ADP 2012 Annual Report Download

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AUTOMATIC DATA PROCESSING INC
FORM 10-K
(Annual Report)
Filed 08/20/12 for the Period Ending 06/30/12
Address ONE ADP BOULVARD
ROSELAND, NJ 07068
Telephone 9739747849
CIK 0000008670
Symbol ADP
SIC Code
7374 - Computer Processing and Data Preparation and Processing Services
Industry Business Services
Sector Services
Fiscal Year 06/30
http://www.edgar-online.com
© Copyright 2013, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ...FORM 10-K (Annual Report) Filed 08/20/12 for the Period Ending 06/30/12 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year ONE ADP BOULVARD ROSELAND, NJ 07068 9739747849 0000008670 ADP 7374 - Computer Processing and Data Preparation and Processing Services Business Services Services...

  • Page 2
    ...) One ADP Boulevard, Roseland, New Jersey (Address of principal executive offices) Registrant's telephone number, including area code: 973-974-5000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, $.10 Par Value (voting) Securities registered pursuant...

  • Page 3
    ... market value of the voting and non-voting common equity held by non-affiliates of the Registrant as of the last business day of the Registrant's most recently completed second fiscal quarter was approximately $ 26,415,304,885. On August 10, 2012 there were 484,504,817 shares of Common Stock...

  • Page 4
    ... Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on...

  • Page 5
    ..., payroll processing, time and labor management, and tax and benefits administration solutions and services, including traditional and Web-based outsourcing solutions, that assist employers in the United States, Canada, Europe, South America (primarily Brazil), Australia and Asia to recruit, staff...

  • Page 6
    ... direct deposit (FSDD), and stored value payroll card (ALINE Card by ADP SM ). Insurance Services provides a comprehensive Pay-by-Pay workers' compensation payment program and, through Automatic Data Processing Insurance Agency, Inc., offers workers compensation and group health insurance to small...

  • Page 7
    ..., COBRA, Dependent Care, Commuter, Health Reimbursement Arrangements, Health Savings Accounts, and FSA administration. Time and Labor Management Services provides solutions for employers to capture, calculate, and report employee time and attendance. 1 1 1 ADP also provides cloud-based medical...

  • Page 8
    ...solutions, and an IP Telephony phone system fullyintegrated into the DMS to help dealerships drive sales processes and business development initiatives. Dealer Services also provides its dealership clients computer hardware, hardware maintenance services, software support, system design, and network...

  • Page 9
    ...franchised dealers and their vehicle manufacturer franchisors. These networks are used for activities such as new vehicle ordering and status inquiry, warranty submission and validation, parts and vehicle location, dealership customer credit application submission and decision-making, vehicle repair...

  • Page 10
    ... factors impacting ADP's competitive position. Clients and Client Contracts ADP provides its services to approximately 600,000 clients. In fiscal 2012, no single client or group of affiliated clients accounted for revenues in excess of 2% of annual consolidated revenues. Our business is typically...

  • Page 11
    ... investing client funds before such funds are remitted to the applicable taxing authorities or client employees. Changes in taxation requirements in the United States or in other countries could adversely affect our effective tax rate and our net income. Changes in laws that govern the co-employment...

  • Page 12
    ... credit ratings, may limit our access to short-term debt markets to meet liquidity needs required by our Employer Services business. We invest our client funds in liquid, investment-grade marketable securities, money market securities, and other cash equivalents. Nevertheless, our client fund assets...

  • Page 13
    Item 1B. Unresolved Staff Comments None. Item 2. Properties ADP owns 13 of its processing/print centers, and 24 other operational offices, sales offices, and its corporate headquarters in Roseland, New Jersey, which aggregate approximately 3,739,235 square feet. None of ADP's owned facilities is ...

  • Page 14
    Part II Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for the Registrant's Common Equity The principal market for the Company's common stock (symbol: ADP) is the NASDAQ Global Select Market. The following table sets ...

