| [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | |||
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| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE | |||
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. Employer Services offers a comprehensive range of . Dealer Services' Dealer Management Systems offer comprehensive, integrated solutions that dealerships use to manage their core dealership business activities. DMS solutions are available as “on-site” applications installed at the dealership or as managed services solutions in which clients access ADP's DMS solutions through a cloud-based IT environment managed by ADP. The DMS accounting modules help clients manage all standard accounting procedures, including general ledger, receivables and balance sheet maintenance. The DMS service and parts modules enable automation of client operations such as service and repair order processing, purchase orders and parts ordering. The DMS sales and finance and insurance (F&I) modules facilitate clients' ability to manage customer inquiries, develop, analyze, present, and consummate transactions with customers, manage and print the forms needed to consummate such transactions, and track funds. Dealer Services . Dealer Services offers comprehensive training and business process consulting services for many of its business earnings. approximately 12 years in Dealer Services, and has not varied significantly from period to period. Health care reform under the Affordable Care Act, as amended, related state laws, and the regulations adopted or to be adopted thereunder, have the potential to impact substantially the way that employers provide health insurance to employees and the health insurance market for the small and mid-sized businesses that comprise ADP TotalSource's clients and prospects. We are unable to determine the ultimate impact that health care reform will have on our PEO business and our ability to attract and retain PEO clients. Amendments to money transmitter statutes have required us to receive licenses in some jurisdictions, and the adoption of new money transmitter statutes in other jurisdictions, as well as changes in the interpretation of existing statutes, in the future could require additional registration or licensing, as well as possible changes to the manner in which we conduct some aspects of our money movement business or our client funds investment strategy. If we fail to adapt our technology to meet client needs and preferences, the demand for our services may diminish Performance Graph 2012. expense and the goodwill impairment charge. 6% without the impact of acquisitions and revenues pertaining to the sale in fiscal 2012 of assets related to rights and obligations to resell a third-party expense management platform. Revenues increased due to new business started during the year from new business bookings growth, an increase in the number of employees on our clients’ payrolls, and the impact of price increases. Our worldwide client revenue retention rate in fiscal2013 increased 40 basis points to 91.3% as compared to our rate in fiscal2012 and our pays per control increased 2.8% in fiscal2013. 2012 2012 fiscal2013, as compared to fiscal2012. Revenues increased due to new business started during the year from growth in new business bookings and increased users of our digital marketing solutions. We continue to see increased utilization of our credit report and vehicle registration transactions, consistent with the steady improvement of the North American new car market. expense and the goodwill impairment charge. During equivalents and accounts receivable, net. businesses included in discontinued operations of For We utilize historical loss experience and actuarial judgment to determine the estimated claim liability for the PEO Services Banks. A-1 and/or P-1. Money market funds must be rated AAA/Aaa-mf. securities. our consolidated revenue from continuing operations. 2012 periods. In corporate investments with fair values of 2013 2013 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 programs. The Company repurchased 2013 2013 2012 2032 CONTINGENCIES EVENTS A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. 2011. 2010. Regina R. Lee joined ADP in 1982. Prior to her 2010. as Senior Vice President, Retirement Services from 2006 to 2011. partner in the Technology, Telecom & Industrial Sector practices at McKinsey & Company from 2001 to 2010. Part IV 2011 2012 2011 2011DelawareDelaware 22-1467904 (State or other jurisdiction of incorporation or organization) ( I.R.S.IRS Employer Identification No.)One ADP Boulevard, Roseland, New Jersey Registrant’sRegistrant's telephone number, including area code:973-974-5000Securities registered pursuant to Section 12(b) of the Act: Name of each exchange onTitle of each class Name of each exchange on which registered (voting)Chicago Stock ExchangeRegistrant’sRegistrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x]Large accelerated filer [x] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ ]Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ ] Registrant’sRegistrant's most recently completed second fiscal quarter was approximately $ 26,415,304,885.27,560,939,417. On August 10, 20129, 2013 there were 484,504,817482,823,076 shares of Common Stock outstanding.Portions of the Registrant’sRegistrant's Proxy Statement for its 20122013 Annual Meeting of Stockholders.Part III Page Part I Item 1. Business Item 1A. Risk Factors 9Item 1B. Unresolved Staff Comments 11Item 2. Properties 11Item 3. Legal Proceedings 11Part II Item 5. Market for the Registrant’sRegistrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities12Item 6. Selected Financial Data Item 7. Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations17Item 7A. Quantitative and Qualitative Disclosures About Market RiskRisks41Item 8. Financial StatementsStatement and Supplementary Data41Item 9. Changes in and Disagreements with Accountants onand Accounting and Financial Disclosure80Item 9A. Controls and Procedures 80Item 9B. Other Information 82Part III Item 10. Directors, Executive Officers and Corporate Governance Executive Officers 83Item 11. Executive Compensation 85Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 85Item 13. Certain Relationships and Related Transactions, and Director Independence 85Item 14. Principal Accounting Fees and Services 85Part IVIV.Item 15. Exhibits, Financial Statement Schedules 86Signatures 92General®Incorporated was founded in Delaware in 1961,1949 on an innovative idea to help business owners focus on core business activities by relieving them from certain administrative tasks such as payroll. Automatic Data Processing, Inc. (together withwas incorporated in the State of Delaware in June 1961 and completed its subsidiaries, “ADP” or the “Company”) isinitial public offering in September 1961. Today we are one of the world’s largestworld's leading providers of business outsourcing solutions. Leveraging over 60 years of experience, ADP® offers a wide range of human resource (HR), payroll, tax and benefits administrationcapital management solutions from a single source. ADP is also a leading provider ofto employers, as well as integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle and heavy equipment retailers and manufacturers throughoutdealers around the world. ADP’s missionWe offer solutions to businesses of all sizes, whether they have simple or complex needs, and serve approximately 620,000 clients in more than 125 countries. Our common stock is listed on the NASDAQ Global Select Market® under the symbol “ADP”.power organizations with insightful solutions that drive business success.“we”, “ADP”, or the “Company” in this Annual Report on Form 10-K, we mean Automatic Data Processing, Inc. and its consolidated subsidiaries.The Company’swww.adp.com, provides materials for investors and information about our services. ADP's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, and the Proxy Statement for itsour Annual Meeting of Stockholders are made available, free of charge, on itsour corporate website atwww.adp.com as soon as reasonably practicable after such reports have been filed with or furnished to the Securities and Exchange Commission (“SEC”)(SEC) and are also available at the SEC’s internet siteSEC's website at www.sec.gov.Segmentswww.sec.gov. The content on any website referenced in this filing is not incorporated by reference into this filing unless expressly noted otherwise. The Company’s Process Outsourcing (BPO) solutions by leveraging our platforms and processes;geographicgeographical area, see Note 1714 to the “Consolidated Financial Statements” contained in this Annual Report on Form 10-K. A brief description of each reportable segment’s operations is provided below.HR information, payroll processing, timebusiness outsourcing and laborhuman capital management solutions, including:taxAttendance Management Solutionsbenefits administration solutions and services, including traditional and Web-based outsourcing solutions, that assist employers in the United States, Canada, Europe, South America (primarily Brazil), Australia and Asia to recruit, staff, manage, pay and retain their employees. As of June 30, 2012, Payment SolutionsServices assisted approximately 564,000 employers with approximately 652,000 payrolls. Employer Services markets these solutions and services through its direct marketing salesforce and, on a limited basis, through indirect sales channels, such as marketing relationships with banks and accountants, among others. In fiscal 2012, 78% of Employer Services’ revenues were from the United States, 14% were from Europe, 5% were from Canada, and 3% were from South America (primarily Brazil), Australia, and Asia.United States Employer Services’Services' approach to the market is to match clients’clients' needs to the solutions and services that will best meet their expectations. To facilitate this approach,requirements. Employer Services serves clients ranging from small businesses with fewer than 50 employees to large enterprises with multinational operations. As of June 30, 2013, Employer Services assisted approximately 590,000 employers with approximately 681,000 payrolls.is comprised of the following market-facing groups: Small BusinessPEO Services, (SBS) (serving primarily organizations with fewer than 50 employees); Major Account Services (serving primarily organizations with between 50 and 999 employees); and National Account Services (serving primarily organizations with 1,000 or more employees).Dealer Services.that includeto employers of all sizes, including the preparation of client employee paychecks, electronic directdeposits, and stored value payroll cards, along with employee pay statements, supporting journals,summaries, and management reports. ADP also supplies the quarterly and annual social security,Medicare, and federal, state and local income tax withholding reports requiredprovides employers with a wide range of payroll options ranging from manually calling in their payroll to be filed by employers.our specialists, entering their payroll data online with an internet-based solution, or outsourcing their entire payroll process to ADP. ADP also enables its largest clients to interface their major enterprise resource planning (ERP) applications with ADP’sADP's outsourced payroll services. Employers can choose a variety of payroll payment options ranging from professionally printed checks to ADP's electronic Wage Payment and Pay Card Solutions. ADP also prepares and files federal, state and local payroll tax returns and quarterly and annual social security, Medicare, and federal, state and local income tax withholding reports on our clients' behalf. In addition, as part of our W-2 management services, ADP supplies year-end tax statements to our clients' employees. For those companies thatclients who choose to process payroll in-house, ADP also delivers stand-alone services such as payroll tax filing,services, check printing and distribution, year-end tax statements (i.e., Form W-2), and wage garnishment services on a stand-alone basis.Other stand-aloneIn addition, ADP benefits administration services deliveredoffers employers an efficient eligibility and enrollment system that provides their employees with tools, communications, and other resources they need to understand their benefits options and make informed choices.includeprovides talent and performance management solutions via our own offerings and also via our resale arrangements with third parties. Integrated with ADP's performance management applications, ADP's succession management solutions offer tools that allow employees to build and update their employee profiles, search for potential positions within the organization, and create-forward looking career paths, while enabling managers to identify and mitigate potential retention risks. In addition, ADP's learning management solutions provide a single point of access to learning and knowledge management capabilities via multiple online delivery methods.Talent Solutions, Benefithelps employers administer various types of retirement plans, such as 401(k) (including “safe harbor” 401(k) and Roth 401(k)), profit sharing (including new comparability), SIMPLE IRA, and executive deferred compensation plans. ADP Retirement Services offers a full service 401(k) plan program, which provides recordkeeping and Time and Labor Management Services. In addition, ouradministrative services, combined with an investment platform offered through ADP Mobile Solutions applicationBroker-Dealer, Inc. that gives our clients’clients' employees access to a wide range of non-proprietary investment options and online tools to monitor the performance of their vital HR, payroll, time, and benefits information via multiple smartphone platforms. In order to address the growing business process outsourcing (BPO) market for clients seeking human resource information systems and benefit outsourcing solutions,investments. ADP offers its integrated comprehensive outsourcing services (COS) solution that allows larger clients to outsource to ADP their HR, payroll, payroll administration, employee service center, benefits administration, and time and labor management functions. In fiscal 2012, ADP broadened its BPO offerings with the addition of recruitment process outsourcing services for large clients. For mid-sized clients, ADP Workforce Now® ComprehensiveRetirement Services provides integrated tools and technology to support payroll, a full-featured benefits administration solution, HR services and administration needs from recruitment to retirement. ADP also offers ADP Resource®, an integrated, flexible HR and payroll service offering for smaller clients that providestrustee services through a menu of optional services, such as 401(k),FSA,third party. and a comprehensive Pay-by-Pay® workers’ compensation payment program. ADP’s Added Value Services division includes the following businesses: (CAPS) (formerly known asand Financial Services), Insurance Services and Tax Credit Services. These businesses primarily support SBS, Major Account Services and/or National Account Services, and their services are sold through those businesses, as well as by dedicated sales teams and via marketing arrangements with alliance partners.CAPS offers a host of full outsourcing services, including payroll tax, garnishment processing,payment processing, unemployment compensationmanagement, and sales and use tax filing. CAPS also offers wage verification services through a resale arrangement with a third party. Inaddition, CAPS offers software-as-a-service solutions including sales,use, and value-added taxcalculationprocessing and automated accounts payable processing.. As part of CAPS’ payrollADP's employment tax services, CAPS collectsADP prepares and processesfiles employment tax returns on our clients' behalf with federal,state, and local payrolltax agencies. In connection with these services, ADP collects federal, state, and local employment taxes on behalf of, andfrom ADP clients and remits these taxes to the appropriate taxing authorities. This businessprovidesagencies via an electronic interface between ADP clients andwith over 7,0007,200 federal,state, and local taxagencies in the United States,States. ADP also responds to inquiries from tax agencies and files tax protests on the Internal Revenue Serviceclients' behalf. In addition to local governments.our full service payroll tax solution, ADP offers a software solution for do-it-yourself employment tax management that can complement a client's in-house payroll system. In fiscal2012, CAPSour fiscal year ended June 30, 2013 (“fiscal 2013”), ADP in the United States processed and delivered approximately 4851 million employeeyear-endemployee year-end tax statements and over 4041 million employer payroll tax returns and deposits, andmoved $1.3and moved approximately $1.4 trillion in client funds to taxing authoritiesagencies and its clients’clients' employees via electronictransfer, direct deposit, and ADPCheckTM.CAPS isADP Tax Credits Services helps clients take advantage of tax credit opportunities as they hire new employees, including federal, state, and local tax credits based on geography, demographics, and other criteria such as work opportunity tax credits, federal empowerment zone employment credits, economic development incentives, training grants, and many other incentives. Integrating the entire process with clients' existing hiring programs, ADP Tax Credits Services enables clients to screen employees and process eligibility forms, monitor and manage screening compliance and form compliance, submit forms to state agencies for tax credit certification, calculate credits, and produce a detailed audit trail.responsible formanages required correspondence to payee agencies, lien processing and order evaluation, and notices. ADP's wage garnishment services also offer a call center to field garnishment-related inquiries from employees, payees, and other third parties.efficient movemententire unemployment claims process, including pre-separation planning, claim protests and administration, appeal processing, hearing representation, and audits of benefit charges.informationsale terminal. The ALINE Card can also be used to make purchases or pay bills. Additional features of the ALINE Card include the ability to load additional funds onto the card, receive electronic payments such as government benefits or tax refunds, and transfer funds from clientsthe card to third parties through service offerings such as new hirereporting, payroll check (ADPCheck)a U.S. bank account.full service direct deposit (FSDD),ADP's PEO business, offers small and stored valuepayroll card (ALINE Card by ADPSM).Insurance Services providesmid-sized businesses a comprehensive Pay-by-Pay workers’ compensation paymentprogramhuman resources outsourcing solution through a co-employment model. As a PEO, ADP TotalSource provides integrated human resources management services while the client continues to direct the day-to-day, job-related duties of the employees. ADP TotalSource integrates key HR management and through Automatic Data Processing Insurance Agency, Inc.,employee benefits functions, including HR administration, employee benefits, and employer liability management, into a single-source solution:workers compensationa variety of comprehensive, integrated HR administration services, such as:clients through a variety of insurance carriers.Tax Credit Services provides job tax credit services that assist employers in the identification of,and filing for, federal,state, and local tax credits and other incentives based on geography,demographics, and othercriteria and includes negotiation of incentive packages with applicablegovernmental agencies. Employer Services also provides the following solutions and services:Retirement Services provides recordkeeping and/or related administrative services to primarilysmall and mid-sized clients with respect to various types of retirement (primarily 401(k) andSIMPLE IRA) plans, deferred compensationplans, and “premium only” cafeteria plans.Talent Solutions includes Screening and Selection Services, Applicant Management Services, I-9Services, and Talent Management solutions. Screening and Selection Services providesbackground checks, reference verifications and an HR help desk. Applicant ManagementServices provides employers with a Web-based solution to manage their talent throughout thehiring process. I-9 Services provides electronic processing, storing and tracking of employmenteligibility verification forms (i.e.,Form I-9). Talent Management solutions, which ADP providesboth through its own services and through resale arrangements with third parties, includeCompensation Management, Performance Management, Learning Management, and SuccessionPlanning.Benefit Services provides benefits administration across all market segments, includingmanagement of open enrollment and ongoing enrollment of benefits, and leave of absence,COBRA, Dependent Care, Commuter, Health Reimbursement Arrangements, Health SavingsAccounts, and FSA administration.Time and Labor Management Services provides solutions for employers to capture,calculate,and report employee time and attendance. ADP also provides cloud-based medical practice management services through AdvancedMD®. These services include practice management software, electronic health records solutions, and comprehensive outsourced medical billing services. ADP made several acquisitions in fiscal 2012, including RightThing, LLC, a provider of recruitment process outsourcing and recruitment training, W. Ray Wallace & Associates, Inc., a provider of tax credit services, Asparity Decisions Solutions, Inc., a supplier of employee benefits decision support tools, SHPS Human Resource Solutions, Inc., a provider of benefits outsourcing solutions, including eligibility and enrollment, health spending accounts, COBRA administration, absence management, benefits advocacy and print and fulfillment, and PhyLogic Healthcare, a provider of comprehensive outsourced medical billing services.International Employer Services has a growing presence outside of the United States, where it offers solutions on the basis of both geographic and specific client business needs. ADP’s GlobalView® offering is available in 41 countries. GlobalView is built on the SAP® ERP Human Capital Management and the SAP NetWeaver® platform and offers multinational and global companies an end-to-end outsourcing solution enabling standardized payroll processing and human resource administration. As of the end of fiscal 2012, 121 clients had contracted for GlobalView services, with approximately 1.1 million employees being processed. Upon completing the implementation for all these clients, ADP expects to be providing GlobalView services to over 2 million employees.ADP also offers in-country “best of breed” payroll and human resource outsourcing solutions to both small and large clients in over a dozen foreign countries. In each of Canada and Europe, ADP is the leading provider of payroll processing (including full departmental outsourcing) and human resource administration services. Within Europe, Employer Services has business operations supporting its in-country solutions in eight countries: France, Germany, Italy, the Netherlands, Poland, Spain,Switzerland, and the United Kingdom. It also offers services in Ireland (from the United Kingdom) and in Portugal (from Spain). In South America (primarily Brazil),Australia, and Asia (primarily China), ADP provides traditional service bureau payroll services, and also offers full departmental outsourcing of payroll services. ADP also offers wage and tax collection and remittance services in Canada, the United Kingdom, theNetherlands, and France. Through its ADP Streamline® offering, which is available in 73 countries (40 of which are countries in which ADP also offers its GlobalView services), ADP also offers a single point of contact for global payroll processing and human resource administration services for multinational companies with small and mid-sized operations. At the end of fiscal 2012, ADP Streamline was used by 495multinational companies with approximately 211,000employees being processed. In fiscal 2012, ADP continued to expand its “best of breed” offering through the acquisition of Ma Foi Consulting SolutionsLimited, a provider of managed payroll services and social benefits administration services in India.Professional Employer Organization (PEO) Services In the United States, ADP TotalSource®, the Company’s PEO business, provides approximately 6,500clients with comprehensive employment administration outsourcing solutions through a co-employment relationship pursuant to which the employees who work at a client’s location (“worksite employees”) are co-employed by us and the client. These comprehensive solutions include payroll, payroll tax filing, HR guidance, 401(k) plan administration, benefits administration, compliance services, health and workers’ compensationcoverage, and other supplemental benefits for employees.businesses. ADP TotalSource is the largest PEO in the United States based on the number of worksite employees. ADP TotalSource has 4954 offices located in 2326 states and serves approximately 268,0006,900 clients and an aggregate of approximately 290,000 worksite employees in all 50 states.ServicesManagement Systems (DMS) and Other Retail Solutionsprovides integrated dealer management systems (such a system is also known in the industry as a “DMS”), digital marketing solutions (including website, sales leads, email, search,display, and social media marketingservices), and other business management solutions to auto, truck, motorcycle, marine, recreational vehicle(RV), and heavy equipment retailers and manufacturers in North America, Europe, South Africa, the MiddleEast, and the Asia Pacific region. Over 26,000 auto, truck, motorcycle, marine,RV, and heavy equipment retailers and manufacturers in nearly 100 countries use ADP’s DMS products, digital marketing solutions, other software applications, networking solutions, data integration, and/or consulting services. Clients use ADP’s DMS solutions to manage core business activities such as accounting, inventory management, factory communications, appointment scheduling, vehicle financing and insurance,sales, and service. In addition to its DMS solutions, Dealer Services offers its clients a full suiterange of additional integrated applications tosolutions that address eachevery department and functional area of the dealership, including customer relationship management (CRM) applications, front-end salesvehicle inventory and marketing/advertisinglot management solutions, and an IP Telephony phone system fully-integrated intotelephone systems. These additional solutions are typically fully integrated with the DMS to help dealerships drive sales processes and business development initiatives.DMS. also provides its dealership clients computer hardware, hardware maintenance services, software support, systemdesign, and network consulting services. Dealer Services also designs, establishes, and maintains communications networks for its dealership clients that allow interactive communications among multiple site locations as well as links between franchised dealers and their vehicle manufacturer franchisors. These networks are used for activities such as new vehicle ordering and status inquiry, warranty submission and validation, parts and vehicle location, dealership customer credit application submission and decision-making, vehicle repairestimation, and acquisition of vehicle registration and lien holder information. Dealer Services also provides digital marketing solutions via The Cobalt Group (Cobalt),under the Cobalt® brand, which ADP acquired in 2010. Cobalt’sCobalt digital marketing solutions and services include dealership websites, sales leads, email marketing, search and display advertising, and social media marketing and management services. These solutions are sold both as retail network marketing platformsprograms in conjunction with the manufacturers of ten leading automotive brands, as well as directly to auto dealerships and regional dealer associations. Cobalt® provides marketingservices to nearly half of the auto dealerships in the United States, as well as to auto dealers in Canada and Mexico.security management applications.solutions. ADP’s DMSsolutions via multiple delivery methods. Task-specific internet-based courses are fully automated and other software solutionsavailable 24 hours a day. Dealer Services also provides interactive instructor-led training via internet-based sessions or live classroom courses that are available as “on-site” applications installed at the dealership or as application service provider (ASP) managed services solutions (in which clients outsource their information technology management activitiescustomized to Dealer Services).meet our clients' specific needs.Markets and Marketing Methods(primarily Brazil),Australia,(in Brazil, Chile, Argentina, and Asia.Peru), China, India, and Australia. We offer wage and tax collection and remittance services in Canada, the United Kingdom, the Netherlands, and France. PEO Servicesoffers services exclusively in the United States. Dealer Services has offerings in NorthIn fiscal 2013, 80% of Employer Services' revenues were from the United States, 13% were from Europe, 5% were from Canada, and 2% were from South America, Europe, South Africa, the Middle EastAustralia, and the Asia Pacific region. In select emerging markets, Dealer Services uses distributors to sell, implement and support ADP’s solutions. None of ADP’s major business groups has a single homogenous client base or market. Employer Services and PEO Services have clients from a large variety of industries and markets. Within this client base are concentrations of clients in specific industries. Asia.(i.e.(i.e., motorcycle, marine, and recreational)RV) and heavy equipment dealers, auto repair shops, used car lots, state departments of motorvehicles, vehicle manufacturers, and manufacturers of automobilesvehicle distributors. Dealer Services has offerings in more than 100 countries across North America, Europe, Africa, the Middle East, and trucks.the Asia Pacific region.offers services markets its solutions through indirect sales channels, such as marketing relationships with banks and accountants, among others. In addition, Dealer Services uses distributors to auto dealers.sell, implement and support its solutions in select emerging markets. None of ADP's major business groups has a single homogenous client base or market. While concentrations of clients exist in specific industries, no one client or industry group is material to ADP’sADP's overall revenues.Historically, ADP’s businesses have not been overly sensitive to price changes, although in the current economic conditions we have observed, among some clients and groups of clients, an impact on sensitivity to pricing and demand for ADP’s services. ADP enjoys a leadership position in each of its major service offerings and does not believe any major service or major business unitof ADP is subject to unique market risk.CompetitionServices’Services' competitors include full service DMS providers, such as The Reynolds & Reynolds Company (Dealer Services’Services' largest DMS competitor in the United States and Canada), DealerTrack, Inc., and companies providing applications and services that compete with Dealer Services’Services' non-DMS applications and services, such as Auto Trader Group, Inc. and Dealer.com, Inc. CompetitionADP’s industriesthe countries in which we offer such services. In addition, our U.S. prepaid access (payroll card) offering is primarilysubject to the anti-money laundering and reporting provisions of the Bank Secrecy Act. Our employee screening and selection services business offers background checking services that are subject to the Fair Credit Reporting Act. Our PEO business (ADP TotalSource) is subject to various state licensing requirements. In addition, because ADP TotalSource is a co-employer with respect to its clients' worksite employees, we may assume certain obligations and responsibilities of an employer under federal and state tax, insurance and employment laws.service responsiveness, productquality,federal, state, or local tax laws and price. ADP believesregulations allowing for tax credits. We are also impacted by foreign data privacy laws, such as the European Union Privacy Directive, which regulate the processing of personal information.it is very competitive in each of these areasmay decrease our revenues and that there are no material negative factors impacting ADP’s competitive position.Clients and Client Contracts600,000620,000 clients. In fiscal 2012,2013, no single client or group of affiliated clients accounted for revenues in excess of 2% of annual consolidated revenues. Our business is typically characterized by long-term client relationships that result in recurring revenue. an SBSa small Employer Services client with fewer than 50 employees (as little as 24 hours) to a longer period for a National Accountlarge Employer Services client with 1,000 or more employees or a Dealer Services client with multiple deliverables (generally six to twelve months), and in some cases may exceed two years for a large GlobalView client or other large, complicated implementation. Although we monitor sales that have not yet been billed or installed, we do not view this metric as material in light of the recurring nature of our business. This is not a reported number, but it is used by management as a planning tool relating to resources needed to install services, and a means of assessing our performance against the installation timing expectations of our clients. ADP’s averageretention is estimated at approximately 11 yearsrelationships that result in Employer Services, approximately 6 years in PEOServices, and 10 or more years in Dealer Services, and has not varied significantly from period to period. ADP’srecurring revenue. Our services are provided under written price quotations or service agreements having varying terms and conditions. No one price quotation or service agreement is material to ADP.Systems Development ADP's client retention is estimated at approximately 12 years in Employer Services, approximately 6 years in PEO Services, and Programming2011, and 2010,2011, ADP invested $706approximately $757 million, $674$699 million, and $614$667 million, respectively, from continuing operations, in systems development and programming, migration to new computing technologies and the development of new products and maintenance of our existing technologies, including purchases of new software and software licenses.Product DevelopmentADP’sADP's revenues or negatively impacts its existing solutions and services, and ADP’sADP's solutions and services have significant remaining life cycles.LicensesADP’sADP's business is not dependent upon a single license or group of licenses. Third-party licenses, patents,trademarks, and franchises are not material to ADP’sADP's business as a whole.Number of Employees57,00060,000 persons as of June 30, 2012.2013.Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk and the consolidated financial statements and related notes included in this Annual Report on Form 10-K. This discussion includes a number of forward-looking statements. You should refer to the description of the qualifications and limitations on forward-looking statements in the first paragraph under Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations included in this Annual Report on Form 10-K. Unless otherwise indicated or the context otherwise requires, reference in this section to “we,” “our,” “us” or similar terms means ADP, together with its subsidiaries. The level of importance of each of the following risks may vary from time to time, and any of these risks may have a material effect on our business. Portions of ADP’sareis subject to governmentala wide range of complex laws and regulations. Changes in laws or governmental regulations, or changes in the interpretation of existing laws or regulations by a regulatory authority, may decrease our revenues and earnings and may require us to change the manner in which we conduct some aspects of our business. For example, a change in regulations either decreasing the amount of taxes to be withheld or allowing less time to remit taxes to government authorities would adversely impact interest income from investing client funds before such funds are remitted to the applicable taxing authorities or client employees. Changes in taxation requirements in the United States or in other countries could adversely affect our effective tax rate and our net income. Changes in laws that govern the co-employment arrangement between a professional employer organization and its worksite employees may require us to change the manner in which we conduct some aspects of our PEO business.1312 of its processing/print centers, and 2423 other operational offices, salesoffices, and its corporate headquarters in Roseland, New Jersey, which aggregate approximately 3,739,2353,620,235 square feet. None of ADP’sADP's owned facilities is subject to any material encumbrances. ADP leases space for some of its processing centers, other operationaloffices, and sales offices. All of these leases, which aggregate approximately 6,677,3566,496,743 square feet in North America, Europe, South America, (primarily Brazil), Asia, Australia and Africa, expire at various times up to the year 2036. ADP believes its facilities are currently adequate for their intended purposes and are adequately maintained.Registrant’sRegistrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesRegistrant’sRegistrant's Common EquityCompany’sCompany's common stock (symbol: ADP) is the NASDAQ Global Select Market. The following table sets forth the reported high and low sales prices of the Company’sCompany's common stock reported on the NASDAQ Global Select Market and the cash dividends per share of common stock declared, during the past two fiscal years. As of June 30, 2012,July 12, 2013, there were 45,22345,423 holders of record of the Company’sCompany's common stock. As of such date, 394,065452,381 additional holders held their common stock in “street name.”Price Per Share Dividends High Low Per Share Fiscal 2012 quarter ended: June 30 $56.19 $50.89 $0.395 March 31 $57.10 $53.31 $0.395 December 31 $54.62 $45.85 $0.395 September 30 $55.02 $44.72 $0.360 Fiscal 2011 quarter ended: June 30 $55.12 $50.82 $0.360 March 31 $51.50 $46.73 $0.360 December 31 $47.17 $41.50 $0.360 September 30 $42.72 $38.41 $0.340 Price Per Share Dividends High Low Per Share Fiscal 2013 quarter ended: June 30 $72.00 $63.30 $0.435 March 31 $65.12 $57.75 $0.435 December 31 $59.96 $54.02 $0.435 September 30 $59.50 $54.85 $0.395 Fiscal 2012 quarter ended: June 30 $56.19 $50.89 $0.395 March 31 $57.10 $53.31 $0.395 December 31 $54.62 $45.85 $0.395 September 30 $55.02 $44.72 $0.360 Total Number Maximum of Shares Number of Shares Purchased as Part that may yet be of the Publicly Purchased under Announced the Common Total Number of Average Price Common Stock Stock Repurchase Period Shares Purchased (1) Paid per Share Repurchase Plan (2) Plan (2) April 1, 2012 to April 30, 2012 727,754 $55.02 726,900 40,658,252 May 1, 2012 to May 31, 2012 3,589,400 $53.18 3,561,200 37,097,052 June 1, 2012 to June 30, 2012 2,117,400 $53.17 2,117,400 34,979,652 Total 6,434,554 6,405,500 Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of the Publicly Announced Common Stock Repurchase Plan (2) Maximum Number of Shares that may yet be Purchased under the Common Stock Repurchase Plan (2) 240,833 $64.95 240,455 27,878,997 1,818,409 $69.95 1,787,600 26,091,397 1,559,198 $68.51 1,559,198 24,532,199 Total 3,618,440 3,587,253 (1) Pursuant to the terms of the Company’sCompany's restricted stock program, the Company purchased 854378 shares during April 2012,2013, and 28,20030,809 shares during May 2012,2013, at the then market value of the shares in connection with the exercise by employees of their option under such program to satisfy certain tax withholding requirements through the delivery of shares to the Company instead of cash. (2) The Company received the Board of Directors’Directors' approval to repurchase shares of the Company’sCompany's common stock as follows:Date of Approval Shares March 2001 50 million November 2002 35 million November 2005 50 million August 2006 50 million August 2008 50 million June 2011 35 million Company’sCompany's common stock for the most recent five years with the cumulative return on the S&P 500 Index and a Peer Group Index, assuming an initial investment of $100 on June 30, 2007,2008, with all dividends reinvested.
Insperity, Inc. (formerly named Administaff, Inc.) Paychex, Inc. Computer Sciences Corporation The Ultimate Software Group, Inc. Global Payments Inc. Total System Services, Inc. Intuit Inc. The Western Union Company Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations, and Quantitative and Qualitative Disclosures About Market Risk included in this Annual Report on Form 10-K.(Dollars and shares in millions, except per share amounts) Years ended June 30, 2012 2011 2010 2009 2008 Total revenues $ 10,665.2 $ 9,879.5 $ 8,927.7 $ 8,838.4 $ 8,733.7 Total costs of revenues $ 6,240.0 $ 5,731.5 $ 5,029.7 $ 4,822.7 $ 4,657.2 Gross profit $ 4,425.2 $ 4,148.0 $ 3,898.0 $ 4,015.7 $ 4,076.5 Earnings from continuing operations before income taxes $ 2,122.1 $ 1,932.7 $ 1,863.2 $ 1,900.1 $ 1,803.4 Adjusted earnings from continuing operations before income taxes (Note 1) $ 2,056.1 $ 1,932.7 $ 1,863.2 $ 1,900.1 $ 1,803.4 Net earnings from continuing operations $ 1,388.5 $ 1,254.2 $ 1,207.3 $ 1,325.1 $ 1,155.7 Adjusted net earnings from continuing operations (Note 1) $ 1,347.3 $ 1,254.2 $ 1,195.1 $ 1,205.1 $ 1,155.7 Basic earnings per share from continuing operations $ 2.85 $ 2.54 $ 2.41 $ 2.63 $ 2.22 Diluted earnings per share from continuing operations $ 2.82 $ 2.52 $ 2.40 $ 2.62 $ 2.19 Adjusted diluted earnings per share from continuing operations (Note 1) $ 2.74 $ 2.52 $ 2.37 $ 2.38 $ 2.19 Basic weighted average shares outstanding 487.3 493.5 500.5 503.2 521.5 Diluted weighted average shares outstanding 492.2 498.3 503.7 505.8 527.2 Cash dividends declared per share $ 1.55 $ 1.42 $ 1.35 $ 1.28 $ 1.10 Return on equity ("ROE") from continuing operations (Note 2) 22.9% 21.8% 22.4% 25.5% 22.6% At year end: Cash, cash equivalents and marketable securities $ 1,665.4 $ 1,523.7 $ 1,775.5 $ 2,388.5 $ 1,660.3 Total assets $ 30,815.5 $ 34,238.3 $ 26,862.2 $ 25,351.7 $ 23,734.4 Obligation under commercial paper borrowing $ - $ - $ - $ 730.0 $ - Long-term debt $ 16.8 $ 34.2 $ 39.8 $ 42.7 $ 52.1 Stockholders’ equity $ 6,114.0 $ 6,010.4 $ 5,478.9 $ 5,322.6 $ 5,087.2 (Dollars and shares in millions, except per share amounts) Years ended June 30, 2013 2012 2011 2010 2009 Total revenues $ 11,310.1 $ 10,616.0 $ 9,833.0 $ 8,881.6 $ 8,797.8 Total costs of revenues $ 6,649.6 $ 6,214.3 $ 5,708.4 $ 4,999.9 $ 4,794.8 Gross profit $ 4,660.5 $ 4,401.7 $ 4,124.6 $ 3,881.7 $ 4,003.0 Earnings from continuing operations before income taxes $ 2,084.3 $ 2,107.9 $ 1,918.0 $ 1,855.6 $ 1,895.9 Adjusted earnings from continuing operations before income taxes (Note 1) $ 2,127.0 $ 2,041.9 $ 1,918.0 $ 1,855.6 $ 1,895.9 Net earnings from continuing operations $ 1,364.1 $ 1,379.7 $ 1,245.0 $ 1,202.6 $ 1,322.5 Adjusted net earnings from continuing operations (Note 1) $ 1,406.8 $ 1,338.5 $ 1,245.0 $ 1,190.4 $ 1,202.5 Basic earnings per share from continuing operations $ 2.83 $ 2.83 $ 2.52 $ 2.40 $ 2.63 Diluted earnings per share from continuing operations $ 2.80 $ 2.80 $ 2.50 $ 2.39 $ 2.61 Adjusted diluted earnings per share from continuing operations (Note 1) $ 2.89 $ 2.72 $ 2.50 $ 2.36 $ 2.38 Basic weighted average shares outstanding 482.7 487.3 493.5 500.5 503.2 Diluted weighted average shares outstanding 487.1 492.2 498.3 503.7 505.8 Cash dividends declared per share $ 1.70 $ 1.55 $ 1.42 $ 1.35 $ 1.28 Return on equity ("ROE") from continuing operations (Note 2) 22.2 % 22.8 % 21.7 % 22.3 % 25.4 % At year end: Cash, cash equivalents and marketable securities $ 2,041.1 $ 1,665.4 $ 1,523.7 $ 1,775.5 $ 2,388.5 Total assets $ 32,268.1 $ 30,817.4 $ 34,238.3 $ 26,862.2 $ 25,351.7 Obligations under reverse repurchase agreements and commercial paper borrowing $ 245.9 $ — $ — $ — $ 730.0 Long-term debt $ 14.7 $ 16.8 $ 34.2 $ 39.8 $ 42.7 Stockholders’ equity $ 6,189.9 $ 6,114.0 $ 6,010.4 $ 5,478.9 $ 5,322.6 for the years ended June 30, 2012, 2011, 2010,2009, and 2008 to adjusted results that exclude a goodwill impairment charge related to our ADP AdvancedMD business for the fiscal year ended June 30, 2013 ("fiscal 2013"), a gain on the sale of assets related to rights and obligations to resell a third-party expense management platform for the fiscal year ended June 30, 2012 ("fiscal 2012"), and certain favorable tax items.items for the fiscal years ended June 30, 2010 and 2009. We use certain adjusted results, among other measures, to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods. We believe that the adjusted results provide relevant and useful information for investors because it allows investors to view performance in a manner similar to the method used by us and improves our ability to understand our operating performance. Since adjusted earnings from continuing operations before income taxes, adjusted net earnings from continuing operations, and adjusted diluted earnings per share (“EPS”) from continuing operations are not measures of performance calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), they should not be considered in isolation from, or as a substitute for, earnings from continuing operations before income taxes, net earnings from continuing operations, and diluted EPS from continuing operations, and they may not be comparable to similarly titled measures employed by other companies.(Dollars in millions, except per share amounts) Years ended June 30, 2012 2011 2010 2009 2008 Earnings from continuing operations before income taxes $ 2,122.1 $ 1,932.7 $ 1,863.2 $ 1,900.1 $ 1,803.4 Adjustments: Gain on sale of assets 66.0 - - - - Adjusted earnings from continuing operations before income taxes $ 2,056.1 $ 1,932.7 $ 1,863.2 $ 1,900.1 $ 1,803.4 Net earnings from continuing operations $ 1,388.5 $ 1,254.2 $ 1,207.3 $ 1,325.1 $ 1,155.7 Adjustments: Favorable tax items - - 12.2 120.0 - Gain on sale of assets 41.2 - - - - Adjusted net earnings from continuing operations $ 1,347.3 $ 1,254.2 $ 1,195.1 $ 1,205.1 $ 1,155.7 Diluted earnings per share from continuing operations $ 2.82 $ 2.52 $ 2.40 $ 2.62 $ 2.19 Adjustments: Favorable tax items - - 0.02 0.24 - Gain on sale of assets 0.08 - - - - Adjusted diluted earnings per share from continuing operations $ 2.74 $ 2.52 $ 2.37 $ 2.38 $ 2.19 (Dollars in millions, except per share amounts) Years ended June 30, 2013 2012 2011 2010 2009 $ 2,084.3 $ 2,107.9 $ 1,918.0 $ 1,855.6 $ 1,895.9 Adjustments: Goodwill impairment 42.7 — — — — Gain on sale of assets — (66.0 ) — — — Adjusted earnings from continuing operations before income taxes $ 2,127.0 $ 2,041.9 $ 1,918.0 $ 1,855.6 $ 1,895.9 Net earnings from continuing operations $ 1,364.1 $ 1,379.7 $ 1,245.0 $ 1,202.6 $ 1,322.5 Adjustments: Goodwill impairment 42.7 — — — — Gain on sale of assets — (41.2 ) — — — Favorable tax items — — — (12.2 ) (120.0 ) Adjusted net earnings from continuing operations $ 1,406.8 $ 1,338.5 $ 1,245.0 $ 1,190.4 $ 1,202.5 Diluted earnings per share from continuing operations $ 2.80 $ 2.80 $ 2.50 $ 2.39 $ 2.61 Adjustments: Goodwill impairment 0.09 — — — — Gain on sale of assets — (0.08 ) — — — Favorable tax items — — — (0.02 ) (0.24 ) Adjusted diluted earnings per share from continuing operations $ 2.89 $ 2.72 $ 2.50 $ 2.36 $ 2.38 stockholders’stockholders' equity. Our ROE for fiscal 2013 includes the impact of a goodwill impairment charge which decreased ROE by 0.6%. Our ROE for fiscal 2012 ROE includes the impact from the sale of assets related to rights and obligations to resell a third-party expense management platform which increased return on equityROE by 0.6%.Management’sManagement's Discussion and Analysis of Financial Condition and Results of OperationsIncInc. (“ADP”) may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature, and which may be identified by the use of words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could” and other words of similar meaning, are forward-looking statements. These statements are based on management’smanagement's expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include: ADP’sADP's success in obtaining, retaining and selling additional services to clients; the pricing of services and products; changes in laws regulating payroll taxes, professional employer organizations and employee benefits; overall market and economic conditions, including interest rate and foreign currency trends; competitive conditions; auto sales and related industry changes; employment and wage levels; changes in technology; availability of skilled technical associates, and;associates; and the impact of new acquisitions and divestitures. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. These risks and uncertainties, along with the risk factors discussed above under “Item 1A.Risk"Item 1A. Risk Factors,”" should be considered in evaluating any forward-looking statements contained herein.DESCRIPTION OF THE COMPANY AND BUSINESS SEGMENTSADP is one of the world’s largest providers of business outsourcing solutions. Leveraging over 60 years of experience, ADP offers a wide range of human resource (“HR”), payroll, tax and benefits administration solutions from a single source. ADP is also a leading provider of integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle (“RV”) and heavy equipment retailers and manufacturers. The Company’s reportable segments are: Employer Services, Professional Employer Organization (“PEO”) Services, and Dealer Services. A brief description of each segment’s operations is provided below.Employer ServicesEmployer Services offers a comprehensive range of HR information, payroll processing, time and labor management, and tax and benefits administration solutions and services, including traditional and Web-based outsourcing solutions, that assist employers in the United States, Canada, Europe, South America (primarily Brazil), Australia, and Asia to recruit, staff, manage, pay and retain their employees. As of June 30, 2012, Employer Services assisted approximately 564,000 employers with approximately 652,000 payrolls. As of June 30, 2011, Employer Services assisted approximately 537,000 employers with approximately 628,000 payrolls. Employer Services markets these solutions and services through its direct marketing sales force and, on a limited basis, through indirect sales channels, such as marketing relationships with banks and accountants, among others. Within Employer Services, the Company collects client funds and remits such funds to tax authorities for payroll tax filing and payment services and to employees of payroll services clients.PEO ServicesPEO Services provides approximately 6,500 small and medium sized businesses with comprehensive employment administration outsourcing solutions through a co-employment relationship, including payroll, payroll tax filing, HR guidance, 401(k) plan administration, benefits administration, compliance services, health and workers’ compensation coverage and other supplemental benefits for employees. Workers’ compensation and employer’s liability deductible reimbursement protection is provided to PEO Services by ADP Indemnity, Inc. (“ADP Indemnity”), a wholly-owned captive insurance company of ADP whose results of operations are recorded in the “Other” segment. Premiums are charged to PEO Services by ADP Indemnity in exchange for which ADP Indemnity provides a policy to PEO Services that reimburses all workers’ compensation and employer’s liability claim expense resulting from worksite employee claims up to a $1 million per occurrence retention. At the beginning of each policy period, ADP Indemnity establishes the premium to be paid by PEO Services required to satisfy the expected ultimate workers’ compensation claims within the $1 million per occurrence retention based upon historical loss experience and the expected workers’ compensation loss estimate as determined by an independent actuary. ADP’s PEO Services business, ADP Totalsource®, is the largest PEO in the United States based on the number of worksite employees. ADP Totalsource® has 49 offices located in 23 states and serves approximately 268,000 worksite employees in all 50 states.Dealer ServicesDealer Services provides integrated dealer management systems (such a system is also known in the industry as a “DMS”), digital marketing solutions, including website, sales leads, email, search, display and social media marketing services and other business management solutions to auto, truck, motorcycle, marine, RV and heavy equipment retailers and manufacturers in North America, Europe, South Africa, the Middle East, and the Asia Pacific region. As of June 30, 2012, over 26,000 auto, truck, motorcycle, marine, RV and heavy equipment retailers in nearly 100 countries use our DMS products, other software applications, networking solutions, data integration, consulting and digital marketing services.For more than 60 years, ADP has served as a trusted human resources, payroll, benefits, and integrated computing solutions partner to employers and automotive dealerships around the world. Oursuccess by deliveringsuccess. We seek to embrace new technology and innovation to deliver market leading products and services that meet the best solutions toneeds of our clients across all of our markets aheadmarkets. Our commitment to service excellence lies at the core of the competitionour relationship with each of our clients, whether a small, mid-sized or large business, or a multinational enterprise. Our business strategy is based on a consistent basis. ADP’s strengths have traditionally been in three core areas: a broad suite of products that deliver relief from administrative burdens; a strong service orientation; and strong sales and distribution.We have redefined ourfour strategic pillars, to align them with our goals which are predicated on drivingour ability to drive innovation and service excellence, and building talent.attract, build, and retain the right talent to position ADP as the global market leader in human capital management (HCM) services. Our strategic pillars are to:Growcloud based Human Capital Management (“HCM”),cloud-based HCM, benefits, and payroll solutions to serve the USU.S. market;Invest market leading HR Business Process Outsourcing solutions by leveraging our platforms and processes;LeverageGrowleaders.Our results during fiscal We believe the strategic pillars outlined above will help us build on our core competencies and develop new ones as we2013 continue to focus on delivering stellar service to our clients, creating an environment that fosters innovation, positioning ADP as the global HCM market leader, and enhancing long-term total shareholder return.During the year ended June 30, 2012 (“fiscal 2012”), we achieved solid results that reflect the strength and resilience of our underlying business model, despiteincluding the challenges posed bydiversity of our client base and products, against the currentuneven global economic environment.recovery. Our focus on product innovation and our investmentimprovements in sales associate headcount hassalesforce productivity led to growth in new business salesbookings. We are pleased with the performance of our business segments, which have continued to drive good revenue growth and strong pretax margin expansion. We continue to benefit from solid revenue retention across our business segments. We aresegments and we remain pleased with the current performancestrength of our strategic acquisitions together with the continued strength in our same-store-sales growth. However, we continue to be impacted by the decline in high-margin client interest revenues as a result of lower interest rates, partially offset by an increase in our average client funds balance. We expect the lower interest rates to continue to impact us during the year ending June 30, 2013 (“fiscal 2013”).Consolidated revenues in fiscal 2012 increased 8%, to $10,665.2 million, as compared to $9,879.5 million for the year ended June 30, 2011 (“fiscal 2011”). Earnings from continuing operations before income taxes increased 10%, to $2,122.1 million, as compared to $1,932.7 million in fiscal 2011 and net earnings from continuing operations increased 11%, to $1,388.5 million, as compared to $1,254.2 million in fiscal 2011. Diluted earnings per share from continuing operations increased 12%, to $2.82 in fiscal 2012, from $2.52 per share in fiscal 2011, on fewer shares outstanding. Our results for the year included a gain on the sale of assets related to rights and obligations to resell a third-party expense management platform of $66.0 million, or $41.2 million after tax, which contributed to increasing our diluted EPS from continuing operations 3%, or $0.08 per share.Each of our business segments has continued to demonstrate core strength. Employer Services’ revenues increased 7% to $7,567.7 million, PEO Services’ revenues increased 15% to $1,771.4 million, and Dealer Services’ revenues increased 10% to $1,683.7 million in fiscal 2012. Our Employer Services’ pays per control metric, which represents the number of employees on our clients' payrolls as measured on a same-store-sales basis utilizing a representative subset of payrolls ranging from small to large businesses that are reflective of a broad range of U.S. geographic regions, increased 3.0% forregions. Despite the twelve months ended June 30, 2012. Our worldwidenegative impact to our margins from strategic acquisitions completed in fiscal 2012, we remain pleased with their positive contribution to our revenue growth. We continue to be impacted by the decline in high-margin client interest revenues as a result of lower interest rates, partially offset by an increase in our average client funds balance. Though we believe that the impact to fiscal 2013 client funds revenue retentionwill be the bottom in terms of the year-over-year decline, we expect the lower interest rate remained strong throughoutenvironment to continue to impact us negatively during the year ending at 91%June 30, 2014 (“fiscal 2014”).Services’Services' revenues increasing 7% to $7,914.0 million and earnings from continuing operations before income taxes increasing 9% to $2,134.2 million, PEO Services' revenues increasing 11% to $1,973.2 million and earnings from continuing operations before income taxes increasing 17% to $199.2 million, and Dealer Services' revenues increasing 9% to $1,813.7 million and earnings from continuing operations before income taxes increasing 21% to $335.7 million in fiscal 2013. Employer Services' and PEO Services’Services' new business sales,bookings, which represent annualized recurring revenues anticipated from sales orders to new and existing clients, grew 13%11% worldwide, to over $1.2$1.35 billion in fiscal 2012.2013. Dealer Services’Services' new business salesbookings showed strength as we continued to experience the effects of a stronger automotive industry and increased penetration of applications within our base.Consolidated interest Our key business metrics continue to reflect the core strength of our business model, with our Employer Services' worldwide client revenue retention rate increasing to a record 91.3% and our pays per control metric increasing 2.8% for the twelve months ended 9%15%, or $46.8$72.4 million, to $493.3$420.9 million from $540.1$493.3 million in fiscal 2011.2012. The decrease in the consolidated interest on funds held for clients resulted from the decrease in the average interest rate earned to 2.8%2.2% in fiscal 20122013, as compared to 3.2%2.8% in fiscal 2011,2012, partially offset by growth in average client funds balancesbalance of 6% due to7% resulting from the continued strength and growth of our positive Employer Services metrics.Thesegment. of our clients’ funds are the foremost objectives of our investment strategy. We continue to promote this strategy by investingThe portfolio is predominantly invested in a prudent and conservative manner in accordance with our investment guidelines with a predominant focus on AAA/AA rated fixed-income securities. We do not hold direct investments in sovereign debt issued by Greece, Ireland, Italy, Portugal, or Spain. Our client funds investment strategy is structured to allow us to average our way through an interest rate cycle by laddering the maturities of our investments out to five years (in the case of the extended portfolio) and out to ten years (in the case of the long portfolio). This investment strategy is supported by our short-term financing arrangements necessary to satisfy short-term funding requirements relating to client funds obligations.2012,2013, with cash and cash equivalents and marketable securities of $1,665.4 million.$2,041.1 million. The cash and marketable securities balance included $0.7 million of cash and $245.2 million of long-term marketable securities pledged as collateral to the outstanding reverse repurchase obligations as of June 30,were $1,910.2 million in fiscal 2012, as compared to $1,705.8 million in fiscal 2011. This increase in cash flows from fiscal 20112012 to fiscal 20122013 was due to the fiscal 2013 payment of a reinsurance arrangement with ACE American Insurance Company, higher net earnings, lower pension plan contributions, and a favorable change in the net components of working capital, partially offset by a variance in the timing of tax-related net cash payments.payments, and unfavorable changes in timing differences on the remaining net components of working capital, partially offset by higher net earnings. The increase in cash provided byused in investing activities of $10,584.2$4,822.0 million is due to the timing of receipts and disbursements of restricted cash and cash equivalents held to satisfy client funds obligations, partially offset by the amount of cash used for business combinationsacquisitions and cash receipts related toproceeds from the sale of property, plant and equipment and other assets.businesses included in discontinued operations. The increase in cash used inprovided by financing activities of $10,293.1$5,104.9 million is primarily due to the timing of cash received and payments made related to client funds as compared to the prior year.20122013 returned excess cash of $739.7$805.5 million through dividends and $741.3$647.3 million through our share buyback program, while also investing $265.7 million in new acquisitions.program. In the last five fiscal years, we have reduced the Company’sCompany's common stock outstanding by approximately 10%5% through share buybacks, net of the effect of common stock issued under employee stock-based compensation programs. We have also raised the dividend payout per share for 3738 consecutive years.Fiscal 2012 Compared to Fiscal 2011Years ended June 30, 2012 2011 $ Change % Change Total revenues $ 10,665.2 $ 9,879.5 $ 785.7 8 % Costs of revenues: Operating expenses 5,380.1 4,900.9 479.2 10 % Systems development and programming costs 599.9 577.2 22.7 4 % Depreciation and amortization 260.0 253.4 6.6 3 % Total costs of revenues 6,240.0 5,731.5 508.5 9 % Selling, general and administrative expenses 2,466.2 2,323.3 142.9 6 % Interest expense 7.7 8.6 (0.9 ) (10 %) Total expenses 8,713.9 8,063.4 650.5 8 % Other income, net (170.8 ) (116.6 ) 54.2 46 % Earnings from continuing operations before income taxes $ 2,122.1 $ 1,932.7 $ 189.4 10 % Margin 19.9 % 19.6 % Provision for income taxes $ 733.6 $ 678.5 $ 55.1 8 % Effective tax rate 34.6 % 35.1 % Net earnings from continuing operations $ 1,388.5 $ 1,254.2 $ 134.3 11 % Diluted earnings per share from continuing operations $ 2.82 $ 2.52 $ 0.30 12 % Years ended June 30, $ Change % Change 2013 2012 2011 2013 2012 2013 2012 Total revenues $ 11,310.1 $ 10,616.0 $ 9,833.0 $ 694.1 $ 783.0 7 % 8 % Costs of revenues: Operating expenses 5,742.4 5,365.2 4,888.6 377.2 476.6 7 % 10 % 654.3 592.7 570.0 61.6 22.7 10 % 4 % Depreciation and amortization 252.9 256.4 249.8 (3.5 ) 6.6 (1 )% 3 % Total costs of revenues 6,649.6 6,214.3 5,708.4 435.3 505.9 7 % 9 % 2,620.6 2,456.9 2,314.6 163.7 142.3 7 % 6 % Goodwill impairment 42.7 — — 42.7 — 100 % — % Interest expense 9.1 7.7 8.6 1.4 (0.9 ) 18 % (10 )% Total expenses 9,322.0 8,678.9 8,031.6 643.1 647.3 7 % 8 % Other income, net (96.2 ) (170.8 ) (116.6 ) (74.6 ) 54.2 (44 )% 46 % $ 2,084.3 $ 2,107.9 $ 1,918.0 $ (23.6 ) $ 189.9 (1 )% 10 % Margin 18.4 % 19.9 % 19.5 % Provision for income taxes $ 720.2 $ 728.2 $ 673.0 $ (8.0 ) $ 55.2 (1 )% 8 % Effective tax rate 34.6 % 34.5 % 35.1 % $ 1,364.1 $ 1,379.7 $ 1,245.0 $ (15.6 ) $ 134.7 (1 )% 11 % $ 2.80 $ 2.80 $ 2.50 $ — $ 0.30 — % 12 % Years ended June 30, $ Change % Change (Dollars in millions, except per share amounts) 2013 2012 2011 2013 2012 2013 2012 $ 2,084.3 $ 2,107.9 $ 1,918.0 $ (23.6 ) $ 189.9 (1 )% 10 % Adjustments: Goodwill impairment 42.7 — — Gain on sale of assets — (66.0 ) — $ 2,127.0 $ 2,041.9 $ 1,918.0 $ 85.1 $ 123.9 4 % 6 % Provision for income taxes $ 720.2 $ 728.2 $ 673.0 $ (8.0 ) $ 55.2 (1 )% 8 % 34.6 % 34.5 % 35.1 % Adjustments: Goodwill impairment — — — Gain on sale of assets — (24.8 ) — Adjusted provision for income taxes $ 720.2 $ 703.4 $ 673.0 $ 16.8 $ 30.4 2 % 5 % 33.9 % 34.4 % 35.1 % Net earnings from continuing operations $ 1,364.1 $ 1,379.7 $ 1,245.0 $ (15.6 ) $ 134.7 (1 )% 11 % Adjustments: Goodwill impairment 42.7 — — Gain on sale of assets — (41.2 ) — Adjusted net earnings from continuing operations $ 1,406.8 $ 1,338.5 $ 1,245.0 $ 68.3 $ 93.5 5 % 8 % Diluted earnings per share from continuing operations $ 2.80 $ 2.80 $ 2.50 $ — $ 0.30 — % 12 % Adjustments: Goodwill impairment 0.09 — — Gain on sale of assets — (0.08 ) — $ 2.89 $ 2.72 $ 2.50 $ 0.17 $ 0.22 6 % 9 % Years ended June 30, (Dollars in millions) 2013 2012 $ Change Interest income on corporate funds $ (64.5 ) $ (85.2 ) $ (20.7 ) Realized gains on available-for-sale securities (32.1 ) (32.1 ) — Realized losses on available-for-sale securities 3.5 7.7 4.2 Impairment losses on available-for-sale securities — 5.8 5.8 Impairment losses on assets held for sale — 2.2 2.2 Gains on sales of buildings (2.2 ) — 2.2 Gain on sale of assets — (66.0 ) (66.0 ) Other, net (0.9 ) (3.2 ) (2.3 ) Other income, net $ (96.2 ) $ (170.8 ) $ (74.6 ) $785.7$783.0 million, or 8%, to $10,665.2$10,616.0 million in fiscal 2012 from $9,879.5 million in, as compared to fiscal 2011, due to an increase in revenues in Employer Services of 7%, or $524.8$510.2 million, to $7,567.7$7,388.5 million, PEO Services of 15%, or $227.5$227.5 million, to $1,771.4$1,771.4 million, and Dealer Services of 10%, or $147.7$147.8 million, to $1,683.7 million.$1,661.3 million. Total revenues would have increased approximately 6% without the impact of recently completed acquisitions and the impact to revenues pertaining to the sale of assets related to rights and obligations to resell a third-party expense management platform. There was no impact to total revenue growth rates as a result of changes in foreign currency exchange rates.2011.2011. The decrease in the consolidated interest earned on funds held for clients resulted from the decrease in2012.$650.5$647.3 million, or 8%, to $8,713.9$8,678.9 million in fiscal 2012 from $8,063.4 million in, as compared to fiscal 2011.2011. The increase in our consolidatedtotal expenses was due to an increase in operating expenses of $479.2$476.6 million, an increase in selling, general and administrative expenses of $142.9$142.3 million, and an increase in systems development and programming costs of $22.7 million.$22.7 million. Total expenses would have increased approximately 6% without the impact of recently completed acquisitions.$6,240.0$6,214.3 million in fiscal 2012, as compared to fiscal 2011 due to an increase in operating expenses of $479.2$476.6 million and an increase in systems development and programming costs of $22.7 million.$22.7 million.$479.2$476.6 million, or 10%, in fiscal 2012, as compared to fiscal 2011 due to the increase in revenues described above, including the increases in PEO Services, which has pass-through costs that are re-billable and which includes costs for benefits coverage, workers’workers' compensation coverage and state unemployment taxes for worksite employees. These pass-through costs were $1,363.6 million in fiscal 2012, which included costs for benefits coverage of $1,060.3 million and costs for workers’workers' compensation and payment of state unemployment taxes of $303.3 million. These pass-through costs were $1,182.2 million in fiscal 2011, which included costs for benefits coverage of $937.8 million and costs for workers’workers' compensation and payment of state unemployment taxes of $244.4 million. The increase in operating expenses is also due to operating expenses related to businesses acquired of $132.1 million, and higher labor-related expenses in Employer Services of $38.5 million. Additionally, operating expenses decreased $5.4 million due to changes in foreign currency exchange rates.$22.7$22.7 million, or 4%, in fiscal 2012, as compared to fiscal 2011, due to businesses acquired of $16.1 million, partially offset by a higher proportion of capitalizable efforts directed at feature and functionality product enhancements in the period. Additionally, systems, development, and programming costs decreased $1.3 million due to changes in foreign currency exchange rates.$142.9$142.3 million, or 6%, in fiscal 2012, as compared to fiscal 2011. The increase in expenses was related to severance expenses of $51.2 million resulting from cost reduction initiatives focused on the realization of synergies in certain international businesses as we adjust our cost structure in light of the softer European economic environment, an increase in selling expenses of $55.5 million resulting from increases in sales forcesalesforce headcount coupled with an increase in selling, general and administrative expenses of businesses acquired businesses of $36.7 million. Additionally, selling, general, and administrative expenses decreased $9.0 million due to changes in foreign currency exchange rates.Years ended June 30, 2012 2011 $ Change (Dollars in millions) Interest income on corporate funds $ (85.2 ) $ (88.8 ) $ (3.6 ) Realized gains on available-for-sale securities (32.1 ) (38.0 ) (5.9 ) Realized losses on available-for-sale securities 7.7 3.6 (4.1 ) Realized gains on investment in Reserve Fund - (0.9 ) (0.9 ) Impairment losses on available-for-sale securities 5.8 - (5.8 ) Impairment losses on assets held for sale 2.2 11.7 9.5 Gain on sale of assets (66.0 ) - 66.0 Net gains on sales of buildings - (1.8 ) (1.8 ) Other, net (3.2 ) (2.4 ) 0.8 Other income, net $ (170.8 ) $ (116.6 ) $ 54.2 Years ended June 30, (Dollars in millions) 2012 2011 $ Change Interest income on corporate funds $ (85.2 ) $ (88.8 ) $ (3.6 ) Realized gains on available-for-sale securities (32.1 ) (38.0 ) (5.9 ) Realized losses on available-for-sale securities 7.7 3.6 (4.1 ) Impairment losses on available-for-sale securities 5.8 — (5.8 ) Impairment losses on assets held for sale 2.2 11.7 9.5 Gains on sales of buildings — (1.8 ) (1.8 ) Gain on sale of assets (66.0 ) — 66.0 Other, net (3.2 ) (3.3 ) (0.1 ) Other income, net $ (170.8 ) $ (116.6 ) $ 54.2 $15.8continuing operationsContinuing Operations before Income Taxes$189.4$189.9 million, or 10%, from $1,932.7to $2,107.9 million in fiscal 20112012, as compared to $2,122.1 million in fiscal 20122011, due to the increase in revenues and the gain on sale of assets, partially offset by the increase in expenses discussed above. Overall margin increased approximately 30 basis points in fiscal 2012 with approximately 60 basis points of the margin contribution related to the gain on the sale of assets and approximately 40 basis points of margin decline attributable to acquisitions.34.6%34.5% and 35.1%, respectively. The decrease in the effective tax rate for the fiscal year is the result of the final resolution of certain tax matters, the expiration of certain statutes of limitation, and the availability of foreign tax credits, partially offset by an unfavorable mix of earnings between jurisdictions.continuing operationsContinuing Operations and Diluted Earnings per Share from continuing operationsContinuing Operations$134.3$134.7 million, or 11%, from $1,254.2to $1,379.7 million in fiscal 2011 to $1,388.5 million in fiscal 2012 and includes an after-tax gain on sale of assets of $41.2 million.million, as compared to fiscal 2011. Diluted earnings per share from continuing operations increased 12%, to $2.82$2.80 compared from $2.52to $2.50 in fiscal 2011. The increase in diluted earnings per share reflects the increase in net earnings and the impact of fewer shares outstanding as a result of the repurchase of approximately 14.6 million shares during fiscal 2012 and the repurchase of 14.2 million shares in fiscal 2011.2012.The following table reconciles our results for fiscal 2012 to adjusted results that exclude the sale of assets related to rights and obligations to resell a third-party expense management platform. We use certain adjusted results, among other measures, to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods. We believe that the adjusted results provide relevant and useful information for investors because it allows investors to view performance in a manner similar to the method used by us and improves our ability to understand our operating performance. Since adjustedand adjusted diluted EPS from continuing operations are not measures of performance calculated in accordance with U.S. GAAP, they should not be considered in isolation from,increased $93.5 million, or as a substitute for, earnings from continuing operations, and diluted EPS from continuing operations and they may not be comparable8% to similarly titled measures employed by other companies.Although we have presented our results for fiscal 2012 adjusted to exclude the gain on the sale of assets discussed above, we do not expect this sale of assets to have a material impact on the results of our future operations.Year ended June 30, 2012 (Dollars in millions, except per share amounts) Diluted EPS Earnings from Net earnings from from continuing operations Provision for continuing continuing before income taxes income taxes operations operations As Reported $ 2,122.1 $ 733.6 $ 1,388.5 $ 2.82 Less Adjustment: Gain on sale of assets 66.0 24.8 41.2 0.08 As Adjusted $ 2,056.1 $ 708.8 $ 1,347.3 $ 2.74 Net earnings from continuing operations, as adjusted, increased $93.1 or 7% to $1,347.3 million,, for fiscal 2012, from $1,254.2$1,245.0 million, as reported, for fiscal 2011, and the related diluted earnings per share from continuing operations, as adjusted, increased 9%, to $2.74$2.72 for fiscal 2012. The increase in diluted earnings per share, as adjusted, for fiscal 2012 reflects the increase in adjusted net earnings from continuing operations, as adjusted, and the impact of fewer shares outstanding due to the repurchase of approximately 14.6 million shares during fiscal 2012 and the repurchase of 14.2 million shares in fiscal 2011.2012.Fiscal 2011 Compared to Fiscal 2010millions, except per share amounts)Years ended June 30, 2011 2010 $Change % Change Total revenues $ 9,879.5 $ 8,927.7 $ 951.8 11 % Costs of revenues: Operating expenses 4,900.9 4,277.2 623.7 15 % Systems development and programming costs 577.2 513.9 63.3 12 % Depreciation and amortization 253.4 238.6 14.8 6 % Total costs of revenues 5,731.5 5,029.7 701.8 14 % Selling, general and administrative expenses 2,323.3 2,127.4 195.9 9 % Interest expense 8.6 8.6 - - Total expenses 8,063.4 7,165.7 897.7 13 % Other income, net (116.6 ) (101.2 ) 15.4 15 % Earnings from continuing operations before income taxes $ 1,932.7 $ 1,863.2 $ 69.5 4 % Margin 19.6 % 20.9 % Provision for income taxes $ 678.5 $ 655.9 $ 22.6 3 % Effective tax rate 35.1 % 35.2 % Net earnings from continuing operations $ 1,254.2 $ 1,207.3 $ 46.9 4 % Diluted earnings per share from continuing operations $ 2.52 $ 2.40 $ 0.12 5 % Total RevenuesOur total revenues increased 11% to $9,879.5 million in fiscal 2011, from $8,927.7 million in fiscal 2010, due to an increase in revenues in Employer Services of 8%, or $507.8 million, to $7,042.9 million, PEO Services of 17%, or $227.1 million, to $1,543.9 million, and Dealer Services of 23%, or $287.9 million, to $1,536.0 million. Total revenue would have increased approximately 6% without the impact of acquisitions. There was no impact to total revenue growth rates as a result of changes in foreign currency exchange rates.Total revenues for fiscal 2011 include interest on funds held for clients of $540.1 million, as compared to $542.8 million in fiscal 2010. The decrease in the consolidated interest earned on funds held for clients resulted from the decrease in the average interest rate earned to 3.2% during fiscal 2011 as compared to 3.6% for fiscal 2010, partially offset by an increase in our average client funds balance of 11%, to $16.9 billion in fiscal 2011.Total ExpensesOur total expenses in fiscal 2011 increased $897.7 million, to $8,063.4 million, from $7,165.7 million in fiscal 2010. The increase in our consolidated expenses was due to an increase in operating expenses of $623.7 million, an increase in selling, general and administrative expenses of $195.9 million and an increase in systems development and programming costs of $63.3 million.Our total costs of revenues increased 14%, to $5,731.5 million in fiscal 2011, as compared to fiscal 2010 due to an increase in operating expenses of $623.7 million and an increase in systems development and programming costs of $63.3 million.Operating expenses increased $623.7 million, or 15%, in fiscal 2011 as compared to fiscal 2010 due to the increase in revenues described above, including the increases in PEO Services, which has pass-through costs that are re-billable and which includes costs for benefits coverage, workers’ compensation coverage and state unemployment taxes for worksite employees. These pass-through costs were $1,182.2 million in fiscal 2011, which included costs for benefits coverage of $937.8 million and costs for workers’ compensation and payment of state unemployment taxes of $244.4 million. These pass-through costs were $988.5 million in fiscal 2010, which included costs for benefits coverage of $811.5 million and costs for workers’ compensation and payment of state unemployment taxes of $176.9 million. The increase in operating expenses is also due to operating expenses related to businesses acquired of $230.6 million, and higher expenses in Employer Services of $47.4 million related to increased service costs for investment in client-facing associates. Additionally, operating expenses increased due to the settlement of a PEO Services state unemployment matter that reduced operating expenses $9.2 million in fiscal 2010. Lastly, operating expenses increased $5.6 million due to changes in foreign currency exchange rates.Systems development and programming costs increased $63.3 million, or 12%, in fiscal 2011 as compared to fiscal 2010, due to expenses of acquired businesses of $42.2 million and higher development expenses.Selling, general and administrative expenses increased $195.9 million, or 9%, in fiscal 2011 as compared to fiscal 2010. The increase in expenses was due to higher selling expenses of $75.6 million resulting from increases in headcount over prior year levels coupled with an increase in selling, general and administrative expenses of acquired businesses of $96.1 million, an increase in stock-based compensation expense of $5.9 million, and an increase in technology related security expenses of $8.1 million. Additionally, selling, general and administrative expenses increased $5.6 million due to changes in foreign currency rates.Other Income, netYears ended June 30, 2011 2010 $ Change (Dollars in millions) Interest income on corporate funds $ (88.8 ) $ (98.8 ) $ (10.0 ) Realized gains on available-for-sale securities (38.0 ) (15.0 ) 23.0 Realized losses on available-for-sale securities 3.6 13.4 9.8 Realized gains on investment in Reserve Fund (0.9 ) (15.2 ) (14.3 ) Impairment losses on available-for-sale securities - 14.4 14.4 Impairment losses on assets held for sale 11.7 - (11.7 ) Net loss (gain) on sales of buildings (1.8 ) 2.3 4.1 Other, net (2.4 ) (2.3 ) 0.1 Other income, net $ (116.6 ) $ (101.2 ) $ 15.4 Other income, net, increased $15.4 million in fiscal 2011 as compared to fiscal 2010. This increase was mainly due to an increase in realized gains on available-for-sale securities of $23.0 million, and a decrease in realized losses on available-for-sale securities of $9.8 million, which together increased other income, net, $32.8 million. Such amounts were offset in fiscal 2011 by an $11.7 million impairment loss on assets held for sale and a $10.0 million decrease in interest income on corporate funds resulting from flat average interest rates at 2.6%, as compared to the prior year, coupled with declining average daily corporate funds, which decreased from $3.8 billion in fiscal 2010 to $3.5 billion in fiscal 2011. Years ended June 30, $ Change % Change 2013 2012 2011 2013 2012 2013 2012 Employer Services $ 7,914.0 $ 7,388.5 $ 6,878.3 $ 525.5 $ 510.2 7 % 7 % PEO Services 1,973.2 1,771.4 1,543.9 201.8 227.5 11 % 15 % Dealer Services 1,813.7 1,661.3 1,513.5 152.4 147.8 9 % 10 % Other 1.7 5.5 12.9 Reconciling items: Foreign exchange 39.9 96.4 97.2 Client fund interest (432.4 ) (307.1 ) (212.8 ) $ 11,310.1 $ 10,616.0 $ 9,833.0 $ 694.1 $ 783.0 7 % 8 % Earnings from continuing operations before income taxes increased $69.5 million, or 4%, from $1,863.2 millionfiscal 2010 to $1,932.7 million in fiscal 2011 due to the increase in revenues partially offset by the increase in expenses discussed above. Overall margin decreased approximately 130 basis points in fiscal 2011 with approximately 90 basis points of the margin decline attributable to acquisitions.millions)Provision for Income Taxes Years ended June 30, $ Change % Change 2013 2012 2011 2013 2012 2013 2012 Employer Services $ 2,134.2 $ 1,949.2 $ 1,831.9 $ 185.0 $ 117.3 9 % 6 % PEO Services 199.2 170.6 137.3 28.6 33.3 17 % 24 % Dealer Services 335.7 277.6 231.3 58.1 46.3 21 % 20 % Other (272.8 ) (102.0 ) (178.1 ) Reconciling items: Foreign exchange 7.4 3.1 (1.0 ) Client fund interest (432.4 ) (307.1 ) (212.8 ) Cost of capital charge 113.0 116.5 109.4 $ 2,084.3 $ 2,107.9 $ 1,918.0 $ (23.6 ) $ 189.9 (1 )% 10 % effective tax rates in fiscal 2011 and 2010 were 35.1% and 35.2%, respectively. The reduction in the effective tax rate for fiscal 2011 is due to the resolution of certain tax matters in fiscal 2010 that resulted in a decrease to the effective tax rate of 0.7 percentage points for that period, offset by a decrease in federal and state income tax expense and a favorable mix of earnings in foreign jurisdictions in fiscal 2011.Net Earnings from Continuing Operations and Diluted Earnings per Share from Continuing OperationsNet earnings from continuing operations increased $46.9 million to $1,254.2 million in fiscal 2011, from $1,207.3 million in fiscal 2010, and diluted earnings per share from continuing operations increased 5%, to $2.52. The increase in net earnings in fiscal 2011 reflects the increase in earnings before income taxes and the impact of the tax matters discussed above. The increase in diluted earnings per share in fiscal 2011 reflects the increase in earnings and the impact of the tax matters discussed above coupled with the effects of fewer shares outstanding.The following table reconciles our results for fiscal 2011 and fiscal 2010 to adjusted results that exclude the impact of certain favorable tax items. We use certain adjusted results, among other measures, to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods. We believe that the adjusted results provide relevant and useful information for investors because it allows investors to view performance in a manner similar to the method used by us and improves our ability to understand our operating performance. Since adjusted earnings from continuing operations and adjusted diluted EPS from continuing operations are not measures of performance calculated in accordance with U.S. GAAP, they should not be considered in isolation from, or as a substitute for, earnings from continuing operations and diluted EPS from continuing operations, and they may not be comparable to similarly titled measures employed by other companies.Year ended June 30, 2011 (Dollars in millions, except per share amounts) Diluted EPS Earnings from Net earnings from from continuing operations Provision for continuing continuing before income taxes income taxes operations operations As Reported $ 1,932.7 $ 678.5 $ 1,254.2 $ 2.52 Less Adjustment: Favorable tax items - - - - As Adjusted $ 1,932.7 $ 678.5 $ 1,254.2 $ 2.52 Year ended June 30, 2010 (Dollars in millions, except per share amounts) Diluted EPS Earnings from Net earnings from from continuing operations Provision for continuing continuing before income taxes income taxes operations operations As Reported $ 1,863.2 $ 655.9 $ 1,207.3 $ 2.40 Less Adjustment: Favorable tax items - 12.2 12.2 0.02 As Adjusted $ 1,863.2 $ 668.1 $ 1,195.1 $ 2.37 Net earnings from continuing operations, as adjusted, increased $59.1 million to $1,254.2 million for fiscal 2011, from $1,195.1 million for fiscal 2010, and the related diluted earnings per share from continuing operations, as adjusted, increased $0.15 to $2.52. The increase in diluted earnings per share, as adjusted, for the fiscal 2011 reflects the impact of fewer shares outstanding due to the repurchase of approximately 14.2 million shares during fiscal 2011 and the repurchase of 18.2 million shares in fiscal 2010.ANALYSIS OF REPORTABLE SEGMENTSRevenues(Dollars in millions) Years ended June 30, $ Change % Change 2012 2011 2010 2012 2011 2012 2011 Employer Services $ 7,567.7 $ 7,042.9 $ 6,535.1 $ 524.8 $ 507.8 7 % 8 % PEO Services 1,771.4 1,543.9 1,316.8 227.5 227.1 15 % 17 % Dealer Services 1,683.7 1,536.0 1,248.1 147.7 287.9 10 % 23 % Other 5.5 12.8 18.5 (7.3 ) (5.7 ) Reconciling items: Foreign exchange (55.9 ) (43.2 ) (54.1 ) Client funds interest (307.2 ) (212.9 ) (136.7 ) Total revenues $ 10,665.2 $ 9,879.5 $ 8,927.7 $ 785.7 $ 951.8 8 % 11 % Earnings from Continuing Operations before Income Taxes (Dollars in millions) Years ended June 30, $ Change % Change 2012 2011 2010 2012 2011 2012 2011 Employer Services $ 1,972.3 $ 1,856.5 $ 1,741.4 $ 115.8 $ 115.1 6 % 7 % PEO Services 170.2 137.3 127.2 32.9 10.1 24 % 8 % Dealer Services 277.1 233.3 204.1 43.8 29.2 19 % 14 % Other (117.6 ) (191.9 ) (173.9 ) 74.3 (18.0 ) Reconciling items: Foreign exchange 2.7 (6.5 ) (8.9 ) Client funds interest (307.2 ) (212.9 ) (136.7 ) Cost of capital charge 124.6 116.9 110.0 Total earnings from continuing operations before income taxes $ 2,122.1 $ 1,932.7 $ 1,863.2 $ 189.4 $ 69.5 10 % 4 % The fiscal 2011 and 2010prior years' reportable segments’segment revenues and earnings from continuing operations before income taxes have been adjusted to reflect updated fiscal 20122013 budgeted foreign exchange rates. This adjustment is made for management purposes so that the reportable segments’segments' revenues are presented on a consistent basis without the impact of changes in foreign currency exchange rates. This adjustment is a reconciling item to revenues from continuing operations and earnings from continuing operations before income taxes and is eliminated in consolidation.chargedallocated to the reportable segments, such as stock-based compensation expense.$524.8$510.2 million, or 7%, to $7,567.7$7,388.5 million in fiscal 2012, as compared to fiscal 2011. Revenues for our Employer Services business would have increased approximately 6% without the impact of acquisitions and revenues pertaining to the sale of assets related to rights and obligations to resell a third-party expense management platform. Revenues increased due to new business started during the year from new business salesbookings growth, an increase in the number of employees on our clients’clients' payrolls, and the impact of price increases. Our worldwide client revenue retention rate for fiscal 2012 decreased slightly as compared to our rate for fiscal 2011. Pays2011 while our pays per control which represents the number of employees on our clients’ payrolls as measured on a same-store-sales basis utilizing a representative subset of payrolls ranging from small to large businesses that are reflective of a broad range of U.S. geographic regions,metric increased 3.0% for fiscal 2012.Services’Services' earnings from continuing operations before income taxes increased $115.8$117.3 million, or 6%, to $1,972.3$1,949.2 million in fiscal 2012, as compared to fiscal 2011. The increase was due to the increase in revenues of $524.8$510.2 million discussed above, which was partially offset by an increase in expenses of $409.0$392.9 million. In addition to an increase in expenses related to increased revenues, expenses increased for fiscal 2012 due to increasesinvestments in salessalesforce associate headcount and labor-related costs over the same period prior year levels coupled with the effects of acquisitions. Overall margin decreaseddecreased approximately 3020 basis points from 26.4%26.6% to 26.1%26.4% for fiscal 2012, as compared to fiscal 2011, with approximately 80 basis points of margin decline attributable to acquisitions.20112013 Compared to Fiscal 2010RevenuesEmployerPEO Services' revenues increased $507.8$201.8 million, or 8%11%, to $7,042.9$1,973.2 million in for fiscal 20112013, as compared to fiscal 2010. Revenues2012. Such revenues include pass-through costs of $1,513.5 million for our Employer Services business would have increased approximately 6% without the impact of acquisitions. Revenues increasedfiscal2013 and $1,363.6 million for fiscal2012 associated with benefits coverage, workers' compensation coverage, and state unemployment taxes for worksite employees. The increase in revenues was due to new business started duringa 9% increase in the yearaverage number of worksite employees, resulting from new business sales growth, an increase in the number of employees onnew clients and growth in our clients’ payrolls, and higher average client funds balances. Our worldwide client revenue retention rate increased 120 basis points in fiscal 2011 to 91.1% as compared to our rate for fiscal 2010 and our pays per control increased 2.4% in fiscal 2011 as compared to our rate for fiscal 2010.existing clients.EmployerPEO Services’ earnings from continuing operations before income taxes increased $115.1$28.6 million, or 17%, to $1,856.5$199.2 million in for fiscal 20112013, as compared to fiscal 2010. The increase was2012. Earnings from continuing operations before income taxes increased due to growth in earnings related to the increase in revenuesthe average number of $507.8 million discussed above, which was partially offset by an increase in expenses of $392.7 million. In addition to an increase in expenses related to increased revenues, expenses increased in fiscal 2011 due to increases in sales and service headcount over fiscal 2010 levels coupled with the effects of acquisitions.worksite employees. Overall margin decreasedincreased approximately 2050 basis points from 26.6%9.6% to 26.4% in 10.1% for fiscal 20112013, as compared to fiscal 2010, with approximately 110 basis points of margin decline attributable to acquisitions.2012, resulting from slower growth in pass-through costs.PEO Services$227.5$227.5 million, or 15%, to $1,771.4$1,771.4 million in fiscal 2012, as compared to fiscal 2011. Such revenues include pass-through costs of $1,363.6 million for fiscal 2012 and $1,182.2 million for fiscal 2011 associated with benefits coverage, workers’workers' compensation coverage, and state unemployment taxes for worksite employees. The increase in revenues was due to a 12% increase in the average number of worksite employees, resulting from an increase in the number of new clients and growth in our existing clients.Services’Services' earnings from continuing operations before income taxes increased $32.9$33.3 million, or 24%, to $170.2$170.6 million for fiscal 2012, as compared to fiscal 2011, due to growth in earnings related to the increase in the average number of worksite employees. Overall margin increased approximately 70 basis points from 8.9%to 9.6% for fiscal 2012, from 8.9% foras compared to fiscal 2011, resulting from a higher average number of worksite employees.20112013 Compared to Fiscal 2010RevenuesPEODealer Services' revenues increased $227.1$152.4 million, or 17%9%, to $1,543.9$1,813.7 million in for fiscal 2011,2013, as compared to fiscal 2010. Such revenues include pass-through costs2012. Revenues for our Dealer Services business would have increased approximately 8% without the impact of $1,182.2 million for fiscal 2011 and $988.5 million for fiscal 2010 associated with benefits coverage, workers’ compensation coverage, and state unemployment taxes for worksite employees. The increase in revenues wasacquisitions due to a 12% increase in the average number of worksite employees, resulting from an increase in the number of new clients, improved client retention, and growth in our existing clients.key products during PEO Services’Dealer Services' earnings from continuing operations before income taxes increased $10.1 $58.1 million, or 8%21%, to $137.3$335.7 million for fiscal2013, as compared to fiscal2012. This increase was due to the increase in revenues of $152.4 million discussed above and was partially offset by higher operating expenses related to implementing and servicing new clients and products. Overall margin increased approximately 180 basis points from 16.7% to 18.5% for fiscal 20112013, as compared to fiscal 20102012, due to growth in earningsincreased operating scale and included approximately 10 basis points of margin improvement related to the increase in the number of average worksite employees. The increase was partially offset by the settlement of a state unemployment tax matter, which increased earnings before income taxes $9.2 millionacquisitions completed in fiscal 2010. Overall margin decreased to 8.9% in fiscal 2011 from 9.7% in fiscal 2010 due to a 70 basis point decline pertaining to the settlement of a fiscal 2010 state unemployment tax matter.2012.Dealer Services$147.7$147.8 million, or 10%, to $1,683.7$1,661.3 million for fiscal 2012, as compared to fiscal 2011. Revenues for our Dealer Services business would have increased approximately 6% for fiscal 2012 without the impact of acquisitions. Revenues without acquisitions increased $90.9 million due to new clients, improved client retention, and growth in our key products during fiscal 2012, as compared to fiscal 2011. TheRevenues increased due to new business started during the year from growth in our key products includednew business bookings, increased users of our dealership front officedigital marketing solutions, (including our customer relationship management ("CRM") applications and services), growth in our "Drive" dealer management system ("DMS") solution and hosted IP telephony services, and an increase in credit report and vehicle registration transaction revenues and increased activity in our digital marketing solutions and data services businesses.revenues.$43.8$46.3 million, or 19%20%, to $277.1$277.6 million for fiscal 2012, as compared to the fiscal 2011. The increase was due to the increase in revenues of $147.7$147.8 million discussed above and was partially offset by higher operating expenses related to implementing and servicing new clients and products. Overall margin increased approximately 130140 basis points from 15.2%15.3% to 16.5%16.7% for fiscal 2012, as compared to fiscal 2011, which includes approximately 20 basis points of margin decrease related to acquisitions. In addition, overall margin increased approximately 50 basis points due to acquisition-related costs incurred during fiscal 2011 related to our acquisition of Cobalt in the prior year.Fiscal 2011 Compared to Fiscal 2010RevenuesDealer Services' revenues increased $287.9 million, or 23%, to $1,536.0 million in fiscal 2011. Revenues for our Dealer Services business would have increased approximately 3% for fiscal 2011 without the impact of acquisitions, which increased revenues $250.7 million. Revenues increased $37.8 million due to new clients, improved client retention, and growth in our key products. The growth in our key products was driven by increased users of application service provider (ASP) managed services, CRM solutions and growth in hosted IP telephony as well as an increase in transaction revenues due to higher credit report checks and vehicle registrations.Earnings from Continuing Operations before Income TaxesDealer Services' earnings from continuing operations before income taxes increased $29.2 million, or 14%, to $233.3 million in fiscal 2011. The increase was due to the increase in revenues of $287.9 million discussed above and was partially offset by higher operating expenses related to implementing and servicing new clients and products. Earnings from continuing operations before income taxes also increased due to an asset impairment charge of $6.8 million recorded in fiscal 2010 resulting from the announcement by GM that it would shut down its Saturn division. Overall margin decreased from 16.4% to 15.2% in fiscal 2011 as compared to fiscal 2010, which includes approximately 240 basis points of margin decline related to acquisitions, partially offset by the prior year effects of the Saturn impairment charge.Otherchargedallocated to the reportable segments, such as stock-based compensation expense.$78.7$96.4 million $76.3, $94.1 million, and $67.6$90.3 million in fiscal 2013, 2012 2011,, and 2010,2011, respectively.workers’workers' compensation and employer’semployer's liability deductible reimbursement insurance protection for PEO Services worksite employees up to a $1 million per occurrence retention.occurrence. PEO Services has secured specific per occurrence and aggregate stop loss insurance from a wholly-owned and regulated insurance carrier of AIG that covers all losses in excess of the $1 million per occurrence retention and also any aggregate losses within the $1 million retention that collectively exceed a certain level in each policy year. We utilize historical loss experience and actuarial judgment to determine the estimated claim liability for the PEO Services business. Premiums are charged to PEO Services to cover the claims expected to be incurred by the PEO Services’Services' worksite employees. Changes in estimated ultimate incurred losses are recognized by ADP Indemnity. and losses on the sale of available-for-sale securities, including impairment losses, were $(18.6)$(28.6) million $(34.4), $(18.6) million, and $12.8$(34.4) million in each of fiscal 2013, 2012 2011,, and 2010,2011, respectively.2012,2013, cash and marketable securities were $1,665.4$2,041.1 million stockholders’, stockholders' equity was $6,114.0$6,189.9 million, and the ratio of long-term debt-to-equity was 0.3%0.2%. Working capital before funds held for clients and client funds obligations at June 30, 2013was $1,233.3$1,195.7 million, as compared to $1,252.2$1,337.0 million at June 30, 2011.2012. The changedecrease in working capital compared to the prior fiscal year 2011 resulted from an increase in accrued expenses and other current liabilities an increase in accrued payroll and payroll related expenses, and an increase in income taxes payable,outstanding obligations under reverse repurchase agreements, partially offset by an increase in cash and cash equivalents. 2012,2013, and we held approximately $1.7$2.0 billion of cash and marketable securities at June 30, 2012.2013. We also have the ability to generate cashborrow through our financing arrangements under our U.S. short-term commercial paper program and our U.S. and Canadian short-term reverse repurchase agreements to meet short-term funding requirements related to client funds obligations. Of the cash and cash equivalents and marketable securities held at June 30, 2012,2013, approximately $0.5$245.2 million and $0.7 million are classified as long-term marketable securities and cash and cash equivalents, respectively, and were pledged as collateral by our Canadian subsidiary to engage in reverse repurchase obligations, which were subsequently repaid on July 2, 2013. An additional $0.6 billion was held by our foreign subsidiaries. Amounts held by foreign subsidiaries, if repatriated to the U.S., would generally be subject to foreign withholding and U.S. income taxes, adjusted for foreign tax credits. Our intent is to permanently reinvest these funds outside of the United StatesU.S. and our current plans do not demonstrate a need to repatriate them to fund our United StatesU.S. operations. Years ended June 30, $ Change 2013 2012 2011 2013 2012 Cash provided by (used in): Operating activities $ 1,577.2 $ 1,910.2 $ 1,705.8 $ (333.0 ) $ 204.4 Investing activities (1,578.4 ) 3,243.6 (7,340.6 ) (4,822.0 ) 10,584.2 Financing activities 151.0 (4,953.9 ) 5,339.2 5,104.9 (10,293.1 ) Effect of exchange rate changes on cash and cash equivalents 1.2 (41.2 ) 41.7 42.4 (82.9 ) Net change in cash and cash equivalents $ 151.0 $ 158.7 $ (253.9 ) $ (7.7 ) $ 412.6 were $1,910.2 million for fiscal2012 as compared to $1,705.8 million for fiscal 2011.. The increasedecrease in net cash flows provided by operating activities was due to the payment of a premium of $141.4 million related to our fiscal2013 reinsurance arrangement with ACE American Insurance Company, higher net earnings, lower pension plan contributions of $66.5$43.7 million and a favorable change in the net components of working capital, partially offset by, a variance in the timing of tax-related net cash payments of $162.7 million.$44.0 million, and an unfavorable change in the net components of working capital.provided byused in investing activities were $3,243.6$1,578.4 million for fiscal 2012,2013, as compared to net cash flows used inprovided by investing activities of $7,340.6$3,243.6 million for fiscal 2011.2012. The net increasechange in cash provided byused in investing activities wasis due to the timing of receipts and disbursements of restricted cash and cash equivalents held to satisfy client funds obligations of $9,692.1$5,016.0 million, partially offset by a decrease in the purchases of corporate and client funds marketable securities of $210.9 million, a decrease of $510.3 million related toin cash used for business acquisitions of $223.7 million, and an increase of $58.5 million in cash receipts related toreceived from the sale of property, plant and equipment and other assets.used inprovided by financing activities were $4,953.9$151.0 million for fiscal 20122013 as compared to net cash flows used in financing activities of $4,953.9 million for fiscal2012. The net change in cash provided by financing activities of $5,339.2 million for fiscal 2011. The increase in cash used wasis due to the net change in client funds obligations of $10,017.5$4,865.1 million as a result of the timing of cash received and payments made related to client funds, and lower proceeds received frompartially offset by an increase in dividends paid to our stock purchase plan and the exercisesshareholders of stock options. $65.8 million.14.610.4 million shares of our common stock at an average price per share of $51.26$61.89 during fiscal 20122013 compared to purchases of 14.214.6 million shares at an average price per share of $51.52 $51.26 during fiscal 2011.2012. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase programs. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual$6.75$6.75 billion in aggregate maturity value of commercial paper.paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. In August 2013, the Company increased the U.S. short-term commercial paper program to provide for the issuance of up to $7.25 billion in aggregate maturity value. Our commercial paper program is rated A-1+ by Standard and Poor’s and Prime-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. For fiscal 20122013 and fiscal 2011, the Company’s2012, our average borrowings were $2.3$2.4 billion and $1.6$2.3 billion, respectively, at weighted average interest ratesrate of 0.1%0.2% and 0.2%0.1%, respectively. The weighted average maturity of the Company’s commercial paper during fiscal2013approximated two days in both fiscal 2012 and fiscal 2011.. We have successfully borrowed through the use of our commercial paper program on an as needed basis to meet short-term funding requirements related to client funds obligations. At June 30, 2013 and June 30, 2012 and June 30, 2011, we had no outstanding obligations under our short-term commercial paper program.$3.0$3.0 billion available to us on a committed basis under these reverse repurchase agreements. We believe that we currently meet all conditions set forth in the committed reverse repurchase agreements to borrow thereunder, and we are not aware of any conditions that would prevent us from borrowing part or all of the $3.0$3.0 billion available to us under the committed reverse repurchase agreements. In fiscal 2012 and 2011, we had average outstanding balances under reverse repurchase agreements of $297.7 million and $505.2 million, respectively, at weighted average interest rates of 0.6% and 0.4%, respectively. We have successfully borrowed through the use of reverse repurchase agreements on an as needed basis to meet short-term funding requirements related to client funds obligations. At June 30, 2013, we had $245.9 million of obligations outstanding related to reverse repurchase agreements, which were subsequently repaid on July 2, 2013. At June 30, 2012 and 2011, we had no outstanding obligations under reverse repurchase agreements.$2.0$2.0 billion, 364-day credit agreement with a group of lenders that matures in June 2013.2014. In addition, we have a four-year $3.25$3.25 billion credit facility maturing in June 2015 that contains an accordion feature under which the aggregate commitment can be increased by $500.0$500.0 million, subject to the availability of additional commitments. We also have a $1.5an existing $2.0 billion five-year credit facility that matures in June 20172018 that also contains an accordion feature under which the aggregate commitment can be increased by $500.0$500.0 million, subject to the availability of additional commitments. The interest rate applicable to committed borrowings is tied to LIBOR, the federal funds effective rate, or the prime rate depending on the notification provided by the Company to the syndicated financial institutions prior to borrowing. The Company is also required to pay facility fees on the credit agreements. The primary uses of the credit facilities are to provide liquidity to the commercial paper program and funding for general corporate purposes, if necessary. We had no borrowings through June 30, 20122013 under the credit agreements. We believe that we currently meet all conditions set forth in the revolving credit agreements to borrow thereunder, and we are not aware of any conditions that would prevent us from borrowing part or all of the $6.75$7.25 billion available to us under the revolving credit agreements.Furthermore, we do not hold direct investments in sovereign debt issued by Greece, Ireland, Italy, Portugal, or Spain. We own AAA rated senior tranches of fixed rate credit card, auto loan, rate reduction, and auto loan receivables,other asset-backed securities, secured predominately by prime collateral. All collateral on asset-backed securities is performing as expected. In addition, we own senior debt directly issued by Federal Home Loan Banks and Federal Farm Credit Banks, Federal National Mortgage Association ("Fannie Mae"), and Federal Home Loan Mortgage Corporation ("Freddie Mac"). We do not own subordinated debt, preferred stock or common stock of any of these agencies.Banks. We do own mortgage-backed securities, which represent an undivided beneficial ownership interest in a group or pool of one or more residential mortgages. These securities are collateralized by the cash flows of 15-year and 30-year residential mortgages and are guaranteed by Fannie MaeFederal National Mortgage Association and Freddie MacFederal Home Loan Mortgage Corporation as to the timely payment of principal and interest. Our client funds investment strategy is structured to allow us to average our way through an interest rate cycle by laddering the maturities of our investments out to five years (in the case of the extended portfolio) and out to ten years (in the case of the long portfolio). This investment strategy is supported by our short-term financing arrangements necessary to satisfy short-term funding requirements relating to client funds obligations. 20122013 were $146.2$174.8 million, as compared to $146.2 million in fiscal2012 and $184.8 million in fiscal 2011 and $90.2 million in fiscal 2010.. The capital expenditures in fiscal 20122013 related to our data center and other facility improvements were made to support our operations. We expect capital expenditures in fiscal 20132014 to be between $160$190 million and $180$210 million.2012:(In millions) Payments due by period Less than 1-3 3-5 More than Contractual Obligations 1 year years years 5 years Unknown Total Debt Obligations (1) $ 17.5 $ 4.6 $ 5.1 $ 7.8 $ - $ 35.0 Operating Lease and Software License Obligations (2) $ 173.7 $ 217.9 $ 70.4 $ 26.6 $ - $ 488.6 Purchase Obligations (3) $ 350.5 $ 264.0 $ 183.4 $ - $ - $ 797.9 Obligations related to Unrecognized $ 7.0 $ - $ - $ - $ 77.7 $ 84.7 Tax Benefits (4) Other long-term liabilities reflected on our Consolidated Balance Sheets: Compensation and Benefits (5) $ 78.7 $ 153.1 $ 94.1 $ 216.2 $ 33.6 $ 575.7 Acquisition-related obligations (6) $ 14.8 $ 13.5 $ - $ - $ - $ 28.3 Total $ 642.2 $ 653.1 $ 353.0 $ 250.6 $ 111.3 $ 2,010.2 (In millions) Payments due by period Contractual Obligations Unknown Total Debt Obligations (1) $ 2.2 $ 4.8 $ 9.5 $ 1.0 $ — $ 17.5 $ 177.4 $ 222.7 $ 81.3 $ 28.8 $ — $ 510.2 Purchase Obligations (3) $ 349.1 $ 260.0 $ 110.9 $ — $ — $ 720.0 $ 3.0 $ — $ — $ — $ 67.7 $ 70.7 Compensation and Benefits (5) $ 9.2 $ 176.0 $ 92.7 $ 276.6 $ 21.1 $ 575.6 Acquisition-related obligations (6) $ 11.1 $ — $ — $ — $ — $ 11.1 Total $ 552.0 $ 663.5 $ 294.4 $ 306.4 $ 88.8 $ 1,905.1 (1) $0.8$0.6 million, $1.5$0.9 million, $1.3$0.3 million, and $0.3$0.0 million, respectively, which have been excluded.(2) Included in these amounts are various facilities and equipment leases and software license agreements. We enter into operating leases in the normal course of business relating to facilities and equipment, as well as the licensing of software. The majority of our lease agreements have fixed payment terms based on the passage of time. Certain facility and equipment leases require payment of maintenance and real estate taxes and contain escalation provisions based on future adjustments in price indices. Our future operating lease obligations could change if we exit certain contracts or if we enter into additional operating lease agreements. (3) Purchase obligations primarily relateare comprised of a $142.4 million reinsurance premium with ACE American Insurance Company for the fiscal 2014 policy year, as well as obligations related to purchase and maintenance agreements on our software, equipment, and other assets.(4) We made the determination that net cash payments expected to be paid within the next 12 months, related to unrecognized tax benefits of $84.7$70.7 million at June 30, 2012,2013, are expected to be up to $7$3 million. We are unable to make reasonably reliable estimates as to the period beyond the next 12 months in which cash payments related to unrecognized tax benefits are expected to be paid.(5) Compensation and benefits primarily relates to amounts associated with our employee benefit plans and other compensation arrangements. These amounts exclude the estimated contributions to our defined benefit plans, which are expected to be $83.7 million in fiscal 2014. (6) Acquisition-related obligations relate to contingentdeferred purchase consideration for business acquisitions for which the amount of contingent consideration was determinablepayments at future dates. A liability is established at the datetime of the acquisition and therefore included on the Consolidated Balance Sheets as a liability.for these fixed payments.2012,2013, the obligations relating to these matters, which are expected to be paid in fiscal 2013,2014, total $20,856.2$21,956.3 million and were recorded in client funds obligations on our Consolidated Balance Sheets. We had $21,539.1$22,228.8 million of cash and marketable securities that have been impounded from our clients to satisfy such obligations recorded in funds held for clients on our Consolidated Balance Sheets as of June 30, 2012.2013.workers’workers' compensation and employer’semployer's liability deductible reimbursement insurance protection for PEO Services worksite employees up to a $1 million per occurrence retention.occurrence. PEO Services has secured specific per occurrence and aggregate stop loss insurance from a select wholly-owned and regulated insurance carrier of AIG that covers all losses in excess of the $1 million per occurrence retention and also any aggregate losses within the $1 million retention that collectively exceed a certain level in each policy year. We utilize historical loss experience and actuarial judgment to determine the estimated claim liability for the PEO business. Premiums are charged to the PEO to cover the PEO Services worksite employee expected claim expenses. Changes in estimated ultimate incurred losses are recognized by ADP Indemnity, Inc. At June 30, 2012, ADP Indemnity’s total assets were $320.9 million to satisfy the actuarially estimated cost of workers’ compensation claims of $239.1 million for the policy years since July 1, 2003. In fiscal 2012 and 2011, ADP Indemnity paid claims of $64.1 million and $63.3 million, respectively. Should AIG and its wholly-owned insurance company be unable to satisfy their contractual obligations, ADP would become responsible for satisfying thethese worksite employee workers’workers' compensation obligations.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK2012,2013, approximately 92%91% of the available-for-sale securities categorized as U.S. Treasury and direct obligations of U.S. government agencies were invested in senior, unsecured, non-callable debt directly issued by the Federal Home Loan Banks and Federal Farm Credit Banks, Fannie Mae and Freddie Mac.$6.75$6.75 billion commercial paper program (rated A-1+ by Standard and Poor’s and Prime-1 (P1) by Moody’s, the highest possible credit rating)ratings), our ability to execute reverse repurchase transactions ($3.0 billion of which is available on a committed basis), and available borrowings under our $6.75$7.25 billion committed revolving credit facilities. However,In August 2013, the Company increased the U.S. short-term commercial paper program to provide for the issuance of up to $7.25 billion in aggregate maturity value. The reduced availability of financing during periods of economic turmoil, even to borrowers with the highest credit ratings, may limit our ability to access short-term debt markets to meet the liquidity needs of our business. In addition to liquidity risk, our investments are subject to interest rate risk and credit risk, as discussed below.CommercialTime deposits and commercial paper and time deposits must be rated A1/P1.(Dollars in millions) Years ended June 30, 2012 2011 2010 Average investment balances at cost: Corporate investments $ 4,024.6 $ 3,467.6 $ 3,839.2 Funds held for clients 17,898.2 16,865.4 15,194.5 Total $ 21,922.8 $ 20,333.0 $ 19,033.7 Average interest rates earned exclusive of realized gains/(losses) on: Corporate investments 2.1 % 2.6 % 2.6 % Funds held for clients 2.8 % 3.2 % 3.6 % Total 2.6 % 3.1 % 3.4 % Realized gains on available-for-sale securities $ 32.1 $ 38.0 $ 15.0 Realized losses on available-for-sale securities (7.7 ) (3.6 ) (13.4 ) Net realized gains on available-for-sale securities $ 24.4 $ 34.4 $ 1.6 Impairment losses onavailable-for-sale securities $ (5.8 ) $ - $ (14.4 ) As of June 30: Net unrealized pre-tax gains on available-for-sale securities $ 710.5 $ 570.9 $ 710.9 Total available-for-sale securities at fair value $ 18,093.4 $ 16,927.5 $ 15,517.0 (Dollars in millions) Years ended June 30, 2013 2012 2011 Average investment balances at cost: Corporate investments $ 4,200.3 $ 4,024.6 $ 3,467.6 Funds held for clients 19,156.3 17,898.2 16,865.4 Total $ 23,356.6 $ 21,922.8 $ 20,333.0 Corporate investments 1.5 % 2.1 % 2.6 % Funds held for clients 2.2 % 2.8 % 3.2 % Total 2.1 % 2.6 % 3.1 % Realized gains on available-for-sale securities $ 32.1 $ 32.1 $ 38.0 Realized losses on available-for-sale securities (3.5 ) (7.7 ) (3.6 ) Net realized gains on available-for-sale securities $ 28.6 $ 24.4 $ 34.4 Impairment losses on available-for-sale securities $ — $ (5.8 ) $ — As of June 30: $ 287.4 $ 710.5 $ 570.9 Total available-for-sale securities at fair value $ 18,838.7 $ 18,093.4 $ 16,927.5 decreased 50decreased approximately 60 basis points, from 3.1%2.6% for fiscal 20112012 to 2.6%2.1% for fiscal 2012.2013. A hypothetical change in both short-term interest rates (e.g.(e.g., overnight interest rates or the federal funds rate) and intermediate-term interest rates of 25 basis points applied to the estimated average investment balances and any related short-term borrowings would result in approximately a $10$6 million impact to earnings from continuing operations before income taxes over the ensuing twelve-month period ending June 30, 2013.2014. A hypothetical change in only short-term interest rates of 25 basis points applied to the estimated average short-term investment balances and any related short-term borrowings would result in approximately a $5$3 million impact to earnings from continuing operations before income taxes over the ensuing twelve-month period ending June 30, 2013.2014.At June 30, 2012, approximately 84%Approximately 83% of our available-for-sale securities held ana AAA or AA rating.rating at June 30, 2013. In addition, we limit amounts that can be invested in any security other than U.S. and Canadian government or government agency securities (and securities carrying their guarantee). 2010, we were exposed to foreign exchange fluctuations on U.S. Dollar denominated short-term intercompany amounts payable by a Canadian subsidiary to a U.S. subsidiary2013, 2012, and 2011, Dealer Services earned 12.1%, 10.7%, and 8.8%, respectively, of the Company in the amountits segment revenues from continuing operations from one client. We did not have any customers that individually accounted for more than 10% of $178.6 million U.S. Dollars. In order to manage the exposure related to the foreign exchange fluctuations between the Canadian Dollar and the U.S. Dollar, the Canadian subsidiary entered into a foreign exchange forward contract, which obligated the Canadian subsidiary to buy $178.6 million U.S. dollars at a rate of 1.15 Canadian Dollars to each U.S. Dollar on December 1, 2009. Upon settlement of such contract on December 1, 2009, an additional foreign exchange forward contract was entered into that obligated the Canadian subsidiary to buy $29.4 million U.S. Dollars at a rate of 1.06 Canadian dollars to each U.S. Dollar on February 26, 2010. The net loss on the foreign exchange forward contracts of $15.8 million for the twelve months ended June 30, 2010 was recognized in earnings in fiscal 2010 and substantially offset the foreign currency mark-to-market gains on the related short-term intercompany amounts payable. The short-term intercompany amounts payable were fully paid by the Canadian subsidiary to the U.S. subsidiary by February 2010.There were no derivative financial instruments outstanding at June 30, 2012, 2011, or 2010.JanuaryJuly 2012, wethe Company adopted the Financial Accounting Standards Board (“FASB”("FASB") Accounting Standards Update (“ASU”("ASU") 2011-03, “Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 revises the criteria for assessing effective control for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The determination of whether the transfer of a financial asset subject to a repurchase agreement is a sale is based, in part, on whether the entity maintains effective control over the financial asset. ASU 2011-03 removes from the assessment of effective control: the criterion requiring the transferor to have the ability to repurchase or redeem the financial asset on substantially the agreed terms, even in the event of default by the transferee, and the related requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets. The adoption of ASU 2011-03 did not have an impact on our consolidated results of operations, financial condition, or cash flows.In January 2012, we adopted ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 requires expansion of the disclosures required for Level 3 measurements of fair value and provides updates to the existing measurement guidance. The adoption of ASU 2011-04 did not have an impact on our consolidated results of operations, financial condition, or cash flows.In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net incomeearnings, and other comprehensive income. ASU 2011-05 is effective for fiscal years beginning after December 15, 2011.The Company has elected to present net earnings and other comprehensive income on two separate, but consecutive statements. The adoption of ASU 2011-05 willdid not have an impact on ourthe Company’s consolidated results of operations, financial condition, or cash flows.September 2011,July 2012, the FASB issuedCompany adopted ASU 2011-08, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” ASU 2011-08 amends the guidance in Accounting Standards Codification (“ASC”) 350-20 on testing goodwill for impairment. ASU 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that the fair value of a reporting unit is less than its carrying value based upon the qualitative assessment, it is necessary to perform the currently prescribed two-step goodwill impairment test. ASU 2011-08 does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. The adoption of ASU 2011-08 did not have an impact on the Company’s consolidated results of operations, financial condition, other comprehensive income, or cash flows.annual fiscal years, and interim goodwill impairment tests performed for fiscalperiods within those years, beginning after December 15, 2011.2012. The adoption of ASU 2011-082013-02 will not have an impact on ourthe Company's consolidated results of operations, financial condition, or cash flows.Services’Services' payroll processing fees) as well as investment income on payroll funds, payroll tax filing funds and other Employer Services’Services' client-related funds. We enter into agreements for a fixed fee per transaction (e.g., number of payees or number of payrolls processed). Fees associated with services are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Our service fees are determined based on written price quotations or service agreements having stipulated terms and conditions that do not require management to make any significant judgments or assumptions regarding any potential uncertainties. Interest income on collected but not yet remitted funds held for clients is recognized in revenues as earned, as the collection, holding, and remittance of these funds are critical components of providing these services.(e.g.(e.g., Dealer Services’Services' dealer management systems). For a majority of our software sales arrangements, which provide hardware, software licenses, installation, and post-contract customer support, revenues are recognized ratably over the software license term, as vendor-specific objective evidence of the fair values of the individual elements in the sales arrangement does not exist. Changes to the elements in an arrangement and the ability to establish vendor-specific objective evidence for those elements could affect the timing of the revenue recognition.customer’scustomer's payment history. We do not believe that a change in our assumptions utilized in the collectability determination would result in a material change to revenues as no single customer accounts for a significant portion of our revenues. and other intangible assets with indefinite useful lives in accordance with ASC 350-10, which states that goodwill and intangible assets with indefinite useful lives should not be amortized, but instead tested for impairment at least annually atand whenever events or changes in circumstances indicate the reporting unit level.carrying value may not be recoverable. We perform this impairment test by first comparing the fair value of oureach reporting unitsunit to theirits carrying amount. If an indicator of impairment exists based upon comparing the carrying value for a reporting unit exceeds its fair value, of our reporting units to their carrying amount, we would then compare the implied fair value of our goodwill to the carrying amount in order to determine the amount of the impairment, if any. We determine the fair value of our reporting units using an equal weighted blended approach, which combines the income approach, which is the present value of expected cash flows, discounted at a risk-adjusted weighted-average cost of capital; and the market approach, which is based on using market multiples of companies in similar lines of business. Significant assumptions used in determining the fair value of our reporting units include projected revenue growth rates, profitability projections, working capital assumptions, the weighted average cost of capital, the determination of appropriate market comparison companies, and terminal growth rates. We had $3,155.3$3,052.6 million of goodwill as of June 30, 2012.2013. Based on the fair value analysis completed in the fourth quarter of 2012,2013, management concluded that fair value exceeded carrying value for all reporting units.units, with the exception of the ADP AdvancedMD reporting unit, for which an impairment charge of $42.7 million was recorded in the fourth quarter of fiscal 2013. In completing the annual impairment test for fiscal 2012,2013, we evaluated the reasonableness of differences noted between the fair value and carrying value of each reporting unit. Given the significance of our goodwill, an adverse change to the fair value of goodwill and intangible assets could result in an impairment charge which could be material to our consolidated earnings if we are unable to generate the anticipated revenue growth, synergies and/or cost savings associated with our acquisitions.entity’sentity's financial statements or tax returns. Judgment is required in addressing the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns (e.g., realization of deferred tax assets, changes in tax laws or interpretations thereof). In addition, we are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. A change in the assessment of the outcomes of such matters could materially impact our consolidated financial statements.entity’sentity's tax benefits being sustained must be “more likely than not” assuming that those positions will be examined by taxing authorities with full knowledge of all relevant information prior to recording the related tax benefit in the financial statements. If a tax position drops below the “more likely than not” standard, the benefit can no longer be recognized. Assumptions, judgment and the use of estimates are required in determining if the “more likely than not” standard has been met when developing the provision for income taxes. A change in the assessment of the “more likely than not” standard could materially impact our consolidated financial statements. As of June 30, 20122013 and 2011,2012, the Company’sCompany's liabilities for unrecognized tax benefits, which include interest and penalties, were $84.7$70.7 million and $105.7$84.7 million, respectively.$10$15 million in the next twelve months. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a revision become known. for by this item is provided under the caption “Quantitative"Quantitative and Qualitative Disclosures About Market Risk”Risk" under “Item"Item 7 – Management’s- Management's Discussion and Analysis of Financial Condition and Results of Operations.”Operation.20122013 and 2011,2012, and the related consolidated statements of consolidated earnings, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 2012.2013. Our audits also included the consolidated financial statement schedule listed in the Index at Item 15(a) 2. These consolidated financial statements and consolidated financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements and consolidated financial statement schedule based on our audits.20122013 and 2011,2012, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2012,2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.2012,2013, based on the criteria established inInternal Control—IntegratedControl-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 19, 201320, 2012 expressed an unqualified opinion on the Company's internal control over financial reporting./s/ Deloitte & Touche LLP Parsippany, New JerseyAugust20, 2012Years ended June 30, 2011 2010 REVENUES: Revenues, other than interest on funds held for clients and PEO revenues $ 8,411.7 $ 7,805.5 $ 7,077.7 Interest on funds held for clients 493.3 540.1 542.8 PEO revenues (A) 1,760.2 1,533.9 1,307.2 TOTAL REVENUES 10,665.2 9,879.5 8,927.7 EXPENSES: Costs of revenues Operating expenses 5,380.1 4,900.9 4,277.2 Systems development and programming costs 599.9 577.2 513.9 Depreciation and amortization 260.0 253.4 238.6 TOTAL COSTS OF REVENUES 6,240.0 5,731.5 5,029.7 Selling, general and administrative expenses 2,466.2 2,323.3 2,127.4 Interest expense 7.7 8.6 8.6 TOTAL EXPENSES 8,713.9 8,063.4 7,165.7 Other income, net (170.8 ) (116.6 ) (101.2 ) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 2,122.1 1,932.7 1,863.2 Provision for income taxes 733.6 678.5 655.9 NET EARNINGS FROM CONTINUING OPERATIONS 1,388.5 1,254.2 1,207.3 Earnings from discontinued operations, net of provision for income taxes of $7.0 for the fiscal year ended June 30, 2010 - - 4.1 NET EARNINGS $ 1,388.5 $ 1,254.2 $ 1,211.4 Basic earnings per share from continuing operations $ 2.85 $ 2.54 $ 2.41 Basic earnings per share from discontinued operations - - 0.01 BASIC EARNINGS PER SHARE $ 2.85 $ 2.54 $ 2.42 Diluted earnings per share from continuing operations $ 2.82 $ 2.52 $ 2.40 Diluted earnings per share from discontinued operations - - 0.01 DILUTED EARNINGS PER SHARE $ 2.82 $ 2.52 $ 2.40 Basic weighted average shares outstanding 487.3 493.5 500.5 Diluted weighted average shares outstanding 492.2 498.3 503.7 Years ended June 30, 2013 2012 2011 REVENUES: $ 8,928.5 $ 8,362.5 $ 7,759.0 Interest on funds held for clients 420.9 493.3 540.1 PEO revenues (A) 1,960.7 1,760.2 1,533.9 TOTAL REVENUES 11,310.1 10,616.0 9,833.0 EXPENSES: Costs of revenues: Operating expenses 5,742.4 5,365.2 4,888.6 Systems development and programming costs 654.3 592.7 570.0 Depreciation and amortization 252.9 256.4 249.8 TOTAL COSTS OF REVENUES 6,649.6 6,214.3 5,708.4 Selling, general, and administrative expenses 2,620.6 2,456.9 2,314.6 Goodwill impairment 42.7 — — Interest expense 9.1 7.7 8.6 TOTAL EXPENSES 9,322.0 8,678.9 8,031.6 Other income, net (96.2 ) (170.8 ) (116.6 ) 2,084.3 2,107.9 1,918.0 Provision for income taxes 720.2 728.2 673.0 NET EARNINGS FROM CONTINUING OPERATIONS $ 1,364.1 $ 1,379.7 $ 1,245.0 EARNINGS FROM DISCONTINUED OPERATIONS BEFORE INCOME TAXES 66.8 14.2 14.7 Provision for income taxes 25.1 5.4 5.5 NET EARNINGS FROM DISCONTINUED OPERATIONS $ 41.7 $ 8.8 $ 9.2 NET EARNINGS $ 1,405.8 $ 1,388.5 $ 1,254.2 Basic Earnings Per Share from Continuing Operations $ 2.83 $ 2.83 $ 2.52 Basic Earnings Per Share from Discontinued Operations 0.09 0.02 0.02 BASIC EARNINGS PER SHARE $ 2.91 $ 2.85 $ 2.54 Diluted Earnings Per Share from Continuing Operations $ 2.80 $ 2.80 $ 2.50 Diluted Earnings Per Share from Discontinued Operations 0.09 0.02 0.02 DILUTED EARNINGS PER SHARE $ 2.89 $ 2.82 $ 2.52 Basic weighted average shares outstanding 482.7 487.3 493.5 Diluted weighted average shares outstanding 487.1 492.2 498.3 $17,792.2, $15,765.3,$19,956.2, $17,792.2, and $13,318.7,$15,765.3, respectively.Years ended June 30, 2013 2012 2011 Net earnings $ 1,405.8 $ 1,388.5 $ 1,254.2 Other comprehensive income: Currency translation adjustments (2.4 ) (141.1 ) 166.7 Unrealized net (losses)/gains on available-for-sale securities (394.6 ) 158.1 (104.6 ) Tax effect 138.5 (54.4 ) 38.8 Reclassification of net (gains) on available-for-sale securities to net earnings (28.6 ) (18.6 ) (35.3 ) Tax effect 10.1 6.4 13.1 Pension net gains/(losses) arising during the period 68.2 (149.7 ) 108.6 Tax effect (25.7 ) 52.3 (42.4 ) Reclassification of pension liability adjustment to net earnings 31.7 15.5 20.8 Tax effect (12.0 ) (5.4 ) (8.1 ) Other comprehensive (loss)/income, net of tax (214.8 ) (136.9 ) 157.6 Comprehensive income $ 1,191.0 $ 1,251.6 $ 1,411.8 June 30, 2013 2012 Assets Current assets: Cash and cash equivalents (A) $ 1,699.1 $ 1,548.1 Short-term marketable securities 28.0 30.4 Accounts receivable, net 1,598.3 1,391.7 Other current assets 646.8 631.6 Assets held for sale — 6.7 Assets of discontinued operations — 125.0 Total current assets before funds held for clients 3,972.2 3,733.5 Funds held for clients 22,228.8 21,539.1 Total current assets 26,201.0 25,272.6 Long-term marketable securities (A) 314.0 86.9 Long-term receivables, net 138.7 129.8 Property, plant and equipment, net 728.7 706.3 Other assets 1,189.9 871.5 Goodwill 3,052.6 3,062.0 Intangible assets, net 643.2 688.3 Total assets $ 32,268.1 $ 30,817.4 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 157.3 $ 167.4 Accrued expenses and other current liabilities 1,178.6 1,062.5 Accrued payroll and payroll-related expenses 632.1 597.0 Dividends payable 206.7 188.4 Short-term deferred revenues 316.4 312.9 Obligations under reverse repurchase agreements 245.9 — Income taxes payable 39.5 39.3 Liabilities of discontinued operations — 29.0 Total current liabilities before client funds obligations 2,776.5 2,396.5 Client funds obligations 21,956.3 20,856.2 Total current liabilities 24,732.8 23,252.7 Long-term debt 14.7 16.8 Other liabilities 603.1 585.9 Deferred income taxes 234.4 381.5 Long-term deferred revenues 493.2 466.5 Total liabilities 26,078.2 24,703.4 Stockholders' equity: — — 63.9 63.9 Capital in excess of par value 456.9 486.4 Retained earnings 13,020.3 12,438.3 (7,366.6 ) (7,104.8 ) Accumulated other comprehensive income 15.4 230.2 Total stockholders’ equity 6,189.9 6,114.0 Total liabilities and stockholders’ equity $ 32,268.1 $ 30,817.4 June 30, 2012 2011 Assets Current assets: Cash and cash equivalents $ 1,548.1 $ 1,389.4 Short-term marketable securities 30.4 36.3 Accounts receivable, net 1,399.3 1,364.8 Other current assets 632.0 648.3 Assets held for sale 6.7 9.1 Total current assets before funds held for clients 3,616.5 3,447.9 Funds held for clients 21,539.1 25,135.6 Total current assets 25,155.6 28,583.5 Long-term marketable securities 86.9 98.0 Long-term receivables, net 129.8 128.7 Property, plant and equipment, net 706.3 716.2 Other assets 870.4 922.6 Goodwill 3,155.3 3,073.6 Intangible assets, net 711.2 715.7 Total assets $ 30,815.5 $ 34,238.3 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 167.7 $ 153.3 Accrued expenses and other current liabilities 1,054.4 930.4 Accrued payroll and payroll related expenses 599.3 558.3 Dividends payable 188.4 174.2 Short-term deferred revenues 334.1 350.9 Income taxes payable 39.3 28.6 Total current liabilities before client funds obligations 2,383.2 2,195.7 Client funds obligations 20,856.2 24,591.1 Total current liabilities 23,239.4 26,786.8 Long-term debt 16.8 34.2 Other liabilities 585.9 556.2 Deferred income taxes 391.3 373.5 Long-term deferred revenues 468.1 477.2 Total liabilities 24,701.5 28,227.9 Commitments and contingencies (Note 15) Stockholders' equity: Preferred stock, $1.00 par value: Authorized, 0.3 shares; issued, none - - Common stock, $0.10 par value: Authorized, 1,000.0 shares; issued, 638.7 shares at June 30, 2012 and 2011; outstanding, 484.2 and 490.8 shares at June 30, 2012 and 2011, respectively 63.9 63.9 Capital in excess of par value 486.4 489.5 Retained earnings 12,438.3 11,803.9 Treasury stock - at cost: 154.5 and 147.9 shares at June 30, 2012 and 2011, respectively (7,104.8 ) (6,714.0 ) Accumulated other comprehensive income 230.2 367.1 Total stockholders' equity 6,114.0 6,010.4 Total liabilities and stockholders' equity $ 30,815.5 $ 34,238.3 Stockholders’Stockholders' EquityAccumulated Capital in Other Common Stock Excess of Retained Treasury Comprehensive Comprehensive Shares Amount Par Value Earnings Stock Income Income (Loss) Balance at June 30, 2009 638.7 $ 63.9 $ 520.0 $ 10,716.6 $ (6,133 .9 ) $ 156 .0 Net earnings - - - 1,211.4 - $ 1,211.4 - Foreign currency translation adjustments (76.1 ) (76 .1 ) Unrealized net gain on securities, net of tax 175.4 175.4 Pension liability adjustment, net of tax (45.8 ) (45.8 ) Comprehensive income $ 1,264 .9 Stock-based compensation expense - - 67.6 - - - Issuances relating to stock compensation plans - - (85.4 ) - 360.7 - Tax benefits from stock compensation plans - - (9.2 ) - - - Treasury stock acquired (18.2 shares) - - - - (766 .3 ) - Dividends ($1.35 per share) - - - (676.0 ) - - Balance at June 30, 2010 638.7 $ 63.9 $ 493.0 $ 11,252.0 $ (6,539.5 ) $ 209.5 Net earnings - - - 1,254 .2 - $ 1,254 .2 - Foreign currency translation adjustments 166.7 166.7 Unrealized net gain on securities, net of tax (88 .0 ) (88 .0 ) Pension liability adjustment, net of tax 78 .9 78 .9 Comprehensive income $ 1,411.8 Stock-based compensation expense - - 76.3 - - - Issuances relating to stock compensation plans - - (78.0 ) - 558 .3 - Tax benefits from stock compensation plans - - (1.8 ) - - - Treasury stock acquired (14.2 shares) - - - - (732.8 ) - Dividends ($1.42 per share) - - - (702.3 ) - - Balance at June 30, 2011 638.7 $ 63.9 $ 489 .5 $ 11,803.9 $ (6,714.0 ) $ 367.1 Net earnings - - - 1,388.5 - $ 1,388.5 - Foreign currency translation adjustments (141.1 ) (141.1 ) Unrealized net gain on securities, net of tax 91.5 91.5 Pension liability adjustment, net of tax (87.3 ) (87.3 ) Comprehensive income $ 1,251.6 Stock-based compensation expense - - 78.7 - - - Issuances relating to stock compensation plans - - (106.0 ) - 356.5 - Tax benefits from stock compensation plans - - 24.2 - - - Treasury stock acquired (14.6 shares) - - - - (747.3 ) - Dividends ($1.55 per share) - - - (754.1 ) - - Balance at June 30, 2012 638.7 $ 63.9 $ 486.4 $ 12,438.3 $ (7,104.8 ) $ 230.2 Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Shares Amount Balance at June 30, 2010 638.7 $ 63.9 $ 493.0 $ 11,252.0 $ (6,539.5 ) $ 209.5 Net earnings — — — 1,254.2 — — Other comprehensive income — — — — — 157.6 Stock-based compensation expense — — 76.3 — — — — — (78.0 ) — 558.3 — Tax benefits from stock compensation plans — — (1.8 ) — — — Treasury stock acquired (14.2 shares) — — — — (732.8 ) — Dividends ($1.42 per share) — — — (702.3 ) — — Balance at June 30, 2011 638.7 $ 63.9 $ 489.5 $ 11,803.9 $ (6,714.0 ) $ 367.1 Net earnings — — — 1,388.5 — — Other comprehensive loss — — — — — (136.9 ) Stock-based compensation expense — — 78.7 — — — — — (106.0 ) — 356.5 — Tax benefits from stock compensation plans — — 24.2 — — — Treasury stock acquired (14.6 shares) — — — — (747.3 ) — Dividends ($1.55 per share) — — — (754.1 ) — — Balance at June 30, 2012 638.7 $ 63.9 $ 486.4 $ 12,438.3 $ (7,104.8 ) $ 230.2 Net earnings — — — 1,405.8 — — Other comprehensive loss — — — — — (214.8 ) Stock-based compensation expense — — 79.2 — — — — — (148.3 ) — 384.7 — Tax benefits from stock compensation plans — — 39.6 — — — Treasury stock acquired (10.4 shares) — — — — (646.5 ) — Dividends ($1.70 per share) — — — (823.8 ) — — Balance at June 30, 2013 638.7 $ 63.9 $ 456.9 $ 13,020.3 $ (7,366.6 ) $ 15.4 Years ended June 30, 2012 2011 2010 Cash Flows From Operating Activities Net earnings $ 1,388.5 $ 1,254.2 $ 1,211.4 Adjustments to reconcile net earnings to cash flows provided by operating activities: Depreciation and amortization 323.3 318.2 309.2 Deferred income taxes 38.1 107.6 96.1 Stock-based compensation expense 78.7 76.3 67.6 Excess tax benefit related to exercises of stock options (5.7 ) (1.0 ) (0.2 ) Net pension expense 36.7 40.7 34.7 Net realized gain from the sales of marketable securities (24.4 ) (34.4 ) (1.6 ) Net amortization of premiums and accretion of discounts on available-for-sale securities 60.0 53.6 57.3 Impairment losses on available-for-sale securities 5.8 - 14.4 Impairment losses on assets held for sale 2.2 11.7 - Gain on sale of assets (66.0 ) - - (Gain) loss on sales of buildings - (1.8 ) 2.3 Gain on sale of discontinued businesses, net of tax - - (0.5 ) Other 21.4 35.1 8.8 Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses: Increase in accounts receivable (40.1 ) (138.3 ) (108.8 ) (Increase) decrease in other assets (71.6 ) (81.3 ) 30.0 Increase (decrease) in accounts payable 11.2 (24.6 ) 34.7 Increase (decrease) in accrued expenses and other liabilities 152.1 89.8 (73.3 ) Net cash flows provided by operating activities 1,910.2 1,705.8 1,682.1 Cash Flows From Investing Activities Purchases of corporate and client funds marketable securities (5,113.5 ) (4,770.9 ) (3,846.7 ) Proceeds from the sales and maturities of corporate and client funds marketable securities 3,962.2 3,305.1 3,406.9 Net decrease (increase) in restricted cash and cash equivalents and other restricted assets held to satisfy client funds obligations 4,855.0 (4,837.1 ) (1,639.4 ) Capital expenditures (140.1 ) (181.9 ) (102.9 ) Additions to intangibles (109.5 ) (95.8 ) (123.8 ) Acquisitions of businesses, net of cash acquired (265.7 ) (776.0 ) (100.0 ) Proceeds from the sale of property, plant and equipment and other assets 71.6 13.1 3.1 Other (16.4 ) 2.9 1.7 Proceeds from the sale of businesses included in discontinued operations - - 21.6 Net cash flows provided by (used in) investing activities 3,243.6 (7,340.6 ) (2,379.5 ) Cash Flows From Financing Activities Net (decrease) increase in client funds obligations (3,726.6 ) 6,290.9 2,020.4 Payments of debt (2.0 ) (5.7 ) (2.9 ) Net repayment of commercial paper borrowing - - (730.0 ) Repurchases of common stock (741.3 ) (732.8 ) (766.4 ) Proceeds from stock purchase plan and exercises of stock options 250.0 478.2 241.1 Excess tax benefit related to exercises of stock options 5.7 1.0 0.2 Dividends paid (739.7 ) (692.4 ) (673.4 ) Net cash flows (used in) provided by financing activities (4,953.9 ) 5,339.2 89.0 Effect of exchange rate changes on cash and cash equivalents (41.2 ) 41.7 (13.6 ) Net change in cash and cash equivalents 158.7 (253.9 ) (622.0 ) Cash and cash equivalents of continuing operations, beginning of year 1,389.4 1,643.3 2,265.3 Cash and cash equivalents of discontinued operations, beginning of year - - - Cash and cash equivalents, end of year 1,548.1 1,389.4 1,643.3 Less cash and cash equivalents of discontinued operations, end of year - - - Cash and cash equivalents of continuing operations, end of year $ 1,548.1 $ 1,389.4 $ 1,643.3 Years ended June 30, 2013 2012 2011 Cash Flows from Operating Activities: Net earnings $ 1,405.8 $ 1,388.5 $ 1,254.2 Adjustments to reconcile net earnings to cash flows provided by operating activities: Depreciation and amortization 317.0 319.7 314.6 Deferred income taxes 24.6 35.9 105.3 Stock-based compensation expense 96.4 94.1 90.3 Net pension expense 43.7 36.7 40.5 Net realized gain from the sales of marketable securities (28.6 ) (24.4 ) (34.4 ) Net amortization of premiums and accretion of discounts on available-for-sale securities 79.3 60.0 53.6 Impairment losses on available-for-sale securities — 5.8 — Impairment losses on assets held for sale — 2.2 11.7 Goodwill impairment 42.7 — — Gain on sale of assets — (66.0 ) — Gains on sales of buildings (2.2 ) — (1.8 ) Gain on sale of discontinued businesses, net of tax (36.7 ) — — Other 9.0 15.1 33.6 Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses: Increase in accounts receivable (217.0 ) (38.5 ) (137.3 ) Increase in other assets (283.5 ) (71.7 ) (82.1 ) (Decrease) increase in accounts payable (10.6 ) 11.0 (24.6 ) Increase in accrued expenses and other liabilities 135.9 135.0 77.4 Operating activities of discontinued operations 1.4 6.8 4.8 Net cash flows provided by operating activities 1,577.2 1,910.2 1,705.8 Cash Flows from Investing Activities: Purchases of corporate and client funds marketable securities (4,902.6 ) (5,113.5 ) (4,770.9 ) Proceeds from the sales and maturities of corporate and client funds marketable securities 3,638.6 3,962.2 3,305.1 Net (increase) decrease in restricted cash and cash equivalents held to satisfy client funds obligations (161.0 ) 4,855.0 (4,837.1 ) Capital expenditures (174.6 ) (140.1 ) (181.9 ) Additions to intangibles (108.3 ) (109.5 ) (95.8 ) Acquisitions of businesses, net of cash acquired (42.0 ) (265.7 ) (776.0 ) Proceeds from the sale of property, plant, and equipment and other assets 10.0 71.6 13.1 Investing activities of discontinued operations (0.6 ) — — Proceeds from the sale of businesses included in discontinued operations 161.4 — — Other 0.7 (16.4 ) 2.9 Net cash flows (used in) provided by investing activities (1,578.4 ) 3,243.6 (7,340.6 ) Cash Flows from Financing Activities: Net increase (decrease) in client funds obligations 1,138.5 (3,726.6 ) 6,290.9 Payments of debt (17.5 ) (2.0 ) (5.7 ) Repurchases of common stock (647.3 ) (741.3 ) (732.8 ) Proceeds from stock purchase plan and exercises of stock options 235.3 250.0 478.2 Dividends paid (805.5 ) (739.7 ) (692.4 ) Net proceeds from reverse repurchase agreements 245.9 — — Other 1.6 5.7 1.0 Net cash flows provided by (used in) financing activities 151.0 (4,953.9 ) 5,339.2 Effect of exchange rate changes on cash and cash equivalents 1.2 (41.2 ) 41.7 Net change in cash and cash equivalents 151.0 158.7 (253.9 ) Cash and cash equivalents of continuing operations, beginning of period 1,548.1 1,389.4 1,643.3 Cash and cash equivalents of continuing operations, end of period $ 1,699.1 $ 1,548.1 $ 1,389.4 workers’workers' compensation and employer’semployer's liability deductible reimbursement insurance protection for PEO Services worksite employees), non-recurring gains and losses, miscellaneous processing services, such as customer financing transactions, and certain charges and expenses that have not been chargedallocated to the reportable segments, such as stock-based compensation expense.expense and the goodwill impairment charge.Services’Services' payroll processing fees) as well as investment income on payroll funds, payroll tax filing funds and other Employer Services’Services' client-related funds. The Company enters into agreements for a fixed fee per transaction (e.g., number of payees or number of payrolls processed). Fees associated with services are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Service fees are determined based on written price quotations or service agreements having stipulated terms and conditions that do not require management to make any significant judgments or assumptions regarding any potential uncertainties.(e.g.(e.g., Dealer Services’Services' dealer management systems). For a majority of our software sales arrangements, which provide hardware, software licenses, installation, and post-contract customer support, revenues are recognized ratably over the software license term, as vendor-specific objective evidence of the fair values of the individual elements in the sales arrangement does not exist.customer’scustomer's payment history.workers’workers' compensation, and state unemployment tax fees for worksite employees are included in PEO revenues and the associated costs are included in operating expenses.Company’sCompany's marketable securities are considered to be “available-for-sale” and, accordingly, are carried on the Consolidated Balance Sheets at fair value. Unrealized gains and losses, net of the related tax effect, are excluded from earnings and are reported as a separate component of accumulated other comprehensive income on the Consolidated Balance Sheets until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis and are included in other income, net on the Statements of Consolidated Earnings.security’ssecurity's amortized cost basis and its fair value. If the Company does not intend to sell a security or it is not more likely than not that it will be required to sell the security before recovery, the unrealized loss is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to all other factors, which is recognized in accumulated other comprehensive income.Company’sCompany's best estimate of the amount of probable credit losses related to the Company’sCompany's existing note receivables.G.H. Property, Plant and Equipment.Property, plant and equipment is stated at cost and depreciated over the estimated useful lives of the assets using the straight-line method. Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. The estimated useful lives of assets are primarily as follows:Data processing equipment 2 to 5 years Buildings 20 to 40 years Furniture and fixtures 3 to 7 years H.I. Goodwill. Goodwill and Other Intangible Assets.Goodwill and intangible assets with indefinite useful lives areis not amortized, but areis instead tested for impairment at least annually atand whenever events or changes in circumstances indicate the reporting unit level.carrying value may not be recoverable. The Company performs this impairment test by first comparing the fair value of oureach reporting units to theirits carrying amount. If an indicator of impairment exists based upon comparing the carrying value for a reporting unit exceeds its fair value, of our reporting units to their carrying amount, the Company would then compare the implied fair value of our goodwill to the carrying amount in order to determine the amount of the impairment, if any. The Company determines the estimated fair value of its reporting units using an equal weighted blended approach, which combines the income approach, which is thepresentthe present value of expected cash flows, discounted at a risk-adjusted weighted-average cost of capital; and the market approach, which is based on using market multiples of companies in similar lines of business. Significant assumptions used in determining the fair value of our reporting units include projected revenue growth rates, profitability projections, working capital assumptions, the weighted average cost of capital, the determination of appropriate market comparison companies, and terminal growth rates. The Company had $3,052.6 million of goodwill as of June 30, 2013. Based on the fair value analysis completed in the fourth quarter of 2013, the Company concluded that goodwill was not impaired for any reporting units with the exception of the ADP AdvancedMD reporting unit, for which an impairment charge of $42.7 million was recorded.I.J. Impairment of Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.J.K. Foreign Currency Translation.The net assets of the Company’sCompany's foreign subsidiaries are translated into U.S. dollars based on exchange rates in effect for each period, and revenues and expenses are translated at average exchange rates in the periods. Gains or losses from balance sheet translation are included in accumulated other comprehensive income on the Consolidated Balance Sheets. Currency transaction gains or losses, which are included in the results of operations, are immaterial for all periods presented.K.L. Foreign Currency Risk Management Programs and Derivative Financial Instruments. The Company transacts business in various foreign jurisdictions and is therefore exposed to market risk from changes in foreign currency exchange rates that could impact its consolidated results of operations, financial position, or cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company does not use derivative financial instruments for trading purposes. or June 30, 2011.L..Effect of Effect of Employee Employee Stock Option Restricted Stock Years ended June 30, Basic Shares Shares Diluted 2012 Net earnings from continuing operations $ 1,388.5 $ 1,388.5 Weighted average shares (in millions) 487.3 3.8 1.1 492.2 EPS from continuing operations $ 2.85 $ 2.82 2011 Net earnings from continuing operations $ 1,254.2 $ 1,254.2 Weighted average shares (in millions) 493.5 3.8 1.0 498.3 EPS from continuing operations $ 2.54 $ 2.52 2010 Net earnings from continuing operations $ 1,207.3 $ 1,207.3 Weighted average shares (in millions) 500.5 2.2 1.0 503.7 EPS from continuing operations $ 2.41 $ 2.40 Years ended June 30, Basic Effect of Employee Stock Option Shares Diluted 2013 Net earnings from continuing operations $ 1,364.1 $ 1,364.1 Weighted average shares (in millions) 482.7 3.3 1.1 487.1 EPS from continuing operations $ 2.83 $ 2.80 2012 Net earnings from continuing operations $ 1,379.7 $ 1,379.7 Weighted average shares (in millions) 487.3 3.8 1.1 492.2 EPS from continuing operations $ 2.83 $ 2.80 2011 Net earnings from continuing operations $ 1,245.0 $ 1,245.0 Weighted average shares (in millions) 493.5 3.8 1.0 498.3 EPS from continuing operations $ 2.52 $ 2.50 and 14.0 million shares of common stock for the year ended June 30, 2012, (“2013 ("fiscal 2012”2013"), the year ended June 30, 2011, (“2012 ("fiscal 2011”2012"), and the year ended June 30, 2010 (“2011 ("fiscal 2010”2011"), respectively, were excluded from the calculation of diluted earnings per share because their exercise prices exceeded the average market price of outstanding common shares for the respective fiscal year.M.N. Stock-Based Compensation.The Company recognizes stock-based compensation expense in net earnings based on the fair value of the award on the date of the grant. 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’sCompany'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.N.O. Internal Use Software.Expenditures for major software purchases and software developed or obtained for internal use are capitalized and amortized over a three- to five-year period on a straight-line basis. For software developed or obtained for internal use, the Company capitalizes costs. The Company’sCompany's policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use computer software. In addition, the Company also capitalizes certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of capitalizable payroll costs with respect to these employees is limited to the time directly spent on such projects. Costs associated with preliminary project stage activities, training, maintenance, and all other post-implementation stage activities are expensed as incurred. The Company also expenses internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities.O.P. Computer Software to be Sold, Leased, or Otherwise Marketed.The Company capitalizes certain costs of computer software to be sold, leased, or otherwise marketed. The Company’sCompany's policy provides for the capitalization of all software production costs upon reaching technological feasibility for a specific product. Technological feasibility is attained when software products have a completed working model whose consistency with the overall product design has been confirmed by testing. Costs incurred prior to the establishment of technological feasibility are expensed as incurred. The establishment of technological feasibility requires judgment by management and in many instances is only attained a short time prior to theP.Q. Income Taxes.The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’sentity's financial statements or tax returns. The Company is subject to the continuous examination of our income tax returns by the Internal Revenue Service (“IRS”) and other tax authorities.entity’sentity's tax benefits being sustained must be “more likely than not,” assuming that these positions will be examined by taxing authorities with full knowledge of all relevant information prior to recording the related tax benefit in the financial statements. If a tax position drops below the “more likely than not” standard, the benefit can no longer be recognized. Assumptions, judgment, and the use of estimates are required in determining if the “more likely than not” standard has been met when developing the provision for income taxes. As of June 30, 20122013 and 2011,2012, the Company’sCompany's liabilities for unrecognized tax benefits, which include interest and penalties, were $84.7$70.7 million, and $105.7$84.7 million, respectively.$10.0 million.$15 million. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability, and deferred taxes in the period in which the facts that give rise to a revision become known.Q. Workers’R. Workers' Compensation Costs.The Company employs a third party actuary to assist in determining the estimated claim liability related to workers’workers' compensation and employer’semployer's liability coverage for PEO Services worksite employees. In estimating ultimate loss rates, we utilize historical loss experience, exposure data, and actuarial judgment, together with a range of inputs which are primarily based upon the worksite employee’semployee's job responsibilities, their location, the historical frequency and severity of workers’workers' compensation claims, and an estimate of future cost trends. For each reporting period, changes in the actuarial assumptions resulting from changes in actual claims experience and other trends are incorporated into our workers’workers' compensation claims cost estimates. The Company has secured specific per occurrence insurance that caps the exposure for each claim at $1$1 million per occurrence, and has also secured aggregate stop loss insurance that caps aggregate losses at a certain level in each policy year. Additionally, for fiscal 2013, the Company entered into a reinsurance arrangement to cover substantially all losses incurred by the Company for the fiscal 2013 policy year up to the $1 million per occurrence related to workers' compensation and employer's liability deductible reimbursement insurance protection for PEO services worksite employees.R.S. Recently Issued Accounting Pronouncements.JanuaryJuly 2012, the Company adopted the Financial Accounting Standards Board (“FASB”("FASB") Accounting Standards Update (“ASU”("ASU") 2011-03, “Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 revises the criteria for assessing effective control for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The determination of whether the transfer of a financial asset subject to a repurchase agreement is a sale is based, in part, on whether the entity maintains effective control over the financial asset. ASU 2011-03 removes from the assessment of effective control: the criterion requiring the transferor to have the ability to repurchase or redeem the financial asset on substantially the agreed terms, even in the event of default by the transferee, and the related requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets. The adoption of ASU 2011-03 did not have an impact on the Company’s consolidated results of operations, financial condition, or cash flows.In January 2012, the Company adopted ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 requires expansion of the disclosures required for Level 3 measurements of fair value and provides updates to the existing measurement guidance. The adoption of ASU 2011-04 did not have an impact on the Company’s consolidated results of operations, financial condition, or cash flows.In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net incomeearnings and other comprehensive income. ASU 2011-05 is effective for fiscal years,The Company has elected to present net earnings and interim periods within those years, beginning after December 15, 2011.other comprehensive income on two separate, but consecutive statements. The adoption of ASU 2011-05 willdid not have an impact on the Company’s consolidated results of operations, financial condition, or cash flows.September 2011,July 2012, the FASB issuedCompany adopted ASU 2011-08, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” ASU 2011-08 amends the guidance in Accounting Standards Codification (“ASC”) 350-20 on testing goodwill for impairment. ASU 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that the fair value of a reporting unit is less than its carrying value based upon the qualitative assessment, it is necessary to perform the currently prescribed two-step goodwill impairment test. ASU 2011-08 does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 willdid not have an impact on the Company’s consolidated results of operations, financial condition, other comprehensive income, or cash flows.Years ended June 30, 2012 2011 2010 Interest income on corporate funds $ (85.2 ) $ (88.8 ) $ (98.8 ) Realized gains on available-for-sale securities (32.1 ) (38.0 ) (15.0 ) Realized losses on available-for-sale securities 7.7 3.6 13.4 Realized gains on investment in Reserve Fund - (0.9 ) (15.2 ) Impairment losses on available-for-sale securities 5.8 - 14.4 Impairment losses on assets held for sale 2.2 11.7 - Gain on sale of assets (66.0 ) - - Net (gains) losses on sales of buildings - (1.8 ) 2.3 Other, net (3.2 ) (2.4 ) (2.3 ) Other income, net $ (170.8 ) $ (116.6 ) $ (101.2 ) Years ended June 30, 2013 2012 2011 Interest income on corporate funds $ (64.5 ) $ (85.2 ) $ (88.8 ) Realized gains on available-for-sale securities (32.1 ) (32.1 ) (38.0 ) Realized losses on available-for-sale securities 3.5 7.7 3.6 Impairment losses on available-for-sale securities — 5.8 — Impairment losses on assets held for sale — 2.2 11.7 Gains on sales of buildings (2.2 ) — (1.8 ) Gain on sale of assets — (66.0 ) — Other, net (0.9 ) (3.2 ) (3.3 ) Other income, net $ (96.2 ) $ (170.8 ) $ (116.6 ) Proceeds from sales and maturities of available-for-sale securities were $3,962.2 million, $3,305.1 million, and $3,406.9 million for fiscal 2012, 2011, and 2010, respectively.third partythird-party expense management platform, and, as a result, recorded a gain of $66.0$66.0 million in other income, net, on the Statements of Consolidated Earnings.2011 and 2010, the Company received distributions from the Reserve Fund in excess of what was previously recorded in short-term marketable securities and, as such, recorded gains of $0.9 million and $15.2 million, respectively, to other income, net on the Statements of Consolidated Earnings.In fiscal and 2010, the Company concluded it had the intent to sell certain securities for which unrealized losses of $5.8 million and $14.4 million, respectively, were previously recorded in accumulated other comprehensive income on the Consolidated Balance Sheets. As such, the Company recorded an impairment charge of $5.8 million and $14.4 million in other income, net on the Statements of Consolidated Earnings during fiscal 2012 and 2010. As of June 30, 2012, all such securities had been sold.In fiscal 2012,$6.9$6.9 million, net of selling costs. The Company had previously classified these assets as assets held for sale on the Consolidated Balance Sheets and recognized impairment losses within other income, net on the Statements of Consolidated Earnings of $2.2$2.2 million and $11.7$11.7 million in fiscal 2012 and 2011, respectively. During fiscal yearsyear 2011, and 2010, the Company sold buildings that were previously classified as assets held for sale on the Consolidated Balance Sheets and, as a result, recorded net gains/(losses)gains of $1.8$1.8 million and ($2.3) million, respectively,, in other income, net on the Statements of Consolidated Earnings.The Company had an outsourcing agreement with Broadridge Financial Solutions, Inc. (“Broadridge”) pursuant to whichprovided data center outsourcing services, which principally consistedconcluded that it had the intent to sell certain available-for-sale securities with unrealized losses of information technology services and service delivery network services.$5.8 million. As a result of this agreement,such, the Company recognized incomerecorded an impairment charge of $112.0$5.8 million $113.0 million and $104.8 million in fiscal 2012, 2011, and 2010, respectively, which was offset by expenses associated with providing such services of $109.8 million, $110.8 million and $102.6 million, respectively, both of which were recorded in other income, net, on the Statements of Consolidated Earnings. The Company had a receivable on the Consolidated Balance Sheets from Broadridge for the services under this agreementAs of $7.6 million and $9.5 million on June 30, 2012 and 2011, respectively. In fiscal 2010, Broadridge notified the Company that it would not extend the outsourcing agreement beyond its current expiration date of June 30, 2012. The expiration of the outsourcing agreement did not have a material impact on the Company’s results of operations., all such securities had been sold.analyses.analysis. Accordingly, the measurement period for such purchase price allocations will end when the information, or the facts and circumstances, becomes available, but will not exceed twelve months.seventwo businesses induring fiscal 20122013 for an aggregate purchase price of approximately $301.0$40.4 million, net of cash acquired. In addition to the cash consideration related toThese acquisitions closed during fiscal 2012, the Company accrued certain liabilities,resulted in approximately $29.5 million of goodwill. Intangible assets acquired, which represent the estimated fair valuetotal approximately $13.5 million for these two acquisitions, included customer contracts and lists and software that are being amortized over a weighted average life of contingent consideration (“earn-out”) expected to be payable in the event that certain specific performance metrics are achieved over the earn-out period. At approximately 8 years. As of June 30, 2012,2013, the Company had not yet finalized the purchase price allocation for these two acquisitions. acquisitions. businesses in fiscal 2012 for an aggregate purchase price of approximately $292.3 million, net of cash acquired. These acquisitions resulted in approximately $182.4$182.6 million of goodwill. Intangible assets acquired, which total approximately $90.0$90.0 million for these seven acquisitions, included customer contracts and lists, software, and trademarks that are being amortized over a weighted average life of approximately 11 years.On August 16, 2010,years Company acquired 100% of the outstanding shares of Cobalt, a leading provider of digital marketing solutions for the auto industry that aligns with Dealer Services’ global layered applications strategy and strongly supports Dealer Services’ long-term growth strategy, for approximately $405.4 million in cash, net of cash acquired.The final purchase price allocation for Cobalt was as follows:Accounts receivable, net $ 42.5 Goodwill 293.5 Identifiable intangible assets 111.6 Other assets 37.5 Total assets acquired $ 485.1 Total liabilities acquired $ 58.0 determined the purchase price allocations for this acquisition based on estimates of the fair value of tangible and intangible assets acquired and liabilities assumed, utilizing recognized valuation techniques, including the income and market approaches. Goodwill for Cobalt, which is not deductible for tax purposes, resulted from the expected impact to Dealer Services’ long-term growth strategy. Intangible assets for Cobalt, which totaled $111.6 million, included customer contracts and lists, software and trademarks that are being amortized over a weighted average life of approximately 11 years. There is no contingent consideration relating to the Cobalt acquisition.In addition to Cobalt discussed above, the Company acquired eightan aggregate purchase price of approximately $370.7$776.1 million, net of cash acquired. These acquisitions resulted in approximately $250.2$543.6 million of goodwill. Intangible assets acquired, which totaled approximately $134.8$246.4 million for these eightnine acquisitions, included customer contracts and lists, software and trademarks that are being amortized over a weighted average life of approximately 912 years. The Company finalized the purchase price allocation for these eightnine acquisitions during fiscal 2012 and adjusted the preliminary values allocated to certain assets and liabilities in order to reflect final information received.acquired five businesses in fiscal 2010 for an aggregate purchase pricereviews estimates of approximately $101.0 million, netthe fair value of cash acquired. The purchase price for these acquisitions includes $3.7 million in accrued contingent paymentsconsideration ("earn-out") expected to be paid in future periods. These acquisitions resulted in approximately $80.8 million of goodwill. Intangible assets acquired, which totaled approximately $33.5 million, consist of software, customer contractsthe event that certain performance metrics are achieved over an earn-out period and listsmakes adjustments when facts and trademarks that are being amortized over a weighted average life of 7 years.circumstances warrant. The Company finalized the purchase price allocation for these five acquisitions during fiscal 2011 and adjusted the preliminary values allocated to certain assets and liabilities in order to reflect final information received.In addition, the Company made contingent payments relating to previously consummated acquisitions of $2.8 $0.8, $2.8 million, and $2.6$0.8 million in during fiscal years 2013, 2012 2011,, and 2010 respectively.2011. 2011,, and 20102011 were not material, either individually or in the aggregate, to the Company’sCompany's operations, financial position, or cash flows.March 24, 2010,December 17, 2012, the Company completed itsthe sale of the non-core Commercial Systemsits Taxware Enterprise Service business (the “Commercial business”("Taxware") for approximately $21.6a pre-tax gain of $58.8 million in cash. The Commercial business was previously reported in, less costs to sell, and recorded such gain within earnings from discontinued operations on the Dealer Services segment.Statements of Consolidated Earnings. In connection with the disposal of this business,Taxware, the Company has classified the results of this business as discontinued operations for all periods presented. Additionally,Taxware was previously reported in fiscal 2010, the Company reported a gain of $5.6 million, or $1.0 million after taxes, within earnings fromEmployer Services segment.on the Statements of Consolidated Earnings.During fiscal 2010, the Company recorded net charges of $0.5 million within earnings from discontinued operations related to a change in estimated taxes on the divestitures of businesses of $0.8 million, partially offset by a change in professional fees incurred in connection with the divestitures of businesses of $0.3 million.There were no revenues and earnings from discontinued operations during fiscal 2012 and 2011. The following table summarizes the revenues and expenses from discontinued operations as reported for the period indicated:Year ended June 30, 2010 Revenues $ 17.2 Earnings from discontinued operations before income taxes 5.2 Provision for income taxes 1.6 Net earnings from discontinued operations before gain on disposal of discontinued operations 3.6 Gain on disposal of discontinued operations, net of provision for income taxes of $5.4 0.5 Net earnings from discontinued operations $ 4.1 Years ended June 30, 2013 2012 2011 Revenues $ 23.7 $ 49.2 $ 46.5 Earnings from discontinued operations before income taxes 8.0 14.2 14.7 Provision for income taxes 3.0 5.4 5.5 5.0 8.8 9.2 Gain on disposal of discontinued operations, less costs to sell 58.8 — — Provision for income taxes 22.1 — — Net gain on disposal of discontinued operations 36.7 — — Net earnings from discontinued operations $ 41.7 $ 8.8 $ 9.2 2011, or 2010.: June 30, 2012 Assets: Accounts receivable, net $ 7.6 Goodwill 93.3 Intangible assets, net 22.9 Other assets 1.2 Total assets $ 125.0 Liabilities: Accounts payable $ 0.4 Accrued expenses and other current liabilities 0.1 Accrued payroll and payroll related expenses 2.3 Deferred revenues 22.7 Deferred income taxes 3.5 Total liabilities $ 29.0 20122013 and 20112012 were as follows: June 30, 2013 Fair Value (A) Type of issue: Money market securities and other cash equivalents $ 5,431.2 $ — $ — $ 5,431.2 Available-for-sale securities: Corporate bonds 7,868.3 166.2 (56.7 ) 7,977.8 5,983.7 152.6 (37.4 ) 6,098.9 Asset-backed securities 1,374.1 5.3 (19.7 ) 1,359.7 Canadian government obligations and
Canadian government agency obligations998.2 10.7 (4.5 ) 1,004.4 Canadian provincial bonds 695.7 20.7 (5.6 ) 710.8 Municipal bonds 536.9 16.7 (4.4 ) 549.2 Other securities 1,094.4 46.3 (2.8 ) 1,137.9 Total available-for-sale securities 18,551.3 418.5 (131.1 ) 18,838.7 Total corporate investments and funds held for clients $ 23,982.5 $ 418.5 $ (131.1 ) $ 24,269.9 as follows:June 30, 2012 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Type of issue: Money market securities and other cash equivalents $ 5,111.1 $ - $ - $ 5,111.1 Available-for-sale securities: U.S. Treasury and direct obligations of U.S. government agencies 6,413.8 260.9 (0.1 ) 6,674.6 Corporate bonds 7,097.2 272.3 (1.5 ) 7,368.0 Canadian provincial bonds 620.8 35.4 (0.3 ) 655.9 Asset-backed securities 533.9 14.5 - 548.4 Municipal bonds 522.0 31.0 (0.1 ) 552.9 Canadian government obligations and Canadian government agency obligations 994.2 23.4 (0.6 ) 1,017.0 Other securities 1,201.0 75.7 (0.1 ) 1,276.6 Total available-for-sale securities 17,382.9 713.2 (2.7 ) 18,093.4 Total corporate investments and funds held for clients $ 22,494.0 $ 713.2 $ (2.7 ) $ 23,204.5 June 30, 2011 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Type of issue: Money market securities and other cash equivalents $ 9,731.8 $ - $ - $ 9,731.8 Available-for-sale securities: U.S. Treasury and direct obligations of U.S. government agencies 6,558.2 213.0 (12.1 ) 6,759.1 Corporate bonds 5,908.6 234.9 (16.9 ) 6,126.6 Canadian provincial bonds 480.0 15.1 (0.8 ) 494.3 Asset-backed securities 422.4 25.4 - 447.8 Municipal bonds 493.7 23.1 (0.6 ) 516.2 Canadian government obligations and Canadian government agency obligations 1,082.0 20.8 (1.3 ) 1,101.5 Other securities 1,411.7 73.2 (2.9 ) 1,482.0 Total available-for-sale securities 16,356.6 605.5 (34.6 ) 16,927.5 Total corporate investments and funds held for clients $ 26,088.4 $ 605.5 $ (34.6 ) $ 26,659.3 June 30, 2012 Fair Value (B) Type of issue: Money market securities and other cash equivalents $ 5,111.1 $ — $ — $ 5,111.1 Available-for-sale securities: Corporate bonds 7,097.2 272.3 (1.5 ) 7,368.0 6,413.8 260.9 (0.1 ) 6,674.6 Asset-backed securities 533.9 14.5 — 548.4 Canadian government obligations and
Canadian government agency obligations994.2 23.4 (0.6 ) 1,017.0 Canadian provincial bonds 620.8 35.4 (0.3 ) 655.9 Municipal bonds 522.0 31.0 (0.1 ) 552.9 Other securities 1,201.0 75.7 (0.1 ) 1,276.6 Total available-for-sale securities 17,382.9 713.2 (2.7 ) 18,093.4 Total corporate investments and funds held for clients $ 22,494.0 $ 713.2 $ (2.7 ) $ 23,204.5 Federal National Mortgage Association (“Fannie Mae”), and Federal Home Loan Mortgage Corporation (“Freddie Mac”) with fair values of $4,189.1$4,325.4 million $1,134.1 and $1,229.0 million $428.6 million and $384.6 million,, respectively. At June 30, 2011,2012, U.S. Treasury and direct obligations of U.S.U. S. government agencies primarily include debt directly issued by Federal Home Loan Banks and Federal Farm Credit Banks Fannie Mae, and Freddie Mac with fair values of $3,886.5$4,189.1 million $914.0 and $1,134.1 million $702.4 million, and $759.1 million, respectively. U.S. Treasury and direct obligations of U.S. government agencies represent senior, unsecured, non-callable debt that primarily carries a credit rating of AAA, as rated by Moody's and AA+, as rated by Standard & Poor's and has maturities ranging from August 2012July 2013 through June 2022. Corporate bonds include investment-grade debt securities, which include a wide variety of issuers and industries, primarily carry credit ratings of A and above, and have maturities ranging from July 2012 to June 2022.May 2023.2012,2013, asset-backed securities include AAA rated senior tranches of securities with predominately prime collateral of fixed rate credit card, auto loan, and rate reduction and auto loan receivables with fair values of $323.0$904.5 million $140.0, $315.7 million, and $85.1$95.4 million, respectively. At June 30, 2011,2012, asset-backed securities include AAA rated senior tranches of securities with predominately prime collateral of fixed rate credit card, auto loan, and rate reduction and auto loan receivables with fair values of $220.5$323.0 million $196.9, $85.1 million, and $30.0$140.0 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 June 30, 2012.2012,2013, other securities and their fair value primarily representrepresent: AA and AAA rated supranational bonds of $427.7$426.9 million, AA and AAA rated sovereign bonds of $405.0$415.4 million, AAA rated commercial mortgage-backed securities of $282.3$163.5 million, and AA rated mortgage-backed securities of $135.3$112.6 million that are guaranteed by Federal National Mortgage Association ("Fannie Mae") and Federal Home Loan Mortgage Corporation ("Freddie Mac"). At June 30, 2012, other securities and their fair value primarily represent: AAA rated supranational bonds of $427.7 million, AA and AAA rated sovereign bonds of $405.0 million, AAA rated commercial mortgage-backed securities of $282.3 million, and AA rated mortgage-backed securities of $135.3 million that are guaranteed by Fannie Mae and Freddie Mac. At June 30, 2011, other securities and their fair value primarily represent supranational bonds of $360.1 million, sovereign bonds of $328.8 million, commercial mortgage-backed securities of $492.5 million, mortgage-backed securities of $146.5 million that are guaranteed by Fannie Mae and Freddie Mac and corporate bonds backed by the Federal Deposit Insurance Corporation's Temporary Liquidity Guarantee Program of $129.1 million. The Company’sCompany's mortgage-backed securities represent an undivided beneficial ownership interest in a group or pool of one or more residential mortgages. These securities are collateralized by the cash flows of 15-year15-year and 30-year30-year residential mortgages and are guaranteed by Fannie Mae and Freddie Mac as to the timely payment of principal and interest.June 30, 2012 2011 Corporate investments: Cash and cash equivalents $ 1,548.1 $ 1,389.4 Short-term marketable securities 30.4 36.3 Long-term marketable securities 86.9 98.0 Total corporate investments $ 1,665.4 $ 1,523.7 June 30, 2013 2012 Corporate investments: Cash and cash equivalents $ 1,699.1 $ 1,548.1 Short-term marketable securities 28.0 30.4 Long-term marketable securities 314.0 86.9 Total corporate investments $ 2,041.1 $ 1,665.4 ourthe Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets.June 30, 2012 2011 Funds held for clients: Restricted cash and cash equivalents held to satisfy client funds obligations $ 3,563.0 $ 8,342.4 Restricted short-term marketable securities held to satisfy client funds obligations 2,954.1 3,059.9 Restricted long-term marketable securities held to satisfy client funds obligations 15,022.0 13,733.3 Total funds held for clients $ 21,539.1 $ 25,135.6 June 30, 2013 2012 Funds held for clients: Restricted cash and cash equivalents held to satisfy client funds obligations $ 3,732.1 $ 3,563.0 Restricted short-term marketable securities held to satisfy client funds obligations 1,407.7 2,954.1 Restricted long-term marketable securities held to satisfy client funds obligations 17,089.0 15,022.0 Total funds held for clients $ 22,228.8 $ 21,539.1 Company’sCompany's contractual obligations to remit funds to satisfy clients’clients' payroll and tax 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 $20,856.2$21,956.3 million and $24,591.1$20,856.2 million as of June 30, 2013 and June 30, 2012 and 2011,, respectively. The Company has classified funds held for clients as a current asset since these funds are held solely for the purposes of satisfying the client funds obligations. The Company has reported the cash flows related to the purchases of corporate and client funds marketable securities and those 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 inflows and outflows related to client funds investments with original maturities of 90 days or less on a net basis within net changeincrease in restricted cash and cash equivalents and other restricted assets held to satisfy client funds obligations in the investing section of 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 changeincrease in client funds obligations in the financing section of the Statements of Consolidated Cash Flows.84%83% of the available-for-sale securities held ana AAA or AA rating at June 30, 2012,2013, as rated by Moody’s,Moody's, Standard & Poor’sPoor's and, for Canadian securities, Dominion Bond Rating Service. All available-for-sale securities were rated as investment grade at June 30, 2012.The amount of collected but not yet remitted funds for the Company’s payroll and payroll tax filing and other services varies significantly during the fiscal year, and averaged approximately $17,898.2 million, $16,865.4 million, and $15,194.5 million in fiscal 2012, 2011, and 2010, respectively.20122013, are as follows:Unrealized Unrealized losses Fair market losses Fair market Total gross less than value less than greater than value greater unrealized Total fair 12 months 12 months 12 months than 12 months losses market value U.S. Treasury and direct obligations of U.S. government agencies $ (0.1 ) $ 43.6 $ - $ - $ (0.1 ) $ 43.6 Corporate bonds (1.1 ) 234.8 (0.4 ) 20.2 (1.5 ) 255.0 Canadian provincial bonds (0.3 ) 58.5 - - (0.3 ) 58.5 Asset-backed securities - 13.6 - - - 13.6 Municipal bonds (0.1 ) 22.8 - - (0.1 ) 22.8 Canadian government obligations and Canadian government agency obligations (0.6 ) 209.4 - - (0.6 ) 209.4 Other securities (0.1 ) 26.3 - - (0.1 ) 26.3 $ (2.3 ) $ 609.0 $ (0.4 ) $ 20.2 $ (2.7 ) $ 629.2 Corporate bonds $ (56.7 ) $ 2,724.9 $ — $ — $ (56.7 ) $ 2,724.9 (37.4 ) 1,374.6 — — (37.4 ) 1,374.6 Asset-backed securities (19.7 ) 1,060.1 — — (19.7 ) 1,060.1 Canadian government obligations and
Canadian government agency obligations(4.5 ) 444.7 — — (4.5 ) 444.7 Canadian provincial bonds (5.6 ) 239.7 — — (5.6 ) 239.7 Municipal bonds (4.4 ) 188.7 — — (4.4 ) 188.7 Other securities (2.8 ) 109.3 — — (2.8 ) 109.3 $ (131.1 ) $ 6,142.0 $ — $ — $ (131.1 ) $ 6,142.0 20112012 are as follows:Unrealized Unrealized losses Fair market losses Fair market Total gross less than value less than greater than value greater unrealized Total fair 12 months 12 months 12 months than 12 months losses market value U.S. Treasury and direct obligations of U.S. government agencies $ (12.1 ) $ 1,049.0 $ - $ - $ (12.1 ) $ 1,049.0 Corporate bonds (16.9 ) 945.2 - - (16.9 ) 945.2 Canadian provincial bonds (0.8 ) 88.5 - - (0.8 ) 88.5 Asset-backed securities - 0.5 - - - 0.5 Municipal bonds (0.6 ) 35.0 - - (0.6 ) 35.0 Canadian government obligations and Canadian government agency obligations (1.3 ) 227.7 - - (1.3 ) 227.7 Other securities (2.9 ) 171.1 - - (2.9 ) 171.1 $ (34.6 ) $ 2,517.0 $ - $ - $ (34.6 ) $ 2,517.0 Corporate bonds $ (1.1 ) $ 234.8 $ (0.4 ) $ 20.2 $ (1.5 ) $ 255.0 U.S. Treasury and direct obligations of U.S. government agencies (0.1 ) 43.6 — — (0.1 ) 43.6 Asset-backed securities — 13.6 — — — 13.6 Canadian government obligations and
Canadian government agency obligations(0.6 ) 209.4 — — (0.6 ) 209.4 Canadian provincial bonds (0.3 ) 58.5 — — (0.3 ) 58.5 Municipal bonds (0.1 ) 22.8 — — (0.1 ) 22.8 Other securities (0.1 ) 26.3 — — (0.1 ) 26.3 $ (2.3 ) $ 609.0 $ (0.4 ) $ 20.2 $ (2.7 ) $ 629.2 20122013 are as follows:Maturity Dates: Due in one year or less $ 2,984.5 Due after one year up to two years 1,617.1 Due after two years up to three years 3,435.2 Due after three years up to four years 4,054.4 Due after four years 6,002.2 Total available-for-sale securities $ 18,093.4 For the securities in an unrealized loss position of $2.7 million at June 30, 2012, the Company concluded that it did not have the intent to sell such securities and that it was not more likely than not that the Company would be required to sell such securities before recovery. The securities with unrealized losses of $2.7 million were primarily comprised of corporate bonds and Canadian government obligations and Canadian government agency obligations. In order to determine whether such losses were due to credit losses, the Company evaluated such securities utilizing a variety of quantitative and qualitative factors including whether the Company expects to collect all amounts due under the contractual terms of the security, information about current and past events of the issuer, and the length of time and the extent to which the fair value has been less than the cost basis. At June 30, 2012, the Company concluded that unrealized losses on available-for-sale securities held at June 30, 2012 were not credit losses and were attributable to changes in interest rates. As a result, the Company concluded that the $2.7 million in unrealized losses on such securities should be recorded in accumulated other comprehensive income on the Consolidated Balance Sheets at June 30, 2012.Due in one year or less $ 1,435.7 Due after one year to two years 3,470.9 Due after two years to three years 4,631.5 Due after three years to four years 3,233.3 Due after four years 6,067.3 Total available-for-sale securities $ 18,838.7 FAIR VALUE MEASUREMENTSFair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date and is based upon the Company’s principal or most advantageous market for a specific asset or liability.U.S. GAAP provides for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows: Level 1Fair value is determined based upon quoted prices for identical assets or liabilities that are traded in active markets.Level 2Fair value is determined based upon inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:quoted prices for similar assets or liabilities in active markets;quoted prices for identical or similar assets or liabilities in markets that are not active;inputs other than quoted prices that are observable for the asset or liability; orinputs that are derived principally from or corroborated by observable market data by correlation or other means.Level 3Fair value is determined based upon inputs that are unobservable and reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based upon the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows).Available-for-sale securities included in Level 1 are valued using closing prices for identical instruments that are traded on active exchanges. Over 99% of the Company’s available-for-sale securities included in Level 2 are valued utilizing inputs obtained from an independent pricing service. To determine the fair value of theCompany’s Level 2 investments, a variety of inputs are utilized, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information. The Company reviews the values generated by the independent pricing service for reasonableness by comparing the valuations received from the independent pricing service to valuations from at least one other observable source. The Company has not adjusted the prices obtained from the independent pricing service. The Company has no available-for-sale securities included in Level 3.The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of assets and liabilities within the fair value hierarchy. In certain instances, the inputs used to measure fair value may meet the definition of more than one level of the fair value hierarchy. The significant input with the lowest level priority is used to determine the applicable level in the fair value hierarchy.The following table presents the Company’s assets measured at fair value on a recurring basis at June 30, 2012. Included in the table are available-for-sale securities within corporate investments of $117.3 million and funds held for clients of $17,976.1 million. Refer to Note 5 for additional disclosure in relation to corporate investments and funds held for clients.Level 1 Level 2 Level 3 Total U.S Treasury and direct obligations of U.S. government agencies $ - $ 6,674.6 $ - $ 6,674.6 Corporate bonds - 7,368.0 - 7,368.0 Canadian provincial bonds - 655.9 - 655.9 Asset-backed securities - 548.4 - 548.4 Municipal bonds - 552.9 - 552.9 Canadian government obligations and Canadian government agency obligations - 1,017.0 - 1,017.0 Other securities 20.6 1,256.0 - 1,276.6 Total available-for-sale securities $ 20.6 $ 18,072.8 $ - $ 18,093.4 The following table presents the Company’s assets measured at fair value on a recurring basis at June 30, 2011. Included in the table are available-for-sale securities within corporate investments of $134.3 million and funds held for clients of $16,793.2 million.Level 1 Level 2 Level 3 Total U.S Treasury and direct obligations of U.S. government agencies $ - $ 6,759.1 $ - $ 6,759.1 Corporate bonds - 6,126.6 - 6,126.6 Canadian provincial bonds - 494.3 - 494.3 Asset-backed securities - 447.8 - 447.8 Municipal bonds - 516.2 - 516.2 Canadian government obligations and Canadian government agency obligations - 1,101.5 - 1,101.5 Other securities 20.1 1,461.9 - 1,482.0 Total available-for-sale securities $ 20.1 $ 16,907.4 $ - $ 16,927.5 NOTE 7. RECEIVABLESCompany’sCompany's trade receivables, which are recorded based upon the amount the Company expects to receive from its clients, net of an allowance for doubtful accounts. The Company’sCompany's receivables also include notes receivable for the financing of the sale of computer systems, primarily from auto, truck, motorcycle, marine, recreational vehicle, and heavy equipment retailers and manufacturers. Notes receivable are recorded based upon the amount the CompanyJune 30, 2012 June 30, 2011 Current Long-term Current Long-term Trade receivables $ 1,363.7 $ - $ 1,333.2 $ - Notes receivable 89.1 145.5 90.5 146.4 Less: Allowance for doubtful accounts - trade receivables (41.1 ) - (44.8 ) - Allowance for doubtful accounts - notes receivable (5.4 ) (8.8 ) (5.7 ) (9.4 ) Unearned income-notes receivable (7.0 ) (6.9 ) (8.4 ) (8.3 ) Total $ 1,399.3 $ 129.8 $ 1,364.8 $ 128.7 Long-term receivables at June 30, 2012 mature as follows: 2014 $ 66.0 2015 $ 43.5 2016 $ 26.1 2017 $ 9.9 $ 145.5 June 30, 2013 June 30, 2012 Current Long-term Current Long-term Trade receivables $ 1,564.8 $ — $ 1,355.7 $ — Notes receivable 91.0 154.7 89.1 145.5 Less: Allowance for doubtful accounts - trade receivables (45.6 ) — (40.7 ) — Allowance for doubtful accounts - notes receivable (5.3 ) (9.0 ) (5.4 ) (8.8 ) Unearned income - notes receivable (6.6 ) (7.0 ) (7.0 ) (6.9 ) $ 1,598.3 $ 138.7 $ 1,391.7 $ 129.8 2015 $ 67.2 2016 $ 47.6 2017 $ 28.8 2018 $ 11.1 Total $ 154.7 Company’sCompany's methodology, the notes receivable balances with specific and non-specific reserves and the specific and non-specific reserves associated with those balances are as follows:June 30, 2012 Notes Receivable Reserve Current Long-term Current Long-term Specific Reserve $ 0.4 $ 0.6 $ 0.4 $ 0.6 Non-specific Reserve 88.7 144.9 5.0 8.2 Total $ 89.1 $ 145.5 $ 5.4 $ 8.8 June 30, 2011 Notes Receivable Reserve Current Long-term Current Long-term Specific Reserve $ 0.6 $ 0.9 $ 0.6 $ 0.9 Non-specific Reserve 89.9 145.5 5.1 8.5 Total $ 90.5 $ 146.4 $ 5.7 $ 9.4 June 30, 2013 Notes Receivable Reserve Current Long-term Current Long-term Specific reserve $ 0.3 $ 0.5 $ 0.3 $ 0.5 Non-specific reserve 90.7 154.2 5.0 8.5 $ 91.0 $ 154.7 $ 5.3 $ 9.0 June 30, 2012 Notes Receivable Reserve Current Long-term Current Long-term Specific reserve $ 0.4 $ 0.6 $ 0.4 $ 0.6 Non-specific reserve 88.7 144.9 5.0 8.2 $ 89.1 $ 145.5 $ 5.4 $ 8.8 Current Long-term Balance at June 30, 2010 $ 9.4 $ 16.1 Incremental provision 1.8 3.0 Recoveries (3.7 ) (6.8 ) Chargeoffs (1.8 ) (2.9 ) Balance at June 30, 2011 $ 5.7 $ 9.4 Incremental provision 1.7 2.1 Recoveries (1.1 ) (1.5 ) Chargeoffs (0.9 ) (1.2 ) Balance at June 30, 2012 $ 5.4 $ 8.8 Current Long-term Balance at June 30, 2011 $ 5.7 $ 9.4 Incremental provision 0.6 0.2 Recoveries — 0.4 Chargeoffs (0.9 ) (1.2 ) Balance at June 30, 2012 $ 5.4 $ 8.8 Incremental provision 0.8 1.2 Recoveries — 0.2 Chargeoffs (0.9 ) (1.2 ) Balance at June 30, 2013 $ 5.3 $ 9.0 and 6% as of June 30, 2011.Notes receivable aged over 30 days past due are considered delinquent. Notes receivable aged over 60 days past due and notes receivable with known collection issues are placed on non-accrual status. Interest revenue is not recognized on notes receivable while on non-accrual status. Cash payments received on non-accrual receivables are applied towards the principal. When notes receivable on non-accrual status are again less than 60 days past due, recognition of interest revenue for notes receivable is resumed. At June 30, 2012, the Company had $0.4 million in notes receivable on non-accrual status, including $0.1 million of notes receivable aged over 60 days past due. At June 30, 2011, the Company had $2.2 million in notes receivable on non-accrual status, including $0.1 million of notes receivable aged over 60 days past due. During fiscal 2012 and 2011, the charge-offs as a percentage of notes receivable were 0.9% and 1.9% respectively.The aging of the notes receivable past due at June 30, 2012 is as follows:Over 30 days to 60 days Over 60 days Notes Receivables $ 0.7 $ 0.1 At June 30, 2012, approximately Approximately are current.The aging of the notes receivable past duewere current at 2011 is as follows:Over 30 days to 60 days Over 60 days Notes Receivables $ 1.2 $ 0.1 At June 30, 2011, approximately 99% of notes receivable are current.8.7. PROPERTY, PLANT AND EQUIPMENT20122013 and 20112012 are as follows:June 30, 2012 2011 Property, plant and equipment: Land and buildings $ 710.4 $ 698.4 Data processing equipment 815.4 791.0 Furniture, leaseholds and other 431.6 462.3 1,957.4 1,951.7 Less: accumulated depreciation (1,251.1 ) (1,235.5 ) Property, plant and equipment, net $ 706.3 $ 716.2 June 30, 2013 2012 Property, plant, and equipment: Land and buildings $ 731.7 $ 710.4 Data processing equipment 850.7 814.5 Furniture, leaseholds, and other 460.5 431.6 2,042.9 1,956.5 Less: accumulated depreciation (1,314.2 ) (1,250.2 ) Property, plant, and equipment, net $ 728.7 $ 706.3 $146.9$149.9 million $146.3, $146.9 million, and $152.6$146.3 million for fiscal 2013, 2012 2011,, and 2010,2011, respectively.NOTE 9. ASSETS HELD FOR SALEIn fiscal 2012, the Company reclassified assets related to two buildings as assets held for sale which were previously reported in property, plant and equipment, net on the Consolidated Balance Sheets. In fiscal 2011, the Company reclassified an additional two buildings as assets held for sale that were previously reported in property, plant and equipment, net on the Consolidated Balance Sheets. These two buildings were subsequently sold during fiscal 2012. At June 30, 2010, the Company had $11.8 million classified as assets held for sale on the Consolidated Balance Sheets relating to two buildings that were subsequently sold during fiscal 2011.10.8. GOODWILL AND INTANGIBLE ASSETS, NET20122013 and 20112012 are as follows:Employer PEO Dealer Services Services Services Total Balance as of June 30, 2010 $ 1,611.3 $ 4.8 $ 767.2 $ 2,383.3 Additions and other adjustments, net 251.3 - 332.9 584.2 Currency translation adjustments 72.4 - 33.7 106.1 Balance as of June 30, 2011 $ 1,935.0 $ 4.8 $ 1,133.8 $ 3,073.6 Additions and other adjustments, net 106.8 - 56.2 163.0 Currency translation adjustments (60.9 ) - (20.4 ) (81.3 ) Balance as of June 30, 2012 $ 1,980.9 $ 4.8 $ 1,169.6 $ 3,155.3 Total Balance at June 30, 2011 $ 1,841.7 $ 4.8 $ 1,133.8 $ 2,980.3 Additions and other adjustments, net 106.8 — 56.2 163.0 Currency translation adjustments (60.9 ) — (20.4 ) (81.3 ) Balance at June 30, 2012 $ 1,887.6 $ 4.8 $ 1,169.6 $ 3,062.0 Additions and other adjustments, net 29.4 — 0.8 30.2 Currency translation adjustments 4.5 — (1.4 ) 3.1 Goodwill impairment (42.7 ) — — (42.7 ) Balance at June 30, 2013 $ 1,878.8 $ 4.8 $ 1,169.0 $ 3,052.6 In2012, 2011, and 2010,2013, the Company performedrecorded an impairment charge of $42.7 million related to the requiredADP AdvancedMD reporting unit. The goodwill impairment was due to a decrease in the estimated fair value of the business resulting from a decline in the sales growth and profitability projections of the business.teststest indicated that ADP AdvancedMD's carrying value exceeded its estimated fair value, a second phase of the goodwill impairment test ("Step 2") was performed specific to this business. Under Step 2, the fair values of all assets and liabilities were estimated, including tangible assets, existing technology, customer lists, and trademarks for the purpose of deriving an estimate of the implied fair value of goodwill. The implied fair value of goodwill was then compared to the recorded goodwill to determine the amount of impairment. Assumptions used in measuring the value of these assets and liabilities included the discount rates, royalty rates, and attrition rates used in valuing the intangible assets. Upon completion of the annual test, the ADP AdvancedMD reporting unit was determined that there was no impairment.to be impaired. ADP AdvancedMD is currently reported in our Employer Services segment.June 30, 2012 2011 Intangibles: Software and software licenses $ 1,423.7 $ 1,322.4 Customer contracts and lists 863.1 821.0 Other intangibles 241.9 238.3 2,528.7 2,381.7 Less accumulated amortization: Software and software licenses (1,153.0 ) (1,062.1 ) Customer contracts and lists (492.2 ) (443.7 ) Other intangibles (172.3 ) (160.2 ) (1,817.5 ) (1,666.0 ) Intangible assets, net $ 711.2 $ 715.7 June 30, 2013 2012 Intangible assets: Software and software licenses $ 1,511.1 $ 1,410.9 Customer contracts and lists 848.9 832.7 Other intangibles 241.7 241.6 2,601.7 2,485.2 Less accumulated amortization: Software and software licenses (1,239.5 ) (1,145.8 ) Customer contracts and lists (534.3 ) (479.1 ) Other intangibles (184.7 ) (172.0 ) (1,958.5 ) (1,796.9 ) Intangible assets, net $ 643.2 $ 688.3 87 years (4 (4 years for software and software licenses, 10 years for customer contracts and lists, and 87 years for other intangibles). Amortization of intangible assets was $176.4$167.1 million $171.9, $172.8 million, and $156.6$168.3 million for fiscal2013, 2012 2011,, and 2010,2011, respectively.Company’sCompany's existing intangible assets for the next fivefiscalyears are as follows:Amount Twelve months ending June 30, 2013 $ 159.4 Twelve months ending June 30, 2014 $ 129.9 Twelve months ending June 30, 2015 $ 99.3 Twelve months ending June 30, 2016 $ 70.2 Twelve months ending June 30, 2017 $ 61.2 Amount Twelve months ending June 30, 2014 $ 157.3 Twelve months ending June 30, 2015 $ 128.0 Twelve months ending June 30, 2016 $ 89.8 Twelve months ending June 30, 2017 $ 67.5 Twelve months ending June 30, 2018 $ 43.5 The Company has not incurred significant costs to renew or extend the term of acquired intangible assets during fiscal 2012.11. SHORT-TERM9. SHORT TERM FINANCING$2.0$2.0 billion 364-day, 364-day credit agreement with a group of lenders that matures in June 2013.2014. In addition, the Company has a four-year $3.25$3.25 billion credit facility maturing in June 2015 that contains an accordion feature under which the aggregate commitment can be increased by $500.0$500.0 million, subject to the availability of additional commitments. The Company also has a $1.5an existing $2.0 billion five-yearfive-year credit facility that matures in June 20172018 that also contains an accordion feature under which the aggregate commitment can be increased by $500.0$500.0 million, subject to the availability of additional commitments. The interest rate applicable to committed borrowings is tied to LIBOR, the federal funds effective rate, or the prime rate depending on the notification provided by the Company to the syndicated financial institutions prior to borrowing. The Company is also required to pay facility fees on the credit agreements. 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 June 30, 20122013 under the credit agreements.