ADP 2010 Annual Report Download - page 19

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RESULTS OF OPERATIONS
ANALYSIS OF CONSOLIDATED OPERATIONS
Fiscal 2010 Compared to Fiscal 2009
(Dollars in millions, except per share amounts)
Total Revenues
Our consolidated revenues grew 1% to $8,927.7 million in fiscal 2010, from $8,838.4 million in fiscal 2009, due to an increase in
revenues in PEO Services of 11%, or $131.0 million, to $1,316.8 million, and fluctuations in foreign currency rates, which increased
revenues $68.2 million. Such increases were partially offset by a decrease in Dealer Services revenues of 3%, or $38.5 million, to
$1,229.4 million, and a decrease in the consolidated interest on funds held for clients of $67.0 million. The decrease in the
consolidated interest on funds held for clients resulted from the decrease in the average interest rate earned to 3.6% in fiscal 2010 as
compared to 4.0% in fiscal 2009. Employer Services
’
revenues were flat in fiscal 2010 as compared to fiscal 2009.
Total Expenses
Our total expenses in fiscal 2010 increased $119.4 million, to $7,165.7 million, from $7,046.3 million in fiscal 2009. The increase in our
consolidated expenses for fiscal 2010 was due to our increase in revenues, higher pass
-
through costs associated with our PEO
Services business of $113.7 million, an increase of $48.6 million related to fluctuations in foreign currency exchange rates, an increase
of $14.7 million related to additional domestic service personnel and incremental investments in our products. These increases were
partially offset by a decrease in severance expenses of $76.8 million, a decrease in stock
-
based compensation expense of $28.4 million
Years ended June 30,
2010
2009
$ Change
% Change
Total revenues
$
8,927.7
$
8,838.4
$
89.3
1
%
Costs of revenues:
Operating expenses
4,277.2
4,087.0
190.2
5
%
Systems development and
programming costs
513.9
498.3
15.6
3
%
Depreciation and amortization
238.6
237.4
1.2
1
%
Total costs of revenues
5,029.7
4,822.7
207.0
4
%
Selling, general and
administrative expenses
2,127.4
2,190.3
(62.9
)
(3
)%
Interest expense
8.6
33.3
(24.7
)
(74
)%
Total expenses
7,165.7
7,046.3
119.4
2
%
Other income, net
(101.2
)
(108.0
)
(6.8
)
(6
)%
Earnings from continuing
operations before income taxes
$
1,863.2
$
1,900.1
$
(36.9
)
(2
)%
Margin
20.9
%
21.5
%
Provision for income taxes
$
655.9
$
575.0
$
80.9
14
%
Effective tax rate
35.2
%
30.3
%
Net earnings from
continuing operations
$
1,207.3
$
1,325.1
$
(117.8
)
(9
)%
Diluted earnings per share
from continuing operations
$
2.40
$
2.62
$
(0.22
)
(8
)%