Automatic Data Processing Inc's Business Segments

Employer Services offers a comprehensive range of payroll processing, human resource ("HR") and benefit administration products and services, including traditional and Web-based outsourcing solutions, that help over 478,000 employers in the United States, Canada, Europe, South America (primarily Brazil), Australia and Asia staff, manage, pay and retain their employees. Employer Services markets these products and services through its direct marketing sales force and, on a limited basis, through indirect sales channels, such as marketing relationships with banks and accountants.

United States and Canada

Employer Services approach to the market is to match a clients needs with the product that will best meet expectations.'To facilitate this approach, in the United States and Canada, Employer Services is comprised of the following groups: Small Business Services ("SBS") (primarily companies with fewer than 50 employees); Major Accounts Services (primarily companies with between 50 and 999 employees); and National Account Services (primarily companies with 1,000 or more employees).

SBS processes payroll for smaller companies and provides them with leading solutions, including a range of value-added services that are specifically designed for small business clients.'Major Accounts Services and National Account Services offer a full suite of best-of-breed employer services solutions, including full database and other functional integration between payroll and HR, for clients ranging from mid-sized through many of the worlds largest corporations.'In fiscal 2004, ADP continued to integrate into National Account Services its fiscal 2003 acquisition of ProBusiness Services, Inc., a provider of comprehensive payroll, payroll tax filing and HR processing services to large companies in the United States.

In some cases, ADP provides system solutions for its clients entire payroll, human resource and benefits needs.'Through ADP Connection(R) (in the United States), and by using current product import capabilities (in Canada), ADP can enable its largest clients to interface their major enterprise resource planning applications with ADPs outsourced payroll services.'For those companies that choose to process these applications in-house, ADP currently delivers stand-alone services such as payroll tax filing, check printing and distribution and year-end tax statements (i.e., form W-2) in the United States.

In the United States and Canada, ADP provides payroll services that include the preparation of client employee paychecks and electronic direct deposits, along with supporting journals, summaries and management reports. In the United States, 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, and analogous services are provided in the Canadian market.

ADPs Tax and Financial Services business in the United States and its money movement business in Canada process and collect federal, state, provincial and local payroll taxes on behalf of, and from, ADP clients and remit such taxes to the appropriate taxing authorities.'ADPs Tax and Financial Services business in the United States and its money movement business in Canada are also responsible for the efficient movement of information and funds from clients to third parties through service offerings such as new hire reporting, ADPs TotalPay(R) payroll check (ADPCheck(TM)), full service direct deposit (FSDD) and, in conjunction with major bank partners, stored value payroll card (TotalPay(R) Card) products and the collection and payment of wage garnishments.
In the United States and Canada, these businesses support large, mid-sized and small clients and provide an electronic interface between approximately 379,000 ADP clients and about 2,000 federal, state, provincial and local tax agencies, from the Internal Revenue Service and Canada Revenue Agency, to local town governments.'

Outside the United States and Canada

The continued increase in the number of multi-national companies makes payroll and human resource management services a global opportunity.'In Europe, ADP is the leading provider of payroll (including full departmental outsourcing) and various HR benefit administration services.'Employer Services is present in eight countries in Europe: France, Germany, Italy, the Netherlands, Poland, Spain, Switzerland and the United Kingdom; it also offers services in Ireland (from the United Kingdom) and in Portugal (from Spain).

Brokerage Services

Brokerage Services provides transaction processing services, desktop productivity applications and investor communications services to the financial services industry worldwide.'ADPs products and services include:'(1) global order entry, trade processing and settlement systems that enable firms to trade virtually any financial instrument, in any market, at any time; (2) full-service investor communications services including: electronic delivery and Web solutions; workflow services; financial, offset, and on-demand printing; proxy distribution and vote processing; householding; regulatory mailings; fulfillment; and customized communications; (3) automated, browser-based desktop productivity tools for financial consultants and back office personnel; and (4) integrated delivery of multiple products and services through ADPs Global Processing Solution(SM).

Brokerage Services serves a large client base in the financial services industry, including: retail and institutional brokerage firms; global banks; mutual funds; annuity companies; institutional investors; specialty trading firms; clearing firms; and publicly owned corporations.'Brokerage Services provides securities transaction processing, printing and electronic distribution of shareholder communications and other services to clients in more than 16 countries in North America, Europe, Asia and Australia.'Brokerage Services also provides computerized proxy vote tabulation and shareholder communication, distribution and fulfillment services, including Web-enabled products and services.

Dealer Services

Dealer Services provides integrated dealer management computer systems (such a system is also known in the industry as a "DMS") and other business solutions to automotive, heavy truck, and powersports (i.e., motorcycle, marine and recreational) vehicle retailers and their manufacturers throughout North America and Europe.'More than 17,000 automotive, heavy truck and powersports dealers use ADPs DMS, networking solutions, data integration, consulting and/or marketing services.

Dealer Services offers its dealership clients a turnkey service package that includes computer hardware, hardware maintenance services, licensed software, software support, system design and network consulting services. Dealer Services also offers its clients Web-enabled business solutions, "front-end" dealership sales process and business development training services, consulting services, software products and customer relationship management solutions (CRM).' Clients use an ADP DMS to manage business activities such as accounting, inventory, factory communications, scheduling, vehicle financing, insurance, sales and service.'Dealer Services also designs, establishes and maintains communications networks for its dealership clients that allow interactive communications among multiple site locations (for larger dealers), as well as links between franchised dealers and their vehicle manufacturer franchisors.'These networks are used for activities such as new vehicle ordering and status inquiry, warranty submission and validation, parts and vehicle locating, dealership customer credit application submission and decisioning, vehicle repair estimation and acquisition of vehicle registration and lien holder information.'Dealer Services also offers an Application Service Provider (ASP) managed services solution to its dealership clients in which the clients outsource all information technology management, computing and network infrastructure, technology decisions and system support to Dealer Services.

Claims Services

Claims Services offers integrated business solutions for clients in the property and casualty insurance, auto collision repair and auto recycling industries.' These products help clients manage costs and improve efficiency and accelerate the claims review and settlement process.'These products and services include (1) claims management applications, such as automated collision repair estimating, total loss vehicle valuation, first notice of loss, dispatch and assignment, claims audit, claims payment and alternative parts locating, that streamline the end-to-end claims process, (2) body shop and auto recycler management systems and auto recycler alternative parts locating solutions, (3) other applications, databases and management information tools and services that enhance and optimize the claims process and (4) insurance broker risk management and insurance distribution services that help clients create, update and manage insurance policies.