ADP Reports First Quarter Fiscal 2013 Results; Confirms Fiscal 2013 Guidance

ADP Reports First Quarter Fiscal 2013 Results; Confirms Fiscal 2013 Guidance

      Revenues Rise 5%, 3% Organic; EPS From Continuing Operations up 2%

                  Anticipates Revenue Growth of 5% to 7% and

     EPS Growth of 5% to 7%, Compared With Adjusted $2.72 in Fiscal 2012

ROSELAND, N.J., Nov. 1, 2012 (GLOBE NEWSWIRE) -- Automatic Data Processing,
Inc. (Nasdaq:ADP) reported revenue growth of 5%, 3% organic, to $2.6 billion
for the first fiscal quarter ended September 30, 2012, Carlos A. Rodriguez,
president and chief executive officer, announced today. Pretax earnings
increased 2%, pretax margin declined 50 basis points, and net earnings
increased 1% on a higher effective tax rate compared with a year ago. Diluted
earnings per share from continuing operations of $0.62 increased 2% from $0.61
a year ago on fewer shares outstanding. Through October 26, 2012 ADP acquired
3.7 million shares of its stock for treasury at a cost of $215 million. Cash
and marketable securities were $1.7 billion at September 30, 2012.

First Quarter Discussion

Commenting on the results, Mr. Rodriguez said, "ADP's first quarter results
were in-line with our expectations. Each of our business segments performed
very well driving solid revenue growth and pretax margin expansion excluding
acquisitions. I am particularly pleased with the 15% worldwide new business
sales growth in Employer Services and PEO Services where strong sales
execution and gains in productivity continued. We also saw continued strength
in growth in the number of employees on our clients' payrolls, and client
revenue retention is solid, even though down from a year ago.

"Previously communicated challenges and tough comparisons we faced heading
into the quarter affected the company's results, including:

  *Unfavorable foreign exchange rates negatively impacted revenue growth 2%
    with minimal impact on earnings.
  *The decline in high-margin interest revenues due to the lower average
    yield on client funds balances negatively impacted revenue growth 1%,
    partially offset by growth in average client funds balances. The client
    funds extended investment strategy, which is primarily driven by interest
    on client funds, negatively impacted pretax earnings growth 4%, pretax
    margin 100 basis points, and diluted earnings per share from continuing
    operations $0.03, or 5%.
  *Foregone revenues and earnings related to the fiscal 2012 second quarter
    sale of assets and the expiration of certain employment tax credits within
    our Tax Credit Services business negatively impacted revenue growth 1%,
    pretax earnings growth 4%, pretax margin 50 basis points, and diluted
    earnings per share $0.02, or 3%.
  *Fiscal 2012 acquisitions contributed 2% to total revenue growth and
    negatively impacted pretax margins 40 basis points with minimal impact on
    earnings.

Employer Services

"Employer Services' revenues grew 6% for the first quarter, 5% organically,
compared to last year's first quarter.The number of employees on our clients'
payrolls in the United States increased 3.3% for the quarter as measured on a
same-store-sales basis for our clients on our AutoPay platform.As
anticipated, worldwide client retention declined 0.4 percentage points
compared with a year ago.Also as anticipated, Employer Services' pretax
margin decreased 60 basis points for the quarter as increased operating scale
was offset by a 90 basis point drag from fiscal 2012 acquisitions.

PEO Services

"PEO Services' revenues increased 13% for the first quarter, all organic,
compared to last year's first quarter. PEO Services' pretax margin increased
110 basis points for the quarter due to slower growth in pass-through revenues
and an easier year-over-year comparison.Average worksite employees paid by
PEO Services increased 11% for the quarter to approximately 269,000.

Dealer Services

"Dealer Services' revenues grew 9% for the first quarter, 7% organically,
compared to last year's first quarter.Dealer Services' pretax margin improved
150 basis points for the quarter benefiting from increased operating scale.