  • Page 15
    ... stock program, the Company purchased 854 shares during April 2012, and 28,200 shares during May 2012, at the then market value of the shares in connection with the exercise by employees of their option under such program to satisfy certain tax withholding requirements through the delivery of shares...

  • Page 16
    ... all dividends reinvested. * The Peer Group Index is comprised of the following companies: Insperity, Inc. (formerly named Administaff, Inc.) Computer Sciences Corporation Global Payments Inc. Intuit Inc. Paychex, Inc. The Ultimate Software Group, Inc. Total System Services, Inc. The Western Union...

  • Page 17
    ... Basic weighted average shares outstanding Diluted weighted average shares outstanding Cash dividends declared per share Return on equity ("ROE") from continuing operations (Note 2) At year end: Cash, cash equivalents and marketable securities Total assets Obligation under commercial paper borrowing...

  • Page 18
    ... our Selected Financial Data for the years ended June 30, 2012, 2011, 2010, 2009, and 2008 to adjusted results that exclude a gain on the sale of assets related to rights and obligations to resell a third-party expense management platform and certain favorable tax items. We use certain adjusted...

  • Page 19
    ..., payroll processing, time and labor management, and tax and benefits administration solutions and services, including traditional and Web-based outsourcing solutions, that assist employers in the United States, Canada, Europe, South America (primarily Brazil), Australia, and Asia to recruit, staff...

  • Page 20
    ...the Asia Pacific region. As of June 30, 2012, over 26,000 auto, truck, motorcycle, marine, RV and heavy equipment retailers in nearly 100 countries use our DMS products, other software applications, networking solutions, data integration, consulting and digital marketing services. EXECUTIVE OVERVIEW...

  • Page 21
    ... rate remained strong throughout the year ending at 91%. Employer Services' and PEO Services' new business sales, which represent annualized recurring revenues anticipated from sales orders to new and existing clients, grew 13% worldwide, to over $1.2 billion in fiscal 2012. Dealer Services' new...

  • Page 22
    ... client retention, and low capital expenditure requirements. We continue to enhance value to our shareholders, and in fiscal 2012 returned excess cash of $739.7 million through dividends and $741.3 million through our share buyback program, while also investing $265.7 million in new acquisitions...

  • Page 23
    ... to the sale of assets related to rights and obligations to resell a thirdparty expense management platform. There was no impact to total revenue growth rates as a result of changes in foreign currency exchange rates. Total revenues for fiscal 2012 include interest on funds held for clients of $493...

  • Page 24
    ... expenses in Employer Services of $38.5 million. Additionally, operating expenses decreased $5.4 million due to changes in foreign currency exchange rates. Systems development and programming costs increased $22.7 million, or 4%, in fiscal 2012 as compared to fiscal 2011, due to businesses acquired...

  • Page 25
    ... points of the margin contribution related to the gain on the sale of assets and approximately 40 basis points of margin decline attributable to acquisitions. Provision for Income Taxes The effective tax rates in fiscal 2012 and 2011 were 34.6% and 35.1%, respectively. The decrease in the effective...

  • Page 26
    Year ended June 30, 2012 (Dollars in millions, except per share amounts) Earnings from continuing operations before income taxes As Reported Less Adjustment: Gain on sale of assets As Adjusted $ $ 2,122.1 Provision for income taxes $ 733.6 Net earnings from continuing operations $ 1,388.5 ...

  • Page 27
    ... without the impact of acquisitions. There was no impact to total revenue growth rates as a result of changes in foreign currency exchange rates. Total revenues for fiscal 2011 include interest on funds held for clients of $540.1 million, as compared to $542.8 million in fiscal 2010. The decrease in...

  • Page 28
    ... to changes in foreign currency exchange rates. Systems development and programming costs increased $63.3 million, or 12%, in fiscal 2011 as compared to fiscal 2010, due to expenses of acquired businesses of $42.2 million and higher development expenses. Selling, general and administrative expenses...

