Classmates.com 2011 Annual Report Download - page 65

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Table of Contents
Provision for Income Taxes
The decrease in the effective income tax rate was primarily due to the benefit of higher year-over-year discrete income tax benefits and
reduced expense related to lower non-deductible stock-based compensation.
FTD Segment Results
FTD Revenues
Excluding the favorable impact of foreign currency exchange rates of $5.6 million due to a stronger British Pound versus the U.S. Dollar,
FTD revenues increased by $27.1 million, or 5%, compared to the prior-year period. The increase was primarily due to a 4% increase in average
order value (a 3% increase excluding the impact of foreign currency exchange rates) for the year ended December 31, 2011, compared to the
year ended December 31, 2010 and a 4% increase in consumer orders. The increase in average order value was driven primarily by increased
merchandise values, partially offset by higher discounts, primarily related to group-buying initiatives.
FTD Cost of Revenues
Excluding the unfavorable impact of foreign currency exchange rates of $3.9 million, FTD cost of revenues increased by $19.4 million, or
6%, compared to the prior-year period primarily due to higher consumer order volume. Cost of revenues as a percentage of revenues was
negatively impacted by higher discounts, as discussed above, increased shipping costs and a decrease in post-transaction sales, which have
minimal cost of revenues.
62
Year Ended
December 31,
2011 2010
(in thousands,
except percentages)
Provision for income taxes
$
23,676
$
36,228
Effective income tax rate
31.4
%
40.3
%
Year Ended
December 31, Change
2011 2010 $ %
(in thousands, except percentages
and average order value)
$
471,885
$
434,035
$
37,850
9
%
Services
115,342
119,641
(4,299
)
(4
)%
Advertising
22
900
(878
)
(98
)%
Total FTD Revenues
$
587,249
$
554,576
$
32,673
6
%
Consumer orders
6,628
6,361
267
4
%
Average order value
$
62.15
$
59.72
$
2.43
4
%
Year Ended
December 31,
Change
2011 2010 $ %
(in thousands, except percentages)
FTD cost of revenues
$
367,232
$
343,988
$
23,244
7
%
FTD cost of revenues as a percentage of FTD revenues
62.5
%
62.0
%