$6.75$6.75 billion in aggregate maturity value of commercial paper.paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. In August 2013, the Company increased the U.S. short-term commercial paper program to provide for the issuance of up to $7.25 billion in aggregate maturity value. The Company’s commercial paper program is rated A-1+ by Standard and Poor’s and Prime-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.days. At June 30, 20122013 and 2011,2012, the Company had no commercial paper outstanding. In fiscal 20122013 and 2011,2012, the Company’sCompany's average borrowings were $2.3$2.4 billion and $1.6$2.3 billion, respectively, at weighted average interest rates of 0.1%0.2% and 0.2%.0.1%, respectively. The weighted average maturity of the Company’s commercial paper in fiscal 20122013 and 2011 was approximately 2012 approximated two days for both fiscal years..agreements. These 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.days. The Company has $3.0$3.0 billion available to it on a committed basis under these reverse repurchase agreements. At June 30, 2013, the Company had $245.9 million of obligations outstanding related to reverse repurchase agreements, which were subsequently repaid on July 2, 2013. At June 30, 2012, and 2011, there were no outstanding obligations under reverse repurchase agreements. In fiscal 20122013 and 2011,2012, the Company had average outstanding balances under reverse repurchase agreements of $297.7$362.0 million and $505.2$297.7 million, respectively, at weighted average interest rates of 0.6%0.7% and 0.4%0.6%, respectively.NOTE 12. FOREIGN CURRENCY RISK MANAGEMENT PROGRAMSThe Company is exposed to market risk from changes in foreign currency exchange rates that could impact its consolidated results of operations, financial position or cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company uses derivative financial instruments as risk management tools and not for trading purposes.During fiscal 2010, the Company was exposed to foreign exchange fluctuations on U.S. Dollar denominated short-term intercompany amounts payable by a Canadian subsidiary to a U.S. subsidiary of the Company in the amount of $178.6 million U.S. Dollars. In order to manage the exposure related to the foreign exchange fluctuations between the Canadian Dollar and the U.S. Dollar, the Canadian subsidiary entered into a foreign exchange forward contract, which obligated the Canadian subsidiary to buy $178.6 million U.S. dollars at a rate of 1.15 Canadian Dollars to each U.S. Dollar on December 1, 2009. Upon settlement of such contract on December 1, 2009, an additional foreign exchange forward contract was entered into that obligated the Canadian subsidiary to buy $29.4 million U.S. Dollars at a rate of 1.06 Canadian dollars to each U.S. Dollar on February 26, 2010. The net loss on the foreign exchange forward contracts of $15.8 million for the twelve months ended June 30, 2010 was recognized in earnings in fiscal 2010 and substantially offset the foreign currency mark-to-market gains and losses on the related short-term intercompany amounts payable. The short-term intercompany amounts payable were fully paid by the Canadian subsidiary to the U.S. subsidiary by February 2010.There were no derivative financial instruments outstanding at June 30, 2012, 2011, or 2010.13.10. EMPLOYEE BENEFIT PLANSStockStock-based Compensation Plans.The Company recognizes stock-based compensation expense in net earnings based on the fair value of the award on the date of grant. Stock-based compensation consists of the following:schedule.schedule and have a term of 10 years. Options granted prior to July 1, 2008 generally vest ratably over five years and have a term of10 years. Optionsoptions granted after July 1, 2008 generally vest ratably over four years and have a term of 10 years.. Compensation expense foris measured based on the fair value of the stock options isoption on the grant date and recognized over the requisite service period for each separately vesting portion of the stock option award. Stock options are forfeited if the employee ceases to be employed by the Company prior to vesting.Restricted Stock.Time-Based Restricted Stock.The Company has issued time-based restricted stock to certain key employees. These shares are restricted as to transfer and in certain circumstances must be returned to the Company at the original purchase price. The Company records stock compensation expense relating to the issuance of restricted stock based on market prices on the date of grant on a straight-line basis over the period in which the transfer restrictions exist, which is up to five years from the date of grant.Performance-Based Restricted Stock.The performance-based restricted stock program has a one-year performance period, and a subsequent six-month service period. Under this program, the Company communicates "target awards" to employees at the beginning of the performance period and, as such, dividends are not paid in respect of the "target awards" during the performance period. After the performance period, if the performance targets are achieved, associates are eligible to receive dividends on shares awarded under the program. The performance target is based on earnings per share growth over the performance period, with possible payouts ranging from 0% to 150% of the "target awards." Stock-based compensation expense is measured based upon the fair value of the award on the grant date. Compensation expense is recognized on a straight-line basis over the vesting period of approximately 18 months, based upon the probability that the performance target will be met.14.610.4 million shares in fiscal 20122013 as compared to 14.214.6 million shares repurchased in fiscal 2011.2012. 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.Stock-based Cash payments related to the settlement of vested time-based restricted stock units and performance-based restricted stock units were approximately $17.8 million, $15.4 million, and $10.3 million during fiscal years 2013, 2012, and 2011.of $78.7 million, $76.3 million, and $67.6 million was recognized in earnings from continuing operations in fiscal 2012, 2011, and 2010, respectively, as well as related income tax benefits in each of $29.0 million, $28.2 million,fiscal2013, 2012, and $22.3 million, respectively.Years ended June 30, 2012 2011 2010 Operating expenses $ 13.4 $ 13.1 $ 11.7 Selling, general and administrative expenses 53.8 51.8 45.9 System development and programming costs 11.5 11.4 10.0 Total pretax stock-based compensation expense $ 78.7 $ 76.3 $ 67.6 Years ended June 30, 2013 2012 2011 Operating expenses $ 17.9 $ 17.2 $ 16.5 Selling, general and administrative expenses 64.0 62.6 59.9 System development and programming costs 14.5 14.3 13.9 Total pretax stock-based compensation expense $ 96.4 $ 94.1 $ 90.3 Income tax benefit $ 34.3 $ 33.5 $ 32.3 2012,2013, the total remaining unrecognized compensation cost related to non-vested stock options, restricted stock units, and restricted stock awards amounted to $8.8$9.7 million, $18.2 million, and $40.5$63.8 million, respectively, which will be amortized over the weighted averageweighted-average remaining requisite service periodperiods of 1.82.0 years, 1.3 years, and 1.01.4 years, respectively. 2012,2013, the following activity occurred under ourthe Company’s existing plans:Number of Options Weighted Average Price per Share Year ended June 30, 2012 (in thousands) (in dollars) Options outstanding, beginning of year 21,714 $40 Options granted 1,136 $54 Options exercised (6,228 ) $40 Options canceled (435 ) $42 Options outstanding, end of year 16,187 $41 Options exercisable, end of year 13,632 $39 Shares available for future grants, end of year 29,452 Shares reserved for issuance under stock option plans, end of year 45,639 Year ended June 30, 2013 Options outstanding, beginning of year 16,187 $ 41 Options granted 1,168 $ 60 Options exercised (6,070 ) $ 38 Options canceled (175 ) $ 41 Options outstanding, end of year 11,110 $ 44 Options exercisable, end of year 8,662 $ 41 Shares available for future grants, end of year 28,459 Shares reserved for issuance under stock option plans, end of year 39,569 Performance-Based Restricted Stock: Time-Based Restricted Stock: Number of Shares Number of Shares (in thousands) (in thousands) Year ended June 30, 2012 Year ended June 30, 2012 Restricted shares outstanding, Restricted shares outstanding, beginning of year 1,351 beginning of year 493 Restricted shares granted 1,801 Restricted shares granted 31 Restricted shares vested (1,581 ) Restricted shares vested (144 ) Restricted shares forfeited (97 ) Restricted shares forfeited (22 ) Restricted shares outstanding, end of year 1,474 Restricted shares outstanding, end of year 358 Year ended June 30, 2013 Restricted shares/units outstanding at July 1, 2012 358 — Restricted shares/units granted 1,171 284 Restricted shares/units vested (168 ) — Restricted shares/units forfeited (48 ) (4 ) Restricted shares/units outstanding at June 30, 2013 1,313 280 Year ended June 30, 2013 Restricted shares/units outstanding, beginning of year 1,474 295 Restricted shares/units granted 542 30 Restricted shares/units vested (1,329 ) (275 ) Restricted shares/units forfeited (166 ) (12 ) Restricted shares/units outstanding, end of year 521 38 20122013 was $245.0$276.8 million and $221.7$242.7 million, respectively, which has a remaining life of 4.14.6 years and 3.4 years, respectively. The aggregate intrinsic value for stock options exercised in fiscal 2013, 2012 2011,, and 20102011 was $83.8$135.1 million $95.7, $83.8 million, and $29.1$95.7 million, respectively.In fiscal 2010, the Company issued 1.4 million shares in connection with the final compensatory employee stock purchase plan offering that vested on December 31, 2009.Years ended June 30, 2012 2011 2010 Risk-free interest rate 0.8% - 1.0% 1.4% - 2.4% 2.3% - 2.6% Dividend yield 2.8% - 3.1% 2.9% - 3.3% 3.2% - 3.4% Weighted average volatility factor 24.9% - 25.9% 24.5% - 24.9% 25.9% - 30.4% Weighted average expected life (in years) 5.2 - 5.3 5.1 - 5.2 5.0 - 5.1 Fair value $8.46 $7.59 $7.05 2013 2012 2011 Risk-free interest rate 0.8% - 1.0% 0.8% - 1.0% 1.4% - 2.4% Dividend yield 2.7% - 2.9% 2.8% - 3.1% 2.9% - 3.3% Weighted average volatility factor 23.5% - 24.4% 24.9% - 25.9% 24.5% - 24.9% Weighted average expected life (in years) 5.3 - 5.4 5.2 - 5.3 5.1 - 5.2 Weighted average fair value (in dollars) $ 8.63 $ 8.46 $ 7.59 Year ended June 30, 2012 Performance-based restricted stock $ 44.33 Time-based restricted stock $ 54.40 Year ended June 30, 2013 Performance-based restricted stock $ 55.13 Time-based restricted stock $ 58.72 Plans.Plansten-yearten-year U.S. Treasury rate. Employees are fully vested upon completion of three years of service. The Company's policy is to make contributions within the range determined by generally accepted actuarial principles. In addition, the Company has various retirement plans for its non-U.S. employees and maintains a Supplemental Officers Retirement Plan (“SORP”). The SORP is a defined benefit plan pursuant to which the Company pays supplemental pension benefits to certain key officers upon retirement based upon the officers’officers' years of service and compensation.Company’sCompany's benefit obligations and fair value of plan assets.statement of financial positionConsolidated Balance Sheets an asset for a plan’splan's net overfunded status or a liability for a plan’splan's net underfunded status, (b) measure a plan’splan's assets and its obligations that determine its funded status as of the end of the employer’semployer's fiscal year, and (c) recognize changes in the funded status of a defined benefit plan in the year in which the changes occur in accumulated other comprehensive income (loss).Company’sCompany's pension plansplans' funded status as of June 30, 20122013 and 20112012 is as follows:June 30, 2012 2011 Change in plan assets: Fair value of plan assets at beginning of year $ 1,313.3 $ 981.7 Actual return on plan assets 106.6 200.0 Employer contributions 91.6 158.1 Currency translation adjustments (4.6 ) 8.1 Benefits paid (37.4 ) (34.6 ) Fair value of plan assets at end of year $ 1,469.5 $ 1,313.3 Change in benefit obligation: Benefit obligation at beginning of year $ 1,178.8 $ 1,087.9 Service cost 57.2 52.5 Interest cost 62.1 56.6 Actuarial (gains)/losses 159.4 (5.4 ) Currency translation adjustments (10.8 ) 14.5 Benefits paid (37.4 ) (34.6 ) Acquisitions 2.8 7.3 Projected benefit obligation at end of year $ 1,412.1 $ 1,178.8 Funded status - plan assets less benefit obligations $ 57.4 $ 134.5 June 30, 2013 2012 Change in plan assets: Fair value of plan assets at beginning of year $ 1,469.5 $ 1,313.3 Actual return on plan assets 121.0 106.6 Employer contributions 135.3 91.6 Currency translation adjustments (1.5 ) (4.6 ) Benefits paid (48.2 ) (37.4 ) Fair value of plan assets at end of year $ 1,676.1 $ 1,469.5 Change in benefit obligation: Benefit obligation at beginning of year $ 1,412.1 $ 1,178.8 Service cost 67.2 57.2 Interest cost 55.1 62.1 Actuarial (gains)/losses (58.6 ) 159.4 Currency translation adjustments 0.2 (10.8 ) Benefits paid (48.2 ) (37.4 ) Acquisitions — 2.8 Projected benefit obligation at end of year $ 1,427.8 $ 1,412.1 Funded status - plan assets less benefit obligations $ 248.3 $ 57.4 20122013 and 20112012 consisted of:June 30, 2012 2011 Noncurrent assets $ 170.3 $ 231.5 Current liabilities (4.3 ) (4.5 ) Noncurrent liabilities (108.6 ) (92.5 ) Net amount recognized $ 57.4 $ 134.5 June 30, 2013 2012 Noncurrent assets $ 362.6 $ 170.3 Current liabilities (4.7 ) (4.3 ) Noncurrent liabilities (109.6 ) (108.6 ) Net amount recognized $ 248.3 $ 57.4 $1,399.9 million and $1,167.4$1,412.8 million and $1,399.9 millionat June 30, 20122013 and 2011,2012, respectively.Company’sCompany's pension plans with accumulated benefit obligations in excess of plan assets as of June 30, 20122013 and 20112012 had the following projected benefit obligation, accumulated benefit obligation and fair value of plan assets:June 30, 2012 2011 Projected benefit obligation $ 171.5 $ 150.7 Accumulated benefit obligation $ 161.8 $ 143.2 Fair value of plan assets $ 60.8 $ 55.6 June 30, 2013 2012 Projected benefit obligation $ 127.7 $ 171.5 Accumulated benefit obligation $ 115.3 $ 161.8 Fair value of plan assets $ 14.2 $ 60.8 costsexpense were as follows:Years ended June 30, 2012 2011 2010 Service cost - benefits earned during the period $ 57.2 $ 52.5 $ 47.6 Interest cost on projected benefits 62.1 56.6 59.1 Expected return on plan assets (97.6 ) (88.5 ) (76.5 ) Amortization of losses 15.0 20.1 4.5 $ 36.7 $ 40.7 $ 34.7 2013 2012 2011 Service cost – benefits earned during the period $ 67.2 $ 57.2 $ 52.3 Interest cost on projected benefits 55.1 62.1 56.6 Expected return on plan assets (109.5 ) (97.6 ) (88.5 ) Net amortization and deferral 30.9 15.0 20.1 Net pension expense $ 43.7 $ 36.7 $ 40.5 $411.0$311.2 million $6.2, $4.9 million, and $0.7$0.6 million, respectively, at June 30, 2012.2013. The estimated net actuarial loss, prior service cost, and transition obligation for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic pension cost over the next fiscal year are $29.3$18.8 million $1.4, $0.9 million, and $0.2$0.2 million, respectively, at June 30, 2012.Years ended June 30, 2012 2011 Discount rate 3.90% 5.40% Increase in compensation levels 4.00% 4.00% Years ended June 30, 2013 2012 Discount rate 4.50 % 3.90 % Increase in compensation levels 4.00 % 4.00 % Years ended June 30, 2012 2011 2010 Discount rate 5.40 % 5.25 % 6.80 % Expected long-term rate of return on assets 7.25 % 7.25 % 7.25 % Increase in compensation levels 4.00 % 5.50 % 5.50 % Years ended June 30, 2013 2012 2011 Discount rate 3.90 % 5.40 % 5.25 % Expected long-term rate of return on assets 7.25 % 7.25 % 7.25 % Increase in compensation levels 4.00 % 4.00 % 5.50 % Company’sCompany's pension plans’plans' asset allocations at June 30, 20122013 and 20112012 by asset category were as follows:2012 2011 United States Fixed Income Securities 41 % 38 % United States Equity Securities 41 % 41 % International Securities 18 % 21 % Total 100 % 100 % 2013 2012 U.S. fixed income securities 31 % 41 % U.S. equity securities 21 % 41 % International equity securities 21 % 18 % Global equity securities 27 % — % 100 % 100 % Company’sCompany's pension plans’plans' asset investment strategy is designed to ensure prudent management of assets, consistent with long-term return objectives and the prompt fulfillment of all pension plan obligations. The investment strategy and asset mix were developed in coordination with an asset liability study conducted by external consultants to maximize the funded ratioplans’plans' assets are currently invested in various asset classes with differing expected rates of return, correlations and volatilities, including large capitalization and small capitalization U.S. equities, international equities, U.S. fixed income securities and cash.United States Fixed Income SecuritiesU.S. fixed income securities 35% –- 45%United States Equity SecuritiesU.S. equity securities37% – 50%14% - 24%International Equity Securitiesequity securities12% – 11% - 21%Global equity securities 20% - 30% plans’plans' fixed income portfolio is designed to match the duration and liquidity characteristics of the pension plans’plans' liabilities. In addition, the pension plans invest only in investment-grade debt securities to ensure preservation of capital. The pension plans’plans' equity portfolios are subject to diversification guidelines to reduce the impact of losses in single investments. Investment managers are prohibited from buying or selling commodities and from the short selling of securities.plans’plans' assets are directly invested in the Company’sCompany's stock, although the pension plans may hold a minimal amount of Company stock to the extent of the Company’sCompany's participation in the S&P 500 Index.PlanPlanThe pension plans' investments included in Level 2 are valued utilizing inputs obtained from an independent pricing service, which are reviewed by the Company for reasonableness. To determine the fair value of our Level 2 plan assets, a variety of inputs are utilized, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information. The Plan haspension plans have no Level 3 investments at June 30, 2012.2012:Level 1 Level 2 Level 3 Total Comingled trusts $ - $ 583.5 $ - $ 583.5 U.S. Government securities - 272.5 - 272.5 Mutual funds 269.6 - - 269.6 Corporate and municipal bonds - 272.8 - 272.8 Mortgage-backed security bonds - 13.9 - 13.9 Total pension assets $ 269.6 $ 1,142.7 $ - $ 1,412.3 Level 1 Level 2 Level 3 Total Commingled trusts $ — $ 1,050.7 $ — $ 1,050.7 U.S. government securities — 228.3 — 228.3 Mutual funds 79.2 — — 79.2 Corporate and municipal bonds — 252.5 — 252.5 Mortgage-backed security bonds — 22.7 — 22.7 Total pension assets $ 79.2 $ 1,554.2 $ — $ 1,633.4 $57.2$42.7 million as of June 30, 2012.2013, which have been classified as Level 2 in the fair value hierarchy.2011:Level 1 Level 2 Level 3 Total Comingled trusts $ - $ 529.7 $ - $ 529.7 U.S. Government securities - 207.4 - 207.4 Mutual funds 283.4 - - 283.4 Corporate and municipal bonds - 237.7 - 237.7 Mortgage-backed security bonds - 33.1 - 33.1 Total pension assets $ 283.4 $ 1,007.9 $ - $ 1,291.3 Level 1 Level 2 Level 3 Total Commingled trusts $ — $ 583.5 $ — $ 583.5 U.S. government securities — 272.5 — 272.5 Mutual funds 269.6 — — 269.6 Corporate and municipal bonds — 272.8 — 272.8 Mortgage-backed security bonds — 13.9 — 13.9 Total pension assets $ 269.6 $ 1,142.7 $ — $ 1,412.3 $22.0$57.2 million as of June 30, 2011. 2012,2013, the Company contributed $91.6$135.3 million to the pension plans. In July 2012,2013, the Company contributed $125.0$75.0 million to the pension plans and expects to contribute an additional $8.3$8.7 million to the pension plans during its fiscal year ended June 30, 2013 (“2014 ("fiscal 2013”2014").20132014 to 20172018 are $48.2$54.1 million $52.8, $60.5 million $60.4, $67.1 million $67.4, $77.0 million and $77.4$86.0 million, respectively. The aggregate benefits expected to be paid in the five fiscal years from 20182019 to 20222023 are $525.7 million.$568.6 million. The expected benefits to be paid are based on the same assumptions used to measure the Company’sCompany's pension plans’plans' benefit obligations at June 30, 20122013 and includes estimated future employee service.35%50% of their compensation annually and allows highly compensated employees to contribute up to 10%12% of their compensation annually. The Company matches a portion of employee contributions, which amounted to approximately $65.9$72.0 million $57.5, $65.9 million, and $55.8$57.5 million for the calendar years ended December 31, 2012, 2011 2010,, and 2009,2010, respectively.14.11. INCOME TAXESYears ended June 30, 2012 2011 2010 Earnings from continuing operations before income taxes: United States $ 1,888.6 $ 1,675.1 $ 1,638.0 Foreign 233.5 257.6 225.2 $ 2,122.1 $ 1,932.7 $ 1,863.2 Years ended June 30, 2013 2012 2011 Earnings from continuing operations before income taxes: United States $ 1,757.6 $ 1,874.4 $ 1,660.4 Foreign 326.7 233.5 257.6 $ 2,084.3 $ 2,107.9 $ 1,918.0 Years ended June 30, 2012 2011 2010 Current: Federal $ 540.4 $ 449.3 $ 401.3 Foreign 87.3 96.9 104.4 State 67.8 24.7 54.1 Total current 695.5 570.9 559.8 Deferred: Federal 50.4 95.7 106.8 Foreign (9.3 ) (1.8 ) (15.1 ) State (3.0 ) 13.7 4.4 Total deferred 38.1 107.6 96.1 Total provision for income taxes $ 733.6 $ 678.5 $ 655.9 Years ended June 30, 2013 2012 2011 Current: Federal $ 539.2 $ 537.6 $ 446.4 Foreign 105.9 87.3 96.9 State 50.5 67.4 24.4 Total current 695.6 692.3 567.7 Deferred: Federal 35.2 48.4 93.7 Foreign (15.0 ) (9.3 ) (1.8 ) State 4.4 (3.2 ) 13.4 Total deferred 24.6 35.9 105.3 Total provision for income taxes $ 720.2 $ 728.2 $ 673.0 Years ended June 30, 2012 % 2011 % 2010 % Provision for taxes at U.S. statutory rate $ 742.7 35.0 $ 676.5 35.0 $ 652.1 35.0 Increase (decrease) in provision from: State taxes, net of federal tax 38.1 1.8 29.2 1.5 34.5 1.9 Tax on foreign income 51.4 2.5 30.3 1.6 15.1 0.8 Utilization of foreign tax credits (51.7 ) (2.5 ) (26.0 ) (1.3 ) (14.9 ) (0.8 ) Tax settlements - - - - - - Resolution of tax matters - - - - (12.2 ) (0.7 ) Section 199 - Qualified Production Activities (22.4 ) (1.1 ) (18.2 ) (1.0 ) (11.8 ) (0.6 ) Other (24.5 ) (1.1 ) (13.3 ) (0.7 ) (6.9 ) (0.4 ) $ 733.6 34.6 $ 678.5 35.1 $ 655.9 35.2 Years ended June 30, 2013 % 2012 % 2011 % Provision for taxes at U.S. statutory rate $ 729.6 35.0 $ 737.8 35.0 $ 671.4 35.0 Increase (decrease) in provision from: State taxes, net of federal tax 35.3 1.7 37.6 1.8 28.7 1.5 U.S. tax on foreign income 85.3 4.1 51.4 2.5 30.3 1.6 Utilization of foreign tax credits (94.4 ) (4.5 ) (51.7 ) (2.5 ) (26.0 ) (1.3 ) Section 199 - Qualified production activities (22.3 ) (1.1 ) (22.4 ) (1.1 ) (18.2 ) (1.0 ) Other (A) (13.3 ) (0.6 ) (24.5 ) (1.2 ) (13.2 ) (0.7 ) $ 720.2 34.6 $ 728.2 34.5 $ 673.0 35.1 Years ended June 30, 2012 2011 Deferred tax assets: Accrued expenses not currently deductible $ 226.9 $ 205.8 Stock-based compensation expense 91.1 95.7 Net operating losses 102.0 111.4 Other 17.2 10.8 437.2 423.7 Less: valuation allowances (54.7 ) (62.7 ) Deferred tax assets, net $ 382.5 $ 361.0 Deferred tax liabilities: Prepaid retirement benefits $ 88.9 $ 97.7 Deferred revenue 61.2 62.3 Fixed and intangible assets 256.2 298.9 Prepaid expenses 84.8 61.3 Unrealized investment gains, net 247.0 194.3 Tax on unrepatriated earnings 14.1 20.0 Other 4.1 0.4 Deferred tax liabilities $ 756.3 $ 734.9 Net deferred tax liabilities $ 373.8 $ 373.9 Years ended June 30, 2013 2012 Deferred tax assets: Accrued expenses not currently deductible $ 223.7 $ 228.0 Stock-based compensation expense 84.1 91.1 Net operating losses 98.1 102.0 Other 39.5 16.9 445.4 438.0 Less: valuation allowances (49.4 ) (54.8 ) Deferred tax assets, net $ 396.0 $ 383.2 Deferred tax liabilities: Prepaid retirement benefits $ 146.2 $ 88.9 Deferred revenue 62.9 69.3 Fixed and intangible assets 235.3 246.4 Prepaid expenses 88.9 84.8 Unrealized investment gains, net 99.8 247.0 Tax on unrepatriated earnings 12.3 14.1 Other 7.3 4.1 Deferred tax liabilities $ 652.7 $ 754.6 Net deferred tax liabilities $ 256.7 $ 371.4 $44.4$26.3 million and $35.2$44.0 million of current deferred tax assets included in other current assets on the Consolidated Balance Sheets at June 30, 20122013 and 2011,2012, respectively. There are $52.1$89.4 million and $62.3$53.2 million of long-term deferred tax assets included in other assets on the Consolidated Balance Sheets at June 30, 20122013 and 2011,2012, respectively. There are $79.0$138.0 million and $97.9$87.1 million of current deferred tax liabilities included in accrued expenses and other current liabilities on the Consolidated Balance Sheets at June 30, 20122013 and 2011,2012, respectively.$932.7$910.3 million as of June 30, 2012,2013, as the Company considers such earnings to be permanently reinvested$129.0$132.1 million as of June 30, 2012,2013, of which $63.4$64.8 million expiresexpire through 20322033 and $65.6$67.3 million has an indefinite utilization period. As of June 30, 2012,2013, the Company has approximately $113.6$98.2 million of federal net operating loss carry-forwards from acquired companies. The net operating loss haslosses have an annual utilization limitation pursuant to section 382 of the Internal Revenue Code and expiresexpire through 2031.2031.$215.5$212.9 million as of June 30, 2012,2013, which expire through 2031.$54.7$49.4 million and $62.7$54.8 million at June 30, 20122013 and 2011,2012, respectively, to reflect the estimated amount of domestic and foreign deferred tax assets that may not be realized.$660.3$693.0 million $628.7, $660.3 million, and $693.4$628.7 million for fiscal 2013, 2012 2011,, and 2010,2011, respectively. 2011,, and 20102011 the Company’sCompany's liabilities for unrecognized tax benefits, which include interest and penalties, were $84.7$70.7 million $105.7, $84.7 million, and $107.2$105.7 million respectively. The amount that, if recognized, would impact the effective tax rate is $43.7$38.8 million $56.3, $43.7 million, and $52.8$56.3 million, respectively. The remainder, if recognized, would principally affect deferred taxes.Fiscal 2012 Fiscal 2011 Fiscal 2010 Unrecognized tax benefits at beginning of the year $ 105.7 $ 107.2 $ 92.8 Additions for tax positions 8.0 9.7 13.3 Reductions for tax positions (0.8 ) (2.4 ) (2.1 ) Additions for tax positions of prior periods 13.0 17.3 29.6 Reductions for tax positions of prior periods (21.6 ) (23.3 ) (1.0 ) Settlement with tax authorities (4.2 ) (4.5 ) (5.0 ) Expiration of the statute of limitations (9.8 ) (0.4 ) (20.3 ) Impact of foreign exchange rate fluctuations (5.6 ) 2.1 (0.1 ) Unrecognized tax benefits at end of year $ 84.7 $ 105.7 $ 107.2 Fiscal 2013 Fiscal 2012 Fiscal 2011 Unrecognized tax benefits at beginning of the year $ 84.7 $ 105.7 $ 107.2 Additions for tax positions 5.0 8.0 9.7 Reductions for tax positions — (0.8 ) (2.4 ) Additions for tax positions of prior periods 5.3 13.0 17.3 Reductions for tax positions of prior periods (3.7 ) (21.6 ) (23.3 ) Settlement with tax authorities (12.0 ) (4.2 ) (4.5 ) Expiration of the statute of limitations (9.7 ) (9.8 ) (0.4 ) Impact of foreign exchange rate fluctuations 1.1 (5.6 ) 2.1 Unrecognized tax benefit at end of year $ 70.7 $ 84.7 $ 105.7 2011,, and 2010,2011, the Company recorded interest expense of $1.2$0.4 million $1.7, $1.2 million, and $4.0$1.7 million, respectively. Penalties incurred during fiscal years ended June 30, 2013, 2012 2011,, and 20102011 were notnot material.2012,2013, the Company had accrued interest of $14.4$12.2 million recorded on the Consolidated Balance Sheets, of which $1.6$1.2 million was recorded within income taxes payable, and the remainder was recorded within other liabilities. At June 30, 2011,2012, the Company had accrued interest of $15.4$14.4 million recorded on the Consolidated Balance Sheets, of which $0.4$1.6 million was recorded within income taxes payable, and the remainder was recorded within other liabilities. At June 30, 2012,2013, the Company had accrued penalties of $2.1$1.0 million recorded on the Consolidated Balance Sheets, of which $0.7$0.1 million was recorded within income taxes payable, and the remainder was recorded within other liabilities. At June 30, 2011,2012, the Company had accrued penalties of $3.4$2.1 million recorded on the Consolidated Balance Sheets, of which $0.1$0.7 million was recorded within income taxes payable, and the remainder was recorded within other liabilities.Taxing Jurisdiction Fiscal Years under Examination U.S. (IRS) 2011 - 20122012-2013California 2006 - 20082006-2008Illinois 2004 - 20052004-2009New York 2007-2009 New Jersey 2002 - 20082002-2009France 2009 - 20112010-2012Company’sCompany's Statements of Consolidated Earnings for a particular future period and on the Company’sCompany's effective tax rate.$10.0$15 million in the next twelve months. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a revision become known.2012,2013, the Company reached agreements with the IRS regarding all outstanding tax audit issues in dispute for the tax years endedthrough and including June 30, 2009 and June 30, 2010,2011, which did not have a material impact to the consolidated financial statements of the Company.In January 2010, the Company reached an agreement with the IRS regarding all outstanding tax audit issues in dispute for the tax years ended June 30, 2007 and June 30, 2008, which did not have a material impact to the consolidated financial statements of the Company.15. CONTRACTUAL12. COMMITMENTS CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS$252.6$270.2 million $159.2, $252.6 million, and $175.4$159.2 million in fiscal 2013, 2012 2011,, and 2010,2011, respectively, with minimum commitments at June 30, 20122013 as follows:Years ending June 30, 2013 $ 173.7 2014 127.1 2015 90.8 2016 46.8 2017 23.6 Thereafter 26.6 $ 488.6 Years ending June 30, 2014 $ 177.4 2015 137.0 2016 85.7 2017 48.2 2018 33.1 Thereafter 28.8 $ 510.2 2012,2013, the Company has purchase commitments of approximately $797.9$720.0 million relating, including a reinsurance premium with ACE American Insurance Company for the fiscal 2014 policy year, as well as obligations related to software and equipment purchasespurchase and maintenance contracts,agreements on our software, equipment, and other assets, of which $350.5$349.1 million relates to the fiscal year ending June 30, 2013, $143.82014, $145.1 million relates to the fiscal year ending June 30, 20142015 and the remaining $303.6$225.8 million relates to fiscal years ending June 30, 20152016 through fiscal 2017.2018.complaintpatent infringement lawsuit against ADP AdvancedMD, Inc. (“("ADP AdvancedMD”AdvancedMD"), a subsidiary of the Company. athenahealth, Inc. allegedCompany, seeking monetary damages, injunctive relief, and costs. The allegations include a claim that ADP AdvancedMD’sAdvancedMD's activities in providing medical practice management and billing and revenue managementtwo ofa patent owned by athenahealth, Inc.’s patents. On May 16, 2012, athenahealth, Inc. and The parties are currently engaged in the Company entered into a joint stipulation to dismiss without prejudice their claims and counterclaims related to one of the two patents. athenahealth, Inc. seeks monetary damages, injunctive relief, and costs in connection with its claim related to the other patent.discovery process. The Company believes that it has meritorious defenses to this claim,lawsuit and is continuingcontinues to vigorously defend itself against the allegations.are still in early stages and involve complex issues subject to inherent uncertainty. There can be no assurance that these matters will be resolved in a manner that is not adverse to the Company.However, the Company is exposed to market risk from changes in foreign currency exchange rates that could impact its financial position, results of operations and cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company uses derivative financial instruments as risk management tools and not for trading purposes. In the normal course of business, the Company also entersmay enter into contracts in which it makes representations and warranties that relate to the performance of the Company’s services and products. The Company does not expect any material losses related to such representations and warranties.16.13. ACCUMULATED OTHER COMPREHENSIVE INCOMEstockholders’stockholders' equity. Other comprehensive (loss) income (loss) was $(136.9)$(214.8) million $157.6, $(136.9) million, and $53.5$157.6 million in fiscal 2013, 2012 2011,, and 2010,2011, respectively. The accumulated balances reported in accumulated other comprehensive income on the Consolidated Balance Sheets for each component of other comprehensive income (loss) are as follows:June 30, 2012 2011 2010 Currency translation adjustments $ 42.0 $ 183.1 $ 16.4 Unrealized net gain on available-for-sale securities, net of tax 461.3 369.8 457.8 Pension liability adjustment, net of tax (273.1 ) (185.8 ) (264.7 ) Accumulated other comprehensive income $ 230.2 $ 367.1 $ 209.5 June 30, 2013 2012 2011 Currency translation adjustments $ 39.6 $ 42.0 $ 183.1 186.7 461.3 369.8 Pension liability adjustment, net of tax (210.9 ) (273.1 ) (185.8 ) Accumulated other comprehensive income $ 15.4 $ 230.2 $ 367.1 17.14. FINANCIAL DATA BY SEGMENT AND GEOGRAPHIC AREAchargedallocated to the reportable segments, such as stock-based compensation expense.expense and the goodwill impairment charge. 