ADP 2012 Annual Report Download - page 83

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If certain pending tax matters settle within the next twelve months, the total amount of unrecognized tax benefits may increase or decrease for
all open tax years and jurisdictions. Based on current estimates, settlements related to various jurisdictions and tax periods could increase
earnings up to $10.0 million in the next twelve months. Audit outcomes and the timing of audit settlements are subject to significant
uncertainty. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax
liability and deferred taxes in the period in which the facts that give rise to a revision become known.
In fiscal 2012, the Company reached agreements with the IRS regarding all outstanding tax audit issues in dispute for the tax years ended June
30, 2009 and June 30, 2010, which did not have a material impact to the consolidated financial statements of the Company.
In January 2010, the Company reached an agreement with the IRS regarding all outstanding tax audit issues in dispute for the tax years ended
June 30, 2007 and June 30, 2008, which did not have a material impact to the consolidated financial statements of the Company.
NOTE 15. CONTRACTUAL COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS
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, 2012 as follows:
In addition to fixed rentals, certain leases require payment of maintenance and real estate taxes and contain escalation provisions based on
future adjustments in price indices.
As of June 30, 2012, the Company has purchase commitments of approximately $797.9 million relating to software and equipment purchases
and maintenance contracts, of which $350.5 million relates to the fiscal year ending June 30, 2013, $143.8 million relates to the fiscal year
ending June 30, 2014 and the remaining $303.6 million relates to fiscal years ending June 30, 2015 through fiscal 2017.
On July 18, 2011, athenahealth, Inc. filed a complaint against ADP AdvancedMD, Inc. (“ADP AdvancedMD”), a subsidiary of the Company.
athenahealth, Inc. alleged that ADP AdvancedMD’s activities in providing medical practice management and billing and revenue management
software and associated services to physicians and medical practice managers infringe two of athenahealth, Inc.’s patents. On May 16, 2012,
athenahealth, Inc. and the Company entered into a joint stipulation to dismiss without prejudice their claims and counterclaims related to one of
the two patents. athenahealth, Inc. seeks monetary damages, injunctive relief, and costs in connection with its claim related to the other patent.
The Company believes that it has meritorious defenses to this claim, and is continuing to vigorously defend itself against the allegations.
In June 2011, the Company received a Commissioner’s Charge from the U.S. Equal Employment Opportunity Commission (“EEOC”) alleging
that the Company has violated Title VII of the Civil Rights Act of 1964 by refusing to recruit, hire, transfer and promote certain persons on the
basis of their race, in the State of Illinois from at least the period of January 1, 2007 to the present. The Company continues to investigate the
allegations set forth in the Commissioner’s Charge and is cooperating with the EEOC’s investigation.
76
Years ending June 30,
2013
$
173.7
2014
127.1
2015
90.8
2016
46.8
2017
23.6
Thereafter
26.6
$
488.6