Cover Page
Cover Page - shares | 6 Months Ended | |
Dec. 31, 2019 | Jan. 30, 2020 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36486 | |
Entity Registrant Name | CDK Global, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-5743146 | |
Entity Address, Address Line One | 1950 Hassell Road, | |
Entity Address, City or Town | Hoffman Estates, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60169 | |
City Area Code | 847 | |
Local Phone Number | 397-1700 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | CDK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 121,491,859 | |
Amendment Flag | false | |
Entity Central Index Key | 0001609702 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 499.6 | $ 478.7 | $ 994.2 | $ 925 |
Expenses: | ||||
Cost of revenues | 235.9 | 230.6 | 483.2 | 433.9 |
Selling, general and administrative expenses | 115.6 | 115.1 | 223.5 | 206.2 |
Restructuring expenses | 0 | 3.7 | 0 | 19.5 |
Total expenses | 351.5 | 349.4 | 706.7 | 659.6 |
Operating earnings | 148.1 | 129.3 | 287.5 | 265.4 |
Interest expense | (36.4) | (34.3) | (74.1) | (66.5) |
Other income, net | 1.3 | 1.6 | 3.6 | 4.2 |
Earnings before income taxes | 113 | 96.6 | 217 | 203.1 |
Provision for income taxes | (43.2) | (24) | (68.8) | (54) |
Net earnings from continuing operations | 69.8 | 72.6 | 148.2 | 149.1 |
Net earnings (loss) from discontinued operations | (45.7) | 18.3 | (40) | 34.1 |
Net earnings | 24.1 | 90.9 | 108.2 | 183.2 |
Less: net earnings attributable to noncontrolling interest | 1.8 | 1.9 | 3.9 | 3.9 |
Net earnings attributable to CDK | $ 22.3 | $ 89 | $ 104.3 | $ 179.3 |
Net earnings (loss) attributable to CDK per share - basic: | ||||
Continuing operations (in dollars per share) | $ 0.56 | $ 0.56 | $ 1.19 | $ 1.13 |
Discontinued operations (in dollars per share) | (0.38) | 0.14 | (0.33) | 0.27 |
Total net earnings attributable to CDK per share - basic (in dollars per share) | 0.18 | 0.70 | 0.86 | 1.40 |
Net earnings (loss) attributable to CDK per share - diluted: | ||||
Continuing operations (in dollars per share) | 0.55 | 0.56 | 1.18 | 1.13 |
Discontinued operations (in dollars per share) | (0.37) | 0.14 | (0.33) | 0.26 |
Total net earnings attributable to CDK per share - diluted (in dollars per share) | $ 0.18 | $ 0.70 | $ 0.85 | $ 1.39 |
Weighted-average common shares outstanding: | ||||
Basic (shares) | 121.6 | 126.8 | 121.5 | 128.2 |
Diluted (shares) | 122.1 | 127.5 | 122.1 | 129.1 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 24.1 | $ 90.9 | $ 108.2 | $ 183.2 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 32 | (12.1) | 12.1 | (18.1) |
Total other comprehensive income (loss) | 32 | (12.1) | 12.1 | (18.1) |
Comprehensive income | 56.1 | 78.8 | 120.3 | 165.1 |
Less: comprehensive income attributable to noncontrolling interest | 1.8 | 1.9 | 3.9 | 3.9 |
Comprehensive income attributable to CDK | $ 54.3 | $ 76.9 | $ 116.4 | $ 161.2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 222.4 | $ 311.4 |
Accounts receivable, net of allowances of $10.0 and $8.8, respectively | 320.9 | 290.4 |
Current assets held for sale | 146.2 | 220.5 |
Other current assets | 162.3 | 164.8 |
Total current assets | 851.8 | 987.1 |
Property, plant and equipment, net of accumulated depreciation of $266.5 and $250.8, respectively | 126.6 | 144.8 |
Other assets | 360.5 | 284.9 |
Goodwill | 1,364.3 | 1,356.3 |
Intangible assets, net | 232.7 | 225.9 |
Total assets | 2,935.9 | 2,999 |
Current liabilities: | ||
Current maturities of long-term debt and finance lease liabilities | 21.1 | 270.8 |
Accounts payable | 23.9 | 38 |
Accrued expenses and other current liabilities | 205.8 | 178.5 |
Litigation liability | 57 | 90 |
Accrued payroll and payroll-related expenses | 60.3 | 89.2 |
Current liabilities held for sale | 50 | 48.9 |
Short-term deferred revenues | 119.7 | 124.8 |
Total current liabilities | 537.8 | 840.2 |
Long-term debt and finance lease liabilities | 2,741.2 | 2,659.4 |
Long-term deferred revenues | 72.5 | 68.4 |
Deferred income taxes | 97.1 | 80.5 |
Other liabilities | 114.3 | 65 |
Total liabilities | 3,562.9 | 3,713.5 |
Stockholders' Deficit: | ||
Preferred stock, $0.01 par value: 50.0 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value: 650.0 shares authorized; 160.3 and 160.3 shares issued, respectively; 121.5 and 121.1 shares outstanding, respectively | 1.6 | 1.6 |
Additional paid-in-capital | 683 | 688.5 |
Retained earnings | 979.1 | 911.6 |
Treasury stock, at cost: 38.8 and 39.2 shares, respectively | (2,308.5) | (2,324.6) |
Accumulated other comprehensive income (loss) | 5.4 | (6.7) |
Total CDK stockholders' deficit | (639.4) | (729.6) |
Noncontrolling interest | 12.4 | 15.1 |
Total stockholders' deficit | (627) | (714.5) |
Total liabilities and stockholders' deficit | $ 2,935.9 | $ 2,999 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 10 | $ 8.8 |
Accumulated depreciation | $ 266.5 | $ 250.8 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 650,000,000 | 650,000,000 |
Common stock, shares issued (in shares) | 160,300,000 | 160,300,000 |
Common stock, shares outstanding (in shares) | 121,500,000 | 121,100,000 |
Treasury stock shares (in shares) | 38,800,000 | 39,200,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net earnings | $ 108.2 | $ 183.2 |
Less: net earnings (loss) from discontinued operations | (40) | 34.1 |
Net earnings from continuing operations | 148.2 | 149.1 |
Adjustments to reconcile net earnings from continuing operations to cash flows provided by operating activities, continuing operations: | ||
Depreciation and amortization | 48.1 | 41.5 |
Asset impairment | 0 | 14.9 |
Deferred income taxes | 14.9 | 4.3 |
Stock-based compensation expense | 11.5 | 6.2 |
Other | 11.9 | 4.1 |
Changes in assets and liabilities, net of effect from acquisitions of businesses: | ||
Change in accounts receivable | (30.9) | (14) |
Change in other assets | 3 | 11.7 |
Change in accounts payable | (14.1) | (16.9) |
Change in accrued expenses and other liabilities | (40.2) | (29.8) |
Net cash flows provided by operating activities, continuing operations | 152.4 | 171.1 |
Net cash flows provided by operating activities, discontinued operations | 26.3 | 28.2 |
Net cash flows provided by operating activities | 178.7 | 199.3 |
Cash Flows from Investing Activities | ||
Capital expenditures | (12.3) | (27.1) |
Proceeds from sale of property, plant and equipment | 0 | 6.7 |
Capitalized software | (26.4) | (16.7) |
Acquisitions of businesses, net of cash acquired | 0 | (513.2) |
Investment in certificates of deposit | (12) | 0 |
Proceeds from maturities of certificates of deposit | 7.3 | 0 |
Investment in joint venture | 0 | (10) |
Proceeds from investments | 0 | 0.4 |
Net cash flows used in investing activities, continuing operations | (43.4) | (559.9) |
Net cash flows used in investing activities, discontinued operations | (4.7) | (4.6) |
Net cash flows used in investing activities | (48.1) | (564.5) |
Cash Flows from Financing Activities | ||
Proceeds from long-term debt | 90 | 1,030 |
Repayments of long-term debt and lease liabilities | (260.4) | (796.9) |
Dividends paid to stockholders | (36.5) | (38) |
Repurchases of common stock | 0 | (374.1) |
Proceeds from exercises of stock options | 4.9 | 1.5 |
Withholding tax payments for stock-based compensation awards | (5.7) | (15.3) |
Dividend payments to noncontrolling owners | (6.6) | (8.2) |
Payments of deferred financing costs | 0 | (4.4) |
Acquisition-related payments | (4.7) | (3.2) |
Net cash flows used in financing activities, continuing operations | (219) | (208.6) |
Net cash flows used in financing activities, discontinued operations | (1.1) | 0 |
Net cash flows used in financing activities | (220.1) | (208.6) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 1.3 | (6.5) |
Net change in cash, cash equivalents, and restricted cash | (88.2) | (580.3) |
Cash, cash equivalents, and restricted cash, beginning of period | 321.1 | 817.1 |
Cash, cash equivalents, and restricted cash end of period | 232.9 | 236.8 |
Cash and cash equivalents | 222.4 | 228.7 |
Restricted cash in funds held for clients included in other current assets | 10.5 | 8.1 |
Cash paid for: | ||
Income taxes and foreign withholding taxes, net of refunds, continuing operations | 30.1 | 67.8 |
Interest | 68.7 | 62.9 |
Non-cash investing and financing activities: | ||
Capitalized property and equipment obtained under lease | 18.9 | 2 |
Lease liabilities incurred | (18.9) | (2) |
Intangible assets purchased, not paid | $ 0.5 | $ 0.1 |
Consolidated Statements Stockho
Consolidated Statements Stockholders' Deficit - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in-Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total CDK Stockholders' Deficit | Non-controlling Interest |
Stockholders' equity, beginning balance at Jun. 30, 2018 | $ (347.3) | $ 1.6 | $ 679.8 | $ 753 | $ (1,810.7) | $ 11.5 | $ (364.8) | $ 17.5 |
Common stock, shares issued, beginning balance (in shares) at Jun. 30, 2018 | 160.3 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 183.2 | 179.3 | 179.3 | 3.9 | ||||
Foreign currency translation adjustments | (18.1) | (18.1) | (18.1) | |||||
Stock-based compensation expense and related dividend equivalents | 6.9 | 7.1 | (0.2) | 6.9 | ||||
Common stock issued for the exercise and vesting of stock-based compensation awards, net | (13.8) | (30.1) | 16.3 | (13.8) | ||||
Dividends paid to stockholders | (38) | (38) | (38) | |||||
Repurchases of common stock | (374.1) | (52) | (322.1) | (374.1) | ||||
Dividend payments to noncontrolling owners | (8.2) | (8.2) | ||||||
Common stock, shares issued, end balance (in shares) at Dec. 31, 2018 | 160.3 | |||||||
Stockholders' equity, ending balance at Dec. 31, 2018 | (500.1) | $ 1.6 | 604.8 | 1,003.8 | (2,116.5) | (7) | (513.3) | 13.2 |
Stockholders' equity, beginning balance at Sep. 30, 2018 | (299.6) | $ 1.6 | 654.6 | 933.6 | (1,909.6) | 5.1 | (314.7) | 15.1 |
Common stock, shares issued, beginning balance (in shares) at Sep. 30, 2018 | 160.3 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 90.9 | 89 | 89 | 1.9 | ||||
Foreign currency translation adjustments | (12.1) | (12.1) | (12.1) | |||||
Stock-based compensation expense and related dividend equivalents | 3.1 | 3.2 | (0.1) | 3.1 | ||||
Common stock issued for the exercise and vesting of stock-based compensation awards, net | 0.1 | (1) | 1.1 | 0.1 | ||||
Dividends paid to stockholders | (18.7) | (18.7) | (18.7) | |||||
Repurchases of common stock | (260) | (52) | (208) | (260) | ||||
Dividend payments to noncontrolling owners | (3.8) | (3.8) | ||||||
Common stock, shares issued, end balance (in shares) at Dec. 31, 2018 | 160.3 | |||||||
Stockholders' equity, ending balance at Dec. 31, 2018 | (500.1) | $ 1.6 | 604.8 | 1,003.8 | (2,116.5) | (7) | (513.3) | 13.2 |
Stockholders' equity, beginning balance at Jun. 30, 2019 | $ (714.5) | $ 1.6 | 688.5 | 911.6 | (2,324.6) | (6.7) | (729.6) | 15.1 |
Common stock, shares issued, beginning balance (in shares) at Jun. 30, 2019 | 160.3 | 160.3 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | $ 108.2 | 104.3 | 104.3 | 3.9 | ||||
Foreign currency translation adjustments | 12.1 | 12.1 | 12.1 | |||||
Stock-based compensation expense and related dividend equivalents | 11.1 | 11.4 | (0.3) | 11.1 | ||||
Common stock issued for the exercise and vesting of stock-based compensation awards, net | (0.8) | (16.9) | 16.1 | (0.8) | ||||
Dividends paid to stockholders | (36.5) | (36.5) | (36.5) | |||||
Dividend payments to noncontrolling owners | $ (6.6) | (6.6) | ||||||
Common stock, shares issued, end balance (in shares) at Dec. 31, 2019 | 160.3 | 160.3 | ||||||
Stockholders' equity, ending balance at Dec. 31, 2019 | $ (627) | $ 1.6 | 683 | 979.1 | (2,308.5) | 5.4 | (639.4) | 12.4 |
Stockholders' equity, beginning balance at Sep. 30, 2019 | (671.6) | $ 1.6 | 677.7 | 975.3 | (2,312.4) | (26.6) | (684.4) | 12.8 |
Common stock, shares issued, beginning balance (in shares) at Sep. 30, 2019 | 160.3 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 24.1 | 22.3 | 22.3 | 1.8 | ||||
Foreign currency translation adjustments | 32 | 32 | 32 | |||||
Stock-based compensation expense and related dividend equivalents | 7.3 | 7.5 | (0.2) | 7.3 | ||||
Common stock issued for the exercise and vesting of stock-based compensation awards, net | 1.7 | (2.2) | 3.9 | 1.7 | ||||
Dividends paid to stockholders | (18.3) | (18.3) | (18.3) | |||||
Dividend payments to noncontrolling owners | $ (2.2) | (2.2) | ||||||
Common stock, shares issued, end balance (in shares) at Dec. 31, 2019 | 160.3 | 160.3 | ||||||
Stockholders' equity, ending balance at Dec. 31, 2019 | $ (627) | $ 1.6 | $ 683 | $ 979.1 | $ (2,308.5) | $ 5.4 | $ (639.4) | $ 12.4 |
Consolidated Statements Stock_2
Consolidated Statements Stockholders' Deficit (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common stock, dividends, declared (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.30 | $ 0.30 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Description of Business. CDK Global, Inc. (the "Company" or "CDK") enables end-to-end automotive commerce across the globe. For over 40 years, the Company has served automotive retailers and original equipment manufacturers ("OEMs") by providing innovative solutions that allow them to better connect, manage, analyze, and grow their businesses. The Company's solutions automate and integrate all parts of the buying process, including the acquisition, sale, financing, insuring, parts supply, repair, and maintenance of vehicles, in more than 100 countries around the world, for approximately 30,000 retail locations and most OEMs. The Company is organized into two main operating groups, CDK North America ("CDKNA") and CDK International ("CDKI"), which are also the two reportable segments. In addition, the Company has an Other segment, the primary components of which are corporate allocations and other expenses not recorded in the segment results. For additional information refer to Note 14, Financial Data by Segment. The Company has committed to a plan to divest its Digital Marketing Business. The Digital Marketing Business is presented as discontinued operations. For additional information refer to Note 4, Discontinued Operations. Basis of Preparation. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect assets, liabilities, revenues, and expenses that are reported in the accompanying financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. The accompanying consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. Interim financial results are not necessarily indicative of financial results for a full year. The financial statements in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2019 . Certain prior year amounts have been reclassified to conform to the current year presentation. See Note 4, Discontinued Operations for the impact of presenting the Digital Marketing Business as held for sale and discontinued operations. Effective July 1, 2019, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Codification , "Leases," as amended ("ASC 842"). The comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented. For additional information, refer to Note 10, Leases for a discussion of the Company's lease accounting policy. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of Significant Accounting Policies The Company's significant accounting policies are described in the aforementioned Annual Report. Included below are certain updates to those policies. Funds Receivable and Funds Held for Clients and Client Fund Obligations. Funds receivable and funds held for clients represent amounts received or expected to be received from clients in advance of performing titling and registration services on behalf of those clients. These amounts are classified within other current assets on the consolidated balance sheets. The total amount due to remit for titling and registration obligations with the department of motor vehicles is recorded to client fund obligations which is classified as accrued expenses and other current liabilities on the consolidated balance sheets. Funds receivable was $27.7 million and $32.3 million , and funds held for clients was $10.5 million and $9.7 million as of December 31, 2019 and June 30, 2019 , respectively. Client fund obligations were $38.2 million and $42.0 million as of December 31, 2019 and June 30, 2019 , respectively. Internal Use Software and Computer Software to be Sold, Leased, or Otherwise Marketed. Pursuant to its software policies, the Company incurred expenses to research, develop, and deploy new and enhanced solutions of $15.7 million and $23.7 million for the three months ended December 31, 2019 and 2018 , respectively, and $37.8 million and $40.4 million for the six months ended December 31, 2019 and 2018 , respectively. These expenses were classified within cost of revenues on the consolidated statements of operations. Additionally, the Company had cash flows used for qualifying capitalized software development cost of $26.4 million and $16.7 million for the six months ended December 31, 2019 and 2018 , respectively. Fair Value of Financial Instruments. Cash and cash equivalents, accounts receivable, other current assets, accounts payable, and other current liabilities are reflected in the consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments. The carrying value of the Company's revolving credit facility and term loan facilities (as described in Note 9, Debt), including accrued interest, approximates fair value based on the Company's current estimated incremental borrowing rate for similar types of arrangements. The approximate aggregate fair value of the Company's senior notes as of December 31, 2019 was $2,252.0 million , based on quoted market prices for the same or similar instruments compared to a carrying value of $2,100.0 million . The term loan facilities and senior notes are considered Level 2 fair value measurements in the fair value hierarchy. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Pronouncements. In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. The Company early adopted this standard as of July 1, 2019, using the prospective approach and applied this guidance to all implementation costs incurred after the date of adoption. In February 2016, the FASB issued ASC 842. Refer to Note 10, Leases, for the required disclosures related to the adoption of this standard. Recently Issued Accounting Pronouncements. In November 2018, the FASB issued ASU 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606" to resolve the diversity in practice concerning the manner in which entities account for transactions based on their assessment of the economics of a collaborative arrangement. For public business entities, ASU 2018-18 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. The Company intends to adopt this standard as of July 1, 2020. Based on its evaluation, the Company does not anticipate a material impact to its consolidated financial statements upon adoption of this standard. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (“ASU 2016-13”), which requires the application of a current expected credit loss (“CECL”) impairment model to financial assets measured at amortized cost (including trade accounts receivable), net investments in leases, and certain off-balance-sheet credit exposures. Under the CECL model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information. Furthermore, the CECL model requires financial assets with similar risk characteristics to be analyzed on a collective basis. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. The Company intends to adopt this standard as of July 1, 2020. The Company is evaluating the impact of adoption on its consolidated financial statements, including accounting policies, processes and systems. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations In June 2019, the Company committed to a plan to divest its Digital Marketing Business in order to focus on its core software-as-a-service and technology solutions for the markets it serves through the CDKNA and CDKI segments. The Digital Marketing Business is comprised of all of the assets of the former Advertising North America segment and certain assets of CDKNA related to mobile advertising solutions and websites services. The Company's decision to divest its Digital Marketing Business was the result of a comprehensive strategic review of the Company’s business, undertaken during the fiscal quarter ended June 30, 2019. The Company intends to complete its divestiture of the Digital Marketing Business during the current fiscal year. This action resulted in the reclassification of the assets and liabilities comprising the Digital Marketing Business as assets and liabilities held for sale in the accompanying consolidated balance sheets, and a corresponding adjustment to consolidated statements of operations and cash flows to reflect discontinued operations, for all periods presented. Net assets held-for-sale are recorded at the lower of carrying value or fair value less selling costs. The Company is required to reassess the carrying value on a quarterly basis. At December 31, 2019, the Company estimated fair value from a market participant perspective, which incorporates information obtained through ongoing negotiations with potential buyers, and determined that the carrying value was higher than the estimated fair value less selling costs. As a result, the Company recorded a valuation allowance of $69.2 million at December 31, 2019. The valuation allowance is included in current assets held-for-sale in the consolidated balance sheets. The following table summarizes the comparative financial results of discontinued operations which are presented as Net earnings from discontinued operations in the consolidated statements of operations: Three Months Ended December 31, Six Months Ended December 31, 2019 2018 2019 2018 Revenues $ 84.8 $ 111.7 $ 170.5 $ 219.9 Expenses: Cost of revenues 65.9 79.3 132.9 157.7 Selling, general and administrative expenses 10.5 7.6 21.6 14.7 Provision for valuation allowance 69.2 — 69.2 — Restructuring expenses — 0.1 — 1.5 Total expenses 145.6 87.0 223.7 173.9 Earnings (loss) before income taxes (60.8 ) 24.7 (53.2 ) 46.0 Benefit from (provision for) income taxes 15.1 (6.4 ) 13.2 (11.9 ) Net earnings (loss) from discontinued operations $ (45.7 ) $ 18.3 $ (40.0 ) $ 34.1 The total assets and liabilities held for sale are stated separately in the consolidated balance sheets. Assets and liabilities held for sale were classified as current at December 31, 2019 and June 30, 2019 as it was probable that the sale would occur within one year as of those dates. December 31, 2019 June 30, 2019 Assets: Current assets: Accounts Receivable $ 108.5 $ 121.9 Prepaid and other current assets 2.6 1.1 Total current assets 111.1 123.0 Property, plant and equipment, net 2.3 2.3 Goodwill 59.4 59.4 Intangible assets, net 39.7 35.6 Other assets 2.9 0.2 Total current assets held for sale 215.4 220.5 Liabilities: Current liabilities: Accounts payable 13.6 19.4 Deferred revenues 1.1 0.8 Accrued expenses and other current liabilities 34.9 26.0 Total current liabilities 49.6 46.2 Other liabilities 0.4 2.7 Total current liabilities held for sale 50.0 48.9 Net assets held for sale, at unadjusted carrying value (1) 165.4 171.6 Valuation allowance (69.2 ) — Net assets held for sale, at fair value less selling costs $ 96.2 $ 171.6 (1) Includes additional assets and liabilities that met the held-for-sale criteria at December 31, 2019. |
Revenue
Revenue | 6 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Contract Balances. The Company receives payments from customers based upon contractual billing schedules. Payment terms can vary by contract but the period between invoicing and when payments are due is not significant. The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in unbilled receivables, contract assets, or contract liabilities, on the Company’s consolidated balance sheets. Unbilled receivables are recorded when the right to consideration becomes unconditional based only on the passage of time. Contract assets include amounts related to the Company's contractual right to consideration for completed performance when the right to consideration is conditional. The Company records contract liabilities when cash payments are received or due in advance of performance. Contract assets and contract liabilities are recognized at the contract level. The following table provides information about accounts receivables, contract assets, and contract liabilities from contracts with customers: December 31, 2019 June 30, 2019 Accounts receivable (including unbilled receivables) $ 320.9 $ 290.4 Short-term contract assets (included in other current assets) 30.3 29.9 Long-term contract assets (included in other assets) 22.3 20.2 Short-term contract liabilities (included in short-term deferred revenue) (119.7 ) (124.8 ) Long-term contract liabilities (included in long-term deferred revenue) (72.5 ) (68.4 ) Net contract assets/(liabilities) $ (139.6 ) $ (143.1 ) During the six months ended December 31, 2019 , the Company recognized $148.9 million of revenue upon satisfaction of performance obligations and invoiced and reclassified $26.7 million to accounts receivable. These amounts were included in the net contract assets or liabilities balance as of June 30, 2019. The Company had no asset impairment charges related to contract assets in the periods presented. The Company may occasionally recognize an adjustment in revenue in the current period for performance obligations partially or fully satisfied in the previous periods resulting from changes in estimates for the transaction price, including any changes to the Company's assessment of whether an estimate of variable consideration is constrained. For the six months ended December 31, 2019 , the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, was not significant. Remaining Performance Obligations. As of December 31, 2019 , the Company had 3.0 billion of remaining performance obligations which represent contracted revenue that has not yet been recognized, including contracted revenue where the contract's original expected duration is one year or less. The Company expects to recognize remaining performance obligations as revenue as follows: December 31, 2019 Six months ending June 30, 2020 $ 670.0 Twelve months ending June 30, 2021 940.0 Twelve months ending June 30, 2022 640.0 Twelve months ending June 30, 2023 410.0 Thereafter 360.0 Total remaining performance obligations $ 3,020.0 The remaining performance obligations exclude future transaction revenue where revenue is recognized as the services are rendered and in the amount to which the Company has the right to invoice. Costs to Obtain and Fulfill a Contract. The Company capitalizes certain contract acquisition costs consisting primarily of commissions incurred when contracts are signed. The Company does not capitalize commissions related to contracts with a duration of less than one year; such commissions are expensed within selling, general and administrative expenses when incurred. Costs to fulfill contracts are capitalized when such costs are direct, incremental, and related to transition or installation activities for hosted software solutions. Capitalized costs to fulfill primarily include travel and employee compensation and benefit related costs for the Company's implementation and training teams. Capitalized costs to obtain a contract and most costs to fulfill a contract are amortized over a period of five years which represents the expected period of benefit of these costs. In instances where the contract term is significantly less than five years, costs to fulfill are amortized over the contract term which the Company believes best reflects the period of benefit of these costs. As of December 31, 2019 and June 30, 2019 , the Company capitalized contract acquisition and fulfillment costs from continuing operations of $205.9 million and $200.4 million , respectively. The Company expects that incremental commission fees incurred as a result of obtaining contracts and fulfillment costs are recoverable . During the six months ended December 31, 2019 and 2018 , the Company recognized cost amortization of $40.6 million and $39.2 million , respectively, and there were no significant impairment losses. |
Restructuring
Restructuring | 6 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the fiscal year ended June 30, 2015, the Company initiated a business transformation plan that was completed at the end of fiscal 2019. Accruals for restructuring expenses were included within accrued expenses and other current liabilities on the consolidated balance sheets as of December 31, 2019 and June 30, 2019 . The following table summarizes restructuring accrual activity for the six months ended December 31, 2019 : Employee-Related Costs Contract Termination Costs Total Costs Balance as of June 30, 2019 $ 9.4 $ 0.1 $ 9.5 Cash payments (4.6 ) — (4.6 ) Non-cash and other adjustments (0.3 ) (0.1 ) (0.4 ) Foreign exchange (0.1 ) — (0.1 ) Balance as of December 31, 2019 $ 4.4 $ — $ 4.4 |
Earnings per Share
Earnings per Share | 6 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The numerator for basic and diluted earnings per share is net earnings attributable to CDK. The denominator for basic and diluted earnings per share is based on the weighted-average number of shares of the Company's common stock outstanding during the applicable reporting periods. Diluted earnings per share also reflects the dilutive effect of unexercised in-the-money stock options and unvested restricted stock. Net earnings allocated to participating securities were not significant for the three and six months ended December 31, 2019 and 2018 . The following table summarizes the components of earnings per share: Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 Net earnings from continuing operations attributable to CDK $ 68.0 $ 70.7 $ 144.3 $ 145.2 Net earnings (loss) from discontinued operations (45.7 ) 18.3 (40.0 ) 34.1 Net earnings attributable to CDK $ 22.3 $ 89.0 $ 104.3 $ 179.3 Weighted-average shares outstanding: Basic 121.6 126.8 121.5 128.2 Effect of employee stock options 0.1 0.2 0.1 0.2 Effect of employee restricted stock 0.4 0.5 0.5 0.7 Diluted 122.1 127.5 122.1 129.1 Net earnings (loss) attributable to CDK per share - basic: Continuing operations $ 0.56 $ 0.56 $ 1.19 $ 1.13 Discontinued operations (0.38 ) 0.14 (0.33 ) 0.27 Total net earnings attributable to CDK per share - basic $ 0.18 $ 0.70 $ 0.86 $ 1.40 Net earnings (loss) attributable to CDK per share - diluted: Continuing operations $ 0.55 $ 0.56 $ 1.18 $ 1.13 Discontinued operations (0.37 ) 0.14 (0.33 ) 0.26 Total net earnings attributable to CDK per share - diluted $ 0.18 $ 0.70 $ 0.85 $ 1.39 The weighted-average number of shares outstanding used in the calculation of diluted earnings per share does not include the effect of the following anti-dilutive securities. Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 Stock-based awards 0.9 0.8 1.0 0.4 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Changes in goodwill for the six months ended December 31, 2019 were as follows: CDKNA CDKI Total Balance as of June 30, 2019 $ 1,000.3 $ 356.0 $ 1,356.3 Currency translation adjustments 0.2 7.8 8.0 Balance as of December 31, 2019 $ 1,000.5 $ 363.8 $ 1,364.3 The Company performs its annual impairment testing for goodwill balances as of April 1 each year; however, the Company may test for impairment between annual tests if an event occurs or circumstances change that indicate that the fair value of the reporting unit may fall below its carrying amount. During the first six month of fiscal 2020, there were no events or changes in circumstances that indicated a need to reassess impairment before the annual test date. Components of intangible assets, net from continuing operations were as follows: December 31, 2019 June 30, 2019 Original Cost Accumulated Amortization Intangible Assets, net Original Cost Accumulated Amortization Intangible Assets, net Software $ 277.4 $ (141.5 ) $ 135.9 $ 250.8 $ (126.7 ) $ 124.1 Customer lists 197.3 (105.3 ) 92.0 196.6 (100.2 ) 96.4 Trademarks 7.5 (3.4 ) 4.1 7.5 (3.1 ) 4.4 Other intangibles 3.2 (2.5 ) 0.7 3.2 (2.2 ) 1.0 $ 485.4 $ (252.7 ) $ 232.7 $ 458.1 $ (232.2 ) $ 225.9 Other intangibles primarily consist of purchased rights, covenants, and patents (acquired directly or through acquisitions). All of the intangible assets have finite lives and, as such, are subject to amortization. The weighted-average remaining useful life of intangible assets is 7 years ( 3 years for software and software licenses, 13 years for customer lists, and 6 years for trademarks). Amortization of intangible assets was $10.7 million and $9.2 million for the three months ended December 31, 2019 and 2018 , respectively, and $20.1 million and $14.8 million for the six months ended December 31, 2019 and 2018 , respectively. During the six months ended December 31, 2018, in addition to the amortization of intangible assets, the Company recorded impairment charges of $14.9 million . Estimated amortization expenses of the Company's intangible assets as of December 31, 2019 were as follows: Amount Six months ending June 30, 2020 $ 19.6 Twelve months ending June 30, 2021 44.8 Twelve months ending June 30, 2022 44.4 Twelve months ending June 30, 2023 31.6 Twelve months ending June 30, 2024 18.5 Twelve months ending June 30, 2025 13.2 Thereafter 60.6 $ 232.7 |
