Cover page
Cover page - shares | 3 Months Ended | |
Sep. 30, 2020 | Oct. 27, 2020 | |
Cover [Abstract] | ||
Title of 12(b) Security | Common Stock, $0.10 Par Value(voting) | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-1467904 | |
Entity Address, Address Line One | One ADP Boulevard | |
Entity Address, City or Town | Roseland, | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 1-5397 | |
Entity Registrant Name | AUTOMATIC DATA PROCESSING, INC. | |
City Area Code | 973 | |
Local Phone Number | 974-5000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Central Index Key | 0000008670 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Common Stock, Shares Outstanding | 428,813,999 | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07068 | |
Trading Symbol | ADP | |
Security Exchange Name | NASDAQ | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Statements of Consolidated Earn
Statements of Consolidated Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
REVENUES: | |||
Revenues, other than interest on funds held for clients and PEO revenues | $ 2,269.6 | $ 2,306.2 | |
Interest on funds held for clients | 106.5 | 133.9 | |
PEO Revenues | [1] | 1,094.6 | 1,055.6 |
TOTAL REVENUES | 3,470.7 | 3,495.7 | |
Costs of revenues: | |||
Operating expenses | 1,762.1 | 1,787.7 | |
Systems development and programming costs | 168.7 | 168.2 | |
Depreciation and amortization | 103.5 | 88.9 | |
TOTAL COSTS OF REVENUES | 2,034.3 | 2,044.8 | |
Selling, general, and administrative expenses | 681 | 726.5 | |
Interest expense | 15.1 | 39.9 | |
TOTAL EXPENSES | 2,730.4 | 2,811.2 | |
Other (income)/expense, net | (24.9) | (54.6) | |
EARNINGS BEFORE INCOME TAXES | 765.2 | 739.1 | |
Provision for income taxes | 163.1 | 156.7 | |
NET EARNINGS | $ 602.1 | $ 582.4 | |
Basic earnings per share (in US$ per share) | $ 1.40 | $ 1.35 | |
Diluted earnings per share (in US$ per share) | $ 1.40 | $ 1.34 | |
Basic weighted average shares outstanding (shares) | 428.6 | 432.7 | |
Diluted weighted average shares outstanding (shares) | 430 | 435.4 | |
[1] | Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $10,925.8 million and $10,510.6 million for the three months ended September 30, 2020 and 2019, respectively. |
Statements of Consolidated Ea_2
Statements of Consolidated Earnings (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||
Direct pass-through costs PEO revenues | $ 10,925.8 | $ 10,510.6 |
Statements of Consolidated Comp
Statements of Consolidated Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 602.1 | $ 582.4 |
Other comprehensive income/(loss): | ||
Currency translation adjustments | 50.4 | (48.9) |
Unrealized net gains/(losses) on available-for-sale securities | (24.6) | 96.1 |
Tax effect | 5.5 | (20.8) |
Reclassification of net (gain)/losses on available-for-sale securities to net earnings | (0.3) | (2.3) |
Tax effect | 0.1 | 0.5 |
Unrealized loss on cash flow hedging activities | (3.3) | 0 |
Tax effect | 0.8 | 0 |
Amortization of unrealized loss on cash flow hedging activities | 0.6 | 0 |
Tax effect | 0 | 0 |
Reclassification of pension liability adjustment to net earnings | 2.5 | (1.7) |
Tax effect | (1) | 0.5 |
Other comprehensive income, net of tax | 30.7 | 23.4 |
Comprehensive income | $ 632.8 | $ 605.8 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | |
Current assets: | |||
Cash and cash equivalents | $ 1,613,100,000 | $ 1,908,500,000 | |
Accounts receivable, net of allowance for doubtful accounts of $89.1 and $92.5, respectively | 2,489,100,000 | 2,441,300,000 | |
Other current assets | 762,900,000 | 506,200,000 | |
Total current assets before funds held for clients | 4,865,100,000 | 4,856,000,000 | |
Funds held for clients | 29,950,300,000 | 26,708,100,000 | |
Total current assets | 34,815,400,000 | 31,564,100,000 | |
Long-term receivables, net of allowance for doubtful accounts of $0.6 and $0.5, respectively | 16,100,000 | 18,600,000 | |
Property, plant and equipment, net | 701,500,000 | 703,900,000 | |
Operating lease right-of-use asset | 479,000,000 | 493,700,000 | |
Deferred contract costs | 2,397,900,000 | 2,401,600,000 | |
Other assets | 438,000,000 | 458,400,000 | |
Goodwill | 2,326,300,000 | 2,309,400,000 | |
Intangible assets, net | 1,215,900,000 | 1,215,800,000 | |
Total assets | 42,390,100,000 | 39,165,500,000 | |
Current liabilities: | |||
Accounts payable | 111,200,000 | 102,000,000 | |
Accrued expenses and other current liabilities | 1,900,200,000 | 1,980,700,000 | |
Accrued payroll and payroll-related expenses | 494,700,000 | 557,000,000 | |
Dividends payable | 387,100,000 | 387,300,000 | |
Short-term deferred revenues | 205,000,000 | 212,500,000 | |
Obligations under reverse repurchase agreements | [1] | 0 | 13,600,000 |
Short-term debt | 0 | 1,001,800,000 | |
Income taxes payable | 133,000,000 | 40,100,000 | |
Total current liabilities before client funds obligations | 3,231,200,000 | 4,295,000,000 | |
Client funds obligations | 29,098,400,000 | 25,831,600,000 | |
Total current liabilities | 32,329,600,000 | 30,126,600,000 | |
Long-term debt | 1,993,900,000 | 1,002,800,000 | |
Operating lease liabilities | 330,400,000 | 344,400,000 | |
Other liabilities | 813,900,000 | 837,000,000 | |
Deferred income taxes | 743,000,000 | 731,900,000 | |
Long-term deferred revenues | 370,400,000 | 370,600,000 | |
Total liabilities | 36,581,200,000 | 33,413,300,000 | |
Commitments and contingencies (Note 13) | |||
Stockholders' equity: | |||
Preferred stock, $1.00 par value: authorized, 0.3 shares; issued, none | 0 | 0 | |
Common stock, $0.10 par value: authorized, 1,000.0 shares; issued, 638.7 shares at September 30, 2020 and June 30, 2020; outstanding, 429.3 and 429.9 shares at September 30, 2020 and June 30, 2020, respectively | 63,900,000 | 63,900,000 | |
Capital in excess of par value | 1,348,400,000 | 1,333,800,000 | |
Retained earnings | 18,644,700,000 | 18,436,300,000 | |
Treasury stock - at cost: 209.4 and 208.9 shares at September 30, 2020 and June 30, 2020, respectively | (14,264,000,000) | (14,067,000,000) | |
Accumulated other comprehensive income (loss) | 15,900,000 | (14,800,000) | |
Total stockholders’ equity | 5,808,900,000 | 5,752,200,000 | |
Total liabilities and stockholders’ equity | $ 42,390,100,000 | $ 39,165,500,000 | |
[1] | (A ) As of June 30, 2020, $13.6 million of long-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements (see Note 9). |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Long-term marketable securities under reverse repurchase agreements | $ 13.6 | |
Allowance for doubtful accounts - trade receivables - Current | $ 89.1 | 92.5 |
Allowance for doubtful accounts - trade receivables - Long-term | $ 0.6 | $ 0.5 |
Preferred stock, par value (in US$ per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 300,000 | 300,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in US$ per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 638,700,000 | 638,700,000 |
Common stock, shares outstanding (in shares) | 429,300,000 | 429,900,000 |
Treasury stock, (in shares) | 209,400,000 | 208,900,000 |
Statements of Consolidated Cash
Statements of Consolidated Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities: | ||
Net earnings | $ 602.1 | $ 582.4 |
Adjustments to reconcile net earnings to cash flows provided by operating activities: | ||
Depreciation and amortization | 131.1 | 117.3 |
Amortization of deferred contract costs | 232.3 | 227.3 |
Deferred income taxes | 23.5 | 44.4 |
Stock-based compensation expense | 33.8 | 37.1 |
Net pension income | (11.1) | (2.7) |
Net amortization of premiums and accretion of discounts on available-for-sale securities | 12.4 | 12.2 |
Impairment of assets | 2.8 | 0 |
Gain on sale of assets | (0.2) | (1.9) |
Other | 6.1 | 11.9 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (78.7) | (96.8) |
Increase in other assets | (454.8) | (391.7) |
Increase/(Decrease) in accounts payable | 5.7 | (15.1) |
Decrease in accrued expenses and other liabilities | (23.1) | (91.6) |
Net cash flows provided by operating activities | 481.9 | 432.8 |
Cash Flows from Investing Activities: | ||
Purchases of corporate and client funds marketable securities | (812.8) | (1,409.9) |
Proceeds from the sales and maturities of corporate and client funds marketable securities | 1,196.7 | 1,653.7 |
Capital expenditures | (43.5) | (56.8) |
Additions to intangibles | (76.4) | (88.2) |
Proceeds from sale of property, plant, and equipment and other assets | 0.2 | 23.4 |
Net cash flows provided by investing activities | 264.2 | 122.2 |
Cash Flows from Financing Activities: | ||
Net increase/(decrease) in client funds obligations | 3,203.3 | (8,063.3) |
Payments of debt | (1,000.6) | (0.5) |
Proceeds from the issuance of debt | 991.1 | 0 |
Settlement of cash flow hedges | (43.6) | 0 |
Repurchases of common stock | (213.6) | (309.7) |
Net proceeds from stock purchase plan and stock-based compensation plans | (7.9) | (32.1) |
Dividends paid | (391) | (343.3) |
Net (payments)/proceeds related to reverse repurchase agreements | (13.6) | 166.3 |
Net proceeds of commercial paper borrowings | 0 | 3,536.7 |
Net cash flows provided by/(used in) financing activities | 2,524.1 | (5,045.9) |
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents | 37.9 | (33.1) |
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents | 3,308.1 | (4,524) |
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period | 7,053.6 | 6,796.2 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | 10,361.7 | 2,272.2 |
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets | ||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents | 10,361.7 | 2,272.2 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 27.3 | 53.6 |
Cash paid for income taxes, net of income tax refunds | $ 45.4 | $ 45.6 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements and footnotes thereto of Automatic Data Processing, Inc., its subsidiaries and variable interest entity (“ADP” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Consolidated Financial Statements and footnotes thereto are unaudited. In the opinion of the Company’s management, the Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, that are necessary for a fair presentation of the Company’s interim financial results. The Company has a grantor trust, which holds the majority of the funds provided by its clients pending remittance to employees of those clients, tax authorities, and other payees. The Company is the sole beneficial owner of the trust. The trust meets the criteria in Accounting Standards Codification (“ASC”) 810, “Consolidation” to be characterized as a variable interest entity (“VIE”). The Company has determined that it has a controlling financial interest in the trust because it has both (1) the power to direct the activities that most significantly impact the economic performance of the trust (including the power to make all investment decisions for the trust) and (2) the right to receive benefits that could potentially be significant to the trust (in the form of investment returns) and, therefore, consolidates the trust. Further information on these funds and the Company’s obligations to remit to its clients’ employees, tax authorities, and other payees is provided in Note 6, “Corporate Investments and Funds Held for Clients.” |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Pronouncements Effective July 1, 2020, the Company adopted accounting standard update (“ASU”) 2018-13, “Fair Value Measurement.” The update modifies the disclosure requirements on fair value measurements. The adoption of ASU 2018-13 modified the disclosures in Note 6 but did not have an impact on the Company's consolidated results of operations, financial condition, or cash flows. Effective July 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This update introduces the current expected credit loss (“CECL”) model, which requires an entity to measure credit losses based on expected losses rather than incurred losses for certain financial instruments and financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated results of operations, financial condition, or cash flows. Recently Issued Accounting Pronouncements The following table summarizes recent ASU's issued by the Financial Accounting Standards Board (“FASB”) that could have a material impact on the Company's consolidated results of operations, financial condition, or cash flows. Standard Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2018-14 Compensation-Retirement Benefits-Defined Benefit Plans This update modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. The amendments in ASU 2018-14 would need to be applied on a retrospective basis. July 1, 2021 The adoption of this guidance will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows. |
