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CDK Global Reports Fourth Quarter and Fiscal 2019 Results

HOFFMAN ESTATES, Ill., Aug. 13, 2019 (GLOBE NEWSWIRE) -- CDK Global, Inc. ( CDK ) today announced financial results for its fourth quarter and fiscal year ended June 30, 2019.

“We achieved very positive results, with record DMS sales in the quarter and improved retention in North America. I’m pleased with the favorable momentum we’re seeing in our business metrics and product innovations, especially with our Drive Flex solution and Fortellis Open API platform,” said Brian Krzanich, president and chief executive officer. “We are excited about the long-term growth opportunities ahead for us as we focus now solely on our world-class software business and providing great experiences for our customers.”

“Company revenues were up, driven by the addition of our ELEAD business and gains from revenue per site growth in both North America and International,” according to Joseph Tautges, executive vice president and chief financial officer. “Auto sites in North America were at their highest levels since December 2017, and sites across all segments showed sequential progress in the quarter.”

Fourth Quarter and Fiscal 2019 Results

CDK Global, Inc.
($ million except per share)
Q4 2019 FY 2019
ASC 606 ASC 605 Change from
4Q2018
ASC 606 ASC 605 Change from FY2018
Revenues 488.6 500.2 +10% 1,914.8 1,945.8 +8%
(Loss) Earnings before income taxes (19.9 ) (18.1) -116% 303.9 309.7 -22%
Adjusted earnings before income taxes 136.0 137.8 0% 561.3 567.1 +6%
Diluted (loss) earnings attributable to CDK per share (1.27 ) (1.27) -269% 0.98 1.02 -63%
Adjusted diluted earnings attributable to CDK per share 0.88 0.89 +22% 3.32 3.35 +24%
Net (loss) earnings attributable to CDK (155.0 ) (154.4) -255% 124.0 128.3 -66%
Net (loss) earnings attributable to CDK margin (31.7 %) (30.9%) -5280bps 6.5 % 6.6% -1460bps
Adjusted EBITDA 193.8 195.6 +9% 774.9 780.7 +13%
Adjusted EBITDA margin 39.7 % 39.1% -30bps 40.5 % 40.1% +180bps

Effective July 1, 2018 we adopted ASU 2014-09 “Revenue from Contracts with Customers” and related ASUs (“ASC 606”), using the modified retrospective transition approach. We did not recast historical information and have reported financial results in fiscal 2019 under both standards for the transition year for comparability purposes. Comparisons of results provided in this press release reflect year-over-year comparisons on an ASC 605 basis. The non-GAAP (adjusted) results and guidance presented in this press release represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures are provided in the tables at the end of this press release.

Impacts to the Fourth Quarter and Fiscal Year 2019:

  • Digital Marketing Business: On June 27, 2019, we committed to a plan to divest: (a) all of the assets of our Advertising North America business segment; and (b) certain assets of our North America segment related to mobile advertising solutions and website services (collectively, the “Digital Marketing Business”). The Digital Marketing Business is presented as discontinued operations and prior year amounts have been reclassified. Reporting segments have been changed to CDK North America and CDK International.
  • Foreign exchange rates: Growth in revenues was negatively impacted by 1 percentage point by foreign exchange rates, for both the quarter and full year, and growth in earnings before income taxes was negatively impacted by 1 percentage point for the quarter and 2 percentage points for the full year by foreign exchange rates.
  • Tax rate: The GAAP effective tax rate for the fourth quarter of fiscal 2019 was 116.6% under ASC 606 and 122.7% under ASC 605, compared to 24.4% in last year’s fourth quarter. The adjusted effective tax rate for the fourth quarter of fiscal 2019 was 19.2% under ASC 606 and 19.7% under ASC 605, compared to 28.1% in last year’s fourth quarter. The GAAP effective tax rate for the full year of fiscal 2019 was 20.5% under ASC 606 and 20.7% under ASC 605, compared to 22.1% last year. The adjusted effective tax rate for the full year of fiscal 2019 was 23.7% under ASC 606 and 23.8% under ASC 605, compared to 28.6% last year.


