ADP 2015 Annual Report Download - page 31

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EarningsfromContinuingOperationsbeforeIncomeTaxes
Employer Services' earnings from continuing operations before income taxes increase d 7% due to the increase in revenues from continuing operations of
$377.5 million discussed above, partially offset by an increase in expenses of $205.7 million . This growth includes an unfavorable impact from foreign currency
translation of one percentage point. Expenses increased in fiscal 2015 , as compared to fiscal 2014 , due to labor related costs to support our growing revenues and
an increase in selling expenses as we experienced traction from our increased focus on product development, high demand for additional HCM solutions, including
products that assist businesses in complying with the ACA, improved productivity, and an improving economic backdrop in the U.S. Overall margin increase d
approximately 60 basis points from 29.9% to 30.5% in fiscal 2015 , as compared to fiscal 2014 , due to our operating costs related to servicing our clients
increasing at a slower rate than our revenues partially offset by an increase in selling expense due to higher new business bookings.
PEOServices
Fiscal 2016 Compared to Fiscal 2015
Revenues
PEO Services' revenues as reported increased 16% in fiscal 2016 , as compared to fiscal 2015 . Such revenues include pass-through costs of $2,336.3
million for fiscal 2016 and $2,015.9 million for fiscal 2015 associated with benefits coverage, workers' compensation coverage, and state unemployment taxes for
worksite employees. The increase in revenues was due to a 13% increase in the average number of worksite employees, driven by an increase in the number of new
PEO Services clients and growth in our existing clients, as well as higher client participation and higher benefit pass-through costs in our PEO benefit offerings.
EarningsfromContinuingOperationsbeforeIncomeTaxes
PEO Services’ earnings from continuing operations before income taxes increased 23% in fiscal 2016 , as compared to fiscal 2015 . The increase was due
to increase d revenues discussed above, which was partially offset by an increase in expenses of $357.0 million . This increase in expenses is primarily related to an
increase in pass-through costs of $320.4 million described above. Overall margin increase d from 11.4% to 12.1% for fiscal 2016 , as compared to fiscal 2015 , due
to operating efficiencies, as our operating costs related to servicing our clients increased slower than our revenues, and sales efficiencies.
Fiscal 2015 Compared to Fiscal 2014
Revenues
PEO Services' revenues increase d 17% in fiscal 2015 , as compared to fiscal 2014 . Such revenues include pass-through costs of $2,015.9 million for
fiscal 2015 and $1,736.0 million for fiscal 2014 associated with benefits coverage, workers' compensation coverage, and state unemployment taxes for worksite
employees. The increase in revenues was due to a 14% increase in the average number of worksite employees, resulting from an increase in the number of new
clients and growth in our existing clients.
EarningsfromContinuingOperationsbeforeIncomeTaxes
PEO Services' earnings from continuing operations before income taxes increase d 30% in fiscal 2015 , as compared to fiscal 2014 . The increase was due
to increased revenues of $376.3 million discussed above, partially offset by an increase in expenses of $307.1 million . This increase in expenses is primarily
related to the increase in pass-through costs of $279.9 million described above. Overall margin increased from 10.3% to 11.4% for fiscal 2015 , as compared to
fiscal 2014 , due to sales productivity and increased operating efficiencies, as our costs related to acquiring new business and servicing our clients increased slower
than our revenues.
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