An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Automatic Data Processing Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in thousands

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Total undiscounted future operating lease payments	—	—	596,400)	539,500)	473,700)	491,100)
Discount rate¹	—	—	2.80%	2.92%	2.92%	2.94%

Total present value of future operating lease payments	—	—	542,858)	484,694)	428,436)	445,608)

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ Weighted-average interest rate for Automatic Data Processing Inc. debt

2019 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 2.80%
2020	147,900)	2020	147,900)	143,872)
2021	109,400)	2021	109,400)	103,522)
2022	87,400)	2022	87,400)	80,451)
2023	67,600)	2023	67,600)	60,530)
2024	50,100)	2024	50,100)	43,639)
2025 and thereafter	134,000)	2025	50,100)	42,450)
		2026	50,100)	41,294)
		2027	33,800)	27,100)
Total:	596,400)		596,400)	542,858)

Based on: 10-K (reporting date: 2019-06-30).

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 2.92%
2019	107,100)	2019	107,100)	104,061)
2020	102,100)	2020	102,100)	96,389)
2021	77,100)	2021	77,100)	70,722)
2022	58,700)	2022	58,700)	52,317)
2023	47,800)	2023	47,800)	41,393)
2024 and thereafter	146,700)	2024	47,800)	40,219)
		2025	47,800)	39,078)
		2026	47,800)	37,969)
		2027	3,300)	2,547)
Total:	539,500)		539,500)	484,694)

Based on: 10-K (reporting date: 2018-06-30).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 2.92%
2018	105,400)	2018	105,400)	102,410)
2019	96,900)	2019	96,900)	91,480)
2020	73,800)	2020	73,800)	67,695)
2021	52,100)	2021	52,100)	46,434)
2022	35,000)	2022	35,000)	30,309)
2023 and thereafter	110,500)	2023	35,000)	29,449)
		2024	35,000)	28,613)
		2025	35,000)	27,802)
		2026	5,500)	4,245)
Total:	473,700)		473,700)	428,436)

Based on: 10-K (reporting date: 2017-06-30).

2016 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 2.94%
2017	106,200)	2017	106,200)	103,167)
2018	106,100)	2018	106,100)	100,126)
2019	78,900)	2019	78,900)	72,331)
2020	59,600)	2020	59,600)	53,077)
2021	39,500)	2021	39,500)	34,172)
2022 and thereafter	100,800)	2022	39,500)	33,196)
		2023	39,500)	32,248)
		2024	21,800)	17,290)
Total:	491,100)		491,100)	445,608)

Based on: 10-K (reporting date: 2016-06-30).

Download chart

Automatic Data Processing Inc., adjustments to financial statements

US$ in thousands

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Adjustment to Total Assets
Total assets (as reported)	48,772,500)	39,165,500)	41,887,700)	37,088,700)	37,180,000)	43,670,000)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	542,858)	484,694)	428,436)	445,608)
Total assets (adjusted)	48,772,500)	39,165,500)	42,430,558)	37,573,394)	37,608,436)	44,115,608)
Adjustment to Total Debt
Total debt (as reported)	3,008,500)	2,018,200)	2,264,200)	2,002,400)	2,002,400)	2,007,700)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	542,858)	484,694)	428,436)	445,608)
Add: Current operating lease liability (recorded within Accrued expenses and other current liabilities)	94,700)	95,500)	—)	—)	—)	—)
Add: Long-term operating lease liabilities	343,200)	344,400)	—)	—)	—)	—)
Total debt (adjusted)	3,446,400)	2,458,100)	2,807,058)	2,487,094)	2,430,836)	2,453,308)

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

^{1, 2} Equal to total present value of future operating lease payments.

Automatic Data Processing Inc., Financial Data: Reported vs. Adjusted

Download chart

Automatic Data Processing Inc., adjusted financial ratios

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Total Asset Turnover¹
Reported total asset turnover	0.31	0.37	0.34	0.36	0.33	0.27
Adjusted total asset turnover	0.31	0.37	0.33	0.35	0.33	0.26
Debt to Equity²
Reported debt to equity	0.53	0.35	0.42	0.58	0.50	0.45
Adjusted debt to equity	0.61	0.43	0.52	0.72	0.61	0.55
Return on Assets³ (ROA)
Reported ROA	5.33%	6.30%	5.47%	4.37%	4.66%	3.42%
Adjusted ROA	5.33%	6.30%	5.40%	4.31%	4.61%	3.38%

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

¹ See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Automatic Data Processing Inc. adjusted total asset turnover ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Automatic Data Processing Inc. adjusted debt to equity ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Automatic Data Processing Inc. adjusted ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Automatic Data Processing Inc., Financial Ratios: Reported vs. Adjusted

Download chart

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
As Reported
Selected Financial Data (US$ in thousands)
Revenues	15,005,400)	14,589,800)	14,175,200)	13,325,800)	12,379,800)	11,667,800)
Total assets	48,772,500)	39,165,500)	41,887,700)	37,088,700)	37,180,000)	43,670,000)
Activity Ratio
Total asset turnover¹	0.31	0.37	0.34	0.36	0.33	0.27
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Revenues	15,005,400)	14,589,800)	14,175,200)	13,325,800)	12,379,800)	11,667,800)
Adjusted total assets	48,772,500)	39,165,500)	42,430,558)	37,573,394)	37,608,436)	44,115,608)
Activity Ratio
Adjusted total asset turnover²	0.31	0.37	0.33	0.35	0.33	0.26

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

2021 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 15,005,400 ÷ 48,772,500 = 0.31

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 15,005,400 ÷ 48,772,500 = 0.31

Download chart

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Automatic Data Processing Inc. adjusted total asset turnover ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
As Reported
Selected Financial Data (US$ in thousands)
Total debt	3,008,500)	2,018,200)	2,264,200)	2,002,400)	2,002,400)	2,007,700)
Stockholders’ equity	5,670,100)	5,752,200)	5,399,900)	3,459,600)	3,977,000)	4,481,600)
Solvency Ratio
Debt to equity¹	0.53	0.35	0.42	0.58	0.50	0.45
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	3,446,400)	2,458,100)	2,807,058)	2,487,094)	2,430,836)	2,453,308)
Stockholders’ equity	5,670,100)	5,752,200)	5,399,900)	3,459,600)	3,977,000)	4,481,600)
Solvency Ratio
Adjusted debt to equity²	0.61	0.43	0.52	0.72	0.61	0.55

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

2021 Calculations

¹ Debt to equity = Total debt ÷ Stockholders’ equity
= 3,008,500 ÷ 5,670,100 = 0.53

² Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= 3,446,400 ÷ 5,670,100 = 0.61

Download chart

Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Automatic Data Processing Inc. adjusted debt-to-equity ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
As Reported
Selected Financial Data (US$ in thousands)
Net earnings	2,598,500)	2,466,500)	2,292,800)	1,620,800)	1,733,400)	1,492,500)
Total assets	48,772,500)	39,165,500)	41,887,700)	37,088,700)	37,180,000)	43,670,000)
Profitability Ratio
ROA¹	5.33%	6.30%	5.47%	4.37%	4.66%	3.42%
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net earnings	2,598,500)	2,466,500)	2,292,800)	1,620,800)	1,733,400)	1,492,500)
Adjusted total assets	48,772,500)	39,165,500)	42,430,558)	37,573,394)	37,608,436)	44,115,608)
Profitability Ratio
Adjusted ROA²	5.33%	6.30%	5.40%	4.31%	4.61%	3.38%

Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).

2021 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 2,598,500 ÷ 48,772,500 = 5.33%

² Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 2,598,500 ÷ 48,772,500 = 5.33%

Download chart

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Automatic Data Processing Inc. adjusted ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Automatic Data Processing Inc. (NASDAQ:ADP)

Analysis of Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

Automatic Data Processing Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Automatic Data Processing Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)