Investor Presentaiton
Non-GAAP Reconciliations
Adj. EBIT, Net Operational Revenues and Net Operational Profit
$M
Net earnings from continuing operations
Adjustments
Provision for income taxes
All other interest expense
All other interest income
Gain on sale of businesses
(d)
(d)
Workforce Optimization Effort
(b)
(b)
Service Alignment Initiaitve
Adjusted EBIT
Adjustments
Fiscal year
2017
2011
1,733.4
1,074.0
797.7
59.3
(22.4)
(205.4)
(5.0)
90.0
576.5
2.9
(15.1)
Client funds interest revenue
Corporate extended interest income
Corporate extended interest expense
Net operational profit
Revenues from continuing operations
Adjustments
PEO pass-throughs
Client funds interest revenues
Net operational revenues
Net operational margin
(a)
Notes:
2,447.6
1,638.3
(397.4)
(540.1)
(54.3)
(73.7)
20.7
5.7
2,016.6
1,030.2
Fiscal year
2017
2011
Change
12,379.8
8,265.0
(2,628.4)
(1,182.2)
(397.4)
(540.1)
9,354.0
6,542.7
21.6%
15.7%
580 bps
a. Our net operational margin is calculated as our net operational profit divided by net operational revenues.
b. The majority of charges relating to our Service Alignment Initiative and Workforce Optimization Effort represent severance charges. Severance charges
have been taken in the past and not included as an adjustment to get to adjusted results. Unlike severance charges in prior periods, these specific charges
relate to our broad-based, company-wide Service Alignment Initiative and Workforce Optimization Effort. The fiscal 2017 Workforce Optimization Effort
adjustment totaling approximately $5 million represents a reversal of the fiscal 2016 estimate.
d. We continue to include the interest income earned on investments associated with our client funds extended investment strategy and interest expense on
borrowings related to our client funds extended investment strategy as we believe these amounts to be fundamental to the underlying operations of our
business model. The adjustments in the table above represent the interest income and interest expense that is not related to our client funds extended
investment strategy and are labeled as "All other interest expense" and "All other interest income."
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2017 ADP, LLC.
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