Debt
Debt | 6 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt comprised of the following: December 31, 2019 June 30, 2019 Revolving credit facility, matures 2023 $ 90.0 $ — Three year term loan facility, due 2021 300.0 300.0 Five year term loan facility, due 2023 281.3 288.8 3.30% senior notes, due 2019 — 250.0 4.50% senior notes, due 2024 500.0 500.0 5.875% senior notes, due 2026 500.0 500.0 4.875% senior notes, due 2027 600.0 600.0 5.250% senior notes due 2029 500.0 500.0 Finance lease liabilities 17.1 19.9 Unamortized debt financing costs (26.1 ) (28.5 ) Total debt and finance lease liabilities $ 2,762.3 $ 2,930.2 Current maturities of long-term debt and finance lease liabilities 21.1 270.8 Total long-term debt and finance lease liabilities $ 2,741.2 $ 2,659.4 The Company's aggregate scheduled maturities of the long-term debt as of December 31, 2019 were as follows: Amount Twelve months ending December 31, 2020 $ 15.0 Twelve months ending December 31, 2021 315.0 Twelve months ending December 31, 2022 15.0 Twelve months ending December 31, 2023 326.3 Twelve months ending December 31, 2024 500.0 Thereafter 1,600.0 Total debt 2,771.3 Unamortized debt financing costs (26.1 ) Total debt, net of unamortized debt financing costs $ 2,745.2 Revolving Credit Facility. On August 17, 2018 , the Company entered into a five-year senior unsecured revolving credit facility (the "revolving credit facility"). The revolving credit facility provides up to $750.0 million of borrowing capacity and includes a sub-limit of up to $100.0 million for loans in Euro, Pound Sterling, and, if approved by the revolving lenders, other currencies. The average outstanding balances of the revolving credit facility were $150.0 million and $371.9 million for the three months ended December 31, 2019 and 2018 , respectively, and $75.2 million and $211.2 million for the six months ended December 31, 2019 and 2018 , respectively. Term Loan Facilities. The three year term loan facility due 2021 and the five year term loan facility due 2023 had interest rates per annum of 3.30% and 3.43% , respectively, as of December 31, 2019 . London Interbank Market (“LIBOR”) Transition. LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and other pressure may cause LIBOR to disappear entirely or to perform differently than in the past. It is expected that certain banks will stop reporting information used to set LIBOR at the end of 2021 when their reporting obligations cease. This will effectively end the usefulness of LIBOR and may end its publication. The consequences of these developments cannot be entirely predicted but, as noted above, could impact the interest rates of the revolving credit facility and the five year term loan. If LIBOR is no longer widely available, the Company will pursue alternative interest rate calculations in its revolving credit facility and five year term loan agreements. However, if no alternative rate can be determined, the LIBOR rate component will no longer be utilized in determining the rates. As of December 31, 2019 and June 30, 2019, the hypothetical impact to the Company’s interest rates without utilizing the LIBOR rate component would not have had a material effect on either rate, thus the Company does not believe the discontinuation of LIBOR will have a material impact on its financial position and results of operations. Restrictive Covenants and Other Matters. The revolving credit facility, the three year term loan facility, and the five year term loan facility are together referred to as the "credit facilities." The credit facilities contain various covenants and restrictive provisions that limit the Company's subsidiaries' ability to incur additional indebtedness, the Company's ability to consolidate or merge with other entities, and the Company's subsidiaries' ability to incur liens, enter into sale and leaseback transactions, and enter into agreements restricting the ability of the Company's subsidiaries to pay dividends. If the Company fails to perform the obligations under these and other covenants, the revolving credit facility could be terminated and any outstanding borrowings, together with accrued interest, under the credit facilities could be declared immediately due and payable. The credit facilities also have, in addition to customary events of default, an event of default triggered by the acceleration of the maturity of any other indebtedness the Company may have in an aggregate principal amount in excess of $75.0 million . The credit facilities also contain financial covenants that will provide that (i) the ratio of total consolidated indebtedness to consolidated EBITDA shall not exceed 3.75 to 1.00 and (ii) the ratio of consolidated EBITDA to consolidated interest expense shall be a minimum of 3.00 to 1.00 . Senior Notes. In November 2016, Moody's and S&P lowered their credit ratings on the senior notes to Ba1 (Stable Outlook) from Baa3 (Negative Outlook) and to BB+ (Stable Outlook) from BBB- (Negative Outlook), respectively. The downgrades triggered interest rate adjustments for the 2019 and 2024 notes. Interest rates for the 2019 and 2024 notes increased to 3.80% from 3.30% and to 5.00% from 4.50% , respectively, effective October 15, 2016. On August 13, 2019, S&P affirmed their rating at BB+ but revised their outlook to Negative from Stable. Finance Lease Liabilities. The Company has lease agreements for equipment, which are classified as finance lease liabilities. Refer to Note 10, Leases for scheduled maturities and additional information relating to finance lease liabilities. Unamortized Debt Financing Costs. As of December 31, 2019 and June 30, 2019 , gross debt issuance costs related to debt instruments were $41.3 million . Accumulated amortization was $15.2 million and $12.8 million as of December 31, 2019 and June 30, 2019 , respectively. Debt financing costs are amortized over the terms of the related debt instruments and recorded within interest expense on the consolidated statements of operations. |
Leases
Leases | 6 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Adoption of ASC 842. On July 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method whereby prior comparative periods have not been restated and continue to be reported under the accounting standards in effect for the prior period. The Company elected the package of practical expedients permitted under the transition guidance for all leases (where the Company is a lessee or a lessor), which allowed the Company to adopt ASC 842 without reassessing whether arrangements contain leases, the lease classification, and the determination of initial direct cost. Upon adoption on July 1, 2019, the Company recognized right-of-use ("ROU") assets inclusive of finance leases, net of prepaids, incentives and impairments, of $68.2 million , and lease liabilities of $76.8 million in the Company's consolidated balance sheets. At adoption, there was no impact on the Company’s statements of operations, cash flows, and stockholders' deficit. Significant Judgments. The Company has lease arrangements where the Company acts as either a lessee or a lessor. The Company applies significant judgment in order to determine if an arrangement contains a lease, to assess which party retains a material amount of economic benefit from the underlying asset, and to determine which party holds control over the direction and use of the asset. The Company also applies significant judgment to determine whether the Company will exercise renewal options, to identify substantive substitution rights over the asset, to determine the incremental borrowing rate, and to estimate the fair value of the leased asset. CDK as a Lessee. The Company has obligations under lease arrangements mainly for facilities, equipment, data centers, and vehicles. These leases have original lease periods expiring between 2019 and 2027 . The Company classifies leases as finance leases when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. When none of these criteria are met, the Company classifies leases as operating leases. Several of the Company's leases include one or more options to renew. The Company does not assume renewal periods in its determination of lease term unless it is reasonably certain that the Company will exercise the renewal option. The Company considers leases with an initial term of 12 months or less as short-term in nature and does not record such leases on the balance sheet. The Company records all other leases on the balance sheet with ROU assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term. The ROU asset is adjusted for prepaid or deferred rent, lease incentives and impairments. The Company uses the incremental borrowing rate at the lease commencement date to determine the present value of the lease payments as the implicit rate within the leases is generally not readily determinable. The incremental borrowing rate is generally determined using factors such as treasury yields, the Company's credit rating and lease term, and may differ for individual leases. In addition to fixed lease payments, several lease arrangements contain provisions for variable lease payments relating to utilities and maintenance costs or rental increases not scheduled in the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities. For the three and six months ended December 31, 2019 , the Company recorded lease expense of $4.1 million and $9.4 million within cost of revenues, respectively, $4.4 million and $8.4 million within selling, general and administrative expenses, respectively, and $0.2 million and $0.4 million within interest expense, respectively, on the consolidated statements of operations. The following table summarizes the components of net lease expense: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Leases classified as finance: Amortization of ROU assets $ 1.3 $ 3.0 Interest on lease liabilities 0.2 0.4 Leases classified as operating: Lease expense 4.0 8.7 Sublease income (gross basis) (0.3 ) (0.4 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 0.8 2.0 Variable lease expense 2.3 4.5 Total net lease expense $ 8.3 $ 18.2 For the three and six months ended December 31, 2018 , rent expense related to operating leases under previous accounting guidance was $7.6 million and $17.2 million , respectively. The following table presents supplemental information related to leases: Six Months Ended December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 9.1 Operating cash flows paid for interest portion of finance leases 0.4 Finance cash flows paid for principal portion of finance leases 3.0 ROU assets obtained in exchange for new operating lease liabilities 18.8 ROU assets obtained in exchange for new finance lease liabilities 0.1 As of December 31, 2019 , the weighted-average remaining lease term was 5.4 years for operating leases and 3 years for finance leases; and the weighted-average discount rate was 3.7% for operating leases and 4.6% for finance leases. The following table presents supplemental balance sheet information related to leases as of December 31, 2019 : Operating Leases Finance Leases ROU assets, net (1) $ 59.3 $ 16.4 Lease liabilities, current (2) 9.3 6.1 Lease liabilities, non-current (3) 57.1 11.0 Total lease liabilities $ 66.4 $ 17.1 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. The following table presents maturity analysis of lease liabilities as of December 31, 2019 : Operating Leases Finance Leases Six months ending June 30, 2020 $ 10.0 $ 3.5 Twelve months ending June 30, 2021 17.8 6.1 Twelve months ending June 30, 2022 15.5 5.1 Twelve months ending June 30, 2023 11.4 3.5 Twelve months ending June 30, 2024 9.2 0.1 Twelve months ending June 30, 2025 7.7 — Thereafter 10.5 — Total undiscounted lease payments $ 82.1 $ 18.3 Less: imputed interest (7.8 ) (1.2 ) Less: lease incentive receivable (7.9 ) — Total lease liabilities $ 66.4 $ 17.1 The Company did not have any material minimum lease payments for executed leases that have not yet commenced as of December 31, 2019 . Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 Total minimum operating lease liabilities $ 74.7 CDK as a Lessor. The Company’s hardware-as-a-service arrangements, in which the Company provides customers continuous access to CDK owned hardware, such as networking and telephony equipment and laser printers, are accounted for as sales-type leases under ASC 842, primarily because they do not contain substantive substitution rights. Since the Company elected to not reassess prior conclusions related to arrangements containing leases, the lease classification, and the initial direct costs, only hardware leases that commenced or are modified on or subsequent to July 1, 2019, are accounted for under ASC 842. Historically, the Company has accounted for these arrangements as a distinct performance obligation under the revenue recognition guidance and recognized revenue over the term of the arrangement. Sales-type lease arrangements follow the Company’s customary contracting practices and, generally, include a fixed monthly fee for the lease and non-lease components for the duration of the contract term. The Company does not typically provide renewal, termination or purchase options to its customers. The Company recognizes net investment in sales-type leases based on the present value of the lease receivable when collectibility is probable. The Company accounts for lease and non-lease components such as maintenance costs, separately. Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers. The following summarizes components of net lease income reported within the consolidated statements of operations: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Revenues (1) $ 5.9 $ 15.8 Cost of revenues (7.4 ) (15.2 ) Interest income 0.2 0.2 Total lease income (loss) $ (1.3 ) $ 0.8 (1) Revenues from lease components are included within Other revenue As of December 31, 2019 , the carrying value of the Company’s lease receivable reported in accounts receivable, net and other assets within the consolidated balance sheets was $4.1 million and $10.3 million , respectively. The following table presents maturity analysis of the lease payments the Company expects to receive as of December 31, 2019 : Amount Six months ending June 30, 2020 $ 2.3 Twelve months ending June 30, 2021 4.2 Twelve months ending June 30, 2022 3.7 Twelve months ending June 30, 2023 2.8 Twelve months ending June 30, 2024 2.3 Twelve months ending June 30, 2025 0.6 Thereafter — Total undiscounted cash flows to be received $ 15.9 Less: imputed interest 1.5 Total lease receivable $ 14.4 |
