Skip to content
AnalystLens

AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Jun 30, 2000

Filing Date
Filed September 12, 2000
Period End
June 30, 2000
Security
ADP
In the record · 2016–202610-K1110-Q328-K103

ADP filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 103 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Sep ’16Sep ’16
  2. Leadership change8-K · May ’19May ’19
  3. Material agreement8-K · Jun ’21Jun ’21
  4. FY2025 annual report10-K · Aug ’25Aug ’25

01—Abstract

Summary

Summary of the 10-K filed September 12, 2000. Cited figures are marked; the original filing is the authoritative source.

Automatic Data Processing (ADP) reported fiscal 2000 (year ended June 30, 2000) as a record year, with total revenues up 13% to $6.29 billiona and net earnings rising 21% to $840.8 million.

Diluted EPS reached $1.31b, up 19% from $1.10 in fiscal 1999 (the prior year was burdened by about $0.03 of non-recurring charges). Pre-tax margin expanded to 20.5% from 19.3% (pre-charges), and management attributed the gains to market penetration, expanded products, higher transaction volumes, and operating efficiencies. Fiscal 2000 marked the company's 39th consecutive year of double-digit EPS growth since going public in 1961.

Segment performance was led by Brokerage Services, where revenues rose 29% to $1.48 billionc and operating margin improved to 23%, aided by record trade volumes and ADP's position as a major processor of online trades. Employer Services, the largest unit at $3.62 billion in revenue (up 11%), saw its operating margin rise to 21.4%. Dealer Services was roughly flat at $736 million.

The company also absorbed a roughly $32 milliond pre-tax loss from selling about $2.6 billion of tax-exempt investments to shift into taxable instruments, a move expected to lift future returns but also raise the effective tax rate (34.8% in fiscal 2000). The balance sheet remains very strong, with about $2.5 billion in cash and marketable securities, shareholders' equity of $4.58 billion, and long-term debt of only $132 million (roughly 3% of equity). Operating cash flow was $1.07 billion.

Management guided to fiscal 2001 revenue growth of 13% to 15% and diluted EPS growth of 16% to 18%. Investors should note that total assets of $16.85 billion are dominated by client funds held in trust, which is an operating feature of ADP's payroll tax services rather than corporate leverage.

02—Key points

Key Highlights

  1. Record fiscal 2000 results: revenues up 13% to $6.29 billion; net earnings up 21% (pre-charge basis) to $840.8 million; diluted EPS $1.31 vs. $1.10 in fiscal 1999.
  2. Brokerage Services was the standout segment, with revenue up 29% to $1.48 billion and operating margin of 23% (vs. 19% in fiscal 1999), driven by 1.2 million daily trades and over 25% of North American online trades processed.
  3. Employer Services remained the core business at $3.62 billion in revenue (up 11%), with an operating margin of 21.4%; the segment serves about 450,000 employers across North America, Europe, and Latin America.
  4. Fortress balance sheet: about $2.5 billion in cash and marketable securities, $4.58 billion in shareholders' equity, and long-term debt of just $132 million (about 3% of equity).
  5. Management guidance for fiscal 2001 calls for revenue growth of 13% to 15% and diluted EPS growth of 16% to 18%, with capital spending of roughly $225 million.
  6. Return on equity held near 20% (19.7%), and the company continued repurchasing shares (4.6 million shares at about $43 each) and paying a higher dividend ($0.33875 per share, up from $0.295).
  7. Effective tax rate rose to 34.8% as tax-exempt holdings were shifted to taxable investments, a ~$32 million pre-tax loss on the sale; management says this reinvestment will benefit future periods but expects the tax rate to keep rising in fiscal 2001.

03—Questions

Frequently Asked Questions

  1. How did ADP perform financially in fiscal 2000?

    ADP delivered record revenue of $6.29 billion (up 13%) and net earnings of $840.8 million, with diluted EPS of $1.31 versus $1.10 a year earlier. Pre-tax margin improved to 20.5%, and the company extended its streak to 39 consecutive years of double-digit EPS growth.

  2. Which business segment drove the most growth?

    Brokerage Services grew fastest, with revenue up 29% to $1.48 billion and operating margin rising to 23%, helped by record trade volumes and new online brokerage clients. Employer Services, the largest segment, grew 11% to $3.62 billion, while Dealer Services was roughly flat at $736 million.

  3. Is ADP's debt level a concern for investors?

    Not based on this filing. Long-term debt was only $132 million at June 30, 2000, about 3% of shareholders' equity, and the company held roughly $2.5 billion in cash and marketable securities. Total assets of $16.85 billion mostly reflect client funds held for tax and payroll remittance, which are offset by an equal client-fund obligation.

  4. What are the main risks or one-time items affecting results?

    The company sold about $2.6 billion of tax-exempt investments at a pre-tax loss of about $32 million to reposition its portfolio, which depressed fiscal 2000 results. Rising tax rates (34.8% in fiscal 2000 vs. 31.7% in fiscal 1998) are expected to continue. Fiscal 1999 also included non-recurring charges of about $0.03 per share. Interest-rate exposure is significant, as half the investment portfolio reprices overnight.

  5. What is management's outlook for fiscal 2001?

    Management projects another record year, with revenue growth of about 13% to 15% and diluted EPS growth of 16% to 18% over fiscal 2000. Capital expenditures are expected to be about $225 million, and operating cash flow is expected to remain strong, though the higher effective tax rate will weigh on earnings growth.

04—Continue

← View all 10-K filings