10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

______________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to    

Commission File Number 1-5397

__________________________

AUTOMATIC DATA PROCESSING, INC.

(Exact name of registrant as specified in its charter)

__________________________

Delaware		22-1467904
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
One ADP Boulevard
Roseland,	NJ	07068
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (973) 974-5000

__________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 Par Value (voting)	ADP	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý   No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ý   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of October 27, 2020 was 428,813,999.

Table of Contents

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Statements of Consolidated Earnings Three months ended September 30, 2020 and 2019	3
	Statements of Consolidated Comprehensive Income Three months ended September 30, 2020 and 2019	4
	Consolidated Balance Sheets At September 30, 2020 and June 30, 2020	5
	Statements of Consolidated Cash Flows Three months ended September 30, 2020 and 2019	6
	Notes to the Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	42
	Signatures	43

2

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

Automatic Data Processing, Inc. and Subsidiaries

Statements of Consolidated Earnings

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended
	September 30,
	2020		2019
REVENUES:
Revenues, other than interest on funds held for clients and PEO revenues	$	2,269.6	$	2,306.2
Interest on funds held for clients	106.5		133.9
PEO revenues (A)	1,094.6		1,055.6
TOTAL REVENUES	3,470.7		3,495.7
EXPENSES:
Costs of revenues:
Operating expenses	1,762.1		1,787.7
Systems development and programming costs	168.7		168.2
Depreciation and amortization	103.5		88.9
TOTAL COSTS OF REVENUES	2,034.3		2,044.8
Selling, general, and administrative expenses	681.0		726.5
Interest expense	15.1		39.9
TOTAL EXPENSES	2,730.4		2,811.2
Other (income)/expense, net	(24.9)		(54.6)
EARNINGS BEFORE INCOME TAXES	765.2		739.1
Provision for income taxes	163.1		156.7
NET EARNINGS	$	602.1	$	582.4
BASIC EARNINGS PER SHARE	$	1.40	$	1.35
DILUTED EARNINGS PER SHARE	$	1.40	$	1.34
Basic weighted average shares outstanding	428.6		432.7
Diluted weighted average shares outstanding	430.0		435.4

(A) Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $10,925.8 million and $10,510.6 million for the three months ended September 30, 2020 and 2019, respectively.

See notes to the Consolidated Financial Statements.

3

Automatic Data Processing, Inc. and Subsidiaries

Statements of Consolidated Comprehensive Income

(In millions)

(Unaudited)

	Three Months Ended
	September 30,
	2020		2019
Net earnings	$	602.1	$	582.4
Other comprehensive income/(loss):
Currency translation adjustments	50.4		(48.9)
Unrealized net gains/(losses) on available-for-sale securities	(24.6)		96.1
Tax effect	5.5		(20.8)
Reclassification of net (gain)/losses on available-for-sale securities to net earnings	(0.3)		(2.3)
Tax effect	0.1		0.5
Unrealized loss on cash flow hedging activities	(3.3)		—
Tax effect	0.8		—
Amortization of unrealized loss on cash flow hedging activities	0.6		—
Tax effect	—		—
Reclassification of pension liability adjustment to net earnings	2.5		(1.7)
Tax effect	(1.0)		0.5
Other comprehensive income, net of tax	30.7		23.4
Comprehensive income	$	632.8	$	605.8

See notes to the Consolidated Financial Statements.

4

Automatic Data Processing, Inc. and Subsidiaries

Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)

	September 30,		June 30,
	2020		2020
Assets
Current assets:
Cash and cash equivalents	$	1,613.1	$	1,908.5
Accounts receivable, net of allowance for doubtful accounts of $89.1 and $92.5, respectively	2,489.1		2,441.3
Other current assets	762.9		506.2
Total current assets before funds held for clients	4,865.1		4,856.0
Funds held for clients	29,950.3		26,708.1
Total current assets	34,815.4		31,564.1
Long-term receivables, net of allowance for doubtful accounts of $0.6 and $0.5, respectively	16.1		18.6
Property, plant and equipment, net	701.5		703.9
Operating lease right-of-use asset	479.0		493.7
Deferred contract costs	2,397.9		2,401.6
Other assets	438.0		458.4
Goodwill	2,326.3		2,309.4
Intangible assets, net	1,215.9		1,215.8
Total assets	$	42,390.1	$	39,165.5
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	111.2	$	102.0
Accrued expenses and other current liabilities	1,900.2		1,980.7
Accrued payroll and payroll-related expenses	494.7		557.0
Dividends payable	387.1		387.3
Short-term deferred revenues	205.0		212.5
Obligations under reverse repurchase agreements (A)	—		13.6
Short-term debt	—		1,001.8
Income taxes payable	133.0		40.1
Total current liabilities before client funds obligations	3,231.2		4,295.0
Client funds obligations	29,098.4		25,831.6
Total current liabilities	32,329.6		30,126.6
Long-term debt	1,993.9		1,002.8
Operating lease liabilities	330.4		344.4
Other liabilities	813.9		837.0
Deferred income taxes	743.0		731.9
Long-term deferred revenues	370.4		370.6
Total liabilities	36,581.2		33,413.3
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, $1.00 par value: authorized, 0.3 shares; issued, none	—		—
Common stock, $0.10 par value: authorized, 1,000.0 shares; issued, 638.7 shares at September 30, 2020 and June 30, 2020;  outstanding, 429.3 and 429.9 shares at September 30, 2020 and June 30, 2020, respectively	63.9		63.9
Capital in excess of par value	1,348.4		1,333.8
Retained earnings	18,644.7		18,436.3
Treasury stock - at cost: 209.4 and 208.9 shares at September 30, 2020 and June 30, 2020, respectively	(14,264.0)		(14,067.0)
Accumulated other comprehensive income (loss)	15.9		(14.8)
Total stockholders’ equity	5,808.9		5,752.2
Total liabilities and stockholders’ equity	$	42,390.1	$	39,165.5

(A) As of June 30, 2020, $13.6 million of long-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements (see Note 9).

See notes to the Consolidated Financial Statements.

5

Automatic Data Processing, Inc. and Subsidiaries

Statements of Consolidated Cash Flows

(In millions)

(Unaudited)

	Three Months Ended
	September 30,
	2020		2019
Cash Flows from Operating Activities:
Net earnings	$	602.1	$	582.4
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization	131.1		117.3
Amortization of deferred contract costs	232.3		227.3
Deferred income taxes	23.5		44.4
Stock-based compensation expense	33.8		37.1
Net pension income	(11.1)		(2.7)
Net amortization of premiums and accretion of discounts on available-for-sale securities	12.4		12.2
Impairment of assets	2.8		—
Gain on sale of assets	(0.2)		(1.9)
Other	6.1		11.9
Changes in operating assets and liabilities:
Increase in accounts receivable	(78.7)		(96.8)
Increase in other assets	(454.8)		(391.7)
Increase/(Decrease) in accounts payable	5.7		(15.1)
Decrease in accrued expenses and other liabilities	(23.1)		(91.6)
Net cash flows provided by operating activities	481.9		432.8
Cash Flows from Investing Activities:
Purchases of corporate and client funds marketable securities	(812.8)		(1,409.9)
Proceeds from the sales and maturities of corporate and client funds marketable securities	1,196.7		1,653.7
Capital expenditures	(43.5)		(56.8)
Additions to intangibles	(76.4)		(88.2)
Proceeds from sale of property, plant, and equipment and other assets	0.2		23.4
Net cash flows provided by investing activities	264.2		122.2
Cash Flows from Financing Activities:
Net increase/(decrease) in client funds obligations	3,203.3		(8,063.3)
Payments of debt	(1,000.6)		(0.5)
Proceeds from the issuance of debt	991.1		—
Settlement of cash flow hedges	(43.6)		—
Repurchases of common stock	(213.6)		(309.7)
Net proceeds from stock purchase plan and stock-based compensation plans	(7.9)		(32.1)
Dividends paid	(391.0)		(343.3)
Net (payments)/proceeds related to reverse repurchase agreements	(13.6)		166.3
Net proceeds of commercial paper borrowings	—		3,536.7
Net cash flows provided by/(used in) financing activities	2,524.1		(5,045.9)
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents	37.9		(33.1)
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents	3,308.1		(4,524.0)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period	7,053.6		6,796.2
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	$	10,361.7	$	2,272.2
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents	$	1,613.1	$	1,403.9
Restricted cash and restricted cash equivalents included in funds held for clients (A)	8,748.6		868.3
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	10,361.7	$	2,272.2
Supplemental disclosures of cash flow information:
Cash paid for interest	$	27.3	$	53.6
Cash paid for income taxes, net of income tax refunds	$	45.4	$	45.6

(A) See Note 6 for a reconciliation of restricted cash and restricted cash equivalents in funds held for clients on the Consolidated Balance Sheets.

See notes to the Consolidated Financial Statements.

6

Automatic Data Processing, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements

(Tabular dollars in millions, except per share amounts or where otherwise stated)

(Unaudited)

Note 1.  Basis of Presentation

The accompanying Consolidated Financial Statements and footnotes thereto of Automatic Data Processing, Inc., its subsidiaries and variable interest entity (“ADP” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  The Consolidated Financial Statements and footnotes thereto are unaudited.  In the opinion of the Company’s management, the Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, that are necessary for a fair presentation of the Company’s interim financial results.

The Company has a grantor trust, which holds the majority of the funds provided by its clients pending remittance to employees of those clients, tax authorities, and other payees.  The Company is the sole beneficial owner of the trust.  The trust meets the criteria in Accounting Standards Codification (“ASC”) 810, “Consolidation” to be characterized as a variable interest entity (“VIE”).  The Company has determined that it has a controlling financial interest in the trust because it has both (1) the power to direct the activities that most significantly impact the economic performance of the trust (including the power to make all investment decisions for the trust) and (2) the right to receive benefits that could potentially be significant to the trust (in the form of investment returns) and, therefore, consolidates the trust.  Further information on these funds and the Company’s obligations to remit to its clients’ employees, tax authorities, and other payees is provided in Note 6, “Corporate Investments and Funds Held for Clients.” 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the assets, liabilities, revenue, expenses, and accumulated other comprehensive income that are reported in the Consolidated Financial Statements and footnotes thereto. Actual results may differ from those estimates. Interim financial results are not necessarily indicative of financial results for a full year.  The information included 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, 2020 (“fiscal 2020”).

Note 2.  New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective July 1, 2020, the Company adopted accounting standard update (“ASU”) 2018-13, “Fair Value Measurement.” The update modifies the disclosure requirements on fair value measurements. The adoption of ASU 2018-13 modified the disclosures in Note 6 but did not have an impact on the Company's consolidated results of operations, financial condition, or cash flows.

Effective July 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This update introduces the current expected credit loss (“CECL”) model, which requires an entity to measure credit losses based on expected losses rather than incurred losses for certain financial instruments and financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated results of operations, financial condition, or cash flows.

7

Recently Issued Accounting Pronouncements

The following table summarizes recent ASU's issued by the Financial Accounting Standards Board (“FASB”) that could have a material impact on the Company's consolidated results of operations, financial condition, or cash flows.

Standard	Description	Effective Date	Effect on Financial Statements or Other Significant Matters
ASU 2018-14 Compensation-Retirement Benefits-Defined Benefit Plans	This update modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. The amendments in ASU 2018-14 would need to be applied on a retrospective basis.	July 1, 2021 (Fiscal 2022)	The adoption of this guidance will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows.

Note 3.  Revenue

Based upon similar operational and economic characteristics, the Company’s revenues are disaggregated by its three strategic pillars: Human Capital Management (“HCM”), HR Outsourcing (“HRO”), and Global (“Global”) Solutions, with separate disaggregation for PEO zero-margin benefits pass-through revenues and client funds interest revenues.  The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.

HCM provides a suite of product offerings that assist employers of all types and sizes in all stages of the employment cycle, from recruitment to retirement. Global is generally consistent with the types of services provided within HCM but represents geographies outside of the United States and includes our multinational offerings. HCM and Global revenues are primarily attributable to fees for providing solutions for payroll, benefits, talent, retirement services and HR processing and fees charged to implement the Company's solutions for clients.

HRO provides a comprehensive human resources outsourcing solution, including offering benefits, providing workers’ compensation insurance, and administering state unemployment insurance, among other human resources functions. This revenue is primarily driven by the PEO. Amounts collected from PEO worksite employers include payroll, fees for benefits, and an administrative fee that also includes payroll taxes, fees for workers’ compensation and state unemployment taxes. The payroll and payroll taxes collected from the worksite employers are presented in revenue net, as the Company does not retain risk and acts as an agent with respect to this aspect of the PEO arrangement. With respect to the payroll and payroll taxes, the worksite employer is primarily responsible for providing the service and has discretion in establishing wages. The fees collected from the worksite employers for benefits (i.e., PEO benefits pass-throughs), workers’ compensation and state unemployment taxes are presented in revenues and the associated costs of benefits, workers’ compensation and state unemployment taxes are included in operating expenses, as the Company acts as a principal with respect to this aspect of the arrangement. With respect to these fees, the Company is primarily responsible for fulfilling the service and has discretion in establishing price. The Company has further disaggregated HRO to separate out its PEO zero-margin benefits pass-through revenues.

The Company recognizes client funds interest revenues on collected but not yet remitted funds held for clients in revenues as earned, as the collection, holding and remittance of these funds are critical components of providing these services.

8

The following tables provide details of revenue by our strategic pillars with disaggregation for PEO zero-margin benefits pass-throughs and client funds interest, and include a reconciliation to the Company’s reportable segments:

	Three Months Ended
	September 30,
Types of Revenues	2020		2019
HCM	$	1,530.6	$	1,568.5
HRO, excluding PEO zero-margin benefits pass-throughs	582.4		591.1
PEO zero-margin benefits pass-throughs	741.0		699.1
Global	510.2		503.1
Interest on funds held for clients	106.5		133.9
Total Revenues	$	3,470.7	$	3,495.7

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2020:

Types of Revenues	Employer Services		PEO		Other		Total
HCM	$	1,532.3	$	—	$	(1.7)	$	1,530.6
HRO, excluding PEO zero-margin benefits pass-throughs	229.1		353.6		(0.3)		582.4
PEO zero-margin benefits pass-throughs	—		741.0		—		741.0
Global	510.2		—		—		510.2
Interest on funds held for clients	105.2		1.3		—		106.5
Total Segment Revenues	$	2,376.8	$	1,095.9	$	(2.0)	$	3,470.7

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2019:

Types of Revenues	Employer Services		PEO		Other		Total
HCM	$	1,570.0	$	—	$	(1.5)	$	1,568.5
HRO, excluding PEO zero-margin benefits pass-throughs	235.7		356.5		(1.1)		591.1
PEO zero-margin benefits pass-throughs	—		699.1		—		699.1
Global	503.1		—		—		503.1
Interest on funds held for clients	132.6		1.3		—		133.9
Total Segment Revenues	$	2,441.4	$	1,056.9	$	(2.6)	$	3,495.7

Contract Balances

The timing of revenue recognition for HCM, HRO and Global Solutions is consistent with the invoicing of clients, as invoicing occurs in the period the services are provided. Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.

Changes in deferred revenue related to set up fees for the three months ended September 30, 2020 were as follows:

Contract Liability
Contract liability, July 1, 2020	$	522.7
Recognition of revenue included in beginning of year contract liability	(43.8)
Contract liability, net of revenue recognized on contracts during the period	30.7
Currency translation adjustments	16.2
Contract liability, September 30, 2020	$	525.8

9

Note 4.  Earnings per Share (“EPS”)

	Basic		Effect of Employee Stock Option Shares	Effect of Employee Restricted Stock Shares	Diluted
Three Months Ended September 30, 2020
Net earnings	$	602.1			$	602.1
Weighted average shares (in millions)	428.6		0.6	0.8	430.0
EPS	$	1.40			$	1.40
Three Months Ended September 30, 2019
Net earnings	$	582.4			$	582.4
Weighted average shares (in millions)	432.7		1.3	1.4	435.4
EPS	$	1.35			$	1.34

Options to purchase 2.1 million and 0.7 million shares of common stock for the three months ended September 30, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Note 5. Other (Income)/Expense, Net

	Three Months Ended
	September 30,
	2020		2019
Interest income on corporate funds	$	(13.8)	$	(32.3)
Realized (gains) / losses on available-for-sale securities, net	(0.3)		(2.3)
Impairment of assets	2.8		—
Gain on sale of assets	(0.2)		(1.9)
Non-service components of pension income, net (see Note 11)	(13.4)		(18.1)
Other (income)/expense, net	$	(24.9)	$	(54.6)

In fiscal 2021, the Company recorded impairment charges of $2.8 million as a result of recognizing certain owned facilities at fair value given intent to sell and accordingly classified as held for sale.

10

Note 6. Corporate Investments and Funds Held for Clients

Corporate investments and funds held for clients at September 30, 2020 and June 30, 2020 were as follows:

	September 30, 2020
	Amortized Cost		Gross Unrealized  Gains		Gross Unrealized Losses		Fair Market Value (A)
Type of issue:
Money market securities, cash and other cash equivalents	$	10,361.7	$	—	$	—	$	10,361.7
Available-for-sale securities:
Corporate bonds	9,013.1		458.0		(0.4)		9,470.7
Asset-backed securities	2,942.7		98.4		(0.2)		3,040.9
U.S. Treasury securities	3,581.3		108.8		—		3,690.1
U.S. government agency securities	1,341.8		34.5		(0.8)		1,375.5
Canadian government obligations and Canadian government agency obligations	1,037.0		22.6		—		1,059.6
Commercial mortgage-backed securities	810.1		54.5		—		864.6
Canadian provincial bonds	652.7		34.8		—		687.5
Other securities	974.5		41.7		—		1,016.2
Total available-for-sale securities	20,353.2		853.3		(1.4)		21,205.1
Total corporate investments and funds held for clients	$	30,714.9	$	853.3	$	(1.4)	$	31,566.8

(A) Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

	June 30, 2020
	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value (B)
Type of issue:
Money market securities, cash and other cash equivalents	$	7,053.6	$	—	$	—	$	7,053.6
Available-for-sale securities:
Corporate bonds	9,188.7		473.4		—		9,662.1
Asset-backed securities	3,274.6		96.0		(0.5)		3,370.1
U.S. Treasury securities	3,580.6		120.8		—		3,701.4
U.S. government agency securities	1,128.2		35.6		—		1,163.8
Canadian government obligations and Canadian government agency obligations	1,018.7		23.1		—		1,041.8
Commercial mortgage-backed securities	814.3		53.9		—		868.2
Canadian provincial bonds	676.6		33.6		—		710.2
Other securities	1,018.1		41.1		(0.2)		1,059.0
Total available-for-sale securities	20,699.8		877.5		(0.7)		21,576.6
Total corporate investments and funds held for clients	$	27,753.4	$	877.5	$	(0.7)	$	28,630.2

(B) Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

11

For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party pricing service, see Note 1 “Summary of Significant Accounting Policies” in the Company's Annual Report on Form 10-K for fiscal 2020. The Company concurred with and did not adjust the prices obtained from the independent pricing service. The Company had no available-for-sale securities included in Level 1 or Level 3 at September 30, 2020.

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of September 30, 2020, are as follows: 

	September 30, 2020
	Securities in Unrealized Loss Position Less Than 12 Months				Securities in Unrealized Loss Position Greater Than 12 Months				Total
	Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value
Corporate bonds	$	(0.4)	$	151.5	$	—	$	—	$	(0.4)	$	151.5
Asset-backed securities	(0.2)		77.5		—		—		(0.2)		77.5
U.S. Treasury securities	—		—		—		—		—		—
U.S. government agency securities	(0.8)		320.0		—		—		(0.8)		320.0
Canadian government obligations and Canadian government agency obligations	—		—		—		—		—		—
Commercial mortgage-backed securities	—		—		—		1.5		—		1.5
Canadian provincial bonds	—		—		—		—		—		—
Other securities	—		12.9		—		—		—		12.9
	$	(1.4)	$	561.9	$	—	$	1.5	$	(1.4)	$	563.4

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2020, are as follows:

	June 30, 2020
	Securities in Unrealized Loss Position Less Than 12 Months				Securities in Unrealized Loss Position Greater Than 12 Months				Total
	Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value
Corporate bonds	$	—	$	—	$	—	$	—	$	—	$	—
Asset-backed securities	(0.5)		43.9		—		—		(0.5)		43.9
U.S. Treasury securities	—		2.0		—		—		—		2.0
U.S. government agency securities	—		—		—		—		—		—
Canadian government obligations and Canadian government agency obligations	—		—		—		—		—		—
Commercial mortgage-backed securities	—		—		—		1.5		—		1.5
Canadian provincial bonds	—		—		—		—		—		—
Other securities	(0.2)		17.1		—		—		(0.2)		17.1
	$	(0.7)	$	63.0	$	—	$	1.5	$	(0.7)	$	64.5

At September 30, 2020, Corporate bonds include investment-grade debt securities with a wide variety of issuers, industries, and sectors, primarily carry credit ratings of A and above, and have maturities ranging from October 2020 through September 2030.

At September 30, 2020, asset-backed securities include AAA-rated senior tranches of securities with predominantly prime collateral of fixed-rate auto loan, credit card, equipment lease, and rate reduction receivables with fair values of $1,520.8 million, $1,100.4 million, $321.9 million, and $97.1 million, respectively. These securities are collateralized by the cash flows

12

of the underlying pools of receivables. The primary risk associated with these securities is the collection risk of the underlying receivables. All collateral on such asset-backed securities has performed as expected through September 30, 2020.

At September 30, 2020, U.S. government agency securities primarily include debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks with fair values of $614.7 million and $590.8 million, respectively. U.S. government agency securities represent senior, unsecured, non-callable debt that primarily carry ratings of Aaa by Moody's, and AA+ by Standard & Poor's, with maturities ranging from October 2020 through December 2029.

At September 30, 2020, other securities and their fair value primarily include municipal bonds of $576.7 million, AA-rated United Kingdom Gilt securities of $197.3 million, and AAA-rated and AA-rated sovereign bonds of $77.2 million.

Classification of corporate investments on the Consolidated Balance Sheets is as follows:

	September 30,		June 30,
	2020		2020
Corporate investments:
Cash and cash equivalents	$	1,613.1	$	1,908.5
Short-term marketable securities (a)	3.4		—
Long-term marketable securities (b)	—		13.6
Total corporate investments	$	1,616.5	$	1,922.1

(a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets.

(b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets.

Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories:

	September 30,		June 30,
	2020		2020
Funds held for clients:
Restricted cash and cash equivalents held to satisfy client funds obligations	$	8,748.6	$	5,145.1
Restricted short-term marketable securities held to satisfy client funds obligations	5,614.4		5,541.2
Restricted long-term marketable securities held to satisfy client funds obligations	15,587.3		16,021.8
Total funds held for clients	$	29,950.3	$	26,708.1

Client funds obligations represent the Company's contractual obligations to remit funds to satisfy clients' payroll, tax, and other payee payment obligations and are recorded on the Consolidated Balance Sheets at the time that the Company impounds funds from clients. The client funds obligations represent liabilities that will be repaid within one year of the balance sheet date. The Company has reported client funds obligations as a current liability on the Consolidated Balance Sheets totaling $29,098.4 million and $25,831.6 million at September 30, 2020 and June 30, 2020, respectively. The Company has classified funds held for clients as a current asset since these funds are held solely for the purpose of satisfying the client funds obligations. Of the Company’s funds held for clients at September 30, 2020 and June 30, 2020, $26,805.6 million and $23,740.0 million, respectively, are held in the grantor trust. The liabilities held within the trust are intercompany liabilities to other Company subsidiaries and are eliminated in consolidation.

The Company has reported the cash flows related to the purchases of corporate and client funds marketable securities and related to the proceeds from the sales and maturities of corporate and client funds marketable securities on a gross basis in the investing section of the Statements of Consolidated Cash Flows. The Company has reported the cash and cash equivalents related to client funds investments with original maturities of ninety days or less, within the beginning and ending balances of cash, cash equivalents, restricted cash, and restricted cash equivalents. These amounts have been reconciled to the Consolidated Balance Sheets on the Statements of Consolidated Cash Flows. The Company has reported the cash flows related to the cash received from and paid on behalf of clients on a net basis within net increase / (decrease) in client funds obligations in the financing activities section of the Statements of Consolidated Cash Flows.

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Approximately 79% of the available-for-sale securities held a AAA-rating or AA-rating at September 30, 2020, as rated by Moody's, Standard & Poor's, DBRS for Canadian dollar-denominated securities, and Fitch for asset-backed and commercial mortgage-backed securities.  All available-for-sale securities were rated as investment grade at September 30, 2020.

Expected maturities of available-for-sale securities at September 30, 2020 are as follows:

One year or less	$	5,617.8
One year to two years	4,283.0
Two years to three years	3,817.6
Three years to four years	2,932.7
After four years	4,554.0
Total available-for-sale securities	$	21,205.1

Note 7.  Leases

The Company records leases on the consolidated balance sheets as operating lease right-of-use (“ROU”) assets, records the current portion of operating lease liabilities within accrued expenses and other current liabilities and, separately, records long-term operating lease liabilities.

The Company has entered into operating lease agreements for facilities and equipment. The Company's leases have remaining lease terms of up to approximately eleven years. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The lease liabilities are measured by discounting future lease payments at the Company’s collateralized incremental borrowing rate for financing instruments of a similar term, unless the implicit rate is readily determinable. ROU assets also include adjustments related to prepaid or deferred lease payments and lease incentives. The difference between total ROU assets and total lease liabilities are primarily attributable to pre-payments of our obligations and the recognition of various lease incentives.