Revenue
Revenue | 3 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Based upon similar operational and economic characteristics, the Company’s revenues are disaggregated by its three strategic pillars: Human Capital Management (“HCM”), HR Outsourcing (“HRO”), and Global (“Global”) Solutions, with separate disaggregation for PEO zero-margin benefits pass-through revenues and client funds interest revenues. The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. HCM provides a suite of product offerings that assist employers of all types and sizes in all stages of the employment cycle, from recruitment to retirement. Global is generally consistent with the types of services provided within HCM but represents geographies outside of the United States and includes our multinational offerings. HCM and Global revenues are primarily attributable to fees for providing solutions for payroll, benefits, talent, retirement services and HR processing and fees charged to implement the Company's solutions for clients. HRO provides a comprehensive human resources outsourcing solution, including offering benefits, providing workers’ compensation insurance, and administering state unemployment insurance, among other human resources functions. This revenue is primarily driven by the PEO. Amounts collected from PEO worksite employers include payroll, fees for benefits, and an administrative fee that also includes payroll taxes, fees for workers’ compensation and state unemployment taxes. The payroll and payroll taxes collected from the worksite employers are presented in revenue net, as the Company does not retain risk and acts as an agent with respect to this aspect of the PEO arrangement. With respect to the payroll and payroll taxes, the worksite employer is primarily responsible for providing the service and has discretion in establishing wages. The fees collected from the worksite employers for benefits (i.e., PEO benefits pass-throughs), workers’ compensation and state unemployment taxes are presented in revenues and the associated costs of benefits, workers’ compensation and state unemployment taxes are included in operating expenses, as the Company acts as a principal with respect to this aspect of the arrangement. With respect to these fees, the Company is primarily responsible for fulfilling the service and has discretion in establishing price. The Company has further disaggregated HRO to separate out its PEO zero-margin benefits pass-through revenues. The Company recognizes client funds interest revenues on collected but not yet remitted funds held for clients in revenues as earned, as the collection, holding and remittance of these funds are critical components of providing these services. The following tables provide details of revenue by our strategic pillars with disaggregation for PEO zero-margin benefits pass-throughs and client funds interest, and include a reconciliation to the Company’s reportable segments: Three Months Ended September 30, Types of Revenues 2020 2019 HCM $ 1,530.6 $ 1,568.5 HRO, excluding PEO zero-margin benefits pass-throughs 582.4 591.1 PEO zero-margin benefits pass-throughs 741.0 699.1 Global 510.2 503.1 Interest on funds held for clients 106.5 133.9 Total Revenues $ 3,470.7 $ 3,495.7 Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2020: Types of Revenues Employer Services PEO Other Total HCM $ 1,532.3 $ — $ (1.7) $ 1,530.6 HRO, excluding PEO zero-margin benefits pass-throughs 229.1 353.6 (0.3) 582.4 PEO zero-margin benefits pass-throughs — 741.0 — 741.0 Global 510.2 — — 510.2 Interest on funds held for clients 105.2 1.3 — 106.5 Total Segment Revenues $ 2,376.8 $ 1,095.9 $ (2.0) $ 3,470.7 Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2019: Types of Revenues Employer Services PEO Other Total HCM $ 1,570.0 $ — $ (1.5) $ 1,568.5 HRO, excluding PEO zero-margin benefits pass-throughs 235.7 356.5 (1.1) 591.1 PEO zero-margin benefits pass-throughs — 699.1 — 699.1 Global 503.1 — — 503.1 Interest on funds held for clients 132.6 1.3 — 133.9 Total Segment Revenues $ 2,441.4 $ 1,056.9 $ (2.6) $ 3,495.7 Contract Balances The timing of revenue recognition for HCM, HRO and Global Solutions is consistent with the invoicing of clients, as invoicing occurs in the period the services are provided. Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing. Changes in deferred revenue related to set up fees for the three months ended September 30, 2020 were as follows: Contract Liability Contract liability, July 1, 2020 $ 522.7 Recognition of revenue included in beginning of year contract liability (43.8) Contract liability, net of revenue recognized on contracts during the period 30.7 Currency translation adjustments 16.2 Contract liability, September 30, 2020 $ 525.8 |
Earnings per Share (EPS)
Earnings per Share (EPS) | 3 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share (EPS) | Earnings per Share (“EPS”) Basic Effect of Employee Stock Option Shares Effect of Diluted Three Months Ended September 30, 2020 Net earnings $ 602.1 $ 602.1 Weighted average shares (in millions) 428.6 0.6 0.8 430.0 EPS $ 1.40 $ 1.40 Three Months Ended September 30, 2019 Net earnings $ 582.4 $ 582.4 Weighted average shares (in millions) 432.7 1.3 1.4 435.4 EPS $ 1.35 $ 1.34 Options to purchase 2.1 million and 0.7 million shares of common stock for the three months ended September 30, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. |
Other (Income)_Expense, Net
Other (Income)/Expense, Net | 3 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other (Income)/Expense, Net | Other (Income)/Expense, Net Three Months Ended September 30, 2020 2019 Interest income on corporate funds $ (13.8) $ (32.3) Realized (gains) / losses on available-for-sale securities, net (0.3) (2.3) Impairment of assets 2.8 — Gain on sale of assets (0.2) (1.9) Non-service components of pension income, net (see Note 11) (13.4) (18.1) Other (income)/expense, net $ (24.9) $ (54.6) In fiscal 2021, the Company recorded impairment charges of $2.8 million as a r esult of recognizing certain owned facilities at fair value given intent to sell and accordingly classified as held for sale. |
Corporate Investments and Funds
Corporate Investments and Funds Held For Clients | 3 Months Ended |
Sep. 30, 2020 | |
Corporate Investments And Funds Held For Clients [Abstract] | |
Corporate Investments and Funds Held For Clients | Corporate Investments and Funds Held for Clients Corporate investments and funds held for clients at September 30, 2020 and June 30, 2020 were as follows: September 30, 2020 Amortized Gross Gross Fair Market Value (A) Type of issue: Money market securities, cash and other cash equivalents $ 10,361.7 $ — $ — $ 10,361.7 Available-for-sale securities: Corporate bonds 9,013.1 458.0 (0.4) 9,470.7 Asset-backed securities 2,942.7 98.4 (0.2) 3,040.9 U.S. Treasury securities 3,581.3 108.8 — 3,690.1 U.S. government agency securities 1,341.8 34.5 (0.8) 1,375.5 Canadian government obligations and Canadian government agency obligations 1,037.0 22.6 — 1,059.6 Commercial mortgage-backed securities 810.1 54.5 — 864.6 Canadian provincial bonds 652.7 34.8 — 687.5 Other securities 974.5 41.7 — 1,016.2 Total available-for-sale securities 20,353.2 853.3 (1.4) 21,205.1 Total corporate investments and funds held for clients $ 30,714.9 $ 853.3 $ (1.4) $ 31,566.8 (A) Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy. June 30, 2020 Amortized Gross Gross Fair Market Value (B) Type of issue: Money market securities, cash and other cash equivalents $ 7,053.6 $ — $ — $ 7,053.6 Available-for-sale securities: Corporate bonds 9,188.7 473.4 — 9,662.1 Asset-backed securities 3,274.6 96.0 (0.5) 3,370.1 U.S. Treasury securities 3,580.6 120.8 — 3,701.4 U.S. government agency securities 1,128.2 35.6 — 1,163.8 Canadian government obligations and Canadian government agency obligations 1,018.7 23.1 — 1,041.8 Commercial mortgage-backed securities 814.3 53.9 — 868.2 Canadian provincial bonds 676.6 33.6 — 710.2 Other securities 1,018.1 41.1 (0.2) 1,059.0 Total available-for-sale securities 20,699.8 877.5 (0.7) 21,576.6 Total corporate investments and funds held for clients $ 27,753.4 $ 877.5 $ (0.7) $ 28,630.2 (B) Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy. For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party pricing service, see Note 1 “Summary of Significant Accounting Policies” in the Company's Annual Report on Form 10-K for fiscal 2020. The Company concurred with and did not adjust the prices obtained from the independent pricing service. The Company had no available-for-sale securities included in Level 1 or Level 3 at September 30, 2020. The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of September 30, 2020, are as follows: September 30, 2020 Securities in Unrealized Loss Position Less Than 12 Months Securities in Unrealized Loss Position Greater Than 12 Months Total Gross Fair Market Gross Fair Market Gross Fair Corporate bonds $ (0.4) $ 151.5 $ — $ — $ (0.4) $ 151.5 Asset-backed securities (0.2) 77.5 — — (0.2) 77.5 U.S. Treasury securities — — — — — — U.S. government agency securities (0.8) 320.0 — — (0.8) 320.0 Canadian government obligations and Canadian government agency obligations — — — — — — Commercial mortgage-backed securities — — — 1.5 — 1.5 Canadian provincial bonds — — — — — — Other securities — 12.9 — — — 12.9 $ (1.4) $ 561.9 $ — $ 1.5 $ (1.4) $ 563.4 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2020, are as follows: June 30, 2020 Securities in Unrealized Loss Position Less Than 12 Months Securities in Unrealized Loss Position Greater Than 12 Months Total Gross Fair Market Gross Fair Market Gross Fair Corporate bonds $ — $ — $ — $ — $ — $ — Asset-backed securities (0.5) 43.9 — — (0.5) 43.9 U.S. Treasury securities — 2.0 — — — 2.0 U.S. government agency securities — — — — — — Canadian government obligations and Canadian government agency obligations — — — — — — Commercial mortgage-backed securities — — — 1.5 — 1.5 Canadian provincial bonds — — — — — — Other securities (0.2) 17.1 — — (0.2) 17.1 $ (0.7) $ 63.0 $ — $ 1.5 $ (0.7) $ 64.5 At September 30, 2020, Corporate bonds include investment-grade debt securities with a wide variety of issuers, industries, and sectors, primarily carry credit ratings of A and above, and have maturities ranging from October 2020 through September 2030. At September 30, 2020, asset-backed securities include AAA-rated senior tranches of securities with predominantly prime collateral of fixed-rate auto loan, credit card, equipment lease, and rate reduction receivables with fair values of $1,520.8 million, $1,100.4 million, $321.9 million, and $97.1 million, respectively. These securities are collateralized by the cash flows of the underlying pools of receivables. The primary risk associated with these securities is the collection risk of the underlying receivables. All collateral on such asset-backed securities has performed as expected through September 30, 2020. At September 30, 2020, U.S. government agency securities primarily include debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks with fair values of $614.7 million and $590.8 million, respectively. U.S. government agency securities represent senior, unsecured, non-callable debt that primarily carry ratings of Aaa by Moody's, and AA+ by Standard & Poor's, with maturities ranging from October 2020 through December 2029. At September 30, 2020, other securities and their fair value primarily include municipal bonds of $576.7 million, AA-rated United Kingdom Gilt securities of $197.3 million, and AAA-rated and AA-rated sovereign bonds of $77.2 million. Classification of corporate investments on the Consolidated Balance Sheets is as follows: September 30, June 30, 2020 2020 Corporate investments: Cash and cash equivalents $ 1,613.1 $ 1,908.5 Short-term marketable securities (a) 3.4 — Long-term marketable securities (b) — 13.6 Total corporate investments $ 1,616.5 $ 1,922.1 (a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets. (b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets. Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets. Funds held for clients have been invested in the following categories: September 30, June 30, 2020 2020 Funds held for clients: Restricted cash and cash equivalents held to satisfy client funds obligations $ 8,748.6 $ 5,145.1 Restricted short-term marketable securities held to satisfy client funds obligations 5,614.4 5,541.2 Restricted long-term marketable securities held to satisfy client funds obligations 15,587.3 16,021.8 Total funds held for clients $ 29,950.3 $ 26,708.1 Client funds obligations represent the Company's contractual obligations to remit funds to satisfy clients' payroll, tax, and other payee payment obligations and are recorded on the Consolidated Balance Sheets at the time that the Company impounds funds from clients. The client funds obligations represent liabilities that will be repaid within one year of the balance sheet date. The Company has reported client funds obligations as a current liability on the Consolidated Balance Sheets totaling $29,098.4 million and $25,831.6 million at September 30, 2020 and June 30, 2020, respectively. The Company has classified funds held for clients as a current asset since these funds are held solely for the purpose of satisfying the client funds obligations. Of the Company’s funds held for clients at September 30, 2020 and June 30, 2020, $26,805.6 million and $23,740.0 million, respectively, are held in the grantor trust. The liabilities held within the trust are intercompany liabilities to other Company subsidiaries and are eliminated in consolidation. The Company has reported the cash flows related to the purchases of corporate and client funds marketable securities and related to the proceeds from the sales and maturities of corporate and client funds marketable securities on a gross basis in the investing section of the Statements of Consolidated Cash Flows. The Company has reported the cash and cash equivalents related to client funds investments with original maturities of ninety days or less, within the beginning and ending balances of cash, cash equivalents, restricted cash, and restricted cash equivalents. These amounts have been reconciled to the Consolidated Balance Sheets on the Statements of Consolidated Cash Flows. The Company has reported the cash flows related to the cash received from and paid on behalf of clients on a net basis within net increase / (decrease) in client funds obligations in the financing activities section of the Statements of Consolidated Cash Flows. Approximately 79% of the available-for-sale securities held a AAA-rating or AA-rating at September 30, 2020, as rated by Moody's, Standard & Poor's, DBRS for Canadian dollar-denominated securities, and Fitch for asset-backed and commercial mortgage-backed securities. All available-for-sale securities were rated as investment grade at September 30, 2020. Expected maturities of available-for-sale securities at September 30, 2020 are as follows: One year or less $ 5,617.8 One year to two years 4,283.0 Two years to three years 3,817.6 Three years to four years 2,932.7 After four years 4,554.0 Total available-for-sale securities $ 21,205.1 |
Leases
Leases | 3 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company records leases on the consolidated balance sheets as operating lease right-of-use (“ROU”) assets, records the current portion of operating lease liabilities within accrued expenses and other current liabilities and, separately, records long-term operating lease liabilities. The Company has entered into operating lease agreements for facilities and equipment. The Company's leases have remaining lease terms of up to approximately eleven years. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The lease liabilities are measured by discounting future lease payments at the Company’s collateralized incremental borrowing rate for financing instruments of a similar term, unless the implicit rate is readily determinable. ROU assets also include adjustments related to prepaid or deferred lease payments and lease incentives. The difference between total ROU assets and total lease liabilities are primarily attributable to pre-payments of our obligations and the recognition of various lease incentives. The components of operating lease expense were as follows: Three Months Ended September 30, 2020 2019 Operating lease cost $ 39.1 $ 44.2 Short-term lease cost 0.4 2.7 Variable lease cost 2.1 1.3 Total operating lease cost $ 41.6 $ 48.2 The following table provides supplemental cash flow information related to the Company's leases: Three Months Ended September 30, 2020 2019 Cash paid for operating lease liabilities $ 45.3 $ 40.2 Operating lease ROU assets obtained in exchange for new operating lease liabilities $ 23.2 $ 6.7 Other information related to our operating lease liabilities is as follows: September 30, June 30, 2020 2020 Weighted-average remaining lease term (in years) 6 6 Weighted-average discount rate 2.3 % 2.3 % As of September 30, 2020, maturities of operating lease liabilities are as follows: Nine months ending June 30, 2021 $ 77.8 Twelve months ending June 30, 2022 93.7 Twelve months ending June 30, 2023 79.6 Twelve months ending June 30, 2024 59.2 Twelve months ending June 30, 2025 43.5 Thereafter 101.2 Total undiscounted lease obligations 455.0 Less: Imputed interest (29.9) Net lease obligations $ 425.1 Current operating lease liabilities were approximately $94.7 million and $95.5 million as of September 30, 2020 and June 30, 2020, respectively, and are included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles Assets, net | Goodwill and Intangible Assets, net Changes in goodwill for the three months ended September 30, 2020 are as follows: Employer PEO Total Balance at June 30, 2020 $ 2,304.6 $ 4.8 $ 2,309.4 Additions and other adjustments — — — Currency translation adjustments 16.9 — 16.9 Balance at September 30, 2020 $ 2,321.5 $ 4.8 $ 2,326.3 Components of intangible assets, net, are as follows: September 30, June 30, 2020 2020 Intangible assets: Software and software licenses $ 2,776.2 $ 2,719.1 Customer contracts and lists 1,029.4 1,021.2 Other intangibles 239.3 239.2 4,044.9 3,979.5 Less accumulated amortization: Software and software licenses (1,950.4) (1,912.0) Customer contracts and lists (654.1) (628.3) Other intangibles (224.5) (223.4) (2,829.0) (2,763.7) Intangible assets, net $ 1,215.9 $ 1,215.8 Other intangibles consist primarily of purchased rights, trademarks and trade names (acquired directly or through acquisitions). All intangible assets have finite lives and, as such, are subject to amortization. The weighted average remaining useful life of the intangible assets is 6 years (6 years for software and software licenses, 5 years for customer contracts and lists, and 3 years for other intangibles). Amortization of intangible assets was $84.2 million and $69.4 million for the three months ended September 30, 2020 and 2019, respectively. Estimated future amortization expenses of the Company's existing intangible assets are as follows: Amount Nine months ending June 30, 2021 $ 232.1 Twelve months ending June 30, 2022 $ 256.6 Twelve months ending June 30, 2023 $ 212.8 Twelve months ending June 30, 2024 $ 166.8 Twelve months ending June 30, 2025 $ 115.2 Twelve months ending June 30, 2026 $ 65.9 |
Short-term Financing
Short-term Financing | 3 Months Ended |
Sep. 30, 2020 | |
Short-Term Financing [Abstract] | |
Short-term Financing | Short-term Financing The Company has a $3.2 billion, 364-day credit agreement that matures in June 2021 with a one year term-out option. The Company also has a $2.75 billion five five The Company's U.S. short-term funding requirements related to client funds are sometimes obtained on an unsecured basis through the issuance of commercial paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. This commercial paper program provides for the issuance of up to $9.7 billion in aggregate maturity value. The Company’s commercial paper program is rated A-1+ by Standard & Poor’s and Prime-1 (“P-1”) by Moody’s. These ratings denote the highest quality commercial paper securities. Maturities of commercial paper can range from overnight to up to 364 days. At September 30, 2020 and June 30, 2020, the Company had no commercial paper borrowing outstanding. Details of the borrowings under the commercial paper program are as follows: Three Months Ended September 30, 2020 2019 Average daily borrowings (in billions) $ 2.4 $ 4.0 Weighted average interest rates 0.1 % 2.3 % Weighted average maturity (approximately in days) 1 day 2 days The Company’s U.S., Canadian and United Kingdom short-term funding requirements related to client funds obligations are sometimes obtained on a secured basis through the use of reverse repurchase agreements, which are collateralized principally by government and government agency securities, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. These agreements generally have terms ranging from overnight to up to five business days. At September 30, 2020, there were no outstanding obligations related to reverse repurchase agreements. At June 30, 2020, the Company had $13.6 million of outstanding obligations related to the reverse repurchase agreements. Details of the reverse repurchase agreements are as follows: Three Months Ended September 30, 2020 2019 Average outstanding balances $ 152.4 $ 426.6 Weighted average interest rates 0.3 % 2.0 % |
Debt
Debt | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company has two series of fixed-rate notes with 10-year, staggered maturities for an aggregate principal amount of $2.0 billion (collectively the “Notes”). The Notes are senior unsecured obligations, and interest is payable in arrears, semi-annually. During the three months ended September 30, 2020, the Company issued $1.0 billion of senior notes due in 2030 bearing a fixed interest rate of 1.250%. The Company also redeemed $1.0 billion of senior notes bearing a fixed interest rate of 2.250%. In connection with the senior notes issuance, the Company also terminated several derivative contracts in place to hedge exposure in changes in benchmark interest rates for the senior notes issued with an aggregate notional amount totaling $1.0 billion (of which $400.0 million were entered into during fiscal year 2020 and $600.0 million were entered into on the day of issuance). Since these derivative contracts were classified as cash flow hedges, the unamortized loss of $43.6 million was deferred in accumulated other comprehensive income and will be amortized to earnings over the life of the Notes as the interest payments are made. The principal amounts and associated effective interest rates of the Notes and other debt as of September 30, 2020 and June 30, 2020, are as follows: Debt instrument Effective Interest Rate September 30, 2020 June 30, 2020 Fixed-rate 2.250% notes due September 15, 2020 2.37% $ — $ 1,000.0 Fixed-rate 3.375% notes due September 15, 2025 3.47% 1,000.0 1,000.0 Fixed-rate 1.250% notes due September 1, 2030 1.83% 1,000.0 — Other 8.2 8.4 2,008.2 2,008.4 Less: current portion (a) (1.8) (1,001.8) Less: unamortized discount and debt issuance costs (12.5) (3.8) Total long-term debt $ 1,993.9 $ 1,002.8 (a) - Current portion of long-term debt as of September 30, 2020 is included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets. The effective interest rates for the Notes include the interest on the Notes and amortization of the discount and debt issuance costs. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Stock-based Compensation Plans. Stock-based compensation consists of the following: • Stock Options. Stock options are granted to employees at exercise prices equal to the fair market value of the Company's common stock on the dates of grant. Stock options generally vest ratably over 4 years and have a term of 10 years. Compensation expense is measured based on the fair value of the stock option on the grant date and recognized on a straight-line basis over the vesting period. Stock options are forfeited if the employee ceases to be employed by the Company prior to vesting. The Company determines the fair value of stock options issued using a binomial option-pricing model. The binomial option-pricing model considers a range of assumptions related to volatility, dividend yield, risk-free interest rate, and employee exercise behavior. Expected volatilities utilized in the binomial option-pricing model are based on a combination of implied market volatilities, historical volatility of the Company's stock price, and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial option-pricing model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of a stock option grant is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding. • Restricted Stock. • Time-Based Restricted Stock and Time-Based Restricted Stock Units. Time-based restricted stock and time-based restricted stock units granted September 1, 2018 and after generally vest ratably over 3 years. Time-based restricted stock and time-based restricted stock units granted prior to September 1, 2018 are generally subject to a vesting period of 2 years. Awards are forfeited if the employee ceases to be employed by the Company prior to vesting. Time-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of time-based restricted stock is measured based on the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period. Dividends are paid on shares awarded under the time-based restricted stock program. Time-based restricted stock units are settled in cash and cannot be transferred during the vesting period. Compensation expense relating to the issuance of time-based restricted stock units is recorded over the vesting period and is initially based on the fair value of the award on the grant date and is subsequently remeasured at each reporting date during the vesting period based on the change in the ADP stock price. No dividend equivalents are paid on units awarded under the time-based restricted stock unit program. • Performance-Based Restricted Stock and Performance-Based Restricted Stock Units. Performance-based restricted stock and performance-based restricted stock units generally vest over a one three Performance-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of performance-based restricted stock is recognized over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of shares awarded during the performance period based on probable and actual performance against targets. After the performance period, if the performance targets are achieved, employees are eligible to receive dividends during the remaining vesting period on shares awarded under the performance-based restricted stock program. Performance-based restricted stock units cannot be transferred and are settled in either cash or stock, depending on the employee's home country. Compensation expense relating to the issuance of performance-based restricted stock units settled in cash is recognized over the vesting period initially based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded during the performance period based on probable and actual performance against targets. In addition, compensation expense is remeasured at each reporting period during the vesting period based on the change in the ADP stock price. Compensation expense relating to the issuance of performance-based restricted stock units settled in stock is recorded over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded based on the probable and actual performance against targets. Dividend equivalents are paid on awards under the performance-based restricted stock unit program. • Employee Stock Purchase Plan. The Company offers an employee stock purchase plan that allows eligible employees to purchase shares of common stock at a price equal to 95% of the market value for the Company's common stock on the last day of the offering period. This plan has been deemed non-compensatory and, therefore, no compensation expense has been recorded. The Company currently utilizes treasury stock to satisfy stock option exercises, issuances under the Company's employee stock purchase plan, and restricted stock awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program. The Company repurchased 1.7 million and 1.9 million shares in the three months ended September 30, 2020 and 2019, respectively. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions. The following table represents pre-tax stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively: Three Months Ended September 30, 2020 2019 Operating expenses $ 3.6 $ 4.0 Selling, general and administrative expenses 25.3 28.3 System development and programming costs 4.9 4.8 Total stock-based compensation expense $ 33.8 $ 37.1 During the three months ended September 30, 2020, the following activity occurred under the Company's existing plans: Stock Options: Number Weighted Options outstanding at July 1, 2020 3,510 $ 126 Options granted 1,153 $ 139 Options exercised (156) $ 95 Options forfeited/cancelled (8) $ 144 Options outstanding at September 30, 2020 4,499 $ 130 Time-Based Restricted Stock and Time-Based Restricted Stock Units: Number of Shares Number of Units Restricted shares/units outstanding at July 1, 2020 905 180 Restricted shares/units granted 636 103 Restricted shares/units vested (340) (73) Restricted shares/units forfeited (9) (1) Restricted shares/units outstanding at September 30, 2020 1,192 209 Performance-Based Restricted Stock and Performance-Based Restricted Stock Units: Number of Shares Number of Units Restricted shares/units outstanding at July 1, 2020 179 851 Restricted shares/units granted 156 167 Restricted shares/units vested (70) (279) Restricted shares/units forfeited (2) (5) Restricted shares/units outstanding at September 30, 2020 263 734 The fair value for stock options granted was estimated at the date of grant using the following assumptions: Three Months Ended September 30, 2020 2019 Risk-free interest rate 0.1 % 1.4 % Dividend yield 2.6 % 1.9 % Weighted average volatility factor 25.8 % 19.3 % Weighted average expected life (in years) 5.4 5.4 Weighted average fair value (in dollars) $ 21.66 $ 24.40 |
Employee Benefit Plans | B. Pension Plans The components of net pension income were as follows: Three Months Ended September 30, 2020 2019 Service cost – benefits earned during the period $ 1.2 $ 14.9 Interest cost on projected benefits 12.7 15.4 Expected return on plan assets (30.4) (29.5) Net amortization and deferral 2.5 1.6 Settlement charges and special termination benefits 2.9 (5.1) Net pension income $ (11.1) $ (2.7) |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe effective tax rate for the three months ended September 30, 2020 and 2019 was 21.3% and 21.2%, respectively. The increase in the effective tax rate is primarily due to a decrease in the excess tax benefit on stock-based compensation partially offset by favorable adjustments to prior year tax liabilities in the three months ended September 30, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In June 2018, a potential class action complaint was filed against the Company in the Circuit Court of Cook County, Illinois asserting that ADP violated the Illinois Biometric Privacy Act in connection with its collection, use and storage of biometric data of employees of its clients who are residents of Illinois. In addition, similar potential class action complaints have been filed in Illinois state courts against ADP and/or certain of its clients with respect to the collection, use and storage of biometric data of the employees of these clients. In June 2020, the Company reached a settlement of all outstanding claims against ADP for $25.0 million, subject to the court's preliminary approval. The Company does not expect that any of the remaining cases against ADP's clients will result in any material liabilities to the Company. In May 2020, two potential class action complaints were filed against ADP, TotalSource and related defendants in the U.S. District Court, District of New Jersey. The complaints assert violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with the ADP TotalSource Retirement Savings Plan’s fiduciary administrative and investment decision-making. The complaints seek statutory and other unspecified monetary damages, injunctive relief and attorney’s fees. These claims are still in their earliest stages and the Company is unable to estimate any reasonably possible loss, or range of loss, with respect to these matters. The Company intends to vigorously defend against these lawsuits. The Company is subject to various claims, litigation, and regulatory compliance matters in the normal course of business. When a loss is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. Management currently believes that the resolution of these claims, litigation and regulatory compliance matters against us, individually or in the aggregate, will not have a material adverse impact on our consolidated results of operations, financial condition or cash flows. These matters are subject to inherent uncertainties and management's view of these matters may change in the future. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity | Stockholders' Equity Changes in stockholders' equity by component are as follows: Three Months Ended September 30, 2020 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total Balance at June 30, 2020 $ 63.9 $ 1,333.8 $ 18,436.3 $ (14,067.0) $ (14.8) $ 5,752.2 Net earnings — — 602.1 — — 602.1 Other comprehensive income — — — — 30.7 30.7 Stock-based compensation expense — 35.1 — — — 35.1 Issuances relating to stock compensation plans — (20.5) — 65.3 — 44.8 Treasury stock acquired (1.7 million shares repurchased) — — — (262.3) — (262.3) Dividends declared ($0.91 per share) — — (393.7) — — (393.7) Balance at September 30, 2020 $ 63.9 $ 1,348.4 $ 18,644.7 $ (14,264.0) $ 15.9 $ 5,808.9 Three Months Ended September 30, 2019 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total Balance at June 30, 2019 $ 63.9 $ 1,183.2 $ 17,500.6 $ (13,090.5) $ (257.3) $ 5,399.9 Net earnings — — 582.4 — — 582.4 Other comprehensive income — — — — 23.4 23.4 Stock-based compensation expense — 36.0 — — — 36.0 Issuances relating to stock compensation plans — (5.5) — 70.5 — 65.0 Treasury stock acquired (1.9 million shares repurchased) — — — (392.6) — (392.6) Dividends declared ($0.79 per share) — — (346.6) — — (346.6) Other — — (6.8) — — (6.8) Balance at September 30, 2019 $ 63.9 $ 1,213.7 $ 17,729.6 $ (13,412.6) $ (233.9) $ 5,360.7 |
Reclassifications out of Accumu
Reclassifications out of Accumulated Other Comprehensive Income (AOCI) | 3 Months Ended |
Sep. 30, 2020 | |
Reclassification out of Accumulated Other Comprehensive Income [Abstract] | |
Reclassifications out of Accumulated Other Comprehensive Income (AOCI) | Reclassifications out of Accumulated Other Comprehensive Income (“AOCI”) Changes in AOCI by component are as follows: Three Months Ended September 30, 2020 Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive (Loss) /Income Balance at June 30, 2020 $ (322.2) $ 680.4 $ (30.3) $ (342.7) $ (14.8) Other comprehensive (loss)/income before reclassification adjustments 50.4 (24.6) (3.3) — 22.5 Tax effect — 5.5 0.8 — 6.3 Reclassification adjustments to net earnings — (0.3) (A) 0.6 (C) 2.5 (B) 2.8 Tax effect — 0.1 — (1.0) (0.9) Balance at September 30, 2020 $ (271.8) $ 661.1 $ (32.2) $ (341.2) $ 15.9 Three Months Ended September 30, 2019 Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Pension Liability Accumulated Other Comprehensive (Loss) /Income Balance at June 30, 2019 $ (269.2) $ 224.6 $ (212.7) $ (257.3) Other comprehensive (loss)/income before reclassification adjustments (48.9) 96.1 — 47.2 Tax effect — (20.8) — (20.8) Reclassification adjustments to net earnings — (2.3) (A) (1.7) (B) (4.0) Tax effect — 0.5 0.5 1.0 Balance at September 30, 2019 $ (318.1) $ 298.1 $ (213.9) $ (233.9) (A) Reclassification adjustments out of AOCI are included within Other (income)/expense, net, on the Statements of Consolidated Earnings. (B) Reclassification adjustments out of AOCI are included in net pension income (see Note 11). |
Interim Financial Data by Segme