CDK Segment Information

CDK North America
($ million except per share)
Q4 2019 FY 2019
ASC 606 ASC 605 Change from
4Q2018
ASC 606 ASC 605 Change from FY2018
Revenues 408.5 411.7 +14% 1,593.0 1,598.2 +11%
Earnings before income taxes 44.4 40.0 -73% 517.5 505.0 -12%
Earnings before income taxes margin 10.9 % 9.7% -3160bps 32.5 % 31.6% -840bps
Adjusted earnings before income taxes 169.5 165.1 +6% 686.4 673.9 +11%
Adjusted earnings before income taxes margin 41.5 % 40.1% -290bps 43.1 % 42.2% +10bps


CDK International
($ million except per share)
Q4 2019 FY 2019
ASC 606 ASC 605 Change from
4Q2018
ASC 606 ASC 605 Change from
FY2018
Revenues 80.1 88.5 -4% 321.8 347.6 -2%
Constant currency revenues 84.9 93.6 +2% 336.3 363.0 +2%
Earnings before income taxes 21.0 27.2 -1% 77.1 95.4 -2%
Earnings before income taxes margin 26.2 % 30.7% +90bps 24.0 % 27.4% 0bps
Adjusted earnings before income taxes 21.2 27.4 -3% 77.8 96.1 -5%
Adjusted earnings before income taxes margin 26.5 % 31.0% +30bps 24.2 % 27.6% -80bps


Fiscal 2020 Guidance

The Company's fiscal year 2020 guidance is provided below. The fiscal 2020 guidance is provided on both a GAAP and a non-GAAP (adjusted) basis, in accordance with ASC 606.

CDK Global, Inc. Guidance for Fiscal 2020
($ million except per share)
FY 2020 GUIDANCE
ASC 606
Revenues $2.00 billion - $2.05 billion
Diluted net earnings attributable to CDK per share $2.80 - $3.00
Adjusted diluted net earnings attributable to CDK per share $3.30 - $3.50
Net earnings attributable to CDK $340 million - $370 million
Adjusted EBITDA $790 million - $820 million
Effective tax rate 25.0% - 26.0%
Adjusted effective tax rate 24.0% - 25.0%
Shareholder Returns (including dividends and share repurchases) $75 million - $150 million


Long-Term Growth Outlook

We expect long-term revenue to grow at mid-single digit rates. Over the next two to three years, we expect adjusted EBITDA to grow at low-single digit rates, with a longer term view of growth accelerating to high-single to low-double digit rates.

For our long-term growth outlook of adjusted EBITDA, the information necessary to calculate such measure on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Therefore, because of the uncertainty and variability of the nature of the amount of future adjustments, which could be significant, no reconciliation is being provided at this time.

Website Schedules

Other financial information, including financial statements and supplementary schedules presented on a GAAP and adjusted basis, and the schedule of quarterly and annual revenues and pretax earnings by reportable segment have been updated for the fourth quarter and fiscal year ended June 30, 2019 and will be posted to the CDK Investor Relations website, http://investors.cdkglobal.com , in the “Financial Information” section.

Webcast and Conference Call

An analyst conference call will be held today, Tuesday, August 13, 2019 at 3:30 p.m. CT. A live webcast of the call will be available on a listen-only basis. To listen to the webcast go to the CDK Investor Relations website, http://investors.cdkglobal.com , and click on the webcast icon. An accompanying slide presentation will be available to download and print about 30 minutes before the webcast at the CDK Investor Relations website at http://investors.cdkglobal.com . CDK financial news releases, current financial information, SEC filings and Investor Relations presentations are accessible at the same website.

About CDK Global

With $2 billion in revenues, CDK Global ( CDK ) is a leading global provider of integrated information technology solutions to the automotive retail and adjacent industries. Focused on enabling end-to-end automotive commerce, CDK Global provides solutions to dealers in more than 100 countries around the world, serving approximately 30,000 retail locations and most automotive manufacturers. CDK solutions automate and integrate all parts of the dealership and buying process, including the acquisition, sale, financing, insuring, parts supply, repair and maintenance of vehicles. Visit cdkglobal.com .



