ADP 2012 Annual Report Download - page 23

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RESULTS OF OPERATIONS
ANALYSIS OF CONSOLIDATED OPERATIONS
Fiscal 2012 Compared to Fiscal 2011
(Dollars in millions, except per share amounts)
Total Revenues
Our total revenues increased $785.7 million, or 8%, to $10,665.2 million in fiscal 2012, from $9,879.5 million in fiscal 2011, due to an increase
in revenues in Employer Services of 7%, or $524.8 million, to $7,567.7 million, PEO Services of 15%, or $227.5 million, to $1,771.4 million,
and Dealer Services of 10%, or $147.7 million, to $1,683.7 million. Total revenues would have increased approximately 6% without the impact
of recently completed acquisitions and the impact to revenues pertaining to the sale of assets related to rights and obligations to resell a third-
party expense management platform. There was no impact to total revenue growth rates as a result of changes in foreign currency exchange
rates.
Total revenues for fiscal 2012 include interest on funds held for clients of $493.3 million, as compared to $540.1 million in fiscal 2011. The
decrease in the consolidated interest earned on funds held for clients resulted from the decrease in the average interest rate earned to 2.8%
during fiscal 2012 as compared to 3.2% for fiscal 2011, partially offset by an increase in our average client funds balance of 6%, to $17.9
billion in fiscal 2012.
Total Expenses
Our total expenses increased $650.5 million, or 8%, to $8,713.9 million in fiscal 2012, from $8,063.4 million in fiscal 2011. The increase in
our consolidated expenses was due to an increase in operating expenses of $479.2 million, an increase in selling, general and administrative
expenses of $142.9 million and an increase in systems development and programming costs of $22.7 million. Total expenses would have
increased approximately 6% without the impact of recently completed acquisitions.
21
Years ended June 30,
2012 2011 $ Change
% Change
Total revenues
$
10,665.2
$
9,879.5
$
785.7
8
%
Costs of revenues:
Operating expenses
5,380.1
4,900.9
479.2
10
%
Systems development and programming costs
599.9
577.2
22.7
4
%
Depreciation and amortization
260.0
253.4
6.6
3
%
Total costs of revenues
6,240.0
5,731.5
508.5
9
%
Selling, general and administrative expenses
2,466.2
2,323.3
142.9
6
%
Interest expense
7.7
8.6
(0.9
)
(10
%)
Total expenses
8,713.9
8,063.4
650.5
8
%
Other income, net
(170.8
)
(116.6
)
54.2
46
%
Earnings from continuing operations before income taxes $
2,122.1
$
1,932.7
$
189.4
10
%
Margin
19.9
%
19.6
%
Provision for income taxes $
733.6
$
678.5
$
55.1
8
%
Effective tax rate
34.6
%
35.1
%
Net earnings from continuing operations
$
1,388.5
$
1,254.2
$
134.3
11
%
Diluted earnings per share from continuing operations $
2.82
$
2.52
$
0.30
12
%