ADP 1999 Annual Report Download

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We’re the business behind businessSM

Table of contents

  • Page 1
    We're the business behind business SM

  • Page 2
    ...filing, and human resource management; securities transaction processing and investor communications; industry-specific computing and consulting services for auto and truck dealers, and their manufacturers; and computerized auto repair estimating, parts availability services, and fee and utilization...

  • Page 3
    TABLE OF CONTENTS Letter to Shareholders Financial Highlights Employer Services Brokerage Services Dealer Services Claims Services ADP Timeline Financial Information 3 5 6 8 10 12 14 15

  • Page 4
    "World class service will differentiate us over a long period of time." - Art Weinbach Arthur F. Weinbach Chairman and Chief Executive Officer Gary C. Butler President and Chief Operating Officer

  • Page 5
    ...industry. In Employer Services, we recently introduced an Internet payroll and human resource product for small employers and the early response has been very positive. In Dealer Services, our joint venture with Cox Communications has created the largest used car database Web site (AutoConnectSM) on...

  • Page 6
    ... OMR Systems, Brokerage Services increased its global processing capabilities for a wide range of non-securitized financial instruments. An important acquisition for Dealer Services was Dealer Solutions, a developer of client/server dealer management systems. We also review each business and product...

  • Page 7
    ... earnings per share* Cash dividends Cash dividends per share Basic shares outstanding Diluted shares outstanding Return on equity At year end: Cash, cash equivalents and marketable securities Working capital Total assets Long-term debt Shareholders' equity Number of employees 1999 $ 5,540,141 $ 714...

  • Page 8
    ... market 1 0 1 1 0 1 • 1 0 1 1 0. . 0 1 1 1 0 1 1 0 0 0 0 0 1 segments throughout Europe and Brazil. 111 and 0 010 01 1 0 1 1 1 0 0 0 0 1 1 0 0 0 1 0 1 1 0 1 1 1 1 1 second largest 0 • Became world 1 0 1 1 0 0 PEO in the 1the 0 1 0 0 1 0 1 1 1 0 0 0 1 0 101 0 with the acquisition Vincam Group...

  • Page 9
    ...resources 0 0 0 1 1 0 0 1 11 0000 0101 1010 1 services, by bringing 1001 1 0 0 1 0 1 0 1 1 1 1 0 0 0 1 10 0 1 0 1 1 0 simplicity to the 1 1 1 0 0 1 0 0 1 1 1 0 0 0 1 1 0 1 0 1 1 0 1 1 0 1 0 1 0 0 0 1 1 1 0 1and performing process 1 1 1 1 0 0 1 0 0 0 0 1 0 0 1 functions 10 0110 0101 1110 1000 1101 00...

  • Page 10
    ... filing and related services to small businesses in the U.S. market. We serve over 340,000 smaller companies with leading solutions, including a range of value-added services that are specifically designed for small business clients. The ADP Tax and Financial Services Center supports all ES market...

  • Page 11
    ... businesses to do payroll and access other ADP services over the Internet. Major Accounts is developing an Internet version of its popular Windows-based PC product. National Accounts is field testing ADP Remote Control SM, which gives large corporations with multiple payrolls secure Internet access...

  • Page 12
    We're Brokerage Services We deliver high-quality investor communication and transaction processing services when and where our clients need them...across the Internet and around the globe. 8

  • Page 13
    ... trades...mailings and tabulated over 50 million ballots, representing over 330 billion shares...processing for many of the top-rated on-line brokerage firms...transactions for them in most of the world's currencies...and an extensive complement of transaction processing services. • Have clients...

  • Page 14
    ..., selected ADP to support its electronic discount brokerage business. In addition to trade and order processing, DBD is utilizing ADP's proxy, optical storage, and prospectus fulfillment services. This comprehensive arrangement includes printing and mailing services for trade confirmations, customer...

  • Page 15
    ... institutions worldwide. ADP Global Proxy Services satisfies the proxy voting requirements of investors and financial services firms around the world. A number of our proxy clients are very large custodial banks, whose customers are public and private pension funds, mutual funds and international

  • Page 16
    ... our newest Millennia 3 systems platform in • Connected over 30,000 auto dealers with 1.5 million prospective buyers each month on the Internet...and management systems software firm, enhancing our development of Web-based, Windows NT® client-server solutions. North America, resulting in an 18...

  • Page 17
    11

  • Page 18
    .... Today, about 18,000 dealers in North America, Europe, and Latin America, and more than 30 vehicle manufacturers, use our on-site systems and communications networks to manage sales, operations, and marketing efforts. In '99, client retention worldwide exceeded 90%. We now support more than 200,000...

  • Page 19
    ... our Web-based, client-server strategy. "The market rewards superior capabilities and performance." - Gary Butler expand the number of dealers to 50,000 and the number of monthly prospects to 2.5 million. Europe Today, more than 7,500 European auto dealers and parts wholesalers are ADP clients. As...

  • Page 20
    ... America and Europe... • Provide our products and services to nearly 14,000 collision repair centers and over 3,000 auto parts recyclers... • Processed a record 15 million claim estimates...• Broadened our global claims capabilities through our • Grew our business that reviews medical claims...

