ADP 2015 Annual Report Download - page 10

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information regarding changes in laws and regulations that could have a materially adverse effect on our reputation, results of operations or financial condition or
have other adverse consequences.
CLIENTS AND CLIENT CONTRACTS
ADP provides its services to more than 650,000 clients. In fiscal 2016, 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
GlobalView client or other large, complicated implementation. Although we monitor sales that have not yet been installed, we do not view this metric as material
to an understanding of our overall business in light of the recurring nature of our business. This metric is not a reported number, but it is used by management as a
planning tool to allocate resources needed to install services, and as a means of assessing our performance against the expectations of our clients. In addition, some
of our products and services are sold under longer term contracts with initial terms ranging from two to seven years. However, this anticipated future revenue under
contract is not a significant portion of ADP’s expected future revenue, is not a meaningful indicator of our future performance and is not used by management
internally to estimate ADP’s future revenue.
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 11 years in Employer Services, and approximately 7 years in PEO Services, and has not varied significantly from period to period.
PRODUCT DEVELOPMENT
ADP continually upgrades, enhances, and expands its solutions and services. In general, new solutions and services supplement rather than replace our
existing solutions and services and, given our recurring revenue model, do not have a material and immediate effect on ADP's revenues. ADP believes that our
strategic solutions and services have significant remaining life cycles.
SYSTEMS DEVELOPMENT AND PROGRAMMING
During the fiscal years ended June 30, 2016 , 2015 , and 2014 , ADP invested approximately $818 million, $767 million, and $686 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.
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 EMPLOYEES
ADP employed approximately 57,000 persons as of June 30, 2016 .
Item 1A. Risk Factors
Ourbusinessesroutinelyencounterandaddressrisks,someofwhichmaycauseourfutureresultstobedifferentthanwecurrentlyanticipate.Risk
factorsdescribedbelowrepresentourcurrentviewofsomeofthemostimportantrisksfacingourbusinessesandareimportanttounderstandingourbusiness.The
followinginformationshouldbereadinconjunctionwithManagement’sDiscussionandAnalysisofFinancialConditionandResultsofOperations,Quantitative
andQualitativeDisclosuresAboutMarketRiskandtheconsolidatedfinancialstatementsandrelatednotesincludedinthisAnnualReportonForm10-K.This
discussionincludesanumberofforward-lookingstatements.Youshouldrefertothedescriptionofthe
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