--------------------------------------------------------------------------------
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5397
AUTOMATIC DATA PROCESSING, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-1467904
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One ADP Boulevard, Roseland, New Jersey 07068
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 973-974-5000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $.10 Par Value New York Stock Exchange
(voting) Chicago Stock Exchange
Pacific Stock Exchange
Liquid Yield Option Notes due 2012 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days. Yes x No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein and will
not be contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of September 6, 2000 was approximately $38,792,200,000. On
September 6, 2000, there were 630,126,931 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
<S> <C>
Portions of the Registrant's 2000 Annual Report to Shareholders Parts I, II & IV
Portions of the Registrant's Proxy Statement for Annual Meeting of Stockholders to be held on November 14, 2000. Part III
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Part I
Item 1. Business
Automatic Data Processing, Inc., incorporated in Delaware in 1961
(together with its subsidiaries "ADP" or the "Registrant"), is one of the
largest providers of computerized transaction processing, data communication,
and information services in the world. For financial information by segment and
by geographic area, see Note 11 of the "Notes to Consolidated Financial
Statements" contained in ADP's 2000 Annual Report to Shareholders, which
information is incorporated herein by reference. The following summary describes
ADP's activities.
Employer Services
ADP Employer Services offers a comprehensive range of payroll, human
resources, benefits administration, time and attendance, tax filing and
reporting, professional employer organization ("PEO"), compliance management
(e.g., new hire reporting and wage garnishment processing) and retirement plan
services to 450,000 employers in the United States, Canada, Europe and Latin
America. These services are marketed through ADP's direct marketing sales forces
and through other indirect sales channels such as marketing relationships with
banks, accountants, and increasingly, online companies through which ADP's
services are marketed to their customers. In fiscal 2000, North America
accounted for 88% of Employer Services' revenues, with Europe generating 11% of
Employer Services' revenues and Latin America (principally Brazil) contributing
the remaining 1%. Further, with the acquisition of PayConnect in July of 2000,
ADP entered into the payroll services market of Australia, and currently
provides payroll and HR solutions to over 7,500 clients in Australia.
In North America, ADP provides payroll services that include the
preparation of client employee paychecks and electronic direct deposits, along
with supporting journals, summaries and management reports. ADP also supplies
the quarterly and annual social security, Medicare, and federal, state and local
income tax withholding reports required to be filed by employers and employees.
ADP's tax filing services process federal, state and local payroll taxes on
behalf of ADP clients and remit such taxes to the appropriate taxing authorities
when due. Through service offerings such as new hire reporting, ADP check/full
service direct deposit (in conjunction with major bank partners) and wage
garnishment payment, the ADP Tax and Financial Services Center is also
responsible for the efficient movement of funds and information to third
parties. In Europe and Latin America, ADP Employer Services provides full
departmental outsourcing of payroll services.
ADP Employer Services' approach to the market is to match a client's
needs with the product that will best meet expectations. In North America,
approximately 30% of Employer Services' revenue during the past fiscal year was
attributable to its Emerging Business Services (companies with fewer than 100
employees); approximately 34% of such revenue was attributable to Major Accounts
(companies with between 100 and 999 employees); and approximately 25% of such
revenue was attributable to National Accounts (companies with 1,000 or more
employees).
ADP's human resource ("HR") services, operating in conjunction with a
client's payroll database, provide comprehensive recordkeeping HR services,
including benefits administration and outsourcing, applicant tracking, employee
history and position control.
ADP is in the process of Internet-enabling existing product offerings,
while at the same time creating new products expressly designed for the
Internet. This year ADP launched its eBusiness
2
<PAGE>
Services unit to provide online payroll, HR, 401(k) and other services to
smaller companies that use the Internet to staff, manage, pay and retain their
employees. ADP also introduced ADP Enterprise Payroll, an Internet-based system
with self-service features for large businesses. Clients can now use ADP
Connection(TM) to interface ADP's payroll and tax filing solutions with
enterprise resource planning applications from Oracle(R), SAP and PeopleSoft(R).
