Cover Page
Cover Page - shares | 3 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36486 | |
Entity Registrant Name | CDK Global, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-5743146 | |
Entity Address, Address Line One | 1950 Hassell Road, | |
Entity Address, City or Town | Hoffman Estates, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60169 | |
City Area Code | 847 | |
Local Phone Number | 397-1700 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | CDK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 121,398,182 | |
Amendment Flag | false | |
Entity Central Index Key | 0001609702 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 494.6 | $ 446.3 |
Expenses: | ||
Cost of revenues | 247.3 | 203.3 |
Selling, general and administrative expenses | 107.9 | 91.1 |
Restructuring expenses | 0 | 15.8 |
Total expenses | 355.2 | 310.2 |
Operating earnings | 139.4 | 136.1 |
Interest expense | (37.7) | (32.2) |
Other income, net | 2.3 | 2.6 |
Earnings before income taxes | 104 | 106.5 |
Provision for income taxes | (25.6) | (30) |
Net earnings from continuing operations | 78.4 | 76.5 |
Net earnings from discontinued operations | 5.7 | 15.8 |
Net earnings | 84.1 | 92.3 |
Less: net earnings attributable to noncontrolling interest | 2.1 | 2 |
Net earnings attributable to CDK | $ 82 | $ 90.3 |
Net earnings attributable to CDK per share - basic: | ||
Continuing operations (in dollars per share) | $ 0.63 | $ 0.58 |
Discontinued operations (in dollars per share) | 0.05 | 0.12 |
Total net earnings attributable to CDK per share - basic (in dollars per share) | 0.68 | 0.70 |
Net earnings attributable to CDK per share - diluted: | ||
Continuing operations (in dollars per share) | 0.62 | 0.57 |
Discontinued operations (in dollars per share) | 0.05 | 0.12 |
Total net earnings attributable to CDK per share - diluted (in dollars per share) | $ 0.67 | $ 0.69 |
Weighted-average common shares outstanding: | ||
Basic (shares) | 121.4 | 129.6 |
Diluted (shares) | 122 | 130.4 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 84.1 | $ 92.3 |
Other comprehensive loss: | ||
Foreign currency translation adjustments | (19.9) | (6) |
Other comprehensive loss | (19.9) | (6) |
Comprehensive income | 64.2 | 86.3 |
Less: comprehensive income attributable to noncontrolling interest | 2.1 | 2 |
Comprehensive income attributable to CDK | $ 62.1 | $ 84.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 313.1 | $ 311.4 |
Accounts receivable, net of allowances of $11.4 and $9.5, respectively | 410.4 | 412.3 |
Current assets held for sale | 103.8 | 98.6 |
Other current assets | 175.5 | 164.8 |
Total current assets | 1,002.8 | 987.1 |
Property, plant and equipment, net of accumulated depreciation of $254.5 and $250.8, respectively | 131.4 | 144.8 |
Other assets | 352.6 | 284.9 |
Goodwill | 1,344.1 | 1,356.3 |
Intangible assets, net | 228 | 225.9 |
Total assets | 3,058.9 | 2,999 |
Current liabilities: | ||
Current maturities of long-term debt and finance lease liabilities | 271.3 | 270.8 |
Accounts payable | 45.9 | 57.4 |
Accrued expenses and other current liabilities | 246.3 | 203.8 |
Litigation liability | 65 | 90 |
Accrued payroll and payroll-related expenses | 59.1 | 89.2 |
Current liabilities held for sale | 7.1 | 1.9 |
Short-term deferred revenues | 111.2 | 124.8 |
Total current liabilities | 805.9 | 837.9 |
Long-term debt and finance lease liabilities | 2,655.2 | 2,659.4 |
Long-term deferred revenues | 74.2 | 68.4 |
Deferred income taxes | 82.3 | 80.5 |
Other liabilities | 112.9 | 67.3 |
Total liabilities | 3,730.5 | 3,713.5 |
Stockholders' Deficit: | ||
Preferred stock, $0.01 par value: 50.0 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value: 650.0 shares authorized; 160.3 and 160.3 shares issued, respectively; 121.4 and 121.1 shares outstanding, respectively | 1.6 | 1.6 |
Additional paid-in-capital | 677.7 | 688.5 |
Retained earnings | 975.3 | 911.6 |
Treasury stock, at cost: 38.9 and 39.2 shares, respectively | (2,312.4) | (2,324.6) |
Accumulated other comprehensive income (loss) | (26.6) | (6.7) |
Total CDK stockholders' deficit | (684.4) | (729.6) |
Noncontrolling interest | 12.8 | 15.1 |
Total stockholders' deficit | (671.6) | (714.5) |
Total liabilities and stockholders' deficit | $ 3,058.9 | $ 2,999 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 11.4 | $ 9.5 |
Accumulated depreciation | $ 254.5 | $ 250.8 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 650,000,000 | 650,000,000 |
Common stock, shares issued | 160,300,000 | 160,300,000 |
Common stock, shares outstanding | 121,400,000 | 121,100,000 |
Treasury stock shares | 38,900,000 | 39,200,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities: | ||
Net earnings | $ 84.1 | $ 92.3 |
Less: net earnings from discontinued operations | 5.7 | 15.8 |
Net earnings from continuing operations | 78.4 | 76.5 |
Adjustments to reconcile net earnings from continuing operations to cash flows provided by operating activities, continuing operations: | ||
Depreciation and amortization | 23.5 | 17.8 |
Deferred income taxes | 0 | 7.8 |
Stock-based compensation expense | 2.9 | 3 |
Other | 6.4 | 1.4 |
Changes in assets and liabilities, net of effect from acquisitions of businesses: | ||
Change in accounts receivable | (8.1) | 11.7 |
Change in other assets | (4.5) | 14.3 |
Change in accounts payable | (5.5) | (3.6) |
Change in accrued expenses and other liabilities | (28.7) | (5.3) |
Net cash flows provided by operating activities, continuing operations | 64.4 | 123.6 |
Net cash flows provided by operating activities, discontinued operations | 7.8 | 16.4 |
Net cash flows provided by operating activities | 72.2 | 140 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (3.1) | (8.8) |
Capitalized software | (10.3) | (7.7) |
Acquisitions of businesses, net of cash acquired | 0 | (513.2) |
Investment in certificates of deposit | (12) | 0 |
Investment in joint venture | 0 | (10) |
Net cash flows used in investing activities, continuing operations | (25.4) | (539.7) |
Net cash flows used in investing activities, discontinued operations | (2.5) | (2.4) |
Net cash flows used in investing activities | (27.9) | (542.1) |
Cash Flows from Financing Activities: | ||
Proceeds from long-term debt | 0 | 860 |
Repayments of long-term debt and lease liabilities | (5.2) | (792.3) |
Dividends paid to stockholders | (18.2) | (19.3) |
Repurchases of common stock | 0 | (114.1) |
Proceeds from exercises of stock options | 2.7 | 1 |
Withholding tax payments for stock-based compensation awards | (5.2) | (14.9) |
Dividend payments to noncontrolling owners | (4.4) | (4.4) |
Payments of deferred financing costs | 0 | (4.4) |
Acquisition-related payments | (3.6) | (1.1) |
Net cash flows used in financing activities, continuing operations | (33.9) | (89.5) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (7.4) | (3.5) |
Net change in cash, cash equivalents, and restricted cash | 3 | (495.1) |
Cash, cash equivalents, and restricted cash, beginning of period | 321.1 | 817.1 |
Cash, cash equivalents, and restricted cash end of period | 324.1 | 322 |
Cash and cash equivalents | 313.1 | 312.8 |
Restricted cash in funds held for clients included in other current assets | 11 | 9.2 |
Cash paid for: | ||
Income taxes and foreign withholding taxes, net of refunds, continuing operations | 11.9 | 10.1 |
Interest | 15.4 | 6.8 |
Non-cash investing and financing activities: | ||
Capitalized property and equipment obtained under lease | 12 | 0 |
Lease liabilities incurred | 1 | 0.2 |
Intangible assets purchased, not paid | $ 1.5 | $ 0 |
Consolidated Statements Stockho
Consolidated Statements Stockholders' Deficit - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in-Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total CDK Stockholders' Deficit | Non-controlling Interest |
Stockholders' equity, beginning balance at Jun. 30, 2018 | $ (347.3) | $ 1.6 | $ 679.8 | $ 753 | $ (1,810.7) | $ 11.5 | $ (364.8) | $ 17.5 |
Common stock, shares issued, beginning balance at Jun. 30, 2018 | 160.3 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | 92.3 | 90.3 | 90.3 | 2 | ||||
Foreign currency translation adjustments | (6) | (6) | (6) | |||||
Stock-based compensation expense and related dividend equivalents | 3.8 | 3.9 | (0.1) | 3.8 | ||||
Common stock issued for the exercise and vesting of stock-based compensation awards, net | (13.9) | (29.1) | 15.2 | (13.9) | ||||
Dividends paid to stockholders | (19.3) | (19.3) | (19.3) | |||||
Repurchases of common stock | (114.1) | (114.1) | (114.1) | |||||
Dividend payments to noncontrolling owners | (4.4) | (4.4) | ||||||
Common stock, shares issued, end balance at Sep. 30, 2018 | 160.3 | |||||||
Stockholders' equity, ending balance at Sep. 30, 2018 | (299.6) | $ 1.6 | 654.6 | 933.6 | (1,909.6) | 5.1 | (314.7) | 15.1 |
Stockholders' equity, beginning balance at Jun. 30, 2019 | $ (714.5) | $ 1.6 | 688.5 | 911.6 | (2,324.6) | (6.7) | (729.6) | 15.1 |
Common stock, shares issued, beginning balance at Jun. 30, 2019 | 160.3 | 160.3 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net earnings | $ 84.1 | 82 | 82 | 2.1 | ||||
Foreign currency translation adjustments | (19.9) | (19.9) | (19.9) | |||||
Stock-based compensation expense and related dividend equivalents | 3.8 | 3.9 | (0.1) | 3.8 | ||||
Common stock issued for the exercise and vesting of stock-based compensation awards, net | (2.5) | (14.7) | 12.2 | (2.5) | ||||
Dividends paid to stockholders | (18.2) | (18.2) | (18.2) | |||||
Dividend payments to noncontrolling owners | $ (4.4) | (4.4) | ||||||
Common stock, shares issued, end balance at Sep. 30, 2019 | 160.3 | 160.3 | ||||||
Stockholders' equity, ending balance at Sep. 30, 2019 | $ (671.6) | $ 1.6 | $ 677.7 | $ 975.3 | $ (2,312.4) | $ (26.6) | $ (684.4) | $ 12.8 |
Consolidated Statements Stock_2
Consolidated Statements Stockholders' Deficit (Parenthetical) - $ / shares | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, dividends, declared (in dollars per share) | $ 0.150 | $ 0.150 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation A. Description of Business CDK Global, Inc. (the "Company" or "CDK") enables end-to-end automotive commerce across the globe. For over 40 years, the Company has served automotive retailers and original equipment manufacturers ("OEMs") by providing innovative solutions that allow them to better connect, manage, analyze, and grow their businesses. The Company's solutions automate and integrate all parts of the buying process, including the acquisition, sale, financing, insuring, parts supply, repair, and maintenance of vehicles, in more than 100 countries around the world, for approximately 30,000 retail locations and most OEMs. The Company is organized into two main operating groups, CDK North America ("CDKNA") and CDK International ("CDKI"), which are also the two reportable segments. In addition, the Company has an Other segment, the primary components of which are corporate allocations and other expenses not recorded in the segment results. For additional information refer to Note 14, Financial Data by Segment. The Company has committed to a plan to divest its Digital Marketing Business. The Digital Marketing Business is presented as discontinued operations. For additional information refer to Note 4, Discontinued Operations. B. Basis of Preparation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect assets, liabilities, revenues, and expenses that are reported in the accompanying financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. The accompanying consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. Interim financial results are not necessarily indicative of financial results for a full year. The financial statements in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2019 . Certain prior year amounts have been reclassified to conform to the current year presentation. See the discussion in Note 4, Discontinued Operations for the impact of presenting the Digital Marketing Business as held for sale and discontinued operations. Effective July 1, 2019, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Codification , "Leases," as amended ("ASC 842"). The comparative information has not been restated and continues to be reported under the accounting standards in effect for the period presented. For additional information, refer to Note 10, Leases for a discussion of the Company's policy related to leases. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of Significant Accounting Policies A. Funds Receivable and Funds Held for Clients and Client Fund Obligations Funds receivable and funds held for clients represent amounts received or expected to be received from clients in advance of performing titling and registration services on behalf of those clients. These amounts are classified within other current assets on the consolidated balance sheets. The total amount due to remit for titling and registration obligations with the department of motor vehicles is recorded to client fund obligations which is classified as accrued expenses and other current liabilities on the consolidated balance sheets. Funds receivable was $27.8 million and $32.3 million , and funds held for clients was $11.0 million and $9.7 million as of September 30, 2019 and June 30, 2019 , respectively. Client fund obligations were $38.8 million and $42.0 million as of September 30, 2019 and June 30, 2019 , respectively. B. Internal Use Software and Computer Software to be Sold, Leased, or Otherwise Marketed The Company’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’s policy also provides for the capitalization of certain payroll and payroll-related costs for employees who are directly associated with the 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 impracticable to separate these costs from normal maintenance activities. The Company amortizes internal use software typically over a three to five year life. The Company's policy provides for the capitalization of certain costs of computer software to be sold, leased, or otherwise marketed. The Company'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 the general release of the software. Maintenance-related costs are expensed as incurred. Pursuant to these policies, the Company incurred expenses to research, develop, and deploy new and enhanced solutions of $22.1 million and $16.7 million for the three months ended September 30, 2019 and 2018 , respectively. These expenses were classified within cost of revenues on the consolidated statements of operations. Additionally, the Company had cash flows used for qualifying capitalized software development cost of $10.3 million and $7.7 million for the three months ended September 30, 2019 and 2018 , respectively. C. Fair Value of Financial Instruments The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Cash and cash equivalents, accounts receivable, other current assets, accounts payable, and other current liabilities are reflected in the consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments. The carrying value of the Company's revolving credit facility and term loan facilities (as described in Note 9), including accrued interest, approximates fair value based on the Company's current estimated incremental borrowing rate for similar types of arrangements. The approximate aggregate fair value of the Company's senior notes as of September 30, 2019 was $2,463.0 million , based on quoted market prices for the same or similar instruments compared to a carrying value of $2,350.0 million . The term loan facilities and senior notes are considered Level 2 fair value measurements in the fair value hierarchy. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," which aligns the accounting for implementation cost incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. ASU 2018-15 is effective for fiscal years, and interim periods beginning after December 15, 2019, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. Early adoption is permitted. The Company early adopted this standard on July 1, 2019, using the prospective approach and applied this guidance to all implementation costs incurred after the date of adoption. In February 2016, the FASB issued ASC 842. Refer to Note 10, Leases, for the required disclosures related to the adoption of this standard. Recently Issued Accounting Pronouncements In November 2018, the FASB issued ASU 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606" to resolve the diversity in practice concerning the manner in which entities account for transactions based on their assessment of the economics of a collaborative arrangement. ASU 2018-18 is effective for fiscal years, and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently in the process of evaluating the potential impact of the adoption of ASU 2018-18 on its consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations In June 2019, the Company committed to a plan to divest the Digital Marketing Business which comprises: (a) all of the assets of ANA; and (b) certain assets of CDKNA related to mobile advertising solutions and website services, in order to focus on its core suite of SaaS software and technology solutions for the markets it serves through the CDKNA and CDKI segments. The Company's decision to divest the Digital Marketing Business was the result of a comprehensive strategic review of the Company’s business, undertaken during the fiscal quarter ended June 30, 2019. The Company intends to complete its divestiture of the Digital Marketing Business during the current fiscal year. This action resulted in the reclassification of the assets and liabilities comprising the Digital Marketing Business as assets and liabilities held for sale in the accompanying consolidated balance sheets, and a corresponding adjustment to consolidated statements of operations and cash flows to reflect discontinued operations, for all periods presented. The net of assets and liabilities held-for-sale related to discontinued operations are required to be recorded at the lower of carrying value or fair value less costs to sell. The following table summarizes the comparative financial results of discontinued operations which are presented as Net earnings from discontinued operations on the Consolidated Statements of Operations: Three months Ended September 30, 2019 2018 Revenues $ 85.7 $ 108.2 Expenses: Cost of revenues 67.0 78.4 Selling, general and administrative expenses 11.1 7.1 Restructuring expenses — 1.4 Total expenses 78.1 86.9 Earnings before income taxes 7.6 21.3 Provision for income taxes (1.9 ) (5.5 ) Net earnings from discontinued operations $ 5.7 $ 15.8 The total assets and liabilities held for sale related to discontinued operations are stated separately in the consolidated balance sheets and comprised the following items: September 30, 2019 June 30, 2019 Assets: Prepaid and other current assets $ 1.0 $ 1.1 Property, plant and equipment, net 2.3 2.3 Goodwill 59.4 59.4 Intangible assets, net 38.1 35.6 Other assets 3.0 0.2 Total current assets held for sale $ 103.8 $ 98.6 Liabilities: Deferred revenues $ 1.6 $ 0.8 Accrued expenses and other current liabilities 4.7 0.7 Other liabilities 0.8 0.4 Total current liabilities held for sale $ 7.1 $ 1.9 |