Interim Financial Data by Segment | 3 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Interim Financial Data by Segment | Interim Financial Data by Segment Based upon similar economic and operational characteristics, the Company’s strategic business units have been aggregated into the following two reportable segments: Employer Services and PEO Services. The primary components of the “Other” segment are certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, costs related to our transformation office, severance costs, non-recurring gains and losses, the elimination of intercompany transactions, and interest expense. Certain revenues and expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. The Company made changes to the allocation methodology for certain corporate allocations, in both the current period and the prior period in the table below, which did not materially affect reportable segment results. Segment Results: Revenues Three Months Ended September 30, 2020 2019 Employer Services $ 2,376.8 $ 2,441.4 PEO Services 1,095.9 1,056.9 Other (2.0) (2.6) $ 3,470.7 $ 3,495.7 Earnings before Income Taxes Three Months Ended September 30, 2020 2019 Employer Services $ 689.3 $ 679.4 PEO Services 159.4 149.3 Other (83.5) (89.6) $ 765.2 $ 739.1 |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Recently Issued Accounting Pronouncements The following table summarizes recent ASU's issued by the Financial Accounting Standards Board (“FASB”) that could have a material impact on the Company's consolidated results of operations, financial condition, or cash flows. Standard Description Effective Date Effect on Financial Statements or Other Significant Matters ASU 2018-14 Compensation-Retirement Benefits-Defined Benefit Plans This update modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. The amendments in ASU 2018-14 would need to be applied on a retrospective basis. July 1, 2021 The adoption of this guidance will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables provide details of revenue by our strategic pillars with disaggregation for PEO zero-margin benefits pass-throughs and client funds interest, and include a reconciliation to the Company’s reportable segments: Three Months Ended September 30, Types of Revenues 2020 2019 HCM $ 1,530.6 $ 1,568.5 HRO, excluding PEO zero-margin benefits pass-throughs 582.4 591.1 PEO zero-margin benefits pass-throughs 741.0 699.1 Global 510.2 503.1 Interest on funds held for clients 106.5 133.9 Total Revenues $ 3,470.7 $ 3,495.7 Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2020: Types of Revenues Employer Services PEO Other Total HCM $ 1,532.3 $ — $ (1.7) $ 1,530.6 HRO, excluding PEO zero-margin benefits pass-throughs 229.1 353.6 (0.3) 582.4 PEO zero-margin benefits pass-throughs — 741.0 — 741.0 Global 510.2 — — 510.2 Interest on funds held for clients 105.2 1.3 — 106.5 Total Segment Revenues $ 2,376.8 $ 1,095.9 $ (2.0) $ 3,470.7 Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2019: Types of Revenues Employer Services PEO Other Total HCM $ 1,570.0 $ — $ (1.5) $ 1,568.5 HRO, excluding PEO zero-margin benefits pass-throughs 235.7 356.5 (1.1) 591.1 PEO zero-margin benefits pass-throughs — 699.1 — 699.1 Global 503.1 — — 503.1 Interest on funds held for clients 132.6 1.3 — 133.9 Total Segment Revenues $ 2,441.4 $ 1,056.9 $ (2.6) $ 3,495.7 |
Contract with Customer, Liability | Changes in deferred revenue related to set up fees for the three months ended September 30, 2020 were as follows: Contract Liability Contract liability, July 1, 2020 $ 522.7 Recognition of revenue included in beginning of year contract liability (43.8) Contract liability, net of revenue recognized on contracts during the period 30.7 Currency translation adjustments 16.2 Contract liability, September 30, 2020 $ 525.8 |
Earnings per Share (EPS) (Table
Earnings per Share (EPS) (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic Effect of Employee Stock Option Shares Effect of Diluted Three Months Ended September 30, 2020 Net earnings $ 602.1 $ 602.1 Weighted average shares (in millions) 428.6 0.6 0.8 430.0 EPS $ 1.40 $ 1.40 Three Months Ended September 30, 2019 Net earnings $ 582.4 $ 582.4 Weighted average shares (in millions) 432.7 1.3 1.4 435.4 EPS $ 1.35 $ 1.34 |
Other (Income)_Expense, Net (Ta
Other (Income)/Expense, Net (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other (Income)/Expense, Net | Three Months Ended September 30, 2020 2019 Interest income on corporate funds $ (13.8) $ (32.3) Realized (gains) / losses on available-for-sale securities, net (0.3) (2.3) Impairment of assets 2.8 — Gain on sale of assets (0.2) (1.9) Non-service components of pension income, net (see Note 11) (13.4) (18.1) Other (income)/expense, net $ (24.9) $ (54.6) |
Corporate Investments and Fun_2
Corporate Investments and Funds Held For Clients (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Corporate Investments And Funds Held For Clients [Abstract] | |
Available-for-sale Securities | Corporate investments and funds held for clients at September 30, 2020 and June 30, 2020 were as follows: September 30, 2020 Amortized Gross Gross Fair Market Value (A) Type of issue: Money market securities, cash and other cash equivalents $ 10,361.7 $ — $ — $ 10,361.7 Available-for-sale securities: Corporate bonds 9,013.1 458.0 (0.4) 9,470.7 Asset-backed securities 2,942.7 98.4 (0.2) 3,040.9 U.S. Treasury securities 3,581.3 108.8 — 3,690.1 U.S. government agency securities 1,341.8 34.5 (0.8) 1,375.5 Canadian government obligations and Canadian government agency obligations 1,037.0 22.6 — 1,059.6 Commercial mortgage-backed securities 810.1 54.5 — 864.6 Canadian provincial bonds 652.7 34.8 — 687.5 Other securities 974.5 41.7 — 1,016.2 Total available-for-sale securities 20,353.2 853.3 (1.4) 21,205.1 Total corporate investments and funds held for clients $ 30,714.9 $ 853.3 $ (1.4) $ 31,566.8 (A) Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy. June 30, 2020 Amortized Gross Gross Fair Market Value (B) Type of issue: Money market securities, cash and other cash equivalents $ 7,053.6 $ — $ — $ 7,053.6 Available-for-sale securities: Corporate bonds 9,188.7 473.4 — 9,662.1 Asset-backed securities 3,274.6 96.0 (0.5) 3,370.1 U.S. Treasury securities 3,580.6 120.8 — 3,701.4 U.S. government agency securities 1,128.2 35.6 — 1,163.8 Canadian government obligations and Canadian government agency obligations 1,018.7 23.1 — 1,041.8 Commercial mortgage-backed securities 814.3 53.9 — 868.2 Canadian provincial bonds 676.6 33.6 — 710.2 Other securities 1,018.1 41.1 (0.2) 1,059.0 Total available-for-sale securities 20,699.8 877.5 (0.7) 21,576.6 Total corporate investments and funds held for clients $ 27,753.4 $ 877.5 $ (0.7) $ 28,630.2 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of September 30, 2020, are as follows: September 30, 2020 Securities in Unrealized Loss Position Less Than 12 Months Securities in Unrealized Loss Position Greater Than 12 Months Total Gross Fair Market Gross Fair Market Gross Fair Corporate bonds $ (0.4) $ 151.5 $ — $ — $ (0.4) $ 151.5 Asset-backed securities (0.2) 77.5 — — (0.2) 77.5 U.S. Treasury securities — — — — — — U.S. government agency securities (0.8) 320.0 — — (0.8) 320.0 Canadian government obligations and Canadian government agency obligations — — — — — — Commercial mortgage-backed securities — — — 1.5 — 1.5 Canadian provincial bonds — — — — — — Other securities — 12.9 — — — 12.9 $ (1.4) $ 561.9 $ — $ 1.5 $ (1.4) $ 563.4 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2020, are as follows: June 30, 2020 Securities in Unrealized Loss Position Less Than 12 Months Securities in Unrealized Loss Position Greater Than 12 Months Total Gross Fair Market Gross Fair Market Gross Fair Corporate bonds $ — $ — $ — $ — $ — $ — Asset-backed securities (0.5) 43.9 — — (0.5) 43.9 U.S. Treasury securities — 2.0 — — — 2.0 U.S. government agency securities — — — — — — Canadian government obligations and Canadian government agency obligations — — — — — — Commercial mortgage-backed securities — — — 1.5 — 1.5 Canadian provincial bonds — — — — — — Other securities (0.2) 17.1 — — (0.2) 17.1 $ (0.7) $ 63.0 $ — $ 1.5 $ (0.7) $ 64.5 |
Classification Of Corporate Investments On The Consolidated Balance Sheets | Classification of corporate investments on the Consolidated Balance Sheets is as follows: September 30, June 30, 2020 2020 Corporate investments: Cash and cash equivalents $ 1,613.1 $ 1,908.5 Short-term marketable securities (a) 3.4 — Long-term marketable securities (b) — 13.6 Total corporate investments $ 1,616.5 $ 1,922.1 (a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets. (b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets. |
Schedule Of Investment Of Funds Held For Clients | Funds held for clients have been invested in the following categories: September 30, June 30, 2020 2020 Funds held for clients: Restricted cash and cash equivalents held to satisfy client funds obligations $ 8,748.6 $ 5,145.1 Restricted short-term marketable securities held to satisfy client funds obligations 5,614.4 5,541.2 Restricted long-term marketable securities held to satisfy client funds obligations 15,587.3 16,021.8 Total funds held for clients $ 29,950.3 $ 26,708.1 |
Expected Maturities Of Available-For-Sale Securities | Expected maturities of available-for-sale securities at September 30, 2020 are as follows: One year or less $ 5,617.8 One year to two years 4,283.0 Two years to three years 3,817.6 Three years to four years 2,932.7 After four years 4,554.0 Total available-for-sale securities $ 21,205.1 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Cost | The components of operating lease expense were as follows: Three Months Ended September 30, 2020 2019 Operating lease cost $ 39.1 $ 44.2 Short-term lease cost 0.4 2.7 Variable lease cost 2.1 1.3 Total operating lease cost $ 41.6 $ 48.2 |
Schedule of Operating lease ROU assets and liabilities | Three Months Ended September 30, 2020 2019 Cash paid for operating lease liabilities $ 45.3 $ 40.2 Operating lease ROU assets obtained in exchange for new operating lease liabilities $ 23.2 $ 6.7 |
Operating lease liabilities | Other information related to our operating lease liabilities is as follows: September 30, June 30, 2020 2020 Weighted-average remaining lease term (in years) 6 6 Weighted-average discount rate 2.3 % 2.3 % |
Schedule of Operating Lease Maturities | As of September 30, 2020, maturities of operating lease liabilities are as follows: Nine months ending June 30, 2021 $ 77.8 Twelve months ending June 30, 2022 93.7 Twelve months ending June 30, 2023 79.6 Twelve months ending June 30, 2024 59.2 Twelve months ending June 30, 2025 43.5 Thereafter 101.2 Total undiscounted lease obligations 455.0 Less: Imputed interest (29.9) Net lease obligations $ 425.1 |
Goodwill and Intangibles Assets
Goodwill and Intangibles Assets, net (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes In Goodwill | Changes in goodwill for the three months ended September 30, 2020 are as follows: Employer PEO Total Balance at June 30, 2020 $ 2,304.6 $ 4.8 $ 2,309.4 Additions and other adjustments — — — Currency translation adjustments 16.9 — 16.9 Balance at September 30, 2020 $ 2,321.5 $ 4.8 $ 2,326.3 |
Components Of Finite-Lived Intangible Assets | Components of intangible assets, net, are as follows: September 30, June 30, 2020 2020 Intangible assets: Software and software licenses $ 2,776.2 $ 2,719.1 Customer contracts and lists 1,029.4 1,021.2 Other intangibles 239.3 239.2 4,044.9 3,979.5 Less accumulated amortization: Software and software licenses (1,950.4) (1,912.0) Customer contracts and lists (654.1) (628.3) Other intangibles (224.5) (223.4) (2,829.0) (2,763.7) Intangible assets, net $ 1,215.9 $ 1,215.8 |
Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expenses of the Company's existing intangible assets are as follows: Amount Nine months ending June 30, 2021 $ 232.1 Twelve months ending June 30, 2022 $ 256.6 Twelve months ending June 30, 2023 $ 212.8 Twelve months ending June 30, 2024 $ 166.8 Twelve months ending June 30, 2025 $ 115.2 Twelve months ending June 30, 2026 $ 65.9 |
Short-term Financing (Tables)
Short-term Financing (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Short-Term Financing [Abstract] | |
Commercial Paper Program | Details of the borrowings under the commercial paper program are as follows: Three Months Ended September 30, 2020 2019 Average daily borrowings (in billions) $ 2.4 $ 4.0 Weighted average interest rates 0.1 % 2.3 % Weighted average maturity (approximately in days) 1 day 2 days |
Reverse Repurchase Agreement | Details of the reverse repurchase agreements are as follows: Three Months Ended September 30, 2020 2019 Average outstanding balances $ 152.4 $ 426.6 Weighted average interest rates 0.3 % 2.0 % |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The principal amounts and associated effective interest rates of the Notes and other debt as of September 30, 2020 and June 30, 2020, are as follows: Debt instrument Effective Interest Rate September 30, 2020 June 30, 2020 Fixed-rate 2.250% notes due September 15, 2020 2.37% $ — $ 1,000.0 Fixed-rate 3.375% notes due September 15, 2025 3.47% 1,000.0 1,000.0 Fixed-rate 1.250% notes due September 1, 2030 1.83% 1,000.0 — Other 8.2 8.4 2,008.2 2,008.4 Less: current portion (a) (1.8) (1,001.8) Less: unamortized discount and debt issuance costs (12.5) (3.8) Total long-term debt $ 1,993.9 $ 1,002.8 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Components Of Stock-Based Compensation Expense | The following table represents pre-tax stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively: Three Months Ended September 30, 2020 2019 Operating expenses $ 3.6 $ 4.0 Selling, general and administrative expenses 25.3 28.3 System development and programming costs 4.9 4.8 Total stock-based compensation expense $ 33.8 $ 37.1 |
