ADP 2006 Annual Report Download

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2006 SUMMARY ANNUAL REPORT
FFOOCCUUSS OONN GGRROOWWTTHH

Table of contents

  • Page 1
    FOCUS ON GROWTH 2006 SUMMARY ANNUAL REPORT

  • Page 2
    ... with Gary Butler, CEO-elect > 5 Business Narrative > 9 ADP At A Glance > 20 Selected Financial Data > 22 Directors & Corporate Officers > 26 Corporate Information > Inside Back Cover Financial Highlights (Dollars and shares in millions, except per share amounts) Years ended June 30, 2006 $ 8,881...

  • Page 3
    FOCUS ON LONG-TERM GROWTH At ADP, building long-term shareholder value is our primary goal. Accelerating revenue growth and improving our margins are the pathways to achieving it...

  • Page 4
    ...new CEO, (2) expect to spin off our Brokerage Services Group, and (3) forecast delivering solid growth in revenues and earnings. We will expand on each of these items in this letter. FISCAL 2006 Fiscal 2006 was the second year of our rebound. We grew our revenues 11%, had our best earnings per share...

  • Page 5
    ... value. Nevertheless, our strategies and future direction are clear. They are discussed in the following Q&A with Gary Butler on pages 5 to 8. NEW CEO As we announced in January, Art Weinbach is retiring as CEO effective August 31, 2006 and is being succeeded by Gary Butler, a 30-year ADP veteran...

  • Page 6
    ... Officer Gary C. Butler President & Chief Operating Officer, CEO-elect August 28, 2006 Farewell As I retire after 26 years at ADP, including the last 10 as CEO, there are many people to thank including the Board of Directors, our clients, ADP associates, our shareholders and our executive team...

  • Page 7
    ...PRIORITIES AS ADP'S NEW CEO? My number one priority is to increase shareholder value by accelerating revenue growth in conjunction with margin expansion. Additionally, an important priority for fiscal 2007 is to execute on the recently announced spin-off of our Brokerage Services Group, facilitating...

  • Page 8
    ... that offer economies of scale, best practices, and service coverage across multiple time zones. > Data center consolidation - Essentially this involves combining our Employer Services and Brokerage Services data processing functions to benefit from shared services engineering and operations. We...

  • Page 9
    ... the world's leading financial institutions. The Brokerage Services Group is a market leader in providing integrated outsourcing solutions to the financial services industry and we believe with its long-term growth opportunities it will be a strong and viable stand-alone public company. "My number...

  • Page 10
    ...for ADP. We opened our first two representative offices in China this year. Our Shanghai facility includes Employer Services staff to support our GlobalView payroll and HR offering for multinational firms, and Dealer Services associates to serve the emerging retail dealership industry in the country...

  • Page 11
    ... of computerized transaction processing and information-based business solutions. We measure our success through the performance of our strategic businesses. Each has achieved market leadership by demonstrating consistency in Product Leadership, World Class Service, and being an Employer of Choice...

  • Page 12
    ..., accelerating sales and revenue growth, and expanding the client base through superior product offerings supported by World Class Service. LARGE MARKETS AND OPPORTUNITIES ES provides leading HR, payroll, time and labor management, and benefits administration solutions to employers throughout the...

  • Page 13
    ... value to Microsoft: country knowledge, best practices, proven solutions, world class service, expert inquiry management, multilingual/multicurrency capability, and a responsive service organization." DIANNE GREENE (left), Sr. Director, GlobalViewSM Client Service ADP Employer Services International...

  • Page 14
    ADVANCE REALTY GROUP HUMAN RESOURCE, PAYROLL, AND TAX FILING ADMINISTRATION EMPLOYER AND EMPLOYEE WEB SELF-SERVICE HEALTHCARE COVERAGE AND ADMINISTRATION REGULATORY AND COMPLIANCE MANAGEMENT WORKERS' COMPENSATION COVERAGE AND RISK MANAGEMENT "In my role as an ADP TotalSource ® Human Resources ...

  • Page 15
    ...to clients in 31 countries throughout North and South America, Europe, and Asia. GlobalView - which uses the mySAPâ„¢ 2004 ERP Human Capital Management software - is a unique offering in the marketplace, providing payroll, human resource management, and self-service solutions across an international...