CDK Global, Inc.
Consolidated Statements of Operations
(In millions, except per share amounts)

Three Months Ended Fiscal Year Ended
June 30, June 30,
2019 2018 2019 2018
Revenues $ 488.6 $ 454.0 $ 1,914.8 $ 1,798.0
Expenses:
Cost of revenues 236.6 208.8 899.8 854.5
Selling, general and administrative expenses 122.2 109.5 444.7 441.2
Restructuring expenses 7.9 4.3 28.0 20.6
Litigation provision 90.0 90.0
Total expenses 456.7 322.6 1,462.5 1,316.3
Operating earnings 31.9 131.4 452.3 481.7
Interest expense (37.2 ) (25.3 ) (139.1 ) (95.9 )
Loss from equity method investment (17.0 ) (17.0 )
Other income, net 2.4 4.0 7.7 13.4
(Loss) Earnings before income taxes (19.9 ) 110.1 303.9 399.2
Provision for income taxes 23.2 (26.9 ) (62.2 ) (88.1 )
Net (loss) earnings from continuing operations 3.3 83.2 241.7 311.1
(Loss) Earnings from discontinued operations, net of taxes (156.2 ) 18.5 (109.8 ) 77.6
Net (loss) earnings (152.9 ) 101.7 131.9 388.7
Less: net earnings attributable to noncontrolling interest 2.1 2.3 7.9 7.9
Net (loss) earnings attributable to CDK $ (155.0 ) $ 99.4 $ 124.0 $ 380.8
Net (loss) earnings attributable to CDK per share - basic:
Continuing operations $ 0.01 $ 0.62 $ 1.86 $ 2.23
Discontinued operations $ (1.28 ) $ 0.14 $ (0.87 ) $ 0.57
Total net (loss) earnings attributable to CDK per share - basic $ (1.27 ) $ 0.76 $ 0.99 $ 2.80
Net (loss) earnings attributable to CDK per share - diluted:
Continuing operations $ 0.01 $ 0.61 $ 1.85 $ 2.21
Discontinued operations $ (1.28 ) $ 0.14 $ (0.87 ) $ 0.57
Total net (loss) earnings attributable to CDK per share - diluted $ (1.27 ) $ 0.75 $ 0.98 $ 2.78
Weighted-average common shares outstanding:
Basic 121.6 131.3 125.5 135.8
Diluted 122.4 132.4 126.4 136.8

Effective July 1, 2018, the Company adopted ASC 606 using the modified retrospective approach.  The comparative information has not been revised and continues to be reported under the accounting standards in effect for the period presented.

During the fourth quarter of fiscal 2019, the Company committed to a plan to divest all of the assets of its previously reported Advertising North America segment and certain assets of CDK North America segment related to mobile advertising and website services businesses (collectively, the "Digital Marketing Business"). The Digital Marketing Business is presented as discontinued operations and prior year amounts have been reclassified.


CDK Global, Inc.
Consolidated Balance Sheets
(In millions)

June 30, June 30,
2019 2018
Assets
Current assets:
Cash and cash equivalents $ 311.4 $ 804.4
Accounts receivable, net of allowances 412.3 374.6
Current assets held for sale 98.6 1.8
Other current assets 164.8 186.5
Total current assets 987.1 1,367.3
Property, plant and equipment, net 144.8 127.6
Long-term assets held for sale 267.6
Other assets 284.9 164.3
Goodwill 1,356.3 989.2
Intangible assets, net 225.9 92.4
Total assets $ 2,999.0 $ 3,008.4
Liabilities and Stockholders' Deficit
Current liabilities:
Current maturities of long-term debt and capital lease obligations $ 270.8 $ 45.2
Accounts payable 57.4 50.5
Accrued expenses and other current liabilities 203.8 197.9
Litigation liability 90.0
Accrued payroll and payroll-related expenses 89.2 85.6
Current liabilities held for sale 1.9 3.7
Short-term deferred revenues 124.8 165.5
Total current liabilities 837.9 548.4
Long-term debt and capital lease obligations 2,659.4 2,575.5
Long-term deferred revenues 68.4 110.2
Deferred income taxes 80.5 56.7
Long-term liabilities held for sale 0.8
Other liabilities 67.3 64.1
Total liabilities 3,713.5 3,355.7
Stockholders' Deficit:
Preferred stock
Common stock 1.6 1.6
Additional paid-in-capital 688.5 679.8
Retained earnings 911.6 753.0
Treasury stock, at cost (2,324.6 ) (1,810.7 )
Accumulated other comprehensive income (6.7 ) 11.5
Total CDK stockholders' deficit (729.6 ) (364.8 )
Noncontrolling interest 15.1 17.5
Total stockholders' deficit (714.5 ) (347.3 )
Total liabilities and stockholders' deficit $ 2,999.0 $ 3,008.4

Effective July 1, 2018, the Company adopted ASC 606 using the modified retrospective approach.  The comparative information has not been revised and continues to be reported under the accounting standards in effect for the period presented.

During the fourth quarter of fiscal 2019, the Company committed to a plan to divest all of the assets of its previously reported Advertising North America segment and certain assets of CDK North America segment related to mobile advertising and website services businesses (collectively, the "Digital Marketing Business"). The Digital Marketing Business is presented as discontinued operations and prior year amounts have been reclassified.


CDK Global, Inc.
Consolidated Statements of Cash Flows
(In millions)

Years Ended June 30,
2019 2018
Cash Flows from Operating Activities:
Net earnings $ 131.9 $ 388.7
Less: (loss) earnings from discontinued operations, net of taxes (109.8 ) 77.6
Net earnings from continuing operations 241.7 311.1
Adjustments to reconcile net earnings to cash flows provided by operating activities:
Depreciation and amortization 89.8 70.8
Asset impairment 19.3
Loss from equity method investment 17.0
Deferred income taxes (5.1 ) (10.1 )
Stock-based compensation expense 30.5 33.4
Other 11.1 4.6
Changes in operating assets and liabilities, net of effects from acquisitions
Increase in accounts receivable (20.1 ) (10.6 )
(Increase) Decrease in other assets (49.2 ) 14.0
(Decrease) Increase in accounts payable (1.6 ) 10.5
Increase (Decrease) in accrued expenses and other liabilities 105.1 (49.8 )
Net cash flows provided by operating activities, continuing operations 438.5 373.9
Net cash flows provided by operating activities, discontinued operations 44.6 92.5
Net cash flows provided by operating activities 483.1 466.4
Cash Flows from Investing Activities:
Capital expenditures (54.4 ) (45.9 )
Proceeds from sale of property, plant and equipment 7.4 1.8
Capitalized software (37.9 ) (30.8 )
Acquisitions of businesses, net of cash acquired (513.0 ) (12.8 )
Contributions to investments (17.0 )
Proceeds from investments 0.4 0.8
Net cash flows used in investing activities, continuing operations (614.5 ) (86.9 )
Net cash flows used in investing activities, discontinued operations (8.7 ) (26.6 )
Net cash flows used in investing activities (623.2 ) (113.5 )
Cash Flows from Financing Activities:
Proceeds from long-term debt 1,100.0 500.0
Repayments of long-term debt and capital lease obligations (806.5 ) (46.4 )
Dividends paid to stockholders (74.8 ) (80.1 )
Repurchases of common stock (524.1 ) (623.6 )
Proceeds from exercise of stock options 5.0 8.9
Withholding tax payments for stock-based compensation awards (15.8 ) (10.6 )
Payments of deferred financing costs (11.7 ) (7.9 )
Dividend payments to noncontrolling owners (10.3 ) (7.4 )
Acquisition-related payments (10.8 ) (4.1 )
Net cash flows (used in) provided by financing activities, continuing operations (349.0 ) (271.2 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (6.9 ) 1.4
Net change in cash, cash equivalents, and restricted cash (496.0 ) 83.1
Cash, cash equivalents, and restricted cash, beginning of period 817.1 734.0
Cash, cash equivalents, and restricted cash, end of period $ 321.1 $ 817.1

Effective July 1, 2018, the Company adopted ASC 606 using the modified retrospective approach.  The comparative information has not been revised and continues to be reported under the accounting standards in effect for the period presented.

During the first quarter of fiscal year 2019, the Company adopted ASU 2016-18 retrospectively and as a result included restricted cash with cash and cash equivalents when reconciling the beginning of the period and end of the period total amounts presented on the Condensed Consolidated Statements of Cash Flows. Prior year amounts have been reclassified to conform to current year presentation.

During the fourth quarter of fiscal 2019, the Company committed to a plan to divest all of the assets of its previously reported Advertising North America segment and certain assets of CDK North America segment related to mobile advertising and website services businesses (collectively, the "Digital Marketing Business"). The Digital Marketing Business is presented as discontinued operations and prior year amounts have been reclassified.

CDK Global, Inc.
Consolidated Adjusted Financial Information
(In millions, except per share amounts)
(Unaudited)

As described below under the Non-GAAP Financial Measures section of this press release, we incorporated additional adjustments within our calculations of non-GAAP financial measures where management has deemed it appropriate to better reflect our underlying operations. These adjustments are inconsistent in amount and frequency and do not directly reflect our underlying operations. Therefore, management believes that excluding such information provides us with a better understanding of our ongoing operating performance across periods. Prior period information has been revised to conform to the new presentation.

Fiscal 2019 Modifications:

  • Effective July 1, 2018, we modified our presentation of adjusted earnings before income taxes, adjusted provision for income taxes, adjusted net earnings attributable to CDK, and adjusted diluted net earnings attributable to CDK per share to include adjustments for amortization of acquired intangible assets.  Although we exclude amortization of acquired intangible assets from our non-GAAP measure, we believe that it is important for the users of the financial statements to understand that the associated intangible assets contribute to revenue generation.
  • Effective October 1, 2018, we modified our presentation of adjusted earnings before income taxes, adjusted provision for income taxes, adjusted net earnings attributable to CDK, adjusted diluted earnings attributable to CDK per share, and adjusted EBITDA to include adjustments for impairment of intangible assets.
  • During the fourth quarter of fiscal 2019, we modified our presentation of:
    1. adjusted earnings before income taxes, adjusted provision for income taxes, adjusted net earnings attributable to CDK, adjusted diluted net earnings attributable to CDK per share, and adjusted EBITDA to include adjustments for loss from equity method investment;
    2. adjusted provision for income taxes, adjusted net earnings attributable to CDK, adjusted diluted net earnings attributable to CDK per share to include adjustments for decrease in valuation allowance;
    3. adjusted net earnings attributable to CDK, adjusted diluted net earnings attributable to CDK per share, and adjusted EBITDA to include adjustments for loss (earnings) from discontinued operations, net of taxes; and
    4. free cash flow from continuing operations to include adjustments for net cash flows provided by operating activities - discontinued operations.

Effective July 1, 2018, the Company adopted ASC 606 using the modified retrospective approach. The tables below present fiscal 2019 consolidated adjusted financial information on both an ASC 606 and an ASC 605 basis. The comparative information has not been revised and continues to be reported under the accounting standards in effect for the period presented.

During the fourth quarter of fiscal 2019, the Company committed to a plan to divest all of the assets of its previously reported Advertising North America segment and certain assets of CDK North America segment related to mobile advertising and website services businesses (collectively, the "Digital Marketing Business"). The Digital Marketing Business is presented as discontinued operations and prior year amounts have been reclassified.

