What changed in this filing

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Item 1. Financial Statements

2021-04-30 compared with 2021-02-01 · 126 added, 119 removed, 577 unchanged (30% of the section changed)

4 unchanged sentences

(In millions, except per share amounts)

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

20 unchanged sentences

Diluted weighted average shares outstanding 427.7 431.8 428.9 433.5

(A) Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $ 13,349.1 million and $ 12,371.6 million for the three months ended December 31, 2020 and 2019, respectively, and $ 24,364.9 million and $ 22,882.2 million for the six months ended December 31, 2020 and 2019, respectively.

(A) Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $ 13,894.6 million and $ 12,643.6 million for the three months ended March 31, 2021 and 2020, respectively, and $ 38,259.5 million and $ 35,525.8 million for the nine months ended March 31, 2021 and 2020, respectively.

See notes to the Consolidated Financial Statements.

3 unchanged sentences

(In millions)

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

12 unchanged sentences

Tax effect ( 1.1 ) 3.7 ( 2.7 ) 3.7

Other comprehensive income, net of tax 24.4 2.7 55.1 26.1

Other comprehensive (loss)/income, net of tax ( 298.0 ) ( 3.2 ) ( 242.9 ) 22.9

Comprehensive income $ 512.7 $ 817.7 $ 1,817.4 $ 2,077.8

4 unchanged sentences

(In millions, except per share amounts)

December 31, June 30,

March 31, June 30,

Current assets:

35 unchanged sentences

Stockholders' equity:

Preferred stoc k, $ 1.00 par value:

Preferred stock, $ 1.00 par value:

authorized, 0.3 shares;

2 unchanged sentences

authorized, 1,000.0 shares;

issued, 638.7 shares at December 31, 2020 and June 30, 2020;

outstanding, 428.1 and 429.9 shares at December 31, 2020 and June 30, 2020, respectively

issued, 638.7 shares at March 31, 2021 and June 30, 2020;

outstanding, 426.0 and 429.9 shares at March 31, 2021 and June 30, 2020, respectively

Capital in excess of par value 1,479.8 1,333.8

1 unchanged sentence

Treasury stock - at cost:

210.6 and 208.9 shares at December 31, 2020 and June 30, 2020, respectively

212.7 and 208.9 shares at March 31, 2021 and June 30, 2020, respectively

( 14,919.6 ) ( 14,067.0 )

8 unchanged sentences

(In millions)

Six Months Ended

Nine Months Ended

Cash Flows from Operating Activities:

13 unchanged sentences

Increase in other assets ( 794.0 ) ( 762.3 )

Increase in accounts payable 10.2 12.3

Decrease in accrued expenses and other liabilities ( 158.9 ) ( 149.8 )

Increase/(Decrease) in accounts payable 9.8 ( 3.6 )

Increase/(Decrease) in accrued expenses and other liabilities 321.1 ( 34.0 )

Net cash flows provided by operating activities 2,440.5 2,249.6

5 unchanged sentences

Proceeds from sale of property, plant, and equipment and other assets 7.8 23.6

Net cash flows used in investing activities ( 949.6 ) ( 124.9 )

Net cash flows (used in)/provided by investing activities ( 2,366.4 ) 478.6

Cash Flows from Financing Activities:

7 unchanged sentences

Net payments related to reverse repurchase agreements ( 13.6 ) ( 262.0 )

Net cash flows provided by financing activities 8,751.5 5,525.1

Net cash flows provided by/(used in) financing activities 12,923.7 ( 964.0 )

Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents 70.4 ( 41.4 )

50 unchanged sentences

The following tables provide details of revenue by our strategic pillars, and include a reconciliation to the Company’s reportable segments:

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

Types of Revenues 2021 2020 2021 2020

5 unchanged sentences

Total Revenues $ 4,102.0 $ 4,047.8 $ 11,268.4 $ 11,213.0

Reconciliation of disaggregated revenue to our reportable segments for the three months ended December 31, 2020:

Reconciliation of disaggregated revenue to our reportable segments for the three months ended March 31, 2021:

Types of Revenues Employer Services PEO Other Total

5 unchanged sentences

Total Segment Revenues $ 2,780.0 $ 1,324.1 $ ( 2.1 ) $ 4,102.0

Reconciliation of disaggregated revenue to our reportable segments for the three months ended December 31, 2019:

Reconciliation of disaggregated revenue to our reportable segments for the three months ended March 31, 2020:

Types of Revenues Employer Services PEO Other Total

5 unchanged sentences

Total Segment Revenues $ 2,811.7 $ 1,238.3 $ ( 2.2 ) $ 4,047.8

Reconciliation of disaggregated revenue to our reportable segments for the six months ended December 31, 2020:

Reconciliation of disaggregated revenue to our reportable segments for the nine months ended March 31, 2021:

Types of Revenues Employer Services PEO Other Total

5 unchanged sentences

Total Segment Revenues $ 7,667.4 $ 3,606.1 $ ( 5.1 ) $ 11,268.4

Reconciliation of disaggregated revenue to our reportable segments for the six months ended December 31, 2019:

Reconciliation of disaggregated revenue to our reportable segments for the nine months ended March 31, 2020:

Types of Revenues Employer Services PEO Other Total

8 unchanged sentences

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 six months ended December 31, 2020 were as follows:

Changes in deferred revenue related to set up fees for the nine months ended March 31, 2021 were as follows:

Contract Liability

3 unchanged sentences

Currency translation adjustments 22.7

Contract liability, December 31, 2020 $ 521.6

Contract liability, March 31, 2021 $ 520.1

Earnings per Share (“EPS”)

1 unchanged sentence

Shares Diluted

Three Months Ended December 31, 2020

Three Months Ended March 31, 2021

Net earnings $ 810.7 $ 810.7

1 unchanged sentence

EPS $ 1.90 $ 1.90

Three Months Ended December 31, 2019

Three Months Ended March 31, 2020

Net earnings $ 820.9 $ 820.9

1 unchanged sentence

EPS $ 1.91 $ 1.90

Six Months Ended December 31, 2020

Nine Months Ended March 31, 2021

Net earnings $ 2,060.3 $ 2,060.3

1 unchanged sentence

EPS $ 4.82 $ 4.80

Six Months Ended December 31, 2019

Nine Months Ended March 31, 2020

Net earnings $ 2,054.9 $ 2,054.9

1 unchanged sentence

EPS $ 4.76 $ 4.74

Options to purchase 1.2 million and 1.3 million shares of common stock for the three months ended December 31, 2020 and 2019, respectively, and 1.8 million and 1.0 million shares of common stock for the six months ended December 31, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Options to purchase 0.4 million and 1.3 million shares of common stock for the three months ended March 31, 2021 and 2020, respectively, and 1.7 million and 1.1 million shares of common stock for the nine months ended March 31, 2021 and 2020, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Other (Income)/Expense, Net

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

5 unchanged sentences

Other (income)/expense, net $ ( 18.8 ) $ ( 44.6 ) $ ( 72.7 ) $ ( 145.2 )

Other (income)/expense, net, decreased for the three and six months ended December 31, 2020 primarily as a result of a decrease in interest income on corporate funds due to lower interest rates earned.

Other (income)/expense, net, decreased for the three and nine months ended March 31, 2021 primarily as a result of a decrease in interest income on corporate funds due to lower interest rates earned.

See Note 11 for further details on non-service components of pension (income)/expense, net.

Corporate Investments and Funds Held for Clients

Corporate investments and funds held for clients at December 31, 2020 and June 30, 2020 were as follows:

December 31, 2020

Corporate investments and funds held for clients at March 31, 2021 and June 30, 2020 were as follows:

March 31, 2021

Losses Fair Market Value (A)

35 unchanged sentences

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 December 31, 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 December 31, 2020, are as follows:

December 31, 2020

The Company had no available-for-sale securities included in Level 1 or Level 3 at March 31, 2021.

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 March 31, 2021, are as follows:

March 31, 2021

Securities in Unrealized Loss Position Less Than 12 Months Securities in Unrealized Loss Position Greater Than 12 Months Total

25 unchanged sentences

$ ( 0.7 ) $ 63.0 $ — $ 1.5 $ ( 0.7 ) $ 64.5

At December 31, 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 ran g ing from January 2021 through October 2030.

