ADP 2014 Annual Report Download - page 24

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Other Income, net
(In millions)
Y ears ended June 30,
2015
2014
$ Change
Interest income on corporate funds
$ (56.9)
$ (53.7)
$ 3.2
Realized gains on available-for-sale securities
(6.8)
(20.4)
(13.6)
Realized losses on available-for-sale securities
1.9
3.9
2.0
Gain on sale of notes receivable
(1.4)
—
1.4
Other income, net
$ (63.2)
$ (70.2)
$ (7.0)
Other income, net in fiscal 2015 includes a $1.4 million gain on the sale of notes receivable related to our Dealer Services financing agreements. The
increase in interest income on corporate funds resulted from higher average daily corporate funds, which increase d from $4.1 billion in fiscal 2014 to $4.6 billion
in fiscal 2015 , partially offset by lower average interest rates of 1.3% in fiscal 2015 as compared to 1.4% in fiscal 2014 .
Earnings from Continuing Operations before Income Taxes
Earnings from continuing operations before income taxes increased 10% due to increases in revenues and expenses discussed above and includes an
unfavorable impact from foreign currency translation of one percentage point. Overall margin increased from 18.4% in fiscal 2014 to 18.9% in fiscal 2015 . This
increase was due to our operating costs related to servicing our clients increasing slower than our revenues, partially offset by the impact of higher selling expenses
to support our new business bookings.
Provision for Income Taxes
The effective tax rate in fiscal 2015 and 2014 was 33.5% and 33.9% , respectively. The decrease in the effective tax rate was due to adjustments to the tax
liability, the usage of foreign tax credits in a planned repatriation of foreign earnings, and a change in the tax law during fiscal 2015, partially offset by the
resolution of certain tax matters during fiscal 2014.
Net Earnings from Continuing Operations and Diluted Earnings per Share from Continuing Operations
Net earnings from continuing operations increased 11% on higher earnings from continuing operations before income taxes and a lower effective tax rate,
as described above. Net earnings from continuing operations growth was unfavorably impacted one percentage point by foreign currency translation in fiscal 2015 ,
as compared to fiscal 2014 . Diluted earnings per share from continuing operations increased 12% to $2.89 in fiscal 2015 , as compared to $2.57 in fiscal 2014 .
Diluted earnings per share growth was unfavorably impacted $0.04 due to foreign currency translation in fiscal 2015 , as compared to fiscal 2014 .
In fiscal 2015 , our diluted earnings per share from continuing operations reflects the increase in net earnings from continuing operations and the impact
of fewer shares outstanding, resulting from the repurchase of approximately 18.2 million shares in fiscal 2015 and 9.0 million shares in fiscal 2014 , partially offset
by the issuances of shares under our stock-based compensation programs.
Fiscal 2014 Compared to Fiscal 2013
Total Revenues
Our total revenues increased $784.4 million , or 8% , to $10,226.4 million in fiscal 2014 , as compared to fiscal 2013 , due to an increase in revenues in
Employer Services of 8% , or $607.0 million , to $8,506.0 million and PEO Services of 15% , or $297.7 million , to $2,270.9 million .
Total revenues for fiscal 2014 include interest on funds held for clients of $373.4 million , as compared to $420.4 million in fiscal 2013 . The decrease in
the consolidated interest earned on funds held for clients resulted from the decrease in the average interest rate earned to 1.8% during fiscal 2014 , as compared to
2.2% for fiscal 2013 , partially offset by an increase in our average client funds balance of 8% , to $20.7 billion in fiscal 2014 .
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