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 data reveals several important trends and fluctuations over the six-year period from 2016 to 2021.

Net Earnings: Net earnings generally increased from 2016 through 2021, starting at approximately $1.49 billion and rising to about $2.60 billion. There was a notable dip in 2018 relative to 2017, but overall, the trend is upward, indicating improved profitability over the long term, with a particularly strong increase in 2019 and steady growth thereafter.
Currency Translation Adjustments: This item exhibited significant volatility, ranging from a negative adjustment of $53 million in 2020 to a positive adjustment of $95.4 million in 2021. The fluctuations suggest exposure to foreign exchange movements, with a large negative impact in 2019 and 2020 followed by a strong recovery in 2021.
Unrealized Net Gains (Losses) on Available-for-Sale Securities, net of tax: There is considerable variability in unrealized gains and losses. The data shows sizeable net losses in 2017 and 2018 (-$264 million and -$337 million, respectively), followed by significant unrealized gains in 2019 and 2020 ($498 million and $466 million). However, this was reversed with a net loss again in 2021 (-$281 million), indicating substantial market-driven fluctuations in this investment category.
Reclassification of Net (Gains) Losses on Available-for-Sale Securities to Net Earnings, net of tax: This reclassification item displayed relatively small values compared to other items, oscillating around zero but trending slightly negative in 2020 and 2021. The impact on net earnings from reclassification was minor and fluctuated without a clear trend.
Unrealized Gains (Losses) on Cash Flow Hedging Activities, net of tax: Data is only available for 2020 and 2021, showing relatively minor losses: a loss of $30.3 million in 2020 and a smaller loss of $2.5 million in 2021. The reduction in losses suggests some improvement in hedging effectiveness or market conditions.
Amortization of Unrealized Losses on Cash Flow Hedging Activities, net of tax: Only reported in 2021 with a small gain of $2.9 million, indicating amortization of previous losses from hedging activities, which slightly offsets earlier negative impacts.
Pension Net Gains (Losses) Arising During the Year, net of tax: This line is marked by considerable volatility and lack of a clear directional trend. It moved from a loss of $126.5 million in 2016 to gains in 2017 and 2018, followed by losses again in 2019 and 2020. A strong gain of $212.5 million occurred in 2021, reflecting changing pension plan assumptions or investment returns.
Reclassification of Pension Liability Adjustment to Net Earnings, net of tax: This item showed modest fluctuations, mostly positive except for a small negative amount in 2020. Its magnitude is relatively low compared to other pension-related entries.
Other Comprehensive Income (Loss), net of tax: Other comprehensive income showed wide variability, with losses in 2017 and 2018 (-$164 million and -$259 million), and substantial gains in 2019 ($423 million) and 2020 ($243 million). However, it sharply decreased to $25.4 million in 2021, indicating lower overall comprehensive income outside net earnings for that year.
Comprehensive Income: Comprehensive income generally follows the trend of net earnings with some volatility due to other comprehensive income components. It increased from about $1.54 billion in 2016 to a peak of $2.72 billion in 2019, then marginally decreased but remained relatively high through 2021, suggesting overall strong financial performance inclusive of all income components.

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Automatic Data Processing Inc. (NASDAQ:ADP)

Statement of Comprehensive Income