Three Months Ended Fiscal Year Ended
June 30, June 30,
2019 2018 ASC 605 Change 2019 2018 ASC 605 Change
ASC
606
ASC 605 $ % ASC 606 ASC 605 $ %
Revenues (a) $ 488.6 $ 500.2 $ 454.0 $ 46.2 10 % $ 1,914.8 $ 1,945.8 $ 1,798.0 $ 147.8 8 %
Impact of exchange rates 5.6 5.9 18.5 19.4
Constant currency revenues (a) (b) $ 494.2 $ 506.1 $ 454.0 $ 52.1 11 % $ 1,933.3 $ 1,965.2 $ 1,798.0 $ 167.2 9 %
(Loss) Earnings before income taxes (a) $ (19.9 ) $ (18.1 ) $ 110.1 $ (128.2 ) (116 )% $ 303.9 $ 309.7 $ 399.2 $ (89.5 ) (22 )%
Margin (4.1 )% (3.6 )% 24.3 % -2790 bps
15.9 % 15.9 % 22.2 % -630 bps
Impairment of intangible assets 14.9 14.9
Restructuring expenses (a) 7.9 7.9 4.3 28.0 28.0 20.6
Other business transformation expenses (a) 6.1 6.1 9.3 20.9 20.9 45.0
Total stock-based compensation (a) 16.5 16.5 7.4 30.5 30.5 33.4
Amortization of acquired intangible assets (a) 4.1 4.1 2.7 15.3 15.3 11.1
Transaction and integration-related expenses (a) 7.5 7.5 2.4 13.2 13.2 15.6
Officer transition expense 6.4 6.4 0.6
Legal and other expenses related to regulatory and competition matters 96.8 96.8 2.0 111.2 111.2 7.4
Loss from equity method investment 17.0 17.0 17.0 17.0
Tax matters indemnification loss/(gain), net (0.4 )
Adjusted earnings before income  taxes (a) (b) $ 136.0 $ 137.8 $ 138.2 $ (0.4 ) % $ 561.3 $ 567.1 $ 532.5 $ 34.6 6 %
Adjusted margin 27.8 % 27.5 % 30.4 % -290 bps
29.3 % 29.1 % 29.6 % -50 bps
Impact of exchange rates 1.7 2.0 6.0 6.5
Constant currency adjusted earnings before income taxes (a) (b) $ 137.7 $ 139.8 $ 138.2 $ 1.6 1 % $ 567.3 $ 573.6 $ 532.5 $ 41.1 8 %



Three Months Ended Fiscal Year Ended
June 30, June 30,
2019 2018 ASC 605 Change 2019 2018 ASC 605 Change
ASC
606
ASC 605 $ % ASC
606
ASC 605 $ %
Provision for income taxes (a) $ (23.2 ) $ (22.2 ) $ 26.9 $ (49.1 ) (183 )% $ 62.2 $ 64.2 $ 88.1 $ (23.9 ) (27 )%
Effective tax rate 116.6 % 122.7 % 24.4 % 20.5 % 20.7 % 22.1 %
Income tax effect of pre-tax adjustments 34.2 34.2 8.2 57.4 57.4 40.4
Decrease in valuation allowance 14.8 14.8 14.8 14.8
Excess tax (expense)/benefit from stock-based compensation 0.3 0.3 0.1 1.4 1.4 5.1
Pre spin-off filed tax return adjustment 0.4
Impact of U.S. tax reform act 3.6 (2.8 ) (2.8 ) 18.5
Adjusted provision for income taxes (a) (b) $ 26.1 $ 27.1 $ 38.8 $ (11.7 ) (30 )% $ 133.0 $ 135.0 $ 152.5 $ (17.5 ) (11 )%
Adjusted effective tax rate 19.2 % 19.7 % 28.1 % 23.7 % 23.8 % 28.6 %



Three Months Ended Fiscal Year Ended
June 30, June 30,
2019 2018 ASC 605 Change 2019 2018 ASC 605 Change
ASC 606 ASC 605 $ % ASC
606
ASC 605 $ %
Net (loss) earnings $ (152.9 ) $ (152.3 ) $ 101.7 $ (254.0 ) (250 )% $ 131.9 $ 136.2 $ 388.7 $ (252.5 ) (65 )%
Less: net earnings attributable to noncontrolling interest 2.1 2.1 2.3 7.9 7.9 7.9
Net (loss) earnings attributable to CDK (155.0 ) (154.4 ) 99.4 (253.8 ) (255 )% 124.0 128.3 380.8 (252.5 ) (66 )%
Loss (Earnings) from discontinued operations, net of taxes 156.2 156.4 (18.5 ) 109.8 109.3 (77.6 )
Impairment of intangible assets 14.9 14.9
Restructuring expenses (a) (c) 7.9 7.9 4.3 27.9 27.9 20.4
Other business transformation expenses (a) (c) 6.1 6.1 9.3 20.9 20.9 44.8
Total stock-based compensation (a) (c) 16.5 16.5 7.3 30.5 30.5 33.3
Amortization of acquired intangible assets (a) (c) 4.0 4.0 2.6 15.0 15.0 10.8
Transaction and integration-related expenses (a) 7.5 7.5 2.4 13.2 13.2 15.6
Officer transition expense 6.4 6.4 0.6
Legal and other expenses related to regulatory and competition matters (c) 96.7 96.7 1.9 111.0 111.0 7.3
Loss from equity method investment 17.0 17.0 17.0 17.0
Tax matters indemnifications loss/(gain), net (0.4 )
Income tax effect of pre-tax adjustments (34.2 ) (34.2 ) (8.2 ) (57.4 ) (57.4 ) (40.4 )
Decrease in valuation allowance (14.8 ) (14.8 ) (14.8 ) (14.8 )
Excess tax expense/(benefit) from stock-based compensation (0.3 ) (0.3 ) (0.1 ) (1.4 ) (1.4 ) (5.1 )
Pre spin-off filed tax return adjustment (0.4 )
Impact of U.S. tax reform act (3.6 ) 2.8 2.8 (18.5 )
Adjusted net earnings attributable to CDK (b) $ 107.6 $ 108.4 $ 96.8 $ 11.6 12 % $ 419.8 $ 423.6 $ 371.2 $ 52.4 14 %



...
Three Months Ended Fiscal Year Ended
June 30, June 30,
2019 2018 ASC 605 Change 2019 2018 ASC 605 Change
ASC 606 ASC 605 $ % ASC 606 ASC 605 $ %
Diluted (loss) earnings attributable to CDK per share $ (1.27 ) $ (1.27 ) $ 0.75 $ (2.02 ) (269 )% $ 0.98 $ 1.02 $ 2.78 $ (1.76 ) (63 )%
Loss (Earnings) from discontinued operations, net of taxes 1.28 1.29 (0.14 ) 0.87 0.86 (0.57 )
Impairment of intangible assets 0.12 0.12
Restructuring expenses (a) (c) 0.07 0.07 0.03 0.22 0.22 0.15
Other business transformation expenses (a) (c) 0.05 0.05 0.07 0.17 0.17 0.33
Total stock-based compensation (a) (c) 0.13 0.13 0.06 0.24 0.24 0.25
Amortization of acquired intangible assets (a) 0.03 0.03 0.02 0.12 0.12 0.08
Transaction and integration-related expenses (a) 0.06 0.06 0.02 0.10 0.10 0.12
Officer transition expense 0.05 0.05
Legal and other expenses related to regulatory and competition matters 0.79 0.79 0.01 0.88 0.88 0.05
Loss from equity method investment 0.14 0.14 0.13 0.13
Tax matters indemnifications loss/(gain), net
Income tax effect of pre-tax adjustments (0.28 ) (0.28 ) (0.06 ) (0.45 ) (0.45 ) (0.30 )
Decrease in valuation allowance (0.12 ) (0.12 ) (0.12 ) (0.12 )
Excess tax expense/(benefit) from stock-based compensation (0.01 ) (0.01 ) (0.04 )
Pre spin-off filed tax return adjustment
Impact of U.S. tax reform act (0.03 ) 0.02 0.02 (0.14 )
Adjusted diluted earnings attributable to CDK per share (b) $ 0.88 $ 0.89 $ 0.73 $ 0.16 22 % 3.32 3.35 2.71 $ 0.64 24 %
Weighted-average common shares outstanding: