Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2017 | Jun. 30, 2017 | Nov. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PAYCHEX INC | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Central Index Key | 723,531 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Amendment Flag | false | ||
Document Type | 10-K | ||
Trading Symbol | PAYX | ||
Document Fiscal Period Focus | FY | ||
Document Period End Date | May 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Common Stock, Shares Outstanding | 359,395,731 | ||
Entity Public Float | $ 18,874,963,639 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |||
Revenue: | |||||
Service revenue | $ 3,100.7 | $ 2,905.8 | $ 2,697.5 | ||
Interest on funds held for clients | 50.6 | 46.1 | 42.1 | ||
Total revenue | 3,151.3 | 2,951.9 | 2,739.6 | ||
Expenses: | |||||
Operating expenses | 919.6 | 857.1 | 808 | ||
Selling, general and administrative expenses | 992.1 | 948.2 | 878 | ||
Total expenses | 1,911.7 | 1,805.3 | 1,686 | ||
Operating income | 1,239.6 | 1,146.6 | 1,053.6 | ||
Investment income, net | 5.2 | 4.5 | 6.4 | ||
Income before income taxes | 1,244.8 | 1,151.1 | 1,060 | ||
Income taxes | 427.5 | 394.3 | 385.1 | ||
Net income | 817.3 | 756.8 | 674.9 | ||
Other comprehensive (loss)/income, net of tax: | |||||
Unrealized (losses)/gains on securities, net of tax | (9.2) | 21.7 | (14) | ||
Total other comprehensive (loss)/income, net of tax | (9.2) | 21.7 | (14) | ||
Comprehensive income | $ 808.1 | $ 778.5 | $ 660.9 | ||
Basic earnings per share | $ 2.27 | [1] | $ 2.10 | [1] | $ 1.86 |
Diluted earnings per share | $ 2.25 | [1] | $ 2.09 | [1] | $ 1.85 |
Weighted-average common shares outstanding | 359.8 | 360.7 | 362.9 | ||
Weighted-average common shares outstanding, assuming dilution | 362.6 | 362.5 | 364.6 | ||
Cash dividends per common share | $ 1.84 | $ 1.68 | $ 1.52 | ||
[1] | Each quarter is a discrete period and the sum of the four quarters' basic and diluted earnings per share amounts may not equal the full year amount. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 184.6 | $ 131.5 |
Corporate investments | 138.8 | 220.6 |
Interest receivable | 35.9 | 36.1 |
Accounts receivable, net of allowance for doubtful accounts | 507.5 | 408.6 |
Prepaid income taxes | 45 | 10.5 |
Prepaid expenses and other current assets | 58.3 | 58.8 |
Current assets before funds held for clients | 970.1 | 866.1 |
Funds held for clients | 4,301.9 | 3,997.5 |
Total current assets | 5,272 | 4,863.6 |
Long-term corporate investments | 454 | 441.1 |
Property and equipment, net of accumulated depreciation | 337.2 | 353 |
Intangible assets, net of accumulated amortization | 57.6 | 69.5 |
Goodwill | 657.1 | 657.1 |
Prepaid income taxes | 24.9 | 24.9 |
Other long-term assets | 30.9 | 31.6 |
Total assets | 6,833.7 | 6,440.8 |
Liabilities | ||
Accounts payable | 57.2 | 56.7 |
Accrued compensation and related items | 280.5 | 247.8 |
Deferred revenue | 22.9 | 26.3 |
Other current liabilities | 91.9 | 79.8 |
Current liabilities before client fund obligations | 452.5 | 410.6 |
Client fund obligations | 4,272.6 | 3,955.3 |
Total current liabilities | 4,725.1 | 4,365.9 |
Accrued income taxes | 45.6 | 72.8 |
Deferred income taxes | 33.9 | 22.1 |
Other long-term liabilities | 73.8 | 68.3 |
Total liabilities | 4,878.4 | 4,529.1 |
Commitments and contingencies - Note O | ||
Stockholders' equity | ||
Common stock, $0.01 par value; Authorized: 600.0 shares; Issued and outstanding: 359.4 shares as of May 31, 2017 and 360.4 shares as of May 31, 2016, respectively. | 3.6 | 3.6 |
Additional paid-in capital | 1,030 | 952.7 |
Retained earnings | 901.7 | 926.2 |
Accumulated other comprehensive income | 20 | 29.2 |
Total stockholders' equity | 1,955.3 | 1,911.7 |
Total liabilities and stockholders' equity | $ 6,833.7 | $ 6,440.8 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2017 | May 31, 2016 |
Stockholders' equity | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 359,400,000 | 360,400,000 |
Common stock, shares outstanding | 359,400,000 | 360,400,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Beginning balance, Shares at May. 31, 2014 | 363 | ||||
Beginning balance at May. 31, 2014 | $ 3.6 | $ 794.4 | $ 957.5 | $ 21.5 | $ 1,777 |
Net income | 674.9 | 674.9 | |||
Unrealized gains/(losses) on securities, net of tax | (14) | (14) | |||
Cash dividends declared | (551.8) | (551.8) | |||
Repurchases of common shares, Shares | (3.9) | ||||
Repurchases of common shares | (7.2) | (175.2) | (182.4) | ||
Stock-based compensation | 31.5 | 31.5 | |||
Activity related to equity-based plans, Shares | 2.1 | ||||
Activity related to equity-based plans | 61.4 | (11.1) | 50.3 | ||
Ending balance, Shares at May. 31, 2015 | 361.2 | ||||
Ending balance at May. 31, 2015 | $ 3.6 | 880.1 | 894.3 | 7.5 | 1,785.5 |
Net income | 756.8 | 756.8 | |||
Unrealized gains/(losses) on securities, net of tax | 21.7 | 21.7 | |||
Cash dividends declared | (606.5) | (606.5) | |||
Repurchases of common shares, Shares | (2.2) | ||||
Repurchases of common shares | (4.1) | (103.8) | (107.9) | ||
Stock-based compensation | 34.6 | 34.6 | |||
Activity related to equity-based plans, Shares | 1.4 | ||||
Activity related to equity-based plans | 42.1 | (14.6) | $ 27.5 | ||
Ending balance, Shares at May. 31, 2016 | 360.4 | 360.4 | |||
Ending balance at May. 31, 2016 | $ 3.6 | 952.7 | 926.2 | 29.2 | $ 1,911.7 |
Net income | 817.3 | 817.3 | |||
Unrealized gains/(losses) on securities, net of tax | (9.2) | (9.2) | |||
Cash dividends declared | (662.3) | $ (662.3) | |||
Repurchases of common shares, Shares | (2.9) | (2.9) | |||
Repurchases of common shares | (5.4) | (160.8) | $ (166.2) | ||
Stock-based compensation | 35.4 | 35.4 | |||
Activity related to equity-based plans, Shares | 1.9 | ||||
Activity related to equity-based plans | 47.3 | (18.7) | $ 28.6 | ||
Ending balance, Shares at May. 31, 2017 | 359.4 | 359.4 | |||
Ending balance at May. 31, 2017 | $ 3.6 | $ 1,030 | $ 901.7 | $ 20 | $ 1,955.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Operating activities | |||
Net income | $ 817.3 | $ 756.8 | $ 674.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization on property and equipment and intangible assets | 126.9 | 115.1 | 106.6 |
Amortization of premiums and discounts on available-for-sale securities | 72.5 | 75.7 | 76.2 |
Stock-based compensation costs | 35.4 | 34.6 | 31.4 |
Provision/(benefit) for deferred income taxes | 17.4 | 7.1 | (4.1) |
Provision for allowance for doubtful accounts | 4.9 | 2.5 | 1.6 |
Net realized gains on sales of available-for-sale securities | (0.1) | (0.1) | (0.3) |
Changes in operating assets and liabilities: | |||
Interest receivable | 0.2 | 1.8 | (1.6) |
Accounts receivable | (103.7) | (37.5) | (28.2) |
Prepaid expenses and other current assets | (34.1) | (5) | (8.5) |
Accounts payable and other current liabilities | 39.1 | 63.3 | 51.1 |
Net change in other long-term assets and liabilities | (15.4) | 3.9 | (3.9) |
Net cash provided by operating activities | 960.4 | 1,018.2 | 895.2 |
Investing activities | |||
Purchases of available-for-sale securities | (50,462.3) | (12,572.2) | (34,020.4) |
Proceeds from sales and maturities of available-for-sale securities | 49,903 | 11,984.3 | 33,719.5 |
Net change in funds held for clients’ money market securities and other cash equivalents | 237.6 | 927.6 | 149.1 |
Purchases of property and equipment | (94.3) | (97.7) | (102.8) |
Acquisition of businesses, net of cash acquired | (296.1) | (27.1) | |
Purchases of other assets | (8.6) | (9) | (3.3) |
Net cash used in investing activities | (424.6) | (63.1) | (285) |
Financing activities | |||
Net change in client fund obligations | 317.3 | (304.8) | 93 |
Dividends paid | (662.3) | (606.5) | (551.8) |
Repurchases of common shares | (166.2) | (107.9) | (182.4) |
Activity related to equity-based plans | 28.5 | 25.6 | 48.5 |
Net cash used in financing activities | (482.7) | (993.6) | (592.7) |
Increase/(decrease) in cash and cash equivalents | 53.1 | (38.5) | 17.5 |
Cash and cash equivalents, beginning of fiscal year | 131.5 | 170 | 152.5 |
Cash and cash equivalents, end of fiscal year | $ 184.6 | $ 131.5 | $ 170 |
Description of Business, Basis
Description of Business, Basis of Presentation, and Significant Accounting Policies | 12 Months Ended |
May 31, 2017 | |
Description of Business, Basis of Presentation, and Significant Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation, and Significant Accounting Policies | Note A — Description of Business, Basis of Presentation, and Significant Accounting Policies Description of business: Paychex, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Paychex”) is a leading provider of integrated human capital management (“HCM”) solutions for payroll, human resource (“HR”), retirement, and insurance services for small- to medium-sized businesses in the United States (“U.S.”). The Company also has operations in Germany. Paychex, a Delaware corporation formed in 1979, reports as one segment. Substantially all of the Company’s revenue is generated within the U.S. The Company also generates revenue within Germany, which represented less than one percent of the Company's total revenue for each of the years ended May 31, 2017 (“fiscal 2017 ”), 2016 (“fiscal 2016 ”), and 2015 (“fiscal 2015 ”). Long-lived assets in Germany are insignificant in relation to total long-lived assets of the Company as of May 31, 2017 and May 31, 2016. During fiscal 2017, the Company disposed of equity-method investments for a joint-venture in Brazil and a minority investment in a Canadian entity, neither of which was significant. Total revenue is comprised of service revenue and interest on funds held for clients. Service revenue is comprised primarily of the fees earned on our portfolio of HCM services, which include payroll processing and complementary HR management and administration services. Payroll service revenue is earned primarily from payroll processing, payroll tax administration services, employee payment services, and other ancillary services. Payroll processing services include the calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients’ payroll obligations. Our Human Resource Services (“HRS”) portfolio of services and products provide small- to medium-sized businesses with retirement services administration, insurance services, HR administration services, and other HR services and products. Our comprehensive HR outsourcing service is available through Paychex HR Solutions, an administrative services organization (“ASO”), and Paychex PEO, a professional employer organization (“PEO”). Both options offer businesses a combined package of services that includes payroll, employer compliance, HR and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained HR services representative, among other services. These comprehensive bundles of services are designed to make it easier for businesses to manage their payroll and related benefits costs while providing a benefits package equal to that of larger companies. The PEO differs from the ASO in that Paychex serves as a co-employer of the clients’ employees, offers health care coverage to PEO client employees, and assumes the risks and rewards of workers’ compensation insurance and certain health insurance products. PEO services are sold through the Company’s registered and licensed subsidiary, Paychex Business Solutions, LLC. Paychex HR Essentials is an ASO product that provides support to the Company’s clients over the phone or online to help manage employee-related topics. In connection with the automated payroll tax administration services, the Company electronically collects payroll taxes from clients’ bank accounts, typically on payday, prepares and files the applicable tax returns, and remits taxes to the applicable tax or regulatory agencies on the respective due dates. These taxes are typically paid between one and 30 days after receipt of collections from clients, with some items extending to 90 days. The Company handles regulatory correspondence, amendments, and penalty and interest disputes, and is subject to cash penalties imposed by tax or regulatory agencies for late filings and late or under payment of taxes. With employee payment services, employers are offered the option of paying their employees by direct deposit, payroll debit card, a check drawn on a Paychex account (Readychex ® ), or a check drawn on the employer’s account and electronically signed by Paychex. For the first three methods, Paychex electronically collects net payroll from the clients’ bank accounts, typically one business day before payday, and provides payment to the employees on payday. Same day ACH functionality is also available for clients using direct deposit. The Company earns fees for funding of temporary staffing agencies’ payroll via purchasing of accounts receivable invoices. The fees are deducted from the funding payment and revenue is recognized over an average collection period of 35 to 45 days. In addition to service fees paid by clients, the Company earns interest on funds held for clients that are collected before due dates and invested until remittance to the applicable tax or regulatory agencies or client employees. The funds held for clients and related client fund obligations are included in the Consolidated Balance Sheets as current assets and current liabilities, respectively. The amount of funds held for clients and related client fund obligations varies significantly during the year. Basis of presentation: The consolidated financial statements include the accounts of Paychex, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Subsequent Events: The Company has evaluated subsequent events for potential recognition and/or disclosure through the date of issuance of these financial statements. On July 13, 2017 , Paychex announced that its Board of Directors (the “Board”) approved a $0.04 per share increase in the Company’s regular quarterly dividend, an increase of 9% . The quarterly dividend will go from $0.46 per share to $0.50 per share and is payable on August 24, 2017 to shareholders of record on August 1, 2017 . Cash and cash equivalents: Cash and cash equivalents consist of available cash, money market securities, and other investments with a maturity of 90 days or less at acquisition. Accounts receivable, net of allowance for doubtful accounts: Accounts receivable balances are shown on the Consolidated Balance Sheets net of the allowance for doubtful accounts of $6.0 million as of May 31, 2017 and $4.2 million as of May 31, 2016 . Accounts receivable balances, net of allowance for doubtful accounts, include: 1) trade receivables for services provided to clients of $255.0 million as of May 31, 2017 and $221.6 million as of May 31, 2016 ; and 2) purchased receivables related to payroll funding arrangements with clients in the temporary staffing industry of $252.5 million as of May 31, 2017 and $187.0 million as of May 31, 2016 . Accounts receivable are written off and charged against the allowance for doubtful accounts when the Company has exhausted all collection efforts without success. No single client had a material impact on total accounts receivable, service revenue, or results of operations. Funds held for clients and corporate investments: Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value obtained from an independent pricing service. The funds held for clients portfolio also includes cash and cash equivalents such as money market securities. Unrealized gains and losses, net of applicable income taxes, are reported as other comprehensive income in the Consolidated Statements of Income and Comprehensive Income. Realized gains and losses on the sale of available-for-sale securities are determined by specific identification of the cost basis of each security. On the Consolidated Statements of Income and Comprehensive Income, realized gains and losses from the funds held for client portfolio and corporate investment portfolio are included in interest on funds held for clients and investment income, net, respectively. Concentrations: Substantially all of the Company’s deposited cash is maintained at large well-capitalized (as defined by their regulators) financial institutions. These deposits may exceed the amount of any insurance provided. All of the Company’s deliverable securities, primarily municipal bond securities, are held in custody with certain of the aforementioned financial institutions, for which that institution bears the risk of custodial loss. Non-deliverable securities, primarily money market funds, are held by well-capitalized financial institutions. Property and equipment, net of accumulated depreciation: Property and equipment is stated at cost, less accumulated depreciation. Depreciation is based on the estimated useful lives of property and equipment using the straight-line method. The estimated useful lives of depreciable assets are generally as follows: Category Depreciable life Buildings and improvements Ten to 35 years or the remaining life, whichever is shorter Data processing equipment Three to four years Furniture, fixtures, and