SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
October 27, 1995
Date of Report (Date of earliest event reported)
AUTOMATIC DATA PROCESSING, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-5397 22-1467904
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) (Identification No.)
One ADP Boulevard, Roseland, New Jersey 07068
(Address of principal executive offices)
Registrant's telephone number, including area code (201) 994-5000
(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) On October 27, 1995, the Registrant acquired control of the
GSI Group (as defined below) when it announced that, pursuant to an
ongoing tender offer that was commenced on October 16, 1995 for all
of the outstanding shares of GSI Participations SCA ("GPSCA") not
held by GSI Associes S.A.("GA"), and all of the shares of GA, it
had acquired control over 80% of the outstanding shares of GPSCA.
The shares of GPSCA held by GA are the only asset held by GA. The
Registrant expects to acquire control of approximately 100% of the
outstanding shares of GPSCA by January 15, 1996, the expiration
date for the ongoing tender offer. If the Registrant purchases all
of the shares of GPSCA not held by GA and all of the shares of GA,
the total purchase price will be approximately FF 2.3 billion
(approximately US $460 million). The purchase price was determined
by arms-length negotiations between representatives of the
Registrant, the shareholders of GPSCA and the shareholders of GA,
respectively, following a competitive bidding process, and the
funds used and to be used by the Registrant in connection with the
acquisition of the aforementioned shares of GPSCA and GA are from
the Registrant's working capital. Prior to the Registrant's
acquisition of the aforementioned shares of GPSCA and GA, such
shares were held primarily by institutional investors and
individuals who are employees or former employees of GSI Group (as
defined below).
GPSCA, together with its subsidiaries (collectively, the "GSI
Group"), is the European leader in providing payroll and human
resource information services. GSI Group also provides facilities
management, banking, clearing and other information services.
For a more complete description of GSI Group, see the
Registrant's press release which is filed as Exhibit B-1 to this
Form 8-K.
(b) The assets acquired by the Registrant as a result of the
acquisition described herein, which assets consist primarily of
property, plant, equipment, accounts receivable and certain
intangible property, are used by GSI Group in providing the
services described in Item 2(a) above, and the Registrant intends
to continue such use of such assets.
Item 7. Financial Statements and Exhibits.
(a) The annual audited financial statements of the acquired
business which are required by Item 7(a) of this Form 8-K are
filed as Exhibit C-1 to this Form 8-K. It is impracticable at
this time for the Registrant to provide the unaudited financial
statements for the interim periods which are required by Item
7(a) of this Form 8-K. Such unaudited financial statements for
the interim periods will be filed by the Registrant as an
amendment to this Form 8-K as soon as practicable, but in any
event not later than 60 days after the date hereof.
(b) It is impracticable at this time for the Registrant to
provide the pro forma financial information relative to the
acquired business which is required by Item 7(b) of this Form 8-
K. Such pro forma financial information will be filed by the
Registrant as an amendment to this Form 8-K as soon as
practicable, but in any event not later than 60 days after the
date hereof. <PAGE>
<PAGE>
(c) The following are filed as exhibits to this Form 8-K:
Exhibit A-1 Letter dated August 25, 1995 from the
Registrant to Maison Lazard et Cei, financial
advisors to the shareholders of GPSCA and GA,
setting forth the terms and conditions of the
acquisition (along with Exhibits A, B and C
attached thereto).
Exhibit B-1 Press Release dated October 27, 1995.
Exhibit C-1 Audited Financial Statements of Acquired
Business which are required by Item 7(a) of
Form 8-K.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
AUTOMATIC DATA PROCESSING, INC.
(Registrant)
By: /s/ James B. Benson
Name: James B. Benson
Title: Corporate Vice President
Date: November 6, 1995
<PAGE>
INDEX TO EXHIBITS
Exhibit A-1 Letter dated August 25, 1995 from the
Registrant to Maison Lazard et Cie, financial
advisors to the shareholders of GPSCA and GA,
setting forth the terms and conditions of the
acquisition (along with Exhibits A, B and C
attached thereto).
Exhibit B-1 Press Release dated October 27, 1995
Exhibit C-1 Audited Financial Statements of Acquired
Business which are required by Item 7(a) of
Form 8-K
<PAGE>
EXHIBIT A-1
Automatic Data Processing, Inc.
One ADP Boulevard
Roseland, NJ 07068
U.S.A
August 25,1995
Maison Lazard et Cie
12 avenue Percier
75008 Paris
Dear Sirs,
1. Subject to the terms and conditions of this letter, we
hereby offer, irrevocably and with intent to be legally bound, to
purchase, at the price specified in paragraph 5:
(i) all of the shares of GSI Participations SCA
("GPSCA") not held by GSI Associes S.A. ("GA"); and
(ii) all of the shares of GA.
2. The present offer is subject to the condition of the holding
of a meeting of the Board of Directors of GA, to be convened no
later than 7 p.m., Paris time, August 25, 1995, at which said
Board shall:
(i) endorse the present offer;
(ii) convene a meeting of the shareholders of GA to be
held no later than October 6, 1995 for the purpose
of:
- endorsement of the transactions
contemplated herein; and
- amendment of the by-laws of GA to the extent
necessary to implement the transactions
contemplated herein (including if so requested
by ADP the right of GPSCA to replace GA as
associe commandite of GPSCA or to terminate the
commandite arrangement); and
(iii) approve a report to the shareholders which
recommends the approval of the aforesaid
transactions and amendments of the by-laws of GA
referred to in (ii) above.
3. The present offer is subject to the additional condition
that, on or before September 6, 1995, shareholders of GPSCA
representing no less than 67% of the capital of said company
(including all of the Individuals listed in Exhibit A) provide to
ADP:
<PAGE>
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3.1 - representations substantially in the form of
Exhibit B;
3.2 - a call option with respect to their shares which,
subject to the provisions of paragraph 11, can be exercised by
ADP at its sole discretion during a period of two years from the
date hereof, at the price defined in paragraph 5 below;
3.3 - in the event of a capital increase of GPSCA,
a commitment either to transfer all of such shareholder's
subscription rights to ADP or to exercise such rights (in
which event the shares issued pursuant to such exercise of
rights will become subject to the aforesaid call option); and
a commitment not to support any capital increase reserved to
a third party;
3.4 - a commitment not to tender their shares to
any third party until the earlier of (i) two years from the
date hereof, or (ii) the listing of GPSCA shares on the cote
officielle or second marche; and
3.5 - in the event of a listing of GPSCA shares as
provided in the preceding subparagraph, a right of first
refusal entitling ADP to acquire said shares (i) at the
listed price on the date upon which said shareholder proposes
to sell such shares, if the shareholder proposes to sell its
shares on the market or (ii) at the price offered by a third
party, if the shareholder proposes to sell its shares to such
third party. Such right of first refusal shall expire two years
following the date hereof.
4. At its aforesaid meeting on August 25, 1995, the Board
of Directors of GA shall undertake on behalf of GA and GPSCA
that:
4.1 neither of such companies shall, directly or
indirectly, enter into any discussion, negotiation or
agreement with any third party pertaining to the sale of any
shares in GA or GPSCA ; and
4.2 each such company shall exercise its best
efforts, to the extent permitted by law, in order to convince
its shareholders to tender their shares to ADP so as to
permit ADP to obtain no less than 67% of the shares of said
company.
5. The aggregate purchase price to be paid by ADP for one
hundred per cent of the equity securities of GA and of all of
the equity securities of GPSCA not held by GA is 2.3 billion
French Francs, it being understood:
5.1 that the respective prices paid for each share
of GA and each share of GPSCA shall be computed by Lazard
Freres & Cie on a proportional basis taking into account GA's
holdings of GPSCA shares, and such determination shall be
definitive and binding on all parties; and
<PAGE>
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5.2 that said purchase prices may be adjusted in
accordance with Exhibit C.
Such purchase prices shall be paid to the tendering
shareholder in cash, immediately upon surrender of the
relevant shares minus the advisory fee payable to Maison
Lazard & Cie pursuant to its engagement agreement with GPSCA
(the relevant terms of which shall be communicated to ADP by
GPSCA), which fee shall be withheld from such payment and
paid directly to Maison Lazard & Cie.
6. ADP undertakes to exercise its best efforts in order to
obtain promptly all governmental approvals necessary in order
to consummate the transactions discussed herein. ADP
represents that it is duly authorized to carry out the
transactions herein contemplated without any further action
by its Board of Directors or any other body of ADP.
7. Subject only to ADP's receipt of governmental approvals
as provided in paragraph 6, to favorable action by the Board
of Directors and the shareholders of GA and GPSCA as provided
in paragraphs 2 and 3 above, and to the provisions of
paragraph 11, ADP shall purchase at the price defined in
paragraph 5 all of the shares of GA and GPSCA that are
tendered to it within 30 days of fulfillment of the last of
such conditions. In the event that such 30 day period does
not commence until after November 15, 1995 (otherwise than as
a result of ADP's failure to secure such governmental
approvals on or before such date), ADP's obligations shall be
subject to the additional condition that there shall have
been no material adverse change affecting the business or
financial condition of GPSCA between the date hereof and the
date of commencement of such 30-day period.
