Note 3. Non-Recurring Items

In the fourth quarter of fiscal 1997, the Company reached a settlement with the Federal Trade Commission under which the Company will divest certain assets, the amount of which is not material. An estimated pretax loss of $17.8 million was recorded in connection with the settlement.

In the fourth quarter of fiscal 1997, a major Brokerage Services client formalized its intention to cancel its services contract with the Company, and, as a result, a client contract deposit was returned to the Company resulting in a non-taxable gain to net earnings of approximately $19 million. The Company is restructuring the internal operations of the Brokerage front office business to better align the business' cost structure with the lower revenue which will result as this client reduces its use of ADP services over the next 12-18 months. A provision of approximately $31 million ($19million after tax) was recorded in order to reduce product lines and platforms and consolidate data centers.