ADP 2012 Annual Report Download - page 29

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Provision for Income Taxes
The effective tax rates in fiscal 2011 and 2010 were 35.1% and 35.2%, respectively. The reduction in the effective tax rate for fiscal 2011 is
due to the resolution of certain tax matters in fiscal 2010 that resulted in a decrease to the effective tax rate of 0.7 percentage points for that
period, offset by a decrease in federal and state income tax expense and a favorable mix of earnings in foreign jurisdictions in fiscal 2011.
Net Earnings from Continuing Operations and Diluted Earnings per Share from Continuing Operations
Net earnings from continuing operations increased $46.9 million to $1,254.2 million in fiscal 2011, from $1,207.3 million in fiscal 2010, and
diluted earnings per share from continuing operations increased 5%, to $2.52. The increase in net earnings in fiscal 2011 reflects the increase in
earnings before income taxes and the impact of the tax matters discussed above. The increase in diluted earnings per share in fiscal 2011
reflects the increase in earnings and the impact of the tax matters discussed above coupled with the effects of fewer shares outstanding.
The following table reconciles our results for fiscal 2011 and fiscal 2010 to adjusted results that exclude the impact of certain favorable tax
items. We use certain adjusted results, among other measures, to evaluate our operating performance in the absence of certain items and for
planning and forecasting of future periods. We believe that the adjusted results provide relevant and useful information for investors because it
allows investors to view performance in a manner similar to the method used by us and improves our ability to understand our operating
performance. Since adjusted earnings from continuing operations and adjusted diluted EPS from continuing operations are not measures of
performance calculated in accordance with U.S. GAAP, they should not be considered in isolation from, or as a substitute for, earnings from
continuing operations and diluted EPS from continuing operations, and they may not be comparable to similarly titled measures employed by
other companies.
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