8. If the shareholders of GA fail to vote favorably any of
the resolutions contemplated in paragraph 2 above, ADP shall
nonetheless be required to offer to purchase at the price
provided for in paragraph 5 all of the GA shares and all of
the GPSCA shares not held by GA provided only that:
8.1 GA ceases to be the associe commandite of
GPSCA at any time within the two year period following the
date hereof;
8.2 there shall have been no material adverse
change affecting the business or financial condition of GPSCA
between the date hereof and the date of termination of GA's
status as associe commandite of GPSCA, it being understood
that, subject to the provisions of paragraph 11, ADP shall be
required to purchase all shares tendered during the period of
90 days following the date of such termination of GA's status
as associe commandite effective as of the last day of such
period;
<PAGE>
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8.3 the obligation of ADP to acquire the GA shares
under this paragraph 8 shall be subject to the additional
conditions that (i) GA shall have adopted the amendments to
its by-laws necessary in order to make such acquisition
possible and that (ii) a majority of the shares of GA are
tendered to ADP prior to expiration of such 90-day period. In
the event that either of such conditions is not satisfied
within such period, ADP shall have no further obligation with
respect to the GA shares but shall continue to be obligated
to acquire the GPSCA shares as provided elsewhere herein.
9. Until the date of the shareholders' meeting of GA
contemplated in paragraph 2 or, if the GA shareholders adopt
at the said meeting the resolutions contemplated in said
paragraph 2, until the end of the 30-day period mentioned in
paragraph 7, GA and GPSCA and all companies directly or
indirectly under their control shall be managed in the
ordinary course of business only and shall refrain (i) from
purchasing or selling any substantial asset outside of the
ordinary course of business (with the exception of the
Businesses listed in Table 1 of Exhibit C), (ii) from
modifying their respective bylaws or capital structure in any
respect whatsoever (except as provided for herein), and (iii)
from deciding any distribution of dividends and/or assets,
except as permitted pursuant to paragraph 10. GA and GPSCA
shall, until completion of all actions contemplated herein,
keep ADP informed of all steps taken by GA and GPSCA to meet
the conditions set forth herein, and shall provide to ADP
copies of their respective management accounts and of all
audited accounts.
10. There shall be no declaration or distribution of
dividends by GPSCA in excess of the amount mandated under
article 29 of GPSCA's statutes (as presently in effect)
without the prior consent of ADP prior to expiration of the
period of two years from the date hereof, it being
understood, however, that ADP acknowledges and accepts the
advance on dividends paid in July 1995.
11. ADP agrees not to make any purchase of GA or GPSCA
shares outside the 30-day period specified in paragraph 7 and
the 90-day period specified in paragraph 8 without the prior
consent of Lazard Freres & Cie, which shall not be withheld
unless the effect of such proposed sale outside such periods
would, in the discretionary judgement of Lazard Freres & Cie,
be to distort the price adjustment computation contemplated
in Exhibit C. Notwithstanding any other provisions of this
letter, ADP agrees not to cause either of such periods to
commence prior to October 16, 1995 without the consent of
GPSCA.
<PAGE>
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12. This offer shall be governed by and interpreted in
accordance with French law.
Signed in 5 originals.
Fred D. Anderson, Jr.
Corporate Vice President,
Chief Financial Officer
G. Harry Durity
Corporate Vice President,
Worldwide Business Development
<PAGE>
EXHIBIT A
Individuals
Jacques Valet
Philippe Gluntz
Ehran Dilman
Andoni Itturioz
Christian Manivel
Georges Raffoul
<PAGE>
EXHIBIT B
Representations of certain sellers of HPSCA shares
1. The seller is the sole owner of the HPSCA shares transferred by
it. All such shares are free and clear of all liens and other
encumbrances. The seller is not bound by any agreement limiting
seller's right to transfer the shares to ADP.
2. The seller has full capacity to transfer the shares. The seller
has obtained all third party consents required in order for the
shares to be validly transferred to ADP (other than governmental
authorizations, which shall be the sole responsibility of ADP).
<PAGE>
EXHIBIT C
Purchase price adjustment mechanism
A purchase price adjustment shall be computed by Lazard
Freres & Cie, as of the earliest of (i) the first day of the 30-
day period specified in paragraph 7, (ii) the first day of the
90-day period specified in paragraph 8, and (iii), subject to
paragraph 11, the first acquisition of any GA or GPSCA shares by
ADP (the "Adjustment Date") as follows.
The aggregate purchase price shall be increased by any
aggregate surplus and reduced by any aggregate shortfall between
(i) net alter tax proceeds from the divestiture of the Businesses
set out below in Table 1 which have been divested prior to such
Adjustment Date; and (ii) their respective Estimated Values set
out below in Table 1.
