Automatic Data Processing Inc. (ADP)

Property, plant and equipment is stated at cost less accumulated depreciation on the Consolidated Balance Sheets. Depreciation is recognized over the estimated useful lives of the assets using the straight-line method. Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. The estimated useful lives of assets are primarily as follows:

Data processing equipment	2 to 5 years
Buildings	20 to 40 years
Furniture and fixtures	4 to 7 years

ADP has obligations under various facilities and equipment leases. ADP assesses whether these arrangements meet the criteria for capital leases by determining whether the agreement transfers ownership of the asset, whether the lease includes a bargain purchase option, whether the lease term is for greater than 75% of the asset's useful life, or whether the minimum lease payments exceed 90% of the leased equipment's fair market value. All of ADP's leases are classified as operating leases. Total expense under these operating lease agreements was approximately $234.9 million, $234.5 million, and $201.7 million in fiscal 2018, 2017, and 2016, respectively.

Source: Automatic Data Processing Inc., Annual Report

Automatic Data Processing Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in thousands

Source: Based on data from Automatic Data Processing Inc. Annual Reports

Item	Description	The company
Property, plant and equipment, gross	Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation.	Automatic Data Processing Inc.'s property, plant and equipment, gross increased from 2016 to 2017 and from 2017 to 2018.
Property, plant and equipment, net	Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment.	Automatic Data Processing Inc.'s property, plant and equipment, net increased from 2016 to 2017 and from 2017 to 2018.

Automatic Data Processing Inc., Property, Plant and Equipment Ratios

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	Automatic Data Processing Inc.'s average age of depreciable property, plant and equipment improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	Automatic Data Processing Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Automatic Data Processing Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.
Estimated remaining life		Automatic Data Processing Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

2018 Calculations

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	Automatic Data Processing Inc.'s average age of depreciable property, plant and equipment improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

2018 Calculations

Ratio	Description	The company
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	Automatic Data Processing Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

2018 Calculations

Ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Automatic Data Processing Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 and from 2017 to 2018.

2018 Calculations

Ratio	Description	The company
Estimated remaining life		Automatic Data Processing Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then declined significantly from 2017 to 2018.