Statement of Comprehensive Income

Comprehensive income is the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owners sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Automatic Data Processing Inc., consolidated statement of comprehensive income

US$ in thousands

12 months ended:	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016
Net earnings	2,598,500)	2,466,500)	2,292,800)	1,620,800)	1,733,400)	1,492,500)
Currency translation adjustments	95,400)	(53,000)	(42,200)	2,800)	23,000)	(25,500)
Unrealized net gains (losses) on available-for-sale securities, net of tax	(280,700)	465,800)	498,000)	(337,300)	(264,100)	186,600)
Reclassification of net (gains) losses on available-for-sale securities to net earnings, net of tax	(8,800)	(10,000)	600)	2,100)	(1,400)	3,300)
Unrealized gains (losses) on cash flow hedging activities, net of tax	(2,500)	(30,300)	—)	—)	—)	—)
Amortization of unrealized losses on cash flow hedging activities, net of tax	2,900)	—)	—)	—)	—)	—)
Pension net gains (losses) arising during the year, net of tax	212,500)	(121,300)	(64,700)	68,300)	66,000)	(126,500)
Reclassification of pension liability adjustment to net earnings, net of tax	6,600)	(8,700)	30,800)	4,800)	12,400)	7,600)
Other comprehensive income (loss), net of tax	25,400)	242,500)	422,500)	(259,300)	(164,100)	45,500)
Comprehensive income	2,623,900)	2,709,000)	2,715,300)	1,361,500)	1,569,300)	1,538,000)

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).

The financial performance over the analyzed six-year period is characterized by a steady increase in net earnings, which grew from US$ 1.49 billion in 2016 to US$ 2.60 billion in 2021. This upward trend indicates strong core profitability growth, with a particularly significant increase occurring between 2018 and 2019.

Net Earnings and Comprehensive Income Trends: A positive correlation is observed between net earnings and comprehensive income. While net earnings followed a consistent growth path, comprehensive income experienced more volatility due to the impact of other comprehensive income (OCI). The highest comprehensive income was achieved in 2019, totaling US$ 2.72 billion, coinciding with a sharp increase in both net earnings and unrealized gains on securities.
Volatility in Other Comprehensive Income (OCI): OCI components exhibit significant fluctuations, primarily driven by unrealized net gains and losses on available-for-sale securities and pension adjustments. Unrealized gains on securities reached a peak of US$ 498 million in 2019 but shifted to a loss of US$ 280.7 million by 2021. Pension-related gains and losses also showed instability, transitioning from a loss of US$ 121.3 million in 2020 to a gain of US$ 212.5 million in 2021.
Currency and Hedging Impacts: Currency translation adjustments fluctuated throughout the period, ending with a substantial positive impact of US$ 95.4 million in 2021. Additionally, unrealized losses on cash flow hedging activities emerged in 2020 and 2021, contributing modestly to the reduction of other comprehensive income in those specific years.
Analysis of Reclassifications: Reclassifications of net gains or losses from available-for-sale securities and pension liability adjustments to net earnings remained relatively small compared to total net earnings. These adjustments were generally immaterial, though a larger negative reclassification for securities was noted in 2020 at US$ 10 million.

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Automatic Data Processing Inc. (NASDAQ:ADP)

Statement of Comprehensive Income