Interest on Funds Held for Clients

"The safety, liquidity, and diversification of our clients' funds are the
foremost objectives of our investment strategy. Client funds are invested in
accordance with ADP's prudent and conservative investment guidelines and the
credit quality of the investment portfolio is predominantly AAA/AA.

"For the first quarter, interest on funds held for clients declined $15.1
million, or 12%, from $121.9 million a year ago to $106.8 million, due to a
decline of about 60 basis points in the average interest yield to 2.7%,
partially offset by an increase of 6% in average client funds balances from
$15.2 billion to $16.1 billion.

Discontinued Operations

"This release has been adjusted to exclude the discontinued operations of a
business ADP intends to sell that generated $50 million in revenues and
approximately $0.02 of earnings per share in fiscal 2012.The results of
operations for this business are reported within discontinued operations in
the fiscal 2013 and 2012 results within this release.

Fiscal 2013 Forecast

"Our fiscal 2013 forecasts assume no changes in the current economic
environment.However, there is concern in the U.S. surrounding the fiscal
cliff, and we continue to anticipate a difficult European economy. We
continue to expect a lower average yield on the client funds portfolio due to
continued low market interest rates, and tough year-over-year comparisons from
certain fiscal 2012 items as noted below. Our forecasts exclude the results of
discontinued operations. It is important to note that despite the impact of
discontinued operations, we have maintained our fiscal 2013 forecasts for
total revenues and earnings per share growth.

  *Total revenues – we continue to anticipate 5% to 7% growth.This forecast
    includes:
    -- An anticipated revenue headwind of about one percentage point from
    unfavorable foreign exchange rates for the year, with about half a
    percentage point negative impact in the second quarter;
    -- An anticipated $70 to $75 million decline in interest on client funds
    resulting in one percentage point of negative impact on revenues from the
    expected lower average yield, with about one percentage point negative
    impact in each of the second through fourthquarters, partially offset by
    anticipated growth in balances;
    -- The year-over-year comparison from the fiscal 2012 second quarter sale
    of assets and the expiration of certain employment tax credits within our
    Tax Credit Services business are expected to negatively impact revenues
    about half a percentage point for the full year, with about one percentage
    point negative impact in the second quarter.
    
  *We anticipate driving good pretax margins in the business segments,
    although we continue to anticipate a decline in total ADP pretax margin of
    about 30 basis points due to:
    -- An anticipated drag of about 100 basis points for the year related to
    the client funds extended investment strategy which is primarily driven by
    interest on client funds.The negative impact by quarter is anticipated to
    be about 100 basis points in both the second and third quarters and about
    120 basis points in the fourth quarter;
    -- An expected drag from fiscal 2012 acquisitions of about 20 basis
    points for the year, with a drag of 20 basis points in both the second and
    third quarters; and
    -- The year-over-year comparison from the fiscal 2012 second quarter sale
    of assets and the expiration of certain employment tax credits within our
    Tax Credit Services business are expected to negatively impact pretax
    margin about 20 basis points for the full year, with about 30 basis points
    negative impact in the second quarter.
    
  *We continue to anticipate an increase of 5% to 7% in diluted earnings per
    share from continuing operations compared to $2.72 from continuing
    operations in fiscal 2012, which excludes the gain from the sale of assets
    in the second quarter of fiscal 2012.Fiscal 2012 and our fiscal 2013
    forecasted diluted earnings per share from continuing operations have been
    reduced by $0.02 and $0.03, respectively, as a result of discontinued
    operations.This forecast includes:
    -- An anticipated drag of about $0.11 in earnings per share due to the
    anticipated decline in earnings related to the client funds extended
    investment strategy which is primarily driven by interest on client
    funds.We anticipate a decline of about $0.03 per share in each of the
    second through fourth quarters;
    -- An expected decline of about $0.04 in earnings per share related to
    the fiscal 2012 second quarter sale of assets and the expiration of
    certain employment tax credits within our Tax Credit Services business.We
    anticipate a decline of nearly $0.02 per share in the second quarter.
    -- An expected minimal impact on earnings per share from foreign exchange
    rates and fiscal 2012 acquisitions.
    
