2J      I5 Arial5! Arial5" Arial5# Arial5$ Arial5%  Arial5& Arial5' Arial5(  Arial !!""            !!!"!#!$!%&&&''(&)'*&+ ,&-'.' /%0' 1%2(3(4%5% 6(7(8(9%  @ @  @ @   @  @ @  @ @@   @   @  @  @  @  @   @   @   @   @   @   @   @   @   @   @   @  @  " @  $ @  & @  '@  ( @  * @ ,@ @  @-@ @  @. @  @/@ @  @ 0@ @@  2 @  3 @  4 @  5 @  6 @  7 @  9 @  ; @  < @  = @  > @  ? @  @ @  B @  C @  E @  F @  G @  I @  J @  L @  O @  P @  Q @  R @  S @  U @  V @  W @  X @  Y @  [ @  \ @  ^ @  ` @  a @  b @  c @  d @  e @  f @  g @  h @  i @  j @  l @  n @  o@  p @  s@ @  t@ @  u@@  v@ @ w @@@ @ x @@ @@ @ y @@  z @@   { @ |@ @  @ @ } @  ~ @     @  @   @  @ @ @  @   @  @   @   @   @  @ @  @ @ @  @   @  @   @  @ @ @  @   @  @   @   @  @   @  @ @  @ @ @  @   @  @   @  @ @ @  @   @  @   @   @   @  @ @  @ @ @  @ @  @ @  @  @ @  @ @@  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  @  q@' q@' q@'q0*)'Statements of Consolidated Earnings6'Automatic Data Processing, Inc. and Subsidiaries.'(In thousands, except per share amounts)'Years Ended June 30, ^2002 ^2001 ^2000+'Revenues other than interest on funds,' held for clients and PEO revenues"$ 6,305,206"$ 6,100,112"$ 5,609,962( 'Interest on funds held for clients "431,236 "518,956 "348,596 'PEO revenues(A) "267,821 "234,584 "209,874'Total revenues"7,004,263"6,853,652"6,168,432'Operating expenses"2,970,645"2,900,124"2,564,496)'General, administrative and selling' expenses"1,606,690"1,665,447"1,643,360/'Systems development and programming costs "474,843 "514,279 "460,275#'Depreciation and amortization "279,077 "320,856 "284,282'Other (income) expense"(113,962)"(72,064)"(73,581)"5,217,293"5,328,642"4,878,832"'Earnings before income taxes"1,786,970"1,525,010"1,289,600 'Provision for income taxes "686,200 "600,290 "448,800'Net earnings"$ 1,100,770"$ 924,720"$ 840,800 'Basic earnings per share "$ 1.78 "$ 1.47 "$ 1.34 "'Diluted earnings per share""$ 1.75""$ 1.44""$ 1.31$'Basic shares outstanding $"618,857 $"629,035 $"626,766 &'Diluted shares outstanding &"630,579 &"645,989 &"646,098\('(A) Net of pass-through costs of $2,648,321, $2,446,768, and $2,197,323, respectively.5*'See notes to consolidated financial statements.!,'Consolidated Balance Sheets6-'Automatic Data Processing, Inc. and Subsidiaries./'(In thousands, except per share amounts)0'June 30, 0^2002 0^2001 2'Assets3'Current assets:$4' Cash and cash equivalents4"$ 798,8104"$ 1,275,356+5' Short-term marketable securities 5"677,005 5"515,2456' Accounts receivable6"1,045,170 6"976,6387' Other current assets 7"296,272 7"316,2219' Total current assets9"2,817,2579"3,083,460%;'Long-term marketable securities;"1,273,768 ;"806,363<'Long-term receivables <"192,769 <"224,964$='Property, plant and equipment:>' Land and buildings >"458,478 >"457,110$?' Data processing equipment ?"696,829 ?"653,641*@' Furniture, leaseholds and other @"540,217 @"533,883B"1,695,524B"1,644,634(C' Less accumulated depreciationC"(1,099,073)C"(1,029,984) E"596,451 E"614,650F'Other assets F"293,808 F"219,133G'IntangiblesG"1,877,198G"1,601,4105I' Total assets before funds held for clientsI"7,051,251I"6,549,980J'Funds held for clientsJ"11,225,271J"11,339,110L' Total assetsL"$ 18,276,522L"$ 17,889,090*O'Liabilities and Shareholders' EquityP'Current liabilities:Q' Accounts payableQ"$ 148,694Q"$ 156,3249R' Accrued expenses and other current liabilitiesR"1,035,389R"1,032,273S' Income taxes S"227,019 S"147,676$U' Total current liabilitiesU"1,411,102U"1,336,273V'Long-term debt V"90,648 V"110,227W'Other liabilities W"233,671 W"208,880X'Deferred income taxes X"237,633 X"207,928Y'Deferred revenue Y"138,893 Y"85,931<[' Total liabilities before client funds obligations["2,111,947["1,949,239\'Client funds obligations\"11,050,370\"11,238,854^' Total liabilities^"13,162,317^"13,188,093`'Shareholders' equity:,a' Preferred stock, $1.00 par value:4b' Authorized, 300 shares; issued, noneb"--b"--(c' Common stock, $.10 par value:5d' Authorized, 1,000,000 shares; issued,8e' 638,702 shares at June 30, 2002 and 2001 e"63,870 e"63,870$f'Capital in excess of par value f"333,371 f"553,927g'Retained earningsg"5,977,318g"5,153,4088h'Treasury stock - at cost 22,385 and 14,766 shares,i' respectivelyi"(1,142,041)i"(837,244)3j'Accumulated other comprehensive income (loss)j"(118,313)j"(232,964)%l' Total shareholders' equityl"5,114,205l"4,700,9970n'Total liabilities and shareholders' equityn"$ 18,276,522n"$ 17,889,0905p'See notes to consolidated financial statements.5s'Statements of Consolidated Shareholders' Equity6t'Automatic Data Processing, Inc. and Subsidiaries.v'(In thousands, except per share amounts)w^Accumulatedx^Common Stockx^Common Stockx^Capital in x^Othery^---------y^----------y^Excess ofy^Retainedy^Treasuryy^Comprehensivey^Comprehensive z^Shares z^Amountz^Par Valuez^Earnings z^Stock z^Income z^Income|'Balance at June 30, 1999 |"628,576 |"62,858 |"421,333|"3,848,421|"(189,204)|"(135,467)}'Net earnings}"--}"--}"-- }"840,800}"--}"$ 840,800}"--~'Currency translation~"(86,277)~"(86,277)'Unrealized net loss on' securities "(7,690) "(7,690)'Comprehensive income"$ 746,833'Employee stock plans and' related tax benefits "2,867 "286 "(7,841) "498 "207,322'Treasury stock acquired' (4,648 shares)"--"--"--"--"(201,007)'Acquisitions (478 shares)"--"-- "4,359"-- "20,122#'Debt conversion (808 shares)  " --"--"(15,084)"-- "31,967#'Dividends ($.3388 per share)  " --"--"--"(212,578)'Balance at June 30, 2000 "631,443 "63,144 "402,767"4,477,141"(130,800)"(229,434)'Net earnings"--"--"-- "924,720"--"$ 924,720"--'Currency translation"(80,816)"(80,816)'Unrealized net gain on' securities "77,286 "77,286'Comprehensive income"$ 921,190'Employee stock plans#' and related tax benefits "6,878 "688 "163,464"-- "187,058'Treasury stock acquired' (16,558 shares)"--"--"--"--"(935,064)'Acquisitions (22 shares)"--"-- "234"-- "839'Debt conversion (1,303' shares) "381"38"(12,538)"-- "40,723!'Dividends ($.395 per share)" --"--"--"(248,453)"--'Balance at June 30, 2001 "638,702 "63,870 "553,927"5,153,408"(837,244)"(232,964)'Net earnings"--"--"--"1,100,770"--"$ 1,100,770"--'Currency translation "73,504 "73,504'Unrealized net gain on' securities "41,147 "41,147'Comprehensive income"$ 1,215,421'Employee stock plans#' and related tax benefits"--"--"(197,083)"-- "515,729'Treasury stock acquired' (17,412 shares)"--"--"--"--"(875,449)'Acquisitions (226 shares)"--"-- "(423)"-- "12,848"'Debt conversion (705 shares) " --"--"(23,050)"-- "42,075#'Dividends ($.4475 per share)  " --"--"--"(276,860)"--'Balance at June 30, 2002 "638,702 "$63,870"$333,371"$5,977,318"$(1,142,041)"$(118,313)5'See notes to consolidated financial statements.+'Statements of Consolidated Cash Flows6'Automatic Data Processing, Inc. and Subsidiaries'(In thousands)'Years ended June 30, ^2002 ^2001 ^2000*'CASH FLOWS FROM OPERATING ACTIVITIES'Net earnings"$1,100,770"$ 924,720"$ 840,800+'Adjustments to reconcile net earnings(' to net cash flows provided by%' operating activities:-' Depreciation and amortization "279,077 "320,856 "284,2821' Write-off of investment in Bridge"-- "90,000"--%' Deferred income taxes "8,680 "29,450 "8,8851' Increase in receivables and other' assets"(73,511)"(70,699)"(149,913)3' Increase in accounts payable and accrued' expenses "138,141 "182,634 "39,339' Other "78,547 "14,063 "46,7089' Net cash flows provided by operating$' activities"1,531,704"1,491,024"1,070,101*'CASH FLOWS FROM INVESTING ACTIVITIES('Purchases of marketable securities"(4,597,320)"(3,973,434)"(7,372,892)1'Proceeds from sale of marketable securities"4,167,028"3,087,406"4,001,848+'Net change in client fund obligations"(188,484) "818,082"3,406,039'Capital expenditures"(145,621)"(185,406)"(166,012)'Additions to intangibles"(109,799)"(97,448)"(67,303)-'Acquisitions of businesses, net of cash' acquired"(219,783)"(73,667)"(175,248)'Disposals of businesses "7,200 "900 "14,634 'Other "6,286"(32,267)"(11,664)5' Net cash flows used in investing$' activities"(1,080,493)"(455,834)"(370,598)*'CASH FLOWS FROM FINANCING ACTIVITIES'Payments of debt "(3,919)"(48,567)"(106,090)%'Proceeds from issuance of notes "358 "26,435 "13,940!'Repurchases of common stock"(875,449)"(935,064)"(201,007),'Proceeds from issuance of common stock "228,113 "218,178 "172,589'Dividends paid"(276,860)"(248,453)"(212,578)5' Net cash flows used in financing$' activities"(927,757)"(987,471)"(333,146)-'Net change in cash and cash equivalents"(476,546) "47,719 "366,357-'Cash and cash equivalents, at beginning' of period"1,275,356"1,227,637 "861,280*'Cash and cash equivalents, at end of' period"$ 798,810"$ 1,275,356"$ 1,227,6375'See notes to consolidated financial statements. 6Sheet1 6Sheet2 6Sheet3d_ Arial  O4!*d"""dFM3FM3 PropertyWK3WK3 Property  I ]G I I]GH HCMHdrI