{
  "docId": "019dd923-622c-750b-8b9b-d9b3dd5a51e8",
  "docSlug": "1c9c0f306991",
  "documentTitle": "Automatic Data Processing (ADP) (ADP)",
  "authorId": "01_Pershing_Square",
  "authorName": "William Ackman",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2017-08-17 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 38,
  "pageCount": 168,
  "prevPage": 37,
  "nextPage": 39,
  "slideType": "comparison_table",
  "function": "diagnose_problem",
  "density": "dense",
  "nDataPoints": 14,
  "notes": "Uses a waterfall chart to bridge Gross Revenue to Net Operational Revenue.",
  "elementsJson": [
    "headline_text",
    "bullet_list",
    "bar_chart_stacked",
    "waterfall_chart"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b9b-d9b3dd5a51e8/38",
  "deckHref": "/decks/019dd923-622c-750b-8b9b-d9b3dd5a51e8",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b9b-d9b3dd5a51e8.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b9b-d9b3dd5a51e8#slide-38",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "ADP’s accounting for PEO “revenues” overstates growth and economic revenue and complicates operational benchmarking given the significant pass-throughs",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-ee38-728b-98d3-624dec535207",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.5,
        "x": 0.46,
        "y": 0.16
      },
      "kind": "chart",
      "text": "PEO Pass-Through Revenue / Costs ($m)",
      "attrs": null,
      "subkind": "bar-stacked",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b59a719b-ec53-47cd-be40-5f34c683d79e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.38,
        "w": 0.5,
        "x": 0.46,
        "y": 0.56
      },
      "kind": "chart",
      "text": "FY 2017 Revenue to Net Operational Revenue",
      "attrs": null,
      "subkind": "waterfall-bridge",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "df9d2197-9ecb-4b1b-8108-f5debc6a1f64",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.7,
        "w": 0.4,
        "x": 0.04,
        "y": 0.18
      },
      "kind": "list",
      "text": "ADP's accounting for PEO \"revenues\" overstates growth and economic revenue and complicates operational benchmarking given the significant pass-throughs. ADP uniquely monetizes its Client Funds (\"Funds Held for Clients\"), generating nearly 100% margin float income which overstates ES's operational profitability. Earnings from float income are not a reflection of management's operational performance. In order to analyze ADP's operational performance we use Net Operational Revenue, and Net Operational Profit, which exclude float income (~$0.4bn) and adjust PEO revenue to exclude pass-throughs (~$2.6bn)",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e2518a82-35f7-4eaf-95dd-fb213ea2a0f1",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Net Operational Revenue: $9,354",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd952-ee38-728b-98d3-6681a9d9ad92",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.92,
        "x": 0.04,
        "y": 0.04
      },
      "kind": "title",
      "text": "Apples-to-Apples Comparisons Must be Done on \"Net Operational Revenue,\" NOT Gross Revenue",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "50d1ba4d-012c-489c-b9fc-36ff7b57b3da",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Comparison frame",
      "slug": "comparison-frame",
      "agent": null,
      "layer": "slide",
      "matchId": "3b74cc60-abaa-49a6-8a21-dc0571069be4",
      "evidence": "Apples-to-Apples Comparisons Must be Done on “Net Operational Revenue,” NOT Gross Revenue",
      "confidence": 0.7
    },
    {
      "name": "Waterfall / value bridge",
      "slug": "waterfall-bridge",
      "agent": null,
      "layer": "slide",
      "matchId": "52aa1ae5-26d9-4dea-94ce-540a0ebe7e80",
      "evidence": "chart/waterfall-bridge: FY 2017 Revenue to Net Operational Revenue",
      "confidence": 0.7
    }
  ],
  "frameworks": [
    {
      "name": "waterfall-bridge",
      "slug": null,
      "matchId": "5d073181-e543-4b90-bf5e-67d7aab88bcb",
      "evidence": "The bottom chart bridges Gross Revenue to Net Operational Revenue by subtracting float income and PEO pass-throughs.",
      "confidence": 1
    }
  ],
  "arcBeats": [],
  "loops": [
    {
      "to": 40,
      "from": 33,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "6499bffe-3e74-4c03-92fb-588fed547d75",
      "evidence": "The presentation emphasizes the consequences of not addressing ADP's underperformance",
      "position": 0,
      "objective": "Highlight the risks of inaction",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.7,
      "description": "Quantify what happens if the audience does nothing"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}