ADP is also developing an Internet-based payroll, benefits and HR management
system with self-service features for the middle market.
Emerging Business Services ("EBS") processes payroll for over 370,000
clients. EBS provides these smaller companies of usually 1-99 employees with
leading solutions, including a range of value-added services that are
specifically designed for small business clients. Major Accounts
(100-999 employees) offers a full suite of best-of-breed employer services
solutions for mid-sized companies, including full database and other functional
integration between payroll and HR. Many of the world's largest corporations
(1000 or more employees) are National Accounts Services clients. In many cases,
ADP provides system solutions for its clients' entire human resource, payroll
and benefits needs. For those companies who choose to process these applications
in-house, ADP also delivers stand-alone services such as payroll tax filing,
check printing and distribution, and year-end statements (i.e., W-2's).
Other large clients rely on ADP to design and deliver their own customized
human resource information systems and benefits outsourcing solutions.
Further, as part of ADP's initiatives to develop online products and services,
this year ADP acquired Business Management Software, LTD, a United Kingdom-based
software developer and long-term partner of ADP, specializing in the
development of payroll and HR applications.
The ADP Tax and Financial Services Center supports large, mid-sized and
small clients. It provides an electronic interface between approximately 350,000
ADP clients in the United States and Canada and about 2000 federal, state and
local tax agencies, from the Internal Revenue Service to local town governments.
In fiscal 2000, the ADP Tax and Financial Service Center processed over 17
million federal and other employer payroll tax returns.
In 1999, ADP became the second largest PEO in the United States with
the acquisition of The Vincam Group, Inc. A PEO provides a comprehensive,
bundled outsourcing solution, including payroll, HR, benefits and workers'
compensation to its clients. ADP's combined PEO business, called TotalSource(R),
has 26 offices located in 11 states and supports approximately 85,000 work-site
employees in 48 states.
ADP complements its payroll and HR services with additional employer
services that include products ranging from time and attendance tracking to
401(k) recordkeeping. ADP's unemployment compensation services aid clients in
managing and reducing unemployment insurance costs. In the last fiscal year, ADP
enhanced its position as a leading benefits administration provider with the
acquisition of netBOA, Inc., a provider of COBRA administration services.
The continued increase in multinational companies makes payroll and
human resource management services a global opportunity. ADP Europe provides
payroll solutions to nearly 24,000 clients in nine European countries and is the
only Pan-European service provider. Additionally, ADP is well positioned in
Latin America to take advantage of future growth in this market. As previously
stated, Employer Services' European and Latin American operations already
comprise 12% of the consolidated Employer Services worldwide revenues. As this
business grows, ADP's Global Business Services will provide a dedicated sales
and service organization trained and equipped to handle payroll for clients with
diverse locations in ADP's major world markets.
3
<PAGE>
Brokerage Services
ADP Brokerage Services provides securities transaction processing,
broker productivity applications and investor communication services to the
financial services industry. These services include bank and brokerage
back-office and related financial computing services such as trade processing,
automated inquiry, reporting and record keeping services for virtually all
financial instruments including foreign currency, fixed income, equities,
commodities and derivatives.
ADP serves a diverse client base, including full service and discount
brokerage firms, global banks, and Internet brokerage companies, as well as
corporations, mutual funds, institutional investors, specialty trading firms,
and other providers of financial services.
In fiscal 2000, ADP processed a significant portion of U.S. and
Canadian securities transactions, with combined daily volumes of more than 1.2
million trades per day, up 50% from the prior year. In addition, ADP served the
North American securities transaction processing needs of most large global
banks.
This year, ADP processed over 25% of all online trades in North America
and expanded its presence as a leading service provider of Internet-based
brokerage services. ADP also initiated new relationships with Web Street
Securities and Millennium Clearing Company LLC, a subsidiary of National
Discount Brokers Group, Inc.