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 fiscal 2011 and 2010prior year reportable segments’ revenues and earnings from continuing operations before income taxes have been adjusted to reflect updated fiscal 20122013 budgeted foreign exchange rates. In addition, there is a reconciling item for the difference between actual interest income earned on invested funds held for clients and interest credited to Employer Services and PEO Services at a standard rate of 4.5%. The reportable segments’ results also include an internal cost of capital charge related to the funding of acquisitions and other investments. All of these adjustments/charges are reconciling items to ourthe Company’s reportable segments’ revenues and/or earnings from continuing operations before income taxes and resultsresult in the elimination of these adjustments/charges in consolidation. Reportable segments’segments' assets from continuing operations include funds held for clients, but exclude corporate cash, corporate marketable securities, and goodwill.Reconciling Items Client Cost of Employer PEO Dealer Foreign Fund Capital Services Services Services Other Exchange Interest Charge Total Year ended June 30, 2012 Revenues from continuing operations $ 7,567.7 $ 1,771.4 $ 1,683.7 $ 5.5 $ (55.9 ) $ (307.2 ) $ - $ 10,665.2 Earnings from continuing operations before income taxes 1,972.3 170.2 277.1 (117.6 ) 2.7 (307.2 ) 124.6 2,122.1 Assets from continuing operations 23,357.9 376.5 685.9 6,395.2 30,815.5 Capital expenditures for continuing operations 39.9 1.2 39.7 65.4 146.2 Depreciation and amortization 218.4 1.2 99.9 128.4 (124.6 ) 323.3 (a) Year ended June 30, 2011 Revenues from continuing operations $ 7,042.9 $ 1,543.9 $ 1,536.0 $ 12.8 $ (43.2 ) $ (212.9 ) $ - $ 9,879.5 Earnings from continuing operations before income taxes 1,856.5 137.3 233.3 (191.9 ) (6.5 ) (212.9 ) 116.9 1,932.7 Assets from continuing operations 27,069.0 262.1 677.4 6,229.8 - - - 34,238.3 Capital expenditures for continuing operations 51.3 1.2 34.4 97.9 - - - 184.8 Depreciation and amortization 210.8 1.1 99.3 123.9 - - (116.9 ) 318.2 (a) Year ended June 30, 2010 Revenues from continuing operations $ 6,535.1 $ 1,316.8 $ 1,248.1 $ 18.5 $ (54.1 ) $ (136.7 ) $ - $ 8,927.7 Earnings from continuing operations before income taxes 1,741.4 127.2 204.1 (173.9 ) (8.9 ) (136.7 ) 110.0 1,863.2 Assets from continuing operations 20,560.5 160.8 517.7 5,623.2 - - - 26,862.2 Capital expenditures for continuing operations 42.5 0.3 24.0 23.4 - - - 90.2 Depreciation and amortization 217.7 1.3 82.4 117.8 - - (110.0 ) 309.2 (a) (a)Includes $63.3 million, $64.8 million, and $70.6 million for the years ended June 30, 2012, 2011 and 2010, respectively, of depreciation and amortization that does not relate to our services and products.Revenues Reconciling Items Employer Services PEO Services Dealer Services Other Foreign Exchange Client Fund Interest Cost of Capital Charge Total Year ended June 30, 2013 $ 7,914.0 $ 1,973.2 $ 1,813.7 $ 1.7 $ 39.9 $ (432.4 ) $ — $ 11,310.1 2,134.2 199.2 335.7 (272.8 ) 7.4 (432.4 ) 113.0 2,084.3 24,174.9 411.4 696.8 6,985.0 — — — 32,268.1 57.9 0.6 35.1 81.2 — — — 174.8 Depreciation and amortization 212.3 1.4 97.0 119.3 — — (113.0 ) 317.0 Year ended June 30, 2012 $ 7,388.5 $ 1,771.4 $ 1,661.3 $ 5.5 $ 96.4 $ (307.1 ) $ — $ 10,616.0 1,949.2 170.6 277.6 (102.0 ) 3.1 (307.1 ) 116.5 2,107.9 23,326.8 376.5 685.9 6,303.2 — — — 30,692.4 39.9 1.2 39.7 65.4 — — — 146.2 Depreciation and amortization 209.0 1.2 99.9 126.1 — — (116.5 ) 319.7 Year ended June 30, 2011 $ 6,878.3 $ 1,543.9 $ 1,513.5 $ 12.9 $ 97.2 $ (212.8 ) $ — $ 9,833.0 1,831.9 137.3 231.3 (178.1 ) (1.0 ) (212.8 ) 109.4 1,918.0 27,034.4 262.1 677.4 6,138.4 — — — 34,112.3 51.3 1.2 34.4 97.9 — — — 184.8 Depreciation and amortization 201.6 1.1 99.3 122.0 — — (109.4 ) 314.6 assets2011, Dealer Services earned 12.1%, 10.7%, and 8.8%, respectively, of its segment revenues from continuing operations by geographic area are as follows:United States Europe Canada Other Total Year ended June 30, 2012 Revenues from continuing operations $ 8,542.5 $ 1,269.8 $ 447.5 $ 405.4 $ 10,665.2 Assets from continuing operations $ 26,325.0 $ 1,969.7 $ 2,130.5 $ 390.3 $ 30,815.5 Year ended June 30, 2011 Revenues from continuing operations $ 7,930.3 $ 1,190.6 $ 428.2 $ 330.4 $ 9,879.5 Assets from continuing operations $ 29,294.8 $ 2,027.6 $ 2,497.6 $ 418.3 $ 34,238.3 Year ended June 30, 2010 Revenues from continuing operations $ 7,195.0 $ 1,089.8 $ 383.4 $ 259.5 $ 8,927.7 Assets from continuing operations $ 22,401.1 $ 1,576.8 $ 2,558.5 $ 325.8 $ 26,862.2 United States Europe Canada Other Total Year ended June 30, 2013 Revenues from continuing operations $ 9,114.9 $ 1,279.1 $ 464.9 $ 451.2 $ 11,310.1 Assets from continuing operations $ 27,327.0 $ 2,261.2 $ 2,182.7 $ 497.2 $ 32,268.1 Years ended June 30, 2012 Revenues from continuing operations $ 8,493.3 $ 1,269.8 $ 447.5 $ 405.4 $ 10,616.0 Assets from continuing operations $ 26,201.9 $ 1,969.7 $ 2,130.5 $ 390.3 $ 30,692.4 Years ended June 30, 2011 Revenues from continuing operations $ 7,883.8 $ 1,190.6 $ 428.2 $ 330.4 $ 9,833.0 Assets from continuing operations $ 29,168.8 $ 2,027.6 $ 2,497.6 $ 418.3 $ 34,112.3 18.15. QUARTERLY FINANCIAL RESULTS (UNAUDITED)20122013 and June 30, 20112012 are as follows:First Second Third Fourth Quarter Quarter Quarter Quarter Year ended June 30, 2012 Revenues $ 2,522.5 $ 2,583.0 $ 2,923.1 $ 2,636.6 Costs of revenues $ 1,506.1 $ 1,519.9 $ 1,624.7 $ 1,589.3 Gross profit $ 1,016.4 $ 1,063.1 $ 1,298.4 $ 1,047.3 Net earnings $ 302.7 $ 375.0 $ 452.4 $ 258.4 Basic earnings per share $ 0.62 $ 0.77 $ 0.93 $ 0.53 Diluted earnings per share $ 0.61 $ 0.76 $ 0.92 $ 0.53 Year ended June 30, 2011 Revenues $ 2,229.4 $ 2,405.7 $ 2,737.3 $ 2,507.1 Costs of revenues $ 1,311.9 $ 1,380.3 $ 1,520.6 $ 1,518.7 Gross profit $ 917.5 $ 1,025.4 $ 1,216.7 $ 988.4 Net earnings $ 278.5 $ 310.1 $ 423.8 $ 241.8 Basic earnings per share $ 0.57 $ 0.63 $ 0.85 $ 0.49 Diluted earnings per share $ 0.56 $ 0.62 $ 0.85 $ 0.48 Second Quarter Year ended June 30, 2013 Revenues $ 2,637.5 $ 2,747.8 $ 3,114.3 $ 2,810.5 Costs of revenues $ 1,586.5 $ 1,624.3 $ 1,745.9 $ 1,692.8 Gross profit $ 1,051.0 $ 1,123.5 $ 1,368.4 $ 1,117.7 Net earnings from continuing operations $ 302.5 $ 352.0 $ 482.7 $ 227.0 Basic earnings per share from continuing operations $ 0.63 $ 0.73 $ 1.00 $ 0.47 Diluted earnings per share from continuing operations $ 0.62 $ 0.72 $ 0.99 $ 0.47 Second Quarter (B) Year ended June 30, 2012 Revenues $ 2,510.9 $ 2,570.7 $ 2,910.9 $ 2,623.6 Costs of revenues $ 1,500.4 $ 1,513.7 $ 1,618.2 $ 1,582.0 Gross profit $ 1,010.5 $ 1,057.0 $ 1,292.7 $ 1,041.6 Net earnings from continuing operations $ 300.4 $ 372.8 $ 450.2 $ 256.2 Basic earnings per share from continuing operations $ 0.62 $ 0.77 $ 0.92 $ 0.53 Diluted earnings per share from continuing operations $ 0.61 $ 0.76 $ 0.91 $ 0.52 19.16. SUBSEQUENT EVENT (UNAUDITED)Company’sCompany's subsidiary captive insurance company, ADP Indemnity, paid a premium of $141.4$142.4 million in July 2013 to enter into a reinsurance arrangement with ACE American Insurance Company to cover substantially all losses for the fiscal 20132014 policy year on terms substantially similar to the fiscal 2013 reinsurance policy to cover losses up to the $1$1 million per occurrence retention related to the workers’workers' compensation and employer’semployer's liability deductible reimbursement insurance protection for PEO Services worksite employees. With the exception of the preceding item and the pension plan contribution in Note 13, there are no further subsequent events for disclosure.ADP’sADP's Chief Executive Officer and Chief Financial Officer, which are required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This “Controls and Procedures” section should be read in conjunction with the report of Deloitte & Touche LLP that appears on page81 70 of this Annual Report on Form 10-K and is hereby incorporated herein by reference.Management’sCompany’sCompany's management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’sCompany's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’sCompany's management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation, the Company’sCompany's Chief Executive Officer and Chief Financial Officer have concluded that the Company’sCompany's disclosure controls and procedures were effective as of June 30, 20122013 in ensuring that (i) information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’sCompany's management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure and (ii) such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’sCommission's rules and forms.Management’s’s's (“ADP”) management to establish and maintain effective internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is designed to provide reasonable assurance to ADP’sADP's management and board of directors regarding the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles. ADP’sADP’sADP's assets that could have a material effect on the financial statements of ADP.ADP’sADP's internal control over financial reporting as of June 30, 20122013 based upon criteria set forth inInternal Control - Integrated Framework (1992) issued bythe Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that ADP’sADP's internal control over financial reporting was effective as of June 30, 2012.2013.ADP’sADP's internal control over financial reporting. The Deloitte & Touche LLP attestation report is set forth below./s/ Carlos A. Rodriguez Carlos A. Rodriguez President and Chief Executive Officer /s/ Christopher R. ReidyJan SiegmundChristopher R. ReidyJan SiegmundChief Financial Officer August20, 2012ADP’sADP's internal control over financial reporting that occurred during the quarter ended June 30, 20122013 that have materially affected, or are reasonably likely to materially affect, ADP’sADP's internal control over financial reporting.2012,2013, based on criteria established inInternal Control —- Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sManagement's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.2012,2013, based on the criteria established inInternal Control —- Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.20122013 of the Company and our report dated August 19, 201320, 2012, expressed an unqualified opinion on those consolidated financial statements and consolidated financial statement schedule./s/ Deloitte & Touche LLP Parsippany, New Jersey August20, 2012Employed by Name Age Position ADP Since Steven J. Anenen 59 President, Dealer Services 1975 Mark D. Benjamin 41 President, Employer Services - International 1992 Michael A. Bonarti 47 Vice President, General Counsel and Secretary 1997 Michael L. Capone 45 Vice President and Chief Information Officer 1988 Michael C. Eberhard 50 Vice President and Treasurer 1998 Edward B. Flynn, III 52 Vice President, Employer Services – Sales 1988 Regina R. Lee 55 President, Employer Services – National Accounts 1982 Services, Major Account Services, Benefits Services, Canada, and GlobalView Dermot J. O’Brien 46 Chief Human Resources Officer 2012 Anish Rajparia 41 President, Employer Services – Small Business 2002 Services, TotalSource, and Retirement Services Christopher R. Reidy 55 Chief Financial Officer 2006 Carlos A. Rodriguez 48 President and Chief Executive Officer 1999 Alan Sheiness 54 Corporate Controller and Principal Accounting Officer 1984 Jan Siegmund 48 President, Employer Services – Added Value Services 1999 and Chief Strategy Officer Employed by Name Age Position ADP Since Steven J. Anenen 60 President, Dealer Services 1975 John Ayala 46 Vice President, Client Experience 2002 and Continuous Improvement Mark D. Benjamin 42 President, Employer Services - International, National 1992 Account Services, Benefit Services, TheRightThing, GlobalView and Streamline Michael A. Bonarti 48 Vice President, General Counsel and Secretary 1997 Michael L. Capone 46 Vice President and Chief Information Officer 1988 Michael C. Eberhard 51 Vice President and Treasurer 1998 Edward B. Flynn, III 53 Vice President, Employer Services - Sales and Marketing 1988 Regina R. Lee 56 President, Major Account Services and ADP Canada 1982 Dermot J. O'Brien 47 Chief Human Resources Officer 2012 Doug Politi 51 President, Added Value Services 1992 Anish Rajparia 42 President, Employer Services - Small Business 2002 Services, TotalSource, Retirement Services, and Insurance Services Carlos A. Rodriguez 49 President and Chief Executive Officer 1999 Alan Sheiness 55 Corporate Controller and Principal Accounting Officer 1984 Jan Siegmund 49 Chief Financial Officer 1999 Joe Timko 53 Chief Strategy Officer 2013 promotion toappointment as President, Employer Services –- International, National Account Services, Benefit Services, TheRightThing, GlobalView and Streamline in July 2011,2013, he served as President, Employer Services - International from July 2011 to June 2013, and as Senior Vice President, Small Business Services, TotalSource, and Resource from 2008 to June 2011, and as Senior Vice President, TotalSource from 2007 to 2008.promotion toappointment as Vice President, General Counsel and Secretary in June 2010, he served as Staff Vice President and Associate General Counsel from November 2007 to June 2010, and as Associate General Counsel from January 2007 to November 2007.Prior to his promotion toHe has served as Vice President and Chief Information Officer in 2008, he served as Senior Vice President and General Manager of GlobalView from 2005 tosince 2008.promotion toappointment as Vice President and Treasurer in 2009, he served as Staff Vice President and Assistant Treasurer from 2007 to 2009.promotion toappointment as Vice President, Employer Services –- Sales and Marketing in 2009,2013, he served as Vice President, Employer Services - Sales from 2009 to 2013, and as President, Employer Services –- International from 2008 to 2009 and as Senior Vice President of Sales for Employer Services, International, from 2004 to 2008.
2009.promotion toappointment as President, –Employer Services - Major Account Services and ADP Canada in 2013, she served as President, Employer Services - National Account Services, Major Account Services, Benefits Services, ADP Canada, and GlobalView infrom 2011 she servedto 2013, as President, Employer Services –- Small Business Services and Major Account Services in 2010, and as President, Employer Services –- National Account Services and Employer Services –- International from 2008 to 2010,and as President, National Account Services, Employer Services from 2005 to 2008. Anish Rajparia joined ADP in 2002. Prior to his promotion to President, Employer Services – Small Business Services, TotalSource, and Retirement Services in 2011, he served as President, Employer Services – International from 2009 to 2010, and as President, Employer Services – Europe from 2006 to 2009.O’BrienO'Brien joined ADP in 2012 as Chief Human Resources Officer. Prior to joining ADP, he was Executive Vice President of Human Resources at TIAA-CREF from 2003 to 2012. Christopher R. Reidy20061992. Prior to his appointment as President, Added Value Services in 2013, he served as Senior Vice President, CFO Suite (AVS) from 2011 to 2013, and Chief Financial Officer.promotionappointment in November 2011 to President and Chief Executive Officer, he served as President and Chief Operating Officer from June 2011 to November 2011, as President, Employer Services –- National Account Services, Canada, and GlobalView and Employer Services –- International, from 2010 to May 2011, and as President, Employer Services –- Small Business Services from 2007 to 2010.promotion toappointment as Chief Financial Officer in 2012, he served as President, Added Value Services and Chief Strategy Officer infrom 2009 he servedto 2012, and as President, Added Value Services from 2007 to 2009. Each of ADP’s executive officers is appointed forterm of one year and until their successors are chosen and qualified or until their death, resignation or removal.Company’s 2012Company's 2013 Annual Meeting of Stockholders, which information is incorporated herein by reference.Company’s 2012Company's 2013 Annual Meeting of Stockholders, which information is incorporated herein by reference.ADP’sADP's website at www.adp.com under “Ethics” in the “About ADP” section. Any amendment to or waivers from the code of ethics will be disclosed on our website within four business days following the date of the amendment or waiver.Company’s 2012Company's 2013 Annual Meeting of Stockholders, which information is incorporated herein by reference.–- Compensation of Non-Employee Directors” in the Proxy Statement for the Company’s 2012Company's 2013 Annual Meeting of Stockholders, which information is incorporated herein by reference.–- Security Ownership of Certain Beneficial Owners and Managers” and “Election of Directors –- Equity Compensation Plan Information” in the Proxy Statement for the Company’s 2012Company's 2013 Annual Meeting of Stockholders, which information is incorporated herein by reference.–- Corporate Governance” in the Proxy Statement for the Company’s 2012Company's 2013 Annual Meeting of Stockholders, which information is incorporated herein by reference.Firm’sFirm's Fees” in the Proxy Statement for the Company’s 2012Company's 2013 Annual Meeting of Stockholders, which information is incorporated herein by reference.2011 and 201020122013 and 2011Stockholders’Stockholders' Equity - years ended June 30, 2013, 2012 2011 and 20102011 and 2010 Page in Form 10-K Schedule II - Valuation and Qualifying Accounts 913.1 -Amended and Restated Certificate of Incorporation dated November 11, 1998 - incorporated by reference to Exhibit 3.1 to the Company’sCompany's Registration Statement No. 333-72023 on Form S-4 filed with the Commission on February 9, 19993.2 -Amended and Restated By-laws of the Company - incorporated by reference to Exhibit 3.2 to the Company’sCompany's Current Report on Form 8-K dated June 7, 201210.1 -Separation and Distribution Agreement, dated as of March 20, 2007, between Automatic Data Processing, Inc. and Broadridge Financial Solutions, LLC - incorporated by reference to Exhibit 10.1 to the Company’sCompany's Current Report on Form 8-K dated March 21, 200710.2 -Letter Agreement dated as of June 28, 2006 between Automatic Data Processing, Inc. and Gary C. Butler - incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 28, 2006 (Management Contract)8610.3-Separation Agreement and General Release, dated November 14, 2011, by and between Gary C. Butler and Automatic Data Processing, Inc. –- incorporated by reference to Exhibit 10.1 to the Company’sCompany's Current Report on Form 8-K dated November 14, 201110.4-10.3 Letter Agreement, dated as of December 14, 2011, between Automatic Data Processing, Inc., and Carlos Rodriguez–Rodriguez - incorporated by reference to Exhibit 10.1 to the Company’sCompany's Current Report on Form 8-K dated December 14, 2011(Management Contract)10.5-Key Employees’ Restricted Stock Plan - incorporated by reference to the Company’s Registration Statement No. 33-25290 on Form S-8 (Management Compensatory Plan)10.6-10.4 Amended and Restated Supplemental Officers Retirement Plan –- incorporated by reference to Exhibit 10.4 to the Company’sCompany's Current Report on Form 8-K dated November 10, 2009 (Management Compensatory Plan)10.7-1989 Non-Employee Director Stock Option Plan - incorporated by reference to Exhibit 10(iii)(A)-#7 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 1990 (Management Compensatory Plan)10.8-Amendment to 1989 Non-Employee Director Stock Option Plan - incorporated by reference to Exhibit 10.6(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 1997 (Management Compensatory Plan)10.9-10.5 1994 Directors’Directors' Pension Arrangement - incorporated by reference to Exhibit 10(iii)(A)-#10 to the Company’sCompany's Annual Report on Form 10-K for the fiscal year ended June 30, 1994 (Management Compensatory Plan)10.10-10.6 2000 Stock Option Plan - incorporated by reference to Exhibit 10.8 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009 (Management Compensatory Plan)10.7 10.11-Automatic Data Processing, Inc. Deferred Compensation Plan, as Amended and Restated Effective July 1,January 11, 2013 - incorporated by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 201210.12-10.8 Change in Control Severance Plan for Corporate Officers, as amended - incorporated by reference to Exhibit 10.10 to the Company’sCompany's Current Report on Form 8-K dated June 16, 2006 (Management Compensatory Plan)10.13-10.9 Amended and Restated Employees’Employees' Saving-Stock Option Plan - incorporated by reference to Exhibit 10.11 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2005 (Management Compensatory Plan)10.14-10.10 2003 Director Stock Plan - incorporated by reference to Exhibit 4.4 to Registration Statement No. 333-147377 on Form S-8 filed with the Commission on November 14, 2007 (Management Compensatory Plan) 10.15-10.11 Amended and Restated Employees’Employees' Savings-Stock Purchase Plan –- incorporated by reference to Exhibit 10.13 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2010 (Management Compensatory Plan)10.12 10.16-364-Day Credit Agreement, dated as of June 20, 2012,19, 2013, among Automatic Data Processing, Inc., the Lendersparty Party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., BNP Paribas, Wells Fargo Bank, N.A., Barclays Bank PLC, and Citibank, N.A., as Syndication Agents, and Deutsche Bank Securities Inc., as Documentation Agent –Agent. - incorporated by reference to Exhibit 10.1410.16 to the Company’sCompany's Current Report on Form 8-K dated June 20, 201219, 201310.13 10.17-Four-Year Credit Agreement, dated as of June 22, 2011, among Automatic Data Processing, Inc., the Lendersparty thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Europe Limited, as London Agent, JP Morgan Chase Bank, N.A., Toronto Branch, as Canadian Agent, Bank of America, N.A., BNP Paribas and Wells Fargo Bank, N.A., Barclays Capital, and Citibank, N.A., as Syndication Agents, and Deutsche Bank Securities Inc. and Intesa SanPaolo S.p.A, as Documentation Agents –- incorporated by reference to Exhibit 10.15 to the Company’sCompany's Current Report on Form 8-K dated June 22, 201110.14 10.18-Amended and Restated Five-Year Credit Agreement, dated as of June 20, 2012,19, 2013, among Automatic Data Processing, Inc., the Lendersparty Party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., BNP Paribas, Wells Fargo Bank, N.A., Barclays Bank PLC, and Citibank, N.A., as Syndication Agents, and Deutsche Bank Securities Inc., as Documentation Agent –Agent. - incorporated by reference to Exhibit 10.1610.18 to the Company’sCompany's Current Report on Form 8-K dated June 20, 201219, 201310.19-10.15 2000 Stock Option Grant Agreement (Form for Employees) for grants prior to August 14, 2008 –- incorporated by reference to Exhibit 10.1 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (Management Compensatory Plan)10.20-10.16 2000 Stock Option Grant Agreement (Form for French Associates) for grants prior to August 14, 2008 –- incorporated by reference to Exhibit 10.2 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (Management Compensatory Plan)10.21-10.17 2000 Stock Option Grant Agreement (Form for Non-Employee Directors) for grants prior to August 14, 2008 –- incorporated by reference to Exhibit 10.3 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (Management Compensatory Plan)10.22-10.18 2000 Stock Option Grant Agreement (Form for Employees) for grants beginning August 14, 2008 –- incorporated by reference to Exhibit 10.25 to the Company’sCompany's Current Report on Form 8-K dated August 13, 2008 (Management Compensatory Plan)10.19 10.23-Non-Employee Director Compensation SummarySheet –- incorporated by reference to Exhibit 10.21 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2011 (Management Compensatory Plan)10.20 10.24-LetterSeparation Agreement and Release, dated as of August 1, 2006,November 12, 2012, by and between Christopher R. Reidy and Automatic Data Processing, Inc. and Christopher R. Reidy –- incorporated by reference to Exhibit 10.2210.1 to the Company’sCompany's Current Report on Form 8-K dated August 2, 2006 (Management Contract)November 12, 201210.25-10.21 2008 Omnibus Award Plan - incorporated by reference to Appendix A to the Company’sCompany's Proxy Statement for its 2008 Annual Meeting of Stockholders filed with the Commission on September 26, 2008 (Management Compensatory Plan)10.26-10.22 French Sub Plan under the 2008 Omnibus Award Plan effective as of January 26, 2012 –- incorporated by reference to Exhibit 10.2 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012 (Management Compensatory Plan)10.27-10.23 Form of Restricted Stock Award Agreement under the 2008 Omnibus Award Plan –- incorporated by reference to Exhibit 10.31 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2008 (Management Compensatory Plan)10.28-10.24 Form of Stock Option Grant Agreement under the 2008 Omnibus Award Plan (Form for French Employees) for grants prior to January 26, 2012 –- incorporated by reference to Exhibit 10.30 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2008 (Management Compensatory Plan)10.25 10.29-Form of Stock Option Grant Agreement under the 2008 Omnibus Award Plan (Form for French Employees) for grants beginning January 26,2012 –- incorporated by reference to Exhibit 10.1 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012 (Management Compensatory Plan)10.30-10.26 Form of Stock Option Grant Agreement under the 2008 Omnibus Award Plan (Form for Non- Employee Directors) for grants prior to November 12, 2008 –- incorporated by reference to Exhibit 10.27 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2008 (Management Compensatory Plan)10.31-10.27 Form of Stock Option Grant Agreement under the 2008 Omnibus Award Plan (Form for Non- Employee Directors) for beginning November 12, 2008 –- incorporated by reference to Exhibit 10.28 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2008 (Management Compensatory Plan)10.32-10.28 Form of Stock Option Grant Agreement under the 2008 Omnibus Award Plan (Form for Employees) –- incorporated by reference to Exhibit 10.29 to the Company’sCompany's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2008 (Management Compensatory Plan)10.33-10.29 Form of Deferred Stock Unit Award Agreement under the 2008 Omnibus Award Plan- incorporated by reference to Exhibit 10.33 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (Management Compensatory Plan) 10.30 Form of Performance Stock Unit Award Agreement under the 2008 Omnibus Award Plan (Management Compensatory Plan) 21 -Subsidiaries of the Company 23 -Consent of Independent Registered Public Accounting Firm 31.1 -Certification by Carlos A. Rodriguez pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 31.2 -Certification by Christopher R. ReidyJan Siegmund pursuant to Rule 13a-14(a) of the Securities Exchange Act of 193432.1 -Certification by Carlos A. Rodriguez pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 -Certification by Christopher R. ReidyJan Siegmund pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002101.INS -XBRL instance document 101.SCH -XBRL taxonomy extension schema document 101.CAL -XBRL taxonomy extension calculation linkbase document 101.LAB -XBRL taxonomy label linkbase document 101.PRE -XBRL taxonomy extension presentation linkbase document 101.DEF -XBRL taxonomy extension definition linkbase document (In thousands) Column A Column B Column C Column D Column E Additions (1) (2) Balance at Charged to Charged Balance beginning costs and to other at end of of period expenses accounts Deductions period Year ended June 30, 2012: Allowance for doubtful accounts: Current $ 50,532 $ 24,822 $ -- $ (28,850 )(A) $ 46,504 Long-term $ 9,438 $ 2,106 $ -- $ (2,732 )(A) $ 8,812 Deferred tax valuation allowance $ 62,700 $ 4,003 $ (5,454 )(B) $ (6,494 ) $ 54,755 Year ended June 30, 2011: Allowance for doubtful accounts: Current $ 48,962 $ 23,615 $ -- $ (22,045 )(A) $ 50,532 Long-term $ 16,048 $ 2,954 $ -- $ (9,564 )(A) $ 9,438 Deferred tax valuation allowance $ 61,883 $ 3,399 $ 2,507 (B) $ (5,089 ) $ 62,700 Year ended June 30, 2010: Allowance for doubtful accounts: Current $ 47,831 $ 21,177 $ -- $ (20,046 )(A) $ 48,962 Long-term $ 18,034 $ 3,846 $ -- $ (5,832 )(A) $ 16,048 Deferred tax valuation allowance $ 51,690 $ 19,988 $ (5,219 )(B) $ (4,576 ) $ 61,883 (A) Doubtful accounts written off, less recoveries on accounts previously written off.(B)Includes amounts related to foreign exchange fluctuation.Column A Column B Column C Column D Column E Additions (1) (2) Balance at beginning of period Charged to costs and expenses Charged to other accounts Deductions Balance at end of period Year ended June 30, 2013: Allowance for doubtful accounts: Current $ 46,132 $ 19,713 $ — $ (14,930 ) (A) $ 50,915 Long-term $ 8,812 $ 2,687 $ — $ (2,466 ) (A) $ 9,033 Deferred tax valuation allowance $ 54,755 $ 3,887 $ (850 ) (B) $ (8,393 ) $ 49,399 Year ended June 30, 2012: Allowance for doubtful accounts: Current $ 50,164 $ 24,088 $ — $ (28,120 ) (A) $ 46,132 Long-term $ 9,438 $ 2,106 $ — $ (2,732 ) (A) $ 8,812 Deferred tax valuation allowance $ 62,700 $ 4,003 $ (5,454 ) (B) $ (6,494 ) $ 54,755 Year ended June 30, 2011: Allowance for doubtful accounts: Current $ 48,543 $ 22,976 $ — $ (21,355 ) (A) $ 50,164 Long-term $ 16,048 $ 2,954 $ — $ (9,564 ) (A) $ 9,438 Deferred tax valuation allowance $ 61,883 $ 3,399 $ 2,507 (B) $ (5,089 ) $ 62,700 AUTOMATIC DATA PROCESSING, INC. (Registrant) August 20, 2012 19, 2013By /s/ Carlos A. Rodriguez Carlos A. Rodriguez President and Chief Executive Officer Signature Title Date /s/ Carlos A. Rodriguez President and Chief Executive August 20, 2012 19, 2013 (Carlos A. Rodriguez) Officer, Director (Principal Executive Officer) /s/ Christopher R. ReidyJan SiegmundChief Financial Officer August 20, 2012 19, 2013 (Christopher R. Reidy)(Jan Siegmund)(Principal Financial Officer) /s/ Alan Sheiness Corporate Controller August 20, 2012 19, 2013 (Alan Sheiness) (Principal Accounting Officer) /s/ Ellen R. Alemany Director August 20, 2012 19, 2013 (Ellen R. Alemany) /s/ Gregory D. Brenneman Director August 20, 2012 19, 2013 (Gregory D. Brenneman) /s/ Leslie A. Brun Director August 20, 2012 19, 2013 (Leslie A. Brun) /s/ Richard T. Clark Director August 20, 2012 19, 2013 (Richard T. Clark) /s/ Eric C. Fast Director August 20, 2012 19, 2013 (Eric C. Fast) /s/ Linda R. Gooden Director August 20, 2012 19, 2013 (Linda R. Gooden) /s/ R. Glenn Hubbard Director August 20, 2012 19, 2013 (R. Glenn Hubbard) /s/ John P. Jones Director August 20, 2012 19, 2013 (John P. Jones) /s/ Enrique T. Salem Director August 20, 2012 19, 2013 (Enrique T. Salem) /s/ Gregory L. Summe Director August 20, 2012 19, 2013 (Gregory L. Summe) 92