  *The impacts noted above from the expected drag from fiscal 2012
    acquisitions as well as the negative year-over-year comparisons from the
    fiscal 2012 second quarter sale of assets and the expiration of certain
    employment tax credits within our Tax Credit Services business are
    reflected in the segment forecasts provided below.
    -- Employer Services – revenue growth of 6% to 7% with pretax margin
    expansion of at least 50 basis points
     -- Pays per control – up 2.0% to 3.0% for the year
    -- PEO Services – revenue growth of 13% to 14% with flat to slight pretax
    margin expansion
    -- Employer Services and PEO Services new business sales – 8% to 10%
    growth compared to over $1.2 billion sold in fiscal 2012
    -- Dealer Services – revenue growth of 7% to 9%, with pretax margin
    expansion of about 100 basis points

"The interest assumptions in our forecasts are based on Fed Funds futures
contracts and forward yield curves as of October 26, 2012. The Fed Funds
futures contracts used in the client short and corporate cash interest income
forecasts do not anticipate any changes during the fiscal year in the Fed
Funds target rate.The three-and-a-half and five-year U.S. government agency
rates based on the forward yield curves as of October 26, 2012 were used to
forecast new purchase rates for the client extended, corporate extended, and
client long portfolios, respectively.

  *Interest on funds held for clients is expected to decline $70 to $75
    million, or 14% to 15%, from $493.3 million in fiscal 2012 to $420 to $425
    million.This forecast is based on a decline of 50 to 60 basis points in
    the expected average interest yield to 2.2% to 2.3%, partially offset by
    5% to 7% anticipated growth in average client funds balances to $18.8 to
    $19.1 billion.
  *Interest income on corporate funds is expected to decline approximately
    $20 million from $85.2 million in fiscal 2012.Included in interest income
    on corporate funds is interest income related to the extended investment
    strategy which is expected to decline about $10 million to approximately
    $55 million.
  *In combination, we expect the total impact related to the client funds
    extended investment strategy to be a decline of $80 to $85 million from
    $556 million in fiscal 2012.Our prior forecast anticipated a decline of
    $75 to $85 million.

"I am cautious as economic growth is still lagging historic levels.However, I
am pleased with the momentum in our businesses and I am confident that ADP is
well positioned to navigate the uncertainty of the global economy.As a
leading global Human Capital Management solutions provider we are focused on
successfully executing against our four strategic pillars for growth.Driving
product innovation and enhancing our distribution and service capabilities are
the right things to do to continue to grow the business long-term," Mr.
Rodriguez concluded.

Website Schedules

The schedules of quarterly and full-year revenue and pretax earnings by
reportable segment for fiscal years 2011 and 2012, and the first quarter of
fiscal 2013, have been updated to reflect fiscal 2013 budgeted foreign
exchange rates and the impact of discontinued operations, and are posted to
the Investor Relations home page
(http://www.investquest.com/iq/a/adp/index.htm) of our website www.ADP.com
under Reportable Segments Financial Data.

An analyst conference call will be held today, Thursday, November 1 at 8:30
a.m. EDT.A live webcast of the call will be available to the public on a
listen-only basis.To listen to the webcast and view the slide presentation,
go to ADP's home page,www.ADP.com, or ADP's Investor Relations home page,
http://www.investquest.com/iq/a/adp/index.htm, and click on the webcast icon.
Please note, this webcast will be broadcast in two streams: Windows Media and
Flash.You may switch streams by selecting "Windows Media" or "Flash" from the
gear-setup symbol located to the right-hand side of the volume control on the
webcast player.Please check your system 10 minutes prior to the webcast.The
presentation will be available to download and print about 60 minutes before
the webcast at the ADP Investor Relations home page at
http://www.investquest.com/iq/a/adp/index.htm.ADP's news releases, current
financial information, SEC filings and Investor Relations presentations are
accessible at the same website.