Revenue
Revenue | 3 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Contract Balances The Company receives payments from customers based upon contractual billing schedules. Payment terms can vary by contract but the period between invoicing and when payments are due is not significant. The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in unbilled receivables, contract assets, or contract liabilities, on the Company’s consolidated balance sheets. Unbilled receivables are recorded when the right to consideration becomes unconditional based only on the passage of time. Contract assets include amounts related to the Company's contractual right to consideration for completed performance when the right to consideration is conditional. The Company records contract liabilities when cash payments are received or due in advance of performance. Contract assets and contract liabilities are recognized at the contract level. The following table provides information about accounts receivables, contract assets, and contract liabilities from contracts with customers: September 30, 2019 June 30, 2019 Accounts receivable (including unbilled receivables) $ 410.4 $ 412.3 Short-term contract assets (included in other current assets) 29.8 29.9 Long-term contract assets (included in other assets) 24.0 20.2 Short-term contract liabilities (included in short-term deferred revenue) (111.2 ) (124.8 ) Long-term contract liabilities (included in long-term deferred revenue) (74.2 ) (68.4 ) Net contract assets/(liabilities) $ (131.6 ) $ (143.1 ) During the three months ended September 30, 2019 , the Company recognized $119.8 million of revenue upon satisfaction of performance obligations and invoiced and reclassified $22.5 million to accounts receivable. These amounts were included in the net contract assets or liabilities balance as of June 30, 2019. The Company had no asset impairment charges related to contract assets in the period presented. The Company may occasionally recognize an adjustment in revenue in the current period for performance obligations partially or fully satisfied in the previous periods resulting from changes in estimates for the transaction price, including any changes to the Company's assessment of whether an estimate of variable consideration is constrained. For the three months ended September 30, 2019 , the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, was not significant. Remaining Performance Obligations As of September 30, 2019 , the Company had $2.9 billion of remaining performance obligations which represent contracted revenue that has not yet been recognized, including contracted revenue where the contract's original expected duration is one year or less. The Company expects to recognize approximately $860.0 million of the remaining performance obligation as revenue during the remainder of fiscal year ending June 30, 2020 ("fiscal 2020"), $810.0 million for the fiscal year ended June 30, 2021, $600.0 million for the fiscal year ended June 30, 2022, and $360.0 million for the fiscal year ended June 30, 2023. The Company expect to recognize the remaining $250.0 million as revenue thereafter. The remaining performance obligations exclude future transaction revenue where revenue is recognized as the services are rendered and in the amount to which the Company has the right to invoice. Costs to Obtain and Fulfill a Contract The Company capitalizes certain contract acquisition costs consisting primarily of commissions incurred when contracts are signed. The Company does not capitalize commissions related to contracts with a duration of less than one year; such commissions are expensed within selling, general and administrative expenses when incurred. Costs to fulfill contracts are capitalized when such costs are direct, incremental, and related to transition or installation activities for hosted software solutions. Capitalized costs to fulfill primarily include travel and employee compensation and benefit related costs for the Company's implementation and training teams. Capitalized costs to obtain a contract and most costs to fulfill a contract are amortized over a period of five years which represents the expected period of benefit of these costs. In instances where the contract term is significantly less than five years, costs to fulfill are amortized over the contract term which the Company believes best reflects the period of benefit of these costs. As of September 30, 2019 and June 30, 2019 , the Company capitalized contract acquisition and fulfillment costs from continuing operations of $202.3 million and $200.4 million , respectively. The Company expects that incremental commission fees incurred as a result of obtaining contracts and fulfillment costs are recoverable . During the three months ended September 30, 2019 and 2018 , the Company recognized cost amortization of $20.1 million and $19.5 million , respectively, and there were no significant impairment losses. |
Restructuring
Restructuring | 3 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the fiscal year ended June 30, 2015, the Company initiated a three-year business transformation plan intended to increase operating efficiency and improve the Company's cost structure within its global operations. The business transformation plan was completed at the end of the fiscal 2019. Accruals for restructuring expenses were included within accrued expenses and other current liabilities on the consolidated balance sheets as of September 30, 2019 and June 30, 2019 . The following table summarizes the activity for the restructuring accrual for the three months ended September 30, 2019 : Employee-Related Costs Contract Termination Costs Total Costs Balance as of June 30, 2019 $ 9.4 $ 0.1 $ 9.5 Cash payments (3.1 ) — (3.1 ) Non-cash and other adjustments (0.4 ) (0.1 ) (0.5 ) Foreign exchange (0.2 ) — (0.2 ) Balance as of September 30, 2019 $ 5.7 $ — $ 5.7 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The numerator for basic and diluted earnings per share is net earnings attributable to CDK. The denominator for basic and diluted earnings per share is based upon the weighted-average number of shares of the Company's common stock outstanding during the reporting periods. Diluted earnings per share also reflects the dilutive effect of unexercised in-the-money stock options and unvested restricted stock. Holders of certain stock-based compensation awards are eligible to receive dividends as described in Note 11. Net earnings allocated to participating securities were not significant for the three months ended September 30, 2019 and 2018 . The following table summarizes the components of basic and diluted earnings per share: Three Months Ended September 30, 2019 2018 Net earnings from continuing operations attributable to CDK $ 76.3 $ 74.5 Net earnings from discontinued operations 5.7 15.8 Net earnings attributable to CDK $ 82.0 $ 90.3 Weighted-average shares outstanding: Basic 121.4 129.6 Effect of employee stock options 0.1 0.3 Effect of employee restricted stock 0.5 0.5 Diluted 122.0 130.4 Net earnings attributable to CDK per share - basic: Continuing operations $ 0.63 $ 0.58 Discontinued operations 0.05 0.12 Total net earnings attributable to CDK per share - basic $ 0.68 $ 0.70 Net earnings attributable to CDK per share - diluted: Continuing operations $ 0.62 $ 0.57 Discontinued operations 0.05 0.12 Total net earnings attributable to CDK per share - diluted $ 0.67 $ 0.69 The weighted-average number of shares outstanding used in the calculation of diluted earnings per share does not include the effect of the following anti-dilutive securities. Three Months Ended September 30, 2019 2018 Stock-based awards 0.7 0.2 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Changes in goodwill for the three months ended September 30, 2019 were as follows: CDKNA CDKI Total Balance as of June 30, 2019 $ 1,000.3 $ 356.0 $ 1,356.3 Currency translation adjustments (0.3 ) (11.9 ) (12.2 ) Balance as of September 30, 2019 $ 1,000.0 $ 344.1 $ 1,344.1 The Company performs its annual impairment testing for goodwill balances as of April 1 each year; however, the Company may test for impairment between annual tests if an event occurs or circumstances change that indicate that the fair value of the reporting unit may fall below its carrying amount. During the first quarter of fiscal 2020, there were no events or changes in circumstances that indicated a need to reassess impairment before the annual test date. Components of intangible assets, net from continuing operations were as follows: September 30, 2019 June 30, 2019 Original Cost Accumulated Amortization Intangible Assets, net Original Cost Accumulated Amortization Intangible Assets, net Software $ 261.9 $ (133.1 ) $ 128.8 $ 250.8 $ (126.7 ) $ 124.1 Customer lists 195.3 (101.2 ) 94.1 196.6 (100.2 ) 96.4 Trademarks 7.5 (3.2 ) 4.3 7.5 (3.1 ) 4.4 Other intangibles 3.2 (2.4 ) 0.8 3.2 (2.2 ) 1.0 $ 467.9 $ (239.9 ) $ 228.0 $ 458.1 $ (232.2 ) $ 225.9 Other intangibles primarily consist of purchased rights, covenants, and patents (acquired directly or through acquisitions). All of the intangible assets have finite lives and, as such, are subject to amortization. The weighted-average remaining useful life of intangible assets is 7 years ( 3 years for software and software licenses, 13 years for customer lists, and 6 years for trademarks). Amortization of intangible assets was $9.4 million and $5.6 million for the three months ended September 30, 2019 and 2018 , respectively. Estimated amortization expenses of the Company's existing intangible assets as of September 30, 2019 were as follows: Amount Nine months ending June 30, 2020 $ 54.6 Twelve months ending June 30, 2021 41.7 Twelve months ending June 30, 2022 27.4 Twelve months ending June 30, 2023 20.2 Twelve months ending June 30, 2024 15.6 Twelve months ending June 30, 2025 12.9 Thereafter 55.6 $ 228.0 |
Debt
Debt | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt was comprised of the following: September 30, 2019 June 30, 2019 Revolving credit facility $ — $ — Three year term loan facility, due 2021 300.0 300.0 Five year term loan facility, due 2023 285.0 288.8 3.30% senior notes, due 2019 250.0 250.0 4.50% senior notes, due 2024 500.0 500.0 5.875% senior notes, due 2026 500.0 500.0 4.875% senior notes, due 2027 600.0 600.0 5.250% senior notes due 2029 500.0 500.0 Finance lease liabilities 18.7 19.9 Unamortized debt financing costs (27.2 ) (28.5 ) Total debt and finance lease liabilities $ 2,926.5 $ 2,930.2 Current maturities of long-term debt and finance lease liabilities 271.3 270.8 Total long-term debt and finance lease liabilities $ 2,655.2 $ 2,659.4 Revolving Credit Facility On August 17, 2018 , the Company entered into a five-year senior unsecured revolving credit facility (the "revolving credit facility") which was undrawn as of September 30, 2019 and June 30, 2019. The revolving credit facility provides up to $750.0 million of borrowing capacity and includes a sub-limit of up to $100.0 million for loans in Euro, Pound Sterling, and, if approved by the revolving lenders, other currencies. In addition, the revolving credit facility contains an accordion feature that allows for an increase in the available borrowing capacity of up to $100.0 million , subject to the agreement of lenders under the revolving credit facility or other financial institutions that become lenders to extend commitments as part of the increased revolving credit facility. Borrowings under the revolving credit facility are available for general corporate purposes. The revolving credit facility will mature on August 17, 2023 , subject to no more than two one -year extensions if lenders holding a majority of the revolving commitments approve such extensions. The revolving credit facility is unsecured and loans thereunder bear interest, at the Company's option, at (a) the rate at which deposits in the applicable currency are offered in the London interbank market (or, in the case of borrowings in Euro, the European interbank market) plus margins varying from 1.250% to 2.375% per annum based on the Company's senior, unsecured non-credit-enhanced, long-term debt ratings from Standard & Poor's Ratings Group and Moody's Investors Services Inc. (the "Ratings") or (b) solely in the case of U.S. dollar loans, (i) the highest of (A) the prime rate of Bank of America, N.A., (B) a rate equal to the average of the overnight federal funds rate with a maturity of one day plus a margin of 0.500% per annum, and (C) the rate at which dollar deposits are offered in the London interbank market for a one-month interest period plus 1.000% plus (ii) margins varying from 0.250% to 1.375% per annum based on the Ratings. The unused portion of the revolving credit facility is subject to commitment fees ranging from 0.150% to 0.350% per annum based on the Ratings. Term Loan Facilities On August 17, 2018 , the Company entered into a term loan agreement which provided the Company with an aggregate of $600.0 million of term loans comprised of a $300.0 million term loan that will mature on August 17, 2021 (the "three year term loan facility") and a $300.0 million term loan that will mature on August 17, 2023 (the "five year term loan facility"). The aggregate principal amount of the three year term loan facility will be repayable in full on the maturity date. The five year term loan facility is subject to amortization in equal quarterly installments of 1.25% of the aggregate principal amount made on the closing date, with any unpaid principal amount to be due and payable on the maturity date. The three year term loan facility and the five year term loan facility are together referred to as the "term loan facilities." The interest rate per annum on the three year term loan facility and the five year term loan facility was 3.55% and 3.68% , respectively, as of September 30, 2019. The three year term loan facility and the five year term loan facility are unsecured and bear interest (a) with respect to the three year term loan facility, (i) at the rate at which deposits in the applicable currency are offered in the London interbank market plus margins varying from 1.125% to 2.250% per annum based on the Company’s senior, unsecured, non-credit-enhanced, long-term debt ratings from the Ratings or (ii) the highest of (X) a rate equal to the average of the overnight federal funds rate with a maturity of one day plus a margin of 0.50% per annum, (Y) the prime rate of Bank of America, N.A. and (Z) the rate at which dollar deposits are offered in the London interbank market for a one-month interest period plus 1.00% , plus margins varying from 0.125% to 1.250% per annum based on the Ratings, and (b) with respect to the five