10-KPeriod: FY2008

AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2008

Filed August 29, 2008For Securities:ADP

Summary

Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2008, with consolidated revenues from continuing operations growing 13% to $8.78 billion. Diluted earnings per share from continuing operations saw a significant increase of 20% to $2.20, reflecting effective cost management and share repurchases. The company's core Employer Services segment continued its robust growth, complemented by strong performance in PEO Services and Dealer Services. ADP highlighted its strategic focus on high-growth, under-penetrated markets, evidenced by the divestiture of non-strategic businesses in prior periods. The company's balance sheet remains solid, with substantial cash and marketable securities. ADP reiterated its commitment to returning excess cash to stockholders through share buybacks and dividends, with a significant repurchase of common stock during the fiscal year. The company is well-positioned to navigate the economic environment, emphasizing its diversified business model and commitment to innovation.

Financial Highlights

31 data points
Beta

Revenue

$8.73B

Net Income

$1.24B

14.1% Net Margin

EPS (Diluted)

$2.34

Total Assets

$23.73B

Cash & Equivalents

$917.50M

Free Cash Flow

$1.77B

Financial Statements
Beta
Revenue$8.73B
SG&A Expenses$2.36B
Operating Expenses$7.10B
Interest Expense$80.50M
Net Income$1.24B
EPS (Basic)$2.37
EPS (Diluted)$2.34
Shares Outstanding (Basic)521.50M
Shares Outstanding (Diluted)527.20M

Key Highlights

  • 1Consolidated revenues grew 13% to $8.78 billion in fiscal year 2008.
  • 2Diluted earnings per share (EPS) from continuing operations increased 20% to $2.20.
  • 3Employer Services, the largest segment, saw a 9% revenue increase.
  • 4PEO Services and Dealer Services also demonstrated strong revenue growth at 20% and 9% respectively.
  • 5The company maintained a strong financial position with $1.66 billion in cash and marketable securities.
  • 6ADP repurchased 32.9 million shares of its common stock during fiscal year 2008.
  • 7The company's investment portfolio is protected from sub-prime mortgage related assets and is focused on investment-grade securities.

Frequently Asked Questions

For the fiscal year ended June 30, 2008, ADP reported total revenues of $8,776.5 million, an increase of 13% compared to $7,800.0 million in the fiscal year ended June 30, 2007.

Diluted earnings per share (EPS) from continuing operations increased by 20% to $2.20 for the fiscal year ended June 30, 2008, up from $1.83 in the prior fiscal year. This increase was driven by higher earnings from continuing operations before income taxes and a lower effective tax rate, partially offset by a decline in other income.

ADP has been divesting certain non-strategic, slow-growing businesses to focus on core areas with strong growth attributes and under-penetrated markets. Examples include the spin-off of its Brokerage Services Group and the divestiture of Sandy Corporation and its Travel Clearing business.

ADP's investment portfolio is managed with safety of principal, liquidity, and diversification as primary goals. The company explicitly stated that its investment portfolio does not contain asset-backed securities with underlying collateral of sub-prime mortgages or home equity loans, CDOs, CLOs, credit default swaps, asset-backed commercial paper, auction rate securities, structured investment vehicles, or non-investment-grade securities. Investments are primarily in investment-grade bonds and senior tranches of AAA fixed-rate securities.