The components of operating lease expense were as follows:

	Three Months Ended
	September 30,
	2020		2019
Operating lease cost	$	39.1	$	44.2
Short-term lease cost	0.4		2.7
Variable lease cost	2.1		1.3
Total operating lease cost	$	41.6	$	48.2

The following table provides supplemental cash flow information related to the Company's leases:

	Three Months Ended
	September 30,
	2020		2019
Cash paid for operating lease liabilities	$	45.3	$	40.2
Operating lease ROU assets obtained in exchange for new operating lease liabilities	$	23.2	$	6.7

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Other information related to our operating lease liabilities is as follows:

	September 30,		June 30,
	2020		2020
Weighted-average remaining lease term (in years)	6		6
Weighted-average discount rate	2.3	%	2.3	%

As of September 30, 2020, maturities of operating lease liabilities are as follows:

Nine months ending June 30, 2021	$	77.8
Twelve months ending June 30, 2022	93.7
Twelve months ending June 30, 2023	79.6
Twelve months ending June 30, 2024	59.2
Twelve months ending June 30, 2025	43.5
Thereafter	101.2
Total undiscounted lease obligations	455.0
Less: Imputed interest	(29.9)
Net lease obligations	$	425.1

Current operating lease liabilities were approximately $94.7 million and $95.5 million as of September 30, 2020 and June 30, 2020, respectively, and are included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

Note 8. Goodwill and Intangible Assets, net

Changes in goodwill for the three months ended September 30, 2020 are as follows:

	Employer Services		PEO Services		Total
Balance at June 30, 2020	$	2,304.6	$	4.8	$	2,309.4
Additions and other adjustments	—		—		—
Currency translation adjustments	16.9		—		16.9
Balance at September 30, 2020	$	2,321.5	$	4.8	$	2,326.3

Components of intangible assets, net, are as follows:

	September 30,		June 30,
	2020		2020
Intangible assets:
Software and software licenses	$	2,776.2	$	2,719.1
Customer contracts and lists	1,029.4		1,021.2
Other intangibles	239.3		239.2
	4,044.9		3,979.5
Less accumulated amortization:
Software and software licenses	(1,950.4)		(1,912.0)
Customer contracts and lists	(654.1)		(628.3)
Other intangibles	(224.5)		(223.4)
	(2,829.0)		(2,763.7)
Intangible assets, net	$	1,215.9	$	1,215.8

Other intangibles consist primarily of purchased rights, trademarks and trade names (acquired directly or through acquisitions).  All intangible assets have finite lives and, as such, are subject to amortization.  The weighted average remaining useful life of the intangible assets is 6 years (6 years for software and software licenses, 5 years for customer contracts and lists, and 3 years for other intangibles).  Amortization of intangible assets was $84.2 million and $69.4 million for the three months ended September 30, 2020 and 2019, respectively.

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Estimated future amortization expenses of the Company's existing intangible assets are as follows:

	Amount
Nine months ending June 30, 2021	$	232.1
Twelve months ending June 30, 2022	$	256.6
Twelve months ending June 30, 2023	$	212.8
Twelve months ending June 30, 2024	$	166.8
Twelve months ending June 30, 2025	$	115.2
Twelve months ending June 30, 2026	$	65.9

Note 9. Short-term Financing

The Company has a $3.2 billion, 364-day credit agreement that matures in June 2021 with a one year term-out option.  The Company also has a $2.75 billion five year credit facility that matures in June 2024 that contains an accordion feature under which the aggregate commitment can be increased by $500 million, subject to the availability of additional commitments. In addition, the Company has a five year $3.75 billion credit facility maturing in June 2023 that also contains an accordion feature under which the aggregate commitment can be increased by $500 million, subject to the availability of additional commitments. The interest rate applicable to committed borrowings is tied to LIBOR, the effective federal funds rate, or the prime rate, depending on the notification provided by the Company to the syndicated financial institutions prior to borrowing. The Company is also required to pay facility fees on the credit agreements. The primary uses of the credit facilities are to provide liquidity to the commercial paper program and funding for general corporate purposes, if necessary. The Company had no borrowings through September 30, 2020 under the credit agreements.

The Company's U.S. short-term funding requirements related to client funds are sometimes obtained on an unsecured basis through the issuance of commercial paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. This commercial paper program provides for the issuance of up to $9.7 billion in aggregate maturity value. The Company’s commercial paper program is rated A-1+ by Standard & Poor’s and Prime-1 (“P-1”) by Moody’s.  These ratings denote the highest quality commercial paper securities. Maturities of commercial paper can range from overnight to up to 364 days. At September 30, 2020 and June 30, 2020, the Company had no commercial paper borrowing outstanding. Details of the borrowings under the commercial paper program are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average daily borrowings (in billions)	$	2.4		$	4.0
Weighted average interest rates	0.1		%	2.3		%
Weighted average maturity (approximately in days)	1 day			2 days

The Company’s U.S., Canadian and United Kingdom short-term funding requirements related to client funds obligations are sometimes obtained on a secured basis through the use of reverse repurchase agreements, which are collateralized principally by government and government agency securities, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. These agreements generally have terms ranging from overnight to up to five business days. At September 30, 2020, there were no outstanding obligations related to reverse repurchase agreements. At June 30, 2020, the Company had $13.6 million of outstanding obligations related to the reverse repurchase agreements. Details of the reverse repurchase agreements are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average outstanding balances	$	152.4		$	426.6
Weighted average interest rates	0.3		%	2.0		%

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Note 10. Debt

The Company has two series of fixed-rate notes with 10-year, staggered maturities for an aggregate principal amount of $2.0 billion (collectively the “Notes”). The Notes are senior unsecured obligations, and interest is payable in arrears, semi-annually.

During the three months ended September 30, 2020, the Company issued $1.0 billion of senior notes due in 2030 bearing a fixed interest rate of 1.250%. The Company also redeemed $1.0 billion of senior notes bearing a fixed interest rate of 2.250%. In connection with the senior notes issuance, the Company also terminated several derivative contracts in place to hedge exposure in changes in benchmark interest rates for the senior notes issued with an aggregate notional amount totaling $1.0 billion (of which $400.0 million were entered into during fiscal year 2020 and $600.0 million were entered into on the day of issuance). Since these derivative contracts were classified as cash flow hedges, the unamortized loss of $43.6 million was deferred in accumulated other comprehensive income and will be amortized to earnings over the life of the Notes as the interest payments are made.

The principal amounts and associated effective interest rates of the Notes and other debt as of September 30, 2020 and June 30, 2020, are as follows:

Debt instrument	Effective Interest Rate	September 30, 2020		June 30, 2020
Fixed-rate 2.250% notes due September 15, 2020	2.37%	$	—	$	1,000.0
Fixed-rate 3.375% notes due September 15, 2025	3.47%	1,000.0		1,000.0
Fixed-rate 1.250% notes due September 1, 2030	1.83%	1,000.0		—
Other		8.2		8.4
		2,008.2		2,008.4
Less: current portion (a)		(1.8)		(1,001.8)
Less: unamortized discount and debt issuance costs		(12.5)		(3.8)
Total long-term debt		$	1,993.9	$	1,002.8

(a) - Current portion of long-term debt as of September 30, 2020 is included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

The effective interest rates for the Notes include the interest on the Notes and amortization of the discount and debt issuance costs.

As of September 30, 2020, the fair value of the Notes, based on Level 2 inputs, was $2,115.0 million. For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party service, see Note 1 “Summary of Significant Accounting Policies” in the Company's Annual Report on Form 10-K for fiscal 2020.

Note 11. Employee Benefit Plans

A.  Stock-based Compensation Plans. Stock-based compensation consists of the following:

•Stock Options.  Stock options are granted to employees at exercise prices equal to the fair market value of the Company's common stock on the dates of grant. Stock options generally vest ratably over 4 years and have a term of 10 years. Compensation expense is measured based on the fair value of the stock option on the grant date and recognized on a straight-line basis over the vesting period. Stock options are forfeited if the employee ceases to be employed by the Company prior to vesting. The Company determines the fair value of stock options issued using a binomial option-pricing model. The binomial option-pricing model considers a range of assumptions related to volatility, dividend yield, risk-free interest rate, and employee exercise behavior. Expected volatilities utilized in the binomial option-pricing model are based on a combination of implied market volatilities, historical volatility of the Company's stock price, and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial option-pricing model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of a stock option grant is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.

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•Restricted Stock.

•Time-Based Restricted Stock and Time-Based Restricted Stock Units. Time-based restricted stock and time-based restricted stock units granted September 1, 2018 and after generally vest ratably over 3 years. Time-based restricted stock and time-based restricted stock units granted prior to September 1, 2018 are generally subject to a vesting period of 2 years. Awards are forfeited if the employee ceases to be employed by the Company prior to vesting.

Time-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of time-based restricted stock is measured based on the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period. Dividends are paid on shares awarded under the time-based restricted stock program.

Time-based restricted stock units are settled in cash and cannot be transferred during the vesting period. Compensation expense relating to the issuance of time-based restricted stock units is recorded over the vesting period and is initially based on the fair value of the award on the grant date and is subsequently remeasured at each reporting date during the vesting period based on the change in the ADP stock price. No dividend equivalents are paid on units awarded under the time-based restricted stock unit program.

•Performance-Based Restricted Stock and Performance-Based Restricted Stock Units. Performance-based restricted stock and performance-based restricted stock units generally vest over a one to three-year performance period and a subsequent service period of up to 38 months. Under these programs, the Company communicates “target awards” at the beginning of the performance period with possible payouts at the end of the performance period ranging from 0% to 150% of the “target awards.” Awards are generally forfeited if the employee ceases to be employed by the Company prior to vesting.

Performance-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of performance-based restricted stock is recognized over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of shares awarded during the performance period based on probable and actual performance against targets. After the performance period, if the performance targets are achieved, employees are eligible to receive dividends during the remaining vesting period on shares awarded under the performance-based restricted stock program.

Performance-based restricted stock units cannot be transferred and are settled in either cash or stock, depending on the employee's home country. Compensation expense relating to the issuance of performance-based restricted stock units settled in cash is recognized over the vesting period initially based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded during the performance period based on probable and actual performance against targets. In addition, compensation expense is remeasured at each reporting period during the vesting period based on the change in the ADP stock price. Compensation expense relating to the issuance of performance-based restricted stock units settled in stock is recorded over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded based on the probable and actual performance against targets. Dividend equivalents are paid on awards under the performance-based restricted stock unit program.

•Employee Stock Purchase Plan. The Company offers an employee stock purchase plan that allows eligible employees to purchase shares of common stock at a price equal to 95% of the market value for the Company's common stock on the last day of the offering period. This plan has been deemed non-compensatory and, therefore, no compensation expense has been recorded.

The Company currently utilizes treasury stock to satisfy stock option exercises, issuances under the Company's employee stock purchase plan, and restricted stock awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program. The Company repurchased 1.7 million and 1.9 million shares in the three months ended September 30, 2020 and 2019, respectively. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions.

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The following table represents pre-tax stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively:

	Three Months Ended
	September 30,
	2020		2019
Operating expenses	$	3.6	$	4.0
Selling, general and administrative expenses	25.3		28.3
System development and programming costs	4.9		4.8
Total stock-based compensation expense	$	33.8	$	37.1

During the three months ended September 30, 2020, the following activity occurred under the Company's existing plans:

Stock Options:

	Number of Options (in thousands)	Weighted Average Price (in dollars)
Options outstanding at July 1, 2020	3,510	$	126
Options granted	1,153	$	139
Options exercised	(156)	$	95
Options forfeited/cancelled	(8)	$	144
Options outstanding at September 30, 2020	4,499	$	130

Time-Based Restricted Stock and Time-Based Restricted Stock Units:

	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2020	905	180
Restricted shares/units granted	636	103
Restricted shares/units vested	(340)	(73)
Restricted shares/units forfeited	(9)	(1)
Restricted shares/units outstanding at September 30, 2020	1,192	209

Performance-Based Restricted Stock and Performance-Based Restricted Stock Units:

	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2020	179	851
Restricted shares/units granted	156	167
Restricted shares/units vested	(70)	(279)
Restricted shares/units forfeited	(2)	(5)
Restricted shares/units outstanding at September 30, 2020	263	734

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The fair value for stock options granted was estimated at the date of grant using the following assumptions:

	Three Months Ended
	September 30,
	2020			2019
Risk-free interest rate	0.1		%	1.4		%
Dividend yield	2.6		%	1.9		%
Weighted average volatility factor	25.8		%	19.3		%
Weighted average expected life (in years)	5.4			5.4
Weighted average fair value (in dollars)	$	21.66		$	24.40

B.  Pension Plans

The components of net pension income were as follows:

	Three Months Ended
	September 30,
	2020		2019
Service cost – benefits earned during the period	$	1.2	$	14.9
Interest cost on projected benefits	12.7		15.4
Expected return on plan assets	(30.4)		(29.5)
Net amortization and deferral	2.5		1.6
Settlement charges and special termination benefits	2.9		(5.1)
Net pension income	$	(11.1)	$	(2.7)

Note 12. Income Taxes

The effective tax rate for the three months ended September 30, 2020 and 2019 was 21.3% and 21.2%, respectively. The increase in the effective tax rate is primarily due to a decrease in the excess tax benefit on stock-based compensation partially offset by favorable adjustments to prior year tax liabilities in the three months ended September 30, 2020.

Note 13. Commitments and Contingencies

In June 2018, a potential class action complaint was filed against the Company in the Circuit Court of Cook County, Illinois asserting that ADP violated the Illinois Biometric Privacy Act in connection with its collection, use and storage of biometric data of employees of its clients who are residents of Illinois. In addition, similar potential class action complaints have been filed in Illinois state courts against ADP and/or certain of its clients with respect to the collection, use and storage of biometric data of the employees of these clients. In June 2020, the Company reached a settlement of all outstanding claims against ADP for $25.0 million, subject to the court's preliminary approval. The Company does not expect that any of the remaining cases against ADP's clients will result in any material liabilities to the Company.

In May 2020, two potential class action complaints were filed against ADP, TotalSource and related defendants in the U.S. District Court, District of New Jersey. The complaints assert violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with the ADP TotalSource Retirement Savings Plan’s fiduciary administrative and investment decision-making. The complaints seek statutory and other unspecified monetary damages, injunctive relief and attorney’s fees. These claims are still in their earliest stages and the Company is unable to estimate any reasonably possible loss, or range of loss, with respect to these matters. The Company intends to vigorously defend against these lawsuits.

The Company is subject to various claims, litigation, and regulatory compliance matters in the normal course of business. When a loss is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. Management currently believes that the resolution of these claims, litigation and regulatory compliance matters against us, individually or in the aggregate, will not have a material adverse impact on our consolidated results of operations, financial condition or cash flows. These matters are subject to inherent uncertainties and management's view of these matters may change in the future.

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It is not the Company’s business practice to enter into off-balance sheet arrangements. In the normal course of business, the Company may enter into contracts in which it makes representations and warranties that relate to the performance of the Company’s services and products. The Company does not expect any material losses related to such representations and warranties.

Note 14. Stockholders' Equity

Changes in stockholders' equity by component are as follows:

	Three Months Ended
	September 30, 2020
	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		AOCI		Total
Balance at June 30, 2020	$	63.9	$	1,333.8	$	18,436.3	$	(14,067.0)	$	(14.8)	$	5,752.2
Net earnings	—		—		602.1		—		—		602.1
Other comprehensive income	—		—		—		—		30.7		30.7
Stock-based compensation expense	—		35.1		—		—		—		35.1
Issuances relating to stock compensation plans	—		(20.5)		—		65.3		—		44.8
Treasury stock acquired (1.7 million shares repurchased)	—		—		—		(262.3)		—		(262.3)
Dividends declared ($0.91 per share)	—		—		(393.7)		—		—		(393.7)
Balance at September 30, 2020	$	63.9	$	1,348.4	$	18,644.7	$	(14,264.0)	$	15.9	$	5,808.9

	Three Months Ended
	September 30, 2019
	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		AOCI		Total
Balance at June 30, 2019	$	63.9	$	1,183.2	$	17,500.6	$	(13,090.5)	$	(257.3)	$	5,399.9
Net earnings	—		—		582.4		—		—		582.4
Other comprehensive income	—		—		—		—		23.4		23.4
Stock-based compensation expense	—		36.0		—		—		—		36.0
Issuances relating to stock compensation plans	—		(5.5)		—		70.5		—		65.0
Treasury stock acquired (1.9 million shares repurchased)	—		—		—		(392.6)		—		(392.6)
Dividends declared ($0.79 per share)	—		—		(346.6)		—		—		(346.6)
Other	—		—		(6.8)		—		—		(6.8)
Balance at September 30, 2019	$	63.9	$	1,213.7	$	17,729.6	$	(13,412.6)	$	(233.9)	$	5,360.7

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Note 15. Reclassifications out of Accumulated Other Comprehensive Income (“AOCI”)

Changes in AOCI by component are as follows:

	Three Months Ended
	September 30, 2020
	Currency Translation Adjustment		Net Gains/Losses on Available-for-sale Securities			Cash Flow Hedging Activities			Pension Liability			Accumulated Other Comprehensive (Loss) /Income
Balance at June 30, 2020	$	(322.2)	$	680.4		$	(30.3)		$	(342.7)		$	(14.8)
Other comprehensive (loss)/income before reclassification adjustments	50.4		(24.6)			(3.3)			—			22.5
Tax effect	—		5.5			0.8			—			6.3
Reclassification adjustments to net earnings	—		(0.3)		(A)	0.6		(C)	2.5		(B)	2.8
Tax effect	—		0.1			—			(1.0)			(0.9)
Balance at September 30, 2020	$	(271.8)	$	661.1		$	(32.2)		$	(341.2)		$	15.9

	Three Months Ended
	September 30, 2019
	Currency Translation Adjustment		Net Gains/Losses on Available-for-sale Securities			Pension Liability			Accumulated Other Comprehensive (Loss) /Income
Balance at June 30, 2019	$	(269.2)	$	224.6		$	(212.7)		$	(257.3)
Other comprehensive (loss)/income before reclassification adjustments	(48.9)		96.1			—			47.2
Tax effect	—		(20.8)			—			(20.8)
Reclassification adjustments to net earnings	—		(2.3)		(A)	(1.7)		(B)	(4.0)
Tax effect	—		0.5			0.5			1.0
Balance at September 30, 2019	$	(318.1)	$	298.1		$	(213.9)		$	(233.9)

(A) Reclassification adjustments out of AOCI are included within Other (income)/expense, net, on the Statements of Consolidated Earnings.

(B) Reclassification adjustments out of AOCI are included in net pension income (see Note 11).

(C) Reclassification adjustments out of AOCI are included in Interest expense on the Statements of Consolidated Earnings.

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Note 16. Interim Financial Data by Segment

Based upon similar economic and operational characteristics, the Company’s strategic business units have been aggregated into the following two reportable segments: Employer Services and PEO Services. The primary components of the “Other” segment are certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, costs related to our transformation office, severance costs, non-recurring gains and losses, the elimination of intercompany transactions, and interest expense. Certain revenues and expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. The Company made changes to the allocation methodology for certain corporate allocations, in both the current period and the prior period in the table below, which did not materially affect reportable segment results.

Segment Results:

	Revenues
	Three Months Ended
	September 30,
	2020		2019
Employer Services	$	2,376.8	$	2,441.4
PEO Services	1,095.9		1,056.9
Other	(2.0)		(2.6)
	$	3,470.7	$	3,495.7

	Earnings before Income Taxes
	Three Months Ended
	September 30,
	2020		2019
Employer Services	$	689.3	$	679.4
PEO Services	159.4		149.3
Other	(83.5)		(89.6)
	$	765.2	$	739.1

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

(Tabular dollars are presented in millions, except per share amounts)

FORWARD-LOOKING STATEMENTS

This document and other written or oral statements made from time to time by Automatic Data Processing, Inc. and its subsidiaries (“ADP” or the “Company”) may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could” and other words of similar meaning, are forward-looking statements. These statements are based on management’s expectations and assumptions and depend upon or refer to future events or conditions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements or that could contribute to such difference include: ADP's success in obtaining and retaining clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing legislation or regulations; overall market, political and economic conditions, including interest rate and foreign currency trends; competitive conditions; our ability to maintain our current credit ratings and the impact on our funding costs and profitability; security or cyber breaches, fraudulent acts, and system interruptions and failures; employment and wage levels; changes in technology; availability of skilled technical associates; the impact of new acquisitions and divestitures; the adequacy, effectiveness and success of our business transformation initiatives; and the impact of and uncertainties related to major natural disasters or catastrophic events, including the coronavirus ("COVID-19") pandemic. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under “Item 1A. - Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 (“fiscal 2020”), and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.

NON-GAAP FINANCIAL MEASURES

In addition to our U.S. GAAP results, we use adjusted results and other non-GAAP metrics to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods. Adjusted EBIT, adjusted EBIT margin, adjusted net earnings, adjusted diluted earnings per share, adjusted effective tax rate and organic constant currency are all non-GAAP financial measures. Please refer to the accompanying financial tables in the “Non-GAAP Financial Measures” section for a discussion of why ADP believes these measures are important and for a reconciliation of non-GAAP financial measures to their comparable GAAP financial measures.

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EXECUTIVE OVERVIEW

Highlights from the three months ended September 30, 2020 include:

We are a leading global provider of cloud-based Human Capital Management (“HCM”) technology solutions to employers around the world. The global COVID-19 pandemic has had a significant impact on the global business environment and on our clients, but our priority has been and continues to be the safety of our associates and the needs of our clients, and we have continued to provide HCM services, including process payroll and tax obligations, to our clients during this time. ADP's efforts have also been focused on providing information and tools to help clients understand and navigate the governmental relief that has been adopted globally. In addition, we released a Return to Workplace solution that assists our clients in bringing their employees back to work safely through a comprehensive set of tools designed to streamline the entire process.

Despite on-going headwinds related to COVID-19, we have seen some improvements in our reported metrics. Our pays per control metric, which represents growth of the employee base for a large portion of our client base, showed a decline of 9% in the three months ended September 30, 2020 compared to a decline of 11% in the three months ended June 30, 2020. Employer Services New Business Bookings grew 2% for the three months ended September 30, 2020, as economic conditions began to stabilize and we saw our clients and prospects show a greater willingness to engage and invest in new HCM solutions. The PEO average number of Worksite Employees decreased 3% for the three months ended September 30, 2020. In addition, we continue to move forward with our digital and procurement transformation initiatives and delivered profit growth and margin expansion for the three months ended September 30, 2020.

We continue to drive innovation by anticipating our clients' evolving needs as the world of work changes as we are always designing for people. We are leading the HCM industry with innovations like our next gen platforms and driving growth through our strategic, cloud-based HCM solutions. We further enable these solutions by supplementing them with organic, differentiated investments such as the ADP Marketplace and ADP Datacloud, and through our compliance expertise. The recognition we have received in the market for our next gen payroll platform and in winning this year's HR Executive 'Top HR Product' award reflect our commitment to innovation and strong execution by our associates.

We have a strong business model, a highly cash generative business with low capital intensity, and offer a suite of products that provide critical HCM support to our clients. We generate sufficient free cash flow to satisfy our cash dividend and our modest debt obligations, which enables us to absorb the impact of downturns and remain steadfast in our reinvestments, our longer term strategy, and our commitments to shareholder friendly actions. We are committed to building upon our past successes by investing in our business through enhancements in research and development and by driving meaningful transformation in the way we operate. Our financial condition remains solid at September 30, 2020 and we remain well positioned to support our associates and our clients.

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RESULTS AND ANALYSIS OF CONSOLIDATED OPERATIONS

Total Revenues

For the three months ended September 30:

Growth:	â	1%
Organic constant currency:	â	1%

Revenues for the three months ended September 30, 2020 decreased due to an impact from lower New Business Bookings during the fourth quarter of fiscal 2020, a decrease in our pays per control and a decrease in our interest earned on funds held for clients discussed below. These decreases were partially offset by strong retention. Refer to “Analysis of Reportable Segments” for additional discussion of the changes in revenue for both of our reportable segments, Employer Services and Professional Employer Organization (“PEO”) Services, respectively.

Total revenues for the three months ended September 30, 2020 include interest on funds held for clients of $106.5 million, as compared to $133.9 million for the three months ended September 30, 2019. The decrease in the consolidated interest earned on funds held for clients resulted from the decrease in our average interest rate earned to 1.9% for the three months ended September 30, 2020, as compared to 2.3% for the three months ended September 30, 2019, coupled with a decrease in our average client funds balance of 7.2% to $22.0 billion for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019.

Total Expenses

	Three Months Ended
	September 30,
	2020		2019		% Change
Costs of revenues:
Operating expenses	$	1,762.1	$	1,787.7	(1)	%
Systems development and programming costs	168.7		168.2		—	%
Depreciation and amortization	103.5		88.9		16	%
Total costs of revenues	2,034.3		2,044.8		(1)	%
Selling, general and administrative expenses	681.0		726.5		(6)	%
Interest expense	15.1		39.9		(62)	%
Total expenses	$	2,730.4	$	2,811.2	(3)	%

Operating expenses decreased due to reduced costs from certain cost and headcount actions as a result of our broad-based transformation initiatives, including digital and procurement transformation initiatives, and excess capacity headcount actions. Additionally, operating expenses decreased due to reduced travel and entertainment expenses, decreased pension costs as a result of eliminated U.S. pension service costs with the July 1, 2020 cessation of U.S. participants accruing any future service benefits, and a favorable change in our estimated losses related to ADP Indemnity in the three months ended September 30, 2020. These decreases were partially offset by an increase in our PEO Services zero-margin benefits pass-through costs to $741.0 million from $699.1 million for the three months ended September 30, 2020 and 2019, respectively.

