ADP 2009 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2009 ADP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

The Company’ s 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, 2009, there were no outstanding
obligations under reverse repurchase agreements. At June 30, 2008, the Company had an $11.8 million obligation outstanding related to reverse
repurchase agreements that matured on July 2, 2008 and was repaid. In fiscal 2009 and 2008, the Company had average outstanding balances
under reverse repurchase agreements of $425.9 million and $360.4 million, respectively, at weighted average interest rates of 1.3% and 3.4%,
respectively.
NOTE 12. DEBT
Components of long-term debt are as follows:
During fiscal 2008, the Company entered into a secured financing agreement, whereby the Company borrowed $21.1 million from a third party
in exchange for a security interest in a single client’ s unbilled accounts receivable, which is billable over a ten-year period. The Company will
continue to collect amounts due from the client as they are billed. The security interest in the receivables retained by the third party is without
recourse against the Company in the event that the client does not make the appropriate payments to the Company. As of June 30, 2009, the
Company has recorded approximately $2.8 million within accrued expenses and other current liabilities and approximately $16.2 million
within long-term debt on the Company’ s Consolidated Balance Sheets related to the secured financing arrangement.
The fair value of the industrial revenue bonds and other debt, included above, approximates carrying value.
Long-term debt repayments at June 30, 2009 are due as follows:
Cash payments relating to interest on long-term debt and the short-term financing arrangements described in Note 11 were approximately $40.1
million, $82.1 million, and $93.5 million in fiscal 2009, 2008 and 2007, respectively.
NOTE 13. FOREIGN CURRENCY RISK MANAGEMENT PROGRAMS
There were no derivative financial instruments outstanding at June 30, 2009, 2008 or 2007.
53
June 30, 2009 2008
Industrial revenue bonds
(with variable interest rates from 1.6% to 2.4%) $26.5 $ 34.1
Secured financing 19.0 20.7
Other - -
45.5 54.8
Less: current portion (2.8) (2.7)
$ 42.7 $ 52.1
2011 $ 2.8
2012 10.5
2013 10.5
2014 2.8
2015 2.8
Thereafter 13.3
$42.7