Share-based Payment Arrangement, Option, Activity | Stock Options: Number Weighted Options outstanding at July 1, 2020 3,510 $ 126 Options granted 1,153 $ 139 Options exercised (156) $ 95 Options forfeited/cancelled (8) $ 144 Options outstanding at September 30, 2020 4,499 $ 130 |
Time Based Restricted Shares and Units | Time-Based Restricted Stock and Time-Based Restricted Stock Units: Number of Shares Number of Units Restricted shares/units outstanding at July 1, 2020 905 180 Restricted shares/units granted 636 103 Restricted shares/units vested (340) (73) Restricted shares/units forfeited (9) (1) Restricted shares/units outstanding at September 30, 2020 1,192 209 |
Performance Based Restricted shares and units | Performance-Based Restricted Stock and Performance-Based Restricted Stock Units: Number of Shares Number of Units Restricted shares/units outstanding at July 1, 2020 179 851 Restricted shares/units granted 156 167 Restricted shares/units vested (70) (279) Restricted shares/units forfeited (2) (5) Restricted shares/units outstanding at September 30, 2020 263 734 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value for stock options granted was estimated at the date of grant using the following assumptions: Three Months Ended September 30, 2020 2019 Risk-free interest rate 0.1 % 1.4 % Dividend yield 2.6 % 1.9 % Weighted average volatility factor 25.8 % 19.3 % Weighted average expected life (in years) 5.4 5.4 Weighted average fair value (in dollars) $ 21.66 $ 24.40 |
Schedule of Net Benefit Costs | The components of net pension income were as follows: Three Months Ended September 30, 2020 2019 Service cost – benefits earned during the period $ 1.2 $ 14.9 Interest cost on projected benefits 12.7 15.4 Expected return on plan assets (30.4) (29.5) Net amortization and deferral 2.5 1.6 Settlement charges and special termination benefits 2.9 (5.1) Net pension income $ (11.1) $ (2.7) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Schedule of Components of Stockholders' Equity | Changes in stockholders' equity by component are as follows: Three Months Ended September 30, 2020 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total Balance at June 30, 2020 $ 63.9 $ 1,333.8 $ 18,436.3 $ (14,067.0) $ (14.8) $ 5,752.2 Net earnings — — 602.1 — — 602.1 Other comprehensive income — — — — 30.7 30.7 Stock-based compensation expense — 35.1 — — — 35.1 Issuances relating to stock compensation plans — (20.5) — 65.3 — 44.8 Treasury stock acquired (1.7 million shares repurchased) — — — (262.3) — (262.3) Dividends declared ($0.91 per share) — — (393.7) — — (393.7) Balance at September 30, 2020 $ 63.9 $ 1,348.4 $ 18,644.7 $ (14,264.0) $ 15.9 $ 5,808.9 Three Months Ended September 30, 2019 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total Balance at June 30, 2019 $ 63.9 $ 1,183.2 $ 17,500.6 $ (13,090.5) $ (257.3) $ 5,399.9 Net earnings — — 582.4 — — 582.4 Other comprehensive income — — — — 23.4 23.4 Stock-based compensation expense — 36.0 — — — 36.0 Issuances relating to stock compensation plans — (5.5) — 70.5 — 65.0 Treasury stock acquired (1.9 million shares repurchased) — — — (392.6) — (392.6) Dividends declared ($0.79 per share) — — (346.6) — — (346.6) Other — — (6.8) — — (6.8) Balance at September 30, 2019 $ 63.9 $ 1,213.7 $ 17,729.6 $ (13,412.6) $ (233.9) $ 5,360.7 |
Reclassifications out of Accu_2
Reclassifications out of Accumulated Other Comprehensive Income (AOCI) (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Reclassification out of Accumulated Other Comprehensive Income [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Income | Changes in AOCI by component are as follows: Three Months Ended September 30, 2020 Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive (Loss) /Income Balance at June 30, 2020 $ (322.2) $ 680.4 $ (30.3) $ (342.7) $ (14.8) Other comprehensive (loss)/income before reclassification adjustments 50.4 (24.6) (3.3) — 22.5 Tax effect — 5.5 0.8 — 6.3 Reclassification adjustments to net earnings — (0.3) (A) 0.6 (C) 2.5 (B) 2.8 Tax effect — 0.1 — (1.0) (0.9) Balance at September 30, 2020 $ (271.8) $ 661.1 $ (32.2) $ (341.2) $ 15.9 Three Months Ended September 30, 2019 Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Pension Liability Accumulated Other Comprehensive (Loss) /Income Balance at June 30, 2019 $ (269.2) $ 224.6 $ (212.7) $ (257.3) Other comprehensive (loss)/income before reclassification adjustments (48.9) 96.1 — 47.2 Tax effect — (20.8) — (20.8) Reclassification adjustments to net earnings — (2.3) (A) (1.7) (B) (4.0) Tax effect — 0.5 0.5 1.0 Balance at September 30, 2019 $ (318.1) $ 298.1 $ (213.9) $ (233.9) (A) Reclassification adjustments out of AOCI are included within Other (income)/expense, net, on the Statements of Consolidated Earnings. (B) Reclassification adjustments out of AOCI are included in net pension income (see Note 11). (C) Reclassification adjustments out of AOCI are included in Interest expense on the Statements of Consolidated Earnings. |
Interim Financial Data by Seg_2
Interim Financial Data by Segment (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment Results: Revenues Three Months Ended September 30, 2020 2019 Employer Services $ 2,376.8 $ 2,441.4 PEO Services 1,095.9 1,056.9 Other (2.0) (2.6) $ 3,470.7 $ 3,495.7 Earnings before Income Taxes Three Months Ended September 30, 2020 2019 Employer Services $ 689.3 $ 679.4 PEO Services 159.4 149.3 Other (83.5) (89.6) $ 765.2 $ 739.1 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 3,470.7 | $ 3,495.7 |
Employer Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,376.8 | 2,441.4 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (2) | (2.6) |
PEO Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,095.9 | 1,056.9 |
HCM | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,530.6 | 1,568.5 |
HCM | Employer Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,532.3 | 1,570 |
HCM | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (1.7) | (1.5) |
HCM | PEO Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
HRO, excluding PEO zero-margin benefits pass-throughs | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 582.4 | 591.1 |
HRO, excluding PEO zero-margin benefits pass-throughs | Employer Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 229.1 | 235.7 |
HRO, excluding PEO zero-margin benefits pass-throughs | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (0.3) | (1.1) |
HRO, excluding PEO zero-margin benefits pass-throughs | PEO Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 353.6 | 356.5 |
PEO zero-margin benefits pass-throughs | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 741 | 699.1 |
PEO zero-margin benefits pass-throughs | Employer Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
PEO zero-margin benefits pass-throughs | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
PEO zero-margin benefits pass-throughs | PEO Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 741 | 699.1 |
Global | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 510.2 | 503.1 |
Global | Employer Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 510.2 | 503.1 |
Global | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Global | PEO Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Interest on funds held for clients | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 106.5 | 133.9 |
Interest on funds held for clients | Employer Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 105.2 | 132.6 |
Interest on funds held for clients | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Interest on funds held for clients | PEO Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1.3 | $ 1.3 |
Revenue - Contract Liability (D
Revenue - Contract Liability (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Change In Contract With Customer, Liability [Roll Forward] | |
Contract liability, July 1, 2020 | $ 522.7 |
Recognition of revenue included in beginning of year contract liability | (43.8) |
Contract liability, net of revenue recognized on contracts during the period | 30.7 |
Currency translation adjustments | 16.2 |
Contract liability, September 30, 2020 | $ 525.8 |
Earnings per Share (EPS) (Detai
Earnings per Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Net earnings | $ 602.1 | $ 582.4 |
Basic weighted average shares outstanding (shares) | 428.6 | 432.7 |
Effect of employee stock option shares (shares) | 0.6 | 1.3 |
Effect of employee restricted stock shares (shares) | 0.8 | 1.4 |
Diluted weighted average shares outstanding (shares) | 430 | 435.4 |
Basic EPS from continuing operations (in US$ per share) | $ 1.40 | $ 1.35 |
Diluted EPS from continuing operations (in US$ per share) | $ 1.40 | $ 1.34 |
Options excluded from the calculation of diluted earnings per share (shares) | 2.1 | 0.7 |
Other (Income)_Expense, Net (De
Other (Income)/Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | ||
Interest income on corporate funds | $ (13.8) | $ (32.3) |
Realized (gains) / losses on available-for-sale securities, net | (0.3) | (2.3) |
Impairment of assets | 2.8 | 0 |
Gain on sale of assets | (0.2) | (1.9) |
Non-service components of pension expense, net | (13.4) | (18.1) |
Other (income)/expense, net | $ (24.9) | $ (54.6) |
Other Income, Net - Narrative (
Other Income, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | ||
Impairment of assets | $ 2.8 | $ 0 |
Corporate Investments and Fun_3
Corporate Investments and Funds Held For Clients (Corporate Investments And Funds Held For Clients) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | ||
Debt Securities, Available-for-sale [Line Items] | ||||
Money market securities and other cash equivalents - amortized cost | $ 10,361.7 | $ 7,053.6 | ||
Money market securities and other cash equivalents - gross unrealized gains | 0 | 0 | ||
Money market securities and other cash equivalents - gross unrealized losses | 0 | 0 | ||
Money market securities and other cash equivalents - fair market value | 10,361.7 | 7,053.6 | ||
Amortized Cost | 20,353.2 | 20,699.8 | ||
Gross Unrealized Gains | 853.3 | 877.5 | ||
Gross Unrealized Losses | (1.4) | (0.7) | ||
Fair market value | 21,205.1 | [1] | 21,576.6 | [2] |
Total corporate investments and funds held for clients - amortized cost | 30,714.9 | 27,753.4 | ||
Total corporate investments and funds held for clients - gross unrealized gains | 853.3 | 877.5 | ||
Total corporate investments and funds held for clients - gross unrealized losses | (1.4) | (0.7) | ||
Total corporate investments and funds held for clients - fair market value | 31,566.8 | 28,630.2 | ||
Corporate Investments | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 3.4 | 13.6 | ||
Funds Held For Clients | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 21,201.7 | 21,563 | ||
Corporate bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 9,013.1 | 9,188.7 | ||
Gross Unrealized Gains | 458 | 473.4 | ||
Gross Unrealized Losses | (0.4) | 0 | ||
Fair market value | 9,470.7 | 9,662.1 | ||
Asset-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 2,942.7 | 3,274.6 | ||
Gross Unrealized Gains | 98.4 | 96 | ||
Gross Unrealized Losses | (0.2) | (0.5) | ||
Fair market value | 3,040.9 | 3,370.1 | ||
U.S. government agency securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 3,581.3 | 3,580.6 | ||
Gross Unrealized Gains | 108.8 | 120.8 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair market value | 3,690.1 | 3,701.4 | ||
U.S. Treasury securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 1,341.8 | 1,128.2 | ||
Gross Unrealized Gains | 34.5 | 35.6 | ||
Gross Unrealized Losses | (0.8) | 0 | ||
Fair market value | 1,375.5 | 1,163.8 | ||
Canadian government obligations and Canadian government agency obligations | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 1,037 | 1,018.7 | ||
Gross Unrealized Gains | 22.6 | 23.1 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair market value | 1,059.6 | 1,041.8 | ||
Commercial mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 810.1 | 814.3 | ||
Gross Unrealized Gains | 54.5 | 53.9 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair market value | 864.6 | 868.2 | ||
Canadian provincial bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 652.7 | 676.6 | ||
Gross Unrealized Gains | 34.8 | 33.6 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair market value | 687.5 | 710.2 | ||
Other securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Amortized Cost | 974.5 | 1,018.1 | ||
Gross Unrealized Gains | 41.7 | 41.1 | ||
Gross Unrealized Losses | 0 | (0.2) | ||
Fair market value | $ 1,016.2 | $ 1,059 | ||
[1] | Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy. | |||
[2] | Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy. |
Corporate Investments and Fun_4
Corporate Investments and Funds Held For Clients (Available-For-Sale Securities That Have Been In An Unrealized Loss Position) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | $ (1.4) | $ (0.7) |
Fair market value of securities in unrealized loss position less than 12 months | 561.9 | 63 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 1.5 | 1.5 |
Total gross unrealized losses | (1.4) | (0.7) |
Total fair market value | 563.4 | 64.5 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | (0.4) | 0 |
Fair market value of securities in unrealized loss position less than 12 months | 151.5 | 0 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 0 | 0 |
Total gross unrealized losses | (0.4) | 0 |
Total fair market value | 151.5 | 0 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | (0.2) | (0.5) |
Fair market value of securities in unrealized loss position less than 12 months | 77.5 | 43.9 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 0 | 0 |
Total gross unrealized losses | (0.2) | (0.5) |
Total fair market value | 77.5 | 43.9 |
U.S. government agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss position less than 12 months | 0 | 2 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 0 | 0 |
Total gross unrealized losses | 0 | 0 |
Total fair market value | 0 | 2 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | (0.8) | 0 |
Fair market value of securities in unrealized loss position less than 12 months | 320 | 0 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 0 | 0 |
Total gross unrealized losses | (0.8) | 0 |
Total fair market value | 320 | 0 |
Canadian government obligations and Canadian government agency obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss position less than 12 months | 0 | 0 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 0 | 0 |
Total gross unrealized losses | 0 | 0 |
Total fair market value | 0 | 0 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss position less than 12 months | 0 | 0 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 1.5 | 1.5 |
Total gross unrealized losses | 0 | 0 |
Total fair market value | 1.5 | 1.5 |
Canadian provincial bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss position less than 12 months | 0 | 0 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 0 | 0 |
Total gross unrealized losses | 0 | 0 |
Total fair market value | 0 | 0 |
Other securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized losses less than 12 months | 0 | (0.2) |
Fair market value of securities in unrealized loss position less than 12 months | 12.9 | 17.1 |
Unrealized losses greater than 12 months | 0 | 0 |
Fair market value of securities in unrealized loss positions greater than 12 months | 0 | 0 |
Total gross unrealized losses | 0 | (0.2) |
Total fair market value | $ 12.9 | $ 17.1 |
Corporate Investments and Fun_5
Corporate Investments and Funds Held For Clients (Narrative) (Details) - USD ($) | 3 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | |||
Debt Securities, Available-for-sale [Line Items] | ||||
Earliest Corporate bond debt maturity date | October 2020 | |||
Latest corporate debt maturity date | September 2030 | |||
Fair market value | $ 21,205,100,000 | [1] | $ 21,576,600,000 | [2] |
Earliest U.S. treasury maturity date | October 2020 | |||
Latest U.S treasury maturity date | December 2029 | |||
Client fund obligation repayment period | 1 year | |||
Client funds obligations | $ 29,098,400,000 | 25,831,600,000 | ||
Client funds held in grantor trust | $ 26,805,600,000 | $ 23,740,000,000 | ||
Client funds investments with original maturities | ninety days or less | |||
Percentage of the available-for-sale securities were rated AAA Or AA | 79.00% | |||
Fair Value, Inputs, Level 1 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | $ 0 | |||
Fair Value, Inputs, Level 3 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 0 | |||
Asset-Backed Auto Loan Receivables | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 1,520,800,000 | |||
Fixed Rate Credit Card | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 1,100,400,000 | |||
Asset-Backed Equipment Lease Receivable | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 321,900,000 | |||
Rate Reduction | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 97,100,000 | |||
Federal Farm Credit Banks | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 614,700,000 | |||
Federal Home Loan Banks | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 590,800,000 | |||
Commercial mortgage-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 576,700,000 | |||
Debt Security, Corporate, Non-US | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | 197,300,000 | |||
Sovereign bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Fair market value | $ 77,200,000 | |||
[1] | Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy. | |||
[2] | Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy. |
Corporate Investments and Fun_6
Corporate Investments and Funds Held For Clients (Classification Of Corporate Investments On The Consolidated Balance Sheets) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | |
Corporate Investments And Funds Held For Clients [Abstract] | ||||
Cash and cash equivalents | $ 1,613.1 | $ 1,908.5 | $ 1,403.9 | |
Short-term marketable securities | [1] | 3.4 | 0 | |
Long-term marketable securities | [2] | 0 | 13.6 | |
Total corporate investments | $ 1,616.5 | $ 1,922.1 | ||
[1] | (a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets. | |||
[2] | (b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets. |
Corporate Investments and Fun_7
Corporate Investments and Funds Held For Clients (Schedule Of Investment Of Funds Held For Clients) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | [1] | |
Debt Securities, Available-for-sale [Line Items] | |||||
Restricted cash and cash equivalents held to satisfy client funds obligations | $ 8,748.6 | [1] | $ 5,145.1 | $ 868.3 | |
Total funds held for clients | 29,950.3 | 26,708.1 | |||
Current | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Available-for-sale securities, restricted | 5,614.4 | 5,541.2 | |||
Non-current | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Available-for-sale securities, restricted | $ 15,587.3 | $ 16,021.8 | |||
[1] | See Note 6 for a reconciliation of restricted cash and restricted cash equivalents in funds held for clients on the Consolidated Balance Sheets. |
Corporate Investments and Fun_8
Corporate Investments and Funds Held For Clients (Expected Maturities Of Available-For-Sale Securities) (Details) $ in Millions | Sep. 30, 2020USD ($) |
Corporate Investments And Funds Held For Clients [Abstract] | |
One year or less | $ 5,617.8 |
One year to two years | 4,283 |
Two years to three years | 3,817.6 |
Three years to four years | 2,932.7 |
After four years | 4,554 |
Total available-for-sale securities | $ 21,205.1 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Leases [Abstract] | ||
Operating lease, contract term | 11 years | |
Operating lease liability, current | $ 94.7 | $ 95.5 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 39.1 | $ 44.2 |
Short-term lease cost | 0.4 | 2.7 |
Variable lease cost | 2.1 | 1.3 |
Operating lease cost | $ 41.6 | $ 48.2 |
Leases - Right of Use Assets an
Leases - Right of Use Assets and Operating Lease Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Leases [Abstract] | |||
Cash paid for operating lease liabilities | $ 45.3 | $ 40.2 | |
Operating lease ROU assets obtained in exchange for new operating lease liabilities | $ 23.2 | $ 6.7 | |
Weighted-average remaining lease term (in years) | 6 years | 6 years | |
Weighted-average discount rate | 2.30% | 2.30% |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturities (Details) $ in Millions | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Nine months ending June 30, 2021 | $ 77.8 |
Twelve months ending June 30, 2022 | 93.7 |
Twelve months ending June 30, 2022 | 79.6 |
Twelve months ending June 30, 2023 | 59.2 |
Twelve months ending June 30, 2024 | 43.5 |
Twelve months ending June 30, 2025 | 101.2 |
Total undiscounted lease obligations | 455 |
Less: Imputed interest | (29.9) |
Net lease obligations | $ 425.1 |
Goodwill and Intangibles Asse_2
Goodwill and Intangibles Assets, net - Changes In Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 2,326.3 | $ 2,309.4 |
Additions and other adjustments | 0 | |
Currency translation adjustments | 16.9 | |
Balance at September 30, 2020 | 2,326.3 | |
Employer Services | ||
Goodwill [Roll Forward] | ||
Goodwill | 2,321.5 | 2,304.6 |
Additions and other adjustments | 0 | |
Currency translation adjustments | 16.9 | |
Balance at September 30, 2020 | 2,321.5 | |
PEO Services | ||
Goodwill [Roll Forward] | ||
Goodwill | 4.8 | $ 4.8 |
Additions and other adjustments | 0 | |
Currency translation adjustments | 0 | |
Balance at September 30, 2020 | $ 4.8 |
Goodwill and Intangibles Asse_3
Goodwill and Intangibles Assets, net - Components Of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Total - gross | $ 4,044.9 | $ 3,979.5 |
Total - accumulated amortization | (2,829) | (2,763.7) |
Intangible assets, net | 1,215.9 | 1,215.8 |
Software and software licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total - gross | 2,776.2 | 2,719.1 |
Total - accumulated amortization | (1,950.4) | (1,912) |
Customer contracts and lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total - gross | 1,029.4 | 1,021.2 |
Total - accumulated amortization | (654.1) | (628.3) |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total - gross | 239.3 | 239.2 |
Total - accumulated amortization | $ (224.5) | $ (223.4) |
Goodwill and Intangibles Asse_4
Goodwill and Intangibles Assets, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 6 years | |
Amortization of intangible assets | $ 84.2 | $ 69.4 |
Software and software licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 6 years | |
Customer contracts and lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years |
Goodwill and Intangibles Asse_5
Goodwill and Intangibles Assets, net - Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Millions | Sep. 30, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Nine months ending June 30, 2021 | $ 232.1 |
Twelve months ending June 30, 2022 | 256.6 |
Twelve months ending June 30, 2022 | 212.8 |
Twelve months ending June 30, 2023 | 166.8 |
Twelve months ending June 30, 2024 | 115.2 |
Twelve months ending June 30, 2025 | $ 65.9 |
Short-term Financing (Details)
Short-term Financing (Details) - USD ($) | 3 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | ||
Short-term Debt [Line Items] | ||||
Line of credit facility, fair value of amount outstanding | $ 0 | |||
Commercial paper | $ 0 | |||
Maturities of short-term funding agreements | overnight to up to five business days | |||
Obligations under reverse repurchase agreements | [1] | $ 0 | $ 13,600,000 | |
364-day credit agreement | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity under credit facilities | $ 3,200,000,000 | |||
Term of credit agreement | 364 days | |||
Extension option term | 1 year | |||
Credit Facility Expiring In June 2024 | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity under credit facilities | $ 2,750,000,000 | |||
Term of credit agreement | 5 years | |||
Line of credit facility potentially available increase in maximum borrowing capacity | $ 500,000,000 | |||
Credit Facility Expiring In June 2023 | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity under credit facilities | $ 3,750,000,000 | |||
Term of credit agreement | 5 years | |||
Line of credit facility potentially available increase in maximum borrowing capacity | $ 500,000,000 | |||
Commercial paper program | ||||
Short-term Debt [Line Items] | ||||
Maximum borrowing capacity under credit facilities | $ 9,700,000,000 | |||
Maturities of commercial paper range | overnight to up to 364 days | |||
Short-term debt, average outstanding amount | $ 2,400,000,000 | $ 4,000,000,000 | ||
Debt instrument, interest rate during period | 0.10% | 2.30% | ||
Short Term Commercial Paper Program | ||||
Short-term Debt [Line Items] | ||||
Commercial paper weighted average maturity | 1 day | 2 days | ||
Reverse repurchase agreements | ||||
Short-term Debt [Line Items] | ||||
Short-term debt, average outstanding amount | $ 152,400,000 | $ 426,600,000 | ||
Debt instrument, interest rate during period | 0.30% | 2.00% | ||
[1] | (A ) As of June 30, 2020, $13.6 million of long-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements (see Note 9). |
Debt (Details)
Debt (Details) - USD ($) | 3 Months Ended | |||
Sep. 30, 2020 | Aug. 13, 2020 | Jun. 30, 2020 | ||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 10 years | |||
Aggregate principal amount | $ 2,000,000,000 | |||
Notes payable | 2,008,200,000 | $ 2,008,400,000 | ||
Derivative, notional amount | 1,000,000,000 | $ 600,000,000 | 400,000,000 | |
Unrealized loss on cash flow hedging instruments | 43,600,000 | |||
Less: current portion | (1,800,000) | [1] | (1,001,800,000) | |
Less: unamortized discount and debt issuance costs | (12,500,000) | (3,800,000) | ||
Total long-term debt | 1,993,900,000 | 1,002,800,000 | ||
Fair value of notes issued | 2,115,000,000 | |||
Fixed-rate 2.250% notes due September 15, 2020 | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 0 | $ 1,000,000,000 | ||
Debt instrument effective rate (percent) | 2.37% | |||
Stated interest rate | 2.25% | |||
Fixed-rate 3.375% notes due September 15, 2025 | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 1,000,000,000 | $ 1,000,000,000 | ||
Debt instrument effective rate (percent) | 3.47% | |||
Stated interest rate | 3.375% | |||
Fixed-rate 1.250% notes due September 1, 2030 | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 1,000,000,000 | 0 | ||
Debt instrument effective rate (percent) | 1.83% | |||
Stated interest rate | 1.25% | |||
Other | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 8,200,000 | $ 8,400,000 | ||
[1] | (a) - Current portion of long-term debt as of September 30, 2020 is included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets. |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) shares in Thousands | 3 Months Ended |
Sep. 30, 2020shares | |
Defined Benefit Plan Disclosure [Line Items] | |
Award vesting period | 4 years |
Options granted, contractual term | 10 years |
Options granted (shares) | 1,153 |
Time Based Restricted Stock Granted Fiscal 2013 | |
Defined Benefit Plan Disclosure [Line Items] | |
Award vesting period | 2 years |
Time Based Restricted Stock Granted Fiscal 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |
Award vesting period | 3 years |
Performance Based Restricted Stock and Units | |
Defined Benefit Plan Disclosure [Line Items] | |
Minimum percentage that will ultimately vest under performance-based restricted stock awards based on performance target | 0.00% |
Maximum percentage that will ultimately vest under performance-based restricted stock awards based on performance target | 150.00% |
Employee Stock | |
Defined Benefit Plan Disclosure [Line Items] | |
Percentage of Market Value paid for Company Stock | 95.00% |
Minimum | |
Defined Benefit Plan Disclosure [Line Items] | |
Performance period | 1 year |
Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Performance period | 3 years |
Maximum | Performance Based Restricted Stock and Units | |
Defined Benefit Plan Disclosure [Line Items] | |
Award vesting period | 38 months |
Employee Benefit Plans (Compone
Employee Benefit Plans (Components Of Stock-Based Compensation Expense) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Total pre-tax stock-based compensation expense | $ 33.8 | $ 37.1 |
Number of Options (in thousands) | ||
Options outstanding at July 1, 2020 (shares) | 3,510 | |
Options granted (shares) | 1,153 | |
Options exercised (shares) | (156) | |
Options forfeited/cancelled (shares) | (8) | |
Options outstanding at September 30, 2020 (shares) | 4,499 | |
Weighted Average Price (in dollars) | ||
Options outstanding at July 1, 2020 (in dollars per share) | $ 126 | |
Options granted, weighted average price (in dollar per share) | 139 | |
Options exercised, weighted average price (in dollar per share) | 95 | |
Options forfeited/cancelled, weighted average price (in dollar per share) | 144 | |
Options outstanding at September 30, 2020 (in dollars per share) | $ 130 | |
Number of shares/units | ||
Risk-free interest rate | 0.10% | 1.40% |
Dividend yield | 2.60% | 1.90% |
Weighted average volatility factor | 25.80% | 19.30% |
Weighted average expected life (in years) | 5 years 4 months 24 days | 5 years 4 months 24 days |
Weighted average fair value (in dollars) | $ 21.66 | $ 24.40 |
Time Based Restricted Stock | ||
Number of shares/units | ||
Restricted shares/units outstanding at July 1, 2020 (in shares/units) | 905 | |
Restricted shares/units granted (in shares/units) | 636 | |
Restricted shares/units vested (in shares/units) | (340) | |
Restricted shares/units forfeited (in shares/units) | (9) | |
Restricted shares/units outstanding at September 30, 2020 (in shares/units) | 1,192 | |
Performance Based Restricted Stock | ||
Number of shares/units | ||
Restricted shares/units outstanding at July 1, 2020 (in shares/units) | 179 | |
Restricted shares/units granted (in shares/units) | 156 | |
Restricted shares/units vested (in shares/units) | (70) | |
Restricted shares/units forfeited (in shares/units) | (2) | |
Restricted shares/units outstanding at September 30, 2020 (in shares/units) | 263 | |
Time Based restricted Stock Units | ||
Number of shares/units | ||
Restricted shares/units outstanding at July 1, 2020 (in shares/units) | 180 | |
Restricted shares/units granted (in shares/units) | 103 | |
Restricted shares/units vested (in shares/units) | (73) | |
Restricted shares/units forfeited (in shares/units) | (1) | |
Restricted shares/units outstanding at September 30, 2020 (in shares/units) | 209 | |
Performance Based Restricted Stock Units | ||
Number of shares/units | ||
Restricted shares/units outstanding at July 1, 2020 (in shares/units) | 851 | |
Restricted shares/units granted (in shares/units) | 167 | |
Restricted shares/units vested (in shares/units) | (279) | |
Restricted shares/units forfeited (in shares/units) | (5) | |
Restricted shares/units outstanding at September 30, 2020 (in shares/units) | 734 | |
Operating expenses | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pre-tax stock-based compensation expense | $ 3.6 | $ 4 |
Selling, general and administrative expenses | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pre-tax stock-based compensation expense | 25.3 | 28.3 |
System development and programming costs | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total pre-tax stock-based compensation expense | $ 4.9 | $ 4.8 |
Employee Benefit Plans (Compo_2
Employee Benefit Plans (Components Of Net Pension Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Retirement Benefits [Abstract] | ||
Service cost – benefits earned during the period | $ 1.2 | $ 14.9 |
Interest cost on projected benefits | 12.7 | 15.4 |
Expected return on plan assets | (30.4) | (29.5) |
Net amortization and deferral | 2.5 | 1.6 |
Settlement charges and special termination benefits | (2.9) | 5.1 |
Net pension expense | $ (11.1) | $ (2.7) |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.30% | 21.20% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation settlement, amount awarded to other party | $ 25 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 5,752.2 | $ 5,399.9 |
Net earnings | 602.1 | 582.4 |
Other comprehensive income | 30.7 | 23.4 |
Stock-based compensation expense | 35.1 | 36 |
Issuances relating to stock compensation plans | 44.8 | 65 |
Treasury stock acquired | $ (262.3) | $ (392.6) |
Treasury stock acquired (shares) | 1.7 | 1.9 |
Dividends declared (in US$ per share) | $ 0.91 | $ 0.79 |
Dividends declared | $ (393.7) | $ (346.6) |
Other | 6.8 | |
Ending balance | 5,808.9 | 5,360.7 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 63.9 | 63.9 |
Net earnings | 0 | 0 |
Other comprehensive income | 0 | 0 |
Stock-based compensation expense | 0 | 0 |
Issuances relating to stock compensation plans | 0 | 0 |
Treasury stock acquired | 0 | 0 |
Dividends declared | 0 | 0 |
Other | 0 | |
Ending balance | 63.9 | 63.9 |
Capital in Excess of Par Value | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 1,333.8 | 1,183.2 |
Net earnings | 0 | 0 |
Other comprehensive income | 0 | 0 |
Stock-based compensation expense | 35.1 | 36 |
Issuances relating to stock compensation plans | (20.5) | (5.5) |
Treasury stock acquired | 0 | 0 |
Dividends declared | 0 | 0 |
Other | 0 | |
Ending balance | 1,348.4 | 1,213.7 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 18,436.3 | 17,500.6 |
Net earnings | 602.1 | 582.4 |
Other comprehensive income | 0 | 0 |
Stock-based compensation expense | 0 | 0 |
Issuances relating to stock compensation plans | 0 | 0 |
Treasury stock acquired | 0 | 0 |
Dividends declared | (393.7) | (346.6) |
Other | 6.8 | |
Ending balance | 18,644.7 | 17,729.6 |
Treasury Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (14,067) | (13,090.5) |
Net earnings | 0 | 0 |
Other comprehensive income | 0 | 0 |
Stock-based compensation expense | 0 | 0 |
Issuances relating to stock compensation plans | 65.3 | 70.5 |
Treasury stock acquired | (262.3) | (392.6) |
Dividends declared | 0 | 0 |
Other | 0 | |
Ending balance | (14,264) | (13,412.6) |
AOCI | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (14.8) | (257.3) |
Net earnings | 0 | 0 |
Other comprehensive income | 30.7 | 23.4 |
Stock-based compensation expense | 0 | 0 |
Issuances relating to stock compensation plans | 0 | 0 |
Treasury stock acquired | 0 | 0 |
Dividends declared | 0 | 0 |
Other | 0 | |
Ending balance | $ 15.9 | $ (233.9) |
Reclassifications out of Accu_3
Reclassifications out of Accumulated Other Comprehensive Income (AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
AOCI Net of Tax [Roll Forward] | |||
Accumulated other comprehensive income, beginning balance | $ (14.8) | $ (257.3) | |
Other comprehensive (loss)/income before reclassification adjustments | 22.5 | 47.2 | |
Tax effect | 6.3 | (20.8) | |
Reclassification adjustments to net earnings | 2.8 | (4) | |
Tax effect | (0.9) | 1 | |
Accumulated other comprehensive income, ending balance | 15.9 | (233.9) | |
Currency Translation Adjustment | |||
AOCI Net of Tax [Roll Forward] | |||
Accumulated other comprehensive income, beginning balance | (322.2) | (269.2) | |
Other comprehensive (loss)/income before reclassification adjustments | 50.4 | (48.9) | |
Tax effect | 0 | 0 | |
Reclassification adjustments to net earnings | 0 | 0 | |
Tax effect | 0 | 0 | |
Accumulated other comprehensive income, ending balance | (271.8) | (318.1) | |
Net Gains/Losses on Available-for-sale Securities | |||
AOCI Net of Tax [Roll Forward] | |||
Accumulated other comprehensive income, beginning balance | 680.4 | 224.6 | |
Other comprehensive (loss)/income before reclassification adjustments | (24.6) | 96.1 | |
Tax effect | 5.5 | (20.8) | |
Reclassification adjustments to net earnings | [1] | (0.3) | (2.3) |
Tax effect | 0.1 | 0.5 | |
Accumulated other comprehensive income, ending balance | 661.1 | 298.1 | |
Cash Flow Hedging Activities | |||
AOCI Net of Tax [Roll Forward] | |||
Accumulated other comprehensive income, beginning balance | (30.3) | ||
Other comprehensive (loss)/income before reclassification adjustments | (3.3) | ||
Tax effect | 0.8 | ||
Reclassification adjustments to net earnings | [2] | 0.6 | |
Tax effect | 0 | ||
Accumulated other comprehensive income, ending balance | (32.2) | ||
Pension Liability | |||
AOCI Net of Tax [Roll Forward] | |||
Accumulated other comprehensive income, beginning balance | (342.7) | (212.7) | |
Other comprehensive (loss)/income before reclassification adjustments | 0 | 0 | |
Tax effect | 0 | 0 | |
Reclassification adjustments to net earnings | [3] | 2.5 | (1.7) |
Tax effect | (1) | 0.5 | |
Accumulated other comprehensive income, ending balance | $ (341.2) | $ (213.9) | |
[1] | (A) Reclassification adjustments out of AOCI are included within Other (income)/expense, net, on the Statements of Consolidated Earnings. | ||
[2] | (C) Reclassification adjustments out of AOCI are included in Interest expense on the Statements of Consolidated Earnings. | ||
[3] | (B) Reclassification adjustments out of AOCI are included in net pension income (see Note 11). |
Interim Financial Data by Seg_3
Interim Financial Data by Segment (Narrative) (Details) | 3 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Interim Financial Data by Seg_4
Interim Financial Data by Segment (Financial Data By Strategic Business Unit Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 3,470.7 | $ 3,495.7 |
Earnings before Income Taxes | 765.2 | 739.1 |
Employer Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,376.8 | 2,441.4 |
Earnings before Income Taxes | 689.3 | 679.4 |
PEO Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,095.9 | 1,056.9 |
Earnings before Income Taxes | 159.4 | 149.3 |
Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | (2) | (2.6) |
Earnings before Income Taxes | $ (83.5) | $ (89.6) |