About ADP

Automatic Data Processing, Inc. (Nasdaq:ADP), with more than $10 billion in
revenues and approximately 600,000 clients, is one of the world's largest
providers of business outsourcing solutions. Leveraging over 60 years of
experience, ADP offers a wide range ofhuman resource,payroll,tax
andbenefits administration solutionsfrom a single source. ADP's easy-to-use
solutions for employers provide superior value to companies of all types and
sizes. ADP is also a leading provider of integrated computing solutions
toauto, truck, motorcycle, marine, recreational vehicle, and heavy equipment
dealersthroughout the world.For more information about ADP or to contact a
local ADP sales office, reach us at 1.800.225.5237 or visit the company's
website atwww.ADP.com.



Automatic Data Processing, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
                                            September 30,     June 30,
                                            2012              2012
Assets                                                        
Cash and cash equivalents/Short-term         $1,153.1        $1,578.5
marketable securities (A)
Other current assets                         2,226.4          2,030.0
Assets of discontinued operations            125.7            125.0
Total current assets before funds held for  3,505.2          3,733.5
clients
                                                             
Funds held for clients                       20,467.4         21,539.1
Total current assets                       23,972.6         25,272.6
                                                             
Long-term marketable securities (A)          522.4            86.9
Property, plant and equipment, net           703.9            706.3
Other non-current assets                     4,945.2          4,751.6
Total assets                                $30,144.1       $30,817.4
                                                             
Liabilities and Stockholders' Equity                          
Other current liabilities                    $2,177.4        $2,367.5
Obligations under reverse repurchase         442.7            --
agreements
Liabilities of discontinued operations       29.7             29.0
Client funds obligations                     19,701.3         20,856.2
Total current liabilities                  22,351.1         23,252.7
                                                             
Long-term debt                               16.3             16.8
Other non-current liabilities                1,484.0          1,433.9
Total liabilities                           23,851.4         24,703.4
                                                             
Total stockholders' equity                   6,292.7          6,114.0
Total liabilities and stockholders' equity  $30,144.1       $30,817.4
                                                             
(A) As of September 30, 2012, $439.4 of Long-term marketable securities and
$3.3 of Cash and cash equivalents have been pledged as collateral under
reverse repurchase agreements.


Automatic Data Processing, Inc. and Subsidiaries
Statements of Consolidated Earnings
(In millions, except per share amounts)
(Unaudited)
                                                             
                                              Three Months Ended
                                              September 30,
                                              2012            2011
Revenues:                                                     
Revenues, other than interest on funds held   $2,081.8      $1,991.1
for clients and PEO revenues
Interest on funds held for clients             106.8          121.9
PEO revenues (A)                               448.9          397.9
Total revenues                                 2,637.5        2,510.9
                                                             
Expenses:                                                     
Costs of revenues:                                            
Operating expenses                             1,367.5        1,289.7
Systems development & programming costs        156.3          147.9
Depreciation & amortization                    62.7           62.8
Total costs of revenues                        1,586.5        1,500.4
                                                             
Selling, general & administrative expenses     611.4          586.9
Interest expense                               3.1            2.1
Total expenses                                 2,201.0        2,089.4
                                                             
Other income, net                             (29.1)         (34.2)
                                                             
Earnings from continuing operations before     465.6          455.7
income taxes
                                                             
Provision for income taxes                    163.1          155.3
                                                             
Net earnings from continuing operations        $302.5        $300.4
                                                             
Earnings from discontinued operations, net of
provision for income taxes of$1.7 and $1.3    2.8            2.3
for the three months ended September 30, 2012
and 2011, respectively
                                                             
Net earnings                                   $305.3        $302.7
                                                             
Basic Earnings Per Share from Continuing       $0.63         $0.62
Operations
Basic Earnings Per Share from Discontinued     0.01           --
Operations
Basic Earnings Per Share                       $0.63         $0.62
                                                             
Diluted Earnings Per Share from Continuing     $0.62         $0.61
Operations
Diluted Earnings Per Share from Discontinued   0.01           --
Operations
Diluted Earnings Per Share                     $0.63         $0.61
                                                             
Dividends declared per common share            $0.3950       $0.3600
                                                             
(A) Professional Employer Organization ("PEO") revenues are net of direct
pass-through costs, primarily consisting of payroll wages and payroll taxes,
of $4,525.8 and $3,935.3 for the three months ended September 30, 2012 and
2011, respectively.


Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data
(Dollars in millions, except per share amounts)
(Unaudited)
                           Three Months Ended                      
                           September 30,                           
                           2012          2011         Change        % Change
Revenues from continuing                                          
operations (A)
Employer Services          $1,819.0    $1,708.9   $110.1      6%
PEO Services               451.9        400.5       51.4         13%
Dealer Services            439.8        402.6       37.2         9%
Other                      (73.2)       (1.1)       (72.1)       (100+)%
                           $2,637.5    $2,510.9   $126.6      5%
Pre-tax earnings from                                             
continuing operations (A)
Employer Services          $421.8      $407.2     $14.6       4%
PEO Services               46.2         36.7        9.5          26%
Dealer Services            76.0         63.4        12.6         20%
Other                      (78.4)       (51.6)      (26.8)       (52)%
                           $465.6      $455.7     $9.9        2%
Pre-tax margin (A)                                                
Employer Services          23.2%         23.8%        (0.6)%       
PEO Services               10.2%         9.2%         1.1%          
Dealer Services            17.3%         15.8%        1.5%          
Other                      n/m           n/m          n/m           
                           17.7%         18.2%        (0.5)%       
                                                                 
(A) Prior year's segment results were adjusted to reflect fiscal     
year 2013 budgeted foreign exchange rates.
n/m - not meaningful                                              
                                                                 
                           Three Months Ended                      
                           September 30,              Change in     
                                                       other
                           2012          2011         income, net   
Components of other income,                                       
net:
Interest income on          $(23.8)     $(29.6)    $(5.8)      
corporate funds
Realized gains on
available-for-sale          (4.9)        (4.3)       0.6          
securities
Realized losses on
available-for-sale          0.4          0.3         (0.1)        
securities
Other, net                  (0.8)        (0.6)       0.2          
Total other income, net     $(29.1)     $(34.2)    $(5.1)      
                                                                 
                           Three Months Ended                      
                           September 30,                           
                           2012          2011         Change        % Change
Earnings per share                                                
information:
Net earnings from           $302.5      $300.4     $2.1        1%
continuing operations
Net earnings               $305.3      $302.7     $2.6        1%
Basic weighted average      483.5        487.9       (4.4)        (1)%
shares outstanding
Basic earnings per share    $0.63       $0.62      $0.01       2%
from continuing operations
Basic earnings per share    $0.63       $0.62      $0.01       2%
                                                                 
Net earnings from           $302.5      $300.4     $2.1        1%
continuing operations
Net earnings                $305.3      $302.7     $2.6        1%
Diluted weighted average    488.4        493.3       (4.9)        (1)%
shares outstanding
Diluted earnings per share  $0.62       $0.61      $0.01       2%
from continuing operations
Diluted earnings per share  $0.63       $0.61      $0.02       3%
                                                                 
                           Three Months Ended                      
                           September 30,                           
                           2012          2011                      
Key Statistics:                                                   
Internal revenue growth:                                          
Employer Services          5%            7%                        
PEO Services               13%           17%                       
Dealer Services            7%            6%                        
                                                                 
Employer Services:                                                
Change in pays per control 3.3%          2.7%                      
- AutoPay product
Change in client revenue
retention percentage -      (0.4) pts     0.2 pts                   
worldwide
Employer Services/PEO new
business sales growth -     15%           8%                        
worldwide
                                                                 
PEO Services:                                                     
Paid PEO worksite          272,000      247,000                  
employees at end of period
Average paid PEO worksite  269,000      242,000                  
employees during the period
                                                                 
