ADP 2001 Annual Report Download - page 25

Capital expenditures during ’01 were $185 million follow-
ing investments of $166 million in ’00 and $178 million in
’99. Capital spending in fiscal ’02 should approximate
$200 million.
Approximately forty-percent of the Company’s overall
investment portfolio is invested in overnight interest-
bearing instruments, which are therefore impacted
immediately by changes in interest rates. The other sixty-
percent of the Company’s investment portfolio is invested
in fixed-income securities, with maturities up to ten years.
The Company has historically had the ability to hold these
investments until maturity, and therefore this has not had
an adverse impact on income or cash flows.
The earnings impact of future rate changes is not pre-
cisely predictable because many factors influence the
return on the Company’s portfolio. These factors include,
among others, the overall portfolio mix between short-
term and long-term investments. This mix varies during
the year and is impacted by daily interest rate changes.
A hypothetical change in interest rates of 25 basis points
applied to the June 30, 2001 balances would result in a
$12 million pre-tax earnings impact over the following
twelve-month period.
Market Price, Dividend Data and Other
The market price of the Company’s common stock (sym-
bol: ADP) based on New York Stock Exchange composite
transactions and cash dividends per share declared during
the past two years have been:
Price Per Share Dividends
High Low Per Share
Fiscal 2001 quarter ended
June 30 $57.1500 $49.5700 $.10250
March 31 63.5625 48.4700 .10250
December 31 69.9375 58.5000 .10250
September 30 67.8750 49.5000 .08750
Fiscal 2000 quarter ended
June 30 $57.9375 $44.6875 $.08750
March 31 55.4375 40.0000 .08750
December 31 54.8125 43.0000 .08750
September 30 44.8750 37.3750 .07625
As of June 30, 2001 there were approximately 34,000
holders of record of the Company’s common stock.
Approximately 271,000 additional holders have their stock
in “street name.”
New Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board
issued SFAS No. 141, “Business Combinations” and SFAS
No. 142 “Goodwill and Other Intangible Assets,” which
revise the standards for accounting for business combina-
tions and goodwill and other intangible assets acquired in
a business combination. The Company intends to adopt
SFAS No. 141 and SFAS No. 142 in fiscal 2002. The pro
forma basic and diluted earnings per share for fiscal 2001
will increase by $.07 per share from $1.47 to $1.54 and
$1.44 to $1.51, respectively.
This report contains “forward-looking statements” based
on management’s expectations and assumptions and are
subject to risks and uncertainties that may cause actual
results to differ from those expressed. Factors that could
cause differences include: ADP’s success in obtaining,
retaining and selling additional services to clients; the pric-
ing of products and services; changes in laws regulating
payroll taxes and employee benefits; overall economic
trends, including interest rate and foreign currency trends;
stock market activity; auto sales and related industry
changes; employment levels; changes in technology;
availability of skilled technical associates; and the impact
of new acquisitions. ADP disclaims any obligations to
update any forward-looking statements, whether as a
result of new information, future events or otherwise.
23