ADP 2013 Annual Report Download - page 26

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$15.8 million, and a decrease in interest income on corporate funds of $3.6 million during fiscal 2012, as compared to fiscal 2011. The decrease
in interest income on corporate funds resulted from lower average interest rates from 2.6% for fiscal 2011 to 2.1% for fiscal 2012, partially offset
by increasing average daily corporate funds, which increased from $3.5 billion for fiscal 2011 to $4.0 billion for fiscal 2012. In addition, in the
fourth quarter of 2012, we completed the sale of two buildings previously classified as assets held for sale for their combined carrying value of
$6.9 million, net of selling costs. We had previously recorded impairment charges related to these two buildings of $2.2 million and $11.7
million during fiscal 2012 and 2011, respectively.
Earnings from Continuing Operations before Income Taxes
Earnings from continuing operations before income taxes increased $189.9 million , or 10% , to $2,107.9 million in fiscal 2012, as
compared to fiscal 2011, due to the increase in revenues and the gain on sale of assets, partially offset by the increase in expenses discussed
above. Overall margin increased approximately 30 basis points in fiscal 2012 with approximately 60 basis points of the margin contribution
related to the gain on the sale of assets and approximately 40 basis points of margin decline attributable to acquisitions.
Adjusted earnings from continuing operations increase d $123.9, or 6%, to $2,041.9 million in fiscal 2012 , as compared to $1,918.0
million , as reported, for fiscal 2011 due to increased revenue and margin improvement in our business segments, partially offset by decline in
interest on funds held for clients.
Provision for Income Taxes
The effective tax rates in fiscal 2012 and 2011 were 34.5% and 35.1% , respectively. The decrease in the effective tax rate for the fiscal
year is the result of the final resolution of certain tax matters, the expiration of certain statutes of limitation, and the availability of foreign tax
credits, partially offset by an unfavorable mix of earnings between jurisdictions.
Net Earnings from Continuing Operations and Diluted Earnings per Share from Continuing Operations
Net earnings from continuing operations increased $134.7 million , or 11% , to $1,379.7 million in fiscal 2012 and includes an after-tax
gain on sale of assets of $41.2 million, as compared to fiscal 2011. Diluted earnings per share from continuing operations increased 12% , to
$2.80 compared to $2.50 in fiscal 2011. The increase in diluted earnings per share reflects the increase in net earnings and the impact of fewer
shares outstanding as a result of the repurchase of approximately 14.6 million shares during fiscal 2012.
Adjusted net earnings from continuing operations increased $93.5 million , or 8% to $1,338.5 million , for fiscal 2012, from $1,245.0
million , as reported, for fiscal 2011, and the related diluted earnings per share from continuing operations, as adjusted, increased 9% , to $2.72
for fiscal 2012. The increase in diluted earnings per share, as adjusted, for fiscal 2012 reflects the increase in adjusted net earnings from
continuing operations, as adjusted, and the impact of fewer shares outstanding due to the repurchase of approximately 14.6 million shares during
fiscal 2012.
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