Said purchase price shall also be reduced by 33% of the
aggregate Estimated Values set out below in Table 1 for the
Businesses which have not been divested as of the Adjustment
Date, provided, however, that in respect of any Business which,
as of the Adjustment Date, has not been divested but is the
subject of a binding divestiture agreement (including such an
agreement that is conditional upon customary closing conditions
such as governmental approvals), the rate of reduction shall be
15% in lieu of 33%.
Table 1
Businesses Estimated Value
Transport & Tourisme FFr. 7 million
Technologies Avancees FFr. 80 million
DMS FFr. 6 million
MSS FFr. 21 million
Industrie FFr. 4 million
Total FFr. 118 million
The price shall also be increased by the amount of any
proceeds payable to GPSCA or GA in consideration of any shares
issued pursuant to any options that may have been issued and
remain outstanding as of the date hereof, insofar as such shares
are required to be taken into account as "equity securities" for
purposes of computing prices per share pursuant to paragraph 5.
Any adjustments made by Lazard Freres & Cie shall be
definitive and binding on all parties.
<PAGE>
EXHIBIT B-1
Arthur Schmidt & Associates,Inc. For:AUTOMATIC DATA PROCESSING,INC
342 Madison Avenue (NYSE:AUD)
New York, New York 10173
Tel: (212) 953-5555
Fax: (212) 953-5554
FOR IMMEDIATE RELEASE
ADP ACQUIRES CONTROL OF GSI
ROSELAND, NJ, Oct. 27, 1995 -- Automatic Data Processing,
Inc. has acquired control of GSI, a leading computer services
company based in Paris, France. ADP now controls over 80% of the
shares of GSI and expects to complete the purchase of close to
100% of GSI by the January 15, 1996 end of the ongoing
shareholder tender.
As previously announced on August 31, 1995, ADP agreed to
acquire for cash all of the outstanding shares of GSI for a total
price of FF 2.3 billion (approximately US $460 million).
GSI's revenues are in excess of FF 2 billion (US $400
million), and the company has over 3,000 employees, with
operations in France, Germany, Italy, Spain, Switzerland and the
United Kingdom.
Josh S. Weston, chairman and chief executive officer of ADP,
said, "With the acquisition of GSI, we will now be positioned to
become the leader of payroll and human resource information
services in Europe."
ADP, with $3 billion in revenue and 350,000 clients, is one
of the largest independent computing services firms in the world.
#MDS#JMC#
The information and opinions contained in this release have been furnished
and approved by Automatic Data Processing, Inc. We are retained by them as
investor relations counsel.
<PAGE>
EXHIBIT C-1
1994 Consolidated Accounts
GSI
<PAGE>
Auditor's report on the consolidated accounts
To the Associates of GSI-Participations.
In accordance with the assignment vested in us by General
Meetings of May 23, 1991 and June 24, 1994, we herewith present
our report on:
.our examination of the consolidated financial statements of
GSI-Participations, as appended to this report,
.our verification of the Group's management report, with
respect to the year ended December 31, 1994.
OPINION ON CONSOLIDATED FINANCIAL STATEMENTS
In auditing the consolidated financial statements, we have
performed such examinations and verifications as we deemed
necessary in accordance with generally accepted accounting
standards.
In our opinion, the consolidated financial statements present
fairly the net worth, financial position and earnings of the
Group made up of the consolidated companies.
SPECIFIC VERIFICATIONS
In accordance with generally accepted accounting standards, we
have also made the specific verifications required by law.
In our opinion, the information in the Group's management report
fairly and accurately reflects the consolidated financial
statements.
Paris, April 20, 1995
The statutory auditors
Andre Huet Barbier Frinault & Autres
Member of the Worldwide
Arthur Andersen Organization,
represented by Claude Weill
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<PAGE>
Consolidated balance sheets as at December 31, 1994 and 1993
<TABLE>
<CAPTION>
Assets
In FRF thousands
December 31, 1994 December 31, 1993
Gross Amortization Net Net
amounts and provisions
<S> <C> <C> <C> <C>
Goodwill
(note 3.1) 224,713 (45,775) 178,938 186,100
Other
intangibles 96,276 (80,293) 15,983 13,765
Tangible
assets
(note 3.2) 566,784 (406,344) 160,440 165,675
Investments
and other
long-term
assets
(note 3.3) 59,058 (6,981) 52,077 53,357
TOTAL FIXED
ASSETS 946,831 (539,393) 407,438 418,897
Inventories
and work in
progress
(note 3.4) 4,161 - 4,161 4,360
Accounts
receivable 625,460 (29,184) 596,276 577,330
Other
receivables 220,852 (200) 220,652 168,253
Cash and
marketable
securities 312,260 - 312,260 307,543
Prepaid
expenses 49,012 - 49,012 44,641
TOTAL CURRENT
ASSETS 1,211,745 (29,384) 1,182,361 1,102,127
TOTAL
ASSETS 2,158,576 (568,777) 1,589,799 1,521,024
</TABLE>
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<PAGE>
Liabilities and shareholders' equity
<TABLE>
In FRF thousands
December 31, 1994 December 31, 1993
<S> <C> <C>
Share capital
(note 3.5) 104,890 104,890
Additional paid-in
capital 190,545 190,545
Consolidated retained
earnings (note 3.5) 95,225 87,595
Net income for the year (31,617) 33,138
TOTAL SHAREHOLDERS'
EQUITY 359,043 416,168
Minority interests 52,475 57,150
Provisions for liabilities
and charges (note 3.6) 94,438 59,591
Long-term borrowings
(note 3.7) 70,332 75,324
Short-term borrowings
(note 3.8) 28,182 36,744
Accounts payable 212,237 199,819
Accrued taxes,
compensation and
benefits 493,900 441,861
Other liabilities
(note 3.9) 91,065 67,649
Deferred income
(note 3.10) 188,127 166,718
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 1,589,799 1,521,024
</TABLE>
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<PAGE>
Consolidated income statements for the years 1994 and 1993
<TABLE>
<CAPTION>
In FRF thousands
December 31, 1994 December 31, 1993
<S> <C> <C>
Total revenues
(note 4.1) 2,605,285 2,588,346
Cost of goods sold 88,062 79,014
Other purchases and
external charges 879,230 851,068
Value added 1,637,993 1,658,264
Taxes other than
income tax 66,443 63,327
Personnel costs
(notes 4.2) 1,412,075 1,390,908
Gross operating income 159,475 204,029
Amortization and
provisions-net 88,190 101,390
OPERATING INCOME 71,285 102,639
Interest income-net
(note 4.3) 1,790 11,046
Non-current income
(note 4.5) (80,886) (3,167)
Income on ordinary
activities before tax (7,811) 110,518
Employee profit sharing (6,103) (11,183)
Income tax (note 4.4) 2,848 (33,707)
Net income after tax (11,066) 65,628
Group share (16,765) 52,068
Extraordinary expense
- net of tax (note 4.6) (4,211) (9,623)
Amortization of goodwill (13,231) (12,953)
CONSOLIDATED NET INCOME (28,508) 43,052
Minority interest 3,109 9,914
Group share (31,617) 33,138
</TABLE>
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<PAGE>
Consolidated statement of cash flows for the years 1994 and 1993
<TABLE>
<CAPTION>
In FRF thousands
December 31, 1994 December 31, 1993
<S> <C> <C>
Operating activities
Consolidated net income (28,508) 43,052
Amortization 110,181 102,044
Elimination of capital
gains and losses (2,255) 1,206
Cash flow 79,418 146,302
Movements in working capital 74,801 41,149
TOTAL OPERATING ACTIVITIES 154,219 187,451
Investing activities
Acquisition of fixed assets (112,593) (105,859)
Acquisition of long-term
investments (10,715) (1,774)
Disposal of fixed assets 16,076 7,834
Net cash resulting from
acquisitions and disposals
of subsidiaries and activities - (248)
TOTAL INVESTING ACTIVITIES (107,232) (100,047)
Financing activities
Dividend paid (33,472) (31,589)
Other movements (574) -
TOTAL FINANCING ACTIVITIES (34,046) (31,589)
Foreign currency translation
differences 2,526 (5,716)
Changes in cash and cash
equivalents 15,467 50,099
Cash and cash equivalents at
the start of the year 206,655 156,556
Cash and cash equivalents at
the end of the year 222,122 206,655
</TABLE>
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<PAGE>
Changes in shareholders' equity and minority interests
<TABLE>
<CAPTION>
In FRF thousands
Shareholders' Minority Total
equity Interests
<S> <C> <C> <C>
At December 31, 1992 413,567 54,910 468,477
Dividends paid (24,704) (6,885) (31,589)
Foreign currency
translation differences (5,833) (789) (6,622)
1993 net income 33,138 9,914 43,052
At December 31, 1993 416,168 57,150 473,318
Dividends paid (25,452) (8,020) (33,472)
Foreign currency
translation differences 205 550 755
Other movements (261) (314) (575)
1994 net income (31,617) 3,109 (28,508)
At December 31, 1994 359,043 52,475 411,518
</TABLE>
Per share information (group share)
<TABLE>
<CAPTION>
In FRF thousands
1994 1993
<S> <C> <C>
Net income after tax (16) 50
Consolidated net income (30) 32
Net assets before distribution 342 397
</TABLE>
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<PAGE>
1 - Consolidation principles and methods
The consolidated financial statements of GSI-Participations have
been prepared according to the accounting standards published by
the International Accounting Standards Committee (IASC) and
conform to French law on consolidated financial statements.
