10-KPeriod: FY2012

AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2012

Filed August 20, 2012For Securities:ADP

Summary

Automatic Data Processing, Inc. (ADP) for the fiscal year ended June 30, 2012, reported total revenues of $10.7 billion, representing an 8% increase year-over-year. This growth was primarily driven by strong performance across its key segments: Employer Services (up 7%), Professional Employer Organization (PEO) Services (up 15%), and Dealer Services (up 10%). Net earnings from continuing operations increased by 11% to $1.4 billion, with diluted EPS rising 12% to $2.82. A notable event during the year was a $66.0 million gain from the sale of assets related to a third-party expense management platform, which contributed to EPS growth. The company's financial health remains robust, characterized by strong cash flow from operations ($1.9 billion), consistent client retention rates (91%), and a solid balance sheet with $1.7 billion in cash and marketable securities. ADP continued to return value to shareholders through dividends and share repurchases, highlighting its commitment to shareholder returns. The company is strategically focused on growing its cloud-based Human Capital Management (HCM) solutions, scaling its HR Business Process Outsourcing (BPO) services, expanding its global HCM offerings, and deepening its solutions in key adjacent markets.

Financial Highlights

50 data points
Beta

Revenue

$10.60B

Net Income

$1.39B

13.1% Net Margin

EPS (Diluted)

$2.82

Total Assets

$30.82B

Cash & Equivalents

$1.55B

Free Cash Flow

$1.91B

Financial Statements
Beta
Revenue$10.60B
SG&A Expenses$2.45B
Operating Expenses$8.66B
Interest Expense$7.70M
Net Income$1.39B
EPS (Basic)$2.85
EPS (Diluted)$2.82
Shares Outstanding (Basic)487.30M
Shares Outstanding (Diluted)492.20M

Key Highlights

  • 1Total revenues grew 8% to $10.67 billion, demonstrating continued top-line expansion.
  • 2Net earnings from continuing operations increased 11% to $1.39 billion, reflecting improved profitability.
  • 3Diluted earnings per share (EPS) from continuing operations rose 12% to $2.82, outpacing net earnings growth.
  • 4All three core business segments (Employer Services, PEO Services, Dealer Services) achieved revenue growth, indicating broad-based strength.
  • 5Employer Services' pays per control metric increased by 3.0%, signaling underlying client activity growth.
  • 6The company maintained strong client retention rates at 91%.
  • 7ADP returned significant capital to shareholders through $740 million in dividends and $741 million in share repurchases.

Frequently Asked Questions

ADP's total revenues increased by 8% to $10.67 billion in fiscal year 2012. This growth was driven by solid performance across its segments: Employer Services (+7%), PEO Services (+15%), and Dealer Services (+10%), fueled by new business sales, increased client payrolls, and price increases.

Profitability improved in fiscal year 2012. Net earnings from continuing operations increased by 11% to $1.39 billion, and diluted EPS from continuing operations grew by 12% to $2.82. This was partly due to a $66 million gain from an asset sale, but core operational performance also contributed.

ADP maintained a strong financial position with $1.7 billion in cash and marketable securities and a healthy balance sheet. Operating cash flow was robust at $1.9 billion, and the company continued to return capital to shareholders through dividends and share buybacks.

ADP's strategic pillars include growing its integrated cloud-based Human Capital Management (HCM) solutions in the US, scaling its HR Business Process Outsourcing (BPO) services, leveraging its global presence for HCM solutions, and strengthening its offerings in key adjacent markets.