the Statements of Consolidated Earnings.
On March 30, 2007, the Company completed the tax-free spin-off of its former Brokerage Services Group business, comprised of Brokerage
Services and Securities Clearing and Outsourcing Services, into an independent publicly traded company. As a result of the spin-off, ADP
stockholders of record on March 23, 2007 (the “record date”) received one share of Broadridge common stock for every four shares of ADP
common stock held by them on the record date and cash for any fractional shares of Broadridge common stock. ADP distributed approximately
138.8 million shares of Broadridge common stock in the distribution. The spin-off was made without the payment of any consideration or the
exchange of any shares by ADP stockholders. The Company classified the results of operations of the spun-off business as discontinued
operations for all periods presented.
On January 23, 2007, the Company completed the sale of Sandy Corporation, a business within the Dealer Services segment, which specializes
in sales and marketing training, for approximately $4.0 million in cash and the assumption of certain liabilities by the buyer, plus additional
earn-out payments if certain revenue targets are achieved. The Company classified the results of operations of this business as discontinued
operations for all periods presented. Additionally, during fiscal 2007, the Company reported a gain of $11.2 million, or $6.9 million after tax,
within earnings from discontinued operations on the Statements of Consolidated Earnings. In March 2008 and April 2009, the Company
received two additional payments of $2.5 million during each period, which represented purchase price adjustments for the sale of Sandy
Corporation. The Company recorded additional gains of $2.5 million, or $1.6 million net of tax, within earnings from discontinued operations
during both fiscal 2008 and fiscal 2009 for the payments received.
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