  • Page 29
    ... matters discussed above coupled with the effects of fewer shares outstanding. The following table reconciles our results for fiscal 2011 and fiscal 2010 to adjusted results that exclude the impact of certain favorable tax items. We use certain adjusted results, among other measures, to evaluate our...

  • Page 30
    ...2010 (Dollars in millions, except per share amounts) Earnings from continuing operations before income taxes As Reported Less Adjustment: Favorable tax items As Adjusted $ $ 1,863.2 Provision for income taxes... 2011, from $1,195.1 million for fiscal 2010, and the related diluted earnings per share ...

  • Page 31
    ...' compensation and employer's liability deductible reimbursement insurance protection for PEO Services worksite employees), non-recurring gains and losses, miscellaneous processing services, such as customer financing transactions, and certain expenses that have not been charged to the reportable...

  • Page 32
    ... from new business sales growth, an increase in the number of employees on our clients' payrolls, and higher average client funds balances. Our worldwide client revenue retention rate increased 120 basis points in fiscal 2011 to 91.1% as compared to our rate for fiscal 2010 and our pays per control...

  • Page 33
    ...") applications and services), growth in our "Drive" dealer management system ("DMS") solution and hosted IP telephony services, and an increase in credit report and vehicle registration transaction revenues and increased activity in our digital marketing solutions and data services businesses. 31

  • Page 34
    ...users of application service provider (ASP) managed services, CRM solutions and growth in hosted IP telephony as well as an increase in transaction revenues due to higher credit report checks and vehicle registrations. Earnings from Continuing Operations before Income Taxes Dealer Services' earnings...

  • Page 35
    .... The weighted average maturity of the Company's commercial paper approximated two days in both fiscal 2012 and fiscal 2011. We have successfully borrowed through the use of our commercial paper program on an as needed basis to meet short-term funding requirements related to client funds obligations...

  • Page 36
    ...sub-prime auto loans or sub-prime home equity loans, collateralized debt obligations, collateralized loan obligations, credit default swaps, asset-backed commercial paper, derivatives, auction rate securities, structured investment vehicles or non-investment grade fixedincome securities. Furthermore...

  • Page 37
    ... indices. Our future operating lease obligations could change if we exit certain contracts or if we enter into additional operating lease agreements. Purchase obligations primarily relate to purchase and maintenance agreements on our software, equipment and other assets. We made the determination...

  • Page 38
    ... (cash and cash equivalents, short-term marketable securities, and longterm marketable securities) and client funds assets (funds that have been collected from clients but not yet remitted to the applicable tax authorities or client employees). Our corporate investments are invested in cash and cash...

  • Page 39
    ... limits for our investments. The minimum allowed credit rating at time of purchase for corporate and Canadian provincial bonds is BBB, for asset-backed securities is AAA, and for municipal bonds is A. The maximum maturity at time of purchase for BBB rated securities is 5 years, for single A rated...

  • Page 40
    ..., we limit amounts that can be invested in any security other than U.S. and Canadian government or government agency securities (and securities carrying their guarantee). We operate and transact business in various foreign jurisdictions and are therefore exposed to market risk from changes in...

  • Page 41
    ... services ( e.g. , Employer Services' payroll processing fees) as well as investment income on payroll funds, payroll tax filing funds and other Employer Services' client-related funds. We enter into agreements for a fixed fee per transaction ( e.g. , number of payees or number of payrolls processed...

  • Page 42
    ... 350-10, which states that goodwill and intangible assets with indefinite useful lives should not be amortized, but instead tested for impairment at least annually at the reporting unit level. We perform this impairment test by first comparing the fair value of our reporting units to their carrying...

  • Page 43
    ... - Management's Discussion and Analysis of Financial Condition and Results of Operations." Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Automatic Data Processing, Inc. Roseland, New Jersey We...

  • Page 44
    ...operations BASIC EARNINGS PER SHARE Diluted earnings per share from continuing operations Diluted earnings per share from discontinued operations DILUTED EARNINGS PER SHARE Basic weighted average shares outstanding Diluted weighted average shares outstanding 2012 2011 2010 $ 8,411.7 493.3 1,760...