year term loan facility (i) at the rate at which deposits in the applicable currency are offered in the London interbank market plus margins varying from 1.250% to 2.375% per annum based on the Company’s Ratings or (ii) the highest of (X) a rate equal to the average of the overnight federal funds rate with a maturity of one day plus a margin of 0.50% per annum, (Y) the prime rate of Bank of America, N.A. and (Z) the rate at which dollar deposits are offered in the London interbank market for a one-month interest period, plus 1.00% , plus margins varying from 0.250% to 1.375% per annum based on the Ratings. London Interbank Market (“LIBOR”) Transition LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and other pressure may cause LIBOR to disappear entirely or to perform differently than in the past. It is expected that certain banks will stop reporting information used to set LIBOR at the end of 2021 when their reporting obligations cease. This will effectively end the usefulness of LIBOR and may end its publication. The consequences of these developments cannot be entirely predicted but, as noted above, could impact the interest rates of the revolving credit facility and the five year term loan. If LIBOR is no longer widely available, the Company will pursue alternative interest rate calculations in its revolving credit facility and five year term loan agreements. However, if no alternative rate can be determined, the LIBOR rate component will no longer be utilized in determining the rates. As of September 30, 2019 and June 30, 2019, the hypothetical impact to the Company’s interest rates without utilizing the LIBOR rate component would not have had a material effect on either rate, thus the Company does not believe the discontinuation of LIBOR will have a material impact on itsfinancial position and results of operations. Restrictive Covenants and Other Matters The revolving credit facility, the three year term loan facility, and the five year term loan facility are together referred to as the "credit facilities." The credit facilities contain various covenants and restrictive provisions that limit the Company's subsidiaries' ability to incur additional indebtedness, the Company's ability to consolidate or merge with other entities, and the Company's subsidiaries' ability to incur liens, enter into sale and leaseback transactions, and enter into agreements restricting the ability of the Company's subsidiaries to pay dividends. If the Company fails to perform the obligations under these and other covenants, the revolving credit facility could be terminated and any outstanding borrowings, together with accrued interest, under the credit facilities could be declared immediately due and payable. The credit facilities also have, in addition to customary events of default, an event of default triggered by the acceleration of the maturity of any other indebtedness the Company may have in an aggregate principal amount in excess of $75.0 million . The credit facilities also contain financial covenants that will provide that (i) the ratio of total consolidated indebtedness to consolidated EBITDA shall not exceed 3.75 to 1.00 and (ii) the ratio of consolidated EBITDA to consolidated interest expense shall be a minimum of 3.00 to 1.00 . Senior Notes On October 14, 2014 , the Company completed an offering of 3.30% unsecured senior notes with a $250.0 million aggregate principal amount due in 2019 (the "2019 notes") and 4.50% unsecured senior notes with a $500.0 million aggregate principal amount due in 2024 (the "2024 notes"). The issuance price of the 2019 and 2024 notes was equal to the stated value. Interest is payable semi-annually on April 15 and October 15 of each year, and payment commenced on April 15, 2015 . The interest rate payable on each applicable series of 2019 and 2024 notes is subject to adjustment from time to time if the credit ratings assigned to any series of 2019 and 2024 notes by the rating agencies is downgraded (or subsequently upgraded). The 2019 notes matured on October 15, 2019 , and the 2024 notes will mature on October 15, 2024 . The 2024 notes are redeemable at the Company's option prior to July 15, 2024 at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the 2024 notes to be redeemed, and (ii) the sum of the present value of the remaining scheduled payments (as defined in the agreement), plus accrued and unpaid interest thereon. Subsequent to July 15, 2024, the redemption price for the 2024 notes will equal 100% of the aggregate principal amount of the notes redeemed, plus accrued and unpaid interest thereon. On June 18, 2018 , the Company completed an offering of 5.875% unsecured senior notes with a $500.0 million aggregate principal amount due in 2026 (the " 2026 notes "). The issuance price of the 2026 notes was equal to the stated value. Interest is payable semi-annually on June 15 and December 15 of each year, and payment will commence on December 15, 2018. The 2026 notes will mature on June 15, 2026. The 2026 notes are redeemable at the Company's option prior to June 15, 2021 in whole or in part at a redemption price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, plus the applicable "make-whole" premium. Subsequent to June 15, 2021, the Company may redeem the 2026 notes at a price equal to: (i) 102.938% of the aggregate principal amount of the 2026 notes redeemed prior to June 15, 2022; (ii) 101.958% of the aggregate principal amount of the notes redeemed on or after June 15, 2022 but prior to June 15, 2023; (iii) 100.979% of the aggregate principal amount of the 2026 notes redeemed on or after June 15, 2023 but prior to June 15, 2024; and (iv) 100.000% of the aggregate principal amount of the 2026 notes redeemed thereafter. On May 15, 2017 , the Company completed an offering of 4.875% unsecured senior notes with a $600.0 million aggregate principal amount due in 2027 (the " 2027 notes"). The issuance price of the 2027 notes was equal to the stated value. Interest is payable semi-annually on June 1 and December 1 of each year, and payment commenced on December 1, 2017. The 2027 notes will mature on June 1, 2027. The 2027 notes are redeemable at the Company's option prior to June 1, 2022 in whole or in part at a redemption price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, plus the applicable "make-whole" premium. Subsequent to June 1, 2022, the Company may redeem the 2027 notes at a price equal to: (i) 102.438% of the aggregate principal amount of the 2027 notes redeemed prior to June 1, 2023; (ii) 101.625% of the aggregate principal amount of the notes redeemed on or after June 1, 2023 but prior to June 1, 2024; (iii) 100.813% of the aggregate principal amount of the 2027 notes redeemed on or after June 1, 2024 but prior to June 1, 2025; and (iv) 100.000% of the aggregate principal amount of the 2027 notes redeemed thereafter. On May 2, 2019, the Company completed an offering of 5.250% unsecured senior notes with a $500.0 million aggregate principal amount due in 2029 (the "2029 notes," together with the "2027 notes," "2026 notes," "2024 notes," and "2019 notes" are the "senior notes"). The issuance price of the 2029 notes was equal to the stated value. Interest is payable semi-annually on March 15 and September 15 of each year, and payment will commence on September 15, 2019. The 2029 notes will mature on May 15, 2029. The 2029 notes are redeemable at the Company's option prior to May 15, 2024 in whole or in part at a redemption price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, plus the applicable "make-whole" premium. Subsequent to May 15, 2024, the Company may redeem the 2029 notes at a price equal to: (i) 102.625% of the aggregate principal amount of the 2029 notes redeemed prior to May 15, 2025; (ii) 101.750% of the aggregate principal amount of the notes redeemed on or after May 15, 2025 but prior to May 15, 2026; (iii) 100.875% of the aggregate principal amount of the 2029 notes redeemed on or after May 15, 2026 but prior to May 15, 2027; and (iv) 100.000% of the aggregate principal amount of the 2029 notes redeemed thereafter. The senior notes are general unsecured obligations of the Company and are not guaranteed by any of the Company's subsidiaries. The senior notes rank equally in right of payment with the Company's existing and future unsecured unsubordinated obligations, including the credit facilities. The senior notes contain covenants restricting the Company's ability to incur additional indebtedness secured by liens, engage in sale/leaseback transactions, and merge, consolidate, or transfer all or substantially all of the Company's assets. The senior notes are also subject to a change of control provision whereby each holder of the senior notes has the right to require the Company to purchase all or a portion of such holder's senior notes at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest upon the occurrence of both a change of control and a decline in the rating of the senior notes. In November 2016, Moody's and S&P lowered their credit ratings on the senior notes to Ba1 (Stable Outlook) from Baa3 (Negative Outlook) and to BB+ (Stable Outlook) from BBB- (Negative Outlook), respectively. The downgrades triggered interest rate adjustments for the 2019 and 2024 notes. Interest rates for the 2019 and 2024 notes increased to 3.80% from 3.30% and to 5.00% from 4.50% , respectively, effective October 15, 2016. On August 13, 2019, S&P affirmed their rating at BB+ but revised their outlook to Negative from Stable. Finance Lease Liabilities The Company has lease agreements for equipment, which are classified as finance lease liabilities. Refer to Note 10, Leases for scheduled maturities and additional information relating to finance lease liabilities. Unamortized Debt Financing Costs As of September 30, 2019 and June 30, 2019 , gross debt issuance costs related to debt instruments were $41.3 million and $41.3 million , respectively. Accumulated amortization was $14.1 million and $12.8 million as of September 30, 2019 and June 30, 2019 , respectively. Debt financing costs are amortized over the terms of the related debt instruments and recorded within interest expense on the consolidated statements of operations. The Company's aggregate scheduled maturities of the long-term debt as of September 30, 2019 were as follows: Amount Twelve months ending September 30, 2020 $ 265.0 Twelve months ending September 30, 2021 315.0 Twelve months ending September 30, 2022 15.0 Twelve months ending September 30, 2023 240.0 Twelve months ending September 30, 2024 — Thereafter 2,100.0 Total debt 2,935.0 Unamortized debt financing costs (27.2 ) Total debt, net of unamortized debt financing costs $ 2,907.8 |
Leases
Leases | 3 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases Adoption of ASC 842 On July 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method whereby prior comparative periods have not been restated and continue to be reported under the accounting standards in effect for the prior period. The Company elected the package of practical expedients permitted under the transition guidance for all leases (where the Company is a lessee or a lessor), which allowed the Company to adopt ASC 842 without reassessing whether arrangements contain leases, the lease classification, and the determination of initial direct cost. Upon adoption on July 1, 2019, the Company recognized right-of-use ("ROU") assets inclusive of finance leases, net of prepaids, incentives and impairments, of $68.2 million , and lease liabilities of $76.8 million in the Company's consolidated balance sheets. At adoption, there was no impact on the Company’s statements of operations, cash flows, and stockholders' deficit. Significant judgments The Company has lease arrangements where the Company acts as either a lessee or a lessor. The Company applies significant judgment in order to determine if an arrangement contains a lease, to assess which party retains a material amount of economic benefit from the underlying asset, and to determine which party holds control over the direction and use of the asset. The Company also applies significant judgment to determine whether the Company will exercise renewal options, to identify substantive substitution rights over the asset, to determine the incremental borrowing rate, and to estimate the fair value of the leased asset. CDK as a Lessee The Company has obligations under lease arrangements mainly for facilities, equipment, data centers, and vehicles. These leases have original lease periods expiring between 2019 and 2027 . The Company classifies leases as finance leases when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. When none of these criteria are met, the Company classifies leases as operating leases. Several of the Company's leases include one or more options to renew. The Company does not assume renewal periods in its determination of lease term unless it is reasonably certain that the Company will exercise the renewal option. The Company considers leases with an initial term of 12 months or less as short-term in nature and does not record such leases on the balance sheet. The Company records all other leases on the balance sheet with ROU assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term. The ROU asset is adjusted for prepaid or deferred rent, lease incentives and impairments. The Company uses the incremental borrowing rate at the lease commencement date to determine the present value of the lease payments as the implicit rate within the leases is generally not readily determinable. The incremental borrowing rate is generally determined using factors such as treasury yields, the Company's credit rating and lease term, and may differ for individual leases. In addition to fixed lease payments, several lease arrangements contain provisions for variable lease payments relating to utilities and maintenance costs or rental increases not scheduled in the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities. For the three months ended September 30, 2019 , the Company recorded lease expense of $4.6 million within cost of revenues, $5.1 million within selling, general and administrative expenses, and $0.2 million within interest expense on the consolidated statements of operations. The following table summarizes the components of net lease expense: Three months ended September 30, 2019 Leases classified as finance: Amortization of ROU assets $ 1.7 Interest on lease liabilities 0.2 Leases classified as operating: Lease expense 4.7 Sublease income (gross basis) (0.1 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 1.2 Variable lease expense 2.2 Total net lease expense $ 9.9 For the three months ended September 30, 2018, rent expense related to operating leases under previous accounting guidance was $9.6 million . The following table presents supplemental information related to leases: Three months ended September 30, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 4.5 Operating cash flows paid for interest portion of finance leases 0.2 Finance cash flows paid for principal portion of finance leases 1.5 ROU assets obtained in exchange for new operating lease liabilities 11.9 ROU assets obtained in exchange for new finance lease liabilities 0.1 As of September 30, 2019, the weighted-average remaining lease term was 6 years for operating leases and 3 years for finance leases; and the weighted-average discount rate was 3.6% for operating leases and 4.6% for finance leases. The following table presents supplemental balance sheet information related to leases as of September 30, 2019: Operating Leases Finance Leases ROU assets, net (1) $ 56.2 $ 17.7 Lease liabilities, current (2) 8.3 6.3 Lease liabilities, non-current (3) 54.9 12.4 Total lease liabilities $ 63.2 $ 18.7 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. The following table presents maturity analysis of lease liabilities as of September 30, 2019: Operating Leases Finance Leases Nine months ending June 30, 2020 $ 13.8 $ 5.4 Twelve months ending June 30, 2021 15.9 6.1 Twelve months ending June 30, 2022 13.8 5.1 Twelve months ending June 30, 2023 9.8 3.5 Twelve months ending June 30, 2024 7.9 0.1 Twelve months ending June 30, 2025 7.2 — Thereafter 10.4 — Total undiscounted lease payments $ 78.8 $ 20.2 Less: imputed interest (7.6 ) (1.5 ) Less: Lease incentive receivable (8.0 ) — Total lease liabilities $ 63.2 $ 18.7 The Company did not have any material minimum lease payments for executed leases that have not yet commenced as of September 30, 2019. Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 $ 74.7 CDK as a Lessor The Company’s hardware-as-a-service arrangements, in which the Company provides customer continuous access to CDK owned hardware, such as networking and telephony equipment and laser printers, are accounted for as a sales-type lease under ASC 842, primarily because they do not contain substantive substitution rights. Since the Company elected to not reassess prior conclusions related to arrangements containing leases, the lease classification, and the initial direct costs, only hardware leases that commenced or are modified subsequent to July 1, 2019, are accounted for under ASC 842. Historically, the Company has accounted for these arrangements as a distinct performance obligation under the revenue recognition guidance and recognized revenue over the term of the arrangement. Sales-type lease arrangements follow the Company’s customary contracting practices and, generally, include a fixed monthly fee for the lease and non-lease components for the duration of the contract term. The Company does not typically provide renewal, termination or purchase options to its customers. The Company recognizes net investment in sales-type leases based on the present value of lease receivable when collectibility is probable. The Company accounts for lease and non-lease components such as maintenance costs, separately. Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers. The following summarizes components of net lease income reported within the consolidated statements of operations: Three months ended September 30, 2019 Revenues (1) $ 9.9 Cost of revenues (7.8 ) Interest income — Total lease income $ 2.1 (1) Revenues from leases are included within Other revenue As of September 30, 2019, the carrying value of the Company’s lease receivable reported in accounts receivable, net and other assets within the consolidated balance sheets was $2.3 million and $6.6 million , respectively. The following table presents maturity analysis of the lease payments the Company expects to receive as of September 30, 2019: Amount Nine months ending June 30, 2020 $ 1.9 Twelve months ending June 30, 2021 2.4 Twelve months ending June 30, 2022 2.2 Twelve months ending June 30, 2023 1.7 Twelve months ending June 30, 2024 1.5 Twelve months ending June 30, 2025 0.3 Thereafter — Total undiscounted cash flows to be received $ 10.0 Less: imputed interest 1.1 Total lease receivable $ 8.9 |