1.1. GROUP STRUCTURE
The consolidated financial statements include the financial
statements of GSI-Participations and those of its direct and
indirect subsidiaries listed in the Appendix.
Companies wholly owned by the Group are consolidated using the
full consolidation method. The "groupement d'interet economique"
(GIE) GSA, 51%-owned by GSI on a joint basis with Steria and
Andersen Consulting, is consolidated using the proportional
consolidation method.
1.2 GOODWILL
Goodwill represents the difference between the acquisition price
and the Group share in the underlying unallocated net assets and
liabilities of the company acquired. Goodwill is reported
separately on the balance sheet.
For those acquisitions which represent a major expansion of the
Group's activities in terms of expertise or geographical market
coverage, goodwill is amortized using the straight line method
over a maximum period of 20 years. Only the goodwill on the
acquisition of the minority interests on GSI SA is amortized over
a 40 year period.
Other goodwill is amortized over a shorter period not exceeding 5
years.
1.3 TRANSLATION OF FOREIGN CURRENCIES
The balance sheets of foreign subsidiaries are translated into
French francs at the exchange rate in effect at the end of the
year and their income statements are translated at the average
exchange rate for the year.
The impact on equity of exchange rate movements from one year to
the next has been included directly in consolidated retained
earnings.
2- Accounting principles and bases of valuation
2.1 RESEARCH AND DEVELOPMENT EXPENDITURE
Expenditure on research and development is written-off in the
year in which it occurred.
2.2 INTANGIBLE ASSETS
Software and licenses acquired are amortized over a period of 1
to 3 years. Other intangibles are amortized over a maximum
period of 5 years.
2.3 PROPERTY, PLANT AND EQUIPMENT
Property, plan and equipment are stated at cost.
Depreciation is based on the expected useful life and is charged
using either the straight line or the declining balance method,
depending on the nature of the assets concerned.
Computer hardware is depreciated over a period of 2 to 5 years.
Other fixed assets (fixtures, furniture, equipment, etc. ) are
depreciated over a period of 5 to 10 years.
2.4 DEFERRED TAXES
The effects of deferred taxation resulting from temporary
differences between the fiscal value and the accounting value of
assets and liabilities are recorded in the consolidated financial
statements using the liability method.
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<PAGE>
No account is taken in the financial statements of deferred tax
assets resulting from tax loss carry forwards,and the temporary
timing differences are written off as they arise.
2.5 RETIREMENT BENEFITS
Retirement benefits for the employees of companies in France are
fully provided for in the balance sheet. The provision is
calculated using the discounted present vale of future benefits.
Similar rights recognized by subsidiaries outside France are
included in the consolidated financial statements.
2.6 ACCOUNTING TREATMENT OF RESULTS ON LONG-TERM CONTRACTS
Profits and losses on long-term contracts are recorded using the
percentage of completion method.
According to this method, revenue and margin are recorded as the
contract progresses; losses are fully provided for when they seem
probable and the excess or shortfall in invoicing compared with
the level of work in progress is recorded as deferred income or
income receivable.
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<PAGE>
3 - Notes to the balance sheet
<TABLE>
<CAPTION>
3.1 GOODWILL
In FRF thousands
December 31, 1994 December 31, 1993
<S> <C> <C>
Gross value 224,713 218,290
Amortization to date (45,775) (32,190)
NET VALUE 178,938 186,100
</TABLE>
3.2 TANGIBLE ASSETS
In FRF thousands
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
.Gross December Acquisitions Disposals Adjustments December
values 31, 1993 in 31, 1994
translation
Land and 9,147 59 (90) 171 9,287
buildings
Machinery 290,552 49,026 (37,351) 5,550 307,777
and
equipment
Other 234,594 38,492 (15,077) (8,289) 249,720
fixed
assets
TOTAL 534,293 87,577 (52,518) (2,568) 566,784
.Amorti- December Charges Write-backs Adjustments December
zation 31, 1993 in 31, 1994
translation
Land and 2,373 322 (51) 23 2,667
buildings
Machinery 208,783 51,289 (32,035) 4,491 232,528
and
equipment
Other 157,462 30,450 (10,372) (6,391) 171,149
fixed
assets
TOTAL 368,618 82,061 (42,458) (1,877) 406,344
</TABLE>
-9-
<PAGE>
3.3 INVESTMENTS AND OTHER LONG-TERM ASSETS
In FRF thousands
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
Gross Provision for Net Net
write down
<S> <C> <C> <C> <C>
Non- 19,593 (6,981) 12,612 15,556
consoli-
dated
investments
Loans 23,573 - 23,573 23,256
Other 15,892 - 15,892 14,545
TOTAL 59,058 (6,981) 52,077 53,357
Loans include FRF21,259 thousand for non-interest bearing loans
in respect of the mandatory national programme to provide housing
funds. With effect from 1992, payments to these funds have been
written off in the year in which they were made.