  • Page 45

  • Page 46
    ...cash equivalents Short-term marketable securities Accounts receivable, net Other current assets Assets held for sale Total current assets before funds held for clients Funds held for clients Total current assets Long-term marketable securities Long-term receivables, net Property, plant and equipment...

  • Page 47
    Total liabilities and stockholders' equity See notes to consolidated financial statements. $ 30,815.5 $ 34,238.3 43

  • Page 48
    ... plans Tax benefits from stock compensation plans Treasury stock acquired (14.6 shares) Dividends ($1.55 per share) - - 78.7 (106.0) 24.2 - (754.1) 356.5 (747.3) - - Balance at June 30, 2012 638.7 $ 63.9 $ 486.4 $ 12,438.3 $ (7,104.8) $ 230.2 See notes to consolidated financial...

  • Page 49

  • Page 50
    ... securities Net decrease (increase) in restricted cash and cash equivalents and other restricted assets held to satisfy client funds obligations Capital expenditures Additions to intangibles Acquisitions of businesses, net of cash acquired Proceeds from the sale of property, plant and equipment...

  • Page 51
    Cash and cash equivalents of continuing operations, end of year See notes to consolidated financial statements. $ 1,548.1 $ 1,389.4 $ 1,643.3 45

  • Page 52
    ... Employer Services' payroll processing fees) as well as investment income on payroll funds, payroll tax filing funds and other Employer Services' client-related funds. The Company enters into agreements for a fixed fee per transaction ( e.g., number of payees or number of payrolls processed). Fees...

  • Page 53
    ... the excess of gross receivables over the sales price of the computer systems financed. Unearned income is amortized using the effective-interest method to maintain a constant rate of return over the term of each contract. The allowance for doubtful accounts on long-term receivables is the Company...

  • Page 54
    ... income, depending on the timing and designated purpose of the derivative. There were no derivative financial instruments outstanding at June 30, 2012 or June 30, 2011. L. Earnings per Share ("EPS"). The calculations of basic and diluted EPS are as follows: Effect of Employee Stock Option Years...

  • Page 55
    ... who are directly associated with internal use computer software projects. The amount of capitalizable payroll costs with respect to these employees is limited to the time directly spent on such projects. Costs associated with preliminary project stage activities, training, maintenance and all...

  • Page 56
    ... not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of...

  • Page 57
    .... The Company had an outsourcing agreement with Broadridge Financial Solutions, Inc. ("Broadridge") pursuant to which the Company provided data center outsourcing services, which principally consisted of information technology services and service delivery network services. As a result of this...

  • Page 58
    ... average life of approximately 11 years. On August 16, 2010, the Company acquired 100% of the outstanding shares of Cobalt, a leading provider of digital marketing solutions for the auto industry that aligns with Dealer Services' global layered applications strategy and strongly supports Dealer...

  • Page 59
    ..., customer contracts and lists and trademarks that are being amortized over a weighted average life of 7 years. The Company finalized the purchase price allocation for these five acquisitions during fiscal 2011 and adjusted the preliminary values allocated to certain assets and liabilities in order...

  • Page 60
    NOTE 4. DIVESTITURES On March 24, 2010, the Company completed its sale of the non-core Commercial Systems business (the "Commercial business") for approximately $21.6 million in cash. The Commercial business was previously reported in the Dealer Services segment. In connection with the disposal of ...

  • Page 61
    ... investments and funds held for clients at June 30, 2012 and 2011 are as follows: June 30, 2012 Gross Amortized Cost Type of issue: Money market securities and other cash equivalents Available-for-sale securities: U.S. Treasury and direct obligations of U.S. government agencies Corporate bonds...

  • Page 62
    ... direct obligations of U.S. government agencies represent senior, unsecured, non-callable debt that primarily carries a credit rating of AAA, as rated by Moody's, and AA+, as rated by Standard & Poor's, and has maturities ranging from August 2012 through June 2022. Corporate bonds include investment...