Leases | Leases Adoption of ASC 842 On July 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method whereby prior comparative periods have not been restated and continue to be reported under the accounting standards in effect for the prior period. The Company elected the package of practical expedients permitted under the transition guidance for all leases (where the Company is a lessee or a lessor), which allowed the Company to adopt ASC 842 without reassessing whether arrangements contain leases, the lease classification, and the determination of initial direct cost. Upon adoption on July 1, 2019, the Company recognized right-of-use ("ROU") assets inclusive of finance leases, net of prepaids, incentives and impairments, of $68.2 million , and lease liabilities of $76.8 million in the Company's consolidated balance sheets. At adoption, there was no impact on the Company’s statements of operations, cash flows, and stockholders' deficit. Significant judgments The Company has lease arrangements where the Company acts as either a lessee or a lessor. The Company applies significant judgment in order to determine if an arrangement contains a lease, to assess which party retains a material amount of economic benefit from the underlying asset, and to determine which party holds control over the direction and use of the asset. The Company also applies significant judgment to determine whether the Company will exercise renewal options, to identify substantive substitution rights over the asset, to determine the incremental borrowing rate, and to estimate the fair value of the leased asset. CDK as a Lessee The Company has obligations under lease arrangements mainly for facilities, equipment, data centers, and vehicles. These leases have original lease periods expiring between 2019 and 2027 . The Company classifies leases as finance leases when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. When none of these criteria are met, the Company classifies leases as operating leases. Several of the Company's leases include one or more options to renew. The Company does not assume renewal periods in its determination of lease term unless it is reasonably certain that the Company will exercise the renewal option. The Company considers leases with an initial term of 12 months or less as short-term in nature and does not record such leases on the balance sheet. The Company records all other leases on the balance sheet with ROU assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term. The ROU asset is adjusted for prepaid or deferred rent, lease incentives and impairments. The Company uses the incremental borrowing rate at the lease commencement date to determine the present value of the lease payments as the implicit rate within the leases is generally not readily determinable. The incremental borrowing rate is generally determined using factors such as treasury yields, the Company's credit rating and lease term, and may differ for individual leases. In addition to fixed lease payments, several lease arrangements contain provisions for variable lease payments relating to utilities and maintenance costs or rental increases not scheduled in the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities. For the three months ended September 30, 2019 , the Company recorded lease expense of $4.6 million within cost of revenues, $5.1 million within selling, general and administrative expenses, and $0.2 million within interest expense on the consolidated statements of operations. The following table summarizes the components of net lease expense: Three months ended September 30, 2019 Leases classified as finance: Amortization of ROU assets $ 1.7 Interest on lease liabilities 0.2 Leases classified as operating: Lease expense 4.7 Sublease income (gross basis) (0.1 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 1.2 Variable lease expense 2.2 Total net lease expense $ 9.9 For the three months ended September 30, 2018, rent expense related to operating leases under previous accounting guidance was $9.6 million . The following table presents supplemental information related to leases: Three months ended September 30, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 4.5 Operating cash flows paid for interest portion of finance leases 0.2 Finance cash flows paid for principal portion of finance leases 1.5 ROU assets obtained in exchange for new operating lease liabilities 11.9 ROU assets obtained in exchange for new finance lease liabilities 0.1 As of September 30, 2019, the weighted-average remaining lease term was 6 years for operating leases and 3 years for finance leases; and the weighted-average discount rate was 3.6% for operating leases and 4.6% for finance leases. The following table presents supplemental balance sheet information related to leases as of September 30, 2019: Operating Leases Finance Leases ROU assets, net (1) $ 56.2 $ 17.7 Lease liabilities, current (2) 8.3 6.3 Lease liabilities, non-current (3) 54.9 12.4 Total lease liabilities $ 63.2 $ 18.7 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. The following table presents maturity analysis of lease liabilities as of September 30, 2019: Operating Leases Finance Leases Nine months ending June 30, 2020 $ 13.8 $ 5.4 Twelve months ending June 30, 2021 15.9 6.1 Twelve months ending June 30, 2022 13.8 5.1 Twelve months ending June 30, 2023 9.8 3.5 Twelve months ending June 30, 2024 7.9 0.1 Twelve months ending June 30, 2025 7.2 — Thereafter 10.4 — Total undiscounted lease payments $ 78.8 $ 20.2 Less: imputed interest (7.6 ) (1.5 ) Less: Lease incentive receivable (8.0 ) — Total lease liabilities $ 63.2 $ 18.7 The Company did not have any material minimum lease payments for executed leases that have not yet commenced as of September 30, 2019. Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 $ 74.7 CDK as a Lessor The Company’s hardware-as-a-service arrangements, in which the Company provides customer continuous access to CDK owned hardware, such as networking and telephony equipment and laser printers, are accounted for as a sales-type lease under ASC 842, primarily because they do not contain substantive substitution rights. Since the Company elected to not reassess prior conclusions related to arrangements containing leases, the lease classification, and the initial direct costs, only hardware leases that commenced or are modified subsequent to July 1, 2019, are accounted for under ASC 842. Historically, the Company has accounted for these arrangements as a distinct performance obligation under the revenue recognition guidance and recognized revenue over the term of the arrangement. Sales-type lease arrangements follow the Company’s customary contracting practices and, generally, include a fixed monthly fee for the lease and non-lease components for the duration of the contract term. The Company does not typically provide renewal, termination or purchase options to its customers. The Company recognizes net investment in sales-type leases based on the present value of lease receivable when collectibility is probable. The Company accounts for lease and non-lease components such as maintenance costs, separately. Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers. The following summarizes components of net lease income reported within the consolidated statements of operations: Three months ended September 30, 2019 Revenues (1) $ 9.9 Cost of revenues (7.8 ) Interest income — Total lease income $ 2.1 (1) Revenues from leases are included within Other revenue As of September 30, 2019, the carrying value of the Company’s lease receivable reported in accounts receivable, net and other assets within the consolidated balance sheets was $2.3 million and $6.6 million , respectively. The following table presents maturity analysis of the lease payments the Company expects to receive as of September 30, 2019: Amount Nine months ending June 30, 2020 $ 1.9 Twelve months ending June 30, 2021 2.4 Twelve months ending June 30, 2022 2.2 Twelve months ending June 30, 2023 1.7 Twelve months ending June 30, 2024 1.5 Twelve months ending June 30, 2025 0.3 Thereafter — Total undiscounted cash flows to be received $ 10.0 Less: imputed interest 1.1 Total lease receivable $ 8.9 |
Leases | Leases Adoption of ASC 842 On July 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method whereby prior comparative periods have not been restated and continue to be reported under the accounting standards in effect for the prior period. The Company elected the package of practical expedients permitted under the transition guidance for all leases (where the Company is a lessee or a lessor), which allowed the Company to adopt ASC 842 without reassessing whether arrangements contain leases, the lease classification, and the determination of initial direct cost. Upon adoption on July 1, 2019, the Company recognized right-of-use ("ROU") assets inclusive of finance leases, net of prepaids, incentives and impairments, of $68.2 million , and lease liabilities of $76.8 million in the Company's consolidated balance sheets. At adoption, there was no impact on the Company’s statements of operations, cash flows, and stockholders' deficit. Significant judgments The Company has lease arrangements where the Company acts as either a lessee or a lessor. The Company applies significant judgment in order to determine if an arrangement contains a lease, to assess which party retains a material amount of economic benefit from the underlying asset, and to determine which party holds control over the direction and use of the asset. The Company also applies significant judgment to determine whether the Company will exercise renewal options, to identify substantive substitution rights over the asset, to determine the incremental borrowing rate, and to estimate the fair value of the leased asset. CDK as a Lessee The Company has obligations under lease arrangements mainly for facilities, equipment, data centers, and vehicles. These leases have original lease periods expiring between 2019 and 2027 . The Company classifies leases as finance leases when there is either a transfer of ownership of the underlying asset by the end of the lease term, the lease contains an option to purchase the asset that the Company is reasonably certain will be exercised, the lease term is for the major part of the remaining economic life of the asset, the present value of the lease payments and any residual value guarantee equals or substantially exceeds all the fair value of the asset, or the asset is of such a specialized nature that it will have no alternative use to the lessor at the end of the lease term. When none of these criteria are met, the Company classifies leases as operating leases. Several of the Company's leases include one or more options to renew. The Company does not assume renewal periods in its determination of lease term unless it is reasonably certain that the Company will exercise the renewal option. The Company considers leases with an initial term of 12 months or less as short-term in nature and does not record such leases on the balance sheet. The Company records all other leases on the balance sheet with ROU assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. The Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term. The ROU asset is adjusted for prepaid or deferred rent, lease incentives and impairments. The Company uses the incremental borrowing rate at the lease commencement date to determine the present value of the lease payments as the implicit rate within the leases is generally not readily determinable. The incremental borrowing rate is generally determined using factors such as treasury yields, the Company's credit rating and lease term, and may differ for individual leases. In addition to fixed lease payments, several lease arrangements contain provisions for variable lease payments relating to utilities and maintenance costs or rental increases not scheduled in the lease. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. The Company has elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component in calculating ROU assets and lease liabilities. For the three months ended September 30, 2019 , the Company recorded lease expense of $4.6 million within cost of revenues, $5.1 million within selling, general and administrative expenses, and $0.2 million within interest expense on the consolidated statements of operations. The following table summarizes the components of net lease expense: Three months ended September 30, 2019 Leases classified as finance: Amortization of ROU assets $ 1.7 Interest on lease liabilities 0.2 Leases classified as operating: Lease expense 4.7 Sublease income (gross basis) (0.1 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 1.2 Variable lease expense 2.2 Total net lease expense $ 9.9 For the three months ended September 30, 2018, rent expense related to operating leases under previous accounting guidance was $9.6 million . The following table presents supplemental information related to leases: Three months ended September 30, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 4.5 Operating cash flows paid for interest portion of finance leases 0.2 Finance cash flows paid for principal portion of finance leases 1.5 ROU assets obtained in exchange for new operating lease liabilities 11.9 ROU assets obtained in exchange for new finance lease liabilities 0.1 As of September 30, 2019, the weighted-average remaining lease term was 6 years for operating leases and 3 years for finance leases; and the weighted-average discount rate was 3.6% for operating leases and 4.6% for finance leases. The following table presents supplemental balance sheet information related to leases as of September 30, 2019: Operating Leases Finance Leases ROU assets, net (1) $ 56.2 $ 17.7 Lease liabilities, current (2) 8.3 6.3 Lease liabilities, non-current (3) 54.9 12.4 Total lease liabilities $ 63.2 $ 18.7 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. The following table presents maturity analysis of lease liabilities as of September 30, 2019: Operating Leases Finance Leases Nine months ending June 30, 2020 $ 13.8 $ 5.4 Twelve months ending June 30, 2021 15.9 6.1 Twelve months ending June 30, 2022 13.8 5.1 Twelve months ending June 30, 2023 9.8 3.5 Twelve months ending June 30, 2024 7.9 0.1 Twelve months ending June 30, 2025 7.2 — Thereafter 10.4 — Total undiscounted lease payments $ 78.8 $ 20.2 Less: imputed interest (7.6 ) (1.5 ) Less: Lease incentive receivable (8.0 ) — Total lease liabilities $ 63.2 $ 18.7 The Company did not have any material minimum lease payments for executed leases that have not yet commenced as of September 30, 2019. Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 $ 74.7 CDK as a Lessor The Company’s hardware-as-a-service arrangements, in which the Company provides customer continuous access to CDK owned hardware, such as networking and telephony equipment and laser printers, are accounted for as a sales-type lease under ASC 842, primarily because they do not contain substantive substitution rights. Since the Company elected to not reassess prior conclusions related to arrangements containing leases, the lease classification, and the initial direct costs, only hardware leases that commenced or are modified subsequent to July 1, 2019, are accounted for under ASC 842. Historically, the Company has accounted for these arrangements as a distinct performance obligation under the revenue recognition guidance and recognized revenue over the term of the arrangement. Sales-type lease arrangements follow the Company’s customary contracting practices and, generally, include a fixed monthly fee for the lease and non-lease components for the duration of the contract term. The Company does not typically provide renewal, termination or purchase options to its customers. The Company recognizes net investment in sales-type leases based on the present value of lease receivable when collectibility is probable. The Company accounts for lease and non-lease components such as maintenance costs, separately. Consideration is allocated between lease and non-lease components based on stand-alone selling price in accordance with ASC 606, Revenue from Contracts with Customers. The following summarizes components of net lease income reported within the consolidated statements of operations: Three months ended September 30, 2019 Revenues (1) $ 9.9 Cost of revenues (7.8 ) Interest income — Total lease income $ 2.1 (1) Revenues from leases are included within Other revenue As of September 30, 2019, the carrying value of the Company’s lease receivable reported in accounts receivable, net and other assets within the consolidated balance sheets was $2.3 million and $6.6 million , respectively. The following table presents maturity analysis of the lease payments the Company expects to receive as of September 30, 2019: Amount Nine months ending June 30, 2020 $ 1.9 Twelve months ending June 30, 2021 2.4 Twelve months ending June 30, 2022 2.2 Twelve months ending June 30, 2023 1.7 Twelve months ending June 30, 2024 1.5 Twelve months ending June 30, 2025 0.3 Thereafter — Total undiscounted cash flows to be received $ 10.0 Less: imputed interest 1.1 Total lease receivable $ 8.9 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The following table represents stock-based compensation expense and the related income tax benefits for the three months ended and three months ended September 30, 2019 and 2018 : Three Months Ended September 30, 2019 2018 Cost of revenues $ 0.3 $ 0.3 Selling, general and administrative expenses 2.6 2.7 Total stock-based compensation expense $ 2.9 $ 3.0 Income tax benefit $ 0.5 $ 0.8 Stock-based compensation expense for the three months ended September 30, 2019 , and 2018 consisted of $3.7 million , and $3.5 million of expense related to equity classified awards and $0.8 million , and $0.5 million of income related to liability classified awards, respectively. As of September 30, 2019 , the total unrecognized compensation cost related to non-vested stock options, restricted stock units, and restricted stock awards was $ 6.2 million , $ 58.3 million , and $ 0.4 million , respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.7 years, 2.1 years, and 0.9 years, respectively. The activity related to the Company's incentive equity awards from June 30, 2019 to September 30, 2019 consisted of the following: Time-Based Stock Options Number of Options (in thousands) Weighted Average Exercise Price (in dollars) Options outstanding as of June 30, 2019 794 $ 46.47 Options granted 334 47.13 Options exercised (68 ) 39.84 Options canceled (89 ) 58.75 Options outstanding as of September 30, 2019 971 $ 46.03 The Binomial model used to determine the grant date fair value of the time-based stock options granted in the first quarter of fiscal 2020 used an expected volatility based on the average of implied volatility and historical stock price volatility for the Company, the average of which was 25.87% , a risk-free interest rate of 1.68% , an expected dividend yield of 1.27% , and weighted average expected life of 6 years. Performance -Based Stock Options There were no grants of performance-based stock options during the three months ended September 30, 2019. Time-Based Restricted Stock and Time-Based Restricted Stock Units Number of Shares (in thousands) Number of Units (in thousands) Non-vested restricted units/shares as of June 30, 2019 145 408 Restricted shares/units granted — 457 Restricted shares/units vested (120 ) (65 ) Restricted shares/units forfeited (2 ) (16 ) Non-vested restricted units/shares as of September 30, 2019 23 784 Performance-Based Restricted Stock Units Number of Units (in thousands) Non-vested restricted units as of June 30, 2019 414 Restricted units granted 359 Restricted units forfeited (25 ) Non-vested restricted units as of September 30, 2019 748 The Monte Carlo simulation model used to determine the grant date fair value of the 359 thousand units of the three-year performance based restricted stock units granted in the first quarter of fiscal 2020 used an expected volatility based on historical stock price volatility for the Company and the peer companies, the average of which was 24.69% and a risk-free interest rate of 1.67% |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Valuation Allowance The Company had valuation allowances of $10.3 million as of September 30, 2019 and June 30, 2019 because the Company has concluded it is more likely than not that it will be unable to utilize net operating and capital loss carryforwards of certain subsidiaries to offset future taxable earnings. As of each reporting date, the Company’s management considers new evidence, both positive and negative, which could impact management’s view with regard to future realization of deferred tax assets. Unrecognized Income Tax Benefits As of September 30, 2019 and June 30, 2019 , the Company had unrecognized income tax benefits of $8.0 million and $7.8 million , respectively, of which $7.2 million and $7.0 million , respectively, would impact the effective tax rate if recognized. During the three months ended September 30, 2019 , the Company increased its unrecognized income tax benefits related to current tax positions by $0.2 million based on information that indicates the extent to which certain tax positions are more likely than not of being sustained. Provision for Income Taxes The effective tax rate for the three months ended September 30, 2019 and 2018 was 24.6% and 28.2% , respectively. The effective tax rate for the three months ended September 30, 2019 was impacted by a $1.2 million tax benefit resulting from an adjustment of an accrual for foreign withholding taxes related to undistributed earnings as a result of the Tax Cuts and Job Act ("Tax Reform Act"), and $0.8 million excess tax expense from stock-based compensation. The effective tax rate for the three months ended September 30, 2018 was impacted by an estimated one-time tax expense of $3.4 million from a revaluation of deferred tax assets associated with executive compensation as a result of the Tax Reform Act, and $1.9 million of excess tax benefits from stock-based compensation. The effective tax rate reduction from September 30, 2018 to September 30, 2019 is also impacted by the mix of earnings by jurisdiction. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, the Company is subject to various claims and is involved in various legal, regulatory, and arbitration proceedings concerning matters arising in connection with the conduct of its business activities, including those noted in this section. Although management at present has no basis to conclude that the ultimate outcome of these proceedings, individually and in the aggregate, will materially harm the Company's financial position, results of operations, cash flows, or overall trends, legal proceedings and related government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could include substantial monetary damages. In addition, in matters for which injunctive relief or other conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices, or requiring other remedies. An unfavorable outcome may result in a material adverse impact on the Company's business, results of operations, financial position, and overall trends. The Company might also conclude that settling one or more such matters is in the best interests of its stockholders, employees, and customers, and any such settlement could include substantial payments. Competition Matters The Company is currently involved in, or where indicated, has settled, the following antitrust lawsuits that set forth allegations of anti-competitive agreements between the Company and The Reynolds and Reynolds Company ("Reynolds") relating to the manner in which the defendants control access to, and allow integration with, their respective DMS, and that seek, among other things, treble damages and injunctive relief. These lawsuits have been transferred to, or filed in, the U.S. District Court for the Northern District of Illinois for consolidated and coordinated pretrial proceedings as part of a multi-district litigation proceeding (“MDL”). Active MDL Lawsuits • Authenticom, Inc. ("Authenticom") brought a suit against CDK Global, LLC and Reynolds. Authenticom’s suit was originally filed on May 1, 2017, in the U.S. District Court for the Western District of Wisconsin. Defendants’ motions to dismiss were granted in part, and denied in part. Defendants filed answers to Authenticom’s complaint and asserted counterclaims against Authenticom on June 30, 2018; Authenticom filed motions to dismiss those counterclaims. Authenticom's motion to dismiss CDK Global, LLC’s counterclaims were granted in part and denied in part; its motion to dismiss one of Reynolds’s counterclaims was granted. On February 15, 2019, Authenticom filed an answer to both defendants’ counterclaims. • Teterboro Automall, Inc. d/b/a Teterboro Chrysler Dodge Jeep Ram (“Teterboro”) brought a putative class action suit on behalf of itself and all similarly situated automobile dealerships against CDK Global, LLC and Reynolds. Teterboro’s suit was originally filed on October 19, 2017, in the U.S. District Court for the District of New Jersey. Since that time, several more putative class actions were filed in a number of federal district courts, with substantively similar allegations; all of them have been consolidated with the MDL proceeding. On June 4, 2018, a consolidated class action complaint was filed on behalf of a putative class made up of all dealerships in the United States that directly purchased DMS and/or allegedly indirectly purchased DMS or data integration services from CDK Global, LLC or Reynolds (“Putative Dealership Class Plaintiffs”). CDK Global, LLC moved to dismiss the complaint, or in the alternative, compel arbitration of certain of the cases while staying the remainder pending the outcome of those arbitration proceedings; its motion to dismiss was granted in part and denied in part, while its motion to compel arbitration was denied. On February 22, 2019, CDK Global, LLC filed an answer to the remaining claims in Putative Dealership Class Plaintiffs’ complaint and asserted counterclaims against the Putative Dealership Class Plaintiffs. The Putative Dealership Class Plaintiffs filed a motion to dismiss CDK Global, LLC’s counterclaims; that motion has been fully briefed and remains pending before the court. On October 23, 2018, the Putative Dealership Class Plaintiffs and Reynolds filed a motion for preliminary approval of settlement and for conditional certification of the proposed settlement class. The court approved that settlement on January 22, 2019. • Loop LLC d/b/a AutoLoop (“AutoLoop”) brought suit against CDK Global, LLC on April 9, 2018, in the U.S. District Court for the Northern District of Illinois, but reserved its rights with respect to remand to the U.S. District Court for the Western District of Wisconsin at the conclusion of the MDL proceedings. On June 5, 2018, AutoLoop amended its complaint to sue on behalf of itself and a putative class action of all other automotive software vendors in the United States that purchased data integration services from CDK Global, LLC or Reynolds. CDK Global, LLC moved to compel arbitration of AutoLoop’s claims, or in the alternative, to dismiss those claims; that motion was denied on January 25, 2019. CDK Global, LLC filed an answer to AutoLoop’s complaint and asserted counterclaims against AutoLoop on February 15, 2019. AutoLoop filed an answer to CDK Global, LLC’s counterclaims on March 8, 2019. • i3 Brands, Inc. and PartProtection LLC (“i3 Brands”) brought suit against CDK Global, LLC and Reynolds. i3 Brands' suit was originally filed on February 4, 2019, in the U.S. District Court for the Southern District of California; it was subsequently transferred to the U.S. District Court for the Northern District of Illinois and consolidated as part of the MDL. On April 1, 2019, Reynolds filed a motion to dismiss i3 Brands’ suit in favor of arbitration, or in the alternative, for failure to state a claim, and CDK Global, LLC filed a motion to stay this case pending the outcome of the proposed arbitration proceedings between Reynolds and i3 Brands, or in the alternative, to dismiss certain of its claims for failure to state a claim. These motions are fully briefed and remain pending before the court. Settled MDL Lawsuits • Motor Vehicle Software Corporation (“MVSC”) brought a suit against the CDK Global, LLC (after initially naming the Company), Reynolds, and Computerized Vehicle Registration (“CVR”), a majority owned joint venture of the Company. MVSC’s suit was originally filed on February 3, 2017, in the U.S. District Court for the Central District of California. Defendants’ motions to dismiss MVSC’s second amended complaint were denied, and the defendants answered MVSC’s complaint on November 7, 2018. On October 10, 2019, CDK Global, LLC and MVSC entered into a settlement agreement that resulted in a dismissal of all claims brought by MVSC in the MDL, and CDK Global, LLC making a one-time cash payment to MVSC. • Cox Automotive, along with multiple subsidiaries (“Cox”), brought suit against CDK Global, LLC. Cox’s suit was originally filed on December 11, 2017, in the U.S. District Court for the Western District of Wisconsin. CDK Global, LLC’s motion to dismiss was granted in part and denied in part on January 25, 2019. CDK Global, LLC filed an answer to the remainder of Cox’s complaint and asserted counterclaims against Cox on February 15, 2019. Cox filed an answer to CDK Global, LLC’s counterclaims on March 8, 2019. On July 10, 2019, CDK Global, LLC and Cox entered into a settlement agreement that resulted in a dismissal of all claims brought by the affiliated parties in the MDL, and CDK Global, LLC making a one-time cash payment to Cox. The Company believes that the remaining unsettled cases are without merit and will continue to vigorously contest all asserted claims. Nonetheless, in light of the Company’s settlement with Cox and MVSC, and its continued expenditure of legal costs to contest the remaining claims, the Company has determined that a loss of some measure is probable and can be reasonably estimated. In the fourth quarter of 2019, the Company recorded a litigation provision of $90 million . As of September 30, 2019, the litigation liability was $65 million which was comprised of the MVSC settlement and the remaining unsettled cases. This estimated loss is based upon currently available information and represents the Company’s best estimate of such loss. Estimating the value of this estimated loss involved significant judgment given the uncertainty that still exists with respect to the remaining unsettled cases due to a variety of factors typical of complex, large scale litigation, including, among others: (i) formative issues, including: (a) the causes of action the plaintiffs can pursue; (b) the definition of the class(es) of plaintiffs; (c) the types of damages that can be recovered; and (d) whether plaintiffs can establish loss causation as a matter of law, all of which have yet to be determined pending the outcome of dispositive motions (e.g., motions for class certification and motions for summary judgment); (ii) discovery is ongoing and significant factual issues remain to be resolved; (iii) expert discovery with respect to, among other things, alleged antitrust injury and damages is not sufficiently advanced; (iv) the absence of productive settlement discussions to date with plaintiffs other than Cox and MVSC; and (v) the novel or uncertain nature of the legal issues presented. For these same reasons, the Company cannot reasonably estimate a maximum potential loss exposure at this time. In addition, the Company’s estimate does not incorporate or reflect the potential value of the Company’s counterclaims against certain of the plaintiffs in the ongoing cases. The legal proceedings underlying the estimated litigation liability will change from time to time and actual results may vary significantly from the estimate. As noted above, an adverse result in any of the remaining cases could have a material adverse effect on the Company's business, results of operations, financial condition, or liquidity. On June 22, 2017, the Company received from the FTC a Civil Investigative Demand consisting of specifications calling for the production of documents relating to any agreements between the Company and Reynolds. Parallel document requests have been received from certain states' Attorneys General. Since 2017, the Company has engaged in continuing communication with and received subsequent requests from the FTC related to its investigation. The Company is responding to the requests and no proceedings have been instituted. The Company believes there has not been any conduct by the Company or its current or former employees that would be actionable under the antitrust laws in connection with the agreements between the Company and Reynolds or otherwise. At this time, the Company does not have sufficient information to predict the outcome of, or the cost of responding to or resolving, these investigations. Other Commitments and Contingencies In the normal course of business, the Company may enter into contracts in which the Company makes representations and warranties that relate to the performance of the Company’s services and products. The Company does not expect any material losses related to such representations and warranties. The Company has provided approximately $27.6 million of guarantees as of September 30, 2019 in the form of surety bonds issued to support certain licenses and contracts which require a surety bond as a guarantee of performance of contractual obligations. In general, the Company would only be liable for the amount of these guarantees in the event the Company defaulted in performing the obligations under each contract, of which, the probability is remote. The Company had a total of $2.4 million in letters of credit outstanding as of September 30, 2019 primarily in connection with insurance programs and its foreign subsidiaries. |
Financial Data by Segment
Financial Data by Segment | 3 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Financial Data by Segment | Financial Data by Segment The Company is organized into two main operating groups, CDK North America and CDK International, which are also reportable segments. The Company's previously reported Advertising North America segment has been classified as discontinued operations for all periods presented. Discontinued operations also includes the Company's mobile advertising and website services businesses, the results of which were previously reported within the CDKNA segment. For additional information refer to Note 4, Discontinued Operations. The primary components of the Other segment are corporate allocations and other expenses not recorded in the segment results, such as stock-based compensation expense, corporate costs, interest expense, costs attributable to the business transformation plan, and certain unallocated expenses. Certain expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. Revenue by category by segment was as follows: Revenues Three Months Ended September 30, 2019 CDKNA CDKI Total Subscription $ 332.4 $ 67.7 $ 400.1 On-site licenses and installation 2.1 4.5 6.6 Transaction 42.7 — 42.7 Other 40.5 4.7 45.2 Total revenue $ 417.7 $ 76.9 $ 494.6 Revenues Three Months Ended September 30, 2018 CDKNA CDKI Total Subscription $ 300.9 $ 66.6 $ 367.5 On-site licenses and installation 1.4 8.0 9.4 Transaction 41.0 — 41.0 Other 24.4 4.0 28.4 Total revenue $ 367.7 $ 78.6 $ 446.3 Earnings before income taxes by segment was as follows: Earnings before income taxes Three Months Ended September 30, 2019 2018 CDKNA $ 144.2 $ 158.5 CDKI 15.2 18.8 Other (55.4 ) (70.8 ) Total earnings before income taxes $ 104.0 $ 106.5 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect assets, liabilities, revenues, and expenses that are reported in the accompanying financial statements and footnotes thereto. Actual results may differ from those estimates and assumptions. |
Funds receivable and funds held for clients and client fund obligations | Funds receivable and funds held for clients represent amounts received or expected to be received from clients in advance of performing titling and registration services on behalf of those clients. These amounts are classified within other current assets on the consolidated balance sheets. The total amount due to remit for titling and registration obligations with the department of motor vehicles is recorded to client fund obligations which is classified as accrued expenses and other current liabilities on the consolidated balance sheets. |
Internal Use Software | The Company’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’s policy also provides for the capitalization of certain payroll and payroll-related costs for employees who are directly associated with the 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 impracticable to separate these costs from normal maintenance activities. The Company amortizes internal use software typically over a three to five year life. |
Computer software to be sold, leased, or otherwise marketed | The Company's policy provides for the capitalization of certain costs of computer software to be sold, leased, or otherwise marketed. The Company'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 the general release of the software. Maintenance-related costs are expensed as incurred. |
Fair value of financial instruments | The Company determines the fair value of financial instruments in accordance with accounting standards pertaining to fair value measurements. Such standards define fair value and establish a framework for measuring fair value in accordance with GAAP. Cash and cash equivalents, accounts receivable, other current assets, accounts payable, and other current liabilities are reflected in the consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments. The carrying value of the Company's revolving credit facility and term loan facilities (as described in Note 9), including accrued interest, approximates fair value based on the Company's current estimated incremental borrowing rate for similar types of arrangements. |
Recently Adopted/Issued Accounting Pronouncement | Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract," which aligns the accounting for implementation cost incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. ASU 2018-15 is effective for fiscal years, and interim periods beginning after December 15, 2019, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. Early adoption is permitted. The Company early adopted this standard on July 1, 2019, using the prospective approach and applied this guidance to all implementation costs incurred after the date of adoption. In February 2016, the FASB issued ASC 842. Refer to Note 10, Leases, for the required disclosures related to the adoption of this standard. Recently Issued Accounting Pronouncements In November 2018, the FASB issued ASU 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606" to resolve the diversity in practice concerning the manner in which entities account for transactions based on their assessment of the economics of a collaborative arrangement. ASU 2018-18 is effective for fiscal years, and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently in the process of evaluating the potential impact of the adoption of ASU 2018-18 on its consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table summarizes the comparative financial results of discontinued operations which are presented as Net earnings from discontinued operations on the Consolidated Statements of Operations: Three months Ended September 30, 2019 2018 Revenues $ 85.7 $ 108.2 Expenses: Cost of revenues 67.0 78.4 Selling, general and administrative expenses 11.1 7.1 Restructuring expenses — 1.4 Total expenses 78.1 86.9 Earnings before income taxes 7.6 21.3 Provision for income taxes (1.9 ) (5.5 ) Net earnings from discontinued operations $ 5.7 $ 15.8 The total assets and liabilities held for sale related to discontinued operations are stated separately in the consolidated balance sheets and comprised the following items: September 30, 2019 June 30, 2019 Assets: Prepaid and other current assets $ 1.0 $ 1.1 Property, plant and equipment, net 2.3 2.3 Goodwill 59.4 59.4 Intangible assets, net 38.1 35.6 Other assets 3.0 0.2 Total current assets held for sale $ 103.8 $ 98.6 Liabilities: Deferred revenues $ 1.6 $ 0.8 Accrued expenses and other current liabilities 4.7 0.7 Other liabilities 0.8 0.4 Total current liabilities held for sale $ 7.1 $ 1.9 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table provides information about accounts receivables, contract assets, and contract liabilities from contracts with customers: September 30, 2019 June 30, 2019 Accounts receivable (including unbilled receivables) $ 410.4 $ 412.3 Short-term contract assets (included in other current assets) 29.8 29.9 Long-term contract assets (included in other assets) 24.0 20.2 Short-term contract liabilities (included in short-term deferred revenue) (111.2 ) (124.8 ) Long-term contract liabilities (included in long-term deferred revenue) (74.2 ) (68.4 ) Net contract assets/(liabilities) $ (131.6 ) $ (143.1 ) |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Activity for Restructuring Expenses and Related Accruals | The following table summarizes the activity for the restructuring accrual for the three months ended September 30, 2019 : Employee-Related Costs Contract Termination Costs Total Costs Balance as of June 30, 2019 $ 9.4 $ 0.1 $ 9.5 Cash payments (3.1 ) — (3.1 ) Non-cash and other adjustments (0.4 ) (0.1 ) (0.5 ) Foreign exchange (0.2 ) — (0.2 ) Balance as of September 30, 2019 $ 5.7 $ — $ 5.7 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes the components of basic and diluted earnings per share: Three Months Ended September 30, 2019 2018 Net earnings from continuing operations attributable to CDK $ 76.3 $ 74.5 Net earnings from discontinued operations 5.7 15.8 Net earnings attributable to CDK $ 82.0 $ 90.3 Weighted-average shares outstanding: Basic 121.4 129.6 Effect of employee stock options 0.1 0.3 Effect of employee restricted stock 0.5 0.5 Diluted 122.0 130.4 Net earnings attributable to CDK per share - basic: Continuing operations $ 0.63 $ 0.58 Discontinued operations 0.05 0.12 Total net earnings attributable to CDK per share - basic $ 0.68 $ 0.70 Net earnings attributable to CDK per share - diluted: Continuing operations $ 0.62 $ 0.57 Discontinued operations 0.05 0.12 Total net earnings attributable to CDK per share - diluted $ 0.67 $ 0.69 |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share | The weighted-average number of shares outstanding used in the calculation of diluted earnings per share does not include the effect of the following anti-dilutive securities. Three Months Ended September 30, 2019 2018 Stock-based awards 0.7 0.2 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | Changes in goodwill for the three months ended September 30, 2019 were as follows: CDKNA CDKI Total Balance as of June 30, 2019 $ 1,000.3 $ 356.0 $ 1,356.3 Currency translation adjustments (0.3 ) (11.9 ) (12.2 ) Balance as of September 30, 2019 $ 1,000.0 $ 344.1 $ 1,344.1 |
Components of Intangible Assets, Net | Components of intangible assets, net from continuing operations were as follows: September 30, 2019 June 30, 2019 Original Cost Accumulated Amortization Intangible Assets, net Original Cost Accumulated Amortization Intangible Assets, net Software $ 261.9 $ (133.1 ) $ 128.8 $ 250.8 $ (126.7 ) $ 124.1 Customer lists 195.3 (101.2 ) 94.1 196.6 (100.2 ) 96.4 Trademarks 7.5 (3.2 ) 4.3 7.5 (3.1 ) 4.4 Other intangibles 3.2 (2.4 ) 0.8 3.2 (2.2 ) 1.0 $ 467.9 $ (239.9 ) $ 228.0 $ 458.1 $ (232.2 ) $ 225.9 |
Estimated Amortization Expenses of the Company's Existing Intangible Assets | Estimated amortization expenses of the Company's existing intangible assets as of September 30, 2019 were as follows: Amount Nine months ending June 30, 2020 $ 54.6 Twelve months ending June 30, 2021 41.7 Twelve months ending June 30, 2022 27.4 Twelve months ending June 30, 2023 20.2 Twelve months ending June 30, 2024 15.6 Twelve months ending June 30, 2025 12.9 Thereafter 55.6 $ 228.0 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt was comprised of the following: September 30, 2019 June 30, 2019 Revolving credit facility $ — $ — Three year term loan facility, due 2021 300.0 300.0 Five year term loan facility, due 2023 285.0 288.8 3.30% senior notes, due 2019 250.0 250.0 4.50% senior notes, due 2024 500.0 500.0 5.875% senior notes, due 2026 500.0 500.0 4.875% senior notes, due 2027 600.0 600.0 5.250% senior notes due 2029 500.0 500.0 Finance lease liabilities 18.7 19.9 Unamortized debt financing costs (27.2 ) (28.5 ) Total debt and finance lease liabilities $ 2,926.5 $ 2,930.2 Current maturities of long-term debt and finance lease liabilities 271.3 270.8 Total long-term debt and finance lease liabilities $ 2,655.2 $ 2,659.4 |
Aggregate Scheduled Maturities of Long-term Debt | The Company's aggregate scheduled maturities of the long-term debt as of September 30, 2019 were as follows: Amount Twelve months ending September 30, 2020 $ 265.0 Twelve months ending September 30, 2021 315.0 Twelve months ending September 30, 2022 15.0 Twelve months ending September 30, 2023 240.0 Twelve months ending September 30, 2024 — Thereafter 2,100.0 Total debt 2,935.0 Unamortized debt financing costs (27.2 ) Total debt, net of unamortized debt financing costs $ 2,907.8 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease, Cost | The following table summarizes the components of net lease expense: Three months ended September 30, 2019 Leases classified as finance: Amortization of ROU assets $ 1.7 Interest on lease liabilities 0.2 Leases classified as operating: Lease expense 4.7 Sublease income (gross basis) (0.1 ) Unclassified leases: Short-term lease expense (including lease term of one month or less) 1.2 Variable lease expense 2.2 Total net lease expense $ 9.9 Three months ended September 30, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows paid for operating leases $ 4.5 Operating cash flows paid for interest portion of finance leases 0.2 Finance cash flows paid for principal portion of finance leases 1.5 ROU assets obtained in exchange for new operating lease liabilities 11.9 ROU assets obtained in exchange for new finance lease liabilities 0.1 |
Assets And Liabilities, Lessee | The following table presents supplemental balance sheet information related to leases as of September 30, 2019: Operating Leases Finance Leases ROU assets, net (1) $ 56.2 $ 17.7 Lease liabilities, current (2) 8.3 6.3 Lease liabilities, non-current (3) 54.9 12.4 Total lease liabilities $ 63.2 $ 18.7 (1) Included in other assets for operating leases and property, plant and equipment, net for finance leases on the consolidated balance sheets. (2) Included in accrued expenses and other current liabilities for operating leases and current maturities of long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. (3) Included in other liabilities for operating leases and long-term debt and finance lease liabilities for finance leases on the consolidated balance sheets. |
Lessee, Operating Lease, Liability, Maturity | The following table presents maturity analysis of lease liabilities as of September 30, 2019: Operating Leases Finance Leases Nine months ending June 30, 2020 $ 13.8 $ 5.4 Twelve months ending June 30, 2021 15.9 6.1 Twelve months ending June 30, 2022 13.8 5.1 Twelve months ending June 30, 2023 9.8 3.5 Twelve months ending June 30, 2024 7.9 0.1 Twelve months ending June 30, 2025 7.2 — Thereafter 10.4 — Total undiscounted lease payments $ 78.8 $ 20.2 Less: imputed interest (7.6 ) (1.5 ) Less: Lease incentive receivable (8.0 ) — Total lease liabilities $ 63.2 $ 18.7 |
Finance Lease, Liability, Maturity | The following table presents maturity analysis of lease liabilities as of September 30, 2019: Operating Leases Finance Leases Nine months ending June 30, 2020 $ 13.8 $ 5.4 Twelve months ending June 30, 2021 15.9 6.1 Twelve months ending June 30, 2022 13.8 5.1 Twelve months ending June 30, 2023 9.8 3.5 Twelve months ending June 30, 2024 7.9 0.1 Twelve months ending June 30, 2025 7.2 — Thereafter 10.4 — Total undiscounted lease payments $ 78.8 $ 20.2 Less: imputed interest (7.6 ) (1.5 ) Less: Lease incentive receivable (8.0 ) — Total lease liabilities $ 63.2 $ 18.7 |
