ADP 2008 Annual Report Download - page 20

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P
rovision for Income Taxes
The effective tax rate in fiscal 2007 was 37.1%, as compared to 38.2% in fiscal 2006. The decrease in the effective tax rate is attributable to
a favorable mix in income among tax jurisdictions and to $10.0 million of income tax expense recorded in fiscal 2006 for the repatriation in
fiscal 2006 of approximately $250.0 million of eligible dividends from non-U.S. subsidiaries.
N
et Earnings from Continuing Operations and Diluted Earnings per Share from Continuing Operations
Net earnings from continuing operations in fiscal 2007 increased 21%, to $1,021.2 million, from $841.9 million in fiscal 2006, and the
related diluted earnings per share from continuing operations increased 26%, to $1.83. The diluted earnings per share from continuing
operations of $1.83 includes a net one-time gain of approximately $20.3 million, net of taxes, from the sale of a Dealer Services non-core
minority investment, offset by restructuring charges, which was accretive to diluted earnings per share from continuing operations by
approximately $0.03 per share. The increase in net earnings from continuing operations in fiscal 2007 reflects the increase in earnings from
continuing operations before income taxes as a result of increased revenues offset by expenses and a lower effective tax rate. The increase in
diluted earnings per share from continuing operations in fiscal 2007 reflects the increase in net earnings from continuing operations and the
impact of fewer shares outstanding due to the repurchase of 40.2 million shares in fiscal 2007 and 29.6 million shares in fiscal 2006.
ANALYSIS OF REPORTABLE SEGMENTS
Revenues
20
(Dollars in millions)
Years ended June 30, Change
2008 2007 2006 2008 2007
Employer Services $6,243.1 $5,707.7 $5,162.6 9% 11%
PEO Services 1,060.5 884.8 703.7 20% 26%
Dealer Services 1,364.3 1,257.3 1,097.7 9% 15%
Other 4.9 (1.5) 36.9 100+% (100)+%
Reconciling items:
Foreign exchange 118.7 (45.4) (108.5)
Client funds interest (15.0)(2.9)(56.8)
Total revenues $8,776.5 $7,800.0 $6,835.6 13% 14%