  • Page 63
    ... 1,523.7 2012 2011 Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to our payroll and payroll tax filing services, which are classified as client funds obligations on...

  • Page 64
    ...Poor's and, for Canadian securities, Dominion Bond Rating Service. All available-for-sale securities were rated as investment grade at June 30, 2012. The amount of collected but not yet remitted funds for the Company's payroll and payroll tax filing and other services varies significantly during the...

  • Page 65
    ... fair values of 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, 2011 are as follows: Unrealized losses less than 12 months U.S. Treasury and direct obligations of U.S. government agencies Corporate bonds...

  • Page 66
    .... To determine the fair value of the Company's Level 2 investments, a variety of inputs are utilized, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly...

  • Page 67
    ... fair value on a recurring basis at June 30, 2011. Included in the table are available-for-sale securities within corporate investments of $134.3 million and funds held for clients of $16,793.2 million. Level 1 U.S Treasury and direct obligations of U.S. government agencies Corporate bonds Canadian...

  • Page 68
    ...2014 2015 2016 2017 $ $ $ $ $ 66.0 43.5 26.1 9.9 145.5 The Company determines the allowance for doubtful accounts related to notes receivable based upon a specific reserve for known collection issues, as well as a non-specific reserve based upon aging, both of which are based upon history of such...

  • Page 69
    ... in notes receivable on non-accrual status, including $0.1 million of notes receivable aged over 60 days past due. During fiscal 2012 and 2011, the charge-offs as a percentage of notes receivable were 0.9% and 1.9% respectively. On an ongoing basis, the Company evaluates the credit quality of its...

  • Page 70
    ... as assets held for sale on the Consolidated Balance Sheets relating to two buildings that were subsequently sold during fiscal 2011. NOTE 10. GOODWILL AND INTANGIBLE ASSETS, NET Changes in goodwill for the fiscal year ended June 30, 2012 and 2011 are as follows: Employer Services Balance as...

  • Page 71
    ... 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 funding for general corporate purposes, if necessary. The Company had no borrowings through June 30, 2012 under the credit agreements. The...

  • Page 72
    ... no derivative financial instruments outstanding at June 30, 2012, 2011, or 2010. NOTE 13. EMPLOYEE BENEFIT PLANS A. Stock Plans. The Company recognizes stock-based compensation expense in net earnings based on the fair value of the award on the date of grant. Stock-based compensation consists of...

  • Page 73
    ... 2011. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions. Stock-based compensation...

  • Page 74
    ...The aggregate intrinsic value for stock options exercised in fiscal 2012, 2011, and 2010 was $83.8 million, $95.7 million and $29.1 million, respectively. In fiscal 2010, the Company issued 1.4 million shares in connection with the final compensatory employee stock purchase plan offering that vested...

  • Page 75
    ...of service and compensation. A June 30 measurement date was used in determining the Company's benefit obligations and fair value of plan assets. The Company is required to (a) recognize in its statement of financial position an asset for a plan's net overfunded status or a liability for a plan's net...

  • Page 76
    The Company's pension plans funded status as of June 30, 2012 and 2011 is as follows: June 30, Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employer contributions Currency translation adjustments Benefits paid $ 1,313.3 106.6 91.6 (4.6) (37.4) $ ...

  • Page 77
    ... present value of benefit obligations were: Years ended June 30, Discount rate Increase in compensation levels 2012 3.90% 4.00% 2011 5.40% 4.00% Assumptions used to determine the net pension expense generally were: Years ended June 30, Discount rate Expected long-term rate of return on assets...

  • Page 78
    ... reasonableness. To determine the fair value of our Level 2 plan assets, a variety of inputs are utilized, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly...

  • Page 79
    The following table presents the investments of the pension plans measured at fair value at June 30, 2011: Level 1 Comingled trusts U.S. Government securities Mutual funds Corporate and municipal bonds Mortgage-backed security bonds Total pension assets $ 283.4 283.4 $ Level 2 529.7 207.4 237.7 33.1...