</TABLE>
3.4 INVENTORIES AND WORK IN PROGRESS
Inventories include supplies valued at average purchase cost.
3.5 SHAREHOLDERS' EQUITY
.Share capital .Consolidated retained earnings
On December 31, 1994, the These reserves mainly represent:
capital of GSI-Participations - the translation reserve;
was FRF104,890 thousand - non-distributed earnings
represented by 1,048,900 retained by consolidated of
shares FRF100 each. companies, net of the balance
of the 1987 write-off of
goodwill.
3.6 PROVISIONS FOR LIABILITIES AND CHARGES
In FRF thousands
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
<S> <C> <C>
Provisions for 10,483 15,882
commercial
liabilities and
litigation
Guarantees and 12,473 17,380
provisions on
contracts
Retirement benefits 18,679 16,473
(net of tax)
Restructuring costs 40,440 -
Other 12,363 9,856
TOTAL 94,438 59,591
</TABLE>
-10-
<PAGE>
3.7 LONG-TERM BORROWINGS
In FRF thousands
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993 Change
<S> <C> <C> <C>
Loan note 70,332 70,357 (25)
Other borrowings - 4,967 (4,967)
of over one year
TOTAL 70,332 75,324 (4,992)
</TABLE>
The loan note issued in 1987 by GSI-Participations is to be
redeemed by the end of 1995.
3.8 SHORT-TERM BORROWINGS
In FRF thousands
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993 Change
<S> <C> <C> <C>
Other borrowings - 1,219 (1,219)
of less than one
year
Bank overdrafts 19,806 24,345 (4,539)
Employee profit 8,376 11,180 (2,804)
sharing
TOTAL 28,182 36,744 (8,562)
</TABLE>
3.9 OTHER LIABILITIES 3.10 DEFERRED INCOME
This includes advance payments In accordance with the
received from customers of accounting treatments of
FRF53,892 thousand (FRF49,814 long-term contracts (see
thousand at December 31, 1993). note 2.6), this included
FRF183 million of income
invoiced in advance.
3.11 CONTINGENT LIABILITIES
In FRF thousands
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
<S> <C> <C>
- -Lease and short 114,270 71,648
term rental
commitments for
computer equipment
- -Commitments under 217,886 187,499
property leases
- -Other commitments 31,367 27,041
</TABLE>
All leases are accounted for as operating expenses.
-11-
<PAGE>
4 - Notes to the income statement
4.1 ANALYSIS OF TOTAL REVENUES
In FRF thousands
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
<S> <C> <C>
France 1,644,216 1,653,955
Europe (excluding France) 877,469 855,027
Other countries 83,600 79,364
TOTAL 2,605,285 2,588,346
</TABLE>
All revenues arise from the computer services sector.
The growth of net revenues is 0.7% (2% with a constant Group
structure and exchange rates).
4.2 NUMBER OF EMPLOYEES
On December 31, 1994 the number of employees was 3,880. The
average number of employees during the year was 3,837.
4.3 FINANCIAL INCOME-NET
In FRF thousands
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993 Change
<S> <C> <C> <C>
Net deposit and 11,815 18,766 (6,951)
other income
Exchange gains 1,844 6,313 (4,469)
Other financial 278 1,635 (1,357)
income
TOTAL FINANCIAL 13,937 26,714 (12,777)
INCOME
Interest on loan note 4,200 4,200 0
Exchange losses 2,564 5,739 (3,175)
Other financial 5,383 5,729 (346)
expense
TOTAL FINANCIAL 12,147 15,668 (3,521)
FINANCIAL INCOME 1,790 11,046 (9,256)
</TABLE>
The decline in financial income is due primarily to a 37%
reduction in deposit and other income, caused mainly by lower
short-term interest rates in Europe.
-12-
<PAGE>
4.4 INCOME TAX
In FRF thousands
<TABLE>
<CAPTION>
The income tax charge for the year was as follows:
December 31, 1994 December 31, 1993
<S> <C> <C>
Current taxes (13,109) (44,783)
Deferred taxes 14,443 3,644
Distribution tax (1,598) -
R & D tax credit 3,112 7,432
TOTAL 2,848 (33,707)
</TABLE>
At December 31, 1994 the Group has tax loss carry forwards of
some FRF60 million of which FRF5 million can be carried forward
indefinitely.
