ADP Reports Record Second Fiscal Quarter; EPS Increases by 16% Prior to Non-Cash Write-Off.

Business Editors

ROSELAND, N.J.--(BUSINESS WIRE)--Jan. 17, 2001

Automatic Data Processing, Inc. (NYSE:ADP) achieved record revenues and earnings in its second quarter of fiscal 2001, Arthur F. Weinbach, chairman and chief executive officer, announced today. This represents ADP's 158th consecutive quarter of record highs in both revenues and earnings per share since becoming a public company in 1961.

Revenues approximated $1.7 billion in the quarter ended December 31, 2000, up 13% from last year. Yesterday, ADP announced a $45 million write-down ($27 million after tax) of its $90 million investment in Bridge Information Systems, Inc. Prior to this non-cash, non-operating write-down, pretax earnings increased 28%, and net earnings increased 18 % on a higher effective tax rate. Both the pretax earnings growth and the increased tax rate have been impacted by the previously discussed change in investment mix to taxable vs. non-taxable investments. Prior to the write-down, diluted earnings per share -- on a larger number of shares outstanding -- increased 16% to $.36 from $.31 last year.

Commenting on the quarter, Mr. Weinbach said, "We had a very positive second quarter. Highlights of the quarter included revenue growth of 14%, very good client retention and internal revenue growth, and improved margins in Employer Services. Brokerage revenue growth was 18%, aided by the recent Cunningham Graphics acquisition. In last year's second quarter, our Brokerage Investor Communications business had $35 million of revenue from a single large company mailing. Brokerage revenue growth would have been 33% without this large prior year transaction. Dealer Services revenue decreased 9% as a result of stronger Y2K influenced results last year. Claims revenue growth was 6%.

"As we noted in yesterday's release, while the ultimate realization of our remaining $45 million investment in Bridge cannot be determined based on the facts available at this time, we will keep you informed as we continue to reassess the possibility of a further write-down.

"Fiscal 2001 is off to a good start and we are pleased with our results and outlook. Prior to considering the non-cash charge to write-down the Bridge investment, we remain comfortable with our previous forecast of 13% to 15% revenue growth and 16% to 18% EPS growth for the full year," Mr. Weinbach concluded.

Below is a summary of unaudited comparative results.

                       Three Months Ended        Six Months Ended
                          December 31,             December 31,
                       2000          1999        2000        1999
                       (B)                       (B)
                           (000's omitted except per share data)

Revenues (R)      $1,683,639     $1,492,486   $3,270,162    $2,843,581
Earnings before
 income taxes (R)   $342,900       $303,200     $629,510      $525,390
Provision for income
 taxes              $135,460       $103,700     $248,670      $179,690
Net earnings (R)    $207,440       $199,500     $380,840      $345,700
Average shares
 outstanding         632,082        625,665      631,035       625,031
Basic earnings per
 share (R)              $.33           $.32         $.60          $.55

Diluted net
 earnings (R)       $208,075       $200,237     $382,154      $347,190
Diluted shares
 outstanding         651,807        645,658      650,407       644,253
Diluted earnings per
 share (R)              $.32           $.31         $.59          $.54


Revenues by business unit (A)
                   $  1,896,000
 Employer Services  $984,000       $863,000   $1,896,000    $1,663,000
 Brokerage Services $370,000       $314,000     $732,000      $571,000
 Dealer Services    $171,000       $188,000     $338,000      $372,000

Pre-tax earnings by business unit (A)
                   $    401,000
 Employer Services  $225,000       $181,000     $401,000      $329,000
 Brokerage Services  $62,000        $63,000     $126,000      $117,000
 Dealer Services     $27,000        $31,000      $48,000       $61,000


(A) Prior years results were restated using FY 01 budgeted foreign
    exchange rates.

(B) The quarter ended December 31, 2000 includes a $45 million
    write down ($27 million after tax) of the companys investment in
    Bridge Information Systems, Inc.

(R) Record high

      An analyst conference call to review the first quarter results
will be held at 3:30 PM on January 17 th. A live audio webcast of the
call will be available to the public on a listen-only basis. To listen
to the webcast go to www.adp.com and click on the Web Conferencing
icon.

      ADP, with over $6 billion in revenues and 500,000 clients, is one
of the largest independent computing services firms in the world.

      This release contains forward-looking statements based on
managements expectations and assumptions and are subject to risks and
uncertainties that may cause actual results to differ from those
expressed. Factors that could cause differences include: ADPs success
in obtaining, retaining and selling additional services to clients;
the pricing of products and services; changes in laws regulating
payroll taxes and employee benefits; overall economic trends,
including interest rate and foreign currency trends; stock market
activity; auto sales and related industry changes; employment levels;
changes in technology; availability of skilled technical associates;
the impact of new acquisitions, and the ultimate realization of ADPs
investment in Bridge Information Systems, Inc. ADP disclaims any
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise.