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Client Id: 77PRELIMINARYNOVEMBER 02, 2017 / 12:30PM, ADP - Q1 2018 Automatic Data Processing Inc Earnings CallADP's unique ability to meet the needs of our clients today while anticipating their needs in the future have been hallmarks of our success overthe past 68 years, and will drive our sustained growth in the years ahead.Also before I turn the call over to Jan, I'd like to say a few words on our acquisition of Global Cash Card, which we announced in October. As thecore of HCM is ensuring employees are paid accurately, securely and in a timely fashion. This is the DNA of ADP. And with the acquisition of GlobalCash Card, we are strengthening and expanding this core capability. For those not familiar, Global Cash Card is a leader in digital payments, includingpay cards and other electronic accounts. The digital payment space is an exciting one for the future of payroll. The increasing use of contract workersin t he gig economy has driven the demand accounts, which could lead independent contractors being the various wages and expenses into asingle account, providing the best picture of the their financial well-being. From the employer's perspective, digital payments can be less expensive,more immediate and a more secure option than other means of payment such as paper checks. With this acquisition, ADP becomes the only HCMprovider with a proprietary digital payments processing platform, which will be integrated with our align pay card solutions for our seamless clientexperience.We are excited about this acquisition, we're pleased to welcome the global cash card team that a ADP family.I'm proud of the efforts of our associates. Our results in a quarter continue to reflect enduring qualities of ADP, including a culture that is relentlesslyfocused on delivering a great client experience through best-in-class technology and unparalleled service.Fiscal 2018 is off to a good start, and we look forward to turning over full attention to advancing our strategy and delivering on our commitmentsto all stakeholders. Clients, shareholders and associates alike. And with that, I'll turn the call over to Jan for a further review of our first quarterJan Siegmund - Automatic Data Processing, Inc. - Corporate VP & CFOThank you very much, Carlos, and good morning, everyone. In my commentary to follow, I will be referencing non-GAAP measures that excludethe impact of certain items in the first fiscal quarter of 2018 as well as a first quarter fiscal 2017 restructuring charge of about 40 million relatedto our Service Alignment Initiative. A description of these charges and a reconciliation of these non-GAAP measures can be found in this morning'spress release and in the supplemental slides on our Investor Relations website.As Carlos mentioned, ADP revenues grew 6% in the quarter to 3.1 billion on a reported and organic basis. On a reported basis, net earnings grew9% or 8% on a constant dollar basis. Adjusted earnings before interest and taxes or adjusted EBIT, declined 3% on a reported and constant dollarbasis. Adjusted EBIT margin decreased by about 150 basis points compared to 19.8% in last year's first quarter. This decrease was slightly betterthan our expectations despite additional pressure from growth in our pass-through revenues and a very difficult first quarter fiscal year 2017compare when we expanded margins by 230 basis points.As a reminder, this first strong -- this strong first quarter fiscal year 2017 margin performance was driven by incremental ACA-related revenues,together with operating efficiencies and lower selling expenses, which now have lapped. During the quarter, we continued our planned investmentsinto innovation, service and distribution while we worked through the short-term pressure from the anticipated lower revenue growth in the firsthalf of fiscal year 2018. As we managed for the pace of our transformation efforts to upgrade our clients and to transform our service experience,we believe these investments will continue to help us deliver against our long-term financial strategic objectives.Adjusted diluted earnings per share grew 6% to 0.91 and 6% on a constant dollar basis have benefited from lower effective tax rate and fewershares outstanding compared with the year-ago. Our adjusted effective tax rate was positively impacted by unplanned stock compensation taxbenefits, which accounted for approximately 90 basis points of the overall decline in our adjustment effective tax rate for the quarter or 0.05 centsto our adjusted diluted earnings per share.As Carlos mentioned, our new business bookings were down 3% and in line with our expectations for the quarter as we begin to re-accelerate ourbookings growth and overcome the remaining additional sales of Affordable Care Act-related modules in the first half of fiscal year 2017. Overall,I'm pleased with our results for the quarter (inaudible) off to a positive start we're making good proxies as we execute against our strategic initiatives.4THOMSON REUTERS STREETEVENTS www.streetevents.com Contact Us 2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited withoutthe prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliatedcompanies.

Client Id: 77PRELIMINARYNOVEMBER 02, 2017 / 12:30PM, ADP - Q1 2018 Automatic Data Processing Inc Earnings CallNow let me take you through our segment results before moving on to our fiscal year 2018 outlook. In our Employer Services segments, revenuesgrew 2% for the quarter and 3% on an organic basis. Our same-store pays per control metric in the U.S. grew 2.4% in the quarter. Average clientfunds balances was 6% compared to a year ago, 5% on a constant dollar basis. This was driven by additions of net new business and increasedwage levels compared to the prior first year's quarter.Outside the U.S., we continue to see solid performance from our international operations with double-digit revenue growth in our multinationalbusinesses. Employer Services margin decreased about 110 basis points in the quarter. This decrease was driven by continued investments intoour operations, innovations and distribution. The PEO continues to perform well growing revenues 14% in the quarter with average worksiteemployee growing nicely by 10% to 484,000 employees. This revenue growth was primarily driven by the growth in average worksite employeesand accelerated growth in health care renewal premiums. This accelerated growth and passed through help their premiums was also the primarydriver for the 60 basis points decline in PEO margins this quarter. But its impact is expected to abate as the year progresses. And I'm pleased withthe performance of both of our segments in this quarter. And as Carlos mentioned, we are off to a good start. Before I discuss our fiscal year 2018outlook, I wanted to highlight some additional detail regarding the acquisition of Global Cash Card. The results of operations of this business willbe included in the employers services segment, and I expect it to contribute just under 1 percentage point of growth in our updated revenueguidance. While we anticipate future synergies, we also anticipate some slight pressure to margins this year, largely driven by integration costs.Accordingly, we have factors operationally back into our updated fiscal year 2018 outlook.As a reminder, fiscal year 2018 has a mix of factors impacting revenue growth and margin in the first half of the year, including the disposal of ourCHSA and COBRA businesses in November of fiscal year 2017, the impacts to revenue and margin from the incremental ACA-related revenuesduring the first half of fiscal year 2017, which now have been fully lapped; and also the impact to revenue growth in fiscal year 2018 from lowerretention and lower-than-anticipated new business bookings in fiscal year 2017. With these items in mind, I will now take a moment to walk throughour revised outlook with you. First, as Carlos mentioned earlier, we are reaffirming our full year new business bookings guidance of 5% to 7% growthon the 1.65 billion sold in fiscal year 2017. With the acquisition of Global Cash Card and some adjustments to our anticipated impacts from ourforeign currency translation, we have updated our consolidated revenue forecast growth from 6% to 8% compared to our prior forecast of 5% to6%. And employee services revenue growth of 4% to 5% compared to our prior forecast up 2% to 3%. Separately, we are reaffirming our PEOrevenue guidance of 11% to 13%.We are also now expecting growth in interest revenue to increase 45 million to 55 million compared with our prior forecasted increase of 40million to 50 million. The total impact from the client funds extended investment strategy is now expected to be up 35 million to 45 millioncompared to the prior forecast increase of 38 million to 40 million. The details of this forecast can be found in the supplemental slides on ourInvestor Relations website.Our margin forecast remains unchanged. We continue to anticipate our consolidated adjusted EBIT margin to contract 25 to 50 basis points from19.8% in fiscal year 2017. And at the segment level, we continue to anticipate margin contraction in certain employee services of 50 to 75 basispoints, with PEO margins expected to expand 25 to 50 basis points.We now expect growth in adjusted diluted earnings per share of 5% to 7% compared to our prior forecast of 2% to 4%, aided by about 1 percentagepoints from the first quarter stock compensation-related tax benefit. Having fully returned the proceeds of our debt offering to shareholders in2017, this forecast does not contemplate any further share buybacks beyond the anticipated dilution related to equity compensation plans. However,it remains our intent to return excess cash to shareholders, subject to market conditions. So with that, I will turn it over to the operator to take yourquestions.QUESTIONS AND ANSWERSOperator(Operator Instructions) We will take our first question from the line of Tien-tsin Huang with JPMorgan.5THOMSON REUTERS STREETEVENTS www.streetevents.com Contact Us 2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited withoutthe prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliatedcompanies.

Client Id: 77PRELIMINARYNOVEMBER 02, 2017 / 12:30PM, ADP - Q1 2018 Automatic Data Processing Inc Earnings CallTien-tsin Huang - JP Morgan Chase & Co, Research Division - Senior AnalystJust I guess on the retention front. I'm curious where you're seeing the greatest improvement there. Is it more in the midmarket as you convert tostrategic cloud platforms? Any color across the organization?Carlos A. Rodriguez - Automatic Data Processing, Inc. - CEO, President & DirectorI think as I mentioned in my comments, I think this quarter, the improvements were really across all of our ES segments. And as we said in the pastmany times, retention can be very volatile metric especially as you get into the upmarket. But we had -- this quarter, we happen to have good newsand we're very happy about it. We think that is not just because of volatility but I think because some of the things we've been doing aroundinvestments in our service we see our impious scores coming up. And so we're very pleased with that. I would say that to your question about themidmarket, we are not finished yet with the migrations of our clients in the midmarket. We have about 2,000 left. We still think that will be closeto done, if not done, by the end of the calendar year. We might have a couple of stragglers. But we do expect to be substantially done by the endof the year. And that does put pressure on our retention because times and is still holds true that there's quite a substantial difference in retentionbetween our strategic platform in midmarket and our legacy platform. So I think what you're alluding to, we hope and we expect will happen acouple of quarters from now as all these migrations market behind us. but that cannot be one of the reasons why there was improvement in themidmarket as well as interest of ES this quarter.Tien-tsin Huang - JP Morgan Chase & Co, Research Division - Senior AnalystRight.Jan Siegmund - Automatic Data Processing, Inc. - Corporate VP & CFOOne additional comment. Don't forget that we had a little bit of an easier growth over this quarter. We lapped the lost of a large client that wetalked about last first quarter and in the year. So the improvement was, in particular, visible in enterprise space by partially aided by the lappingof that 5 bus.Carlos A. Rodriguez - Automatic Data Processing, Inc. - CEO, President & DirectorI think the impact of large losses was around 100 basis points last year. So the right way to look at this is about 60 basis point improvement andretention is for the quarter?Tien-tsin Huang - JP Morgan Chase & Co, Research Division - Senior AnalystRight. You get that back but still a little bit better. Okay, good, good, good. Just my quick follow up just on PEO. Was it a unit growth of 10%. I thinkthat's a little bit below trend. Anything to read into there in PEO?Carlos A. Rodriguez - Automatic Data Processing, Inc. - CEO, President & DirectorOther than that it's getting really big. We're still pretty happy with 10% unit growth. And I don't think anything further to report there but that'sbecoming a very large -- were close the 0.5 million worksite employees if you look at it, which we do as an employer even though there are subclientsobviously there's 1 in 10,000 clients in the PEO. But it's a very large way we treated the way we have our retirement program and the way we haveworkers' compensation and benefits, et cetera. We are a co-employer and we consider it sounds employer for the purposes of some of theresponsibilities around employment. And so technically, I think we're probably in the top 5 now in terms of the size of employers based in the U.S.business. We're just becoming a very large base. But we feel pretty gabby and pretty satisfied with that kind of growth rate.6THOMSON REUTERS STREETEVENTS www.streetevents.com Contact Us 2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited withoutthe prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliatedcompanies.

Client Id: 77PRELIMINARYNOVEMBER 02, 2017 / 12:30PM, ADP - Q1 2018 Automatic Data Processing Inc Earnings CallJan Siegmund - Automatic Data Processing, Inc. - Corporate VP & CFOThe development is right in line with our expectations, and as you saw we are reaffirming our revenue guidance. So doing good.OperatorOur next question will come from the line of Jason Kupferberg with Bank of America Merrill Lynch.Jason Alan Kupferberg - BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior AnalystI just wanted to follow up on the comments around migrations. I think you said 83% of clients have now been migrated to the next-gen platforms.Can you tell us in terms of percentage of revenue where we stand on that? And then any comments around a reasonable new bookings growthrange for Q2.Carlos A. Rodriguez - Automatic Data Processing, Inc. - CEO, President & DirectorSo just to make sure we get our language clear here because we have been introduced some new terminologies and what we refer to next genplatforms. So we have our strategic platforms, which are Workforce Now run Vantage and our global you will to national. We did start talking andhe mentioned it in our introductory comments that we talked the industry analysts in mid-September next-generation platforms which we haveonly a handful of clients on today. So I just want to make sure I clarified kind of the language there. As we go forward, we'll be more careful aboutmaking sure that we pick the right language. So I'm sorry, the rest of the -- what was the rest of the question?Jason Alan Kupferberg - BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior AnalystThe percentage of revenue then I guess that has migrated to this strategic platforms I think you said 83% of clients but percentage revenue.Carlos A. Rodriguez - Automatic Data Processing, Inc. - CEO, President & DirectorSo since we still have a lot of work to in the upmarket where we really only begun the migrations and consistent with what we've said. Before, inour publicly released information around the proxy cards, I think we included their about 51% of our revenues being on our strategic platformsthat I just mentioned the names of. It's very important to note that when we talk about our strategic platforms, we have a number of areas of ourbusiness where there's really no immediate plan to migrate or move clients. So for example, our insurance services, our retirement services. Wehave international platforms that we're happy not planning any movement there. So we're probably in the future, be able to provide some morecolor around the addressable market. In other words, what part of our client base is really up for migration, if you will, but the right answer, thestraight answer is 51%. But we're not getting into 100%.Jan Siegmund - Automatic Data Processing, Inc. - Corporate VP & CFOAnd then Jason, if I pick up your question regarding the second quarter, is we're reaffirming just our full year guidance for 5% to 7%, and we don'tgive quarterly guidance, really, for our new business bookings or any other number. And before Carlos, the 51% of the revenues refers to ES revenues.That's all the metric that we can offer.7THOMSON REUTERS STREETEVENTS www.streetevents.com Contact Us 2017 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited withoutthe prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliatedcompanies.

Client Id: 77PRELIMINARYNOVEMBER 02, 2017 / 12:30PM, ADP - Q1 2018 Automatic Data Processing Inc Earnings CallJason Alan Kupferberg - BofA Merrill Lynch, Research Division - MD in US Equity Research & Senior AnalystOkay. And it's good to hear about some of the innovation investments that you're doing. Any detail we can get on latest trends with respect toyour overall R&D spending, the budgets they are instead of kind of the maintenance piece for some of the legacy platforms and how much of theR&D budget has been directed to new product development and any shifts in those ratios?Carlos A. Rodriguez - Automatic Data Processing, Inc. - CEO, President & DirectorSure. We disclose a lot of information again as we're trying to communicate with shareholders about some of the things that we've been doingover the last 5 or 6 years. We've disclosed, I think, some additional information about that. And I think starting off and the fact that we've increasedour innovations spend from around 150 million to around 450 million, or somewhere thereabouts, in that neighborhood. So a significant amountof increase in our R&D investments, up a large part of that was the next generation platforms that we just announced recently that we've beenworking on here some cases for 3 to 4 years. But we've also made big investments in things like our data c

ADP - Q1 2018 Automatic Data Processing Inc Earnings Call EVENT DATE/TIME: NOVEMBER 02, 2017 / 12:30PM GMT OVERVIEW: Co. reported 1Q18 revenues of 3.1b and adjusted diluted EPS of 0.91. Expects FY18 revenues to grow 6-8% and adjusted diluted EPS to grow 5-7%. THOMSON REUTERS STREETEVENTS www.streetevents.com Contact Us 2017 Thomson Reuters.