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Fiscal 2010 Compared to Fiscal 2009
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 $36.2 million, to
$1,205.9 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, and our cost savings initiatives, which included lower compensation from reduced headcount and a reduction in travel and
entertainment expenses.
Our total costs of revenues increased $207.0 million to $5,029.7 million in fiscal 2010, as compared to fiscal 2009 due to the increase in
operating expenses discussed below.
20
(Dollars in millions, except per share amounts)
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
)%