ADP Brokerage Services also provides computerized proxy vote tabulation
and shareholder communication, distribution and fulfillment services, including
Internet-enabled products and services. In fiscal 2000, ADP handled over 680
million shareholder communications on behalf of its clients worldwide, nearly
35% more than fiscal 1999. It also more than doubled Internet distribution of
shareholder communications in fiscal 2000. ADP also signed Morgan Stanley Dean
Witter to a new multi-year investor communication services contract. This year,
ADP created the IRexpress.com(SM) Internet platform suite of services that
allows investor relations professionals to manage their process, access
institutional ownership of information, and track institutional portfolios
online.
Internationally, ADP Brokerage Services integrated the delivery of
multiple products and services through its Global Processing Solution. ADP now
serves brokerage and banking clients in 25 countries, providing global trade
processing and settlement systems for international securities in multiple
currencies. In fiscal 2000, ADP's Wilco Systems strengthened its ability to
adapt to market changes by setting up a development center in Hyderabad,
India. In fiscal 2000, ADP also launched initiatives to continue serving
the emerging online brokerage markets internationally, developing a new
Internet-enabled trading solution for the European market, with global
straight through processing capabilities, as well as partnering with a
leading provider of end-to-end on-line retail financial services enabling
ADP to offer turnkey Internet solutions. In addition, ADP maintained ISO
9002 certification for shareholder information processing, an international
standard for the highest quality.
In June 2000, ADP acquired Cunningham Graphics International, Inc., a
provider of a wide range of graphic communications services to financial
services, insurance, healthcare, and telecommunication firms, as well as
publishing houses. These services include the production and distribution of
time sensitive analytical research and marketing materials, as well as general
commercial and on-demand printing services. Cunningham Graphics operates in
select international markets through its facilities in the United States, United
Kingdom, Canada, Hong Kong, and Singapore.
4
<PAGE>
Dealer Services
ADP Dealer Services provides e-business and integrated computing
solutions for motor vehicle (car and truck) retailers and their manufacturers
worldwide. Approximately 40% of the automotive retailers in North America (about
20% globally) and more than 30 vehicle manufacturers use ADP's on-site systems
and communications networks to manage sales, operations and marketing, with over
200,000 installed applications.
ADP offers clients a service solution that includes computer hardware,
licensed software, software support, network consulting, design and hardware
maintenance services. Clients use ADP's systems to manage business activities
such as accounting, inventory, factory communications, scheduling, finance,
insurance, sales and service. ADP designs, establishes and maintains
communications networks for its clients that allow interactive communications
among multiple site locations for larger dealers as well as links between
franchise dealers and their respective manufacturers. These networks are used
for new vehicle ordering, status inquiry and warranty submission and validation,
parts and vehicle locating, credit application submissions, vehicle repair
estimates, vehicle registration and lienholder information.
In fiscal 2000, ADP Dealer Services formed ChoiceParts, LLC with ADP
Claims Services and other partners to establish an efficient parts procurement
marketplace for auto retailers and collision repair centers. ADP's acquisition
last year of Dealer Solutions, Inc., a developer of Windows NT(R) dealer
management systems software, is another significant step in ADP's Internet-based
strategy. This past fiscal year, ADP launched DealerSuite.com(SM), an e-business
portal that provides dealers with quick access to a wide range of Internet-based
products, services and tools, including consumer finance sources, online
training, and ADP customer service. ADP also introduced myautogarage.com(SM),
ADP's Internet initiative with IBM that links dealers and manufacturers with
vehicle owners to create unique brand loyalty relationships.
Claims Services
ADP Claims Services offers a broad line of claims information products
to property and casualty insurance companies, claims adjusters, repair shops and
auto parts recycling facilities. These products help insurers to accurately
estimate auto damage, property damage and bodily injury claims and help repair
shops and recyclers locate parts and manage their operations. The products and
services include the following: repair estimating applications and databases for
the property and casualty, and collision repair industries, including
wireless-enabled, digital imaging, and complete workflow services; total loss
vehicle valuations; body shop management systems; parts locator systems; and
medical cost containment applications and services for the auto injury and
workers' compensation markets.
Markets and Marketing Methods
All of ADP's services are sold broadly across the United States and
Canada. Most ADP services are offered in Western Europe and some employer
services are offered in Brazil and Australia. All services use common marketing
techniques, including direct sales methodologies with emphasis on referral
sources.
None of ADP's major business groups have a single homogenous client
base or market. For example, while Brokerage Services primarily serves the
retail brokerage market, it also serves banks,
5
<PAGE>
commodity dealers, the institutional brokerage market and individual
non-brokerage corporations. Dealer Services primarily serves automobile dealers,
but also serves truck and agricultural equipment dealers, auto repair shops,
used car lots, state departments of motor vehicles and manufacturers of
automobiles, trucks and agricultural equipment. Claims Services has many clients
who are insurance companies, but also provides services to automobile
manufacturers, body repair shops, salvage yards, distributors of new and used
automobile parts and other non-insurance clients. Employer Services has clients
from a large variety of industries and markets. Within this client base are
concentrations of clients in specific industries. Employer Services also sells
to auto dealers, brokerage clients and insurance clients. While concentrations
of clients exist, no one business group is material to ADP's overall revenue.
None of ADP's businesses are overly sensitive to price changes.
Economic conditions among selected clients and groups of clients may and do have
a temporary impact on demand for ADP's services.
ADP enjoys a leadership position in each of its major service offerings
and does not believe any major service or business unit in ADP is subject to
unique market risk.
Competition
The computing services industry is highly competitive. ADP knows of no
reliable statistics by which it can determine the number of its competitors, but
it believes that it is one of the largest providers of computerized transaction
processing, data communication and information services in the world.
ADP's competitors include other independent computing services
companies, divisions of diversified enterprises and banks. Another competitive
factor in the computing services industry is the in-house computing function,
whereby a company installs and operates its own computing systems.
Competition in the computing services industry is primarily based on
service responsiveness, product quality and price. ADP believes that it is very
competitive in each of these areas and that there are no material negative
factors impacting ADP's competitive position in the computing services industry.
No one competitor or group of competitors is dominant in the computing services
industry.
Clients and Client Contracts
ADP provides its services to nearly 500,000 clients. No single client
accounts for revenues in excess of 1% of annual consolidated revenue.
ADP has no material "backlog" because the period between the time a
client agrees to use ADP's services and the time the service begins is generally
very short and because no sale is considered firm until it is installed and
begins producing revenue.
ADP's average client retention is about 8 years in Employer Services
and is 10 or more years in Brokerage, Dealer and Claims Services, and does not
vary significantly from period to period.
ADP's 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. Discounts, rebates and promotions offered
by ADP to clients are not material.
6
<PAGE>
ADP offers a service warranty to its clients that if any errors or
omissions occur in its service offerings, ADP will correct them as soon as
possible. In addition, ADP provides, either directly or through third parties,
maintenance and support for the ADP-provided equipment and software which
facilitates the delivery of its services to clients.
Systems Development and Programming
During the fiscal years ended June 30, 2000, 1999 and 1998, ADP spent
$460 million, $412 million and $376 million, respectively, on systems
development and programming activities for the development of new, and the
improvement and maintenance of existing, computing services.
Product Development
ADP continually upgrades, enhances and expands its existing products
and services. Generally, no new product or service has a significant effect on
ADP's revenue or negatively impacts its existing products and services, and
ADP's products and services have a significant remaining life cycle.
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 40,000 persons as of June 30, 2000.
Item 2. Properties
ADP leases space for more than 55 of its processing centers. In
addition, ADP leases numerous small processing centers and sales offices. All of
these leases, which aggregate approximately 5,800,000 square feet in the United
States, Canada, Europe, South America, Asia, Australia and South Africa, expire
at various times up to the year 2016. ADP owns 30 of its processing facilities
and its corporate headquarters complex in Roseland, New Jersey, which aggregate
approximately 3,000,000 square feet.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
7
<PAGE>
Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
See "Market Price, Dividend Data and Other" contained in the
Registrant's 2000 Annual Report to Shareholders, which information is
incorporated herein by reference. As of September 6, 2000, the Registrant had
33,985 registered holders of its Common Stock, par value $.10 per share. The
Registrant's Common Stock is traded on the New York, Chicago and Pacific Stock
Exchanges.
On July 6, 1999, the Registrant issued 6,317 shares of its Common Stock
in respect of an earnout paid to certain shareholders of a company previously
acquired by the Registrant in exchange for all of the issued and outstanding
shares of such company pursuant to a stock acquisition agreement dated April 28,
1998. On December 23, 1999, the Registrant issued 178,228 shares of its Common
Stock in respect of an earnout paid to certain shareholders of a company
previously acquired by the Registrant in exchange for all of the issued and
outstanding shares of such company pursuant to a stock purchase agreement dated
February 11, 1998. On June 30, 2000, the Registrant issued 293,325 shares of its
Common Stock to the shareholders of a company acquired by the Registrant in
exchange for all of the issued and outstanding shares of the capital stock of
such company pursuant to the terms of a share purchase agreement. The Registrant
issued the foregoing shares of Common Stock without registration under the
Securities Act of 1933, as amended, in reliance upon the exemption therefrom set
forth in Section 4(2) of such Act, relating to sales by an issuer not involving
a public offering.
Item 6. Selected Financial Data
See "Selected Financial Data" contained in the Registrant's 2000 Annual
Report to Shareholders, which information is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
See "Management's Discussion and Analysis" contained in the
Registrant's 2000 Annual Report to Shareholders, which information is
incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Approximately half of the Registrant's overall investment portfolio is
invested in overnight interest-bearing instruments, which are therefore impacted
immediately by changes in interest rates. The other half of the Registrant's
investment portfolio is invested in fixed-income securities, with maturities up
to five and a half years, which are also subject to interest rate risk,
including reinvestment risk. The Registrant 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.
8
<PAGE>
Item 8. Financial Statements and Supplementary Data
The financial statements described in Item 14(a) hereof are
incorporated herein.
The following supplementary data is incorporated herein by reference:
Quarterly Financial Results (unaudited) for the two years ended June
30, 2000 (see Note 12 of the "Notes to Consolidated Financial
Statements" contained in ADP's 2000 Annual Report to Shareholders)
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
9
<PAGE>
Part III
Item 10. Directors and Executive Officers of the Registrant
Executive Officers of the Registrant
The executive officers of the Registrant, their ages, positions and the
period during which they have been employed by ADP are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Employed by
Name Age Position ADP Since
-------------------- --- -------------------------- ----------
John D. Barfitt 47 President, Claims 1979
Services
James B. Benson 55 Vice President, General 1977
Counsel and Secretary
Richard C. Berke 55 Vice President, Human 1989
Resources
Gary C. Butler 53 President and Chief 1975
Operating Officer
Raymond L. Colotti 54 Vice President and 1995
Treasurer
Richard J. Daly 47 Group President, 1989
Brokerage Services
Richard A. Douville 45 Vice President, 1999
Finance
G. Harry Durity 53 Vice President, 1994
Worldwide Business
Development
Karen E. Dykstra 41 Vice President and 1981
Controller
Russell P. Fradin 45 Group President, 1996
Employer Services - North America
Eugene A. Hall 44 Senior Vice President and 1998
President of Financial
and Technology Services,
Employer Services - North America
Richard J. Haviland 54 Chief Financial Officer 1982
and Vice President
10
<PAGE>
John Hogan 52 Group President, 1993
Brokerage Services
Campbell Langdon 39 Vice President, 2000
Strategic Development
S. Michael Martone 52 Group President, Dealer 1987
Services
Arthur F. Weinbach 57 Chairman and 1980
Chief Executive Officer
</TABLE>
Messrs. Benson, Berke, Butler, Daly, Durity, Haviland, Hogan, Martone
and Weinbach have each been employed by ADP in senior executive positions for
more than the past five years.
John D. Barfitt joined ADP in 1979. Prior to his promotion to
President, Claims Services, he served as Senior Vice President - Automotive
Claims Services at ADP from 1996 to 1998 and Senior Vice President - Value Added
Services at ADP from 1994 to 1996.
Raymond L. Colotti joined ADP in 1995. Prior to his promotion to Vice
President and Treasurer, he served as President of ADP Atlantic, Inc. and its
related companies from 1995 to 1997.
Karen E. Dykstra joined ADP in 1981. Prior to her promotion to Vice
President and Controller in 1998, she served as Assistant Corporate Controller
from 1996 to 1998 and as Chief Financial Officer of Dealer Services from 1995 to
1996.
Richard A. Douville joined ADP in 1999 as Vice President, Finance.
Prior to joining ADP, he was a Senior Vice President and Chief Financial Officer
of United States Surgical Corporation for six years.
Russell P. Fradin joined ADP in 1996. Prior to his promotion to Group
President, Employer Services - North America, he served as Senior Vice
President. Prior to joining ADP, he was a senior partner of McKinsey & Company
and had been associated with that firm for 18 years.
Eugene A. Hall joined ADP in 1998 as Senior Vice President. In 2000, he
also became President of Financial and Technology Services of Employer Services
- North America. Prior to joining ADP, he was a senior partner of McKinsey &
Company and had been associated with that firm for 16 years.
Campbell Langdon joined ADP in 2000 as Vice President, Strategic
Development. Prior to joining ADP, he was a partner of McKinsey & Company and
had been associated with that firm for 11 years.
Each of ADP's executive officers is elected for a term of one year and
until their successors are chosen and qualified or until their death,
resignation or removal.
Directors of the Registrant
See "Election of Directors" in the Proxy Statement for Registrant's
2000 Annual Meeting of Stockholders, which information is incorporated herein by
reference.
11
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
See "Section 16(a) Beneficial Ownership Reporting Compliance" in the
Proxy Statement for Registrant's 2000 Annual Meeting of Stockholders, which
information is incorporated herein by reference.
Item 11. Executive Compensation
See "Compensation of Executive Officers" in the Proxy Statement for
Registrant's 2000 Annual Meeting of Stockholders, which information is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
See "Election of Directors - Security Ownership of Certain Beneficial
Owners and Managers" in the Proxy Statement for Registrant's 2000 Annual Meeting
of Stockholders, which information is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
See "Compensation of Executive Officers - Certain Transactions" in the
Proxy Statement for Registrant's 2000 Annual Meeting of Stockholders, which
information is incorporated herein by reference.
12
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)1. Financial Statements
The following reports and consolidated financial statements of the
Registrant contained in the Registrant's 2000 Annual Report to Shareholders are
also included in Part II, Item 8:
Statements of Consolidated Earnings - years
ended June 30, 2000, 1999 and 1998
Consolidated Balance Sheets - June 30, 2000 and 1999
Statements of Consolidated Shareholders' Equity - years ended June
30, 2000, 1999 and 1998
Statements of Consolidated Cash Flows - years ended June 30, 2000,
1999 and 1998
Notes to Consolidated Financial Statements
Report of Management
Independent Auditors' Report
Financial information of the Registrant is omitted because the
Registrant is primarily an operating company. The Registrant's subsidiaries
which are listed on Exhibit 21 attached hereto are wholly-owned.
2. Financial Statement Schedules
Page in Form 10-K
-----------------
Independent Auditors' Report on Schedule 16
Schedule II - Valuation and Qualifying Accounts 17
All other Schedules have been omitted because they are inapplicable or
are not required or the information is included elsewhere in the financial
statements or notes thereto.
3. The following exhibits are filed with this Form 10-K or
incorporated herein by reference to the document set forth next to the exhibit
in the list below:
3.1 - Amended and Restated Certificate of Incorporation dated
November 11, 1998 - incorporated by reference to Exhibit
3.1 to Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1998
13
<PAGE>
3.2 - By-Laws as currently in effect (amended May 15, 2000)
4 - Indenture dated as of February 20, 1992 between Automatic
Data Processing, Inc. and Bankers Trust Company, as
trustee, regarding the Liquid Yield Option Notes due 2012
of the Registrant - incorporated by reference to Exhibit
(4)-#1 to Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1992
10.1 - Letter Agreement dated as of August 1, 1996 between
Automatic Data Processing, Inc. and Arthur F. Weinbach -
incorporated by reference to Exhibit 10.2 to Registrant's
Annual Report on Form 10-K for the fiscal year ended June
30, 1996 (Management Contract)
10.2 - Letter Agreement dated September 14, 1998 between
Automatic Data Processing, Inc. and Gary Butler
- incorporated by reference to Exhibit 10.2 to
Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1998 (Management Contract)
10.4 - Key Employees' Restricted Stock Plan - incorporated by
reference to Registrant's Registration Statement No.
33-25290 on Form S-8 (Management Compensatory Plan)
10.5 - Supplemental Officers' Retirement Plan, as amended and
restated - incorporated by reference to Exhibit 10(iii)(A)
-#5 to Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1993 (Management Compensatory
Plan)
10.5(a) - Amendment to Supplemental Officers' Retirement Plan -
incorporated by reference to Exhibit 10(iii)(A)- #5 to
Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997 (Management Compensatory Plan)
10.6 - 1989 Non-Employee Director Stock Option Plan -
incorporated by reference to Exhibit 10(iii)(A)-#7
to Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1990 (Management Compensatory Plan)
10.6(a) - Amendment to 1989 Non-Employee Director Stock Option Plan
- incorporated by reference to Exhibit 10(6)(a)- to
Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997 (Management Compensatory Plan)
10.7 - 1990 Key Employees' Stock Option Plan - incorporated by
reference to Exhibit 10(iii)(A)-#8 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30,
1990 (Management Compensatory Plan)
10.7(a) - Amendment to 1990 Key Employees' Stock Option Plan -
incorporated by reference to Exhibit 10(7)(a) to
Registrant's Annual Report on Form
14
<PAGE>
10-K for the fiscal year ended June 30, 1997
(Management Compensatory Plan)
10.8 - 1994 Directors' Pension Arrangement - incorporated by
reference to Exhibit 10(iii)(A)-#10 to Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30,
1994 (Management Compensatory Plan)
10.9 - 1994 Executive Compensation Plan - incorporated by
reference to Exhibit A to Registrant's Proxy Statement
for its Annual Meeting of Stockholders held November 15,
1994 (Management Compensatory Plan)
10.10 - 2000 Key Employees' Stock Option Plan - incorporated by
reference to Exhibit 10.10 to Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30, 1999
(Management Compensatory Plan)
11 - Schedule of Calculation of Earnings Per Share
13 - Pages 18 - 32 of the 2000 Annual Report to Shareholders
(with the exception of the pages incorporated by reference
herein, the Annual Report is not a part of this filing)
21 - Subsidiaries of the Registrant
23 - Independent Auditors' Consent
27 - Financial Data Schedule
(b) None.
15
<PAGE>
INDEPENDENT AUDITORS' REPORT ON SCHEDULE
To the Board of Directors
and Shareholders of
Automatic Data Processing, Inc.
Roseland, New Jersey
We have audited the consolidated financial statements of Automatic Data
Processing, Inc. and subsidiaries as of June 30, 2000 and 1999, and for each of
the three years in the period ended June 30, 2000, and have issued our report
thereon dated August 14, 2000; such consolidated financial statements and report
are included in your 2000 Annual Report to Shareholders and are incorporated
herein by reference. Our audits also included the financial statement schedule
of Automatic Data Processing, Inc., listed in Item 14. This financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
/s/ Deloitte & Touche LLP
-------------------------
New York, New York
August 14, 2000
16
<PAGE>
AUTOMATIC DATA PROCESSING, INC.
AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
-------- -------- -------- -------- ---------
Additions
---------------------------
(1) (2)
Charged to
Balance at Charged to other Balance at
beginning costs and accounts- Deductions end of
of period expenses describe describe period
--------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended June 30, 2000:
Allowance for doubtful accounts:
Current $46,357 $ 25,020 $1,663 (B) $ (24,592) (A) $ 48,448
Long-term $16,556 $ 1,942 $ -- $ (1,552) (A) $ 16,946
Deferred Tax Valuation Allowance $22,496 $ -- $ (333)(C) $ -- $ 22,163
Year ended June 30, 1999:
Allowance for doubtful accounts:
Current $45,595 $ 17,551 $1,788 (B) $ (18,577) (A) $ 46,357
Long-term $14,431 $ 2,470 $ -- $ (345) (A) $ 16,556
Deferred Tax Valuation Allowance $22,639 $ -- $ (143)(C) $ -- $ 22,496
Year ended June 30, 1998:
Allowance for doubtful accounts:
Current $40,374 $ 17,677 $ 907 (B) $ (13,363) (A) $ 45,595
Long-term $20,370 $ 1,345 $ -- $ (7,284) (A) $ 14,431
Deferred Tax Valuation Allowance $22,776 $ -- $ (137)(C) $ -- $ 22,639
(A) Doubtful accounts written off, less recoveries on accounts previously written off.
(B) Acquired in purchase/pooling transactions.
(C) Related to foreign exchange fluctuation.
</TABLE>
17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AUTOMATIC DATA PROCESSING, INC.
(Registrant)
September 12, 2000 By: /s/ Arthur F. Weinbach
------------------------------------
Arthur F. Weinbach
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ------- ------
<S> <C> <C>
/s/ Arthur F. Weinbach Chairman, Chief Executive September 12, 2000
---------------------------------
(Arthur F. Weinbach) Officer and Director
(Principal Executive Officer)
/s/ Richard J. Haviland Chief Financial Officer September 12, 2000
---------------------------------
(Richard J. Haviland) (Principal Financial Officer)
/s/ Gary C. Butler Director September 12, 2000
---------------------------------
(Gary C. Butler)
/s/ Joseph A. Califano, Jr. Director September 12, 2000
---------------------------------
(Joseph A. Califano, Jr.)
/s/ Leon G. Cooperman Director September 12, 2000
---------------------------------
(Leon G. Cooperman)
/s/ George H. Heilmeier Director September 12, 2000
---------------------------------
(George H. Heilmeier)
/s/ Ann Dibble Jordan Director September 12, 2000
---------------------------------
(Ann Dibble Jordan)
18
<PAGE>
/s/ Harvey M. Krueger Director September 12, 2000
---------------------------------
(Harvey M. Krueger)
/s/ Frederic V. Malek Director September 12, 2000
---------------------------------
(Frederic V. Malek)
/s/ Henry Taub Director September 12, 2000
---------------------------------
(Henry Taub)
/s/ Laurence A. Tisch Director September 12, 2000
---------------------------------
(Laurence A. Tisch)
/s/ Josh S. Weston Director September 12, 2000
---------------------------------
(Josh S. Weston)
</TABLE>
19
