ADP 2013 Annual Report Download - page 31

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2013 , cash and marketable securities were $2,041.1 million , stockholders' equity was $6,189.9 million , and the ratio of
long-term debt-to-equity was 0.2% . Working capital before funds held for clients and client funds obligations at June 30, 2013 was $1,195.7
million , as compared to $1,337.0 million at June 30, 2012 . The decrease in working capital resulted from an increase in accrued expenses and
other current liabilities and outstanding obligations under reverse repurchase agreements, partially offset by an increase in cash and cash
equivalents and accounts receivable, net.
Our principal sources of liquidity for operations are derived from cash generated through operations and through corporate cash and
marketable securities on hand. We continued to generate positive cash flows from operations during fiscal 2013 , and we held approximately
$2.0 billion of cash and marketable securities at June 30, 2013 . We have the ability to borrow through our financing arrangements under our
U.S. short-term commercial paper program and our U.S. and Canadian short-term reverse repurchase agreements to meet short-term funding
requirements related to client funds obligations. Of the cash and cash equivalents and marketable securities held at June 30, 2013
, approximately
$245.2 million and $0.7 million are classified as long-term marketable securities and cash and cash equivalents, respectively, and were pledged
as collateral by our Canadian subsidiary to engage in reverse repurchase obligations, which were subsequently repaid on July 2, 2013 . An
additional $0.6 billion was held by our foreign subsidiaries. Amounts held by foreign subsidiaries, if repatriated to the U.S., would generally be
subject to foreign withholding and U.S. income taxes, adjusted for foreign tax credits. Our intent is to permanently reinvest these funds outside
of the U.S. and our current plans do not demonstrate a need to repatriate them to fund our U.S. operations.
Our cash flows from operating, investing, and financing activities, as reflected in the Statements of Consolidated Cash Flows for the
years ended
2013 , 2012 , and 2011 , are summarized as follows:
Net cash flows provided by operating activities were $1,577.2 million for fiscal 2013 , as compared to $ 1,910.2 million provided by
operating activities for fiscal 2012 . The decrease in net cash flows provided by operating activities was due to the payment of a premium of
$141.4 million related to our fiscal 2013
reinsurance arrangement with ACE American Insurance Company, higher pension plan contributions of
$43.7 million , a variance in the timing of tax-related net cash payments of $44.0 million , and an unfavorable change in the net components of
working capital.
Net cash flows used in investing activities were $ 1,578.4 million for fiscal 2013 , as compared to net cash flows provided by investing
activities of $ 3,243.6 million for fiscal 2012 . The net change in cash used in investing activities is due to the timing of receipts and
disbursements of restricted cash and cash equivalents held to satisfy client funds obligations of $5,016.0 million , partially offset by a decrease
in
the purchases of corporate and client funds marketable securities of $210.9 million , a decrease in cash used for business acquisitions of $223.7
million , and an increase in cash received from the sale of businesses included in discontinued operations of $161.4 million .
Net cash flows provided by financing activities were $ 151.0 million for fiscal 2013 as compared to net cash flows used in financing
activities of $ 4,953.9 million for fiscal 2012 . The net change in cash provided by financing activities is due to the net change in client funds
obligations of $4,865.1 million as a result of the timing of cash received and payments made related to client funds, partially offset by an
increase in dividends paid to our shareholders of $65.8 million.
We purchased approximately 10.4 million shares of our common stock at an average price per share of $61.89 during fiscal 2013
compared to purchases of 14.6 million shares at an average price per share of $51.26 during fiscal 2012 . From time to time, the Company may
repurchase shares of its common stock under its authorized share repurchase programs. The Company considers several factors in determining
when to execute share repurchases, including, among other things, actual
28
Years ended June 30, $ Change
2013 2012 2011 2013 2012
Cash provided by (used in):
Operating activities
$
1,577.2
$
1,910.2
$
1,705.8
$
(333.0
)
$
204.4
Investing activities
(1,578.4
)
3,243.6
(7,340.6
)
(4,822.0
)
10,584.2
Financing activities
151.0
(4,953.9
)
5,339.2
5,104.9
(10,293.1
)
Effect of exchange rate changes on cash and
cash equivalents
1.2
(41.2
)
41.7
42.4
(82.9
)
Net change in cash and cash equivalents
$
151.0
$
158.7
$
(253.9
)
$
(7.7
)
$
412.6