/2H/d 1$&%*$'Part I. Financial Information*'STATEMENTS OF CONSOLIDATED EARNINGS/'(In thousands, except per share amounts)'(Unaudited)^Three Months Ended^Three Months Ended^Six Months Ended^Six Months Ended^December 31,^December 31,^December 31,^December 31, ^2000 ^1999 ^2000 ^1999$ 'Revenues, other than interest 'on funds held for clients 'and PEO revenues "$1,494,450 "$1,373,485 "$2,909,682 "$2,614,479! 'Interest on funds held for'clients"129,918 "71,240"245,557"137,184!'PEO revenues (net of pass-!'through costs of $651,151,'$515,507, $1,243,398,'$982,618 respectively) "59,271 "47,761"114,923 "91,918"----------"----------"----------"----------'Total revenues"1,683,639"1,492,486"3,270,162"2,843,581"----------"----------"----------"----------'Operating expenses"677,102"613,778"1,337,060"1,164,868"'General, administrative and'selling expenses"410,627"394,825"846,062"800,212'Systems development and'programming costs"127,503"109,225"246,577"212,880$!'Depreciation and amortization !"78,524 !"67,547!"160,068!"133,181#'Interest #"3,349 #"3,642 #"6,647 #"7,177%'(Gains)/losses on&'investments &"43,634 &"269 &"44,238 &"(127)'"----------'"----------'"----------'"----------*"1,340,739*"1,189,286*"2,640,652*"2,318,191+"----------+"----------+"----------+"----------#-'EARNINGS BEFORE INCOME TAXES-"342,900-"303,200-"629,510-"525,390!/'Provision for income taxes/"135,460/"103,700/"248,670/"179,6900"----------0"----------0"----------0"----------2'NET EARNINGS2"$ 207,4402"$ 199,5002"$ 380,8402"$ 345,7003"==========3"==========3"==========3"==========5'BASIC EARNINGS PER SHARE5"$ .335"$ 0.325"$ .605"$ 0.556"==========6"==========6"==========6"==========!8'DILUTED EARNINGS PER SHARE8"$ .328"$ 0.318"$ .598"$ 0.549"==========9"==========9"==========9"==========;'Dividends per share;"$ 0.1025;"$ 0.0875;"$ 0.1900;"$ 0.16375<"==========<"==========<"==========<"==========:>'See notes to the consolidated financial statements.@'Form 10Q"A'CONSOLIDATED BALANCE SHEETSB'(IN THOUSANDS)C'(UNAUDITED)E^December 31,E^June 30, F'Assets F^2000 F^2000 H'Cash and cash equivalentsH"$ 1,294,214H"$ 1,227,637'I'Short-term marketable securitiesI"595,135I"596,792J'Accounts receivableJ"940,611J"899,314K'Other current assetsK"361,275K"340,709L"-----------L"-----------M'Total current assetsM"3,191,235M"3,064,452&O'Long-term marketable securitiesO"908,793O"628,120P'Long-term receivablesP"233,220P"245,249R'Land and buildingsR"447,733R"439,022 S'Data processing equipmentS"638,537S"612,608&T'Furniture, leaseholds and otherT"515,622T"498,354U"-----------U"-----------V"1,601,892V"1,549,984$W'Less accumulated depreciationW"(989,959)W"(952,715)X"-----------X"-----------Y"611,933Y"597,269['Other assets["254,620["271,136\'Intangibles\"1,621,888\"1,623,701]"-----------]"-----------1^'Total assets before funds held for clients^"6,821,689^"6,429,927_'Funds held for clients_"14,235,790_"10,420,889`"-----------`"-----------a'Total assetsa"$21,057,479a"$16,850,816b"===========b"===========+d'Liabilities and Shareholders' Equity+e'------------------------------------f'Notes payablef"$ 4,411f"$ 21,523g'Accounts payableg"130,932g"129,436'h'Accrued expenses & other currenti'liabilitiesi"944,059i"1,044,002j'Income taxesj"131,144j"101,707k"-----------k"----------- l'Total current liabilitiesl"1,210,546l"1,296,668n'Long-term debtn"124,631n"132,017o'Other liabilitieso"222,147o"171,843p'Deferred income taxesp"165,943p"151,337q'Deferred revenue q"95,197 q"95,361r"-----------r"------------s'Total liabilities before clients fundst'obligationst"1,818,464t"1,847,226u'Client funds obligationsu"14,165,746u"10,420,772v"-----------v"-----------w'Total liabilitiesw"15,984,210w"12,267,998y'Shareholders' equity:z'Common stock z"63,628 z"63,144%{'Capital in excess of par value{"543,077{"402,767|'Retained earnings|"4,737,978|"4,477,141}'Treasury stock}"(52,525)}"(130,800)-~'Accumulated other comprehensive income~"(218,889)~"(229,434)"-----------"-----------!'Total shareholders' equity"5,073,269"4,582,818"-----------"-----------1'Total liabilities and shareholders' equity"$21,057,479"$16,850,816"==========="===========:'See notes to the consolidated financial statements.'Form 10Q6'CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS'(IN THOUSANDS)'(UNAUDITED)^Six Months Ended^Six Months Ended^December 31,^December 31, ^2000 ^1999,'Cash Flows From Operating Activities:'Net earnings"$ 380,840"$ 345,700,'Expenses not requiring outlay of cash"183,417"126,125&'Changes in operating net assets"(19,150)"(8,240)"----------"----------6'Net cash flows provided by operating activities"545,107"463,585"----------"----------,'Cash Flows From Investing Activities:,'-------------------------------------('Purchase of marketable securities"(5,578,302)"(6,039,762)2'Proceeds from sale of marketable securities"1,581,357"724,800-'Net change in client funds obligations"3,744,974"5,228,595'Capital expenditures"(90,915)"(59,490)'Additions to intangibles"(43,543)"(28,771)!'Acquisitions of businesses"(45,314) "3,109 'Other"(10,261)"(11,176)"-----------"----------2'Net cash flows used in investing activities"(442,004)"(182,695)"----------"----------,'Cash Flows From Financing Activities:,'-------------------------------------&'Proceeds from issuance of notes "26,253 "3,130'Repayments of debt"(43,317)"(18,899)-'Proceeds from issuance of common stock"100,541 "75,529'Dividends paid"(120,003)"(102,381)"----------"----------2'Net cash flows used in financing activities"(36,526)"(42,621)"----------"----------.'Net change in cash and cash equivalents "66,577"238,2691'Cash and cash equivalents, at beginning of 'period"1,227,637"861,280"----------"----------+'Cash and cash equivalents, at end of 'period"$1,294,214"$1,099,549"=========="==========:'See notes to the consolidated financial statements.