At December 31, 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 $ 1,478.7 million, $ 965.8 million, $ 302.8 million, and $ 80.8 million, respectively.

At March 31, 2021, 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 ran g ing from April 2021 through March 2031.

At March 31, 2021, 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 $ 1,394.6 million, $ 851.4 million, $ 283.0 million, and $ 75.5 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 December 31, 2020.

At December 31, 2020, U.S.

All collateral on such asset-backed securities has performed as expected through March 31, 2021.

At March 31, 2021, U.S.

government agency securities primarily include debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks with fair values of $ 780.8 million and $ 556.7 million, respectively.

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 January 2021 through November 2030.

At December 31, 2020, U.S government agency commercial mortgage-backed securities of $ 860.4 million include those issued by Federal Home Loan Mortgage Corporation and Federal National Mortgage Association.

At December 31, 2020, other securities primarily include municipal bonds, diversified with a variety of issuers, with credit ratings of A and above with fair values of $ 560.7 million and AA-rated United Kingdom Gilt securities of $ 208.3 million.

At March 31, 2021, U.S government agency commercial mortgage-backed securities of $ 834.8 million include those issued by Federal Home Loan Mortgage Corporation and Federal National Mortgage Association.

At March 31, 2021, other securities primarily include municipal bonds, diversified with a variety of issuers, with credit ratings of A and above with fair values of $ 566.3 million and AA-rated United Kingdom Gilt securities of $ 236.4 million.

Classification of corporate investments on the Consolidated Balance Sheets is as follows:

December 31, June 30,

March 31, June 30,

Corporate investments:

7 unchanged sentences

Funds held for clients have been invested in the following categories:

December 31, June 30,

March 31, June 30,

Funds held for clients:

5 unchanged sentences

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 Shee ts totaling $ 36,066.1 million and $ 25,831.6 million at December 31, 2020 and June 30, 2020, respectively.

The Company has reported client funds obligations as a current liability on the Consolidated Balance Shee ts totaling $ 41,043.0 million and $ 25,831.6 million at March 31, 2021 and June 30, 2020, respectively.

The Company h as 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 December 31, 2020 and June 30, 2020 , $ 33,706.4 million an d $ 23,740.0 million, respectively, are held in the grantor trust.

Of the Company’s funds held for clients at March 31, 2021 and June 30, 2020 , $ 36,686.9 million an d $ 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.

1 unchanged sentence

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 77 % of the available-for-sale securities held a AAA-rating or AA-rating at December 31, 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 December 31, 2020.

Expected maturities of available-for-sale securities at December 31, 2020 are as follows:

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 74 % of the available-for-sale securities held a AAA-rating or AA-rating at March 31, 2021, 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 March 31, 2021.

Expected maturities of available-for-sale securities at March 31, 2021 are as follows:

One year or less $ 3,916.0

9 unchanged sentences

The components of operating lease expense were as follows:

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

4 unchanged sentences

The following table provides supplemental cash flow information related to the Company's leases:

Six Months Ended

Nine Months Ended

Cash paid for operating lease liabilities $ 111.9 $ 186.9

1 unchanged sentence

Other information related to our operating lease liabilities is as follows:

December 31, June 30,

March 31, June 30,

Weighted-average remaining lease term (in years) 6 6

1 unchanged sentence

Current operating lease liability $ 96.2 $ 95.5

As of December 31, 2020, maturities of operating lease liabilities are as follows:

Six months ending June 30, 2021 $ 52.9

As of March 31, 2021, maturities of operating lease liabilities are as follows:

Three months ending June 30, 2021 $ 26.2

Twelve months ending June 30, 2022 103.0

7 unchanged sentences

Goodwill and Intangible Assets, net

Changes in goodwill for the six months ended December 31, 2020 are as follows:

Changes in goodwill for the nine months ended March 31, 2021 are as follows:

Services Total

Balance at June 30, 2020 $ 2,304.6 $ 4.8 $ 2,309.4

Additions and other adjustments — — —

Currency translation adjustments 24.4 — 24.4

Balance at December 31, 2020 $ 2,341.8 $ 4.8 $ 2,346.6

Balance at March 31, 2021 $ 2,329.0 $ 4.8 $ 2,333.8

Components of intangible assets, net, are as follows:

December 31, June 30,

March 31, June 30,

Intangible assets:

12 unchanged sentences

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 $ 80.8 million and $ 69.7 million for the three months ended December 31, 2020 and 2019, respectively, and $ 165.0 million and $ 139.1 million for the six months ended December 31, 2020 and 2019, respectively.