Leases | Leases Adoption of ASC 842. On July 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method whereby prior comparative periods have not been restated and continue to be reported under the accounting standards in effect for the prior period. The Company elected the package of practical expedients permitted under the transition guidance for all leases (where the Company is a lessee or a lessor), which allowed the Company to adopt ASC 842 without reassessing whether arrangements contain leases, the lease classification, and the determination of initial direct cost. Upon adoption on July 1, 2019, the Company recognized right-of-use ("ROU") assets inclusive of finance leases, net of prepaids, incentives and impairments, of $68.2 million , and lease liabilities of $76.8 million in the Company's consolidated balance sheets. At adoption, there was no impact on the Company’s statements of operations, cash flows, and stockholders' deficit. Significant Judgments. The Company has lease arrangements where the Company acts as either a lessee or a lessor. The Company applies significant judgment in order to determine if an arrangement contains a lease, to assess which party retains a material amount of economic benefit from the underlying asset, and to determine which party holds control over the direction and use of the asset. The Company also applies significant judgment to determine whether the Company will exercise renewal options, to identify substantive substitution rights over the asset, to determine the incremental borrowing rate, and to estimate the fair value of the leased asset. CDK as a Lessee. The Company has obligations under lease arrangements mainly for facilities, equipment, data centers, and vehicles. These leases have original lease periods expiring between 2019 and 2027 . The Company classifies leases as finance leases when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. When none of these criteria are met, the Company classifies leases as operating leases. Several of the Company's leases include one or more options to renew. The Company does not assume renewal periods in its determination of lease term unless it is reasonably certain that the Company will exercise the renewal option. The Company considers leases with an initial term of 12 months or less as short-term in nature and does not record such leases on the balance sheet. The Company records all other leases on the balance sheet with ROU assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term. The ROU asset is adjusted for prepaid or deferred rent, lease incentives and impairments. The Company uses the incremental borrowing rate at the lease commencement date to determine the present value of the lease payments as the implicit rate within the leases is generally not readily determinable. The incremental borrowing rate is generally determined using factors such as treasury yields, the Company's credit rating and lease term, and may differ for individual leases. In addition to fixed lease payments, several lease arrangements contain provisions for variable lease payments relating to utilities and maintenance costs or rental increases not scheduled in the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities. For the three and six months ended December 31, 2019 , the Company recorded lease expense of $4.1 million and $9.4 million within cost of revenues, respectively, $4.4 million and $8.4 million within selling, general and administrative expenses, respectively, and $0.2 million and $0.4 million within interest expense, respectively, on the consolidated statements of operations. The following table summarizes the components of net lease expense: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Leases classified as finance: Amortization of ROU assets $ 1.3 $ 3.0 Interest on lease liabilities 0.2 0.4 Leases classified as operating: Lease expense 4.0 8.7 Sublease income (gross basis) (0.3 ) (0.4 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 0.8 2.0 Variable lease expense 2.3 4.5 Total net lease expense $ 8.3 $ 18.2 For the three and six months ended December 31, 2018 , rent expense related to operating leases under previous accounting guidance was $7.6 million and $17.2 million , respectively. The following table presents supplemental information related to leases: Six Months Ended December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 9.1 Operating cash flows paid for interest portion of finance leases 0.4 Finance cash flows paid for principal portion of finance leases 3.0 ROU assets obtained in exchange for new operating lease liabilities 18.8 ROU assets obtained in exchange for new finance lease liabilities 0.1 As of December 31, 2019 , the weighted-average remaining lease term was 5.4 years for operating leases and 3 years for finance leases; and the weighted-average discount rate was 3.7% for operating leases and 4.6% for finance leases. The following table presents supplemental balance sheet information related to leases as of December 31, 2019 : Operating Leases Finance Leases ROU assets, net (1) $ 59.3 $ 16.4 Lease liabilities, current (2) 9.3 6.1 Lease liabilities, non-current (3) 57.1 11.0 Total lease liabilities $ 66.4 $ 17.1 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. The following table presents maturity analysis of lease liabilities as of December 31, 2019 : Operating Leases Finance Leases Six months ending June 30, 2020 $ 10.0 $ 3.5 Twelve months ending June 30, 2021 17.8 6.1 Twelve months ending June 30, 2022 15.5 5.1 Twelve months ending June 30, 2023 11.4 3.5 Twelve months ending June 30, 2024 9.2 0.1 Twelve months ending June 30, 2025 7.7 — Thereafter 10.5 — Total undiscounted lease payments $ 82.1 $ 18.3 Less: imputed interest (7.8 ) (1.2 ) Less: lease incentive receivable (7.9 ) — Total lease liabilities $ 66.4 $ 17.1 The Company did not have any material minimum lease payments for executed leases that have not yet commenced as of December 31, 2019 . Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 Total minimum operating lease liabilities $ 74.7 CDK as a Lessor. The Company’s hardware-as-a-service arrangements, in which the Company provides customers continuous access to CDK owned hardware, such as networking and telephony equipment and laser printers, are accounted for as sales-type leases under ASC 842, primarily because they do not contain substantive substitution rights. Since the Company elected to not reassess prior conclusions related to arrangements containing leases, the lease classification, and the initial direct costs, only hardware leases that commenced or are modified on or subsequent to July 1, 2019, are accounted for under ASC 842. Historically, the Company has accounted for these arrangements as a distinct performance obligation under the revenue recognition guidance and recognized revenue over the term of the arrangement. Sales-type lease arrangements follow the Company’s customary contracting practices and, generally, include a fixed monthly fee for the lease and non-lease components for the duration of the contract term. The Company does not typically provide renewal, termination or purchase options to its customers. The Company recognizes net investment in sales-type leases based on the present value of the lease receivable when collectibility is probable. The Company accounts for lease and non-lease components such as maintenance costs, separately. Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers. The following summarizes components of net lease income reported within the consolidated statements of operations: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Revenues (1) $ 5.9 $ 15.8 Cost of revenues (7.4 ) (15.2 ) Interest income 0.2 0.2 Total lease income (loss) $ (1.3 ) $ 0.8 (1) Revenues from lease components are included within Other revenue As of December 31, 2019 , the carrying value of the Company’s lease receivable reported in accounts receivable, net and other assets within the consolidated balance sheets was $4.1 million and $10.3 million , respectively. The following table presents maturity analysis of the lease payments the Company expects to receive as of December 31, 2019 : Amount Six months ending June 30, 2020 $ 2.3 Twelve months ending June 30, 2021 4.2 Twelve months ending June 30, 2022 3.7 Twelve months ending June 30, 2023 2.8 Twelve months ending June 30, 2024 2.3 Twelve months ending June 30, 2025 0.6 Thereafter — Total undiscounted cash flows to be received $ 15.9 Less: imputed interest 1.5 Total lease receivable $ 14.4 |
Leases | Leases Adoption of ASC 842. On July 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method whereby prior comparative periods have not been restated and continue to be reported under the accounting standards in effect for the prior period. The Company elected the package of practical expedients permitted under the transition guidance for all leases (where the Company is a lessee or a lessor), which allowed the Company to adopt ASC 842 without reassessing whether arrangements contain leases, the lease classification, and the determination of initial direct cost. Upon adoption on July 1, 2019, the Company recognized right-of-use ("ROU") assets inclusive of finance leases, net of prepaids, incentives and impairments, of $68.2 million , and lease liabilities of $76.8 million in the Company's consolidated balance sheets. At adoption, there was no impact on the Company’s statements of operations, cash flows, and stockholders' deficit. Significant Judgments. The Company has lease arrangements where the Company acts as either a lessee or a lessor. The Company applies significant judgment in order to determine if an arrangement contains a lease, to assess which party retains a material amount of economic benefit from the underlying asset, and to determine which party holds control over the direction and use of the asset. The Company also applies significant judgment to determine whether the Company will exercise renewal options, to identify substantive substitution rights over the asset, to determine the incremental borrowing rate, and to estimate the fair value of the leased asset. CDK as a Lessee. The Company has obligations under lease arrangements mainly for facilities, equipment, data centers, and vehicles. These leases have original lease periods expiring between 2019 and 2027 . The Company classifies leases as finance leases when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. When none of these criteria are met, the Company classifies leases as operating leases. Several of the Company's leases include one or more options to renew. The Company does not assume renewal periods in its determination of lease term unless it is reasonably certain that the Company will exercise the renewal option. The Company considers leases with an initial term of 12 months or less as short-term in nature and does not record such leases on the balance sheet. The Company records all other leases on the balance sheet with ROU assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term. The ROU asset is adjusted for prepaid or deferred rent, lease incentives and impairments. The Company uses the incremental borrowing rate at the lease commencement date to determine the present value of the lease payments as the implicit rate within the leases is generally not readily determinable. The incremental borrowing rate is generally determined using factors such as treasury yields, the Company's credit rating and lease term, and may differ for individual leases. In addition to fixed lease payments, several lease arrangements contain provisions for variable lease payments relating to utilities and maintenance costs or rental increases not scheduled in the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities. For the three and six months ended December 31, 2019 , the Company recorded lease expense of $4.1 million and $9.4 million within cost of revenues, respectively, $4.4 million and $8.4 million within selling, general and administrative expenses, respectively, and $0.2 million and $0.4 million within interest expense, respectively, on the consolidated statements of operations. The following table summarizes the components of net lease expense: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Leases classified as finance: Amortization of ROU assets $ 1.3 $ 3.0 Interest on lease liabilities 0.2 0.4 Leases classified as operating: Lease expense 4.0 8.7 Sublease income (gross basis) (0.3 ) (0.4 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 0.8 2.0 Variable lease expense 2.3 4.5 Total net lease expense $ 8.3 $ 18.2 For the three and six months ended December 31, 2018 , rent expense related to operating leases under previous accounting guidance was $7.6 million and $17.2 million , respectively. The following table presents supplemental information related to leases: Six Months Ended December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 9.1 Operating cash flows paid for interest portion of finance leases 0.4 Finance cash flows paid for principal portion of finance leases 3.0 ROU assets obtained in exchange for new operating lease liabilities 18.8 ROU assets obtained in exchange for new finance lease liabilities 0.1 As of December 31, 2019 , the weighted-average remaining lease term was 5.4 years for operating leases and 3 years for finance leases; and the weighted-average discount rate was 3.7% for operating leases and 4.6% for finance leases. The following table presents supplemental balance sheet information related to leases as of December 31, 2019 : Operating Leases Finance Leases ROU assets, net (1) $ 59.3 $ 16.4 Lease liabilities, current (2) 9.3 6.1 Lease liabilities, non-current (3) 57.1 11.0 Total lease liabilities $ 66.4 $ 17.1 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. The following table presents maturity analysis of lease liabilities as of December 31, 2019 : Operating Leases Finance Leases Six months ending June 30, 2020 $ 10.0 $ 3.5 Twelve months ending June 30, 2021 17.8 6.1 Twelve months ending June 30, 2022 15.5 5.1 Twelve months ending June 30, 2023 11.4 3.5 Twelve months ending June 30, 2024 9.2 0.1 Twelve months ending June 30, 2025 7.7 — Thereafter 10.5 — Total undiscounted lease payments $ 82.1 $ 18.3 Less: imputed interest (7.8 ) (1.2 ) Less: lease incentive receivable (7.9 ) — Total lease liabilities $ 66.4 $ 17.1 The Company did not have any material minimum lease payments for executed leases that have not yet commenced as of December 31, 2019 . Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 Total minimum operating lease liabilities $ 74.7 CDK as a Lessor. The Company’s hardware-as-a-service arrangements, in which the Company provides customers continuous access to CDK owned hardware, such as networking and telephony equipment and laser printers, are accounted for as sales-type leases under ASC 842, primarily because they do not contain substantive substitution rights. Since the Company elected to not reassess prior conclusions related to arrangements containing leases, the lease classification, and the initial direct costs, only hardware leases that commenced or are modified on or subsequent to July 1, 2019, are accounted for under ASC 842. Historically, the Company has accounted for these arrangements as a distinct performance obligation under the revenue recognition guidance and recognized revenue over the term of the arrangement. Sales-type lease arrangements follow the Company’s customary contracting practices and, generally, include a fixed monthly fee for the lease and non-lease components for the duration of the contract term. The Company does not typically provide renewal, termination or purchase options to its customers. The Company recognizes net investment in sales-type leases based on the present value of the lease receivable when collectibility is probable. The Company accounts for lease and non-lease components such as maintenance costs, separately. Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers. The following summarizes components of net lease income reported within the consolidated statements of operations: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Revenues (1) $ 5.9 $ 15.8 Cost of revenues (7.4 ) (15.2 ) Interest income 0.2 0.2 Total lease income (loss) $ (1.3 ) $ 0.8 (1) Revenues from lease components are included within Other revenue As of December 31, 2019 , the carrying value of the Company’s lease receivable reported in accounts receivable, net and other assets within the consolidated balance sheets was $4.1 million and $10.3 million , respectively. The following table presents maturity analysis of the lease payments the Company expects to receive as of December 31, 2019 : Amount Six months ending June 30, 2020 $ 2.3 Twelve months ending June 30, 2021 4.2 Twelve months ending June 30, 2022 3.7 Twelve months ending June 30, 2023 2.8 Twelve months ending June 30, 2024 2.3 Twelve months ending June 30, 2025 0.6 Thereafter — Total undiscounted cash flows to be received $ 15.9 Less: imputed interest 1.5 Total lease receivable $ 14.4 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The following table represents stock-based compensation expense and the related income tax benefits for the three months ended and six months ended December 31, 2019 and 2018 : Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 Cost of revenues $ 0.6 $ 0.3 $ 0.9 $ 0.6 Selling, general and administrative expenses 8.0 2.9 10.6 5.6 Total stock-based compensation expense $ 8.6 $ 3.2 $ 11.5 $ 6.2 Income tax benefit $ 2.4 $ 0.5 $ 2.9 $ 1.3 Stock-based compensation expense for the three months ended December 31, 2019 and 2018 consisted of $6.7 million and $2.9 million of expense related to equity classified awards and $1.9 million and $0.3 million of expense related to liability classified awards, respectively. Stock-based compensation expense for the six months ended December 31, 2019 and 2018 consisted of $10.4 million and $6.4 million of expense related to equity classified awards and $1.1 million of expense and $0.2 million of income related to liability classified awards, respectively. Total stock based compensation expense during the three and six months ended December 31, 2019 was impacted by changes in fair value of liability classified awards due to Company's stock price fluctuations and $3.9 million benefit for awards that were forfeited related to an officer's transition during prior year. As of December 31, 2019 , the total unrecognized compensation cost related to non-vested stock options, restricted stock units, and restricted stock awards was $ 5.2 million , $ 54.2 million , and $ 0.2 million , respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.5 years, 2.0 years, and 0.7 years, respectively. The activity related to the Company's incentive equity awards from June 30, 2019 to December 31, 2019 consisted of the following: Time-Based Stock Options Number of Options (in thousands) Weighted Average Exercise Price (in dollars) Options outstanding as of June 30, 2019 794 $ 46.47 Options granted 334 47.13 Options exercised (136 ) 36.42 Options canceled (103 ) 58.75 Options outstanding as of December 31, 2019 889 $ 46.85 The Binomial model used to determine the grant date fair value of the time-based stock options granted in the first quarter of fiscal 2020 used an expected volatility based on the average of implied volatility and historical stock price volatility for the Company, the average of which was 25.87% , a risk-free interest rate of 1.68% , an expected dividend yield of 1.27% , and weighted average expected life of 6 years. Performance - Based Stock Options. There were no grants of performance-based stock options during the three and six months ended December 31, 2019 . Time-Based Restricted Stock and Time-Based Restricted Stock Units Number of Shares (in thousands) Number of Units (in thousands) Non-vested restricted units/shares as of June 30, 2019 145 408 Restricted shares/units granted — 539 Restricted shares/units vested (122 ) (113 ) Restricted shares/units forfeited (4 ) (41 ) Non-vested restricted units/shares as of December 31, 2019 19 793 Performance-Based Restricted Stock Units Number of Units (in thousands) Non-vested restricted units as of June 30, 2019 414 Restricted units granted 378 Restricted units forfeited (36 ) Non-vested restricted units as of December 31, 2019 756 The Monte Carlo simulation model used to determine the grant date fair value of the 378 thousand three-year performance based restricted stock units granted in the six months ended December 31, 2019 used an expected volatility based on historical stock price volatility for the Company and the peer companies, the average of which was 24.69% and a risk-free interest rate of 1.67% |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Valuation Allowances. The Company had valuation allowances of $25.1 million and $10.3 million as of December 31, 2019 and June 30, 2019 , respectively, because the Company has concluded it is more likely than not that it will be unable to utilize net operating and capital loss carryforwards of certain subsidiaries to offset future taxable earnings. As of each reporting date, the Company’s management considers new evidence, both positive and negative, which could impact management’s view with regard to future realization of deferred tax assets. During three months ended December 31, 2019 , the valuation allowance balance increase of $14.8 million is related to the capital gain the Company previously expected to recognize in conjunction with the sale of the assets of the Digital Marketing Business which are classified as held for sale in the fourth quarter of fiscal 2019. In the second quarter of fiscal 2020, the expected fair value of the asset group decreased and the mix of assets to be sold changed. As a result, a capital gain is no longer expected to be recognized. Unrecognized Income Tax Benefits. As of December 31, 2019 and June 30, 2019 , the Company had unrecognized income tax benefits of $8.5 million and $7.8 million , respectively, of which $7.7 million and $7.0 million , respectively, would impact the effective tax rate if recognized. During the six months ended December 31, 2019 , the Company increased its unrecognized income tax benefits related to current tax positions by $0.7 million based on information that indicates the extent to which certain tax positions are more likely than not of being sustained. Provision for Income Taxes. The effective tax rate for the three months ended December 31, 2019 and 2018 was 38.2% and 24.8% , respectively. The effective tax rate for the three months ended December 31, 2019 was impacted by $14.8 million of tax expense from the increase in valuation allowance associated with a deferred tax asset for a capital loss carryforward which the Company does not expect to utilize and $0.1 million excess tax benefit from stock-based compensation. The effective tax rate for the three months ended December 31, 2018 was impacted by $1.2 million excess tax expense from stock-based compensation. The effective tax rate increase from December 31, 2018 to December 31, 2019 is also impacted by the mix of earnings by jurisdiction. The effective tax rate for the six months ended December 31, 2019 and 2018 was 31.7% and 26.6% , respectively. The effective tax rate for the six months ended December 31, 2019 was impacted by $14.8 million of tax expense from the increase in valuation allowance as discussed above, $1.2 million of one-time tax benefit resulting from an adjustment of an accrual for foreign withholding taxes related to undistributed earnings as a result of the Tax Cuts and Job Act ("Tax Reform Act"), and $0.7 million excess tax expense from stock-based compensation. The effective tax rate for the six months ended December 31, 2018 was impacted by an estimated one-time tax expense of $3.4 million from a revaluation of deferred tax assets associated with executive compensation as a result of the Tax Reform Act and $0.7 million |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings. From time to time, the Company is subject to various claims and is involved in various legal, regulatory, and arbitration proceedings concerning matters arising in connection with the conduct of its business activities, including those noted in this section. Although management at present has no basis to conclude that the ultimate outcome of these proceedings, individually and in the aggregate, will materially harm the Company's financial position, results of operations, cash flows, or overall trends, legal proceedings and related government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could include substantial monetary damages. In addition, in matters for which injunctive relief or other conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices, or requiring other remedies. An unfavorable outcome may result in a material adverse impact on the Company's business, results of operations, financial position, and overall trends. The Company might also conclude that settling one or more such matters is in the best interests of its stockholders, employees, and customers, and any such settlement could include substantial payments. Competition Matters. The Company is currently involved in, or where indicated, has settled, the following antitrust lawsuits that set forth allegations of anti-competitive agreements between the Company and The Reynolds and Reynolds Company ("Reynolds") relating to the manner in which the defendants control access to, and allow integration with, their respective DMS, and that seek, among other things, treble damages and injunctive relief. These lawsuits have been transferred to, or filed in, the U.S. District Court for the Northern District of Illinois for consolidated and coordinated pretrial proceedings as part of a multi-district litigation proceeding (“MDL”). Active MDL Lawsuits • Authenticom, Inc. ("Authenticom") brought a suit against CDK Global, LLC and Reynolds. Authenticom’s suit was originally filed on May 1, 2017, in the U.S. District Court for the Western District of Wisconsin. Defendants’ motions to dismiss were granted in part, and denied in part. Defendants filed answers to Authenticom’s complaint and asserted counterclaims against Authenticom on June 30, 2018; Authenticom filed motions to dismiss those counterclaims. Authenticom's motion to dismiss CDK Global, LLC’s counterclaims were granted in part and denied in part; its motion to dismiss one of Reynolds’s counterclaims was granted. On February 15, 2019, Authenticom filed an answer to both defendants’ counterclaims. • Teterboro Automall, Inc. d/b/a Teterboro Chrysler Dodge Jeep Ram (“Teterboro”) brought a putative class action suit on behalf of itself and all similarly situated automobile dealerships against CDK Global, LLC and Reynolds. Teterboro’s suit was originally filed on October 19, 2017, in the U.S. District Court for the District of New Jersey. Since that time, several more putative class actions were filed in a number of federal district courts, with substantively similar allegations; all of them have been consolidated with the MDL proceeding. On June 4, 2018, a consolidated class action complaint was filed on behalf of a putative class made up of all dealerships in the United States that directly purchased DMS and/or allegedly indirectly purchased DMS or data integration services from CDK Global, LLC or Reynolds (“Putative Dealership Class Plaintiffs”). CDK Global, LLC moved to dismiss the complaint, or in the alternative, compel arbitration of certain of the cases while staying the remainder pending the outcome of those arbitration proceedings; its motion to dismiss was granted in part and denied in part, while its motion to compel arbitration was denied. On February 22, 2019, CDK Global, LLC filed an answer to the remaining claims in Putative Dealership Class Plaintiffs’ complaint and asserted counterclaims against the Putative Dealership Class Plaintiffs. The Putative Dealership Class Plaintiffs filed a motion to dismiss CDK Global, LLC’s counterclaims; that motion has been fully briefed and remains pending before the court. On October 23, 2018, the Putative Dealership Class Plaintiffs and Reynolds filed a motion for preliminary approval of settlement and for conditional certification of the proposed settlement class. The court approved that settlement on January 22, 2019. • Loop LLC d/b/a AutoLoop (“AutoLoop”) brought suit against CDK Global, LLC on April 9, 2018, in the U.S. District Court for the Northern District of Illinois, but reserved its rights with respect to remand to the U.S. District Court for the Western District of Wisconsin at the conclusion of the MDL proceedings. On June 5, 2018, AutoLoop amended its complaint to sue on behalf of itself and a putative class action of all other automotive software vendors in the United States that purchased data integration services from CDK Global, LLC or Reynolds. CDK Global, LLC moved to compel arbitration of AutoLoop’s claims, or in the alternative, to dismiss those claims; that motion was denied on January 25, 2019. CDK Global, LLC filed an answer to AutoLoop’s complaint and asserted counterclaims against AutoLoop on February 15, 2019. AutoLoop filed an answer to CDK Global, LLC’s counterclaims on March 8, 2019. • i3 Brands, Inc. and PartProtection LLC (“i3 Brands”) brought suit against CDK Global, LLC and Reynolds. i3 Brands' suit was originally filed on February 4, 2019, in the U.S. District Court for the Southern District of California; it was subsequently transferred to the U.S. District Court for the Northern District of Illinois and consolidated as part of the MDL. On April 1, 2019, Reynolds filed a motion to dismiss i3 Brands’ suit in favor of arbitration, or in the alternative, for failure to state a claim, and CDK Global, LLC filed a motion to stay this case pending the outcome of the proposed arbitration proceedings between Reynolds and i3 Brands, or in the alternative, to dismiss certain of its claims for failure to state a claim. These motions are fully briefed and remain pending before the court. Settled MDL Lawsuits • Motor Vehicle Software Corporation (“MVSC”) brought a suit against the CDK Global, LLC (after initially naming the Company), Reynolds, and Computerized Vehicle Registration (“CVR”), a majority owned joint venture of the Company. MVSC’s suit was originally filed on February 3, 2017, in the U.S. District Court for the Central District of California. Defendants’ motions to dismiss MVSC’s second amended complaint were denied, and the defendants answered MVSC’s complaint on November 7, 2018. On October 10, 2019, CDK Global, LLC and MVSC entered into a settlement agreement that resulted in a dismissal of all claims brought by MVSC in the MDL, and CDK Global, LLC making a one-time cash payment to MVSC. • Cox Automotive, along with multiple subsidiaries (“Cox”), brought suit against CDK Global, LLC. Cox’s suit was originally filed on December 11, 2017, in the U.S. District Court for the Western District of Wisconsin. CDK Global, LLC’s motion to dismiss was granted in part and denied in part on January 25, 2019. CDK Global, LLC filed an answer to the remainder of Cox’s complaint and asserted counterclaims against Cox on February 15, 2019. Cox filed an answer to CDK Global, LLC’s counterclaims on March 8, 2019. On July 10, 2019, CDK Global, LLC and Cox entered into a settlement agreement that resulted in a dismissal of all claims brought by the affiliated parties in the MDL, and CDK Global, LLC making a one-time cash payment to Cox. The Company believes that the remaining unsettled cases are without merit and will continue to vigorously contest all asserted claims. Nonetheless, in light of the Company’s settlement with Cox and MVSC, and its continued expenditure of legal