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum operating lease commitments as of June 30, 2019 and accounted for under previous lease guidance were as follows: Amount Twelve months ending June 30, 2020 $ 16.7 Twelve months ending June 30, 2021 13.9 Twelve months ending June 30, 2022 12.5 Twelve months ending June 30, 2023 8.9 Twelve months ending June 30, 2024 6.9 Thereafter 15.8 $ 74.7 |
Sales-type Lease, Lease Income | The following summarizes components of net lease income reported within the consolidated statements of operations: Three months ended September 30, 2019 Revenues (1) $ 9.9 Cost of revenues (7.8 ) Interest income — Total lease income $ 2.1 (1) Revenues from leases are included within Other revenue |
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | The following table presents maturity analysis of the lease payments the Company expects to receive as of September 30, 2019: Amount Nine months ending June 30, 2020 $ 1.9 Twelve months ending June 30, 2021 2.4 Twelve months ending June 30, 2022 2.2 Twelve months ending June 30, 2023 1.7 Twelve months ending June 30, 2024 1.5 Twelve months ending June 30, 2025 0.3 Thereafter — Total undiscounted cash flows to be received $ 10.0 Less: imputed interest 1.1 Total lease receivable $ 8.9 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Expense and Related Income Tax Benefits | The following table represents stock-based compensation expense and the related income tax benefits for the three months ended and three months ended September 30, 2019 and 2018 : Three Months Ended September 30, 2019 2018 Cost of revenues $ 0.3 $ 0.3 Selling, general and administrative expenses 2.6 2.7 Total stock-based compensation expense $ 2.9 $ 3.0 Income tax benefit $ 0.5 $ 0.8 |
Activity Related to the Company's Incentive Equity Awards | The activity related to the Company's incentive equity awards from June 30, 2019 to September 30, 2019 consisted of the following: Time-Based Stock Options Number of Options (in thousands) Weighted Average Exercise Price (in dollars) Options outstanding as of June 30, 2019 794 $ 46.47 Options granted 334 47.13 Options exercised (68 ) 39.84 Options canceled (89 ) 58.75 Options outstanding as of September 30, 2019 971 $ 46.03 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Number of Shares (in thousands) Number of Units (in thousands) Non-vested restricted units/shares as of June 30, 2019 145 408 Restricted shares/units granted — 457 Restricted shares/units vested (120 ) (65 ) Restricted shares/units forfeited (2 ) (16 ) Non-vested restricted units/shares as of September 30, 2019 23 784 |
Share-based Compensation, Performance Shares Award Nonvested Activity | Number of Units (in thousands) Non-vested restricted units as of June 30, 2019 414 Restricted units granted 359 Restricted units forfeited (25 ) Non-vested restricted units as of September 30, 2019 748 |
Financial Data by Segment (Tabl
Financial Data by Segment (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Earnings Before Taxes, by Segment | Revenue by category by segment was as follows: Revenues Three Months Ended September 30, 2019 CDKNA CDKI Total Subscription $ 332.4 $ 67.7 $ 400.1 On-site licenses and installation 2.1 4.5 6.6 Transaction 42.7 — 42.7 Other 40.5 4.7 45.2 Total revenue $ 417.7 $ 76.9 $ 494.6 Revenues Three Months Ended September 30, 2018 CDKNA CDKI Total Subscription $ 300.9 $ 66.6 $ 367.5 On-site licenses and installation 1.4 8.0 9.4 Transaction 41.0 — 41.0 Other 24.4 4.0 28.4 Total revenue $ 367.7 $ 78.6 $ 446.3 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Earnings before income taxes by segment was as follows: Earnings before income taxes Three Months Ended September 30, 2019 2018 CDKNA $ 144.2 $ 158.5 CDKI 15.2 18.8 Other (55.4 ) (70.8 ) Total earnings before income taxes $ 104.0 $ 106.5 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | 3 Months Ended |
Sep. 30, 2019reportable_segmentoperating_segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | operating_segment | 2 |
Number of reportable segments | reportable_segment | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | |||
Funds Receivable | $ 27.8 | $ 32.3 | |
Funds Held for Clients | 11 | 9.7 | |
Client fund obligations | 38.8 | $ 42 | |
Research and Development Expense, Software (Excluding Acquired in Process Cost) | 22.1 | $ 16.7 | |
Payments to Acquire Software | $ 10.3 | $ 7.7 | |
Debt Instrument [Line Items] | |||
Weighted average remaining useful life | 7 years | ||
Long-term Debt | $ 2,907.8 | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 2,350 | ||
Fair Value, Inputs, Level 2 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, fair value disclosure | $ 2,463 | ||
Software | |||
Debt Instrument [Line Items] | |||
Weighted average remaining useful life | 3 years | ||
Minimum | Software | |||
Debt Instrument [Line Items] | |||
Weighted average remaining useful life | 3 years | ||
Maximum | Software | |||
Debt Instrument [Line Items] | |||
Weighted average remaining useful life | 5 years |
Discontinued Operations (Detail
Discontinued Operations (Details) - Digital Marketing Business - Discontinued Operations, Held-for-sale - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | $ 85.7 | $ 108.2 |
Cost of revenues | 67 | 78.4 |
Selling, general and administrative expenses | 11.1 | 7.1 |
Restructuring expenses | 0 | 1.4 |
Total expenses | 78.1 | 86.9 |
(Loss) Earnings before income taxes | 7.6 | 21.3 |
Provision from income taxes | (1.9) | (5.5) |
(Loss) Earnings from discontinued operations, net of taxes | $ 5.7 | $ 15.8 |
Discontinued Operations - Asset
Discontinued Operations - Assets and Liabilities Held-for-Sale (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Assets: | ||
Total current assets held for sale | $ 103.8 | $ 98.6 |
Digital Marketing Business | Discontinued Operations, Held-for-sale | ||
Assets: | ||
Prepaid and other current assets | 1 | 1.1 |
Property, plant and equipment, net | 2.3 | 2.3 |
Goodwill | 59.4 | 59.4 |
Intangible assets, net | 38.1 | 35.6 |
Other assets | 3 | 0.2 |
Total current assets held for sale | 103.8 | 98.6 |
Liabilities: | ||
Deferred revenues | 1.6 | 0.8 |
Accrued expenses and other current liabilities | 4.7 | 0.7 |
Other liabilities | 0.8 | 0.4 |
Total liabilities held for sale | $ 7.1 | $ 1.9 |
Revenue Contract Balances (Deta
Revenue Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2019 | Jun. 30, 2019 | Jul. 01, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable (including unbilled receivables) | $ 410.4 | $ 412.3 | $ 412.3 |
Short-term contract assets (included in other current assets) | 29.8 | 29.9 | |
Long-term contract assets (included in other assets) | 24 | 20.2 | |
Short-term contract liabilities (included in short-term deferred revenue) | (111.2) | (124.8) | (124.8) |
Long-term contract liabilities (included in long-term deferred revenue) | (74.2) | $ (68.4) | (68.4) |
Net contract assets/(liabilities) | (131.6) | $ (143.1) | |
Contract with customer, liability, revenue recognized | 119.8 | ||
Contract with customer, asset, reclassified to receivable | $ 22.5 |
Revenue Remaining Performance O
Revenue Remaining Performance Obligation (Details) $ in Millions | Sep. 30, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 2,900 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | 860 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 810 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 600 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 360 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 250 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue Costs to Obtain and Ful
Revenue Costs to Obtain and Fulfill a Contract (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jul. 01, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Capitalized Contract Cost, Net | $ 202.3 | $ 200.4 | |
Capitalized Contract Cost, Amortization | $ 20.1 | $ 19.5 | |
Capitalized Contract Cost, Amortization Period | 5 years |
Restructuring - Activity for Re
Restructuring - Activity for Restructuring Expenses and Related Accruals (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Restructuring Reserve | |
Balance as of June 30, 2019 | $ 9.5 |
Cash payments | (3.1) |
Non-cash and other adjustments | (0.5) |
Foreign exchange | (0.2) |
Balance as of September 30, 2019 | 5.7 |
Employee-Related Costs | |
Restructuring Reserve | |
Balance as of June 30, 2019 | 9.4 |
Cash payments | (3.1) |
Non-cash and other adjustments | (0.4) |
Foreign exchange | (0.2) |
Balance as of September 30, 2019 | 5.7 |
Contract Termination Costs | |
Restructuring Reserve | |
Balance as of June 30, 2019 | 0.1 |
Cash payments | 0 |
Non-cash and other adjustments | (0.1) |
Foreign exchange | 0 |
Balance as of September 30, 2019 | $ 0 |
- Components of Basic and Dilut
- Components of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||
Net earnings from continuing operations attributable to CDK | $ 76.3 | $ 74.5 |
(Loss) Earnings from discontinued operations, net of taxes | 5.7 | 15.8 |
Net earnings attributable to CDK | $ 82 | $ 90.3 |
Weighted-average shares outstanding: | ||
Basic (shares) | 121.4 | 129.6 |
Effect of employee stock options (shares) | 0.1 | 0.3 |
Effect of employee restricted stock (shares) | 0.5 | 0.5 |
Diluted (shares) | 122 | 130.4 |
Net earnings (loss) attributable to CDK per share - basic: | ||
Continuing operations (in dollars per share) | $ 0.63 | $ 0.58 |
Discontinued operations (in dollars per share) | 0.05 | 0.12 |
Total net earnings attributable to CDK per share - basic (in dollars per share) | 0.68 | 0.70 |
Net earnings (loss) attributable to CDK per share - diluted: | ||
Continuing operations (in dollars per share) | 0.62 | 0.57 |
Discontinued operations (in dollars per share) | 0.05 | 0.12 |
Total net earnings attributable to CDK per share - diluted (in dollars per share) | $ 0.67 | $ 0.69 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Securities Excluded from Computation of Diluted Earnings per Share (Details) - shares shares in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Stock-based awards | 0.7 | 0.2 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Changes In Goodwill (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Changes in Goodwill | |
Balance as of June 30, 2019 | $ 1,356.3 |
Goodwill, Foreign Currency Translation Gain (Loss) | (12.2) |
Balance as of September 30, 2019 | 1,344.1 |
Retail Solutions North America | |
Changes in Goodwill | |
Balance as of June 30, 2019 | 1,000.3 |
Goodwill, Foreign Currency Translation Gain (Loss) | (0.3) |
Balance as of September 30, 2019 | 1,000 |
CDKI | |
Changes in Goodwill | |
Balance as of June 30, 2019 | 356 |
Goodwill, Foreign Currency Translation Gain (Loss) | (11.9) |
Balance as of September 30, 2019 | $ 344.1 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Components Of Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | $ 467.9 | $ 458.1 |
Accumulated Amortization | (239.9) | (232.2) |
Intangible Assets, net | 228 | 225.9 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 261.9 | 250.8 |
Accumulated Amortization | (133.1) | (126.7) |
Intangible Assets, net | 128.8 | 124.1 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 195.3 | 196.6 |
Accumulated Amortization | (101.2) | (100.2) |
Intangible Assets, net | 94.1 | 96.4 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 7.5 | 7.5 |
Accumulated Amortization | (3.2) | (3.1) |
Intangible Assets, net | 4.3 | 4.4 |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Original Cost | 3.2 | 3.2 |
Accumulated Amortization | (2.4) | (2.2) |
Intangible Assets, net | $ 0.8 | $ 1 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 7 years | |
Amortization of Intangible Assets | $ 9.4 | $ 5.6 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 3 years | |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 13 years | |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 6 years |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Nine months ending June 30, 2020 | $ 54.6 | |
Twelve months ending June 30, 2021 | 41.7 | |
Twelve months ending June 30, 2022 | 27.4 | |
Twelve months ending June 30, 2023 | 20.2 | |
Twelve months ending June 30, 2024 | 15.6 | |
Twelve months ending June 30, 2025 | 12.9 | |
Thereafter | 55.6 | |
Intangible Assets, net | $ 228 | $ 225.9 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | May 02, 2019 | Jun. 18, 2018 | May 15, 2017 | Oct. 15, 2016 | Oct. 14, 2014 |
Debt Instrument [Line Items] | |||||||
Unamortized debt financing costs | $ (27.2) | $ (28.5) | |||||
Total debt and capital lease obligations | 2,926.5 | 2,930.2 | |||||
Current maturities of long-term debt and finance lease liabilities | 271.3 | 270.8 | |||||
Total long-term debt and finance lease liabilities | 2,655.2 | 2,659.4 | |||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | 0 | 0 | |||||
Term Loan Facilities | Three year term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | 300 | 300 | |||||
Term Loan Facilities | Five year term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | 285 | 288.8 | |||||
Senior Notes | 3.30% senior notes, due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | $ 250 | 250 | |||||
Interest rate | 3.30% | 3.80% | 3.30% | ||||
Senior Notes | 4.50% senior notes, due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | $ 500 | 500 | |||||
Interest rate | 4.50% | 5.00% | 4.50% | ||||
Senior Notes | Senior Notes Due in 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | $ 500 | 500 | |||||
Interest rate | 5.875% | 5.875% | |||||
Senior Notes | 4.875% senior notes, due 2027 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | $ 600 | 600 | |||||
Interest rate | 4.875% | 4.875% | |||||
Senior Notes | 5.250% Senior Notes, Due 2029 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | $ 500 | 500 | |||||
Interest rate | 5.25% | 5.25% | |||||
Finance lease liabilities | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt and capital lease obligations, gross | $ 18.7 | $ 19.9 |
Debt - Narrative (Details)
Debt - Narrative (Details) | May 02, 2019USD ($) | Aug. 17, 2018USD ($) | Jun. 18, 2018USD ($) | May 15, 2017USD ($) | Oct. 14, 2014USD ($) | Sep. 16, 2014USD ($)extension | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Oct. 15, 2016 |
Debt Instrument [Line Items] | |||||||||
Debt issuance costs, gross | $ 41,300,000 | $ 41,300,000 | |||||||
Accumulated amortization of debt issuance costs | 14,100,000 | 12,800,000 | |||||||
Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Revolving credit facility term extension period | 1 year | ||||||||
Revolving Credit Facility | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 0.50% | ||||||||
Revolving Credit Facility | One-Month LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.00% | ||||||||
Revolving Credit Facility | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee percentage on unused portion of the revolving credit facility | 0.15% | ||||||||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.25% | ||||||||
Revolving Credit Facility | Minimum | One-Month LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 0.25% | ||||||||
Revolving Credit Facility | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee percentage on unused portion of the revolving credit facility | 0.35% | ||||||||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 2.375% | ||||||||
Revolving Credit Facility | Maximum | One-Month LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.375% | ||||||||
Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving credit facility, maximum borrowing capacity | $ 750,000,000 | ||||||||
Revolving credit facility, Euro or Sterling sublimit | 100,000,000 | ||||||||
Long-term debt and capital lease obligations, gross | 0 | 0 | |||||||
Line of credit facility accordion feature | $ 100,000,000 | ||||||||
Line of credit, number of one-year extensions | extension | 2 | ||||||||
Term Loan Facilities | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan, face amount | $ 600,000,000 | ||||||||
Term Loan Facilities | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 3 years | ||||||||
Long-term debt and capital lease obligations, gross | $ 300,000,000 | 300,000,000 | |||||||
Loan, face amount | $ 300,000,000 | ||||||||
Annual interest rate on loan facility | 3.55% | ||||||||
Term Loan Facilities | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Long-term debt and capital lease obligations, gross | $ 285,000,000 | 288,800,000 | |||||||
Loan, face amount | $ 300,000,000 | ||||||||
Periodic payment of principal, in percentage, term loan | 1.25% | ||||||||
Annual interest rate on loan facility | 3.68% | ||||||||
Term Loan Facilities | Federal Funds Rate | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 0.50% | ||||||||
Term Loan Facilities | Federal Funds Rate | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 0.50% | ||||||||
Term Loan Facilities | One-Month LIBOR | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.00% | ||||||||
Term Loan Facilities | One-Month LIBOR | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.00% | ||||||||
Term Loan Facilities | Minimum | London Interbank Offered Rate (LIBOR) | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.125% | ||||||||
