ADP 2012 Annual Report Download - page 31
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ANALYSIS OF REPORTABLE SEGMENTS
Revenues
The fiscal 2011 and 2010 reportable segments’ revenues and earnings from continuing operations before income taxes have been adjusted to
reflect updated fiscal 2012 budgeted foreign exchange rates. This adjustment is made for management purposes so that the reportable
segments’ revenues are presented on a consistent basis without the impact of changes in foreign currency exchange rates. This adjustment is a
reconciling item to revenues and earnings from continuing operations before income taxes and is eliminated in consolidation.
Certain revenues and expenses are charged to the reportable segments at a standard rate for management reasons. Other costs are charged to the
reportable segments based on management’s responsibility for the applicable costs. The primary components of the “Other” segment are the
results of operations of ADP Indemnity (a wholly-owned captive insurance company that provides workers’ compensation and employer’s
liability deductible reimbursement insurance protection for PEO Services worksite employees), non-recurring gains and losses, miscellaneous
processing services, such as customer financing transactions, and certain expenses that have not been charged to the reportable segments, such
as stock-based compensation expense.
In addition, the reconciling items include an adjustment for the difference between actual interest income earned on invested funds held for
clients and interest credited to Employer Services and PEO Services at a standard rate of 4.5%. This allocation is made for management reasons
so that the reportable segments’ results are presented on a consistent basis without the impact of fluctuations in interest rates. This allocation is
a reconciling item to our reportable segments’ revenues and earnings from continuing operations before income taxes and is eliminated in
consolidation.
29
(Dollars in millions)
Years ended June 30, $ Change % Change
2012
2011
2010
2012
2011
2012
2011
Employer Services
$
7,567.7
$
7,042.9
$
6,535.1
$
524.8
$
507.8
7
%
8
%
PEO Services
1,771.4
1,543.9
1,316.8
227.5
227.1
15
%
17
%
Dealer Services
1,683.7
1,536.0
1,248.1
147.7
287.9
10
%
23
%
Other
5.5
12.8
18.5
(7.3
)
(5.7
)
Reconciling items:
Foreign exchange
(55.9
)
(43.2
)
(54.1
)
Client funds interest
(307.2
)
(212.9
)
(136.7
)
Total revenues $
10,665.2
$
9,879.5
$
8,927.7
$
785.7
$
951.8
8
%
11
%
Earnings from Continuing Operations before Income Taxes
(Dollars in millions)
Years ended June 30, $ Change % Change
2012 2011 2010 2012
2011 2012 2011
Employer Services $
1,972.3
$
1,856.5
$
1,741.4
$
115.8
$
115.1
6
%
7
%
PEO Services
170.2
137.3
127.2
32.9
10.1
24
%
8
%
Dealer Services
277.1
233.3
204.1
43.8
29.2
19
%
14
%
Other
(117.6
)
(191.9
)
(173.9
)
74.3
(18.0
)
Reconciling items:
Foreign exchange
2.7
(6.5
)
(8.9
)
Client funds interest
(307.2
)
(212.9
)
(136.7
)
Cost of capital charge
124.6
116.9
110.0
Total earnings from continuing
operations before income taxes $
2,122.1
$
1,932.7
$
1,863.2
$
189.4
$
69.5
10
%
4
%