  • Page 16
    ... the added value that knowledgeable and fluent local support personnel bring to our growing international business, we have opened dedicated regional service centers in Prague (Czech Republic), Halifax (Canada), and Hyderabad (India). These are in addition to our live hosting centers in Australia...

  • Page 17
    ... PAYROLL PROCESSING PAYROLL TAX FILING DEDICATED CLIENT SERVICE "ADP's Accountant Wholesaler Program enables Christianson Accounting Services to process its clients' payrolls with ADP and offer other value-added ADP services." ERIC W. ARMSTRONG (left), Senior Client Service Representative ADP ES...

  • Page 18
    ... in the financial services industry. It enables us to create a full-service back-office solution and is a vital part of the growth strategy for the back-office business. ADP Clearing & Outsourcing Services completed its first full year with a growing client list and an active sales pipeline. This...

  • Page 19
    ... in the sales and trading of fixed-income securities, Multi-Bank Securities, Inc. chose ADP Clearing & Outsourcing Services because of ADP's financial stability, broad industry knowledge, extensive product line, commitment to its clients, and ability to handle both retail and institutional business...

  • Page 20
    ... network for voice and data communications. This year, we also introduced new services that add incremental value to our client relationships. ADP's CustomerTouchSM, triggered by events stored in DMS, enables dealers to automatically contact the right clients at the right time by direct mail, e-mail...

  • Page 21
    ... REAL-TIME INFORMATION > A Fortune 500 auto retailer headquartered in Houston, Texas, Group 1 Automotive is in the process of consolidating from three separate service providers to ADP, enabling the retailer to manage its dealership operations and accounting functions - including vehicle and parts...

  • Page 22
    ..., representing over 450,000 employees > Launched the ADP National Employment ReportSM, a real-time new estimate of employment trends in the U.S. non-farm private sector, based on a monthly sampling of active payroll data > ES INTERNATIONAL SERVICES Serves multinational and other clients outside the...

  • Page 23
    BROKERAGE SERVICES A leading provider of transaction processing, desktop productivity applications, investor communications solutions, and clearing and operations outsourcing services to the financial services industry worldwide. MAJOR GEOGRAPHIC MARKETS North America, Europe, Asia, and Australia ...

  • Page 24
    ... for Stock Compensation Expense for the Years Ended June 30, 2005 and 2004 on page 23. Our Annual Report on Form 10-K, which includes Management's Discussion and Analysis, Financial Statements and related Footnotes, is available online under "Investor Relations" on ADP's Web site, www.adp.com...

  • Page 25
    ... in provision for income taxes for the years ended June 30, 2005 and 2004, respectively. Our Annual Report on Form 10-K, which includes Management's Discussion and Analysis, Financial Statements and related Footnotes, is available online under "Investor Relations" on ADP's Web site, www.adp.com. 23

  • Page 26
    ... 17,859.2 21,831.5 - 63.9 - (13.3) 7,966.0 (2,246.8) 14.1 5,783.9 $27,490.1 $ 27,615.4 Our Annual Report on Form 10-K, which includes Management's Discussion and Analysis, Financial Statements and related Footnotes, is available online under "Investor Relations" on ADP's Web site, www.adp.com. 24

  • Page 27
    ... net cash flows provided by operating activities: Depreciation and amortization Deferred income taxes Stock-based compensation expense Pension expense Realized gains (losses) from the sales of marketable securities Amortization of premiums and discounts on available-for-sale securities Gain on sale...

  • Page 28
    ..., Air Products and Chemicals, Inc. Ann Dibble Jordan (1), (3) Consultant Member of various boards Chairman, Thayer Capital Partners Honorary Chairman CORPORATE OFFICERS Arthur F. Weinbach Chairman and Chief Executive Officer Gary C. Butler President and Chief Operating Officer, CEO-elect Group...

  • Page 29
    CORPORATE HEADQUARTERS Automatic Data Processing, Inc. One ADP Boulevard Roseland, New Jersey 07068-1728 973.974.5000 ADP COMMON STOCK The shares of ADP Common Stock are listed on the New York Stock Exchange with the symbol ADP. As of August 28, 2006, there were 41,476 registered holders of ADP's ...

  • Page 30
    AUTOMATIC DATA PROCESSING, INC. One ADP Boulevard Roseland, NJ 07068-1728 973.974.5000 www.adp.com