Term Loan Facilities | Minimum | London Interbank Offered Rate (LIBOR) | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.25% | ||||||||
Term Loan Facilities | Minimum | One-Month LIBOR | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 0.125% | ||||||||
Term Loan Facilities | Minimum | One-Month LIBOR | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 0.25% | ||||||||
Term Loan Facilities | Maximum | London Interbank Offered Rate (LIBOR) | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 2.25% | ||||||||
Term Loan Facilities | Maximum | London Interbank Offered Rate (LIBOR) | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 2.375% | ||||||||
Term Loan Facilities | Maximum | One-Month LIBOR | Three year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.25% | ||||||||
Term Loan Facilities | Maximum | One-Month LIBOR | Five year term loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, line of credit | 1.375% | ||||||||
Credit Facilities | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum ratio of indebtedness to EBITDA | 375.00% | ||||||||
Minimum ratio of EBITDA to Interest expense | 300.00% | ||||||||
Credit Facilities | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum aggregate principal amount of accelerated maturity of other indebtedness allowed | $ 75,000,000 | ||||||||
Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, subject to change of control provision and decline in rating | 101.00% | ||||||||
Senior Notes | 3.30% senior notes, due 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 250,000,000 | 250,000,000 | |||||||
Loan, face amount | $ 250,000,000 | ||||||||
Interest rate | 3.30% | 3.30% | 3.80% | ||||||
Senior Notes | 4.50% senior notes, due 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 500,000,000 | 500,000,000 | |||||||
Loan, face amount | $ 500,000,000 | ||||||||
Interest rate | 4.50% | 4.50% | 5.00% | ||||||
Senior Notes | Senior Notes Due in 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 500,000,000 | 500,000,000 | |||||||
Loan, face amount | $ 500,000,000 | ||||||||
Interest rate | 5.875% | 5.875% | |||||||
Senior Notes | 4.875% senior notes, due 2027 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 600,000,000 | 600,000,000 | |||||||
Interest rate | 4.875% | 4.875% | |||||||
Senior Notes | 4.875% senior notes, due 2027 [Domain] | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan, face amount | $ 600,000,000 | ||||||||
Senior Notes | 5.250% Senior Notes, Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt and capital lease obligations, gross | $ 500,000,000 | $ 500,000,000 | |||||||
Loan, face amount | $ 500,000,000 | ||||||||
Interest rate | 5.25% | 5.25% | |||||||
Senior Notes | Debt Instrument, Redemption, Period One | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period One | Minimum | Senior Notes Due in 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period One | Minimum | 4.875% senior notes, due 2027 [Domain] | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period One | Minimum | 5.250% Senior Notes, Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | Minimum | Senior Notes Due in 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 102.938% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | Minimum | 4.875% senior notes, due 2027 [Domain] | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 102.438% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | Minimum | 5.250% Senior Notes, Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 102.625% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Three | Minimum | Senior Notes Due in 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 101.958% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Three | Minimum | 4.875% senior notes, due 2027 [Domain] | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 101.625% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Three | Minimum | 5.250% Senior Notes, Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 101.75% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Four | Minimum | Senior Notes Due in 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.979% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Four | Minimum | 4.875% senior notes, due 2027 [Domain] | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.813% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Four | Minimum | 5.250% Senior Notes, Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.875% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Five | Minimum | Senior Notes Due in 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Five | Minimum | 4.875% senior notes, due 2027 [Domain] | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% | ||||||||
Senior Notes | Debt Instrument, Redemption, Period Five | Minimum | 5.250% Senior Notes, Due 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage, minimum | 100.00% |
Debt - Schedule of Maturities (
Debt - Schedule of Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Debt Disclosure [Abstract] | ||
Twelve months ending September 30, 2020 | $ 265 | |
Twelve months ending September 30, 2021 | 315 | |
Twelve months ending September 30, 2022 | 15 | |
Twelve months ending September 30, 2023 | 240 | |
Twelve months ending September 30, 2024 | 0 | |
Thereafter | 2,100 | |
Total debt | 2,935 | |
Unamortized debt financing costs | (27.2) | $ (28.5) |
Total debt, net of unamortized debt financing costs | $ 2,907.8 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jul. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease, cost | $ 9.9 | ||
Rent expense | $ 9.6 | ||
Operating lease, weighted average remaining lease term | 6 years | ||
Finance lease, weighted average remaining lease term | 3 years | ||
Operating lease, weighted average discount rate, percent | 3.60% | ||
Finance lease, weighted average discount rate, percent | 4.60% | ||
Total lease receivable | $ 8.9 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
ROU assets, net | $ 68.2 | ||
Lease liability | $ 76.8 | ||
Cost of revenues | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease, cost | 4.6 | ||
Selling, general and administrative expenses | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease, cost | 5.1 | ||
Interest Expense | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease, cost | 0.2 | ||
Accounts Receivable | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total lease receivable | 2.3 | ||
Other Assets | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total lease receivable | $ 6.6 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Amortization of ROU assets | $ 1.7 |
Interest on lease liabilities | 0.2 |
Lease expense | 4.7 |
Sublease income (gross basis) | (0.1) |
Short-term lease expense (including lease term of one month or less) | 1.2 |
Variable lease expense | 2.2 |
Total net lease expense | $ 9.9 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows paid for operating leases | $ 4.5 |
Operating cash flows paid for interest portion of finance leases | 0.2 |
Finance cash flows paid for principal portion of finance leases | 1.5 |
ROU assets obtained in exchange for new operating lease liabilities | 11.9 |
ROU assets obtained in exchange for new finance lease liabilities | $ 0.1 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) $ in Millions | Sep. 30, 2019USD ($) |
Operating Leases | |
ROU assets, net | $ 56.2 |
Lease liabilities, current | 8.3 |
Lease liabilities, non-current | 54.9 |
Total lease liabilities | 63.2 |
Finance Leases | |
ROU assets, net | 17.7 |
Lease liabilities, current | 6.3 |
Lease liabilities, non-current | 12.4 |
Total lease liabilities | $ 18.7 |
Leases - Maturity Schedule for
Leases - Maturity Schedule for Finance and Operating Leases (Details) $ in Millions | Sep. 30, 2019USD ($) |
Operating Leases | |
Nine months ending June 30, 2020 | $ 13.8 |
Twelve months ending June 30, 2021 | 15.9 |
Twelve months ending June 30, 2022 | 13.8 |
Twelve months ending June 30, 2023 | 9.8 |
Twelve months ending June 30, 2024 | 7.9 |
Twelve months ending June 30, 2025 | 7.2 |
Thereafter | 10.4 |
Total undiscounted lease payments | 78.8 |
Less: imputed interest | (7.6) |
Less: Lease incentive receivable | (8) |
Total lease liabilities | 63.2 |
Finance Leases | |
Nine months ending June 30, 2020 | 5.4 |
Twelve months ending June 30, 2021 | 6.1 |
Twelve months ending June 30, 2022 | 5.1 |
Twelve months ending June 30, 2023 | 3.5 |
Twelve months ending June 30, 2024 | 0.1 |
Twelve months ending June 30, 2025 | 0 |
Thereafter | 0 |
Total undiscounted lease payments | 20.2 |
Less: imputed interest | (1.5) |
Less: Lease incentive receivable | 0 |
Total lease liabilities | $ 18.7 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments Under Previous Guidance (Details) $ in Millions | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Twelve months ending June 30, 2020 | $ 16.7 |
Twelve months ending June 30, 2021 | 13.9 |
Twelve months ending June 30, 2022 | 12.5 |
Twelve months ending June 30, 2023 | 8.9 |
Twelve months ending June 30, 2024 | 6.9 |
Thereafter | 15.8 |
Total | $ 74.7 |
Leases - Lessor, Lease Income (
Leases - Lessor, Lease Income (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Revenues | $ 9.9 |
Cost of revenues | (7.8) |
Interest income | 0 |
Total lease income | $ 2.1 |
Leases - Lessor, Fiscal Year Ma
Leases - Lessor, Fiscal Year Maturity Schedule (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Nine months ending June 30, 2020 | $ 1.9 |
Twelve months ending June 30, 2021 | 2.4 |
Twelve months ending June 30, 2022 | 2.2 |
Twelve months ending June 30, 2023 | 1.7 |
Twelve months ending June 30, 2024 | 1.5 |
Twelve months ending June 30, 2025 | 0.3 |
Thereafter | 0 |
Total undiscounted cash flows to be received | 10 |
Less: imputed interest | 1.1 |
Total lease receivable | $ 8.9 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 2.9 | $ 3 |
Risk-free interest rate | 1.67% | |
Weighted-average volatility factor | 24.69% | |
Equity Classified Awards Expense | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 3.7 | 3.5 |
Liability Classified Awards Expense | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | (0.8) | $ (0.5) |
Employee Stock Option | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total unrecognized compensation cost | $ 6.2 | |
Weighted-average remaining requisite vesting period | 2 years 8 months 12 days | |
Fair value assumptions, expected volatility rate | 25.87% | |
Risk-free interest rate | 1.68% | |
Fair value assumptions, expected dividend rate | 1.27% | |
Fair value assumptions, expected term | 6 years | |
Options granted (in shares) | 334,000 | |
Performance Based Stock Options | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Options granted (in shares) | 0 | |
Performance-Based Restricted Stock Units | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Grants in period (in shares) | 359,000 | |
Award vesting period | 3 years | |
Restricted Stock Units | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total unrecognized compensation cost | $ 58.3 | |
Weighted-average remaining requisite vesting period | 2 years 1 month 6 days | |
Restricted Stock | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total unrecognized compensation cost | $ 0.4 | |
Weighted-average remaining requisite vesting period | 10 months 24 days |
Stock-Based Compensation - Comp
Stock-Based Compensation - Components Of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Pre-tax stock-based compensation expense | $ 2.9 | $ 3 |
Income tax benefit | 0.5 | 0.8 |
Cost of revenues | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pre-tax stock-based compensation expense | 0.3 | 0.3 |
Selling, general and administrative expenses | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pre-tax stock-based compensation expense | $ 2.6 | $ 2.7 |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity Related to the Company's Incentive Equity Awards (Details) shares in Thousands | 3 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Employee Stock Option | |
Number of Options (in shares) | |
Options outstanding as of June 30, 2017 (in shares) | 794 |
Options granted (in shares) | 334 |
Options exercised (in shares) | (68) |
Options canceled (in shares) | (89) |
Options outstanding as of September 30, 2017 (in shares) | 971 |
Weighted Average Exercise Price (in usd per share) | |
Options outstanding as of June 30, 2017 (usd per share) | $ / shares | $ 46.47 |
Options granted (usd per share) | $ / shares | 47.13 |
Options exercised (usd per share) | $ / shares | 39.84 |
Options canceled (usd per share) | $ / shares | 58.75 |
Options outstanding as of September 30, 2017 (usd per share) | $ / shares | $ 46.03 |
Time-Based Restricted Stock | |
Restricted Stock and Restricted Stock Units (in shares) | |
Non-vested restricted shares/units as of June 30, 2017 (in shares) | 145 |
Grants in period (in shares) | 0 |
Restricted shares/units vested (in shares) | (120) |
Restricted shares/units forfeited (in shares) | (2) |
Non-vested restricted shares/units as of September 30, 2017 (in shares) | 23 |
Time-Based Restricted Stock Units | |
Restricted Stock and Restricted Stock Units (in shares) | |
Non-vested restricted shares/units as of June 30, 2017 (in shares) | 408 |
Grants in period (in shares) | 457 |
Restricted shares/units vested (in shares) | (65) |
Restricted shares/units forfeited (in shares) | (16) |
Non-vested restricted shares/units as of September 30, 2017 (in shares) | 784 |
Performance-Based Restricted Stock Units | |
Restricted Stock and Restricted Stock Units (in shares) | |
Non-vested restricted shares/units as of June 30, 2017 (in shares) | 414 |
Grants in period (in shares) | 359 |
Restricted shares/units forfeited (in shares) | (25) |
Non-vested restricted shares/units as of September 30, 2017 (in shares) | 748 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowances | $ 10.3 | $ 10.3 | |
Unrecognized income tax benefits | 8 | 7.8 | |
Unrecognized income tax benefits that would impact effective tax rate, if recognized | 7.2 | $ 7 | |
Unrecognized tax benefits, increase resulting from current period tax positions | $ 0.2 | ||
Effective tax rate | 24.60% | 28.20% | |
Tax Cuts and Jobs Act of 2017, income tax benefit | $ 1.2 | $ (3.4) | |
Other tax expense (benefit) | $ 0.8 | ||
Share-based compensation, excess tax benefit, amount | $ 1.9 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingency, estimate of possible loss | $ 65 | $ 90 |
Surety bonds outstanding, amount | 27.6 | |
Letters of credit outstanding, amount | $ 2.4 |
Financial Data by Segment - Re
Financial Data by Segment - Revenue and Earnings Before Taxes by Segment (Details) $ in Millions | 3 Months Ended | |
Sep. 30, 2019USD ($)reportable_segmentoperating_segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | operating_segment | 2 | |
Number of reportable segments | reportable_segment | 2 | |
Revenues | $ 494.6 | $ 446.3 |
Earnings before income taxes | 104 | 106.5 |
Other | ||
Segment Reporting Information [Line Items] | ||
Earnings before income taxes | (55.4) | (70.8) |
CDK North America | ||
Segment Reporting Information [Line Items] | ||
Revenues | 417.7 | 367.7 |
CDK North America | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Earnings before income taxes | 144.2 | 158.5 |
CDKI | ||
Segment Reporting Information [Line Items] | ||
Revenues | 76.9 | 78.6 |
CDKI | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Earnings before income taxes | 15.2 | 18.8 |
Subscription | ||
Segment Reporting Information [Line Items] | ||
Revenues | 400.1 | 367.5 |
Subscription | CDK North America | ||
Segment Reporting Information [Line Items] | ||
Revenues | 332.4 | 300.9 |
Subscription | CDKI | ||
Segment Reporting Information [Line Items] | ||
Revenues | 67.7 | 66.6 |
On-site licenses and installation | ||
Segment Reporting Information [Line Items] | ||
Revenues | 6.6 | 9.4 |
On-site licenses and installation | CDK North America | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2.1 | 1.4 |
On-site licenses and installation | CDKI | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4.5 | 8 |
Transaction | ||
Segment Reporting Information [Line Items] | ||
Revenues | 42.7 | 41 |
Transaction | CDK North America | ||
Segment Reporting Information [Line Items] | ||
Revenues | 42.7 | 41 |
Transaction | CDKI | ||
Segment Reporting Information [Line Items] | ||
Revenues | 0 | 0 |
Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | 45.2 | 28.4 |
Other | CDK North America | ||
Segment Reporting Information [Line Items] | ||
Revenues | 40.5 | 24.4 |
Other | CDKI | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 4.7 | $ 4 |
Uncategorized Items - cdkq1fy20
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 109,300,000 |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 109,300,000 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (400,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 109,700,000 |