ADP 2000 Annual Report Download

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2000 Annual Report
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Table of contents

  • Page 1
    [dot ] 2 0 0 0 A nnual Report

  • Page 2
    Contents 1 Financial Highlights 2 Letter to Our Shareholders 5 Who We Are...What We Do 14 Employer Services At-a-glance 15 Brokerage Services At-a-glance 16 Dealer Services At-a-glance 17 Claims Services At-a-glance 18 Selected Financial Data 19 M anagement's Discussion and Analysis 21 Statements of...

  • Page 3
    ... per share Cash dividends Cash dividends per share Basic shares outstanding Diluted shares outstanding Return on equity 615,630 636,892 18.7% At year end: Cash, cash equivalents and marketable securities Working capital Total assets* * Long-term debt Shareholders' equity Number of employees...

  • Page 4
    let t er t o our shareholders Arthur F. Weinbach (left) Gary C. Butler (right) 2000! What a w ay for ADP to start the 21st century. We had excellent financial results, built on a solid foundation of improved service quality, improved associate and client retention, and significantly expanded ...

  • Page 5
    ...-end cash and marketable security balances w ere almost $2.5 billion, after spending of $201 million in '00 to acquire 4.6 million ADP shares on the open market to fund employee equity plans. Improved Service Quality Over three years ago, w e committed ourselves to becoming a World Class Service...

  • Page 6
    ...'s services are a natural extension of the print and distribution services of our Brokerage Services Investor Communications business and should be an important grow th vehicle for that business in the years ahead. Clicks and M ortar Strategy We believe that the w inning strategy for ADP is to link...

  • Page 7
    ...and benefits administration); integrated securities transaction processing, investor communications services for the financial services industry; computing solutions for auto and truck dealers and vehicle manufacturers; and computer-assisted auto damage repair estimating, parts availability, and fee...

  • Page 8
    click s & m ort ar [ 6 The Internet is accelerating the trend for businesses to outsource. ] Today, every major ADP business unit provides traditional and Web-enabled business solutions.

  • Page 9
    ... to staff, manage, pay, and retain their employees. We introduced ADP Enterprise Payroll, a Web-based system w ith self-service features for large businesses. Our clients can now use ADP Connectionâ„¢ to interface ADP's payroll and tax filing solutions w ith major enterprise resource planning...

  • Page 10
    w orld class service [ 8 Service levels w ill increasingly differentiate even the best competitors. ] Every interaction w ith a client is an opportunity for us to demonstrate our capabilities and commitment.

  • Page 11
    ... effectively our products w ork. It's a combination of everything w e do to create a client relationship -and then make it flourish. World Class Service is succeeding at ADP because w e w ork hard at it everyday and have made it part of our business culture. In FY 2000, w e added net new clients. In...

  • Page 12
    t alent t o succeed [ 10 Labor-scarce markets are compelling employers to aggressively compete for the most qualified candidates. ] M otivated associates help us to retain existing clients longer and attract new ones.

  • Page 13
    ..., top-tier service solutions. ADP's challenging business culture, improved training and communications, and more competitive pay, benefit and rew ard systems represent the cornerstones of our effort. The early results of our EOC initiative are positive. This year, for example, productivity (both...

  • Page 14
    a m ark et leader in grow ing m ark et s [ 12 By far, the best grow th for any business is sustained grow th in expanding markets. ] ADP alw ays aims to be the market leader in every business w e enter.

  • Page 15
    .... Additionally, w e pay only 4 million employees outside of North America. Brokerage Services is the leading provider in the online brokerage services market, yet processes only about 25% of the online trades in North America-a market that has grow n 100% annually in each of the past tw o years and...

  • Page 16
    ..., pay, and retain their employees in the United States, Canada, Europe, and Latin America. EasyPayNet sm and a suite of Internet-based solutions to sm all and em erging com panies. us to m illions of M icrosoft, Am erica Online, and EarthLink subscribers. • Form ed strategic alliances that w ill...

  • Page 17
    ...ent services, including Internet-enabled products and services. m ajor m ark et s M ajor M arkets ADP Brokerage Services provides securities transaction processing, investor com m unications, and other services to clients in: North America, South America, Europe, and the Far East. • Global trade...

  • Page 18
    ..., LLC w ith ADP Claim s Services and other partners to establish an efficient parts procurem ent m arketplace for auto retailers and collision repair centers. • Allied w ith Standard Register to create DOX sm Dealer Office Xpress, a " clicks and m ortar" solution for form s and office supply...

  • Page 19
    ... property insurance claims; auto collision repair centers; auto recyclers; and auto accident/workers' compensation medical cost containment. We serve the following geographical markets: North America, Europe, Brazil, Israel and South Africa. product s & services Products & Services • Repair estim...

  • Page 20
    [ select ed f inancial dat a ] 2000 1999 Automatic Data Processing, Inc. and Subsidiaries (In thousands, except per share amounts) Years ended June 30, 1998 1997 1996 Total revenues $ 6,287,512 $ 1,289,600 $ 840,800 $ 5,540,141 $ 4,925,956 $ 4,193,447 $3,613,014 Earnings before income ...

  • Page 21
    ... strong trade processing activity. In '99 the Company divested the $150 million revenue frontoffice "market data" business and as part of the agreement took a minority investment in the acquiring company. 2000 1999 1998 2000 1999 1998 Employer Services Brokerage Services Dealer Services Other...

  • Page 22
    ... '01 ADP is planning another record year with revenue growth of about 13% to 15% and diluted earnings per share growth of 16% to 18% over '00 results. Additional comments and operating results are included in the Letter to Shareholders on pages 2 through 4 and in the business descriptions presented...

  • Page 23
    ... ed earnings ] Automatic Data Processing, Inc. and Subsidiaries (In thousands, except per share amounts) Years ended June 30, 2000 1999 ...136,720 4,925,956 Operating expenses General, administrative and selling expenses Systems development and programming costs Depreciation and amortization ...

  • Page 24
    ... Data Processing, Inc. and Subsidiaries (In thousands, except per share amounts) Years ended June 30, 2000 1999 Assets Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable Other current assets Total current assets Long-term marketable securities Long...

  • Page 25
    ...) Balance, June 30, 1999 Net earnings Currency translation Unrealized loss on securities Comprehensive income Employee stock plans and related tax benefits Treasury stock acquired (4,648 shares) Acquisitions (478 shares) Debt conversion (808 shares) Dividends ($.33875 per share) - - - 840,800...

  • Page 26
    ... s of consolidat ed cash f low s ] Automatic Data Processing, Inc. and Subsidiaries (In thousands) Years ended June 30, 2000 1999 1998 Cash Flow s From Operating Activities Net earnings Adjustments to reconcile net earnings to net cash flow s provided by operating activities: Depreciation and...

  • Page 27
    ...balance sheet. H. Earnings Per Share (EPS). The calculation of basic and diluted EPS is as follows: Effect of Zero Coupon Subordinated Basic Notes Effect of Stock Options (In thousands, except EPS) Diluted 2000 Net earnings Average shares EPS 1999 Net earnings Average shares EPS 1998 Net earnings...

  • Page 28
    ... at June 30, 2000 and 1999, respectively. Other intangibles consist primarily of purchased rights (acquired directly or through acquisitions) to provide data processing services to various groups of clients (amortized over periods from 5 to 36 years) and purchased software (amortized over periods...

  • Page 29
    ... and Client Funds Obligations As part of its integrated payroll and payroll tax filing services, the Company impounds funds for federal, state and local employment taxes from approximately 350,000 clients, files annually over 17 million returns, handles all regulatory correspondence, amendments...

  • Page 30
    ...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-Scholes option pricing model with the following weighted average assumptions: Years ended June 30, 2000 1999 1998...

  • Page 31
    ... Years ended June 30, 2000 1999 Discount rate Expected long-term rate on assets Increase in compensation levels 7.75% 8.75% 6.0% 7.50% 8.75% 6.0% June 30, 2000 1999 Change in plan assets: Funded plan assets at market value at beginning of year Plans of acquired employers Actual return on plan...

  • Page 32
    ...rates. Business unit assets include funds held for clients but exclude corporate cash, marketable securities and goodwill. "Other" consists primarily of Claims Services, corporate expenses, non-recurring items and the reconciling items referred to above. Years ended June 30, 2000 % 1999 % 1998...

  • Page 33
    ... Employer Services Brokerage Services Dealer Services Other Total Year ended June 30, 2000 Revenues Pre-tax earnings Assets Capital expenditures Depreciation and amortization Year ended June 30, 1999 Revenues Pre-tax earnings Assets Capital expenditures Depreciation and amortization Year ended...

  • Page 34
    ... an and Chief Executive Officer Richard J. Haviland Chief Financial Officer Karen E. Dykstra Controller Roseland, New Jersey August 14, 2000 [ independent audit ors' report Board of Directors and Shareholders Automatic Data Processing, Inc. Roseland, New Jersey We have audited the accompanying...

  • Page 35
    [ aut om at ic dat a processing, inc. ] Annual M eeting This year's shareholders' meeting will be held at Automatic Data Processing, Inc., One ADP Boulevard, Roseland, New Jersey, on November 14, 2000 at 10:00 a.m. A notice of the meeting, proxy statement, and proxy voting card will be mailed to ...

  • Page 36
    Automatic Data Processing, Inc. One ADP Boulevard Roseland, New Jersey 07068-1728 973• 974• 5000 w w w.adp.com