costs to contest the remaining claims, the Company has determined that a loss of some measure is probable and can be reasonably estimated. In the fourth quarter of 2019, the Company recorded a litigation provision of $90 million . As of December 31, 2019 , the litigation liability was $57 million related to the remaining unsettled cases. This estimated loss is based upon currently available information and represents the Company’s best estimate of such loss. Estimating the value of this estimated loss involved significant judgment given the uncertainty that still exists with respect to the remaining unsettled cases due to a variety of factors typical of complex, large scale litigation, including, among others: (i) formative issues, including: (a) the causes of action the plaintiffs can pursue; (b) the definition of the class(es) of plaintiffs; (c) the types of damages that can be recovered; and (d) whether plaintiffs can establish loss causation as a matter of law, all of which have yet to be determined pending the outcome of dispositive motions (e.g., motions for class certification and motions for summary judgment); (ii) discovery is ongoing and significant factual issues remain to be resolved; (iii) expert discovery with respect to, among other things, alleged antitrust injury and damages is not sufficiently advanced; (iv) the absence of productive settlement discussions to date with plaintiffs other than Cox and MVSC; and (v) the novel or uncertain nature of the legal issues presented. For these same reasons, the Company cannot reasonably estimate a maximum potential loss exposure at this time. In addition, the Company’s estimate does not incorporate or reflect the potential value of the Company’s counterclaims against certain of the plaintiffs in the ongoing cases. The legal proceedings underlying the estimated litigation liability will change from time to time and actual results may vary significantly from the estimate. As noted above, an adverse result in any of the remaining cases could have a material adverse effect on the Company's business, results of operations, financial condition, or liquidity. On June 22, 2017, the Company received from the FTC a Civil Investigative Demand consisting of specifications calling for the production of documents relating to any agreements between the Company and Reynolds. Parallel document requests have been received from certain states' Attorneys General. Since 2017, the Company has engaged in continuing communication with and received subsequent requests from the FTC related to its investigation. The Company is responding to the requests and no proceedings have been instituted. The Company believes there has not been any conduct by the Company or its current or former employees that would be actionable under the antitrust laws in connection with the agreements between the Company and Reynolds or otherwise. At this time, the Company does not have sufficient information to predict the outcome of, or the cost of responding to or resolving, these investigations. Other Commitments and Contingencies. In the normal course of business, the Company may enter into contracts in which the Company makes representations and warranties that relate to the performance of the Company’s services and products. The Company does not expect any material losses related to such representations and warranties. The Company has provided approximately $27.8 million of guarantees as of December 31, 2019 in the form of surety bonds issued to support certain licenses and contracts which require a surety bond as a guarantee of performance of contractual obligations. In general, the Company would only be liable for the amount of these guarantees in the event the Company defaulted in performing the obligations under each contract, of which, the probability is remote. The Company had a total of $2.4 million in letters of credit outstanding as of December 31, 2019 primarily in connection with insurance programs and its foreign subsidiaries. |
Financial Data by Segment
Financial Data by Segment | 6 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Financial Data by Segment | Financial Data by Segment The Company is organized into two main operating groups, CDK North America and CDK International, which are also reportable segments. The Company's previously reported Advertising North America segment has been classified as discontinued operations for all periods presented. Discontinued operations also includes the Company's mobile advertising and website services businesses, the results of which were previously reported within the CDKNA segment. For additional information refer to Note 4, Discontinued Operations. The primary components of the Other segment are corporate allocations and other expenses not recorded in the segment results, such as stock-based compensation expense, corporate costs, interest expense, costs attributable to the business transformation plan, and certain unallocated expenses. Certain expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. Revenues by category by segment were as follows: Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 CDKNA Subscription $ 336.8 $ 330.0 $ 669.2 $ 630.9 On-site license and installation 3.0 2.8 5.1 4.2 Transaction 39.8 38.3 82.5 79.3 Other 38.6 35.6 79.1 60.0 Total CDKNA 418.2 406.7 835.9 774.4 CDKI Subscription 68.2 61.2 135.9 127.8 On-site license and installation 8.8 7.5 13.3 15.5 Other 4.4 3.3 9.1 7.3 Total CDKI 81.4 72.0 158.3 150.6 Total $ 499.6 $ 478.7 $ 994.2 $ 925.0 Earnings (Loss) before income taxes by segment were as follows: Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 CDKNA $ 151.8 $ 147.4 $ 296.0 $ 305.9 CDKI 15.9 9.5 31.1 28.3 Other (54.7 ) (60.3 ) (110.1 ) (131.1 ) Total earnings before income taxes $ 113.0 $ 96.6 $ 217.0 $ 203.1 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect assets, liabilities, revenues, and expenses that are reported in the accompanying financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. |
Funds receivable and funds held for clients and client fund obligations | Funds receivable and funds held for clients represent amounts received or expected to be received from clients in advance of performing titling and registration services on behalf of those clients. These amounts are classified within other current assets on the consolidated balance sheets. The total amount due to remit for titling and registration obligations with the department of motor vehicles is recorded to client fund obligations which is classified as accrued expenses and other current liabilities on the consolidated balance sheets. |
Fair value of financial instruments | Cash and cash equivalents, accounts receivable, other current assets, accounts payable, and other current liabilities are reflected in the consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments. The carrying value of the Company's revolving credit facility and term loan facilities (as described in Note 9, Debt), including accrued interest, approximates fair value based on the Company's current estimated incremental borrowing rate for similar types of arrangements. |
Recently Adopted/Issued Accounting Pronouncement | Recently Adopted Accounting Pronouncements. In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. The Company early adopted this standard as of July 1, 2019, using the prospective approach and applied this guidance to all implementation costs incurred after the date of adoption. In February 2016, the FASB issued ASC 842. Refer to Note 10, Leases, for the required disclosures related to the adoption of this standard. Recently Issued Accounting Pronouncements. In November 2018, the FASB issued ASU 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606" to resolve the diversity in practice concerning the manner in which entities account for transactions based on their assessment of the economics of a collaborative arrangement. For public business entities, ASU 2018-18 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. The Company intends to adopt this standard as of July 1, 2020. Based on its evaluation, the Company does not anticipate a material impact to its consolidated financial statements upon adoption of this standard. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (“ASU 2016-13”), which requires the application of a current expected credit loss (“CECL”) impairment model to financial assets measured at amortized cost (including trade accounts receivable), net investments in leases, and certain off-balance-sheet credit exposures. Under the CECL model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information. Furthermore, the CECL model requires financial assets with similar risk characteristics to be analyzed on a collective basis. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. The Company intends to adopt this standard as of July 1, 2020. The Company is evaluating the impact of adoption on its consolidated financial statements, including accounting policies, processes and systems. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table summarizes the comparative financial results of discontinued operations which are presented as Net earnings from discontinued operations in the consolidated statements of operations: Three Months Ended December 31, Six Months Ended December 31, 2019 2018 2019 2018 Revenues $ 84.8 $ 111.7 $ 170.5 $ 219.9 Expenses: Cost of revenues 65.9 79.3 132.9 157.7 Selling, general and administrative expenses 10.5 7.6 21.6 14.7 Provision for valuation allowance 69.2 — 69.2 — Restructuring expenses — 0.1 — 1.5 Total expenses 145.6 87.0 223.7 173.9 Earnings (loss) before income taxes (60.8 ) 24.7 (53.2 ) 46.0 Benefit from (provision for) income taxes 15.1 (6.4 ) 13.2 (11.9 ) Net earnings (loss) from discontinued operations $ (45.7 ) $ 18.3 $ (40.0 ) $ 34.1 The total assets and liabilities held for sale are stated separately in the consolidated balance sheets. Assets and liabilities held for sale were classified as current at December 31, 2019 and June 30, 2019 as it was probable that the sale would occur within one year as of those dates. December 31, 2019 June 30, 2019 Assets: Current assets: Accounts Receivable $ 108.5 $ 121.9 Prepaid and other current assets 2.6 1.1 Total current assets 111.1 123.0 Property, plant and equipment, net 2.3 2.3 Goodwill 59.4 59.4 Intangible assets, net 39.7 35.6 Other assets 2.9 0.2 Total current assets held for sale 215.4 220.5 Liabilities: Current liabilities: Accounts payable 13.6 19.4 Deferred revenues 1.1 0.8 Accrued expenses and other current liabilities 34.9 26.0 Total current liabilities 49.6 46.2 Other liabilities 0.4 2.7 Total current liabilities held for sale 50.0 48.9 Net assets held for sale, at unadjusted carrying value (1) 165.4 171.6 Valuation allowance (69.2 ) — Net assets held for sale, at fair value less selling costs $ 96.2 $ 171.6 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table provides information about accounts receivables, contract assets, and contract liabilities from contracts with customers: December 31, 2019 June 30, 2019 Accounts receivable (including unbilled receivables) $ 320.9 $ 290.4 Short-term contract assets (included in other current assets) 30.3 29.9 Long-term contract assets (included in other assets) 22.3 20.2 Short-term contract liabilities (included in short-term deferred revenue) (119.7 ) (124.8 ) Long-term contract liabilities (included in long-term deferred revenue) (72.5 ) (68.4 ) Net contract assets/(liabilities) $ (139.6 ) $ (143.1 ) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The Company expects to recognize remaining performance obligations as revenue as follows: December 31, 2019 Six months ending June 30, 2020 $ 670.0 Twelve months ending June 30, 2021 940.0 Twelve months ending June 30, 2022 640.0 Twelve months ending June 30, 2023 410.0 Thereafter 360.0 Total remaining performance obligations $ 3,020.0 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Activity for Restructuring Expenses and Related Accruals | The following table summarizes restructuring accrual activity for the six months ended December 31, 2019 : Employee-Related Costs Contract Termination Costs Total Costs Balance as of June 30, 2019 $ 9.4 $ 0.1 $ 9.5 Cash payments (4.6 ) — (4.6 ) Non-cash and other adjustments (0.3 ) (0.1 ) (0.4 ) Foreign exchange (0.1 ) — (0.1 ) Balance as of December 31, 2019 $ 4.4 $ — $ 4.4 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes the components of earnings per share: Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 Net earnings from continuing operations attributable to CDK $ 68.0 $ 70.7 $ 144.3 $ 145.2 Net earnings (loss) from discontinued operations (45.7 ) 18.3 (40.0 ) 34.1 Net earnings attributable to CDK $ 22.3 $ 89.0 $ 104.3 $ 179.3 Weighted-average shares outstanding: Basic 121.6 126.8 121.5 128.2 Effect of employee stock options 0.1 0.2 0.1 0.2 Effect of employee restricted stock 0.4 0.5 0.5 0.7 Diluted 122.1 127.5 122.1 129.1 Net earnings (loss) attributable to CDK per share - basic: Continuing operations $ 0.56 $ 0.56 $ 1.19 $ 1.13 Discontinued operations (0.38 ) 0.14 (0.33 ) 0.27 Total net earnings attributable to CDK per share - basic $ 0.18 $ 0.70 $ 0.86 $ 1.40 Net earnings (loss) attributable to CDK per share - diluted: Continuing operations $ 0.55 $ 0.56 $ 1.18 $ 1.13 Discontinued operations (0.37 ) 0.14 (0.33 ) 0.26 Total net earnings attributable to CDK per share - diluted $ 0.18 $ 0.70 $ 0.85 $ 1.39 |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share | The weighted-average number of shares outstanding used in the calculation of diluted earnings per share does not include the effect of the following anti-dilutive securities. Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 Stock-based awards 0.9 0.8 1.0 0.4 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | Changes in goodwill for the six months ended December 31, 2019 were as follows: CDKNA CDKI Total Balance as of June 30, 2019 $ 1,000.3 $ 356.0 $ 1,356.3 Currency translation adjustments 0.2 7.8 8.0 Balance as of December 31, 2019 $ 1,000.5 $ 363.8 $ 1,364.3 |
Components of Intangible Assets, Net | Components of intangible assets, net from continuing operations were as follows: December 31, 2019 June 30, 2019 Original Cost Accumulated Amortization Intangible Assets, net Original Cost Accumulated Amortization Intangible Assets, net Software $ 277.4 $ (141.5 ) $ 135.9 $ 250.8 $ (126.7 ) $ 124.1 Customer lists 197.3 (105.3 ) 92.0 196.6 (100.2 ) 96.4 Trademarks 7.5 (3.4 ) 4.1 7.5 (3.1 ) 4.4 Other intangibles 3.2 (2.5 ) 0.7 3.2 (2.2 ) 1.0 $ 485.4 $ (252.7 ) $ 232.7 $ 458.1 $ (232.2 ) $ 225.9 |
Estimated Amortization Expenses of the Company's Existing Intangible Assets | Estimated amortization expenses of the Company's intangible assets as of December 31, 2019 were as follows: Amount Six months ending June 30, 2020 $ 19.6 Twelve months ending June 30, 2021 44.8 Twelve months ending June 30, 2022 44.4 Twelve months ending June 30, 2023 31.6 Twelve months ending June 30, 2024 18.5 Twelve months ending June 30, 2025 13.2 Thereafter 60.6 $ 232.7 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt comprised of the following: December 31, 2019 June 30, 2019 Revolving credit facility, matures 2023 $ 90.0 $ — Three year term loan facility, due 2021 300.0 300.0 Five year term loan facility, due 2023 281.3 288.8 3.30% senior notes, due 2019 — 250.0 4.50% senior notes, due 2024 500.0 500.0 5.875% senior notes, due 2026 500.0 500.0 4.875% senior notes, due 2027 600.0 600.0 5.250% senior notes due 2029 500.0 500.0 Finance lease liabilities 17.1 19.9 Unamortized debt financing costs (26.1 ) (28.5 ) Total debt and finance lease liabilities $ 2,762.3 $ 2,930.2 Current maturities of long-term debt and finance lease liabilities 21.1 270.8 Total long-term debt and finance lease liabilities $ 2,741.2 $ 2,659.4 |