  • Page 80
    ...ended June 30, Provision for taxes at U.S. statutory rate $ 742.7 35.0 $ 676.5 35.0 $ 652.1 35.0 2012 % 2011 % 2010 % Increase (decrease) in provision from: State taxes, net of federal tax Tax on foreign income Utilization of foreign tax credits Tax settlements Resolution of tax matters Section 199...

  • Page 81
    ... and their balance sheet classifications are as follows: Years ended June 30, Deferred tax assets: Accrued expenses not currently deductible Stock-based compensation expense Net operating losses Other $ 226.9 91.1 102.0 17.2 $ 205.8 95.7 111.4 10.8 2012 2011 437.2 Less: valuation allowances (54...

  • Page 82
    ... in progress in which the Company has significant business operations are as follows: Taxing Jurisdiction U.S. (IRS) California Illinois New Jersey France Fiscal Years under Examination 2011 - 2012 2006 - 2008 2004 - 2005 2002 - 2008 2009 - 2011 The Company regularly considers the likelihood of...

  • Page 83
    ... The Company has obligations under various facilities and equipment leases and software license agreements. Total expense under these agreements was approximately $252.6 million, $159.2 million, and $175.4 million in fiscal 2012, 2011, and 2010, respectively, with minimum commitments at June 30...

  • Page 84
    ... income earned on invested funds held for clients and interest credited to Employer Services and PEO Services at a standard rate of 4.5%. The reportable segments' results also include an internal cost of capital charge related to the funding of acquisitions and other investments. All of these...

  • Page 85
    ...55.9) $ (307.2) $ $ 10,665.2 PEO Services Dealer Services Other Foreign Exchange Fund Interest Cost of Capital Charge Total Year ended June 30, 2011 Revenues from continuing operations Earnings from continuing operations before income taxes Assets from continuing operations Capital expenditures for...

  • Page 86
    ... $1 million per occurrence retention related to the workers' compensation and employer's liability deductible reimbursement insurance protection for PEO Services worksite employees. With the exception of the preceding item and the pension plan contribution in Note 13, there are no further subsequent...

  • Page 87
    Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Attached as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K are certifications of ADP's Chief Executive Officer and Chief Financial Officer, which are ...

  • Page 88
    ...Carlos A. Rodriguez Carlos A. Rodriguez President and Chief Executive Officer /s/ Christopher R. Reidy Christopher R. Reidy Chief Financial Officer Roseland, New Jersey August 20, 2012 Changes in Internal Control over Financial Reporting There were no changes in ADP's internal control over financial...

  • Page 89
    ...company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to...

  • Page 90
    ..., and GlobalView Chief Human Resources Officer President, Employer Services - Small Business Services, TotalSource, and Retirement Services Chief Financial Officer President and Chief Executive Officer Corporate Controller and Principal Accounting Officer President, Employer Services - Added Value...

  • Page 91
    ... Services - Small Business Services, TotalSource, and Retirement Services in 2011, he served as President, Employer Services - International from 2009 to 2010, and as President, Employer Services - Europe from 2006 to 2009. Dermot J. O'Brien joined ADP in 2012 as Chief Human Resources Officer...

  • Page 92
    ...of Executive Officers" and "Election of Directors - Compensation of Non-Employee Directors" in the Proxy Statement for the Company's 2012 Annual Meeting of Stockholders, which information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and...

  • Page 93
    ... - incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K dated June 7, 2012 Separation and Distribution Agreement, dated as of March 20, 2007, between Automatic Data Processing, Inc. and Broadridge Financial Solutions, LLC - incorporated by reference to Exhibit 10.1 to...

  • Page 94
    ... November 14, 2011 Letter Agreement, dated as of December 14, 2011, between Automatic Data Processing, Inc., and Carlos Rodriguez- incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 14, 2011 (Management Contract) Key Employees' Restricted Stock Plan...

  • Page 95
    ... Employees' Savings-Stock Purchase Plan - incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2010 (Management Compensatory Plan) 364-Day Credit Agreement, dated as of June 20, 2012, among Automatic Data Processing...

  • Page 96
    ..., 2011 (Management Compensatory Plan) Letter Agreement, dated as of August 1, 2006, between Automatic Data Processing, Inc. and Christopher R. Reidy - incorporated by reference to Exhibit 10.22 to the Company's Current Report on Form 8-K dated August 2, 2006 (Management Contract) 2008 Omnibus Award...

  • Page 97
    ....2 32.1 - Form of Deferred Stock Unit Award Agreement under the 2008 Omnibus Award Plan (Management Compensatory Plan) Subsidiaries of the Company Consent of Independent Registered Public Accounting Firm Certification by Carlos A. Rodriguez pursuant to Rule 13a-14(a) of the Securities Exchange Act...

  • Page 98
    AUTOMATIC DATA PROCESSING, INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (In thousands) Column B Column A Column C Additions (2) Charged to other accounts Column D Column E Balance at beginning of period Year ended June 30, 2012: Allowance for doubtful accounts: Current ...

  • Page 99
    ... the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AUTOMATIC DATA PROCESSING, INC. (Registrant) August 20, 2012 By /s/ Carlos A. Rodriguez Carlos A. Rodriguez President and Chief Executive Officer Pursuant to the requirements of the...

  • Page 100
    (Enrique T. Salem) /s/ Gregory L. Summe (Gregory L. Summe) 92 Director August 20, 2012

  • Page 101
    ... the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise. 1.3 " Annual Bonus Payments " shall mean, with respect to any Eligible Employee who does not qualify as a sales associate, the compensation...

  • Page 102
    ..., as applicable, Annual Bonus Payments and Qualifying Sales Bonuses. 1.5 " Beneficiary " or " Beneficiaries " shall mean the person or persons designated in writing by a Participant in accordance with procedures established by the Committee or the Plan Administrator to receive the benefits specified...

  • Page 103
    ... or the Plan Administrator for each Participant that is credited with (i) a number of Company stock units equal to the PBRS Awards that he or she elects to defer, if any, and (ii) an amount equal to the Dividend Equivalents (and earnings and losses (based on the Investment Rate) attributable to...

  • Page 104
    ... performance-based restricted stock program under the Company's 2008 Omnibus Award Plan (or any successor plan), as in effect from time to time. 1.29 " Plan " shall mean this Automatic Data Processing, Inc. Deferred Compensation Plan. 1.30 " Plan Administrator " shall mean, if applicable, any record...

  • Page 105
    ... quarter in any Plan Year or (ii) receives sales bonuses on a monthly basis, the bonus paid to such person in respect of such person's performance for the last month in any Plan Year. 1.33 " Scheduled Distribution Date " shall mean, as applicable, the In-Service Distribution Date or the Separation...

  • Page 106
    ... order to satisfy Social Security Tax (including Medicare), income tax withholding for compensation that cannot be deferred, employee benefit plan withholding requirements and any other withholding requirements. (c) Irrevocable Elections . Elections to defer Annual Incentive Amounts and PBRS Awards...

  • Page 107
    ... his Annual Incentive Amounts and PBRS Awards to be deferred for a Plan Year (and all earnings and losses (based on the Investment Rate) attributable thereto, including in respect of Dividend Equivalents) (i) on an In-Service Distribution Date, (ii) on a Separation from Service Distribution Date or...

  • Page 108
    ... in writing or through an electronic medium such as a website enrollment window or though an email enrollment form or through a Plan Administrator, provided that there is sufficient record of when such election is made. 3.3 Elections as to Deemed Investment Choices . (a) Prior to the date on which...

  • Page 109
    ...amount equal to the Annual Incentive Amounts deferred by the Participant; and (b) on a daily basis, each investment fund subaccount of a Participant's Bonus Deferral Subaccount shall be credited with earnings or losses based on the applicable Investment Rate. 4.2 Company Matching Contributions . The...

  • Page 110
    ... in Section 6.5, in either case, in respect of PBRS Awards. 6.1 Distribution of Accounts While Employed . (a) Scheduled Distributions . (1) In respect of all Distributable Amounts payable in a lump sum on an In-Service Distribution Date, the value thereof shall be determined as of the ninth day of...

  • Page 111
    ... the Separation from Service, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter, and (ii) each subsequent installment shall be valued as of the ninth day of September of each of the following calendar years, and the...

  • Page 112
    ... sole discretion, that the requested distribution is on account of an Unforeseeable Emergency; and (c) the Unforeseeable Emergency cannot be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets, to the extent the liquidation of...

  • Page 113
    ... Equivalents) shall be made in the form of one share of Company Common Stock for each Company stock unit therein. All shares of Company Common Stock ultimately distributed in respect of Company stock units under the Company Stock Unit Subaccount will be issued under the 2008 Omnibus Award Plan...

  • Page 114
    ... and kind of benefits payable to Participants and their Beneficiaries; (d) to maintain all records that may be necessary for the administration of the Plan; (e) to provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries...

  • Page 115
    ... to reduce any payment (or compensation), or the amount credited to a Participant's Account, by the amount of cash (or equivalent value of Company stock units, as applicable, as determined by the Committee) sufficient to provide the amount of said taxes. 8.4 Amendment, Modification, Suspension or...

  • Page 116
    ... the amendment and restatement of this Plan, effective July 1, 2012, by Automatic Data Processing, Inc., this document is signed by a duly authorized officer. AUTOMATIC DATA PROCESSING, INC. By: /s/ Michael A. Bonarti Name: Michael A. Bonarti Title: Vice President, General Counsel and Secretary 16

  • Page 117
    ... of the award of common stock, par value $0.10 per share, of the Company (that would otherwise have been deliverable on the date hereof in respect of the PBRS Program) pursuant to the terms of the Automatic Data Processing, Inc. Deferred Compensation Plan (the " Deferred Compensation Plan "); and...

  • Page 118
    ... any financial restatements or irregularities, or (ii) without the consent of the Company, while employed by or providing services to the Company or any Affiliate or after termination of such employment or service, violates a non-competition, non-solicitation or non-disclosure covenant or agreement...

  • Page 119
    ... shall be valid unless the same be in writing and signed by the parties hereto, except for any changes permitted without consent of the Participant under the Plan or the Deferred Compensation Plan. (f) Governing Law . This Agreement shall be construed and interpreted in accordance with the laws...

  • Page 120
    .... ADP Payroll Services, Inc. ADP Screening and Selection Services, Inc. ADP Tax Services, Inc. ADP Technology Services, Inc. ADP TotalSource Group, Inc. ADP Vehicle Information Technology (Shanghai) Co., Ltd Automatic Data Processing Limited Automatic Data Processing Limited (UK) Business Management...

  • Page 121
    ... Data Processing, Inc. and subsidiaries (the "Company"), and the effectiveness of the Company's internal control over financial reporting, appearing in the Annual Report on Form 10-K of Automatic Data Processing, Inc. for the year ended June 30, 2012. /s/ Deloitte & Touche LLP Parsippany, New Jersey...

  • Page 122
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 20, 2012 /s/ Carlos A. Rodriguez Carlos A. Rodriguez President and Chief Executive Officer

  • Page 123
    ...'s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 20, 2012 /s/ Christopher R. Reidy...

  • Page 124
    ... with the Annual Report of Automatic Data Processing, Inc. (the "Company") on Form 10-K for the fiscal year ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carlos A. Rodriguez, President and Chief Executive Officer of the Company...

  • Page 125
    ... FINANCIAL OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Automatic Data Processing, Inc. (the "Company") on Form 10-K for the fiscal year ending June 30, 2012 as filed with...