                                                                 
Automatic Data Processing, Inc. and Subsidiaries
Other Selected Financial Data, Continued
(Dollars in millions, except per share amounts or where otherwise stated)
(Unaudited)
                           Three Months Ended                      
                           September 30,                           
                           2012          2011         Change        % Change
Average investment balances                                       
at cost (in billions):
Corporate, other than      $1.2        $1.4       $(0.1)      (10)%
corporate extended
Corporate extended         3.8          3.5         0.3          7%
Total corporate            5.0          4.9         0.1          2%
Funds held for clients     16.1         15.2        0.9          6%
Total                      $21.1       $20.0      $1.0        5%
                                                                 
Average interest rates
earned exclusive of                                               
realized losses (gains) on:
Corporate, other than      0.9%          1.0%                      
corporate extended
Corporate extended         2.2%          2.8%                      
Total corporate            1.9%          2.4%                      
Funds held for clients     2.7%          3.2%                      
Total                      2.5%          3.0%                      
                                                                 
Net unrealized gain         $806.0      $741.4                  
position at end of period
                                                                 
Average short-term                                                
financing (in billions):
U.S. commercial paper      $3.2        $3.0                    
borrowings
U.S. & Canadian reverse
repurchase agreement        0.5          0.5                      
borrowings
                           $ 3.8        $ 3.5                    
Average interest rates paid                                       
on:
U.S. commercial paper      0.2%          0.1%                      
borrowings
U.S. & Canadian reverse
repurchase agreement        0.7%          0.5%                      
borrowings
                                                                 
Interest on funds held for  $106.8      $121.9     $(15.1)     (12)%
clients
Corporate extended interest 21.2         25.6        (4.4)        (17)%
income (B)
Corporate interest
expense-short-term          (2.5)        (1.5)       (1.0)        (69)%
financing (B)
                           $125.5      $145.9     $(20.5)     (14)%
                                                                 
                                                                 
(B)While "Corporate extended interest income" and "Corporate interest expense
-short-term financing" are non-GAAP disclosures, management believes this
information is beneficial to reviewing the financial statements of ADP.
Management believes this information is beneficial as it allows the reader to
understand the extended investment strategy for ADP's client funds assets,
corporate investments and short-term borrowings.A reconciliation of
thenon-GAAP measures to GAAP measures is as follows:
                                                                 
                                                                 
                           Three Months Ended                      
                           September 30,                           
                           2012          2011                      
                                                                 
Corporate extended interest $21.2       $25.6                   
income
All other interest income   2.6          4.0                      
Total interest income on   $23.8       $29.6                   
corporate funds
                                                                 
Corporate interest expense  $2.5        $1.5                    
- short-term financing
All other interest expense  0.6          0.6                      
Total interest expense     $3.1        $2.1                    
                                                                 

This document and other written or oral statements made from time to time by
ADP may contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements that are not historical
in nature and which may be identified by the use of words like "expects,"
"assumes," "projects," "anticipates," "estimates," "we believe," "could be"
and other words of similar meaning, are forward-looking statements. These
statements are based on management's expectations and assumptions and are
subject to risks and uncertainties that may cause actual results to differ
materially from those expressed. Factors that could cause actual results to
differ materially from those contemplated by the forward-looking statements
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, professional employer organizations and employee benefits;
overall market and economic conditions, including interest rate and foreign
currency trends; competitive conditions; auto sales and related industry
changes; employment and wage levels; changes in technology; availability of
skilled technical associates and the impact of new acquisitions and
divestitures. ADP disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise. These risks and uncertainties, along with the risk factors
discussed under "Item 1A. - Risk Factors" in our Annual Report on Form 10-K
for the fiscal year ended June 30, 2012 should be considered in evaluating any
forward-looking statements contained herein.

CONTACT: Automatic Data Processing, Inc.
  ADP Investor Relations
  Elena Charles, 973.974.4077
  Debbie Morris, 973.974.7821
 
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