Aggregate Scheduled Maturities of Long-term Debt | The Company's aggregate scheduled maturities of the long-term debt as of December 31, 2019 were as follows: Amount Twelve months ending December 31, 2020 $ 15.0 Twelve months ending December 31, 2021 315.0 Twelve months ending December 31, 2022 15.0 Twelve months ending December 31, 2023 326.3 Twelve months ending December 31, 2024 500.0 Thereafter 1,600.0 Total debt 2,771.3 Unamortized debt financing costs (26.1 ) Total debt, net of unamortized debt financing costs $ 2,745.2 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | The following table summarizes the components of net lease expense: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Leases classified as finance: Amortization of ROU assets $ 1.3 $ 3.0 Interest on lease liabilities 0.2 0.4 Leases classified as operating: Lease expense 4.0 8.7 Sublease income (gross basis) (0.3 ) (0.4 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 0.8 2.0 Variable lease expense 2.3 4.5 Total net lease expense $ 8.3 $ 18.2 Six Months Ended December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 9.1 Operating cash flows paid for interest portion of finance leases 0.4 Finance cash flows paid for principal portion of finance leases 3.0 ROU assets obtained in exchange for new operating lease liabilities 18.8 ROU assets obtained in exchange for new finance lease liabilities 0.1 |
Assets And Liabilities, Lessee | The following table presents supplemental balance sheet information related to leases as of December 31, 2019 : Operating Leases Finance Leases ROU assets, net (1) $ 59.3 $ 16.4 Lease liabilities, current (2) 9.3 6.1 Lease liabilities, non-current (3) 57.1 11.0 Total lease liabilities $ 66.4 $ 17.1 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. |
Lessee, Operating Lease, Liability, Maturity | The following table presents maturity analysis of lease liabilities as of December 31, 2019 : Operating Leases Finance Leases Six months ending June 30, 2020 $ 10.0 $ 3.5 Twelve months ending June 30, 2021 17.8 6.1 Twelve months ending June 30, 2022 15.5 5.1 Twelve months ending June 30, 2023 11.4 3.5 Twelve months ending June 30, 2024 9.2 0.1 Twelve months ending June 30, 2025 7.7 — Thereafter 10.5 — Total undiscounted lease payments $ 82.1 $ 18.3 Less: imputed interest (7.8 ) (1.2 ) Less: lease incentive receivable (7.9 ) — Total lease liabilities $ 66.4 $ 17.1 |
Finance Lease, Liability, Maturity | The following table presents maturity analysis of lease liabilities as of December 31, 2019 : Operating Leases Finance Leases Six months ending June 30, 2020 $ 10.0 $ 3.5 Twelve months ending June 30, 2021 17.8 6.1 Twelve months ending June 30, 2022 15.5 5.1 Twelve months ending June 30, 2023 11.4 3.5 Twelve months ending June 30, 2024 9.2 0.1 Twelve months ending June 30, 2025 7.7 — Thereafter 10.5 — Total undiscounted lease payments $ 82.1 $ 18.3 Less: imputed interest (7.8 ) (1.2 ) Less: lease incentive receivable (7.9 ) — Total lease liabilities $ 66.4 $ 17.1 |
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 Total minimum operating lease liabilities $ 74.7 |
Sales-type Lease, Lease Income | The following summarizes components of net lease income reported within the consolidated statements of operations: Three Months Ended December 31, 2019 Six Months Ended December 31, 2019 Revenues (1) $ 5.9 $ 15.8 Cost of revenues (7.4 ) (15.2 ) Interest income 0.2 0.2 Total lease income (loss) $ (1.3 ) $ 0.8 (1) Revenues from lease components are included within Other revenue |
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | The following table presents maturity analysis of the lease payments the Company expects to receive as of December 31, 2019 : Amount Six months ending June 30, 2020 $ 2.3 Twelve months ending June 30, 2021 4.2 Twelve months ending June 30, 2022 3.7 Twelve months ending June 30, 2023 2.8 Twelve months ending June 30, 2024 2.3 Twelve months ending June 30, 2025 0.6 Thereafter — Total undiscounted cash flows to be received $ 15.9 Less: imputed interest 1.5 Total lease receivable $ 14.4 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation Expense and Related Income Tax Benefits | The following table represents stock-based compensation expense and the related income tax benefits for the three months ended and six months ended December 31, 2019 and 2018 : Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 Cost of revenues $ 0.6 $ 0.3 $ 0.9 $ 0.6 Selling, general and administrative expenses 8.0 2.9 10.6 5.6 Total stock-based compensation expense $ 8.6 $ 3.2 $ 11.5 $ 6.2 Income tax benefit $ 2.4 $ 0.5 $ 2.9 $ 1.3 |
Activity Related to the Company's Incentive Equity Awards | The activity related to the Company's incentive equity awards from June 30, 2019 to December 31, 2019 consisted of the following: Time-Based Stock Options Number of Options (in thousands) Weighted Average Exercise Price (in dollars) Options outstanding as of June 30, 2019 794 $ 46.47 Options granted 334 47.13 Options exercised (136 ) 36.42 Options canceled (103 ) 58.75 Options outstanding as of December 31, 2019 889 $ 46.85 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Number of Shares (in thousands) Number of Units (in thousands) Non-vested restricted units/shares as of June 30, 2019 145 408 Restricted shares/units granted — 539 Restricted shares/units vested (122 ) (113 ) Restricted shares/units forfeited (4 ) (41 ) Non-vested restricted units/shares as of December 31, 2019 19 793 |
Share-based Compensation, Performance Shares Award Nonvested Activity | Number of Units (in thousands) Non-vested restricted units as of June 30, 2019 414 Restricted units granted 378 Restricted units forfeited (36 ) Non-vested restricted units as of December 31, 2019 756 |
Financial Data by Segment (Tabl
Financial Data by Segment (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Earnings Before Taxes, by Segment | Revenues by category by segment were as follows: Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 CDKNA Subscription $ 336.8 $ 330.0 $ 669.2 $ 630.9 On-site license and installation 3.0 2.8 5.1 4.2 Transaction 39.8 38.3 82.5 79.3 Other 38.6 35.6 79.1 60.0 Total CDKNA 418.2 406.7 835.9 774.4 CDKI Subscription 68.2 61.2 135.9 127.8 On-site license and installation 8.8 7.5 13.3 15.5 Other 4.4 3.3 9.1 7.3 Total CDKI 81.4 72.0 158.3 150.6 Total $ 499.6 $ 478.7 $ 994.2 $ 925.0 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Earnings (Loss) before income taxes by segment were as follows: Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 CDKNA $ 151.8 $ 147.4 $ 296.0 $ 305.9 CDKI 15.9 9.5 31.1 28.3 Other (54.7 ) (60.3 ) (110.1 ) (131.1 ) Total earnings before income taxes $ 113.0 $ 96.6 $ 217.0 $ 203.1 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | 6 Months Ended |
Dec. 31, 2019operating_segmentreportable_segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | operating_segment | 2 |
Number of reportable segments | reportable_segment | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | |||||
Funds Receivable | $ 27.7 | $ 27.7 | $ 32.3 | ||
Funds Held for Clients | 10.5 | 10.5 | 9.7 | ||
Client fund obligations | 38.2 | 38.2 | $ 42 | ||
Research and development expense, software (excluding acquired in process cost) | 15.7 | $ 23.7 | 37.8 | $ 40.4 | |
Payments to acquire software | 26.4 | $ 16.7 | |||
Debt Instrument [Line Items] | |||||
Long-term Debt | 2,745.2 | 2,745.2 | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt | 2,100 | 2,100 | |||
Fair Value, Inputs, Level 2 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, fair value disclosure | $ 2,252 | $ 2,252 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Digital Marketing Business - Discontinued Operations, Held-for-sale - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Revenues | $ 84.8 | $ 111.7 | $ 170.5 | $ 219.9 | |
Cost of revenues | 65.9 | 79.3 | 132.9 | 157.7 | |
Selling, general and administrative expenses | 10.5 | 7.6 | 21.6 | 14.7 | |
Provision for valuation allowance | 69.2 | 0 | 69.2 | 0 | $ 0 |
Restructuring expenses | 0 | 0.1 | 0 | 1.5 | |
Total expenses | 145.6 | 87 | 223.7 | 173.9 | |
(Loss) Earnings before income taxes | (60.8) | 24.7 | (53.2) | 46 | |
Provision from income taxes | 15.1 | (6.4) | 13.2 | (11.9) | |
(Loss) Earnings from discontinued operations, net of taxes | $ (45.7) | $ 18.3 | $ (40) | $ 34.1 |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities Held-for-Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Assets: | |||||
Total current assets held for sale | $ 146.2 | $ 146.2 | $ 220.5 | ||
Liabilities: | |||||
Total current liabilities | 50 | 50 | 48.9 | ||
Digital Marketing Business | Discontinued Operations, Held-for-sale | |||||
Assets: | |||||
Accounts Receivable | 108.5 | 108.5 | 121.9 | ||
Prepaid and other current assets | 2.6 | 2.6 | 1.1 | ||
Total current assets held for sale | 111.1 | 111.1 | 123 | ||
Property, plant and equipment, net | 2.3 | 2.3 | 2.3 | ||
Goodwill | 59.4 | 59.4 | 59.4 | ||
Intangible assets, net | 39.7 | 39.7 | 35.6 | ||
Other assets | 2.9 | 2.9 | 0.2 | ||
Total current assets held for sale | 215.4 | 215.4 | 220.5 | ||
Liabilities: | |||||
Accounts payable | 13.6 | 13.6 | 19.4 | ||
Deferred revenues | 1.1 | 1.1 | 0.8 | ||
Accrued expenses and other current liabilities | 34.9 | 34.9 | 26 | ||
Total current liabilities | 49.6 | 49.6 | 46.2 | ||
Other liabilities | 0.4 | 0.4 | 2.7 | ||
Total current liabilities held for sale | 50 | 50 | 48.9 | ||
Net assets held for sale, at unadjusted carrying value(1) | 165.4 | 165.4 | 171.6 | ||
Valuation allowance | (69.2) | $ 0 | (69.2) | $ 0 | 0 |
Net assets held for sale, at fair value less selling costs | $ 96.2 | $ 96.2 | $ 171.6 |
Revenue Contract Balances (Deta
Revenue Contract Balances (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable (including unbilled receivables) | $ 320.9 | $ 290.4 |
Short-term contract assets (included in other current assets) | 30.3 | 29.9 |
Long-term contract assets (included in other assets) | 22.3 | 20.2 |
Short-term contract liabilities (included in short-term deferred revenue) | (119.7) | (124.8) |
Long-term contract liabilities (included in long-term deferred revenue) | (72.5) | (68.4) |
Net contract assets/(liabilities) | (139.6) | $ (143.1) |
Contract with customer, liability, revenue recognized | 148.9 | |
Contract with customer, asset, reclassified to receivable | $ 26.7 |
Revenue Remaining Performance O
Revenue Remaining Performance Obligation (Details) $ in Millions | Dec. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 3,020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 670 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 940 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 640 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 410 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 360 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue Costs to Obtain and Ful
Revenue Costs to Obtain and Fulfill a Contract (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Capitalized contract cost, amortization period | 5 years | ||
Capitalized contract cost, net | $ 205.9 | $ 200.4 | |
Capitalized contract cost, amortization | $ 40.6 | $ 39.2 |
Restructuring - Activity for Re
Restructuring - Activity for Restructuring Expenses and Related Accruals (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Restructuring Reserve | |
Balance as of June 30, 2019 | $ 9.5 |
Cash payments | (4.6) |
Non-cash and other adjustments | (0.4) |
Foreign exchange | (0.1) |
Balance as of December 31, 2019 | 4.4 |
Employee-Related Costs | |
Restructuring Reserve | |
Balance as of June 30, 2019 | 9.4 |
Cash payments | (4.6) |
Non-cash and other adjustments | (0.3) |
Foreign exchange | (0.1) |
Balance as of December 31, 2019 | 4.4 |
Contract Termination Costs | |
Restructuring Reserve | |
Balance as of June 30, 2019 | 0.1 |
Cash payments | 0 |
Non-cash and other adjustments | (0.1) |
Foreign exchange | 0 |
Balance as of December 31, 2019 | $ 0 |
- Components of Basic and Dilut
- Components of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||||
Net earnings from continuing operations attributable to CDK | $ 68 | $ 70.7 | $ 144.3 | $ 145.2 |
(Loss) Earnings from discontinued operations, net of taxes | (45.7) | 18.3 | (40) | 34.1 |
Net earnings attributable to CDK | $ 22.3 | $ 89 | $ 104.3 | $ 179.3 |
Weighted-average shares outstanding: | ||||
Basic (shares) | 121.6 | 126.8 | 121.5 | 128.2 |
Effect of employee stock options (shares) | 0.1 | 0.2 | 0.1 | 0.2 |
Effect of employee restricted stock (shares) | 0.4 | 0.5 | 0.5 | 0.7 |
Diluted (shares) | 122.1 | 127.5 | 122.1 | 129.1 |
Net earnings (loss) attributable to CDK per share - basic: | ||||
Continuing operations (in dollars per share) | $ 0.56 | $ 0.56 | $ 1.19 | $ 1.13 |
Discontinued operations (in dollars per share) | (0.38) | 0.14 | (0.33) | 0.27 |
Total net earnings attributable to CDK per share - basic (in dollars per share) | 0.18 | 0.70 | 0.86 | 1.40 |
Net earnings (loss) attributable to CDK per share - diluted: | ||||
Continuing operations (in dollars per share) | 0.55 | 0.56 | 1.18 | 1.13 |
Discontinued operations (in dollars per share) | (0.37) | 0.14 | (0.33) | 0.26 |
Total net earnings attributable to CDK per share - diluted (in dollars per share) | $ 0.18 | $ 0.70 | $ 0.85 | $ 1.39 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Securities Excluded from Computation of Diluted Earnings per Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock-based awards | 0.9 | 0.8 | 1 | 0.4 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes In Goodwill (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Changes in Goodwill | |
Balance as of June 30, 2019 | $ 1,356.3 |
Goodwill, Foreign Currency Translation Gain (Loss) | 8 |
Balance as of December 31, 2019 | 1,364.3 |
Retail Solutions North America | |
Changes in Goodwill | |
Balance as of June 30, 2019 | 1,000.3 |
Goodwill, Foreign Currency Translation Gain (Loss) | 0.2 |
Balance as of December 31, 2019 | 1,000.5 |
CDKI | |
Changes in Goodwill | |
Balance as of June 30, 2019 | 356 |
Goodwill, Foreign Currency Translation Gain (Loss) | 7.8 |
Balance as of December 31, 2019 | $ 363.8 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Components Of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | $ 485.4 | $ 458.1 |
Accumulated Amortization | (252.7) | (232.2) |
Intangible Assets, net | 232.7 | 225.9 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 277.4 | 250.8 |
Accumulated Amortization | (141.5) | (126.7) |
Intangible Assets, net | 135.9 | 124.1 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 197.3 | 196.6 |
Accumulated Amortization | (105.3) | (100.2) |
Intangible Assets, net | 92 | 96.4 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 7.5 | 7.5 |
Accumulated Amortization | (3.4) | (3.1) |
Intangible Assets, net | 4.1 | 4.4 |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 3.2 | 3.2 |
Accumulated Amortization | (2.5) | (2.2) |
Intangible Assets, net | $ 0.7 | $ 1 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average remaining useful life | 7 years | |||
Amortization of Intangible Assets | $ 10.7 | $ 9.2 | $ 20.1 | $ 14.8 |
Impairment of intangible assets | $ 14.9 | |||
Software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average remaining useful life | 3 years | |||
Customer lists | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average remaining useful life | 13 years | |||
Trademarks | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average remaining useful life | 6 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Six months ending June 30, 2020 | $ 19.6 | |
Twelve months ending June 30, 2021 | 44.8 | |
Twelve months ending June 30, 2022 | 44.4 | |
Twelve months ending June 30, 2023 | 31.6 | |
Twelve months ending June 30, 2024 | 18.5 | |
Twelve months ending June 30, 2025 | 13.2 | |
Thereafter | 60.6 | |
Intangible Assets, net | $ 232.7 | $ 225.9 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 | Oct. 15, 2016 | Oct. 14, 2014 |
Debt Instrument [Line Items] | ||||
Unamortized debt financing costs | $ (26.1) | $ (28.5) | ||
Total debt and capital lease obligations | 2,762.3 | 2,930.2 | ||
Current maturities of long-term debt and finance lease liabilities | 21.1 | 270.8 | ||
Total long-term debt and finance lease liabilities | 2,741.2 | 2,659.4 | ||
Line of Credit | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | 90 | 0 | ||
Term Loan Facilities | Three year term loan facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | 300 | 300 | ||
Term Loan Facilities | Five year term loan facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | 281.3 | 288.8 | ||
Senior Notes | 3.30% senior notes, due 2019 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | $ 0 | 250 | ||
Interest rate | 3.30% | 3.80% | 3.30% | |
Senior Notes | 4.50% senior notes, due 2024 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | $ 500 | 500 | ||
Interest rate | 4.50% | 5.00% | 4.50% | |
Senior Notes | Senior Notes Due in 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | $ 500 | 500 | ||
Interest rate | 5.875% | |||
Senior Notes | 4.875% senior notes, due 2027 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | $ 600 | 600 | ||
Interest rate | 4.875% | |||
Senior Notes | 5.250% Senior Notes, Due 2029 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | $ 500 | 500 | ||
Interest rate | 5.25% | |||
Finance lease liabilities | ||||
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations, gross | $ 17.1 | $ 19.9 |
Debt - Schedule of Maturities (
Debt - Schedule of Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 |
Debt Disclosure [Abstract] | ||
Twelve months ending December 31, 2020 | $ 15 | |
Twelve months ending December 31, 2021 | 315 | |
Twelve months ending December 31, 2022 | 15 | |
Twelve months ending December 31, 2023 | 326.3 | |
Twelve months ending December 31, 2024 | 500 | |
Thereafter | 1,600 | |
Total debt | 2,771.3 | |
Unamortized debt financing costs | (26.1) | $ (28.5) |
Total debt, net of unamortized debt financing costs | $ 2,745.2 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Aug. 17, 2018 | Sep. 16, 2014 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | Oct. 15, 2016 | Oct. 14, 2014 |
Debt Instrument [Line Items] | |||||||||
Debt issuance costs, gross | $ 41,300,000 | $ 41,300,000 | $ 41,300,000 | ||||||
Accumulated amortization, debt issuance costs | 15,200,000 | 15,200,000 | 12,800,000 | ||||||
Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving credit facility, maximum borrowing capacity | $ 750,000,000 | ||||||||
Revolving credit facility, Euro or Sterling sublimit | $ 100,000,000 | ||||||||
Average outstanding amount | 150,000,000 | $ 371,900,000 | 75,200,000 | $ 211,200,000 | |||||
Long-term debt and capital lease obligations, gross | 90,000,000 | 90,000,000 | 0 | ||||||
Term Loan Facilities | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 3 years | ||||||||
Long-term debt and capital lease obligations, gross | $ 300,000,000 | $ 300,000,000 | 300,000,000 | ||||||
Annual interest rate on loan facility | 3.30% | 3.30% | |||||||
Term Loan Facilities | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Long-term debt and capital lease obligations, gross | $ 281,300,000 | $ 281,300,000 | 288,800,000 | ||||||
Annual interest rate on loan facility | 3.43% | 3.43% | |||||||
Credit Facilities | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum ratio of indebtedness to EBITDA | 375.00% | ||||||||
Minimum ratio of EBITDA to Interest expense | 300.00% | ||||||||
Credit Facilities | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum aggregate principal amount of accelerated maturity of other indebtedness allowed | $ 75,000,000 | ||||||||
Senior Notes | 3.30% senior notes, due 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 0 | $ 0 | 250,000,000 | ||||||
Interest rate | 3.30% | 3.30% | 3.80% | 3.30% | |||||
Senior Notes | 4.50% senior notes, due 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 500,000,000 | $ 500,000,000 | 500,000,000 | ||||||
Interest rate | 4.50% | 4.50% | 5.00% | 4.50% | |||||
Senior Notes | Senior Notes Due in 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 500,000,000 | $ 500,000,000 | 500,000,000 | ||||||
Interest rate | 5.875% | 5.875% | |||||||
Senior Notes | 4.875% senior notes, due 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 600,000,000 | $ 600,000,000 | 600,000,000 | ||||||
Interest rate | 4.875% | 4.875% | |||||||
Senior Notes | 5.250% Senior Notes, Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||||||
Interest rate | 5.25% | 5.25% |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease, cost | $ 8.3 | $ 18.2 | ||
Rent expense | $ 7.6 | $ 17.2 | ||
Operating lease, weighted average remaining lease term | 5 years 4 months 24 days | 5 years 4 months 24 days | ||
Finance lease, weighted average remaining lease term | 3 years | 3 years | ||
Operating lease, weighted average discount rate, percent | 3.70% | 3.70% | ||
Finance lease, weighted average discount rate, percent | 4.60% | 4.60% | ||
Total lease receivable | $ 14.4 | $ 14.4 | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
ROU assets, net | $ 68.2 | |||
Lease liability | $ 76.8 | |||
Cost of revenues | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease, cost | 4.1 | 9.4 | ||
Selling, general and administrative expenses | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease, cost | 4.4 | 8.4 | ||
Interest Expense | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease, cost | 0.2 | 0.4 | ||
Accounts Receivable | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total lease receivable | 4.1 | 4.1 | ||
Other Assets | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total lease receivable | $ 10.3 | $ 10.3 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Amortization of ROU assets | $ 1.3 | $ 3 |
Interest on lease liabilities | 0.2 | 0.4 |
Lease expense | 4 | 8.7 |
Sublease income (gross basis) | (0.3) | (0.4) |
Short-term lease expense (including lease term of one month or less) | 0.8 | 2 |
Variable lease expense | 2.3 | 4.5 |
Total net lease expense | $ 8.3 | $ 18.2 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows paid for operating leases | $ 9.1 |
Operating cash flows paid for interest portion of finance leases | 0.4 |
Finance cash flows paid for principal portion of finance leases | 3 |
ROU assets obtained in exchange for new operating lease liabilities | 18.8 |
ROU assets obtained in exchange for new finance lease liabilities | $ 0.1 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) $ in Millions | Dec. 31, 2019USD ($) |
Operating Leases | |
ROU assets, net | $ 59.3 |
Lease liabilities, current | 9.3 |
Lease liabilities, non-current | 57.1 |
Total lease liabilities | 66.4 |
Finance Leases | |
ROU assets, net | 16.4 |
Lease liabilities, current | 6.1 |
Lease liabilities, non-current | 11 |
Total lease liabilities | $ 17.1 |
Leases - Maturity Schedule for
Leases - Maturity Schedule for Finance and Operating Leases (Details) $ in Millions | Dec. 31, 2019USD ($) |
Operating Leases | |
Six months ending June 30, 2020 | $ 10 |
Twelve months ending June 30, 2021 | 17.8 |
Twelve months ending June 30, 2022 | 15.5 |
Twelve months ending June 30, 2023 | 11.4 |
Twelve months ending June 30, 2024 | 9.2 |
Twelve months ending June 30, 2025 | 7.7 |
Thereafter | 10.5 |
Total undiscounted lease payments | 82.1 |
Less: imputed interest | (7.8) |
Less: lease incentive receivable | (7.9) |
Total lease liabilities | 66.4 |
Finance Leases | |
Six months ending June 30, 2020 | 3.5 |
Twelve months ending June 30, 2021 | 6.1 |
Twelve months ending June 30, 2022 | 5.1 |
Twelve months ending June 30, 2023 | 3.5 |
Twelve months ending June 30, 2024 | 0.1 |
Twelve months ending June 30, 2025 | 0 |
Thereafter | 0 |
Total undiscounted lease payments | 18.3 |
Less: imputed interest | (1.2) |
Less: lease incentive receivable | 0 |
Total lease liabilities | $ 17.1 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments Under Previous Guidance (Details) $ in Millions | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Twelve months ending June 30, 2020 | $ 16.7 |
Twelve months ending June 30, 2021 | 13.9 |
Twelve months ending June 30, 2022 | 12.5 |
Twelve months ending June 30, 2023 | 8.9 |
Twelve months ending June 30, 2024 | 6.9 |
Thereafter | 15.8 |
Total minimum operating lease liabilities | $ 74.7 |
Leases - Lessor, Lease Income (
Leases - Lessor, Lease Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Revenues | $ 5.9 | $ 15.8 |
Cost of revenues | (7.4) | (15.2) |
Interest income | 0.2 | 0.2 |
Total lease income (loss) | $ (1.3) | $ 0.8 |
Leases - Lessor, Fiscal Year Ma
Leases - Lessor, Fiscal Year Maturity Schedule (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Six months ending June 30, 2020 | $ 2.3 |
Twelve months ending June 30, 2021 | 4.2 |
Twelve months ending June 30, 2022 | 3.7 |
Twelve months ending June 30, 2023 | 2.8 |
Twelve months ending June 30, 2024 | 2.3 |
Twelve months ending June 30, 2025 | 0.6 |
Thereafter | 0 |
Total undiscounted cash flows to be received | 15.9 |
Less: imputed interest | 1.5 |
Total lease receivable | $ 14.4 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 8.6 | $ 3.2 | $ 11.5 | $ 6.2 |
Risk-free interest rate | 1.67% | |||
Weighted-average volatility factor | 24.69% | |||
Equity Classified Awards Expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 6.7 | 2.9 | 10.4 | 6.4 |
Liability Classified Awards Expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1.9 | $ 0.3 | 1.1 | $ (0.2) |
Employee Stock Option | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total unrecognized compensation cost | $ 5.2 | $ 5.2 | ||
Weighted-average remaining requisite vesting period | 2 years 6 months | |||
Fair value assumptions, expected volatility rate | 25.87% | |||
Risk-free interest rate | 1.68% | |||
Fair value assumptions, expected dividend rate | 1.27% | |||
Fair value assumptions, expected term | 6 years | |||
Options granted (in shares) | 334,000 | |||
Performance Based Stock Options | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Options granted (in shares) | 0 | |||
Performance-Based Restricted Stock Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Grants in period (in shares) | 378,000 | 378,000 | ||
Award vesting period | 3 years | |||
Restricted Stock Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total unrecognized compensation cost | $ 54.2 | $ 54.2 | ||
Weighted-average remaining requisite vesting period | 2 years | |||
Restricted Stock | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total unrecognized compensation cost | 0.2 | $ 0.2 | ||
Weighted-average remaining requisite vesting period | 8 months 12 days | |||
Officer | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based payment arrangement, accelerated cost | $ 3.9 | $ 3.9 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Components Of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 8.6 | $ 3.2 | $ 11.5 | $ 6.2 |
Income tax benefit | 2.4 | 0.5 | 2.9 | 1.3 |
Cost of revenues | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pre-tax stock-based compensation expense | 0.6 | 0.3 | 0.9 | 0.6 |
Selling, general and administrative expenses | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 8 | $ 2.9 | $ 10.6 | $ 5.6 |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity Related to the Company's Incentive Equity Awards (Details) - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Employee Stock Option | ||
Number of Options (in shares) | ||
Options outstanding as of June 30, 2017 (in shares) | 794 | |
Options granted (in shares) | 334 | |
Options exercised (in shares) | (136) | |
Options canceled (in shares) | (103) | |
Options outstanding as of September 30, 2017 (in shares) | 889 | 889 |
Weighted Average Exercise Price (in usd per share) | ||
Options outstanding as of June 30, 2017 (usd per share) | $ 46.47 | |
Options granted (usd per share) | 47.13 | |
Options exercised (usd per share) | 36.42 | |
Options canceled (usd per share) | 58.75 | |
Options outstanding as of September 30, 2017 (usd per share) | $ 46.85 | $ 46.85 |
Time-Based Restricted Stock | ||
Restricted Stock and Restricted Stock Units (in shares) | ||
Non-vested restricted shares/units as of June 30, 2017 (in shares) | 145 | |
Grants in period (in shares) | 0 | |
Restricted shares/units vested (in shares) | (122) | |
Restricted shares/units forfeited (in shares) | (4) | |
Non-vested restricted shares/units as of September 30, 2017 (in shares) | 19 | 19 |
Time-Based Restricted Stock Units | ||
Restricted Stock and Restricted Stock Units (in shares) | ||
Non-vested restricted shares/units as of June 30, 2017 (in shares) | 408 | |
Grants in period (in shares) | 539 | |
Restricted shares/units vested (in shares) | (113) | |
Restricted shares/units forfeited (in shares) | (41) | |
Non-vested restricted shares/units as of September 30, 2017 (in shares) | 793 | 793 |
Performance-Based Restricted Stock Units | ||
Restricted Stock and Restricted Stock Units (in shares) | ||
Non-vested restricted shares/units as of June 30, 2017 (in shares) | 414 | |
Grants in period (in shares) | 378 | 378 |
Restricted shares/units forfeited (in shares) | (36) | |
Non-vested restricted shares/units as of September 30, 2017 (in shares) | 756 | 756 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Valuation allowances | $ 25.1 | $ 25.1 | $ 10.3 | ||
Unrecognized income tax benefits | 8.5 | 8.5 | 7.8 | ||
Unrecognized income tax benefits that would impact effective tax rate, if recognized | $ 7.7 | 7.7 | $ 7 | ||
Unrecognized tax benefits, increase resulting from current period tax positions | $ 0.7 | ||||
Effective tax rate | 38.20% | 24.80% | 31.70% | 26.60% | |
Change in deferred tax assets valuation allowance | $ 14.8 | $ 14.8 | |||
Tax Cuts and Jobs Act of 2017, income tax expense (benefit) | (1.2) | $ 3.4 | |||
Share-based compensation, excess tax expense (benefit) | $ (0.1) | $ 1.2 | $ 0.7 | $ (0.7) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingency, estimate of possible loss | $ 90 | |
Surety bonds outstanding, amount | $ 27.8 | |
Letters of credit outstanding, amount | $ 2.4 |
Financial Data by Segment - Re
Financial Data by Segment - Revenue and Earnings Before Taxes by Segment (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($)operating_segmentreportable_segment | Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | operating_segment | 2 | |||
Number of reportable segments | reportable_segment | 2 | |||
Revenues | $ 499.6 | $ 478.7 | $ 994.2 | $ 925 |
Earnings before income taxes | 113 | 96.6 | 217 | 203.1 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before income taxes | (54.7) | (60.3) | (110.1) | (131.1) |
CDK North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 418.2 | 406.7 | 835.9 | 774.4 |
CDK North America | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before income taxes | 151.8 | 147.4 | 296 | 305.9 |
CDKI | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 81.4 | 72 | 158.3 | 150.6 |
CDKI | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Earnings before income taxes | 15.9 | 9.5 | 31.1 | 28.3 |
Subscription | CDK North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 336.8 | 330 | 669.2 | 630.9 |
Subscription | CDKI | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 68.2 | 61.2 | 135.9 | 127.8 |
On-site licenses and installation | CDK North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3 | 2.8 | 5.1 | 4.2 |
On-site licenses and installation | CDKI | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 8.8 | 7.5 | 13.3 | 15.5 |
Transaction | CDK North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 39.8 | 38.3 | 82.5 | 79.3 |
Other | CDK North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 38.6 | 35.6 | 79.1 | 60 |
Other | CDKI | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 4.4 | $ 3.3 | $ 9.1 | $ 7.3 |
Uncategorized Items - cdkq2fy20
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 109,300,000 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (400,000) |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 109,300,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 109,700,000 |