ADP Reports Record Third Fiscal Quarter; EPS Increases by 17%.

Business Editors

ROSELAND, N.J.--(BUSINESS WIRE)--April 18, 2000

Automatic Data Processing, Inc. (NYSE:AUD) achieved record revenues and earnings in its third quarter of fiscal 2000, Arthur F. Weinbach, chairman and chief executive officer, announced today.

This represents ADP's 155th consecutive quarter of record highs in both revenues and earnings per share since becoming a public company in 1961.

Revenues grew 14% to $1.7 billion in the quarter ended March 31, 2000. Pretax earnings increased 23%, excluding the impact of several prior year, non-recurring transactions. Net earnings increased 20% on a higher effective tax rate caused by a change in investment mix to more taxable vs. non-taxable investments; and diluted earnings per share, on increased shares outstanding, increased 17 % to $.42 from $.36 last year.

Commenting on the quarter, Mr. Weinbach said, "The highlight of the strong third quarter continues to be high Brokerage trade volumes, resulting in 40% Brokerage revenue growth in the quarter. Employer Services (ES) revenue growth was 9%, impacted by prior year dispositions and slower new business sales in November and December resulting from Y2K related decision deferrals. ES sales rebounded during the third quarter. Revenue growth in Claims Services was 20%, aided by strong growth in our medical claims review business. Dealer Services revenue for the quarter was roughly flat with the previous year due to the impact of prior dispositions, slower international installations and lower consulting revenues. Margins in the quarter increased primarily from the impact of prior year dispositions and increased operating efficiencies in each of our core businesses. We also benefited from increasing interest rates.

"We are pleased with both our results and our outlook. Our strong operating results have enabled us to accelerate over $45 million of investments that were not originally planned in our fiscal 2000 expense forecast to benefit future years. These investments are primarily new business and Internet related. We are comfortable that we will exceed our forecast of revenue growth for the full year of about 10% and that we will meet or exceed our forecast of EPS growth of 15% above the $1.13 reported prior to non-recurring items in fiscal 1999," Mr. Weinbach concluded.

ADP, with over $5 billion in revenues and over 450,000 clients, is one of the largest independent computing services firms in the world.

    Below is a summary of unaudited comparative results.


                                           Three Months Ended
                                                March 31,
                                  ------------------------------------
                                        2000                 1999

                                 (000's omitted except per share data)

Revenues (R)                        $ 1,719,730        $ 1,514,132
Earnings before income taxes (R)    $   415,450        $   351,600(A)
Provision for income taxes          $   144,140        $   125,950(A)
                                    ------------         ----------
Net earnings (R)                    $   271,310        $   225,650
Average shares outstanding              629,144            617,364
Basic earnings per share (R)               $.43               $.37


Diluted net earnings (R)            $   272,028        $   226,497
Diluted shares outstanding              647,759            637,102
Diluted earnings per share (R)             $.42               $.36

Revenues by business unit (C)
  Employer Services                 $ 1,036,000        $   953,000
  Brokerage Services                $   402,000        $   287,000
  Dealer Services                   $   184,000        $   183,000

Pre-tax earnings by business unit (C)
  Employer Services                 $   295,000        $   271,000
  Brokerage Services                $    99,000        $    58,000
  Dealer Services                   $    29,000        $    30,000




                                             Nine Months Ended

                                                 March 31,
                                           ---------------------

                                           2000              1999


                                 (000's omitted except per share data)


Revenues (R)                           $ 4,563,311     $ 4,069,454
Earnings before income taxes (R)       $   940,840     $ 791,817(A)(B)
Provision for income taxes             $   323,830     $ 286,766(A)(B)
                                      ------------      ------------

Net earnings (R)                       $   617,010     $ 505,051(B)
Average shares outstanding                 626,401       613,927
Basic earnings per share (R)                  $.99          $.82(B)



Diluted net earnings (R)               $   619,218     $ 507,896
Diluted shares outstanding                 645,307       635,130
Diluted earnings per share (R)                $.96          $.80(B)



Revenues by business unit (C)

  Employer Services                    $ 2,718,000   $ 2,467,000
  Brokerage Services                   $   974,000   $   758,000
  Dealer Services                      $   562,000   $   545,000


Pre-tax earnings by business unit (C)

  Employer Services                    $   623,000   $   527,000
  Brokerage Services                   $   216,000   $   125,000
  Dealer Services                      $    91,000   $    83,000



(A)    In the quarter ended March 31, 1999 the Company sold its
       Peachtree Software business and decided to exit several other
       businesses and contracts. The combination of these transactions
       and certain other non-recurring charges resulted in
       approximately $15 million of pretax income and a $15 million
       provision for income taxes in the quarter.

(B)    The quarter ended December 31, 1998 includes a pretax gain of
       approximately $22 million, a provision for income taxes of
       approximately $25 million, and a net loss of approximately $3
       million resulting from the sale of the Brokerage Services
       "front office" market data business. The quarter ended December
       31, 1998 also includes approximately $21 million of transaction
       costs and other non-recurring adjustments ($14 million after
       tax) recorded by Vincam prior to the March 1999 pooling
       transaction.

(C)    Prior year results were restated using the FY '00 budgeted
       foreign exchange rates.

(R)    Record high

This release contains "forward-looking statements" based on management's expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ from those expressed. Factors that could cause differences include: ADP's success in obtaining, retaining and selling additional services to clients; the pricing of products and services; 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; and the impact of new acquisitions.