SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
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 22-14679
(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) 994-5
(Former name or former address, if changed since last report.
<PAGE>
The undersigned Registrant hereby amends the following item of
its Current Report on Form 8-K which was filed with the Securities
and Exchange Commission on November 6, 1995:
Item 7. Financial Statements and Exhibits.
(a) The financial statements of the acquired business which are
required by Item 7(a) of Form 8-K are filed as Exhibit A to this
Form 8-K/A.
(b) The pro forma financial information relative to the
acquired business which is required by Item 7(b) of Form 8-K are
filed as Exhibit B to this Form 8-K/A.
(c) The following are filed as exhibits to this Form 8-K/A:
Exhibit A Financial Statements of the acquired business
which are required by Item 7(a) of Form 8-K.
- Audited financial statements for the
years ended December 31, 1994 and 1993.
- Unaudited financial statements for the
six months periods ended June 30, 1995
and 1994.
Exhibit B Pro Forma Financial Information relative to
the acquired business which is required by
Item 7(b) of Form 8-K.
- Balance sheet as of June 30, 1995.
- Income statement as of June 30, 1995.
- Notes
<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 13, 1995
<PAGE>
INDEX TO EXHIBITS
Exhibit A Financial Statements of the acquired business
which are required by Item 7(a) of Form 8-K.
- Audited financial statements for the
years ended December 31, 1994 and 1993.
- Unaudited financial statements for the
six months periods ended June 30, 1995
and 1994.
Exhibit B Pro Forma Financial Information relative to
the acquired business which is required by
Item 7(b) of Form 8-K.
- Balance sheet as of June 30, 1995.
- Income statement as of June 30, 1995.
- Notes
<PAGE>
<PAGE> EXHIBIT A
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
-1-
<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>
-2-
<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>
-3-
<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>
-4-
<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>
-5-
<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>
-6-
<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.
-7-
<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.
-8-
<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> EXIHIBIT A
GSI - PARTICIPATIONS
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30,
1995 1994
(in FRF thousands)
<S> <C> <C>
Assets
Goodwill 172,500 180,800
Other intangibles 29,400 16,000
Tangible assets 170,000 155,100
Investments and other long-term assets 49,800 52,900
Total fixed assets 421,700 404,800
Inventories and work in progress 3,500 4,300
Accounts receivable 606,500 618,000
Other receivables 220,900 232,800
Cash and marketable securities 217,500 254,900
Prepaid expenses 48,800 47,200
Total current assets 1,097,200 1,157,200
Total assets 1,518,900 1,562,000
Liabilities and Shareholders' Equity
Share capital 105,000 105,000
Additional paid-in capital 190,500 190,500
Consolidated retained earnings 40,100 94,600
Net income for the year 22,800 6,000
Total shareholders' equity 358,400 396,100
Minority interests 50,100 58,900
Provisions for liabilities and charges 66,400 53,000
Long-term borrowings 72,400 72,400
Short-term borrowings - 47,400
Bank overdrafts 31,000 -
Employee profit sharing 7,600 12,800
Accounts payable 190,800 210,100
Accrued taxes, compensation,
and benefits 434,700 436,100
Other liabilities 110,900 95,100
Deferred income 196,600 180,100
Total liabilities and
shareholders' equity 1,518,900 1,562,000
</TABLE>
<PAGE>
GSI - PARTICIPATIONS
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
6 Months Ended June 30,
1995 1994
(in FRF thousands)
<S> <C> <C>
Total revenues 1,337,100 1,287,600
Cost of goods sold 37,100 39,700
Other purchases and external charges 472,300 438,100
Value Added 827,700 809,800
Taxes other than income taxes 34,700 34,000
Personnel costs 705,100 706,800
Gross Operating Income 87,900 69,000
Amortization and provisions - net 31,800 37,600
Operating Income 56,100 31,400
Interest income - Net 2,500 (100)
Non-current income (6,200) (1,100)
Income on Ordinary Activities Before Tax 52,400 30,200
Employee profit sharing (4,200) (5,300)
Income tax (18,000) (11,500)
Net Income After Tax 30,200 13,400
Extraordinary expense - net of tax 1,800 3,600
Amortization of goodwill (6,000) (6,500)
Consolidated Net Income 26,000 10,500
Minority interests 3,200 4,500
Group Share 22,800 6,000
</TABLE>
<PAGE>
GSI - PARTICIPATIONS
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
6 Months Ended June 30,
1995 1994
(in FRF thousands)
<S> <C> <C>
Operating Activities:
Consolidated net income 26,000 10,500
Amortization 51,300 50,300
Elimination of capital gains and losses (3,200) (2,600)
Cash flow 74,100 58,200
Movements in working capital (88,000) (57,400)
Total Operating Activities (13,900) 800
Investing Activities:
Acquisition of fixed assets (70,700) (40,400)
Acquisition of long-term investments (2,500) (9,800)
Disposal of fixed assets 6,900 4,800
Total Investing Activities (66,300) (45,400)
Financing Activities:
Dividends paid (30,000) (28,100)
Total Financing Activities (30,000) (28,100)
Foreign currency translation
differences 2,200 1,000
Changes in cash and cash equivalents (108,000) (71,700)
Cash and Cash Equivalents -
beginning of period 222,100 206,600
Cash and Cash Equivalents - 114,100 134,900
end of period
</TABLE>
<PAGE>
GSI - PARTICIPATIONS
NOTES TO UNAUDITED FINANCIAL STATEMENTS
The consolidated unaudited financial statements of GSI - Participations for the
six months ended June 30, 1995 and 1994 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.
The information furnished herein reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results for
the interim periods. All adjustments are of a normal recurring nature.
These statements should be read in conjunction with the annual financial
statements and related notes of the Company for the year ended December 31,1994.
The results of operations for the six months ended June 30, 1995 may not be
indicative of the results to be expected for the year ending December 31, 1995.
<PAGE>
Exhibit B
PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet as of
June 30, 1995 and the unaudited pro forma statement of consolidated earnings
for the year ended June 30, 1995 give effect to the acquisition of GSI -
Participations ("GSI") by Automatic Data Processing, Inc. ("ADP").
The pro forma information is based on the historical consolidated financial
statements of ADP and GSI (after giving effect to certain adjustments to GSI's
financial statements resulting from the application of U.S. generally accepted
accounting principles), giving effect to the GSI transaction under the purchase
method of accounting and the assumptions and adjustments in the accompanying
notes to the pro forma condensed consolidated financial statements. The
pro forma adjustments are based on information available as of the date hereof,
while the actual adjustments will be based on the ultimate appraisals,
evaluations, and estimates of the fair value of assets acquired and liabilities
assumed. Accordingly, there can be no assurance that the actual adjustments
will not differ from those reflected herein.
The pro forma condensed consolidated balance sheet gives effect to the
acquisition as if it had occurred on June 30, 1995. The pro forma statement
of consolidated earnings gives effect to the acquisition as if it had occurred
on July 1, 1994.
The pro forma information is presented for illustrative purposes only and is
not indicative of the financial position or the results of operations which
would actually have been reported had the acquisition been in effect during
these periods, or which may be reported in the future. These pro forma
financial statements should be read in conjunction with the historical
financial statements and related notes of ADP included within its Annual Report
on Form 10-K for the year ended June 30, 1995, and with the financial statements
and related notes of GSI for the year ended December 31, 1994 included in
Form 8-K filed by ADP on November 6, 1995 and for the six months ended June 30,
1995 contained in this Form 8-KA.
<PAGE>
EXHIBIT B
PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1995
(in thousands)
<TABLE>
<CAPTION>
GSI Historical
French U.S.
GAAP GAAP
and Reclassif- U.S. GAAP and ADP Pro Forma Pro Forma
Format ications Adjustments Format Historical Adjustments Combined
(a) (b) (f) (k)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Cash and cash
equivalents $ 44,957 $ - $ - $ 44,957 $ 313,612 $ (1,013) $(231,000)(i) $ 126,556
Short-term marketable
securities - - - - 384,009 - (148,000)(i) 236,009
Accounts receivable 125,364 - - 125,364 377,145 (54.052) (2,378)(h) 446,079
Other current assets 56,470 - - 56,470 136,377 10,428 - 203,275
Total current
assets 226,791 - - 226,791 1,211,143 (44,637) (381,378) 1,011,919
Long-term marketable
securities 594,268 - - 594,268
Long-term receivables 189,858 - - 189,858
Property, plant
& equipment - net 35,139 - (2,462)(d) 32,677 415,959 (3,038) (1,321)(h) 444,277
Other assets 10,294 - - 10,294 84,212 (3,204) (1,726)(h) 89,576
Intangibles 41,733 - - 41,733 705,656 (2,480) 484,645 (j) 1,229,554
$313,957 $ - $ (2,462)(c) 311,495 $3,201,096 $(53,359) $ 100,220 $3,559,452
Liabilities and
Shareholders' Equity
Short-term debt $ - $ - $ - $ - $ - $ - $ 102,000 (i) $ 102,000
Accounts payable 39,438 - - 39,438 65,955 (11,534) 93,859
Accrued expenses
and other current
liabilities 15,298 94,812 25,308(c) 135,418 385,040 (31,170) 44,492 (g) 533,780
Income taxes 89,852 (86,235) - 3,617 82,672 - - 86,289
Current portion of
long-term debt 6,407 14,965 - 21,372 9,556 (558) - 30,370
Total current
liabilities 150,995 23,542 25,308 199,845 543,223 (43,262) 146,492 846,298
Long-term debt 25,321 (14,965) - 10,356 390,177 - - 400,533
Other liabilities 22,923 (8,577) - 14,346 66,865 (909) - 80,302
Deferred income taxes - - - - 18,844 - - 18,844
Deferred revenue 40,637 - - 40,637 85,372 (5,912) - 120,097
Shareholders' equity 74,081 - (27,770) 46,311 2,096,615 (3,276) (46,272) 2,093,378
$313,957 $ - $ (2,462) $311,495 $3,201,096 $(53,359) $100,220 $3,559,452
</TABLE>
See notes to pro forma condensed consolidated financial statements.
<PAGE>
PRO FORMA
STATEMENT OF CONSOLIDATED EARNINGS
YEAR ENDED JUNE 30, 1995
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
GSI Historical
French U.S.
GAAP GAAP
and Reclassif- U.S. GAAP and ADP Pro Forma Pro Forma
Format ications Adjustments Format Historical Adjustments Combined
(a) (b) (e) (f) (l)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $513,704 $ 3,734 $ - $517,438 $2,893,742 $(133,399) $(14,200) $3,263,581
Operating expenses - 342,069 (4,717) 337,352 1,177,292 (103,465) (8,807) 1,402,372
Costs of goods sold 16,525 (16,525) - - - - - -
Other purchases and
external charges 176,724 (176,724) - - - - - -
Taxes other than
income taxes 13,003 (13,003) - - - - - -
Personnel costs 272,912 (272,912) - - - - - -
General, administrative,
and selling expenses - 128,426 - 128,426 792,121 (26,606) (3,306) 890,635
Depreciation and
amortization 15,944 4,567 (392) 20,119 172,536 (3,135) 18,343 207,863
Amortization of goodwill 2,457 (2,457) - - - -
Systems development and
programming costs - 25,677 - 25,677 193,173 - (661) 218,189
Interest income - net (832) 832 - - - - - -
Interest expense - 2,903 - 2,903 24,340 (77) 6,885 34,051
Non-current expense 16,622 (16,622) - - - - - -
Employee profit sharing 968 (968) - - - - - -
Minority interest 368 (368) - - - - - -
514,691 4,895 (5,109) 514,477 2,359,462 (133,283) 12,454 2,753,110
Earnings/(loss) before
income taxes (987) (1,161) 5,109 2,961 534,280 (116) (26,654) 510,471
Provision for income
taxes 735 - 1,790 2,525 139,450 (484) 1,717 143,208
Extraordinary expense
- net of tax 1,161 (1,161) - - - - - -
Net earnings $ (2,883) $ - $ 3,319 $ 436 $ 394,830 $ 368 $(28,371) 367,263
Earnings per share $2.77 $2.58
Average number of common
shares outstanding 142,556 142,556
See notes to pro forma condensed consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(a) The GSI historical balance sheet as of June 30, 1995 has been translated
from French francs to U.S. dollars at an exchange ratio of .2067
(rate at June 30, 1995) dollars to the franc. The income statement
for the year ended June 30, 1995 has been translated at a rate of .1935
(average rate for the year ended June 30, 1995).
(b) To conform with classifications used by ADP.
Adjustments to GSI's consolidated financial statements resulting from the
application of U.S. generally accepted accounting principles.
(c) Represents estimated losses on client contracts [$15,157,000] and excess
leased space [$10,151,000] (recorded in order to comply with Statement
of Financial Accounting Standards No. 5). Additionally, certain claims
have been made against GSI in the normal course of business. The fair
value of such contingencies is not currently determinable based on the
information available at this time.
(d) Represents adjustments to reflect the proper useful life and accumulated
depreciation of property,plant and equipment related to specific client
contracts.
(e) Represents the impact of the adjustments referred to in (c) and
(d) above on the Statement of Consolidated Earnings, as if the
acquisition had occurred as of July 1, 1994.
1. impact of adjustments (c) $4,717,000
2. impact of adjustment (d) 392,000
3. income tax impact of items 1
and 2 above at an estimated
effective tax rate of 35%. (1,790,000)
$3,319,000
Purchase Accounting Pro Forma Adjustments
(f) Represents the elimination of the assets and liabilities and results of
operations of GSI entities disposed of during the year ended June 30, 1995
or to be disposed of subsequent to June 30, 1995, including GSI's interest
in a joint venture that had previously been consolidated using the
proportional consolidation method. Estimated proceeds of $18,200,000
are reflected in other current assetsc.
(g) Represents estimated liability for planned involuntary employee termination
benefits [$40,532,000] and estimated losses on asset impairments and
disposals of assets [$3,960,000].
(h) Represents miscellaneous adjustments related to initial estimates of fair
value of assets acquired and liabilities assumed.
(i) Represents reduction of ADP's historical cash and marketable securities
and increase in debt as a result of the acquisition.
(j) Represents the elimination of GSI's historical goodwill existing as of the
acquisition date [$35,655,000] and the initial estimate of goodwill and
other intangibles arising from the acquisition. This estimate will be
adjusted based on the ultimate appraisals, evaluations, and estimates of
the fair value of assets acquired and liabilities assumed.
(k) Upon completion of the valuation process, a deferred tax liability and/or
asset will be recognized in accordance with Statement of Financial
Accounting Standards No. 109 for differences between the assigned value
and the tax bases of all assets acquired, other than goodwill, and
liabilities assumed. Currently, the information to make such a
determination is not available and, accordingly, no deferred tax
liability and/or asset is reflected in the pro forma consolidated
financial statements.
(l) Represents the impact of the pro forma adjustments on the Statement of
Consolidated Earnings, as if the acquisition had occurred as of
July 1, 1994.
1. decrease in interest earnings [$14,200,000 $ 21,085,000
resulting from the reduction of $379,000,000 of
cash and marketable securities] and increase in
interest expense [$6,885,000 resulting from
$102,000,000 of short-term debt with an assumed
interest rate of 6.75%] assuming the purchase of
GSI-Participations as of July 1, 1994.
2. decrease in goodwill amortization arising from (2,457,000)
the elimination of historical GSI goodwill.
<PAGE>
3. initial estimate of amortization of intangibles. 20,800,000
This estimate is calculated based on an assumed
blended amortization period of 25 years. This
estimate will be adjusted based on the ultimate
appraisals, evaluations, and estimates of the
fair value of assets acquired and liabilities
assumed which will be developed and documented
over the next year.
4. elimination of restructuring charges previously (12,774,000)
recorded by GSI (these charges would have been
reflected in the calculation of goodwill had ADP
acquired GSI July 1, 1994).
5. income tax impact of items 1 through 4 above. 1,717,000
$ 28,371,000
<PAGE>
(201) 994-5677
November 13, 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/A (Amendment No.1) 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/A (Amendment
No.1) (the "Form 8-K/A"), including exhibits.
One (1) manually signed copy of the Form 8-K/A, 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