Amortization of intangible assets was $ 81.0 million and $ 71.9 million for the three months

ended March 31, 2021 and 2020, respectively, and $ 245.9 million and $ 211.0 million for the nine months ended March 31, 2021 and 2020, respectively.

Estimated future amortization expenses of the Company's existing intangible assets are as follows:

Six months ending June 30, 2021 $ 157.0

Three months ending June 30, 2021 $ 85.8

Twelve months ending June 30, 2022 $ 292.1

10 unchanged sentences

The primary uses of the credit facilities are to provide liquidity to the commercial paper program and funding for general corporate purposes, if necessary.

The Company had no borrowings through December 31, 2020 under the credit agreements.

The Company had no borrowings through March 31, 2021 under the credit agreements.

The Company's U.S.

4 unchanged sentences

Maturities of commercial paper can range from overnight to up to 364 days.

At December 31, 2020 and June 30, 2020, the Company had no commercial paper borrowing outstanding.

At March 31, 2021 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 Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

1 unchanged sentence

Weighted average interest rates 0.1 % 1.5 % 0.1 % 1.9 %

Weighted average maturity (approximately in days) 1 day 2 days 1 day 2 days

Weighted average maturity (approximately in days) 1 day 1 day 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 December 31, 2020, there were no outstanding obligations related to reverse repurchase agreements.

At March 31, 2021, 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 Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

7 unchanged sentences

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 December 31, 2020 and June 30, 2020, are as follows:

Debt instrument Effective Interest Rate December 31, 2020 June 30, 2020

The principal amounts and associated effective interest rates of the Notes and other debt as of March 31, 2021 and June 30, 2020, are as follows:

Debt instrument Effective Interest Rate March 31, 2021 June 30, 2020

Fixed-rate 2.250 % notes due September 15, 2020

9 unchanged sentences

Total long-term debt $ 1,994.3 $ 1,002.8

(a) - Current portion of long-term debt as of December 31, 2020 is included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

(a) - Current portion of long-term debt as of March 31, 2021 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.

As of December 31, 2020, the fair value of the Notes, based on Level 2 inputs, was $ 2,120.6 million.

As of March 31, 2021, the fair value of the Notes, based on Level 2 inputs, was $ 2,016.8 million.

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.

8 unchanged sentences

From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program.

The Company repurchased 1.6 million and 1.8 million shares in the three months ended December 31, 2020 and 2019, respectively, and repurchased 3.2 million and 3.7 million shares in the six months ended December 31, 2020 and 2019, respectively.

The Company repurchased 2.5 million and 2.5 million shares in the three months ended March 31, 2021 and 2020, respectively, and repurchased 5.7 million and 6.2 million shares in the nine months ended March 31, 2021 and 2020, 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 and six months ended December 31, 2020 and 2019, respectively:

Three Months Ended Six Months Ended

December 31, December 31,

The following table represents pre-tax stock-based compensation expense for the three and nine months ended March 31, 2021 and 2020, respectively:

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

8 unchanged sentences

The components of net pension income were as follows:

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

5 unchanged sentences

Net pension (income)/expense $ ( 13.9 ) $ ( 14.2 ) $ ( 35.9 ) $ ( 14.6 )

The effective tax rate for the three months ended December 31, 2020 and 2019 was 22.2 % and 22.0 %, respectively.

The increase in the effective tax rate is primarily due to the benefit from a valuation allowance release related to foreign tax credit carryforwards in the three months ended December 31, 2019, partially offset by the benefits from a foreign tax election in the three months ended December 31, 2020.

The effective tax rate for the six months ended December 31, 2020 and 2019 was 21.8 % and 21.6 %, respectively.

The increase in the effective tax rate is primarily due to the benefit from a valuation allowance release related to foreign tax credits carryforwards in the six months ended December 31, 2019 and a decrease in the excess tax benefit on stock-based compensation partially offset by favorable adjustments to prior year tax liabilities and the benefits from a foreign tax election in the six months ended December 31, 2020.

pension plan, which is currently closed to new entrants, has been frozen effective July 1, 2020.