4.5 EXCEPTIONAL EXPENSE 4.6 EXTRAORDINARY EXPENSE
The exceptional loss of The loss of FRF4,211 thousand
FRF80,886 thousand includes (net of tax) relates
restructuring costs amounting to primarily to the cost to
FRF66,025 thousand. incurred in the disposal of
certain activities.
-13-
<PAGE>
Appendix
Group structure at December 31, 1994 and 1993
<TABLE>
<CAPTION>
Legal Form Holding %
1994 1993
<S> <C> <C> <C>
.Companies in France
Generale de Service SA 99 99
Informatique
GSI Division des Banques SA 99 99
GSI Ingenierie et Service SA 99 99
CS Informatic SA 99 99
GSI Transport Tourisme SA 59 59
GSI Finances SA 99 99
GSI Entreprise-Centre
Francais de Recherche
Operationnelle (CFRO) SA 99 99
GSI Industrie SA 99 99
GSI Midi SA 99 99
GSI G.P. Rhone-Alpes SA 99 99
GSI France Nord SA 99 99
GSI Telematique SA 99 99
GSI Tecsi SA 70 69
GSI Services, groupement
d'interet economique forme
entre certaines filiales
du groupe GIE - -
Generale de Service SARL 99 99
GSI ASCII SA 99 99
GSI Motor Trade SA 99 99
GSI Erli SA 69 69
GSI Sceta Informatique
Transport SA 50 50
Sesamtel-GSI SA 59 57
GSI Contact SA 99 99
GSI TPI SA 51 51
Navitel SA 29 29
GSI Distribution SA 99 99
GSI Systemes SA 99 99
GSA GIE 51 52
GSI AMI SA 99 99
GSI GE SA 99 -
GSI Diffusion SA 99 -
GSI Entreprises SA 99 -
GSI SM SA 99 -
GSI ST SA 99 -
GSI IR SAS 99 -
-14-
<PAGE>
Group structure at December 31, 1994 and 1993
Legal Form Holding %
1994 1993
.Companies outside France
GSI SA (Belgium) SA/NV 99 99
GSI Travel &
Transportation Belgium SA/NV 59 59
GSI UK Ltd. 99 99
GSI Travel &
Transportation UK Ltd. 59 59
GSI Resource UK Ltd. 99 99
GSI Italia SpA 99 99
GSI Datel (Germany) GmbH 94 94
GSI Danet (Germany) GmbH 57 57
GSI Danet IS (Germany) GmbH 43 43
GSI Autocomp (Germany) GmbH 94 94
GSI Transport & Touristik
(Germany) GmbH 59 59
GSI Suisse SA 99 99
GSI Nederland BV 99 99
GSI Travel & Transportation
Nederland BV 59 59
GSI USA and its subsidiary
TDSI Inc. 99 99
GSI Danet USA Inc. 57 57
Seresco (Spain) and its
subsidiaries SA 99 99
Tecsidel (Spain) SA 79 79
GSI Transporte & Turismo
(Spain) SA 59 59
GSI Incorporated System
(Canada) Inc. 99 99
GSI Transport Tourisme
(Switzerland) SA 59 59
GSI Ucoms
(The Netherlands) BV 59 59
GSI Information Systems
Singapore PTE Ltd. 99 99
Lammert-Paisy (Germany) GmbH 94 94
GSI Softmark (Germany) GmbH 94 94
PAB (Germany) GmbH 94 94
GSI Argentina SA 99 99
GSI de Mexico SA 84 -
</TABLE>
-15-
<PAGE>
GSI
25, bd de l'Amiral Bruix - 75782 Paris Cdx 16, France -
Tel: +33(1) 45 02 75 Fax: +33(1) 45 00 59 43
<PAGE>
(201) 994-5677
November 6, 1995
Securities and Exchange Commission
Filing Desk
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Current Report on Form 8-K of Automatic Data Processing,
Inc. ("ADP")
Gentlemen:
We hereby electronically file via EDGAR, pursuant to
applicable rules promulgated under the Securities Exchange Act of
1934, as amended, ADP's Current Report on Form 8-K (the "Form 8-
K"), including exhibits.
One (1) manually signed copy of the Form 8-K, with exhibits,
is being mailed on the date hereof to each of the New York Stock
Exchange, the Pacific Stock Exchange and the Chicago Stock
Exchange.
Sincerely,
/s/ Daniel A. Zaccardo
Daniel A. Zaccardo, Esq.
cc (w/encl): The New York Stock Exchange
The Pacific Stock Exchange
The Chicago Stock Exchange
