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Letter to the Editor

ADP Reports Record Third Fiscal Quarter

ROSELAND, N.J. -- Automatic Data Processing, Inc. achieved record revenues and earnings in its third quarter of fiscal 2001, Arthur F. Weinbach, chairman and chief executive officer, has announced.

This represents ADP's 159th consecutive quarter of record highs in both revenues and earnings per share since becoming a public company in 1961.

Revenues approximated $1.9 billion in the quarter ended March 31, 2001, up ten percent from last year. In February, ADP announced a $45 million write-off ($27 million after tax) of its remaining investment in Bridge Information Systems, Inc. (An initial $45 million write-down of the Bridge investment had previously been recorded in the second quarter.) Pretax earnings increased 25 percent prior to this non-cash, non-operating write-down, and net earnings increased 16 percent 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 from non-taxable to taxable investments. Prior to the write-down diluted earnings per share increased 17 percent to $.49 from $.42 last year.

Commenting on the quarter, Mr. Weinbach said, "Earnings growth in the third quarter was strong, despite slower revenue growth. Overall revenue growth of ten percent was lower than previous quarters as a result of weaker economic conditions and lower interest rates."

Dealer Services revenue decreased two percent and Claims revenue growth was nine percent.

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