What were ADP's main business segments in fiscal year 2002?

In fiscal year 2002, ADP's main business segments were Employer Services, Brokerage Services, Dealer Services, and Claims Services. Employer Services was the largest, providing payroll, HR, and benefits administration. Brokerage Services focused on transaction processing and investor communications for financial firms. Dealer Services offered management systems for auto and truck dealers, and Claims Services provided automated tools for the insurance industry.

How did economic conditions affect ADP's performance in fiscal 2002?

The weak economic conditions in fiscal 2002 had a mixed impact. Employer Services saw slower sales and lower client retention due to bankruptcies and fewer employees on client payrolls. Brokerage Services experienced reduced discretionary spending and a lower revenue per trade due to industry weakness and a shift in transaction mix. Declining interest rates also impacted interest earnings on client funds.

What significant acquisitions did ADP make in fiscal 2002?

In fiscal 2002, ADP made several strategic acquisitions. These included Avert, Inc., a provider of pre-employment screening services, to enhance its Employer Services offerings. For Dealer Services, ADP acquired Digital Motorworks Holdings, Inc. (DMI) to improve data extraction and standardization capabilities. Additionally, the acquisition of the output services business from IBM Global Services strengthened Brokerage Services' distributive printing capabilities, and the Argus Group acquisition enhanced investor delivery and fulfillment services.

What is ADP's approach to technology and product development?

ADP invests significantly in systems development and programming, with $475 million allocated in fiscal 2002. The company focuses on upgrading and expanding existing products, as well as developing new internet-enabled solutions across its service lines. Examples include internet-based payroll solutions for various client sizes and employee self-service capabilities for HR and benefits administration.

ADP 10-K FY2002 Annual Report — Revenue, Net Income, EPS

Summary

Automatic Data Processing, Inc. (ADP) reported its fiscal year ending June 30, 2002, showcasing a diversified business model with significant operations in Employer Services, Brokerage Services, Dealer Services, and Claims Services. The company emphasizes its role as a leading global provider of transaction processing and information services, serving a broad range of clients from small businesses to large corporations across various industries. ADP's Employer Services segment, the largest contributor, offers comprehensive payroll, HR, benefits administration, and tax filing solutions, experiencing growth in areas like retirement services and COBRA administration. The Brokerage Services division provides critical transaction processing and investor communication services to financial firms, with notable expansion in electronic delivery of investor communications and ISO 9001:2000 certification. The company also highlights its strategic acquisitions, such as Avert, Inc. for pre-employment screening and Digital Motorworks Holdings, Inc. (DMI) for dealer data solutions, demonstrating a commitment to inorganic growth and expanding its service capabilities. Despite a challenging economic environment impacting some segments, ADP maintained strong client retention across its services.

Key Highlights

1ADP operates a diversified business model with significant segments including Employer Services, Brokerage Services, Dealer Services, and Claims Services.

2Employer Services is the largest segment, offering a comprehensive suite of payroll, HR, benefits administration, and tax filing solutions to approximately 450,000 employers.

3Brokerage Services processes a significant volume of U.S. and Canadian securities transactions and provides investor communication services, noting a 172% increase in internet-delivered investor communications.

4The company made strategic acquisitions in fiscal 2002, including Avert, Inc. for pre-employment screening and Digital Motorworks Holdings, Inc. (DMI) to enhance its Dealer Services offerings.

5ADP demonstrated strong client retention, with an average of over 8 years in Employer Services and 10+ years in Brokerage and Dealer Services.

6The company invested heavily in systems development and programming, totaling $475 million in fiscal 2002, to enhance existing products and develop new ones, including internet-enabled solutions.

AUTOMATIC DATA PROCESSING INC Annual Report, Year Ended Sep 16, 2002

Summary

Key Highlights

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