ADP 2014 Annual Report Download - page 10

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The foregoing description does not include an exhaustive list of the laws and regulations governing and impacting our business. See the discussion
contained in the “Risk Factors” section in Part I, Item 1A of this Annual Report on Form 10-K for information regarding changes in laws and regulations that may
decrease our revenues and earnings.
CL IENTS AND CL IENT CONTRACTS
ADP provides its services to more than 630,000 clients. In fiscal 2015, no single client or group of affiliated clients accounted for revenues in excess of
2% of ADP’s annual consolidated revenues.
ADP is continuously in the process of performing implementation services for new clients. Depending on the service agreement and/or the size of the
client, the installation or conversion period for new clients could vary from a short period of time for a small Employer Services client (as little as 24 hours) to a
longer period for a large Employer Services client with multiple deliverables (generally six to twelve months), and in some cases may exceed two years for a large
GlobalV iew Select client or other large, complicated implementation. Although we monitor sales that have not yet been billed or installed, we do not view this
metric as material in light of the recurring nature of our business. This is not a reported number, but it is used by management as a planning tool relating to
resources needed to install services, and as a means of assessing our performance against the installation timing expectations of our clients.
Our business is typically characterized by long-term client relationships that result in recurring revenue. Our services are provided under written price
quotations or service agreements having varying terms and conditions. No one price quotation or service agreement is material to ADP. ADP’s client retention is
estimated at approximately 12 years in Employer Services, and approximately 7 years in PEO Services, and has not varied significantly from period to period.
SY STEMS DEV EL OPMENT AND PROGRA MMING
During the fiscal years ended J une 30, 2015, 2014, and 2013, ADP invested approximately $767 million, $686 million, and $596 million, respectively,
from continuing operations, in systems development and programming, which includes expenses for activities such as client migrations to our new strategic
platforms, the development of new products and maintenance of our existing technologies, including purchases of new software and software licenses.
PRODUCT DEV ELOPMENT
ADP continually upgrades, enhances, and expands its existing solutions and services. Generally, no new solution or service has a significant effect on
ADP’s revenues or negatively impacts its existing solutions and services, and ADP’s solutions and services have significant remaining life cycles.
LICENSES
ADP is the licensee under a number of agreements for computer programs and databases. ADP’s business is not dependent upon a single license or group
of licenses. Third-party licenses, patents, trademarks, and franchises are not material to ADP’s business as a whole.
NUMBER OF EMPL OY EES
ADP employed approximately 55,000 persons as of June 30, 2015.
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