Benefits under the plan continued to accrue through June 30, 2020, and as of July 1, 2020 and onward, participants will retain their accrued benefits

and will not accrue any future benefits due to service rendered or pay increases.

As a result of the freeze, the Company

recognized $ 17.0 million of prior service credits during the three months ended March 31, 2020 within Other Income, net,

which were previously recognized within accumulated other comprehensive income (see Note 15).

The effective tax rate for the three months ended March 31, 2021 and 2020 was 24.0 % and 23.8 %, respectively.

The increase in the effective tax rate is primarily due to the benefit of a foreign tax law change in the three months ended March 31, 2020 and a decrease in the excess tax benefit on stock-based compensation, partially offset by higher reserves for uncertain tax positions and foreign withholding taxes on future distributions in the three months ended March 31, 2020.

The effective tax rate for the nine months ended March 31, 2021 and 2020 was 22.7 % and 22.5 %, respectively.

The increase in the effective tax rate is primarily due to the ben efit from a valuation allowance release related to foreign tax credits carryforwards in the nine months ended March 31, 2020 and a decrease in the excess tax b enefit on stock-based compensation, partially offset by favorable adjustments to prior year tax liabilities and the benefits from a foreign tax election in the nine months ended March 31, 2021.

Commitments and Contingencies

1 unchanged sentence

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 it for $ 25.0 million, subject to the court's final approval.

In June 2020, the Company reached a settlement of all outstanding claims against it for $ 25.0 million.

In February 2021, the court granted final approval of the $ 25.0 million settlement.

The Company does not expect that any of the remaining cases against its clients will result in any material liabilities to the Company.

1 unchanged sentence

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 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.

11 unchanged sentences

Three Months Ended

December 31, 2020

March 31, 2021

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

Balance at September 30, 2020 $ 63.9 $ 1,348.4 $ 18,644.7 $ ( 14,264.0 ) $ 15.9 $ 5,808.9

Balance at December 31, 2020 $ 63.9 $ 1,407.6 $ 18,893.6 $ ( 14,505.4 ) $ 40.3 $ 5,900.0

Net earnings — — 810.7 — — 810.7

6 unchanged sentences

— — ( 396.8 ) — — ( 396.8 )

Balance at December 31, 2020 $ 63.9 $ 1,407.6 $ 18,893.6 $ ( 14,505.4 ) $ 40.3 $ 5,900.0

Balance at March 31, 2021 $ 63.9 $ 1,479.8 $ 19,307.5 $ ( 14,919.6 ) $ ( 257.7 ) $ 5,673.9

Three Months Ended

December 31, 2019

March 31, 2020

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

Balance at September 30, 2019 $ 63.9 $ 1,213.7 $ 17,729.6 $ ( 13,412.6 ) $ ( 233.9 ) $ 5,360.7

Balance at December 31, 2019 $ 63.9 $ 1,253.7 $ 17,987.6 $ ( 13,709.6 ) $ ( 231.2 ) $ 5,364.4

Net earnings — — 820.9 — — 820.9

6 unchanged sentences

— — ( 392.0 ) — — ( 392.0 )

Balance at December 31, 2019 $ 63.9 $ 1,253.7 $ 17,987.6 $ ( 13,709.6 ) $ ( 231.2 ) $ 5,364.4

Six Months Ended

December 31, 2020

Balance at March 31, 2020 $ 63.9 $ 1,315.1 $ 18,416.5 $ ( 14,070.4 ) $ ( 234.4 ) $ 5,490.7

Nine Months Ended

March 31, 2021

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

8 unchanged sentences

— — ( 1,189.1 ) — — ( 1,189.1 )

Balance at December 31, 2020 $ 63.9 $ 1,407.6 $ 18,893.6 $ ( 14,505.4 ) $ 40.3 $ 5,900.0

Six Months Ended

December 31, 2019

Balance at March 31, 2021 $ 63.9 $ 1,479.8 $ 19,307.5 $ ( 14,919.6 ) $ ( 257.7 ) $ 5,673.9

Nine Months Ended

March 31, 2020

Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock AOCI Total

9 unchanged sentences

Other — — ( 6.9 ) — — ( 6.9 )

Balance at December 31, 2019 $ 63.9 $ 1,253.7 $ 17,987.6 $ ( 13,709.6 ) $ ( 231.2 ) $ 5,364.4

Balance at March 31, 2020 $ 63.9 $ 1,315.1 $ 18,416.5 $ ( 14,070.4 ) $ ( 234.4 ) $ 5,490.7

Reclassifications out of Accumulated Other Comprehensive Income (“AOCI”)

1 unchanged sentence

Three Months Ended

December 31, 2020

March 31, 2021

Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive (Loss) /Income

Balance at September 30, 2020 $ ( 271.8 ) $ 661.1 $ ( 32.2 ) $ ( 341.2 ) $ 15.9

Balance at December 31, 2020 $ ( 209.9 ) $ 621.0 $ ( 31.5 ) $ ( 339.3 ) $ 40.3

Other comprehensive (loss)/income before reclassification adjustments ( 27.5 ) ( 352.5 ) — — ( 380.0 )

2 unchanged sentences

Tax effect — ( 0.1 ) ( 0.3 ) ( 1.1 ) ( 1.5 )

Balance at December 31, 2020 $ ( 209.9 ) $ 621.0 $ ( 31.5 ) $ ( 339.3 ) $ 40.3

Balance at March 31, 2021 $ ( 237.4 ) $ 348.0 $ ( 30.7 ) $ ( 337.6 ) $ ( 257.7 )

Three Months Ended

December 31, 2019

March 31, 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 September 30, 2019 $ ( 318.1 ) $ 298.1 $ — $ ( 213.9 ) $ ( 233.9 )

Balance at December 31, 2019 $ ( 283.8 ) $ 264.6 $ 0.5 $ ( 212.5 ) $ ( 231.2 )

Other comprehensive (loss)/income before reclassification adjustments ( 68.4 ) 139.3 ( 38.2 ) — 32.7

2 unchanged sentences

Tax effect — 0.6 — 3.7 4.3

Balance at December 31, 2019 $ ( 283.8 ) $ 264.6 $ 0.5 $ ( 212.5 ) $ ( 231.2 )

Six Months Ended

December 31, 2020

Balance at March 31, 2020 $ ( 352.2 ) $ 369.8 $ ( 28.2 ) $ ( 223.8 ) $ ( 234.4 )

Nine Months Ended

March 31, 2021

Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive (Loss) /Income

4 unchanged sentences

Tax effect — 1.7 ( 0.6 ) ( 2.7 ) ( 1.6 )

Balance at December 31, 2020 $ ( 209.9 ) $ 621.0 $ ( 31.5 ) $ ( 339.3 ) $ 40.3

Six Months Ended

December 31, 2019

Balance at March 31, 2021 $ ( 237.4 ) $ 348.0 $ ( 30.7 ) $ ( 337.6 ) $ ( 257.7 )

Nine Months Ended

March 31, 2020

Currency Translation Adjustment Net Gains/Losses on Available-for-sale Securities Cash Flow Hedging Activities Pension Liability Accumulated Other Comprehensive (Loss) /Income

4 unchanged sentences

Tax effect — 2.6 — 3.7 6.3

Balance at December 31, 2019 $ ( 283.8 ) $ 264.6 $ 0.5 $ ( 212.5 ) $ ( 231.2 )

Balance at March 31, 2020 $ ( 352.2 ) $ 369.8 $ ( 28.2 ) $ ( 223.8 ) $ ( 234.4 )

(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)/expense (see Note 11).

The three and nine months ended March 31, 2020, include $ 17.0 million of prior service credits which were recognized as a component of net pension expense as a result of the U.S.

pension plan freeze.

(C) Reclassification adjustments out of AOCI are included in Interest expense on the Statements of Consolidated Earnings (see Note 10).

7 unchanged sentences

Segment Results:

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

4 unchanged sentences

Earnings before Income Taxes

Three Months Ended Six Months Ended

December 31, December 31,

Three Months Ended Nine Months Ended

March 31, March 31,

2021 2020 2021 2020

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements