ADP Revises Forecast; Expects 41st Consecutive Year of Double Digit Earnings Per Share Gains.

Business Editors

ROSELAND, N.J.--(BUSINESS WIRE)--Oct. 4, 2001

Automatic Data Processing, Inc.'s (NYSE:ADP) unique record of 40 consecutive years of double digit earnings per share growth is expected to continue in our fiscal year ending June 30th, 2002 despite the weakened economy and reduction in interest rates, Arthur F. Weinbach, chairman and chief executive officer, said today.

"We remain shocked and saddened by the September 11th terrorist attacks. All of ADP's associates are accounted for and safe. We mourn those that were not so fortunate.

"We are proud of how, in the immediate aftermath of the attack, ADP associates continued to service our clients. The Brokerage Services' trade processing business was fully operational when major exchanges reopened the week following the tragedy. Our associates throughout ADP provided exceptional service, going well beyond what is normally expected.

"Economic conditions have deteriorated and interest rates have declined significantly since the tragic events of September 11th. In our Employer Services business we expect the weakened economy to negatively impact client retention, pays per control and, potentially, new business sales. As a result our overall ADP revenue expectations are now in the mid single digits. However, with our strong financial position, cost control initiatives and core operating strength, even in this environment we are projecting double digit earnings per share growth over FY'01 pro forma results of $1.59. Our previous forecast was for ADP revenue growth of high single digits and 13% to 15% earnings per share growth.

"The fundamental recurring revenue model in ADP's businesses is powerful and has served us well through many economic cycles. We are expecting revenue growth and margin improvements in each of our businesses. In Employer Services we expect revenue growth of high single digits and significant margin improvement based on previously discussed cost containment actions taken at the end of FY'01 and continued leveraging of our infrastructure.

"In Brokerage Services we are expecting revenue growth of about 10% despite the short term impact of four lost trading days in our back office processing business after the tragedy of September 11th. Our margins in Brokerage Services should improve as well, helped by FY'01 cost measures and the investments made in our back office processing infrastructure at the end of FY'00. We expect revenue growth in the low single digits in our Dealer and Claims Services businesses accompanied by margin improvements beginning in the first quarter.

"In the first quarter of fiscal year 2002 we invested over $430 million by acquiring about 9 million shares of ADP stock reflecting our financial strength and our confidence in the future," Mr. Weinbach concluded.

ADP, with over $7 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 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; 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; and the impact of new acquisitions. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.