  • Page 21
    We will continue to enhance the capabilities of our Claimsflo ® nk Powerlink Shoplink ntext utosource solutions, to provide our clients with maximum workflow efficiencies throughout the claims management pipeline. 13 PenPro aimsflo

  • Page 22
    ... offers products and services that allow insurers to efficiently review medical expenses related to auto accidents and workers' compensation claims. Detecting potential claims abuse and insurance fraud is an important and implicit part of our commitment to our clients. Our products and services are...

  • Page 23
    ... management system; AccuPart 2.0, a portable inventory entry device; and EDEN TM Online, an Internet product that broadens market potential and opens an extensive new distribution channel for ADP Hollander clients. Audatex, the leading provider of insurance claims estimating outside North America...

  • Page 24
    ... Claims Services, began his ADP career in 1979 as an account executive with Dealer Services in Canada. Karen Dykstra, ADP's Corporate Controller, joined the company in 1981 as a junior accountant. Gary Butler, our President and Chief Operating Officer, began with ADP in 1975 selling payroll services...

  • Page 25
    ...dividends per share Return on equity At year end: Cash, cash equivalents and marketable securities Working capital Total assets Long-term debt Shareholders...two-for-one stock split on January 1, 1999. The selected financial data shown above have also been restated to reflect a March 1999 pooling-of-...

  • Page 26
    ... the disposition of several unprofitable businesses and strong trading activity. In '99 the Company divested the $150 million revenue front-office "market data" business and as part of the agreement took a minority investment in the acquiring company. Dealer Services Consolidated revenues grew 12...

  • Page 27
    ... include: ADP's success in obtaining, retaining and selling additional services to clients; the pricing of products and services; overall economic trends, including interest rate and foreign currency trends; impact of Year 2000; stock market activity; auto sales and related industry changes...

  • Page 28
    ... of $1,748,841 $1,293,866 and $723,429, respectively) Total revenues Operating expenses General, administrative and selling expenses Systems development and programming costs Depreciation and amortization Interest expense 1999 $5,379,758 160,383 5,540,141 2,376,172 1,375,192 412,380 272,807 19,090...

  • Page 29
    ...30, Assets 1999 1998 Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable Other current assets Total current assets Long-term marketable securities Long-term receivables Property, plant and equipment - at cost: Land and buildings Data processing equipment...

  • Page 30
    ... Currency translation Unrealized gain on securities Comprehensive income Employee stock plans and related tax benefits Treasury stock acquired (2,550 shares) Acquisitions (4,316 shares) Debt conversion (2,623 shares) Dividends ($.295 per share) Balance, June 30, 1999 See notes to consolidated...

  • Page 31
    ... 1999 ... assets Increase in accounts payable and accrued...marketable securities Proceeds from sale of marketable securities Capital expenditures Additions to intangibles Acquisitions of businesses, net of cash acquired Disposals of businesses...stock Proceeds from issuance of common stock Dividends...

  • Page 32
    ... indicated, a write-down to fair value (normally measured by discounting estimated future cash flows) is taken. F. Revenue Recognition. Service revenues, including monthly license, maintenance and other fees, are recognized as services are provided. Prepaid software licenses and the gross profit on...

  • Page 33
    ... approximately $270 million and $95 million, respectively. As part of the 1999 business dispositions, the Company received $90 million of convertible preferred stock which is included in other assets. The $90 million approximates fair value. Note 3. Non-recurring Items Unearned income from finance...

  • Page 34
    ... A. Stock Plans. The Company has stock option plans which provide for the issuance to eligible employees of incentive and non-qualified stock options, which may expire as much as 10 years from the date of grant, at prices not less than the fair market value on the date of grant. At June 30, 1999...

  • Page 35
    ...and Subsidiaries (continued) The Company follows APB 25 to account for its stock plans. The pro forma net income impact of options and stock purchase plan rights granted subsequent to July 1, 1995 is shown below. The fair value for these instruments was estimated at the date of grant using a Black...

  • Page 36
    ... cost of capital for acquisitions. Revenues on invested client funds are credited to Employer Services at a standard rate of 6%. Business unit assets exclude cash, marketable securities and goodwill. Other consists primarily of Claims Services, corporate expenses, non-recurring items and the above...

  • Page 37
    ... June 30,1999 Revenues Assets Year ended June 30, 1998 Revenues Assets Year ended June 30, 1997 Revenues Assets United States $4,564 $4,356 $4,172 $3,741 $3,549 $3,030 Europe $ 704 $1,216 $ 493 $1,248 $ 512 $1,315 Canada $ 212 ... year-end processing associated with many of the Company's services. 27

  • Page 38
    ... & Touche and the internal auditors have free access to the Audit Committee. Arthur F. Weinbach Chairman and Chief Executive Officer Richard J. Haviland Chief Financial Officer Karen E. Dykstra Controller Roseland, New Jersey August 10, 1999 Directors and Corporate Officers Directors Henry Taub...

  • Page 39
    ... with generally accepted accounting principles. New York, New York August 10, 1999 Automatic Data Processing, Inc. Corporate Headquarters Automatic Data Processing, Inc. One ADP Boulevard Roseland, New Jersey 07068-1728 (973) 974-5000 Transfer Agent ChaseMellon Shareholder Services Overpeck Centre...

  • Page 40
    Automatic Data Processing, Inc. One ADP Boulevard Roseland, New Jersey 07068-1728 (973) 974-5000