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Systems development and programming costs were flat for the three months ended September 30, 2020 due to increased investments and costs to develop, support, and maintain our products, offset by capitalization of costs related to our strategic projects, including our next gen platforms. Depreciation and amortization expense increased due to the amortization of our acquisitions of intangibles and internally developed software.

Selling, general and administrative expenses decreased for the three months ended September 30, 2020 due to decreased selling and marketing expenses and reduced facilities costs and travel and entertainment expenses. Additionally, selling, general and administrative expenses decreased due to reduced costs from certain cost and headcount actions as a result of our broad-based transformation initiatives, including procurement transformation initiatives, and excess capacity headcount actions.

Interest expense decreased for the three months ended September 30, 2020 due to a decrease in average interest rates for commercial paper borrowings to 0.1% for the three months ended September 30, 2020, as compared to 2.3% for the three months ended September 30, 2019 coupled with a decrease in average daily borrowings under our commercial paper program to $2.4 billion for the three months ended September 30, 2020, as compared to $4.0 billion for the three months ended September 30, 2019.

Other (Income)/Expense, net

	Three Months Ended
	September 30,
	2020		2019		$ Change
Interest income on corporate funds	$	(13.8)	$	(32.3)	$	(18.5)
Realized (gains) / losses on available-for-sale securities, net	(0.3)		(2.3)		(2.0)
Impairment of assets	2.8		—		(2.8)
Gain on sale of assets	(0.2)		(1.9)		(1.7)
Non-service components of pension income, net	(13.4)		(18.1)		(4.7)
Other (income)/expense, net	$	(24.9)	$	(54.6)	$	(29.7)

Other (income)/expense, net, decreased $29.7 million for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019. The decrease is primarily due to a decrease in interest income on corporate funds due to lower interest rates earned, a decrease in non-service components of pension income, net, and impairment charges of $2.8 million recorded in the three months ended September 30, 2020 as a result of recognizing certain owned facilities at fair value given intent to sell and accordingly classified as held for sale.

Earnings Before Income Taxes

For the three months ended September 30:

Growth: á 4% á 90bps

Earnings before income taxes increased for the three months ended September 30, 2020 due to the decreases in expenses discussed above.

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Margin increased for the three months ended September 30, 2020 as a result of reduced costs from certain cost and headcount actions as a result of our broad-based transformation initiatives, including digital and procurement transformation initiatives, and excess capacity headcount actions. In addition, our margin improvement was aided by decreased interest expense, decreased selling and marketing expenses, reduced facilities costs and travel and entertainment expenses, decreased pension costs and a change in our estimated losses related to ADP Indemnity. These were partially offset by incremental pressure from growth in our zero-margin benefits pass-throughs and an increase in amortization expense.

Adjusted Earnings before certain Interest and Taxes ("Adjusted EBIT")

For the three months ended September 30:

Growth: á 5% á 120bps

Adjusted EBIT and Adjusted EBIT margin exclude certain interest amounts, net charges related to our broad-based transformation initiatives and the impact of the net severance charges related to excess capacity as applicable in the respective periods.

Provision for Income Taxes

The effective tax rate for the three months ended September 30, 2020 and 2019 was 21.3% and 21.2%, respectively. The increase in the effective tax rate is primarily due to a decrease in the excess tax benefit on stock-based compensation partially offset by favorable adjustments to prior year tax liabilities in the three months ended September 30, 2020.

Adjusted Provision for Income Taxes

The adjusted effective tax rate for the three months ended September 30, 2020 and 2019 was 21.3% and 21.2%, respectively. The drivers of the adjusted effective tax rate are the same as the drivers of the effective tax rate discussed above.

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Net Earnings and Diluted EPS

For the three months ended September 30:

Growth: á 3% á 4%

For the three months ended September 30, 2020, net earnings reflect the changes described above in our earnings before income taxes and our effective tax rate.

For the three months ended September 30, 2020, diluted EPS increased as a result of an increase in net earnings and the impact of fewer shares outstanding resulting from the repurchase of approximately 1.7 million shares during the three months ended September 30, 2020 and 1.9 million shares for the three months ended September 30, 2019, partially offset by the issuances of shares under our employee benefit plans.

Adjusted Net Earnings and Adjusted Diluted EPS

For the three months ended September 30:

Growth: á 4% á 5%

For the three months ended September 30, 2020, adjusted net earnings reflect the changes described above in our adjusted EBIT and our adjusted effective tax rate.

For the three months ended September 30, 2020, adjusted diluted EPS reflects the changes described above in our adjusted net earnings and shares outstanding.

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ANALYSIS OF REPORTABLE SEGMENTS

	Revenues
	Three Months Ended
	September 30,				% Change
	2020		2019		As Reported		Organic constant currency
Employer Services	$	2,376.8	$	2,441.4	(3)	%	(3)	%
PEO Services	1,095.9		1,056.9		4	%	4	%
Other	(2.0)		(2.6)		n/m		n/m
	$	3,470.7	$	3,495.7	(1)	%	(1)	%

	Earnings before Income Taxes
	Three Months Ended				% Change
	September 30,
	2020		2019		As Reported
Employer Services	$	689.3	$	679.4	1	%
PEO Services	159.4		149.3		7	%
Other	(83.5)		(89.6)		n/m
	$	765.2	$	739.1	4	%

n/m - not meaningful

Employer Services

Revenues

Revenues decreased for the three months ended September 30, 2020 due to an impact from lower New Business Bookings during the fourth quarter of fiscal 2020, a decrease in our pays per control of 9% and a decrease in interest earned on funds held for clients. These decreases were partially offset by strong retention.

Our pays per control metric measures the number of employees on our clients' payrolls as measured on a same-store-sales basis utilizing a representative subset of payrolls ranging from small to large businesses that are reflective of a broad range of U.S. geographic regions.

Earnings before Income Taxes

Employer Services' earnings before income taxes increased for the three months ended September 30, 2020 due to decreases in expenses. The decreases in expenses were due to reduced costs from certain cost and headcount actions as a result of our broad-based transformation initiatives, including digital and procurement transformation initiatives, and excess capacity headcount actions. Additionally, decreases in expenses were due to a decrease in selling and marketing expenses and reduced facilities costs and travel and entertainment expenses. These decreases were partially offset by an increase in amortization expense.

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For the three months ended September 30, respectively:

Growth: á 120bps

Employer Services' margin increased for the three months ended September 30, 2020 as a result of reduced costs from certain cost and headcount actions as a result of our broad-based transformation initiatives, including digital and procurement initiatives, and excess capacity headcount actions. In addition, our margin improvement was aided by decreased selling and marketing expenses and reduced travel and entertainment expenses. These were partially offset by an increase in amortization expense.

PEO Services

Revenues

	PEO Revenues
	Three Months Ended				Change
	September 30,
	2020		2019		$		%
PEO Services' revenues	$	1,095.9	$	1,056.9	$	39.0	4	%
Less: PEO zero-margin benefits pass-throughs	741.0		699.1		41.9		6	%
PEO Services' revenues excluding zero-margin benefits pass-throughs	$	354.9	$	357.8	$	(2.9)	(1)	%

PEO Services' revenues increased 4% for the three months ended September 30, 2020, due to an increase in zero-margin benefits pass-throughs partially offset by a 3% decrease in the average number of Worksite Employees for the three months ended September 30, 2020. Additionally, PEO Services' revenues, excluding zero-margin benefits pass-through costs, decreased by 1% for the three months ended September 30, 2020.

Earnings before Income Taxes

PEO Services' earnings before income taxes increased 7% for the three months ended September 30, 2020 due to a change in our estimated losses related to ADP Indemnity and a decrease in selling expenses in the three months ended September 30, 2020, as compared to the three months ended September 30, 2019.

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For the three months ended September 30, respectively:

Growth: á 40bps

PEO Services' margin increased for the three months ended September 30, 2020, due to a change in our estimated losses related to ADP Indemnity and a decrease in selling expenses in the three months ended September 30, 2020, as compared to the three months ended September 30, 2019.

ADP Indemnity provides workers’ compensation and employer’s liability deductible reimbursement insurance protection for PEO Services’ worksite employees up to $1 million per occurrence. PEO Services has secured a workers’ compensation and employer’s liability insurance policy that has a $1 million per occurrence retention and, in fiscal years 2012 and prior, aggregate stop loss insurance that covers any aggregate losses within the $1 million retention that collectively exceed a certain level, from an admitted and licensed insurance company of AIG. We utilize historical loss experience and actuarial judgment to determine the estimated claim liability, and changes in estimated ultimate incurred losses are included in the PEO segment. ADP Indemnity recorded a pre-tax benefit of approximately $10.4 million for the three months ended September 30, 2020, compared to approximately $3.4 million for the three months ended September 30, 2019, which were primarily a result of changes in our estimated actuarial losses. Beginning in fiscal year 2013, ADP Indemnity paid premiums to enter into reinsurance arrangements with ACE American Insurance Company, a wholly-owned subsidiary of Chubb Limited, to cover substantially all losses incurred by ADP Indemnity during these policy years. Each of these reinsurance arrangements limits our overall exposure incurred up to a certain limit. We believe the likelihood of ultimate losses exceeding this limit is remote. For the three months ended September 30, 2020, ADP Indemnity paid a premium of $240 million to enter into a reinsurance arrangement with Chubb Limited to cover substantially all losses incurred by ADP Indemnity for the fiscal 2021 policy year on terms substantially similar to the fiscal 2020 reinsurance policy.

Other

The primary components of “Other” are certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, costs related to our transformation office, severance costs, non-recurring gains and losses, the elimination of intercompany transactions, and other interest expense.

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Non-GAAP Financial Measures

In addition to our U.S. GAAP results, we use the adjusted results and other non-GAAP metrics set forth in the table below to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods:

Adjusted Financial Measure	U.S. GAAP Measures
Adjusted EBIT	Net earnings
Adjusted provision for income taxes	Provision for income taxes
Adjusted net earnings	Net earnings
Adjusted diluted earnings per share	Diluted earnings per share
Adjusted effective tax rate	Effective tax rate
Organic constant currency	Revenues

We believe that the exclusion of the identified items helps us reflect the fundamentals of our underlying business model and analyze results against our expectations and against prior period, and to plan for future periods by focusing on our underlying operations. We believe that the adjusted results provide relevant and useful information for investors because it allows investors to view performance in a manner similar to the method used by management and improves their ability to understand and assess our operating performance.  The nature of these exclusions is for specific items that are not fundamental to our underlying business operations.  Since these adjusted financial measures and other non-GAAP metrics are not measures of performance calculated in accordance with U.S. GAAP, they should not be considered in isolation from, as a substitute for, or superior to their corresponding U.S. GAAP measures, and they may not be comparable to similarly titled measures at other companies.

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	Three Months Ended						% Change
	September 30,
	2020			2019			As Reported
Net earnings	$	602.1		$	582.4		3	%
Adjustments:
Provision for income taxes	163.1			156.7
All other interest expense (a)	14.1			14.8
All other interest income (a)	(1.8)			(8.4)
Transformation initiatives (b)	0.8			(0.6)
Excess capacity severance charges (c)	2.4			—
Adjusted EBIT	$	780.7		$	744.9		5	%
Adjusted EBIT Margin	22.5		%	21.3		%
Provision for income taxes	$	163.1		$	156.7		4	%
Adjustments:
Transformation initiatives (d)	0.2			(0.2)
Excess capacity severance charges (d)	0.6			—
Adjusted provision for income taxes	$	163.9		$	156.5		5	%
Adjusted effective tax rate (e)	21.3		%	21.2		%
Net earnings	$	602.1		$	582.4		3	%
Adjustments:
Transformation initiatives (b)	0.8			(0.6)
Income tax (benefit)/ provision for transformation initiatives (d)	(0.2)			0.2
Excess capacity severance charges (c)	2.4			—
Income tax benefit for excess capacity severance charges (d)	(0.6)			—
Adjusted net earnings	$	604.5		$	582.0		4	%
Diluted EPS	$	1.40		$	1.34		4	%
Adjustments:
Transformation initiatives (b) (d)	—			—
Excess capacity severance charges (c) (d)	—			—
Adjusted diluted EPS	$	1.41		$	1.34		5	%

(a) We 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 are not related to our client funds extended investment strategy and are labeled as “All other interest expense” and “All other interest income.”

(b) In the three months ended September 30, 2020, transformation initiatives include charges of $2.8 million related to impairment charges as a result of recognizing certain owned facilities at fair value given intent to sell and accordingly classified as held for sale and net reversals of charges related to transformation initiatives of $2.0 million. Unlike certain other severance charges in prior periods that are not included as an adjustment to get to adjusted results, these specific charges relate to actions that are part of our broad-based, company-wide transformation initiatives.

(c) Represents net severance cost related to excess capacity. Unlike certain other severance charges in prior periods that are not included as an adjustment to get to adjusted results, these specific charges relate to actions that are part of our broad-based, company-wide initiatives to address excess capacity across our business and functions.

(d) The income tax (benefit)/ provision was calculated based on the annualized marginal rate in effect during the quarter of the adjustment.

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(e) The Adjusted effective tax rate is calculated as our Adjusted provision for income taxes divided by the sum of our Adjusted net earnings plus our Adjusted provision for income taxes.

The following table reconciles our reported growth rates to the non-GAAP measure of organic constant currency, which excludes the impact of acquisitions, the impact of dispositions, and the impact of foreign currency. The impact of acquisitions and dispositions is calculated by excluding the current year revenues of acquisitions until the one-year anniversary of the transaction and by excluding the prior year revenues of divestitures for the one-year period preceding the transaction. The impact of foreign currency is determined by calculating the current year result using foreign exchange rates consistent with the prior year. The PEO segment is not impacted by acquisitions, dispositions or foreign currency.

	Three Months Ended
	September 30,
	2020
Consolidated revenue growth as reported	(1)	%
Adjustments:
Impact of acquisitions	—	%
Impact of foreign currency	—	%
Consolidated revenue growth, organic constant currency	(1)	%
Employer Services revenue growth as reported	(3)	%
Adjustments:
Impact of acquisitions	—	%
Impact of foreign currency	—	%
Employer Services revenue growth, organic constant currency	(3)	%

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2020, cash and cash equivalents were $1.6 billion, which were primarily invested in time deposits and money market funds.

For corporate liquidity, we expect existing cash, cash equivalents, short-term marketable securities, cash flow from operations together with our $9.7 billion of committed credit facilities and our ability to access both long-term and short-term debt financing from the capital markets will be adequate to meet our operating, investing, and financing activities such as regular quarterly dividends, share repurchases, and capital expenditures for the foreseeable future. Our financial condition remains solid at September 30, 2020 and we have sufficient liquidity as noted above; however, given the continuing uncertainty in the rapidly changing market and economic conditions related to the COVID-19 pandemic, we will continue to evaluate the nature and extent of the impact to our financial condition and liquidity.

For client funds liquidity, we have the ability to borrow through our financing arrangements under our U.S. short-term commercial paper program and our U.S., Canadian and United Kingdom short-term reverse repurchase agreements, together with our $9.7 billion of committed credit facilities and our ability to use corporate liquidity when necessary to meet short-term funding requirements related to client funds obligations. Please see “Quantitative and Qualitative Disclosures about Market Risk” for a further discussion of the risks, including with respect to the COVID-19 pandemic, related to our client funds extended investment strategy. See Note 9 of our Consolidated Financial Statements for a description of our short-term financing including commercial paper.

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Operating, Investing and Financing Cash Flows

Our cash flows from operating, investing, and financing activities, as reflected in the Statements of Consolidated Cash Flows for the three months ended September 30, 2020 and 2019, respectively, are summarized as follows:

	Three Months Ended
	September 30,
	2020		2019		$ Change
Cash provided by / (used in):
Operating activities	$	481.9	$	432.8	$	49.1
Investing activities	264.2		122.2		142.0
Financing activities	2,524.1		(5,045.9)		7,570.0
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents	37.9		(33.1)		71.0
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	3,308.1	$	(4,524.0)	$	7,832.1

Net cash flows provided by operating activities for the three months ended September 30, 2020 and September 30, 2019 include cash payments for reinsurance agreements of $240.0 million and $215.0 million, respectively, which represent the policy premium for the entire fiscal year. The increase in operating cash provided is primarily due to growth in our business supplemented by net favorable change in the components of working capital as compared to the three months ended September 30, 2019.

Net cash flows from investing activities changed due to the timing of proceeds and purchases of corporate and client funds marketable securities of $140.1 million, lower payments related to acquisitions of intangibles and payments related to capital expenditures partially offset by lower proceeds from the sale of assets in the three months ended September 30, 2020.

Net cash flows from financing activities changed due to a net increase in the cash flow from client funds obligations of $11,266.6 million, which is due to the timing of impounds from our clients and payments to our clients' employees and other payees, proceeds from debt issuance, and less cash paid for share repurchases. These were partially offset by a decrease of net proceeds of commercial paper, payments of debt, a net repayment of reverse repurchase agreements, more cash returned to shareholders via dividends, and settlement of cash flow hedges in the three months ended September 30, 2020.

We purchased approximately 1.7 million shares of our common stock at an average price per share of $136.55 during the three months ended September 30, 2020, as compared to purchases of 1.9 million shares at an average price per share of $164.80 during the three months ended September 30, 2019. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions.

Capital Resources and Client Funds Obligations

We have $2.0 billion of senior unsecured notes with maturity dates in 2025 and 2030. We may from time to time revisit the long-term debt market to refinance existing debt, finance investments including acquisitions for our growth, and maintain the appropriate capital structure. However, there can be no assurance that volatility in the global capital and credit markets would not impair our ability to access these markets on terms acceptable to us, or at all. See Note 10 of our Consolidated Financial Statements for a description of our long-term financing.

Our U.S. short-term funding requirements related to client funds are sometimes obtained on an unsecured basis through the issuance of commercial paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. This commercial paper program provides for the issuance of up to $9.7 billion in aggregate maturity value. Our commercial paper program is rated A-1+ by Standard & Poor’s and Prime-1 (“P-1”) by Moody’s. These ratings denote the highest quality commercial paper securities. Maturities of commercial paper can range from overnight to up to 364 days. At September 30, 2020 and June 30, 2020, the Company had no commercial paper borrowing outstanding. Details of the borrowings under the commercial paper program are as follows:

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	Three Months Ended
	September 30,
	2020			2019
Average daily borrowings (in billions)	$	2.4		$	4.0
Weighted average interest rates	0.1		%	2.3		%
Weighted average maturity (approximately in days)	1 day			2 days

Our U.S., Canadian, and United Kingdom short-term funding requirements related to client funds obligations are sometimes obtained on a secured basis through the use of reverse repurchase agreements, which are collateralized principally by government and government agency securities, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. These agreements generally have terms ranging from overnight to up to five business days. We have successfully borrowed through the use of reverse repurchase agreements on an as-needed basis to meet short-term funding requirements related to client funds obligations. At September 30, 2020, there were no outstanding obligations related to reverse repurchase agreements. At June 30, 2020, the Company had $13.6 million of outstanding obligations related to the reverse repurchase agreements. Details of the reverse repurchase agreements are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average outstanding balances	$	152.4		$	426.6
Weighted average interest rates	0.3		%	2.0		%

We vary the maturities of our committed credit facilities to limit the refinancing risk of any one facility. We have a $3.2 billion, 364-day credit agreement that matures in June 2021 with a one year term-out option. In addition, we have a five-year $2.75 billion credit facility and a five-year $3.75 billion credit facility maturing in June 2024 and June 2023, respectively, each with an accordion feature under which the aggregate commitment can be increased by $500 million, subject to the availability of additional commitments. The primary uses of the credit facilities are to provide liquidity to the commercial paper program and funding for general corporate purposes, if necessary. We had no borrowings through September 30, 2020 under the credit facilities. We believe that we currently meet all conditions set forth in the revolving credit agreements to borrow thereunder and we are not aware of any conditions that would prevent us from borrowing part or all of the $9.7 billion available to us under the revolving credit agreements. See Note 9 of our Consolidated Financial Statements for a description of our short-term financing including credit facilities.

Our investment portfolio does not contain any asset-backed securities with underlying collateral of sub-prime mortgages, alternative-A mortgages, sub-prime auto loans or sub-prime home equity loans, collateralized debt obligations, collateralized loan obligations, credit default swaps, derivatives, auction rate securities, structured investment vehicles or non-investment grade fixed-income securities. We own AAA-rated senior tranches of primarily fixed rate auto loan, credit card, equipment lease, and rate reduction receivables, secured predominantly by prime collateral. All collateral on asset-backed securities is performing as expected. In addition, we own senior debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks. Our client funds investment strategy is structured to allow us to average our way through an interest rate cycle by laddering the maturities of our investments out to five years (in the case of the extended portfolio) and out to ten years (in the case of the long portfolio). This investment strategy is supported by our short-term financing arrangements necessary to satisfy short-term funding requirements relating to client funds obligations. See Note 6 of our Consolidated Financial Statements for a description of our corporate investments and funds held for clients.

Capital expenditures for the three months ended September 30, 2020 were $45.2 million, as compared to $52.2 million for the three months ended September 30, 2019. We expect capital expenditures in fiscal 2021 to be between $175 million and $200 million, as compared to $168.3 million in fiscal 2020.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our overall investment portfolio is comprised of corporate investments (cash and cash equivalents, short-term marketable securities) and client funds assets (funds that have been collected from clients but have not yet been remitted to the applicable tax authorities or client employees).

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Our corporate investments are invested in cash and cash equivalents and highly liquid, investment-grade marketable securities.  These assets are available for our regular quarterly dividends, share repurchases, capital expenditures and/or acquisitions, as well as other corporate operating purposes. All of our short-term fixed-income securities are classified as available-for-sale securities.

Our client funds assets are invested with safety of principal, liquidity, and diversification as the primary objectives. Consistent with those objectives, we also seek to maximize interest income and to minimize the volatility of interest income.  Client funds assets are invested in highly liquid, investment-grade marketable securities, with a maximum maturity of 10 years at the time of purchase, and money market securities and other cash equivalents.  

We utilize a strategy by which we extend the maturities of our investment portfolio for funds held for clients and employ short-term financing arrangements to satisfy our short-term funding requirements related to client funds obligations. Our client funds investment strategy is structured to allow us to average our way through an interest rate cycle by laddering the maturities of our investments out to five years (in the case of the extended portfolio) and out to ten years (in the case of the long portfolio). As part of our client funds investment strategy, we use the daily collection of funds from our clients to satisfy other unrelated client funds obligations, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. In circumstances where we experience a reduction in employment levels due to a slowdown in the economy, we may make tactical decisions to sell certain securities in order to reduce the size of the funds held for clients to correspond to client funds obligations. We minimize the risk of not having funds collected from a client available at the time such client’s obligation becomes due by impounding, in virtually all instances, the client’s funds in advance of the timing of payment of such client’s obligation. As a result of this practice, we have consistently maintained the required level of client funds assets to satisfy all of our obligations.

There are inherent risks and uncertainties involving our investment strategy relating to our client funds assets. Such risks include liquidity risk, including the risk associated with our ability to liquidate, if necessary, our available-for-sale securities in a timely manner in order to satisfy our client funds obligations. However, our investments are made with the safety of principal, liquidity, and diversification as the primary goals to minimize the risk of not having sufficient funds to satisfy all of our client funds obligations. We also believe we have significantly reduced the risk of not having sufficient funds to satisfy our client funds obligations by consistently maintaining access to other sources of liquidity, including our corporate cash balances, available borrowings under our $9.7 billion commercial paper program (rated A-1+ by Standard and Poor’s and P-1 by Moody’s, the highest possible short-term credit ratings), and our ability to engage in reverse repurchase agreement transactions and available borrowings under our $9.7 billion committed credit facilities. The reduced availability of financing during periods of economic turmoil, including the COVID-19 pandemic, even to borrowers with the highest credit ratings, may limit our ability to access short-term debt markets to meet the liquidity needs of our business. In addition to liquidity risk, our investments are subject to interest rate risk and credit risk, as discussed below.

We have established credit quality, maturity, and exposure limits for our investments. The minimum allowed credit rating at time of purchase for corporate, Canadian government agency and Canadian provincial bonds is BBB, for asset-backed securities is AAA, and for municipal bonds is A. The maximum maturity at time of purchase for BBB-rated securities is 5 years, for single A rated securities is 7 years, and for AA-rated and AAA-rated securities is 10 years. Time deposits and commercial paper must be rated A-1 and/or P-1. Money market funds must be rated AAA/Aaa-mf.

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Details regarding our overall investment portfolio are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average investment balances at cost:
Corporate investments	$	4,234.4		$	6,055.0
Funds held for clients	21,970.9			23,681.4
Total	$	26,205.3		$	29,736.4
Average interest rates earned exclusive of realized (gains)/losses on:
Corporate investments	1.3		%	2.1		%
Funds held for clients	1.9		%	2.3		%
Total	1.8		%	2.2		%
Net realized (gains)/losses on available-for-sale securities	$	(0.3)		$	(2.3)

	September 30, 2020		June 30, 2020
Net unrealized pre-tax gains on available-for-sale securities	$	851.9	$	876.8
Total available-for-sale securities at fair value	$	21,205.1	$	21,576.6

We are exposed to interest rate risk in relation to securities that mature, as the proceeds from maturing securities are reinvested. Factors that influence the earnings impact of interest rate changes include, among others, the amount of invested funds and the overall portfolio mix between short-term and long-term investments. This mix varies during the fiscal year and is impacted by daily interest rate changes. The annualized interest rate earned on our entire portfolio decreased from 2.2% for the three months ended September 30, 2019 to 1.8% for the three months ended September 30, 2020. A hypothetical change in both short-term interest rates (e.g., overnight interest rates or the federal funds rate) and intermediate-term interest rates of 25 basis points applied to the estimated average investment balances and any related short-term borrowings would result in approximately a $22 million impact to earnings before income taxes over the ensuing twelve-month period ending September 30, 2021. A hypothetical change in only short-term interest rates of 25 basis points applied to the estimated average short-term investment balances and any related short-term borrowings would result in approximately a $7 million impact to earnings before income taxes over the ensuing twelve-month period ending September 30, 2021.

We are exposed to credit risk in connection with our available-for-sale securities through the possible inability of the borrowers to meet the terms of the securities.  We limit credit risk by investing in investment-grade securities, primarily AAA-rated and AA- rated securities, as rated by Moody’s, Standard & Poor’s, DBRS for Canadian dollar denominated securities, and Fitch for asset-backed and commercial-mortgage-backed securities. Approximately 79% of our available-for-sale securities held a AAA-rating or AA-rating at September 30, 2020. In addition, we limit amounts that can be invested in any security other than U.S. government and government agency, Canadian government, and United Kingdom government securities.

We operate and transact business in various foreign jurisdictions and are therefore exposed to market risk from changes in foreign currency exchange rates that could impact our consolidated results of operations, financial position, or cash flows. We manage our exposure to these market risks through our regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. We may use derivative financial instruments as risk management tools and not for trading purposes.

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CRITICAL ACCOUNTING POLICIES

Our Consolidated Financial Statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  The preparation of these financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues, expenses, and other comprehensive income.  We continually evaluate the accounting policies and estimates used to prepare the Consolidated Financial Statements.  The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances.  Actual amounts and results could differ from these estimates made by management. In addition, as the duration and severity of the COVID-19 pandemic are uncertain, certain of our estimates could require further judgment or modification and therefore carry a higher degree of variability and volatility. As events continue to evolve, our estimates may change materially in future periods. Refer to Note 2 of our Consolidated Financial Statements for changes to our accounting policies effective for the fiscal 2021.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 2, New Accounting Pronouncements, of Notes to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is provided under the caption “Quantitative and Qualitative Disclosures about Market Risk” under Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 4.  Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “evaluation”).  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  Based on the evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of September 30, 2020 in ensuring that (i) information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure and (ii) such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

There was no change in the Company's internal control over financial reporting that occurred during the three months ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II.  OTHER INFORMATION

Except as noted below, all other items are either inapplicable or would result in negative responses and, therefore, have been omitted.

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Item 1.  Legal Proceedings

In the normal course of business, the Company is subject to various claims and litigation.  While the outcome of any litigation is inherently unpredictable, the Company believes it has valid defenses with respect to the legal matters pending against it and the Company believes that the ultimate resolution of these matters will not have a material adverse impact on its financial condition, results of operations, or cash flows.

With respect to the disclosure of administrative or judicial proceedings arising under any Federal, State, or local provisions regulating the discharge of materials into the environment or that are primarily for the purpose of protecting the environment, the Company has determined that the following threshold is reasonably designed to result in disclosure of any such proceeding that is material to its business or financial condition: any proceeding when the potential monetary sanctions exceed $1 million.

Item 1A.  Risk Factors

There have been no material changes in our risk factors disclosed in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of the Publicly Announced Common Stock Repurchase Plan (2)	Maximum Approximate Dollar Value of Shares that may yet be Purchased under the Common Stock Repurchase Plan (2)
Period
July 1 to 31, 2020	92,915	$	132.36	90,684	$	4,451,425,248
August 1 to 31, 2020	684,012	$	138.39	683,298	$	4,356,862,440
September 1 to 30, 2020	1,135,818	$	136.45	878,407	$	4,237,787,851
Total	1,912,745			1,652,389

(1)  During the three months ended September 30, 2020, pursuant to the terms of our restricted stock program, the Company purchased 260,356 shares at the then-market value of the shares to satisfy certain tax withholding requirements for employees upon the vesting of their restricted shares.

(2)  The Company received the Board of Directors' approval to repurchase the shares of our common stock included in the table above as follows:

Date of Approval
November 2019	$5 billion

There is no expiration date for the common stock repurchase plan.

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Item 6.  Exhibits

Exhibit Number	Exhibit
4.1	Form of First Supplemental Indenture between Automatic Data Processing, Inc. and U.S. Bank National Association, as trustee - incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on August 13, 2020
4.2	Form of 1.250% Senior Notes due 2030 - incorporated by reference to Exhibit A to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on August 13, 2020
10.1	Automatic Data Processing, Inc. Deferred Compensation Plan, as Amended and Restated Effective October 14, 2020 (Management Compensatory Plan)
10.2	Automatic Data Processing, Inc. Retirement and Savings Restoration Plan, Amended and Restated as of February 3, 2020 (Management Compensatory Plan)
31.1	Certification by Carlos A. Rodriguez pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2	Certification by Kathleen A. Winters pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1	Certification by Carlos A. Rodriguez pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification by Kathleen A. Winters pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.LAB	Inline XBRL Taxonomy Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Document
104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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SIGNATURES

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 thereunto duly authorized.

		AUTOMATIC DATA PROCESSING, INC. (Registrant)
Date:	October 30, 2020	/s/ Kathleen A. Winters Kathleen A. Winters
		Chief Financial Officer (Title)

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EX-10.1

Document

EX-10.2

Automatic Data Processing, Inc.

Retirement and Savings

Restoration Plan (RSRP)

(Effective January 1, 2015; Amended and Restated as of February 3, 2020)

Contents

Article 1. General Information	3
1.1 Purpose of the Plan	3
1.2 Legal Status	3
1.3 Effective Date	3
Article 2. Definitions	4
2.1 Definitions	4
2.2 Construction	7
Article 3. Participation	8
3.1 Eligibility	8
Article 4. Contributions	8
4.1 Contribution Amount	8
4.2 Contribution Timing	9
Article 5. Accounts	9
5.1 Establishment of Accounts	9
5.2 Earnings	9
Article 6. Vesting	10
6.1 Vesting	10
6.2 Forfeitures	10
Article 7. Distributions	11
7.1 Elections	11
7.2 Change to Form of Payment	11
7.3 Separation From Service	11
7.4 Death	12
Article 8. Administration	12
8.1 Committee	12
8.2 Committee Action	12
8.3 Powers of the Committee	12
8.4 Construction and Interpretation	13
8.5 Compensation and Expenses	13
Article 9. Amendment	13
9.1 Amendment to the Plan	13
9.2 Continuation of the Plan	14

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Article 10. Claims Procedure	14
10.1 Initial Claim	14
10.2 Claim Decision	14
10.3 Appeal Process	14
Article 11. Miscellaneous Provisions	15
11.1 Unsecured General Creditor	15
11.2 No Employment Rights	15
11.3 Tax Withholding	15
11.4 Non-alienation of Benefits	15
11.5 Severability	15
11.6 Section 409A	16
11.7 Controlling Law	16

2

Article 1. General Information

1.1 Purpose of the Plan

Automatic Data Processing, Inc. (the Company) establishes this Automatic Data Processing, Inc. Retirement and Savings Restoration Plan (the Plan) to attract and retain key letter-grade executive employees by restoring Qualified Plan retirement benefits that are unable to be provided due to Code limits on compensation and benefit amounts payable under tax-qualified retirement plans.

1.2 Legal Status

(a)The Plan is unfunded and is maintained primarily for the purpose of providing deferred compensation for a select group of management and highly compensated employees.

(b)The Plan is intended to meet the exemptions provided in Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, as well as the requirements of Department of Labor Regulation Section 2520.104-23. The Plan shall be administered and interpreted so as to meet the requirements of these exemptions and the regulation.

(c)The Plan is subject to the provisions of Code Section 409A. The Plan shall be administered and interpreted so as to meet the requirements of Code Section 409A.

1.3 Effective Date

This Plan is effective as of January 1, 2015, and amended and restated as of February 3, 2020.

3

Article 2. Definitions

2.1Definitions

Whenever used in the Plan, the following terms have the meanings set forth below unless otherwise expressly provided. References to specific Code provisions include any final regulations, Revenue Rulings, and guidance of general applicability thereunder.

(a)“Account” means the recordkeeping account maintained by the Company on behalf of a Participant that reflects the amount credited to the Participant under the terms of the Plan, including all Company Contributions and any earnings, gains or losses credited with respect to such amounts.

(b)“Beneficiary” means the individual, trust, or estate designated by a Participant to receive Plan benefits in the event of the Participant’s death.

(c)“Board of Directors” means the Board of Directors of the Company.

(d)“Cause” means, (i) the Company or an affiliate having “cause” to terminate a Participant’s employment or service, as defined in any employment or consulting agreement between the Participant and the Company or an affiliate in effect at the time of such termination or (ii) in the absence of any such employment or consulting agreement (or the absence of any definition of “Cause” contained therein), (A) the good faith determination by the Committee that the Participant has ceased to perform his or her duties to the Company or an affiliate (other than as a result of his or her incapacity due to physical or mental illness or injury), which failure amounts to an intentional and extended neglect of his or her duties to such party, provided that no such failure shall constitute Cause unless the Participant has been given notice of such failure and (if cure is reasonably possible) has not cured such act or omission within 15 days following receipt of such notice, (B) the Committee’s good faith determination that the Participant has engaged or is about to engage in conduct injurious to the Company or an affiliate, (C) the Participant having been convicted of, or plead guilty or no contest to, a felony or any crime involving fraud or dishonesty as a material element thereof, or (D) the consistent failure of the Participant to follow the lawful instructions of the Board of Directors or his or her direct superiors, which failure amounts to an intentional and extended neglect of his or her duties to the Company or an affiliate thereof. Any determination of whether Cause exists shall be made by the Committee in its sole discretion.

(e)“Code” means the Internal Revenue Code of 1986, as amended, or any other provision of law of similar purpose as may at any time be substituted therefore.

(f)“Committee” means a committee as the Compensation Committee may appoint to administer the Plan or, if no such committee has been appointed by

4

the Compensation Committee, then it shall be the Compensation Committee. As of the effective date of this Plan, the Committee shall consist of (i) the person occupying the position of General Counsel of the Company, and (ii) the person occupying the position of Chief Human Resources Officer of the Company. In the event of a vacancy in either the position of General Counsel or Chief Human Resources Officer, then unless the Compensation Committee otherwise determines, the Committee shall consist of the remaining person until such vacant position is filled.

(g)“Company” means Automatic Data Processing, Inc.

(h)“Company Contributions” means contributions allocated to a Participant’s Account pursuant to Article 4.

(i)“Compensation” means ‘Compensation’ as defined from time to time in the Qualified Plan.

(j)“Compensation Committee” shall mean the Compensation Committee of the Board.

(k)“Continuous Service” means an Employee’s uninterrupted period of common law, full-time employment with the Company or any parent, subsidiary, or affiliate of the Company.

(l)“Disability” means a circumstance where the Company shall have cause to terminate a Participant’s employment or service on account of “disability,” as defined in any then-existing employment, consulting or other similar agreement between the Participant and the Company or, in the absence of such an employment, consulting or other similar agreement (or the absence of any definition thereof contained therein), a condition entitling the Participant to receive benefits under a long-term disability plan of the Company, or, in the absence of such a plan, as determined by the Committee based upon medical evidence acceptable to it; provided, however, that a Participant shall not have a Disability for purposes of the Plan unless the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering the Company’s employees.

5

(m)“Distribution Election” means the election made by a Participant, as described in Article 7.1 as to the payment form for such Participant’s balance under the Plan.

(n)“Employee” means anyindividual employed on a full-time basis by the Company, or any parent, subsidiary, or affiliate of the Company.

(o)“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any other provision of law of similar purpose as may at any time be substituted therefor.

(p)“Investment Fund” means a fund (which may be notional) selected by the Committee as described in Article 5.2 to determine earnings on Company Contributions.

(q)“Participant” means any Employee who has begun participating in the Plan in accordance with the requirements of Article 3.1 and who continues to be entitled to accrue additional benefits under the Plan, or a former Employee who is no longer entitled to accrue additional benefits but who is still entitled to receive benefit payments under the Plan.

(r)“Plan” means the Automatic Data Processing, Inc. Retirement and Savings Restoration Plan, as set forth in this document and as hereafter amended from time to time.

(s)“Plan Year” means the calendar year beginning January 1 and ending December 31.

(t)“Qualified Plan” means the Automatic Data Processing, Inc. Retirement and Savings Plan (as amended from time to time).

(u)“Separation From Service” means when the Participant ceases to be employed by the Company and all entities considered a single employer with the Company under Code Sections 414(b) and (c) as a result of death, retirement, or other termination of employment. For this purpose, an 80% or greater threshold will be used in determining a controlled group of corporations within the meaning of Code Section 414(b) and the trades and businesses that are under common control within the meaning of Code Section 414(c).

Whether a Separation from Service occurs will be determined in accordance with the rules under Code Section 409A. In general, a Participant’s employment will be deemed terminated on the date as of which, in the Company’s and Participant’s reasonable expectation, the Participant’s level of bona fide services for the Company decreases to 20% or less of his or her average level of bona fide services over the immediately-preceding 36-month period (or the full period of services if the Participant has been providing services to the Company for

6

fewer than 36 months) and a Participant’s employment will be deemed not to have terminated as long as the Participant’s level of bona fide services exceeds the 20% threshold.

A Participant’s employment will be treated as continuing while he or she is on military leave, sick leave, disability leave, or other bona fide leave of absence if the period of the leave does not exceed six months or, if longer, for as long as the Participant has a statutory or contractual right to reemployment with the Company. If the period of leave exceeds six months, and the Participant does not have a statutory or contractual right to reemployment, the Participant’s employment will be deemed to terminate on the first day immediately following the six-month period.

Article 2 Construction

Terms capitalized in the Plan shall have the meaning set forth in Article 2.1 above or as specified elsewhere in the Plan. Except where otherwise indicated by the context, any masculine or feminine terminology shall also include the opposite gender, and the definition of any term in the singular or plural shall also include the opposite number. The headings of this Plan are inserted for convenience of reference only, and they are not to be used in the construction of the Plan.

7

Article 3 Participation

Article 1 Eligibility

Prior to July 1, 2020, Employees who (i) are hired after the effective date of the Plan and (ii) reach an executive grade position (either upon hire or by subsequent promotion) will be eligible to participate in the Plan. Beginning on July 1, 2020, Employees who either (x) are in an executive grade position as of such date or (y) reach an executive grade position (either upon hire or by subsequent promotion) on or after such date will be eligible to participate in the Plan.

Notwithstanding the foregoing, the Committee reserves the right in its sole discretion to determine that any Employee is not eligible to participate in the Plan. In addition, the Committee reserves the right in its sole discretion to, from time to time, modify the above eligibility requirements and make such additional or other requirements for eligibility as the Committee may determine.

An Employee’s participation in the Plan shall commence on the first of the month coincident with or next following such Employee’s becoming eligible for participation in the Plan as set forth above.

Article 4. Contributions

4.1 Contribution Amount

Starting with the later of (i) the Plan Year in which a Participant first participates in the Plan and (ii) the Plan Year in which a Participant first becomes eligible for employer contributions pursuant to the terms of the Qualified Plan, and for each Plan Year thereafter throughout which the Participant remains actively employed by the Company and eligible to participate in the Plan, the Company will credit to the Participant’s Account the amount in (a) below less the amount in (b) below:

(a)The maximum potential employer contributions that could have been made on behalf of such Participant to the Qualified Plan for such Plan Year (excluding amounts credited as earnings and/or interest), determined without regard to compensation and/or benefit limits under Sections 401(a)(17) and 415 of the Code, assuming for such purpose that the Participant had elected and made the maximum contributions to such Qualified Plans for such Plan Year.

(b)The maximum potential employer contributions that could have been made on behalf of such Participant to the Qualified Plan for such Plan Year (excluding amounts credited as earnings and/or interest).

For the Plan Year in which a Participant first participates in the Plan, or if later, the Plan Year in which a Participant first becomes eligible for employer contributions pursuant to

8

the terms of the Qualified Plan: (i) the Participant’s Compensation that is to be taken into account for the purpose of calculating his or her Company Contribution shall be the Compensation payable during the entire Plan Year; (ii) the employer contributions to the Qualified Plan as defined in (b) above shall be the maximum contributions that could have been made during the entire Plan Year based on the Compensation payable during the entire Plan Year; and (iii) the Company Contribution for such Plan Year determined in accordance with the foregoing shall then be prorated to reflect the portion of the Plan Year beginning with the date the Employee becomes a Participant in this Plan and ending with the last day of such Plan Year (so that, for example, if an Employee who is eligible for employer contributions pursuant to the terms of the Qualified Plan becomes a Participant on October 1, the proration factor would be 3/12). For the avoidance of doubt, no amounts shall be credited to a Participant’s Account under this Plan in respect of any Plan Year ending before the first date on which such Participant first becomes eligible for employer contributions pursuant to the terms of the Qualified Plan.

For the Plan Year in which a Participant incurs a Separation From Service, a Participant will not receive a Company Contribution under this Plan.

For the Plan Year in which a Participant ceases to be in an executive letter grade position (but does not terminate employment): (i) the Participant’s Compensation that is to be taken into account for the purpose of calculating his or her Company Contribution shall be the Compensation payable during the entire Plan Year; (ii) the employer contributions to the Qualified Plan as defined in (b) above shall be the maximum contributions that could have been made during the entire Plan Year based on the Compensation payable during the entire Plan Year; and (iii) the Company Contribution for such Plan Year determined in accordance with the foregoing shall then be prorated to reflect the portion of the Plan Year beginning with the first day of such Plan Year and ending with the date the Employee’s demotion is effective (so that, for example, if a Participant is demoted on October 1, the proration factor would be 9/12).

4.2 Contribution Timing

Company Contributions will be credited to a Participant’s Account as soon as practicable following the end of the applicable Plan Year.

Article 5. Accounts

5.1 Establishment of Accounts

The Committee will establish a bookkeeping account for each Participant to which the Company Contributions described in Article 4 will be credited.An Account shall be maintained for each Participant until full payment of the balance credited to the Account has been made under Article 7.

9

5.2 Earnings

Unless the Participant directs otherwise pursuant to the terms of this Article 5, his or her Account shall be notionally invested in an Investment Fund selected by the Committee. The Committee may, in its discretion, offer a choice of Investment Funds in which amounts credited to the Account may be notionally invested at the direction of the Participant. This choice grants Participants no real or beneficial interest in any specific fund or property, or the ability to affect the actual investments the Company may or may not make to cover its obligations under the Plan.

There is no obligation on the part of the Company, or anyone else, to segregate or otherwise set aside amounts notionally credited to any Account, and any actual investments intended to cover the obligations hereunder shall be made by the Company at its discretion, and may or may not bear a resemblance to the Participants’ investment choices. The Committee shall also establish a default Investment Fund in which an Account will be notionally invested if the Participant fails to make an investment election. In lieu of offering the Investment Funds, the Committee may notionally credit Accounts with interest, at a rate determined by the Committee. The Investment Funds (and the interest crediting rate, as applicable) may be added to, decreased or changed at any time and for any reason at the sole discretion of the Committee.

Article 6. Vesting

6.1 Vesting

A Participant’s Account (inclusive of all Company Contributions and any income, gains, or losses thereon) will be 100% vested upon the earliest of the following events, provided the Participant is an active Employee on the date of such event:

(a)three years of Continuous Service with the Company from date of hire;

(b)Participant’s death; and

(c)Participant’s Disability.

6.2 Forfeitures

Notwithstanding Article 6.1, a Participant shall forfeit his or her Account, without regard to whether such amounts are vested or unvested in the event:

(a)The Participant’s employment is terminated for Cause; or

(b)While employed or within 24 months after Separation From Service, the Participant violates a non-competition, non-solicitation or non-disclosure covenant or agreement between the Participant and the Company or any affiliate.

10

Article 7. Distributions

7.1 Elections

Each Participant shall have the opportunity, at any time during the first 30 days of participation in the Plan, to elect to receive his or her vested Account upon Separation From Service in one of the payment form options specified in this Article 7.1 (Distribution Election). Participants may elect to receive distributions in one of the following forms:

(a)Lump sum; or

(b)5, 10, or 15 annual installments with each installment equal to the Participant’s vested Account balance (as of the date of determination set forth in Article 7.3) divided by the number of remaining installments.

However, if a Participant Separates From Service with a vested Account balance of less than $50,000 or Separates From Service prior to age 55, the Participant will receive the entire vested balance following such Separation From Service in a single lump sum in accordance with Article 7.3(a) below.

If a Participant fails to make an election during the first 30 days of participation, he or she will be treated as if he or she elected a lump sum form of payment.

7.2 Change to Form of Payment

An active Participant who has not previously Separated From Service may make a one-time election to change the form of payment in the event the following conditions are met:

(a)The election is made at least 12 months prior to the date on which payments were scheduled to begin.

(b)The election delays the payment for at least 5 years from the date on which payments were scheduled to begin.

7.3 Separation From Service

For a Participant who Separates From Service for a reason other than death, the Participant’s vested Account will be distributed in accordance with the form of payment elected by the Participant pursuant to Article 7.1.

(a)If the Participant has elected (or is deemed to have elected) a lump sum, the value thereof shall be determined as of the ninth day of the seventh month following the Separation from Service, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter.

11

(b)If the Participant has elected installments, (i) the first installment shall be valued as of the ninth day of the seventh month following the Separation from Service, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter, and (ii) each subsequent installment shall be valued as of the ninth day of September of each of the following calendar years, and the distribution thereof shall be made as soon as administratively possible (and in no event later than 90 days) thereafter. For the avoidance of doubt, under no circumstances shall two installments be paid in a single calendar year.

7.4 Death

If a Participant’s employment terminates due to death, the value of the Participant’s Account as of the date of death shall be distributed to the Participant’s Beneficiary in a lump sum as soon as practicable following the Participant’s death, but no later than 90 days following the Participant’s death.

If a Participant dies following Separation From Service, but before having received all payments under the Plan, the remaining payments (valued as of the date of death) shall be paid in a single lump sum to the Beneficiary as soon as practicable but no later than 90 days after death.

Article 8. Administration

8.1 Committee

A Committee shall be appointed by, and serve at the pleasure of, the Compensation Committee. A member of the Committee may resign by delivering a written notice of resignation to the Compensation Committee. The Compensation Committee or the Board of Directors may remove any member, with or without cause, by delivering a copy of its resolution of removal to such member.

8.2 Committee Action

The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by a majority of members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee. A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant. Any member of the Committee may execute any certificate or other written direction on behalf of the Committee.

8.3 Powers of the Committee

The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of

12

the Plan, and shall have all powers necessary to accomplish its purposes, including, but not limited to, the following:

(a)    to select the Investment Funds;

(b)    to construe and interpret the terms and provisions of this Plan;

(c)    to compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries;

(d)    to maintain all records that may be necessary for the administration of the Plan;

(e)    to provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law;

(f)    to make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof;

(g)    to appoint one or more agents, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe; and

(h)    to take all actions necessary for the administration of the Plan.

8.4 Construction and Interpretation

The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretations or construction shall be final and binding on all parties, including but not limited to the Company and any Participant or Beneficiary.

8.5 Compensation and Expenses

The members of the Committee shall serve without compensation for their services hereunder. The Committee is authorized at the expense of the Company to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder. Expenses and fees in connection with the administration of the Plan shall be paid by the Company.

Article 9. Amendment

9. 1 Amendment to the Plan

The Compensation Committee may amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s

13

Account. The Committee may also amend the Plan, provided that the Committee may adopt only amendments that (i) do not have a negative material financial impact on the Company; or (ii) are required by tax or legal statutes, regulations or pronouncements.

9. 2 Continuation of the Plan

The Company intends to maintain the Plan indefinitely, but the Company reserves the right in its sole discretion at any time and for any reason to discontinue the Plan either in whole or in part.

Article 10. Claims Procedure

10.1 Initial Claim

A Participant or Beneficiary (hereinafter referred to as Claimant) who believes that a benefit is due under the Plan may file a written claim with the Committee.

10.2 Claim Decision

The Committee shall provide written notice of its decision to the Claimant within 90 days after the initial claim was filed. If more than 90 days are necessary for the Committee to deliver a reply, the Committee will notify the Claimant in writing during the initial 90 day period indicating the special circumstances requiring the extension and the date by which the Committee expects to reply to the claim.

If a claim for benefits is denied in whole or in part, the written notice shall include the following:

(a)specific reason for the denial;

(b)specific references to pertinent Plan provisions on which the denial is based;

(c)if applicable, a description of any additional material or information necessary for the Claimant to provide in order to perfect the claim and an explanation as to why such material or such information is necessary; and

(d)steps for Claimant to submit his or her clam for further review.

10.3 Appeal Process

Any Claimant whose claim has been denied in whole or in part may request a review of the decision by the Committee within 60 days of receiving the written notice of the denial of benefits. In connection with any such review, the Claimant or the Claimant’s duly authorized representative shall be provided, upon request, reasonable access to pertinent documents used by the Committee to deny the claim.

14

The Committee or its delegate shall provide written notice of its decision upon review to the Claimant within 60 days after the request for review was filed, unless special circumstances require an extension in which case a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If more than 60 days are necessary for the Committee to deliver a reply, the Committee will notify the Claimant in writing during the initial 60 day period. The decision shall include specific reasons and references to the provisions of the Plan on which the decision is based.

Article 11. Miscellaneous Provisions

11.1 Unsecured General Creditor

Participants and Beneficiaries shall not have any interest in any property or assets of the Company or its affiliates on account of participation in the Plan, and no other rights against the Company or its affiliates, except as a general unsecured creditor. Any rabbi trust or other arrangement that may (but need not) be established by the Company to facilitate the administration of the Plan shall not change the nature of the obligations of the Company nor the rights of the Participants and Beneficiaries as provided in this Plan.

11.2 No Employment Rights

The Plan does not constitute a contract of continuing employment or in any manner obligate the Company to continue service of Participant, or obligate a Participant to continue in the service of the Company, or limit the Company’s right to discharge any Employee with or without Cause.

11.3 Tax Withholding

The Company shall have the right to withhold any federal, state, local or any other governmental income tax, payroll or employment tax (including FICA obligations for both Social Security and Medicare), excise tax, or any other tax or assessment owed with respect to Company Contributions, and earnings thereon, and any distributions made hereunder.

11.4 Non-alienation of Benefits

The interest of a Participant or Beneficiary in his or her Plan benefits is not subject to the claims of the Participant’s or Beneficiary’s creditors and may not be voluntarily or involuntarily sold, transferred, pledged, alienated, assigned, anticipated, or encumbered. Any attempt by a Participant or Beneficiary to do so will be null and void.

11.5 Severability

If a provision of the Plan shall be held illegal or invalid or shall cause detrimental tax treatment to a Participant or Beneficiary, the illegality, invalidity or detriment shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal, invalid, or detrimental provision had not been included in the Plan.

15

11.6 Section 409A

Notwithstanding any provision of the Plan to the contrary, it is intended that the provisions of the Plan shall comply with Section 409A of the Code, and all provisions of this Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. If the Committee determines that any amounts payable hereunder may be taxable to a Participant under Section 409A, the Company may (i) adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid or limit the imposition of an additional tax under Section 409A. Each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or in respect of such Participant in connection with this Plan or any other plan maintained by the Company (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any subsidiary or affiliate shall have any obligation to indemnify or otherwise hold such Participant or any Beneficiary harmless from any or all such taxes or penalties.

11.7 Controlling Law

To the extent not superseded by the laws of the United States, this Plan shall be governed and construed in accordance with the laws of the State of Delaware, without regard to such state’s choice of law rules.

16

IN WITNESS WHEREOF, the Company has duly executed this Amended and Restated Plan document, effective as of February 3, 2020.

Automatic Data Processing, Inc.

By:	/s/ Michael A. Bonarti
Title:	Vice President, General Counsel and Secretary
Date:	February 3, 2020

17

EX-31.1

EXHIBIT 31.1

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

I, Carlos A. Rodriguez, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Automatic Data Processing, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 30, 2020	/s/ Carlos A. Rodriguez
		Carlos A. Rodriguez
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

I, Kathleen A. Winters, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Automatic Data Processing, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 30, 2020	/s/ Kathleen A. Winters
		Kathleen A. Winters
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Automatic Data Processing, Inc. (the "Company") on Form 10-Q for the fiscal quarter ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carlos A. Rodriguez, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	October 30, 2020	/s/ Carlos A. Rodriguez
		Carlos A. Rodriguez
		President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Automatic Data Processing, Inc. (the "Company") on Form 10-Q for the fiscal quarter ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kathleen A. Winters, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	October 30, 2020	/s/ Kathleen A. Winters
		Kathleen A. Winters
		Chief Financial Officer

XML

Cover page - shares	3 Months Ended
	Sep. 30, 2020	Oct. 27, 2020
Cover [Abstract]
Title of 12(b) Security	Common Stock, $0.10 Par Value(voting)
Document Transition Report	false
Document Quarterly Report	true
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-1467904
Entity Address, Address Line One	One ADP Boulevard
Entity Address, City or Town	Roseland,
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Entity File Number	1-5397
Entity Registrant Name	AUTOMATIC DATA PROCESSING, INC.
City Area Code	973
Local Phone Number	974-5000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Central Index Key	0000008670
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Common Stock, Shares Outstanding		428,813,999
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07068
Trading Symbol	ADP
Security Exchange Name	NASDAQ
Entity Small Business	false
Entity Emerging Growth Company	false

XML

Statements of Consolidated Earnings - USD ($) shares in Millions, $ in Millions		3 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
REVENUES:
Revenues, other than interest on funds held for clients and PEO revenues		$ 2,269.6	$ 2,306.2
Interest on funds held for clients		106.5	133.9
PEO Revenues	[1]	1,094.6	1,055.6
TOTAL REVENUES		3,470.7	3,495.7
Costs of revenues:
Operating expenses		1,762.1	1,787.7
Systems development and programming costs		168.7	168.2
Depreciation and amortization		103.5	88.9
TOTAL COSTS OF REVENUES		2,034.3	2,044.8
Selling, general, and administrative expenses		681.0	726.5
Interest expense		15.1	39.9
TOTAL EXPENSES		2,730.4	2,811.2
Other (income)/expense, net		(24.9)	(54.6)
EARNINGS BEFORE INCOME TAXES		765.2	739.1
Provision for income taxes		163.1	156.7
NET EARNINGS		$ 602.1	$ 582.4
Basic earnings per share (in US$ per share)		$ 1.40	$ 1.35
Diluted earnings per share (in US$ per share)		$ 1.40	$ 1.34
Basic weighted average shares outstanding (shares)		428.6	432.7
Diluted weighted average shares outstanding (shares)		430.0	435.4

[1] Professional Employer Organization (“PEO”) revenues are net of direct pass-through costs, primarily consisting of payroll wages and payroll taxes of $10,925.8 million and $10,510.6 million for the three months ended September 30, 2020 and 2019, respectively.

XML

Statements of Consolidated Earnings (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Direct pass-through costs PEO revenues	$ 10,925.8	$ 10,510.6

XML

Statements of Consolidated Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net earnings	$ 602.1	$ 582.4
Other comprehensive income/(loss):
Currency translation adjustments	50.4	(48.9)
Unrealized net gains/(losses) on available-for-sale securities	(24.6)	96.1
Tax effect	5.5	(20.8)
Reclassification of net (gain)/losses on available-for-sale securities to net earnings	(0.3)	(2.3)
Tax effect	0.1	0.5
Unrealized loss on cash flow hedging activities	(3.3)	0.0
Tax effect	0.8	0.0
Amortization of unrealized loss on cash flow hedging activities	0.6	0.0
Tax effect	0.0	0.0
Reclassification of pension liability adjustment to net earnings	2.5	(1.7)
Tax effect	(1.0)	0.5
Other comprehensive income, net of tax	30.7	23.4
Comprehensive income	$ 632.8	$ 605.8

XML

Consolidated Balance Sheets - USD ($)		Sep. 30, 2020	Jun. 30, 2020
Current assets:
Cash and cash equivalents		$ 1,613,100,000	$ 1,908,500,000
Accounts receivable, net of allowance for doubtful accounts of $89.1 and $92.5, respectively		2,489,100,000	2,441,300,000
Other current assets		762,900,000	506,200,000
Total current assets before funds held for clients		4,865,100,000	4,856,000,000.0
Funds held for clients		29,950,300,000	26,708,100,000
Total current assets		34,815,400,000	31,564,100,000
Long-term receivables, net of allowance for doubtful accounts of $0.6 and $0.5, respectively		16,100,000	18,600,000
Property, plant and equipment, net		701,500,000	703,900,000
Operating lease right-of-use asset		479,000,000.0	493,700,000
Deferred contract costs		2,397,900,000	2,401,600,000
Other assets		438,000,000.0	458,400,000
Goodwill		2,326,300,000	2,309,400,000
Intangible assets, net		1,215,900,000	1,215,800,000
Total assets		42,390,100,000	39,165,500,000
Current liabilities:
Accounts payable		111,200,000	102,000,000.0
Accrued expenses and other current liabilities		1,900,200,000	1,980,700,000
Accrued payroll and payroll-related expenses		494,700,000	557,000,000.0
Dividends payable		387,100,000	387,300,000
Short-term deferred revenues		205,000,000.0	212,500,000
Obligations under reverse repurchase agreements	[1]	0	13,600,000
Short-term debt		0	1,001,800,000
Income taxes payable		133,000,000.0	40,100,000
Total current liabilities before client funds obligations		3,231,200,000	4,295,000,000.0
Client funds obligations		29,098,400,000	25,831,600,000
Total current liabilities		32,329,600,000	30,126,600,000
Long-term debt		1,993,900,000	1,002,800,000
Operating lease liabilities		330,400,000	344,400,000
Other liabilities		813,900,000	837,000,000.0
Deferred income taxes		743,000,000.0	731,900,000
Long-term deferred revenues		370,400,000	370,600,000
Total liabilities		36,581,200,000	33,413,300,000
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, $1.00 par value: authorized, 0.3 shares; issued, none		0	0
Common stock, $0.10 par value: authorized, 1,000.0 shares; issued, 638.7 shares at September 30, 2020 and June 30, 2020; outstanding, 429.3 and 429.9 shares at September 30, 2020 and June 30, 2020, respectively		63,900,000	63,900,000
Capital in excess of par value		1,348,400,000	1,333,800,000
Retained earnings		18,644,700,000	18,436,300,000
Treasury stock - at cost: 209.4 and 208.9 shares at September 30, 2020 and June 30, 2020, respectively		(14,264,000,000.0)	(14,067,000,000.0)
Accumulated other comprehensive income (loss)		15,900,000	(14,800,000)
Total stockholders’ equity		5,808,900,000	5,752,200,000
Total liabilities and stockholders’ equity		$ 42,390,100,000	$ 39,165,500,000

[1] (A) As of June 30, 2020, $13.6 million of long-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements (see Note 9).

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Statement of Financial Position [Abstract]
Long-term marketable securities under reverse repurchase agreements		$ 13.6
Allowance for doubtful accounts - trade receivables - Current	$ 89.1	92.5
Allowance for doubtful accounts - trade receivables - Long-term	$ 0.6	$ 0.5
Preferred stock, par value (in US$ per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized (in shares)	300,000	300,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in US$ per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	1,000,000,000.0	1,000,000,000.0
Common stock, shares issued (in shares)	638,700,000	638,700,000
Common stock, shares outstanding (in shares)	429,300,000	429,900,000
Treasury stock, (in shares)	209,400,000	208,900,000

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Statements of Consolidated Cash Flows - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash Flows from Operating Activities:
Net earnings	$ 602.1	$ 582.4
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization	131.1	117.3
Amortization of deferred contract costs	232.3	227.3
Deferred income taxes	23.5	44.4
Stock-based compensation expense	33.8	37.1
Net pension income	(11.1)	(2.7)
Net amortization of premiums and accretion of discounts on available-for-sale securities	12.4	12.2
Impairment of assets	2.8	0.0
Gain on sale of assets	(0.2)	(1.9)
Other	6.1	11.9
Changes in operating assets and liabilities:
Increase in accounts receivable	(78.7)	(96.8)
Increase in other assets	(454.8)	(391.7)
Increase/(Decrease) in accounts payable	5.7	(15.1)
Decrease in accrued expenses and other liabilities	(23.1)	(91.6)
Net cash flows provided by operating activities	481.9	432.8
Cash Flows from Investing Activities:
Purchases of corporate and client funds marketable securities	(812.8)	(1,409.9)
Proceeds from the sales and maturities of corporate and client funds marketable securities	1,196.7	1,653.7
Capital expenditures	(43.5)	(56.8)
Additions to intangibles	(76.4)	(88.2)
Proceeds from sale of property, plant, and equipment and other assets	0.2	23.4
Net cash flows provided by investing activities	264.2	122.2
Cash Flows from Financing Activities:
Net increase/(decrease) in client funds obligations	3,203.3	(8,063.3)
Payments of debt	(1,000.6)	(0.5)
Proceeds from the issuance of debt	991.1	0.0
Settlement of cash flow hedges	(43.6)	0.0
Repurchases of common stock	(213.6)	(309.7)
Net proceeds from stock purchase plan and stock-based compensation plans	(7.9)	(32.1)
Dividends paid	(391.0)	(343.3)
Net (payments)/proceeds related to reverse repurchase agreements	(13.6)	166.3
Net proceeds of commercial paper borrowings	0.0	3,536.7
Net cash flows provided by/(used in) financing activities	2,524.1	(5,045.9)
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents	37.9	(33.1)
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents	3,308.1	(4,524.0)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period	7,053.6	6,796.2
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period	10,361.7	2,272.2
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Consolidated Balance Sheets
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	10,361.7	2,272.2
Supplemental disclosures of cash flow information:
Cash paid for interest	27.3	53.6
Cash paid for income taxes, net of income tax refunds	$ 45.4	$ 45.6

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Basis of Presentation

3 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying Consolidated Financial Statements and footnotes thereto of Automatic Data Processing, Inc., its subsidiaries and variable interest entity (“ADP” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  The Consolidated Financial Statements and footnotes thereto are unaudited.  In the opinion of the Company’s management, the Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, that are necessary for a fair presentation of the Company’s interim financial results.

The Company has a grantor trust, which holds the majority of the funds provided by its clients pending remittance to employees of those clients, tax authorities, and other payees.  The Company is the sole beneficial owner of the trust.  The trust meets the criteria in Accounting Standards Codification (“ASC”) 810, “Consolidation” to be characterized as a variable interest entity (“VIE”).  The Company has determined that it has a controlling financial interest in the trust because it has both (1) the power to direct the activities that most significantly impact the economic performance of the trust (including the power to make all investment decisions for the trust) and (2) the right to receive benefits that could potentially be significant to the trust (in the form of investment returns) and, therefore, consolidates the trust.  Further information on these funds and the Company’s obligations to remit to its clients’ employees, tax authorities, and other payees is provided in Note 6, “Corporate Investments and Funds Held for Clients.” 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the assets, liabilities, revenue, expenses, and accumulated other comprehensive income that are reported in the Consolidated Financial Statements and footnotes thereto. Actual results may differ from those estimates. Interim financial results are not necessarily indicative of financial results for a full year.  The information included 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, 2020 (“fiscal 2020”).

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New Accounting Pronouncements

3 Months Ended

Sep. 30, 2020

Accounting Standards Update and Change in Accounting Principle [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective July 1, 2020, the Company adopted accounting standard update (“ASU”) 2018-13, “Fair Value Measurement.” The update modifies the disclosure requirements on fair value measurements. The adoption of ASU 2018-13 modified the disclosures in Note 6 but did not have an impact on the Company's consolidated results of operations, financial condition, or cash flows.

Effective July 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This update introduces the current expected credit loss (“CECL”) model, which requires an entity to measure credit losses based on expected losses rather than incurred losses for certain financial instruments and financial assets, including trade receivables. The adoption of ASU 2016-13 did not have a material impact on the Company's consolidated results of operations, financial condition, or cash flows.

Recently Issued Accounting Pronouncements

The following table summarizes recent ASU's issued by the Financial Accounting Standards Board (“FASB”) that could have a material impact on the Company's consolidated results of operations, financial condition, or cash flows.

Standard	Description	Effective Date	Effect on Financial Statements or Other Significant Matters
ASU 2018-14 Compensation-Retirement Benefits-Defined Benefit Plans	This update modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. The amendments in ASU 2018-14 would need to be applied on a retrospective basis.	July 1, 2021 (Fiscal 2022)	The adoption of this guidance will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows.

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Revenue

3 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Based upon similar operational and economic characteristics, the Company’s revenues are disaggregated by its three strategic pillars: Human Capital Management (“HCM”), HR Outsourcing (“HRO”), and Global (“Global”) Solutions, with separate disaggregation for PEO zero-margin benefits pass-through revenues and client funds interest revenues.  The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.

HCM provides a suite of product offerings that assist employers of all types and sizes in all stages of the employment cycle, from recruitment to retirement. Global is generally consistent with the types of services provided within HCM but represents geographies outside of the United States and includes our multinational offerings. HCM and Global revenues are primarily attributable to fees for providing solutions for payroll, benefits, talent, retirement services and HR processing and fees charged to implement the Company's solutions for clients.

HRO provides a comprehensive human resources outsourcing solution, including offering benefits, providing workers’ compensation insurance, and administering state unemployment insurance, among other human resources functions. This revenue is primarily driven by the PEO. Amounts collected from PEO worksite employers include payroll, fees for benefits, and an administrative fee that also includes payroll taxes, fees for workers’ compensation and state unemployment taxes. The payroll and payroll taxes collected from the worksite employers are presented in revenue net, as the Company does not retain risk and acts as an agent with respect to this aspect of the PEO arrangement. With respect to the payroll and payroll taxes, the worksite employer is primarily responsible for providing the service and has discretion in establishing wages. The fees collected from the worksite employers for benefits (i.e., PEO benefits pass-throughs), workers’ compensation and state unemployment taxes are presented in revenues and the associated costs of benefits, workers’ compensation and state unemployment taxes are included in operating expenses, as the Company acts as a principal with respect to this aspect of the arrangement. With respect to these fees, the Company is primarily responsible for fulfilling the service and has discretion in establishing price. The Company has further disaggregated HRO to separate out its PEO zero-margin benefits pass-through revenues.

The Company recognizes client funds interest revenues on collected but not yet remitted funds held for clients in revenues as earned, as the collection, holding and remittance of these funds are critical components of providing these services.

The following tables provide details of revenue by our strategic pillars with disaggregation for PEO zero-margin benefits pass-throughs and client funds interest, and include a reconciliation to the Company’s reportable segments:

	Three Months Ended
	September 30,
Types of Revenues	2020		2019
HCM	$	1,530.6	$	1,568.5
HRO, excluding PEO zero-margin benefits pass-throughs	582.4		591.1
PEO zero-margin benefits pass-throughs	741.0		699.1
Global	510.2		503.1
Interest on funds held for clients	106.5		133.9
Total Revenues	$	3,470.7	$	3,495.7

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2020:

Types of Revenues	Employer Services		PEO		Other		Total
HCM	$	1,532.3	$	—	$	(1.7)	$	1,530.6
HRO, excluding PEO zero-margin benefits pass-throughs	229.1		353.6		(0.3)		582.4
PEO zero-margin benefits pass-throughs	—		741.0		—		741.0
Global	510.2		—		—		510.2
Interest on funds held for clients	105.2		1.3		—		106.5
Total Segment Revenues	$	2,376.8	$	1,095.9	$	(2.0)	$	3,470.7

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2019:

Types of Revenues	Employer Services		PEO		Other		Total
HCM	$	1,570.0	$	—	$	(1.5)	$	1,568.5
HRO, excluding PEO zero-margin benefits pass-throughs	235.7		356.5		(1.1)		591.1
PEO zero-margin benefits pass-throughs	—		699.1		—		699.1
Global	503.1		—		—		503.1
Interest on funds held for clients	132.6		1.3		—		133.9
Total Segment Revenues	$	2,441.4	$	1,056.9	$	(2.6)	$	3,495.7

Contract Balances

The timing of revenue recognition for HCM, HRO and Global Solutions is consistent with the invoicing of clients, as invoicing occurs in the period the services are provided. Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing.

Changes in deferred revenue related to set up fees for the three months ended September 30, 2020 were as follows:

Contract Liability
Contract liability, July 1, 2020	$	522.7
Recognition of revenue included in beginning of year contract liability	(43.8)
Contract liability, net of revenue recognized on contracts during the period	30.7
Currency translation adjustments	16.2
Contract liability, September 30, 2020	$	525.8

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Earnings per Share (EPS)

3 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings per Share (EPS)

Earnings per Share (“EPS”)

	Basic		Effect of Employee Stock Option Shares	Effect of Employee Restricted Stock Shares	Diluted
Three Months Ended September 30, 2020
Net earnings	$	602.1			$	602.1
Weighted average shares (in millions)	428.6		0.6	0.8	430.0
EPS	$	1.40			$	1.40
Three Months Ended September 30, 2019
Net earnings	$	582.4			$	582.4
Weighted average shares (in millions)	432.7		1.3	1.4	435.4
EPS	$	1.35			$	1.34

Options to purchase 2.1 million and 0.7 million shares of common stock for the three months ended September 30, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

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Other (Income)/Expense, Net

3 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

Other (Income)/Expense, Net

Other (Income)/Expense, Net

	Three Months Ended
	September 30,
	2020		2019
Interest income on corporate funds	$	(13.8)	$	(32.3)
Realized (gains) / losses on available-for-sale securities, net	(0.3)		(2.3)
Impairment of assets	2.8		—
Gain on sale of assets	(0.2)		(1.9)
Non-service components of pension income, net (see Note 11)	(13.4)		(18.1)
Other (income)/expense, net	$	(24.9)	$	(54.6)

In fiscal 2021, the Company recorded impairment charges of $2.8 million as a result of recognizing certain owned facilities at fair value given intent to sell and accordingly classified as held for sale.

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Corporate Investments and Funds Held For Clients

3 Months Ended

Sep. 30, 2020

Corporate Investments And Funds Held For Clients [Abstract]

Corporate Investments and Funds Held For Clients

Corporate Investments and Funds Held for Clients

Corporate investments and funds held for clients at September 30, 2020 and June 30, 2020 were as follows:

	September 30, 2020
	Amortized Cost		Gross Unrealized  Gains		Gross Unrealized Losses		Fair Market Value (A)
Type of issue:
Money market securities, cash and other cash equivalents	$	10,361.7	$	—	$	—	$	10,361.7
Available-for-sale securities:
Corporate bonds	9,013.1		458.0		(0.4)		9,470.7
Asset-backed securities	2,942.7		98.4		(0.2)		3,040.9
U.S. Treasury securities	3,581.3		108.8		—		3,690.1
U.S. government agency securities	1,341.8		34.5		(0.8)		1,375.5
Canadian government obligations and Canadian government agency obligations	1,037.0		22.6		—		1,059.6
Commercial mortgage-backed securities	810.1		54.5		—		864.6
Canadian provincial bonds	652.7		34.8		—		687.5
Other securities	974.5		41.7		—		1,016.2
Total available-for-sale securities	20,353.2		853.3		(1.4)		21,205.1
Total corporate investments and funds held for clients	$	30,714.9	$	853.3	$	(1.4)	$	31,566.8

(A) Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

	June 30, 2020
	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value (B)
Type of issue:
Money market securities, cash and other cash equivalents	$	7,053.6	$	—	$	—	$	7,053.6
Available-for-sale securities:
Corporate bonds	9,188.7		473.4		—		9,662.1
Asset-backed securities	3,274.6		96.0		(0.5)		3,370.1
U.S. Treasury securities	3,580.6		120.8		—		3,701.4
U.S. government agency securities	1,128.2		35.6		—		1,163.8
Canadian government obligations and Canadian government agency obligations	1,018.7		23.1		—		1,041.8
Commercial mortgage-backed securities	814.3		53.9		—		868.2
Canadian provincial bonds	676.6		33.6		—		710.2
Other securities	1,018.1		41.1		(0.2)		1,059.0
Total available-for-sale securities	20,699.8		877.5		(0.7)		21,576.6
Total corporate investments and funds held for clients	$	27,753.4	$	877.5	$	(0.7)	$	28,630.2

(B) Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party pricing service, see Note 1 “Summary of Significant Accounting Policies” in the Company's Annual Report on Form 10-K for fiscal 2020. The Company concurred with and did not adjust the prices obtained from the independent pricing service. The Company had no available-for-sale securities included in Level 1 or Level 3 at September 30, 2020.

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of September 30, 2020, are as follows: 

	September 30, 2020
	Securities in Unrealized Loss Position Less Than 12 Months				Securities in Unrealized Loss Position Greater Than 12 Months				Total
	Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value
Corporate bonds	$	(0.4)	$	151.5	$	—	$	—	$	(0.4)	$	151.5
Asset-backed securities	(0.2)		77.5		—		—		(0.2)		77.5
U.S. Treasury securities	—		—		—		—		—		—
U.S. government agency securities	(0.8)		320.0		—		—		(0.8)		320.0
Canadian government obligations and Canadian government agency obligations	—		—		—		—		—		—
Commercial mortgage-backed securities	—		—		—		1.5		—		1.5
Canadian provincial bonds	—		—		—		—		—		—
Other securities	—		12.9		—		—		—		12.9
	$	(1.4)	$	561.9	$	—	$	1.5	$	(1.4)	$	563.4

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2020, are as follows:

	June 30, 2020
	Securities in Unrealized Loss Position Less Than 12 Months				Securities in Unrealized Loss Position Greater Than 12 Months				Total
	Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value
Corporate bonds	$	—	$	—	$	—	$	—	$	—	$	—
Asset-backed securities	(0.5)		43.9		—		—		(0.5)		43.9
U.S. Treasury securities	—		2.0		—		—		—		2.0
U.S. government agency securities	—		—		—		—		—		—
Canadian government obligations and Canadian government agency obligations	—		—		—		—		—		—
Commercial mortgage-backed securities	—		—		—		1.5		—		1.5
Canadian provincial bonds	—		—		—		—		—		—
Other securities	(0.2)		17.1		—		—		(0.2)		17.1
	$	(0.7)	$	63.0	$	—	$	1.5	$	(0.7)	$	64.5

At September 30, 2020, Corporate bonds include investment-grade debt securities with a wide variety of issuers, industries, and sectors, primarily carry credit ratings of A and above, and have maturities ranging from October 2020 through September 2030.

At September 30, 2020, asset-backed securities include AAA-rated senior tranches of securities with predominantly prime collateral of fixed-rate auto loan, credit card, equipment lease, and rate reduction receivables with fair values of $1,520.8 million, $1,100.4 million, $321.9 million, and $97.1 million, respectively. These securities are collateralized by the cash flows

of the underlying pools of receivables. The primary risk associated with these securities is the collection risk of the underlying receivables. All collateral on such asset-backed securities has performed as expected through September 30, 2020.

At September 30, 2020, U.S. government agency securities primarily include debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks with fair values of $614.7 million and $590.8 million, respectively. U.S. government agency securities represent senior, unsecured, non-callable debt that primarily carry ratings of Aaa by Moody's, and AA+ by Standard & Poor's, with maturities ranging from October 2020 through December 2029.

At September 30, 2020, other securities and their fair value primarily include municipal bonds of $576.7 million, AA-rated United Kingdom Gilt securities of $197.3 million, and AAA-rated and AA-rated sovereign bonds of $77.2 million.

Classification of corporate investments on the Consolidated Balance Sheets is as follows:

	September 30,		June 30,
	2020		2020
Corporate investments:
Cash and cash equivalents	$	1,613.1	$	1,908.5
Short-term marketable securities (a)	3.4		—
Long-term marketable securities (b)	—		13.6
Total corporate investments	$	1,616.5	$	1,922.1

(a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets.

(b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets.

Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client funds obligations on our Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories:

	September 30,		June 30,
	2020		2020
Funds held for clients:
Restricted cash and cash equivalents held to satisfy client funds obligations	$	8,748.6	$	5,145.1
Restricted short-term marketable securities held to satisfy client funds obligations	5,614.4		5,541.2
Restricted long-term marketable securities held to satisfy client funds obligations	15,587.3		16,021.8
Total funds held for clients	$	29,950.3	$	26,708.1

Client funds obligations represent the Company's contractual obligations to remit funds to satisfy clients' payroll, tax, and other payee payment obligations and are recorded on the Consolidated Balance Sheets at the time that the Company impounds funds from clients. The client funds obligations represent liabilities that will be repaid within one year of the balance sheet date. The Company has reported client funds obligations as a current liability on the Consolidated Balance Sheets totaling $29,098.4 million and $25,831.6 million at September 30, 2020 and June 30, 2020, respectively. The Company has classified funds held for clients as a current asset since these funds are held solely for the purpose of satisfying the client funds obligations. Of the Company’s funds held for clients at September 30, 2020 and June 30, 2020, $26,805.6 million and $23,740.0 million, respectively, are held in the grantor trust. The liabilities held within the trust are intercompany liabilities to other Company subsidiaries and are eliminated in consolidation.

The Company has reported the cash flows related to the purchases of corporate and client funds marketable securities and related to the proceeds from the sales and maturities of corporate and client funds marketable securities on a gross basis in the investing section of the Statements of Consolidated Cash Flows. The Company has reported the cash and cash equivalents related to client funds investments with original maturities of ninety days or less, within the beginning and ending balances of cash, cash equivalents, restricted cash, and restricted cash equivalents. These amounts have been reconciled to the Consolidated Balance Sheets on the Statements of Consolidated Cash Flows. The Company has reported the cash flows related to the cash received from and paid on behalf of clients on a net basis within net increase / (decrease) in client funds obligations in the financing activities section of the Statements of Consolidated Cash Flows.

Approximately 79% of the available-for-sale securities held a AAA-rating or AA-rating at September 30, 2020, as rated by Moody's, Standard & Poor's, DBRS for Canadian dollar-denominated securities, and Fitch for asset-backed and commercial mortgage-backed securities.  All available-for-sale securities were rated as investment grade at September 30, 2020.

Expected maturities of available-for-sale securities at September 30, 2020 are as follows:

One year or less	$	5,617.8
One year to two years	4,283.0
Two years to three years	3,817.6
Three years to four years	2,932.7
After four years	4,554.0
Total available-for-sale securities	$	21,205.1

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Leases

3 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Leases

The Company records leases on the consolidated balance sheets as operating lease right-of-use (“ROU”) assets, records the current portion of operating lease liabilities within accrued expenses and other current liabilities and, separately, records long-term operating lease liabilities.

The Company has entered into operating lease agreements for facilities and equipment. The Company's leases have remaining lease terms of up to approximately eleven years. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. The lease liabilities are measured by discounting future lease payments at the Company’s collateralized incremental borrowing rate for financing instruments of a similar term, unless the implicit rate is readily determinable. ROU assets also include adjustments related to prepaid or deferred lease payments and lease incentives. The difference between total ROU assets and total lease liabilities are primarily attributable to pre-payments of our obligations and the recognition of various lease incentives.

The components of operating lease expense were as follows:

	Three Months Ended
	September 30,
	2020		2019
Operating lease cost	$	39.1	$	44.2
Short-term lease cost	0.4		2.7
Variable lease cost	2.1		1.3
Total operating lease cost	$	41.6	$	48.2

The following table provides supplemental cash flow information related to the Company's leases:

	Three Months Ended
	September 30,
	2020		2019
Cash paid for operating lease liabilities	$	45.3	$	40.2
Operating lease ROU assets obtained in exchange for new operating lease liabilities	$	23.2	$	6.7

Other information related to our operating lease liabilities is as follows:

	September 30,		June 30,
	2020		2020
Weighted-average remaining lease term (in years)	6		6
Weighted-average discount rate	2.3	%	2.3	%

As of September 30, 2020, maturities of operating lease liabilities are as follows:

Nine months ending June 30, 2021	$	77.8
Twelve months ending June 30, 2022	93.7
Twelve months ending June 30, 2023	79.6
Twelve months ending June 30, 2024	59.2
Twelve months ending June 30, 2025	43.5
Thereafter	101.2
Total undiscounted lease obligations	455.0
Less: Imputed interest	(29.9)
Net lease obligations	$	425.1

Current operating lease liabilities were approximately $94.7 million and $95.5 million as of September 30, 2020 and June 30, 2020, respectively, and are included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

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Goodwill and Intangible Assets, net

3 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangibles Assets, net

Goodwill and Intangible Assets, net

Changes in goodwill for the three months ended September 30, 2020 are as follows:

	Employer Services		PEO Services		Total
Balance at June 30, 2020	$	2,304.6	$	4.8	$	2,309.4
Additions and other adjustments	—		—		—
Currency translation adjustments	16.9		—		16.9
Balance at September 30, 2020	$	2,321.5	$	4.8	$	2,326.3

Components of intangible assets, net, are as follows:

	September 30,		June 30,
	2020		2020
Intangible assets:
Software and software licenses	$	2,776.2	$	2,719.1
Customer contracts and lists	1,029.4		1,021.2
Other intangibles	239.3		239.2
	4,044.9		3,979.5
Less accumulated amortization:
Software and software licenses	(1,950.4)		(1,912.0)
Customer contracts and lists	(654.1)		(628.3)
Other intangibles	(224.5)		(223.4)
	(2,829.0)		(2,763.7)
Intangible assets, net	$	1,215.9	$	1,215.8

Other intangibles consist primarily of purchased rights, trademarks and trade names (acquired directly or through acquisitions).  All intangible assets have finite lives and, as such, are subject to amortization.  The weighted average remaining useful life of the intangible assets is 6 years (6 years for software and software licenses, 5 years for customer contracts and lists, and 3 years for other intangibles).  Amortization of intangible assets was $84.2 million and $69.4 million for the three months ended September 30, 2020 and 2019, respectively.

Estimated future amortization expenses of the Company's existing intangible assets are as follows:

	Amount
Nine months ending June 30, 2021	$	232.1
Twelve months ending June 30, 2022	$	256.6
Twelve months ending June 30, 2023	$	212.8
Twelve months ending June 30, 2024	$	166.8
Twelve months ending June 30, 2025	$	115.2
Twelve months ending June 30, 2026	$	65.9

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Short-term Financing

3 Months Ended

Sep. 30, 2020

Short-Term Financing [Abstract]

Short-term Financing

Short-term Financing

The Company has a $3.2 billion, 364-day credit agreement that matures in June 2021 with a one year term-out option.  The Company also has a $2.75 billion five year credit facility that matures in June 2024 that contains an accordion feature under which the aggregate commitment can be increased by $500 million, subject to the availability of additional commitments. In addition, the Company has a five year $3.75 billion credit facility maturing in June 2023 that also contains an accordion feature under which the aggregate commitment can be increased by $500 million, subject to the availability of additional commitments. The interest rate applicable to committed borrowings is tied to LIBOR, the effective federal funds rate, or the prime rate, depending on the notification provided by the Company to the syndicated financial institutions prior to borrowing. The Company is also required to pay facility fees on the credit agreements. The primary uses of the credit facilities are to provide liquidity to the commercial paper program and funding for general corporate purposes, if necessary. The Company had no borrowings through September 30, 2020 under the credit agreements.

The Company's U.S. short-term funding requirements related to client funds are sometimes obtained on an unsecured basis through the issuance of commercial paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. This commercial paper program provides for the issuance of up to $9.7 billion in aggregate maturity value. The Company’s commercial paper program is rated A-1+ by Standard & Poor’s and Prime-1 (“P-1”) by Moody’s.  These ratings denote the highest quality commercial paper securities. Maturities of commercial paper can range from overnight to up to 364 days. At September 30, 2020 and June 30, 2020, the Company had no commercial paper borrowing outstanding. Details of the borrowings under the commercial paper program are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average daily borrowings (in billions)	$	2.4		$	4.0
Weighted average interest rates	0.1		%	2.3		%
Weighted average maturity (approximately in days)	1 day			2 days

The Company’s U.S., Canadian and United Kingdom short-term funding requirements related to client funds obligations are sometimes obtained on a secured basis through the use of reverse repurchase agreements, which are collateralized principally by government and government agency securities, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities. These agreements generally have terms ranging from overnight to up to five business days. At September 30, 2020, there were no outstanding obligations related to reverse repurchase agreements. At June 30, 2020, the Company had $13.6 million of outstanding obligations related to the reverse repurchase agreements. Details of the reverse repurchase agreements are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average outstanding balances	$	152.4		$	426.6
Weighted average interest rates	0.3		%	2.0		%

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Debt

3 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt

Debt

The Company has two series of fixed-rate notes with 10-year, staggered maturities for an aggregate principal amount of $2.0 billion (collectively the “Notes”). The Notes are senior unsecured obligations, and interest is payable in arrears, semi-annually.

During the three months ended September 30, 2020, the Company issued $1.0 billion of senior notes due in 2030 bearing a fixed interest rate of 1.250%. The Company also redeemed $1.0 billion of senior notes bearing a fixed interest rate of 2.250%. In connection with the senior notes issuance, the Company also terminated several derivative contracts in place to hedge exposure in changes in benchmark interest rates for the senior notes issued with an aggregate notional amount totaling $1.0 billion (of which $400.0 million were entered into during fiscal year 2020 and $600.0 million were entered into on the day of issuance). Since these derivative contracts were classified as cash flow hedges, the unamortized loss of $43.6 million was deferred in accumulated other comprehensive income and will be amortized to earnings over the life of the Notes as the interest payments are made.

The principal amounts and associated effective interest rates of the Notes and other debt as of September 30, 2020 and June 30, 2020, are as follows:

Debt instrument	Effective Interest Rate	September 30, 2020		June 30, 2020
Fixed-rate 2.250% notes due September 15, 2020	2.37%	$	—	$	1,000.0
Fixed-rate 3.375% notes due September 15, 2025	3.47%	1,000.0		1,000.0
Fixed-rate 1.250% notes due September 1, 2030	1.83%	1,000.0		—
Other		8.2		8.4
		2,008.2		2,008.4
Less: current portion (a)		(1.8)		(1,001.8)
Less: unamortized discount and debt issuance costs		(12.5)		(3.8)
Total long-term debt		$	1,993.9	$	1,002.8

(a) - Current portion of long-term debt as of September 30, 2020 is included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

The effective interest rates for the Notes include the interest on the Notes and amortization of the discount and debt issuance costs.

As of September 30, 2020, the fair value of the Notes, based on Level 2 inputs, was $2,115.0 million. For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party service, see Note 1 “Summary of Significant Accounting Policies” in the Company's Annual Report on Form 10-K for fiscal 2020.

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Employee Benefit Plans

3 Months Ended

Sep. 30, 2020

Retirement Benefits [Abstract]

Employee Benefit Plans

Stock-based Compensation Plans. Stock-based compensation consists of the following:•Stock Options.  Stock options are granted to employees at exercise prices equal to the fair market value of the Company's common stock on the dates of grant. Stock options generally vest ratably over 4 years and have a term of 10 years. Compensation expense is measured based on the fair value of the stock option on the grant date and recognized on a straight-line basis over the vesting period. Stock options are forfeited if the employee ceases to be employed by the Company prior to vesting. The Company determines the fair value of stock options issued using a binomial option-pricing model. The binomial option-pricing model considers a range of assumptions related to volatility, dividend yield, risk-free interest rate, and employee exercise behavior. Expected volatilities utilized in the binomial option-pricing model are based on a combination of implied market volatilities, historical volatility of the Company's stock price, and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial option-pricing model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of a stock option grant is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.

•Restricted Stock.

•Time-Based Restricted Stock and Time-Based Restricted Stock Units. Time-based restricted stock and time-based restricted stock units granted September 1, 2018 and after generally vest ratably over 3 years. Time-based restricted stock and time-based restricted stock units granted prior to September 1, 2018 are generally subject to a vesting period of 2 years. Awards are forfeited if the employee ceases to be employed by the Company prior to vesting.

Time-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of time-based restricted stock is measured based on the fair value of the award on the grant date and recognized on a straight-line basis over the vesting period. Dividends are paid on shares awarded under the time-based restricted stock program.

Time-based restricted stock units are settled in cash and cannot be transferred during the vesting period. Compensation expense relating to the issuance of time-based restricted stock units is recorded over the vesting period and is initially based on the fair value of the award on the grant date and is subsequently remeasured at each reporting date during the vesting period based on the change in the ADP stock price. No dividend equivalents are paid on units awarded under the time-based restricted stock unit program.

•Performance-Based Restricted Stock and Performance-Based Restricted Stock Units. Performance-based restricted stock and performance-based restricted stock units generally vest over a one to three-year performance period and a subsequent service period of up to 38 months. Under these programs, the Company communicates “target awards” at the beginning of the performance period with possible payouts at the end of the performance period ranging from 0% to 150% of the “target awards.” Awards are generally forfeited if the employee ceases to be employed by the Company prior to vesting.

Performance-based restricted stock cannot be transferred during the vesting period. Compensation expense relating to the issuance of performance-based restricted stock is recognized over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of shares awarded during the performance period based on probable and actual performance against targets. After the performance period, if the performance targets are achieved, employees are eligible to receive dividends during the remaining vesting period on shares awarded under the performance-based restricted stock program.

Performance-based restricted stock units cannot be transferred and are settled in either cash or stock, depending on the employee's home country. Compensation expense relating to the issuance of performance-based restricted stock units settled in cash is recognized over the vesting period initially based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded during the performance period based on probable and actual performance against targets. In addition, compensation expense is remeasured at each reporting period during the vesting period based on the change in the ADP stock price. Compensation expense relating to the issuance of performance-based restricted stock units settled in stock is recorded over the vesting period based on the fair value of the award on the grant date with subsequent adjustments to the number of units awarded based on the probable and actual performance against targets. Dividend equivalents are paid on awards under the performance-based restricted stock unit program.

•Employee Stock Purchase Plan. The Company offers an employee stock purchase plan that allows eligible employees to purchase shares of common stock at a price equal to 95% of the market value for the Company's common stock on the last day of the offering period. This plan has been deemed non-compensatory and, therefore, no compensation expense has been recorded.

The Company currently utilizes treasury stock to satisfy stock option exercises, issuances under the Company's employee stock purchase plan, and restricted stock awards. From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase program. The Company repurchased 1.7 million and 1.9 million shares in the three months ended September 30, 2020 and 2019, respectively. The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions.

The following table represents pre-tax stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively:

	Three Months Ended
	September 30,
	2020		2019
Operating expenses	$	3.6	$	4.0
Selling, general and administrative expenses	25.3		28.3
System development and programming costs	4.9		4.8
Total stock-based compensation expense	$	33.8	$	37.1

During the three months ended September 30, 2020, the following activity occurred under the Company's existing plans:

Stock Options:

	Number of Options (in thousands)	Weighted Average Price (in dollars)
Options outstanding at July 1, 2020	3,510	$	126
Options granted	1,153	$	139
Options exercised	(156)	$	95
Options forfeited/cancelled	(8)	$	144
Options outstanding at September 30, 2020	4,499	$	130

Time-Based Restricted Stock and Time-Based Restricted Stock Units:

	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2020	905	180
Restricted shares/units granted	636	103
Restricted shares/units vested	(340)	(73)
Restricted shares/units forfeited	(9)	(1)
Restricted shares/units outstanding at September 30, 2020	1,192	209

Performance-Based Restricted Stock and Performance-Based Restricted Stock Units:

	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2020	179	851
Restricted shares/units granted	156	167
Restricted shares/units vested	(70)	(279)
Restricted shares/units forfeited	(2)	(5)
Restricted shares/units outstanding at September 30, 2020	263	734

The fair value for stock options granted was estimated at the date of grant using the following assumptions:

	Three Months Ended
	September 30,
	2020			2019
Risk-free interest rate	0.1		%	1.4		%
Dividend yield	2.6		%	1.9		%
Weighted average volatility factor	25.8		%	19.3		%
Weighted average expected life (in years)	5.4			5.4
Weighted average fair value (in dollars)	$	21.66		$	24.40

Employee Benefit Plans

B.  Pension Plans

The components of net pension income were as follows:

	Three Months Ended
	September 30,
	2020		2019
Service cost – benefits earned during the period	$	1.2	$	14.9
Interest cost on projected benefits	12.7		15.4
Expected return on plan assets	(30.4)		(29.5)
Net amortization and deferral	2.5		1.6
Settlement charges and special termination benefits	2.9		(5.1)
Net pension income	$	(11.1)	$	(2.7)

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Income Taxes	3 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe effective tax rate for the three months ended September 30, 2020 and 2019 was 21.3% and 21.2%, respectively. The increase in the effective tax rate is primarily due to a decrease in the excess tax benefit on stock-based compensation partially offset by favorable adjustments to prior year tax liabilities in the three months ended September 30, 2020.

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Commitments and Contingencies

3 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

In June 2018, a potential class action complaint was filed against the Company in the Circuit Court of Cook County, Illinois asserting that ADP violated the Illinois Biometric Privacy Act in connection with its collection, use and storage of biometric data of employees of its clients who are residents of Illinois. In addition, similar potential class action complaints have been filed in Illinois state courts against ADP and/or certain of its clients with respect to the collection, use and storage of biometric data of the employees of these clients. In June 2020, the Company reached a settlement of all outstanding claims against ADP for $25.0 million, subject to the court's preliminary approval. The Company does not expect that any of the remaining cases against ADP's clients will result in any material liabilities to the Company.

In May 2020, two potential class action complaints were filed against ADP, TotalSource and related defendants in the U.S. District Court, District of New Jersey. The complaints assert violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with the ADP TotalSource Retirement Savings Plan’s fiduciary administrative and investment decision-making. The complaints seek statutory and other unspecified monetary damages, injunctive relief and attorney’s fees. These claims are still in their earliest stages and the Company is unable to estimate any reasonably possible loss, or range of loss, with respect to these matters. The Company intends to vigorously defend against these lawsuits.

The Company is subject to various claims, litigation, and regulatory compliance matters in the normal course of business. When a loss is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. Management currently believes that the resolution of these claims, litigation and regulatory compliance matters against us, individually or in the aggregate, will not have a material adverse impact on our consolidated results of operations, financial condition or cash flows. These matters are subject to inherent uncertainties and management's view of these matters may change in the future.

It is not the Company’s business practice to enter into off-balance sheet arrangements. In the normal course of business, the Company may enter into contracts in which it makes representations and warranties that relate to the performance of the Company’s services and products. The Company does not expect any material losses related to such representations and warranties.

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Stockholders' Equity

3 Months Ended

Sep. 30, 2020

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity

Stockholders' Equity

Changes in stockholders' equity by component are as follows:

	Three Months Ended
	September 30, 2020
	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		AOCI		Total
Balance at June 30, 2020	$	63.9	$	1,333.8	$	18,436.3	$	(14,067.0)	$	(14.8)	$	5,752.2
Net earnings	—		—		602.1		—		—		602.1
Other comprehensive income	—		—		—		—		30.7		30.7
Stock-based compensation expense	—		35.1		—		—		—		35.1
Issuances relating to stock compensation plans	—		(20.5)		—		65.3		—		44.8
Treasury stock acquired (1.7 million shares repurchased)	—		—		—		(262.3)		—		(262.3)
Dividends declared ($0.91 per share)	—		—		(393.7)		—		—		(393.7)
Balance at September 30, 2020	$	63.9	$	1,348.4	$	18,644.7	$	(14,264.0)	$	15.9	$	5,808.9

	Three Months Ended
	September 30, 2019
	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		AOCI		Total
Balance at June 30, 2019	$	63.9	$	1,183.2	$	17,500.6	$	(13,090.5)	$	(257.3)	$	5,399.9
Net earnings	—		—		582.4		—		—		582.4
Other comprehensive income	—		—		—		—		23.4		23.4
Stock-based compensation expense	—		36.0		—		—		—		36.0
Issuances relating to stock compensation plans	—		(5.5)		—		70.5		—		65.0
Treasury stock acquired (1.9 million shares repurchased)	—		—		—		(392.6)		—		(392.6)
Dividends declared ($0.79 per share)	—		—		(346.6)		—		—		(346.6)
Other	—		—		(6.8)		—		—		(6.8)
Balance at September 30, 2019	$	63.9	$	1,213.7	$	17,729.6	$	(13,412.6)	$	(233.9)	$	5,360.7

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Reclassifications out of Accumulated Other Comprehensive Income (AOCI)

3 Months Ended

Sep. 30, 2020

Reclassification out of Accumulated Other Comprehensive Income [Abstract]

Reclassifications out of Accumulated Other Comprehensive Income (AOCI)

Reclassifications out of Accumulated Other Comprehensive Income (“AOCI”)

Changes in AOCI by component are as follows:

	Three Months Ended
	September 30, 2020
	Currency Translation Adjustment		Net Gains/Losses on Available-for-sale Securities			Cash Flow Hedging Activities			Pension Liability			Accumulated Other Comprehensive (Loss) /Income
Balance at June 30, 2020	$	(322.2)	$	680.4		$	(30.3)		$	(342.7)		$	(14.8)
Other comprehensive (loss)/income before reclassification adjustments	50.4		(24.6)			(3.3)			—			22.5
Tax effect	—		5.5			0.8			—			6.3
Reclassification adjustments to net earnings	—		(0.3)		(A)	0.6		(C)	2.5		(B)	2.8
Tax effect	—		0.1			—			(1.0)			(0.9)
Balance at September 30, 2020	$	(271.8)	$	661.1		$	(32.2)		$	(341.2)		$	15.9

	Three Months Ended
	September 30, 2019
	Currency Translation Adjustment		Net Gains/Losses on Available-for-sale Securities			Pension Liability			Accumulated Other Comprehensive (Loss) /Income
Balance at June 30, 2019	$	(269.2)	$	224.6		$	(212.7)		$	(257.3)
Other comprehensive (loss)/income before reclassification adjustments	(48.9)		96.1			—			47.2
Tax effect	—		(20.8)			—			(20.8)
Reclassification adjustments to net earnings	—		(2.3)		(A)	(1.7)		(B)	(4.0)
Tax effect	—		0.5			0.5			1.0
Balance at September 30, 2019	$	(318.1)	$	298.1		$	(213.9)		$	(233.9)

(A) Reclassification adjustments out of AOCI are included within Other (income)/expense, net, on the Statements of Consolidated Earnings.

(B) Reclassification adjustments out of AOCI are included in net pension income (see Note 11).

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Interim Financial Data by Segment

3 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Interim Financial Data by Segment

Interim Financial Data by Segment

Based upon similar economic and operational characteristics, the Company’s strategic business units have been aggregated into the following two reportable segments: Employer Services and PEO Services. The primary components of the “Other” segment are certain corporate overhead charges and expenses that have not been allocated to the reportable segments, including corporate functions, costs related to our transformation office, severance costs, non-recurring gains and losses, the elimination of intercompany transactions, and interest expense. Certain revenues and expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are recorded based on management responsibility. The Company made changes to the allocation methodology for certain corporate allocations, in both the current period and the prior period in the table below, which did not materially affect reportable segment results.

Segment Results:

	Revenues
	Three Months Ended
	September 30,
	2020		2019
Employer Services	$	2,376.8	$	2,441.4
PEO Services	1,095.9		1,056.9
Other	(2.0)		(2.6)
	$	3,470.7	$	3,495.7

	Earnings before Income Taxes
	Three Months Ended
	September 30,
	2020		2019
Employer Services	$	689.3	$	679.4
PEO Services	159.4		149.3
Other	(83.5)		(89.6)
	$	765.2	$	739.1

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New Accounting Pronouncements (Tables)

3 Months Ended

Sep. 30, 2020

Accounting Standards Update and Change in Accounting Principle [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Recently Issued Accounting Pronouncements

The following table summarizes recent ASU's issued by the Financial Accounting Standards Board (“FASB”) that could have a material impact on the Company's consolidated results of operations, financial condition, or cash flows.

Standard	Description	Effective Date	Effect on Financial Statements or Other Significant Matters
ASU 2018-14 Compensation-Retirement Benefits-Defined Benefit Plans	This update modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. The amendments in ASU 2018-14 would need to be applied on a retrospective basis.	July 1, 2021 (Fiscal 2022)	The adoption of this guidance will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, or cash flows.

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Revenue (Tables)

3 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables provide details of revenue by our strategic pillars with disaggregation for PEO zero-margin benefits pass-throughs and client funds interest, and include a reconciliation to the Company’s reportable segments:

	Three Months Ended
	September 30,
Types of Revenues	2020		2019
HCM	$	1,530.6	$	1,568.5
HRO, excluding PEO zero-margin benefits pass-throughs	582.4		591.1
PEO zero-margin benefits pass-throughs	741.0		699.1
Global	510.2		503.1
Interest on funds held for clients	106.5		133.9
Total Revenues	$	3,470.7	$	3,495.7

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2020:

Types of Revenues	Employer Services		PEO		Other		Total
HCM	$	1,532.3	$	—	$	(1.7)	$	1,530.6
HRO, excluding PEO zero-margin benefits pass-throughs	229.1		353.6		(0.3)		582.4
PEO zero-margin benefits pass-throughs	—		741.0		—		741.0
Global	510.2		—		—		510.2
Interest on funds held for clients	105.2		1.3		—		106.5
Total Segment Revenues	$	2,376.8	$	1,095.9	$	(2.0)	$	3,470.7

Reconciliation of disaggregated revenue to our reportable segments for the three months ended September 30, 2019:

Types of Revenues	Employer Services		PEO		Other		Total
HCM	$	1,570.0	$	—	$	(1.5)	$	1,568.5
HRO, excluding PEO zero-margin benefits pass-throughs	235.7		356.5		(1.1)		591.1
PEO zero-margin benefits pass-throughs	—		699.1		—		699.1
Global	503.1		—		—		503.1
Interest on funds held for clients	132.6		1.3		—		133.9
Total Segment Revenues	$	2,441.4	$	1,056.9	$	(2.6)	$	3,495.7

Contract with Customer, Liability

Changes in deferred revenue related to set up fees for the three months ended September 30, 2020 were as follows:

Contract Liability
Contract liability, July 1, 2020	$	522.7
Recognition of revenue included in beginning of year contract liability	(43.8)
Contract liability, net of revenue recognized on contracts during the period	30.7
Currency translation adjustments	16.2
Contract liability, September 30, 2020	$	525.8

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Earnings per Share (EPS) (Tables)

3 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

	Basic		Effect of Employee Stock Option Shares	Effect of Employee Restricted Stock Shares	Diluted
Three Months Ended September 30, 2020
Net earnings	$	602.1			$	602.1
Weighted average shares (in millions)	428.6		0.6	0.8	430.0
EPS	$	1.40			$	1.40
Three Months Ended September 30, 2019
Net earnings	$	582.4			$	582.4
Weighted average shares (in millions)	432.7		1.3	1.4	435.4
EPS	$	1.35			$	1.34

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Other (Income)/Expense, Net (Tables)

3 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

Other (Income)/Expense, Net

	Three Months Ended
	September 30,
	2020		2019
Interest income on corporate funds	$	(13.8)	$	(32.3)
Realized (gains) / losses on available-for-sale securities, net	(0.3)		(2.3)
Impairment of assets	2.8		—
Gain on sale of assets	(0.2)		(1.9)
Non-service components of pension income, net (see Note 11)	(13.4)		(18.1)
Other (income)/expense, net	$	(24.9)	$	(54.6)

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Corporate Investments and Funds Held For Clients (Tables)

3 Months Ended

Sep. 30, 2020

Corporate Investments And Funds Held For Clients [Abstract]

Available-for-sale Securities

Corporate investments and funds held for clients at September 30, 2020 and June 30, 2020 were as follows:

	September 30, 2020
	Amortized Cost		Gross Unrealized  Gains		Gross Unrealized Losses		Fair Market Value (A)
Type of issue:
Money market securities, cash and other cash equivalents	$	10,361.7	$	—	$	—	$	10,361.7
Available-for-sale securities:
Corporate bonds	9,013.1		458.0		(0.4)		9,470.7
Asset-backed securities	2,942.7		98.4		(0.2)		3,040.9
U.S. Treasury securities	3,581.3		108.8		—		3,690.1
U.S. government agency securities	1,341.8		34.5		(0.8)		1,375.5
Canadian government obligations and Canadian government agency obligations	1,037.0		22.6		—		1,059.6
Commercial mortgage-backed securities	810.1		54.5		—		864.6
Canadian provincial bonds	652.7		34.8		—		687.5
Other securities	974.5		41.7		—		1,016.2
Total available-for-sale securities	20,353.2		853.3		(1.4)		21,205.1
Total corporate investments and funds held for clients	$	30,714.9	$	853.3	$	(1.4)	$	31,566.8

(A) Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

	June 30, 2020
	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value (B)
Type of issue:
Money market securities, cash and other cash equivalents	$	7,053.6	$	—	$	—	$	7,053.6
Available-for-sale securities:
Corporate bonds	9,188.7		473.4		—		9,662.1
Asset-backed securities	3,274.6		96.0		(0.5)		3,370.1
U.S. Treasury securities	3,580.6		120.8		—		3,701.4
U.S. government agency securities	1,128.2		35.6		—		1,163.8
Canadian government obligations and Canadian government agency obligations	1,018.7		23.1		—		1,041.8
Commercial mortgage-backed securities	814.3		53.9		—		868.2
Canadian provincial bonds	676.6		33.6		—		710.2
Other securities	1,018.1		41.1		(0.2)		1,059.0
Total available-for-sale securities	20,699.8		877.5		(0.7)		21,576.6
Total corporate investments and funds held for clients	$	27,753.4	$	877.5	$	(0.7)	$	28,630.2

(B) Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of September 30, 2020, are as follows: 

	September 30, 2020
	Securities in Unrealized Loss Position Less Than 12 Months				Securities in Unrealized Loss Position Greater Than 12 Months				Total
	Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value
Corporate bonds	$	(0.4)	$	151.5	$	—	$	—	$	(0.4)	$	151.5
Asset-backed securities	(0.2)		77.5		—		—		(0.2)		77.5
U.S. Treasury securities	—		—		—		—		—		—
U.S. government agency securities	(0.8)		320.0		—		—		(0.8)		320.0
Canadian government obligations and Canadian government agency obligations	—		—		—		—		—		—
Commercial mortgage-backed securities	—		—		—		1.5		—		1.5
Canadian provincial bonds	—		—		—		—		—		—
Other securities	—		12.9		—		—		—		12.9
	$	(1.4)	$	561.9	$	—	$	1.5	$	(1.4)	$	563.4

The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2020, are as follows:

	June 30, 2020
	Securities in Unrealized Loss Position Less Than 12 Months				Securities in Unrealized Loss Position Greater Than 12 Months				Total
	Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value		Gross Unrealized Losses		Fair Market Value
Corporate bonds	$	—	$	—	$	—	$	—	$	—	$	—
Asset-backed securities	(0.5)		43.9		—		—		(0.5)		43.9
U.S. Treasury securities	—		2.0		—		—		—		2.0
U.S. government agency securities	—		—		—		—		—		—
Canadian government obligations and Canadian government agency obligations	—		—		—		—		—		—
Commercial mortgage-backed securities	—		—		—		1.5		—		1.5
Canadian provincial bonds	—		—		—		—		—		—
Other securities	(0.2)		17.1		—		—		(0.2)		17.1
	$	(0.7)	$	63.0	$	—	$	1.5	$	(0.7)	$	64.5

Classification Of Corporate Investments On The Consolidated Balance Sheets

Classification of corporate investments on the Consolidated Balance Sheets is as follows:

	September 30,		June 30,
	2020		2020
Corporate investments:
Cash and cash equivalents	$	1,613.1	$	1,908.5
Short-term marketable securities (a)	3.4		—
Long-term marketable securities (b)	—		13.6
Total corporate investments	$	1,616.5	$	1,922.1

(a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets.

(b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets.

Schedule Of Investment Of Funds Held For Clients

Funds held for clients have been invested in the following categories:

	September 30,		June 30,
	2020		2020
Funds held for clients:
Restricted cash and cash equivalents held to satisfy client funds obligations	$	8,748.6	$	5,145.1
Restricted short-term marketable securities held to satisfy client funds obligations	5,614.4		5,541.2
Restricted long-term marketable securities held to satisfy client funds obligations	15,587.3		16,021.8
Total funds held for clients	$	29,950.3	$	26,708.1

Expected Maturities Of Available-For-Sale Securities

Expected maturities of available-for-sale securities at September 30, 2020 are as follows:

One year or less	$	5,617.8
One year to two years	4,283.0
Two years to three years	3,817.6
Three years to four years	2,932.7
After four years	4,554.0
Total available-for-sale securities	$	21,205.1

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Leases (Tables)

3 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of Lease Cost

The components of operating lease expense were as follows:

	Three Months Ended
	September 30,
	2020		2019
Operating lease cost	$	39.1	$	44.2
Short-term lease cost	0.4		2.7
Variable lease cost	2.1		1.3
Total operating lease cost	$	41.6	$	48.2

Schedule of Operating lease ROU assets and liabilities

	Three Months Ended
	September 30,
	2020		2019
Cash paid for operating lease liabilities	$	45.3	$	40.2
Operating lease ROU assets obtained in exchange for new operating lease liabilities	$	23.2	$	6.7

Operating lease liabilities

Other information related to our operating lease liabilities is as follows:

	September 30,		June 30,
	2020		2020
Weighted-average remaining lease term (in years)	6		6
Weighted-average discount rate	2.3	%	2.3	%

Schedule of Operating Lease Maturities

As of September 30, 2020, maturities of operating lease liabilities are as follows:

Nine months ending June 30, 2021	$	77.8
Twelve months ending June 30, 2022	93.7
Twelve months ending June 30, 2023	79.6
Twelve months ending June 30, 2024	59.2
Twelve months ending June 30, 2025	43.5
Thereafter	101.2
Total undiscounted lease obligations	455.0
Less: Imputed interest	(29.9)
Net lease obligations	$	425.1

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Goodwill and Intangibles Assets, net (Tables)

3 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Changes In Goodwill

Changes in goodwill for the three months ended September 30, 2020 are as follows:

	Employer Services		PEO Services		Total
Balance at June 30, 2020	$	2,304.6	$	4.8	$	2,309.4
Additions and other adjustments	—		—		—
Currency translation adjustments	16.9		—		16.9
Balance at September 30, 2020	$	2,321.5	$	4.8	$	2,326.3

Components Of Finite-Lived Intangible Assets

Components of intangible assets, net, are as follows:

	September 30,		June 30,
	2020		2020
Intangible assets:
Software and software licenses	$	2,776.2	$	2,719.1
Customer contracts and lists	1,029.4		1,021.2
Other intangibles	239.3		239.2
	4,044.9		3,979.5
Less accumulated amortization:
Software and software licenses	(1,950.4)		(1,912.0)
Customer contracts and lists	(654.1)		(628.3)
Other intangibles	(224.5)		(223.4)
	(2,829.0)		(2,763.7)
Intangible assets, net	$	1,215.9	$	1,215.8

Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense

Estimated future amortization expenses of the Company's existing intangible assets are as follows:

	Amount
Nine months ending June 30, 2021	$	232.1
Twelve months ending June 30, 2022	$	256.6
Twelve months ending June 30, 2023	$	212.8
Twelve months ending June 30, 2024	$	166.8
Twelve months ending June 30, 2025	$	115.2
Twelve months ending June 30, 2026	$	65.9

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Short-term Financing (Tables)

3 Months Ended

Sep. 30, 2020

Short-Term Financing [Abstract]

Commercial Paper Program

Details of the borrowings under the commercial paper program are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average daily borrowings (in billions)	$	2.4		$	4.0
Weighted average interest rates	0.1		%	2.3		%
Weighted average maturity (approximately in days)	1 day			2 days

Reverse Repurchase Agreement

Details of the reverse repurchase agreements are as follows:

	Three Months Ended
	September 30,
	2020			2019
Average outstanding balances	$	152.4		$	426.6
Weighted average interest rates	0.3		%	2.0		%

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Debt (Tables)

3 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long Term Debt

The principal amounts and associated effective interest rates of the Notes and other debt as of September 30, 2020 and June 30, 2020, are as follows:

Debt instrument	Effective Interest Rate	September 30, 2020		June 30, 2020
Fixed-rate 2.250% notes due September 15, 2020	2.37%	$	—	$	1,000.0
Fixed-rate 3.375% notes due September 15, 2025	3.47%	1,000.0		1,000.0
Fixed-rate 1.250% notes due September 1, 2030	1.83%	1,000.0		—
Other		8.2		8.4
		2,008.2		2,008.4
Less: current portion (a)		(1.8)		(1,001.8)
Less: unamortized discount and debt issuance costs		(12.5)		(3.8)
Total long-term debt		$	1,993.9	$	1,002.8

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Employee Benefit Plans (Tables)

3 Months Ended

Sep. 30, 2020

Retirement Benefits [Abstract]

Components Of Stock-Based Compensation Expense

The following table represents pre-tax stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively:

	Three Months Ended
	September 30,
	2020		2019
Operating expenses	$	3.6	$	4.0
Selling, general and administrative expenses	25.3		28.3
System development and programming costs	4.9		4.8
Total stock-based compensation expense	$	33.8	$	37.1

Share-based Payment Arrangement, Option, Activity

Stock Options:

	Number of Options (in thousands)	Weighted Average Price (in dollars)
Options outstanding at July 1, 2020	3,510	$	126
Options granted	1,153	$	139
Options exercised	(156)	$	95
Options forfeited/cancelled	(8)	$	144
Options outstanding at September 30, 2020	4,499	$	130

Time Based Restricted Shares and Units

Time-Based Restricted Stock and Time-Based Restricted Stock Units:

	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2020	905	180
Restricted shares/units granted	636	103
Restricted shares/units vested	(340)	(73)
Restricted shares/units forfeited	(9)	(1)
Restricted shares/units outstanding at September 30, 2020	1,192	209

Performance Based Restricted shares and units

Performance-Based Restricted Stock and Performance-Based Restricted Stock Units:

	Number of Shares (in thousands)	Number of Units (in thousands)
Restricted shares/units outstanding at July 1, 2020	179	851
Restricted shares/units granted	156	167
Restricted shares/units vested	(70)	(279)
Restricted shares/units forfeited	(2)	(5)
Restricted shares/units outstanding at September 30, 2020	263	734

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The fair value for stock options granted was estimated at the date of grant using the following assumptions:

	Three Months Ended
	September 30,
	2020			2019
Risk-free interest rate	0.1		%	1.4		%
Dividend yield	2.6		%	1.9		%
Weighted average volatility factor	25.8		%	19.3		%
Weighted average expected life (in years)	5.4			5.4
Weighted average fair value (in dollars)	$	21.66		$	24.40

Schedule of Net Benefit Costs

The components of net pension income were as follows:

	Three Months Ended
	September 30,
	2020		2019
Service cost – benefits earned during the period	$	1.2	$	14.9
Interest cost on projected benefits	12.7		15.4
Expected return on plan assets	(30.4)		(29.5)
Net amortization and deferral	2.5		1.6
Settlement charges and special termination benefits	2.9		(5.1)
Net pension income	$	(11.1)	$	(2.7)

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Stockholders' Equity (Tables)

3 Months Ended

Sep. 30, 2020

Stockholders' Equity Attributable to Parent [Abstract]

Schedule of Components of Stockholders' Equity

Changes in stockholders' equity by component are as follows:

	Three Months Ended
	September 30, 2020
	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		AOCI		Total
Balance at June 30, 2020	$	63.9	$	1,333.8	$	18,436.3	$	(14,067.0)	$	(14.8)	$	5,752.2
Net earnings	—		—		602.1		—		—		602.1
Other comprehensive income	—		—		—		—		30.7		30.7
Stock-based compensation expense	—		35.1		—		—		—		35.1
Issuances relating to stock compensation plans	—		(20.5)		—		65.3		—		44.8
Treasury stock acquired (1.7 million shares repurchased)	—		—		—		(262.3)		—		(262.3)
Dividends declared ($0.91 per share)	—		—		(393.7)		—		—		(393.7)
Balance at September 30, 2020	$	63.9	$	1,348.4	$	18,644.7	$	(14,264.0)	$	15.9	$	5,808.9

	Three Months Ended
	September 30, 2019
	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		AOCI		Total
Balance at June 30, 2019	$	63.9	$	1,183.2	$	17,500.6	$	(13,090.5)	$	(257.3)	$	5,399.9
Net earnings	—		—		582.4		—		—		582.4
Other comprehensive income	—		—		—		—		23.4		23.4
Stock-based compensation expense	—		36.0		—		—		—		36.0
Issuances relating to stock compensation plans	—		(5.5)		—		70.5		—		65.0
Treasury stock acquired (1.9 million shares repurchased)	—		—		—		(392.6)		—		(392.6)
Dividends declared ($0.79 per share)	—		—		(346.6)		—		—		(346.6)
Other	—		—		(6.8)		—		—		(6.8)
Balance at September 30, 2019	$	63.9	$	1,213.7	$	17,729.6	$	(13,412.6)	$	(233.9)	$	5,360.7

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Reclassifications out of Accumulated Other Comprehensive Income (AOCI) (Tables)

3 Months Ended

Sep. 30, 2020

Reclassification out of Accumulated Other Comprehensive Income [Abstract]

Reclassification out of Accumulated Other Comprehensive Income

Changes in AOCI by component are as follows:

	Three Months Ended
	September 30, 2020
	Currency Translation Adjustment		Net Gains/Losses on Available-for-sale Securities			Cash Flow Hedging Activities			Pension Liability			Accumulated Other Comprehensive (Loss) /Income
Balance at June 30, 2020	$	(322.2)	$	680.4		$	(30.3)		$	(342.7)		$	(14.8)
Other comprehensive (loss)/income before reclassification adjustments	50.4		(24.6)			(3.3)			—			22.5
Tax effect	—		5.5			0.8			—			6.3
Reclassification adjustments to net earnings	—		(0.3)		(A)	0.6		(C)	2.5		(B)	2.8
Tax effect	—		0.1			—			(1.0)			(0.9)
Balance at September 30, 2020	$	(271.8)	$	661.1		$	(32.2)		$	(341.2)		$	15.9

	Three Months Ended
	September 30, 2019
	Currency Translation Adjustment		Net Gains/Losses on Available-for-sale Securities			Pension Liability			Accumulated Other Comprehensive (Loss) /Income
Balance at June 30, 2019	$	(269.2)	$	224.6		$	(212.7)		$	(257.3)
Other comprehensive (loss)/income before reclassification adjustments	(48.9)		96.1			—			47.2
Tax effect	—		(20.8)			—			(20.8)
Reclassification adjustments to net earnings	—		(2.3)		(A)	(1.7)		(B)	(4.0)
Tax effect	—		0.5			0.5			1.0
Balance at September 30, 2019	$	(318.1)	$	298.1		$	(213.9)		$	(233.9)

(A) Reclassification adjustments out of AOCI are included within Other (income)/expense, net, on the Statements of Consolidated Earnings.

(B) Reclassification adjustments out of AOCI are included in net pension income (see Note 11).

(C) Reclassification adjustments out of AOCI are included in Interest expense on the Statements of Consolidated Earnings.

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Interim Financial Data by Segment (Tables)

3 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Segment Results:

	Revenues
	Three Months Ended
	September 30,
	2020		2019
Employer Services	$	2,376.8	$	2,441.4
PEO Services	1,095.9		1,056.9
Other	(2.0)		(2.6)
	$	3,470.7	$	3,495.7

	Earnings before Income Taxes
	Three Months Ended
	September 30,
	2020		2019
Employer Services	$	689.3	$	679.4
PEO Services	159.4		149.3
Other	(83.5)		(89.6)
	$	765.2	$	739.1

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Revenues	$ 3,470.7	$ 3,495.7
Employer Services
Disaggregation of Revenue [Line Items]
Revenues	2,376.8	2,441.4
Other
Disaggregation of Revenue [Line Items]
Revenues	(2.0)	(2.6)
PEO Services
Disaggregation of Revenue [Line Items]
Revenues	1,095.9	1,056.9
HCM
Disaggregation of Revenue [Line Items]
Revenues	1,530.6	1,568.5
HCM | Employer Services
Disaggregation of Revenue [Line Items]
Revenues	1,532.3	1,570.0
HCM | Other
Disaggregation of Revenue [Line Items]
Revenues	(1.7)	(1.5)
HCM | PEO Services
Disaggregation of Revenue [Line Items]
Revenues	0.0	0.0
HRO, excluding PEO zero-margin benefits pass-throughs
Disaggregation of Revenue [Line Items]
Revenues	582.4	591.1
HRO, excluding PEO zero-margin benefits pass-throughs | Employer Services
Disaggregation of Revenue [Line Items]
Revenues	229.1	235.7
HRO, excluding PEO zero-margin benefits pass-throughs | Other
Disaggregation of Revenue [Line Items]
Revenues	(0.3)	(1.1)
HRO, excluding PEO zero-margin benefits pass-throughs | PEO Services
Disaggregation of Revenue [Line Items]
Revenues	353.6	356.5
PEO zero-margin benefits pass-throughs
Disaggregation of Revenue [Line Items]
Revenues	741.0	699.1
PEO zero-margin benefits pass-throughs | Employer Services
Disaggregation of Revenue [Line Items]
Revenues	0.0	0.0
PEO zero-margin benefits pass-throughs | Other
Disaggregation of Revenue [Line Items]
Revenues	0.0	0.0
PEO zero-margin benefits pass-throughs | PEO Services
Disaggregation of Revenue [Line Items]
Revenues	741.0	699.1
Global
Disaggregation of Revenue [Line Items]
Revenues	510.2	503.1
Global | Employer Services
Disaggregation of Revenue [Line Items]
Revenues	510.2	503.1
Global | Other
Disaggregation of Revenue [Line Items]
Revenues	0.0	0.0
Global | PEO Services
Disaggregation of Revenue [Line Items]
Revenues	0.0	0.0
Interest on funds held for clients
Disaggregation of Revenue [Line Items]
Revenues	106.5	133.9
Interest on funds held for clients | Employer Services
Disaggregation of Revenue [Line Items]
Revenues	105.2	132.6
Interest on funds held for clients | Other
Disaggregation of Revenue [Line Items]
Revenues	0.0	0.0
Interest on funds held for clients | PEO Services
Disaggregation of Revenue [Line Items]
Revenues	$ 1.3	$ 1.3

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Revenue - Contract Liability (Details) $ in Millions	3 Months Ended
	Sep. 30, 2020 USD ($)
Change In Contract With Customer, Liability [Roll Forward]
Contract liability, July 1, 2020	$ 522.7
Recognition of revenue included in beginning of year contract liability	(43.8)
Contract liability, net of revenue recognized on contracts during the period	30.7
Currency translation adjustments	16.2
Contract liability, September 30, 2020	$ 525.8

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Earnings per Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Net earnings	$ 602.1	$ 582.4
Basic weighted average shares outstanding (shares)	428.6	432.7
Effect of employee stock option shares (shares)	0.6	1.3
Effect of employee restricted stock shares (shares)	0.8	1.4
Diluted weighted average shares outstanding (shares)	430.0	435.4
Basic EPS from continuing operations (in US$ per share)	$ 1.40	$ 1.35
Diluted EPS from continuing operations (in US$ per share)	$ 1.40	$ 1.34
Options excluded from the calculation of diluted earnings per share (shares)	2.1	0.7

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Other (Income)/Expense, Net (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Other Income and Expenses [Abstract]
Interest income on corporate funds	$ (13.8)	$ (32.3)
Realized (gains) / losses on available-for-sale securities, net	(0.3)	(2.3)
Impairment of assets	2.8	0.0
Gain on sale of assets	(0.2)	(1.9)
Non-service components of pension expense, net	(13.4)	(18.1)
Other (income)/expense, net	$ (24.9)	$ (54.6)

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Other Income, Net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Other Income and Expenses [Abstract]
Impairment of assets	$ 2.8	$ 0.0

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Corporate Investments and Funds Held For Clients (Corporate Investments And Funds Held For Clients) (Details) - USD ($) $ in Millions	Sep. 30, 2020		Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]
Money market securities and other cash equivalents - amortized cost	$ 10,361.7		$ 7,053.6
Money market securities and other cash equivalents - gross unrealized gains	0.0		0.0
Money market securities and other cash equivalents - gross unrealized losses	0.0		0.0
Money market securities and other cash equivalents - fair market value	10,361.7		7,053.6
Amortized Cost	20,353.2		20,699.8
Gross Unrealized  Gains	853.3		877.5
Gross Unrealized Losses	(1.4)		(0.7)
Fair market value	21,205.1	[1]	21,576.6	[2]
Total corporate investments and funds held for clients - amortized cost	30,714.9		27,753.4
Total corporate investments and funds held for clients - gross unrealized gains	853.3		877.5
Total corporate investments and funds held for clients - gross unrealized losses	(1.4)		(0.7)
Total corporate investments and funds held for clients - fair market value	31,566.8		28,630.2
Corporate Investments
Debt Securities, Available-for-sale [Line Items]
Fair market value	3.4		13.6
Funds Held For Clients
Debt Securities, Available-for-sale [Line Items]
Fair market value	21,201.7		21,563.0
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	9,013.1		9,188.7
Gross Unrealized  Gains	458.0		473.4
Gross Unrealized Losses	(0.4)		0.0
Fair market value	9,470.7		9,662.1
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,942.7		3,274.6
Gross Unrealized  Gains	98.4		96.0
Gross Unrealized Losses	(0.2)		(0.5)
Fair market value	3,040.9		3,370.1
U.S. government agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,581.3		3,580.6
Gross Unrealized  Gains	108.8		120.8
Gross Unrealized Losses	0.0		0.0
Fair market value	3,690.1		3,701.4
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,341.8		1,128.2
Gross Unrealized  Gains	34.5		35.6
Gross Unrealized Losses	(0.8)		0.0
Fair market value	1,375.5		1,163.8
Canadian government obligations and Canadian government agency obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,037.0		1,018.7
Gross Unrealized  Gains	22.6		23.1
Gross Unrealized Losses	0.0		0.0
Fair market value	1,059.6		1,041.8
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	810.1		814.3
Gross Unrealized  Gains	54.5		53.9
Gross Unrealized Losses	0.0		0.0
Fair market value	864.6		868.2
Canadian provincial bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	652.7		676.6
Gross Unrealized  Gains	34.8		33.6
Gross Unrealized Losses	0.0		0.0
Fair market value	687.5		710.2
Other securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	974.5		1,018.1
Gross Unrealized  Gains	41.7		41.1
Gross Unrealized Losses	0.0		(0.2)
Fair market value	$ 1,016.2		$ 1,059.0

[1] Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

[2] Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

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Corporate Investments and Funds Held For Clients (Available-For-Sale Securities That Have Been In An Unrealized Loss Position) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	$ (1.4)	$ (0.7)
Fair market value of securities in unrealized loss position less than 12 months	561.9	63.0
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	1.5	1.5
Total gross unrealized losses	(1.4)	(0.7)
Total fair market value	563.4	64.5
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	(0.4)	0.0
Fair market value of securities in unrealized loss position less than 12 months	151.5	0.0
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	0.0	0.0
Total gross unrealized losses	(0.4)	0.0
Total fair market value	151.5	0.0
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	(0.2)	(0.5)
Fair market value of securities in unrealized loss position less than 12 months	77.5	43.9
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	0.0	0.0
Total gross unrealized losses	(0.2)	(0.5)
Total fair market value	77.5	43.9
U.S. government agency securities
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	0.0	0.0
Fair market value of securities in unrealized loss position less than 12 months	0.0	2.0
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	0.0	0.0
Total gross unrealized losses	0.0	0.0
Total fair market value	0.0	2.0
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	(0.8)	0.0
Fair market value of securities in unrealized loss position less than 12 months	320.0	0.0
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	0.0	0.0
Total gross unrealized losses	(0.8)	0.0
Total fair market value	320.0	0.0
Canadian government obligations and Canadian government agency obligations
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	0.0	0.0
Fair market value of securities in unrealized loss position less than 12 months	0.0	0.0
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	0.0	0.0
Total gross unrealized losses	0.0	0.0
Total fair market value	0.0	0.0
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	0.0	0.0
Fair market value of securities in unrealized loss position less than 12 months	0.0	0.0
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	1.5	1.5
Total gross unrealized losses	0.0	0.0
Total fair market value	1.5	1.5
Canadian provincial bonds
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	0.0	0.0
Fair market value of securities in unrealized loss position less than 12 months	0.0	0.0
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	0.0	0.0
Total gross unrealized losses	0.0	0.0
Total fair market value	0.0	0.0
Other securities
Debt Securities, Available-for-sale [Line Items]
Unrealized losses less than 12 months	0.0	(0.2)
Fair market value of securities in unrealized loss position less than 12 months	12.9	17.1
Unrealized losses greater than 12 months	0.0	0.0
Fair market value of securities in unrealized loss positions greater than 12 months	0.0	0.0
Total gross unrealized losses	0.0	(0.2)
Total fair market value	$ 12.9	$ 17.1

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Corporate Investments and Funds Held For Clients (Narrative) (Details) - USD ($)	3 Months Ended
	Sep. 30, 2020		Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]
Earliest Corporate bond debt maturity date	October 2020
Latest corporate debt maturity date	September 2030
Fair market value	$ 21,205,100,000	[1]	$ 21,576,600,000	[2]
Earliest U.S. treasury maturity date	October 2020
Latest U.S treasury maturity date	December 2029
Client fund obligation repayment period	1 year
Client funds obligations	$ 29,098,400,000		25,831,600,000
Client funds held in grantor trust	$ 26,805,600,000		$ 23,740,000,000.0
Client funds investments with original maturities	ninety days or less
Percentage of the available-for-sale securities were rated AAA Or AA	79.00%
Fair Value, Inputs, Level 1
Debt Securities, Available-for-sale [Line Items]
Fair market value	$ 0
Fair Value, Inputs, Level 3
Debt Securities, Available-for-sale [Line Items]
Fair market value	0
Asset-Backed Auto Loan Receivables
Debt Securities, Available-for-sale [Line Items]
Fair market value	1,520,800,000
Fixed Rate Credit Card
Debt Securities, Available-for-sale [Line Items]
Fair market value	1,100,400,000
Asset-Backed Equipment Lease Receivable
Debt Securities, Available-for-sale [Line Items]
Fair market value	321,900,000
Rate Reduction
Debt Securities, Available-for-sale [Line Items]
Fair market value	97,100,000
Federal Farm Credit Banks
Debt Securities, Available-for-sale [Line Items]
Fair market value	614,700,000
Federal Home Loan Banks
Debt Securities, Available-for-sale [Line Items]
Fair market value	590,800,000
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Fair market value	576,700,000
Debt Security, Corporate, Non-US
Debt Securities, Available-for-sale [Line Items]
Fair market value	197,300,000
Sovereign bonds
Debt Securities, Available-for-sale [Line Items]
Fair market value	$ 77,200,000

[1] Included within available-for-sale securities are corporate investments with fair values of $3.4 million and funds held for clients with fair values of $21,201.7 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

[2] Included within available-for-sale securities are corporate investments with fair values of $13.6 million and funds held for clients with fair values of $21,563.0 million. All available-for-sale securities were included in Level 2 of the fair value hierarchy.

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Corporate Investments and Funds Held For Clients (Classification Of Corporate Investments On The Consolidated Balance Sheets) (Details) - USD ($) $ in Millions		Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019
Corporate Investments And Funds Held For Clients [Abstract]
Cash and cash equivalents		$ 1,613.1	$ 1,908.5	$ 1,403.9
Short-term marketable securities	[1]	3.4	0.0
Long-term marketable securities	[2]	0.0	13.6
Total corporate investments		$ 1,616.5	$ 1,922.1

[1] (a) - Short-term marketable securities are included within Other current assets on the Consolidated Balance Sheets.

[2] (b) - Long-term marketable securities are included within Other assets on the Consolidated Balance Sheets.

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Corporate Investments and Funds Held For Clients (Schedule Of Investment Of Funds Held For Clients) (Details) - USD ($) $ in Millions	Sep. 30, 2020		Jun. 30, 2020	Sep. 30, 2019	[1]
Debt Securities, Available-for-sale [Line Items]
Restricted cash and cash equivalents held to satisfy client funds obligations	$ 8,748.6	[1]	$ 5,145.1	$ 868.3
Total funds held for clients	29,950.3		26,708.1
Current
Debt Securities, Available-for-sale [Line Items]
Available-for-sale securities, restricted	5,614.4		5,541.2
Non-current
Debt Securities, Available-for-sale [Line Items]
Available-for-sale securities, restricted	$ 15,587.3		$ 16,021.8

[1] See Note 6 for a reconciliation of restricted cash and restricted cash equivalents in funds held for clients on the Consolidated Balance Sheets.

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Corporate Investments and Funds Held For Clients (Expected Maturities Of Available-For-Sale Securities) (Details) $ in Millions	Sep. 30, 2020 USD ($)
Corporate Investments And Funds Held For Clients [Abstract]
One year or less	$ 5,617.8
One year to two years	4,283.0
Two years to three years	3,817.6
Three years to four years	2,932.7
After four years	4,554.0
Total available-for-sale securities	$ 21,205.1

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Leases - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Leases [Abstract]
Operating lease, contract term	11 years
Operating lease liability, current	$ 94.7	$ 95.5

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Leases - Lease Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 39.1	$ 44.2
Short-term lease cost	0.4	2.7
Variable lease cost	2.1	1.3
Operating lease cost	$ 41.6	$ 48.2

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Leases - Right of Use Assets and Operating Lease Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Leases [Abstract]
Cash paid for operating lease liabilities	$ 45.3	$ 40.2
Operating lease ROU assets obtained in exchange for new operating lease liabilities	$ 23.2	$ 6.7
Weighted-average remaining lease term (in years)	6 years		6 years
Weighted-average discount rate	2.30%		2.30%

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Leases - Operating Lease Maturities (Details) $ in Millions	Sep. 30, 2020 USD ($)
Leases [Abstract]
Nine months ending June 30, 2021	$ 77.8
Twelve months ending June 30, 2022	93.7
Twelve months ending June 30, 2022	79.6
Twelve months ending June 30, 2023	59.2
Twelve months ending June 30, 2024	43.5
Twelve months ending June 30, 2025	101.2
Total undiscounted lease obligations	455.0
Less: Imputed interest	(29.9)
Net lease obligations	$ 425.1

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Goodwill and Intangibles Assets, net - Changes In Goodwill (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020
Goodwill [Roll Forward]
Goodwill	$ 2,326.3	$ 2,309.4
Additions and other adjustments	0.0
Currency translation adjustments	16.9
Balance at September 30, 2020	2,326.3
Employer Services
Goodwill [Roll Forward]
Goodwill	2,321.5	2,304.6
Additions and other adjustments	0.0
Currency translation adjustments	16.9
Balance at September 30, 2020	2,321.5
PEO Services
Goodwill [Roll Forward]
Goodwill	4.8	$ 4.8
Additions and other adjustments	0.0
Currency translation adjustments	0.0
Balance at September 30, 2020	$ 4.8

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Goodwill and Intangibles Assets, net - Components Of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Total - gross	$ 4,044.9	$ 3,979.5
Total - accumulated amortization	(2,829.0)	(2,763.7)
Intangible assets, net	1,215.9	1,215.8
Software and software licenses
Finite-Lived Intangible Assets [Line Items]
Total - gross	2,776.2	2,719.1
Total - accumulated amortization	(1,950.4)	(1,912.0)
Customer contracts and lists
Finite-Lived Intangible Assets [Line Items]
Total - gross	1,029.4	1,021.2
Total - accumulated amortization	(654.1)	(628.3)
Other intangibles
Finite-Lived Intangible Assets [Line Items]
Total - gross	239.3	239.2
Total - accumulated amortization	$ (224.5)	$ (223.4)

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Goodwill and Intangibles Assets, net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Finite-Lived Intangible Assets [Line Items]
Useful life	6 years
Amortization of intangible assets	$ 84.2	$ 69.4
Software and software licenses
Finite-Lived Intangible Assets [Line Items]
Useful life	6 years
Customer contracts and lists
Finite-Lived Intangible Assets [Line Items]
Useful life	5 years
Other intangibles
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years

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Goodwill and Intangibles Assets, net - Schedule Of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Millions	Sep. 30, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Nine months ending June 30, 2021	$ 232.1
Twelve months ending June 30, 2022	256.6
Twelve months ending June 30, 2022	212.8
Twelve months ending June 30, 2023	166.8
Twelve months ending June 30, 2024	115.2
Twelve months ending June 30, 2025	$ 65.9

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Short-term Financing (Details) - USD ($)		3 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Short-term Debt [Line Items]
Line of credit facility, fair value of amount outstanding		$ 0
Commercial paper		$ 0
Maturities of short-term funding agreements		overnight to up to five business days
Obligations under reverse repurchase agreements	[1]	$ 0		$ 13,600,000
364-day credit agreement
Short-term Debt [Line Items]
Maximum borrowing capacity under credit facilities		$ 3,200,000,000
Term of credit agreement		364 days
Extension option term		1 year
Credit Facility Expiring In June 2024
Short-term Debt [Line Items]
Maximum borrowing capacity under credit facilities		$ 2,750,000,000
Term of credit agreement		5 years
Line of credit facility potentially available increase in maximum borrowing capacity		$ 500,000,000
Credit Facility Expiring In June 2023
Short-term Debt [Line Items]
Maximum borrowing capacity under credit facilities		$ 3,750,000,000
Term of credit agreement		5 years
Line of credit facility potentially available increase in maximum borrowing capacity		$ 500,000,000
Commercial paper program
Short-term Debt [Line Items]
Maximum borrowing capacity under credit facilities		$ 9,700,000,000
Maturities of commercial paper range		overnight to up to 364 days
Short-term debt, average outstanding amount		$ 2,400,000,000	$ 4,000,000,000.0
Debt instrument, interest rate during period		0.10%	2.30%
Short Term Commercial Paper Program
Short-term Debt [Line Items]
Commercial paper weighted average maturity		1 day	2 days
Reverse repurchase agreements
Short-term Debt [Line Items]
Short-term debt, average outstanding amount		$ 152,400,000	$ 426,600,000
Debt instrument, interest rate during period		0.30%	2.00%

[1] (A) As of June 30, 2020, $13.6 million of long-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements (see Note 9).

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Debt (Details) - USD ($)	3 Months Ended
	Sep. 30, 2020		Aug. 13, 2020	Jun. 30, 2020
Debt Instrument [Line Items]
Debt instrument, term	10 years
Aggregate principal amount	$ 2,000,000,000.0
Notes payable	2,008,200,000			$ 2,008,400,000
Derivative, notional amount	1,000,000,000.0		$ 600,000,000.0	400,000,000.0
Unrealized loss on cash flow hedging instruments	43,600,000
Less: current portion	(1,800,000)	[1]		(1,001,800,000)
Less: unamortized discount and debt issuance costs	(12,500,000)			(3,800,000)
Total long-term debt	1,993,900,000			1,002,800,000
Fair value of notes issued	2,115,000,000.0
Fixed-rate 2.250% notes due September 15, 2020
Debt Instrument [Line Items]
Notes payable	0			$ 1,000,000,000.0
Debt instrument effective rate (percent)				2.37%
Stated interest rate				2.25%
Fixed-rate 3.375% notes due September 15, 2025
Debt Instrument [Line Items]
Notes payable	$ 1,000,000,000.0			$ 1,000,000,000.0
Debt instrument effective rate (percent)	3.47%
Stated interest rate	3.375%
Fixed-rate 1.250% notes due September 1, 2030
Debt Instrument [Line Items]
Notes payable	$ 1,000,000,000.0			0
Debt instrument effective rate (percent)	1.83%
Stated interest rate	1.25%
Other
Debt Instrument [Line Items]
Notes payable	$ 8,200,000			$ 8,400,000

[1] (a) - Current portion of long-term debt as of September 30, 2020 is included within Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

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Employee Benefit Plans (Narrative) (Details) shares in Thousands	3 Months Ended
	Sep. 30, 2020 shares
Defined Benefit Plan Disclosure [Line Items]
Award vesting period	4 years
Options granted, contractual term	10 years
Options granted (shares)	1,153
Time Based Restricted Stock Granted Fiscal 2013
Defined Benefit Plan Disclosure [Line Items]
Award vesting period	2 years
Time Based Restricted Stock Granted Fiscal 2019
Defined Benefit Plan Disclosure [Line Items]
Award vesting period	3 years
Performance Based Restricted Stock and Units
Defined Benefit Plan Disclosure [Line Items]
Minimum percentage that will ultimately vest under performance-based restricted stock awards based on performance target	0.00%
Maximum percentage that will ultimately vest under performance-based restricted stock awards based on performance target	150.00%
Employee Stock
Defined Benefit Plan Disclosure [Line Items]
Percentage of Market Value paid for Company Stock	95.00%
Minimum
Defined Benefit Plan Disclosure [Line Items]
Performance period	1 year
Maximum
Defined Benefit Plan Disclosure [Line Items]
Performance period	3 years
Maximum | Performance Based Restricted Stock and Units
Defined Benefit Plan Disclosure [Line Items]
Award vesting period	38 months

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Employee Benefit Plans (Components Of Stock-Based Compensation Expense) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Defined Benefit Plan Disclosure [Line Items]
Total pre-tax stock-based compensation expense	$ 33.8	$ 37.1
Number of Options (in thousands)
Options outstanding at July 1, 2020 (shares)	3,510
Options granted (shares)	1,153
Options exercised (shares)	(156)
Options forfeited/cancelled (shares)	(8)
Options outstanding at September 30, 2020 (shares)	4,499
Weighted Average Price (in dollars)
Options outstanding at July 1, 2020 (in dollars per share)	$ 126
Options granted, weighted average price (in dollar per share)	139
Options exercised, weighted average price (in dollar per share)	95
Options forfeited/cancelled, weighted average price (in dollar per share)	144
Options outstanding at September 30, 2020 (in dollars per share)	$ 130
Number of shares/units
Risk-free interest rate	0.10%	1.40%
Dividend yield	2.60%	1.90%
Weighted average volatility factor	25.80%	19.30%
Weighted average expected life (in years)	5 years 4 months 24 days	5 years 4 months 24 days
Weighted average fair value (in dollars)	$ 21.66	$ 24.40
Time Based Restricted Stock
Number of shares/units
Restricted shares/units outstanding at July 1, 2020 (in shares/units)	905
Restricted shares/units granted (in shares/units)	636
Restricted shares/units vested (in shares/units)	(340)
Restricted shares/units forfeited (in shares/units)	(9)
Restricted shares/units outstanding at September 30, 2020 (in shares/units)	1,192
Performance Based Restricted Stock
Number of shares/units
Restricted shares/units outstanding at July 1, 2020 (in shares/units)	179
Restricted shares/units granted (in shares/units)	156
Restricted shares/units vested (in shares/units)	(70)
Restricted shares/units forfeited (in shares/units)	(2)
Restricted shares/units outstanding at September 30, 2020 (in shares/units)	263
Time Based restricted Stock Units
Number of shares/units
Restricted shares/units outstanding at July 1, 2020 (in shares/units)	180
Restricted shares/units granted (in shares/units)	103
Restricted shares/units vested (in shares/units)	(73)
Restricted shares/units forfeited (in shares/units)	(1)
Restricted shares/units outstanding at September 30, 2020 (in shares/units)	209
Performance Based Restricted Stock Units
Number of shares/units
Restricted shares/units outstanding at July 1, 2020 (in shares/units)	851
Restricted shares/units granted (in shares/units)	167
Restricted shares/units vested (in shares/units)	(279)
Restricted shares/units forfeited (in shares/units)	(5)
Restricted shares/units outstanding at September 30, 2020 (in shares/units)	734
Operating expenses
Defined Benefit Plan Disclosure [Line Items]
Total pre-tax stock-based compensation expense	$ 3.6	$ 4.0
Selling, general and administrative expenses
Defined Benefit Plan Disclosure [Line Items]
Total pre-tax stock-based compensation expense	25.3	28.3
System development and programming costs
Defined Benefit Plan Disclosure [Line Items]
Total pre-tax stock-based compensation expense	$ 4.9	$ 4.8

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Employee Benefit Plans (Components Of Net Pension Expense) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Retirement Benefits [Abstract]
Service cost – benefits earned during the period	$ 1.2	$ 14.9
Interest cost on projected benefits	12.7	15.4
Expected return on plan assets	(30.4)	(29.5)
Net amortization and deferral	2.5	1.6
Settlement charges and special termination benefits	(2.9)	5.1
Net pension expense	$ (11.1)	$ (2.7)

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Income Taxes (Details)	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate	21.30%	21.20%

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Commitments and Contingencies (Details) $ in Millions	3 Months Ended
	Sep. 30, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Litigation settlement, amount awarded to other party	$ 25.0

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Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 5,752.2	$ 5,399.9
Net earnings	602.1	582.4
Other comprehensive income	30.7	23.4
Stock-based compensation expense	35.1	36.0
Issuances relating to stock compensation plans	44.8	65.0
Treasury stock acquired	$ (262.3)	$ (392.6)
Treasury stock acquired (shares)	1.7	1.9
Dividends declared (in US$ per share)	$ 0.91	$ 0.79
Dividends declared	$ (393.7)	$ (346.6)
Other		6.8
Ending balance	5,808.9	5,360.7
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	63.9	63.9
Net earnings	0.0	0.0
Other comprehensive income	0.0	0.0
Stock-based compensation expense	0.0	0.0
Issuances relating to stock compensation plans	0.0	0.0
Treasury stock acquired	0.0	0.0
Dividends declared	0.0	0.0
Other		0.0
Ending balance	63.9	63.9
Capital in Excess of Par Value
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	1,333.8	1,183.2
Net earnings	0.0	0.0
Other comprehensive income	0.0	0.0
Stock-based compensation expense	35.1	36.0
Issuances relating to stock compensation plans	(20.5)	(5.5)
Treasury stock acquired	0.0	0.0
Dividends declared	0.0	0.0
Other		0.0
Ending balance	1,348.4	1,213.7
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	18,436.3	17,500.6
Net earnings	602.1	582.4
Other comprehensive income	0.0	0.0
Stock-based compensation expense	0.0	0.0
Issuances relating to stock compensation plans	0.0	0.0
Treasury stock acquired	0.0	0.0
Dividends declared	(393.7)	(346.6)
Other		6.8
Ending balance	18,644.7	17,729.6
Treasury Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(14,067.0)	(13,090.5)
Net earnings	0.0	0.0
Other comprehensive income	0.0	0.0
Stock-based compensation expense	0.0	0.0
Issuances relating to stock compensation plans	65.3	70.5
Treasury stock acquired	(262.3)	(392.6)
Dividends declared	0.0	0.0
Other		0.0
Ending balance	(14,264.0)	(13,412.6)
AOCI
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(14.8)	(257.3)
Net earnings	0.0	0.0
Other comprehensive income	30.7	23.4
Stock-based compensation expense	0.0	0.0
Issuances relating to stock compensation plans	0.0	0.0
Treasury stock acquired	0.0	0.0
Dividends declared	0.0	0.0
Other		0.0
Ending balance	$ 15.9	$ (233.9)

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Reclassifications out of Accumulated Other Comprehensive Income (AOCI) (Details) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
AOCI Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance		$ (14.8)	$ (257.3)
Other comprehensive (loss)/income before reclassification adjustments		22.5	47.2
Tax effect		6.3	(20.8)
Reclassification adjustments to net earnings		2.8	(4.0)
Tax effect		(0.9)	1.0
Accumulated other comprehensive income, ending balance		15.9	(233.9)
Currency Translation Adjustment
AOCI Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance		(322.2)	(269.2)
Other comprehensive (loss)/income before reclassification adjustments		50.4	(48.9)
Tax effect		0.0	0.0
Reclassification adjustments to net earnings		0.0	0.0
Tax effect		0.0	0.0
Accumulated other comprehensive income, ending balance		(271.8)	(318.1)
Net Gains/Losses on Available-for-sale Securities
AOCI Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance		680.4	224.6
Other comprehensive (loss)/income before reclassification adjustments		(24.6)	96.1
Tax effect		5.5	(20.8)
Reclassification adjustments to net earnings	[1]	(0.3)	(2.3)
Tax effect		0.1	0.5
Accumulated other comprehensive income, ending balance		661.1	298.1
Cash Flow Hedging Activities
AOCI Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance		(30.3)
Other comprehensive (loss)/income before reclassification adjustments		(3.3)
Tax effect		0.8
Reclassification adjustments to net earnings	[2]	0.6
Tax effect		0.0
Accumulated other comprehensive income, ending balance		(32.2)
Pension Liability
AOCI Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance		(342.7)	(212.7)
Other comprehensive (loss)/income before reclassification adjustments		0.0	0.0
Tax effect		0.0	0.0
Reclassification adjustments to net earnings	[3]	2.5	(1.7)
Tax effect		(1.0)	0.5
Accumulated other comprehensive income, ending balance		$ (341.2)	$ (213.9)

[1] (A) Reclassification adjustments out of AOCI are included within Other (income)/expense, net, on the Statements of Consolidated Earnings.

[2] (C) Reclassification adjustments out of AOCI are included in Interest expense on the Statements of Consolidated Earnings.

[3] (B) Reclassification adjustments out of AOCI are included in net pension income (see Note 11).

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Interim Financial Data by Segment (Narrative) (Details)	3 Months Ended
	Sep. 30, 2020 segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Interim Financial Data by Segment (Financial Data By Strategic Business Unit Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Revenues	$ 3,470.7	$ 3,495.7
Earnings before Income Taxes	765.2	739.1
Employer Services
Segment Reporting Information [Line Items]
Revenues	2,376.8	2,441.4
Earnings before Income Taxes	689.3	679.4
PEO Services
Segment Reporting Information [Line Items]
Revenues	1,095.9	1,056.9
Earnings before Income Taxes	159.4	149.3
Other
Segment Reporting Information [Line Items]
Revenues	(2.0)	(2.6)
Earnings before Income Taxes	$ (83.5)	$ (89.6)