equipment Three to seven years Leasehold improvements Ten years or the life of the lease, whichever is shorter Normal and recurring repairs and maintenance costs are charged to expense as incurred. The Company reviews the carrying value of property and equipment for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Software development and enhancements: Expenditures for software purchases and software developed for internal use are capitalized and depreciated on a straight-line basis over the estimated useful lives, which are generally three to five years. Software developed as part of the Company's main processing platform is depreciated over fifteen years. For software developed for internal use, certain costs are capitalized, including external direct costs of materials and services associated with developing or obtaining the software, and payroll and payroll-related costs for employees who are directly associated with internal-use software projects. Capitalization of these costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs associated with preliminary project stage activities, training, maintenance, and other post-implementation stage activities are expensed as incurred. The carrying value of software and development costs is reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Goodwill and other intangible assets, net of accumulated amortization: The Company had $657.1 million of goodwill as of both May 31, 2017 and 2016 . Goodwill is not amortized, but instead is tested for impairment on an annual basis and between annual tests if an event occurs or circumstances change in a way to indicate that there has been a potential decline in the fair value of a reporting unit. We perform our annual impairment testing in our fiscal fourth quarter. For fiscal 2017, it was determined that the Company has three reporting units. A qualitative analysis was performed for our Paychex Advance LLC (“Paychex Advance”) reporting unit in fiscal 2017. The assessment considered various financial, macroeconomic, industry, and reporting unit specific qualitative factors. For all other defined reporting units in fiscal 2017, a quantitative analysis was performed to determine if it was more-likely-than-not that the fair value of the reporting unit had declined below its carrying value. During fiscal years 2016 and 2015, a quantitative analysis was performed for our German reporting unit, and for all other reporting units a qualitative analysis was performed. Based on the results of our testing, no impairment loss was recognized in the results of operations for fiscal years 2017 , 2016 , or 2015 . Subsequent to the latest review, there have been no events or circumstances that indicate any potential impairment of the Company’s goodwill balance. Intangible assets are comprised primarily of client list acquisitions and are reported net of accumulated amortization on the Consolidated Balance Sheets. Intangible assets are amortized over periods generally ranging from three to twelve years. Client lists use an accelerated method, while other intangible assets use the straight-line method of amortization. The Company tests intangible assets for potential impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Revenue recognition: Revenues are primarily attributable to fees for providing services as well as investment income earned on funds held for clients. Fees associated with services are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Certain processing services are provided under annual service arrangements with revenue recognized ratably over the service period. The Company’s service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. Fees earned for funding of payrolls for temporary staffing agency clients via the purchase of accounts receivable are based on a percentage of funding amounts as specified in the client contract. These fees are then recognized over the average collection period of 45 to 60 days. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in service revenue, and the costs for the delivery are included in operating expenses on the Consolidated Statements of Income and Comprehensive Income. For certain of the Company's service offerings, it receives advance payments for set-up fees from its clients. The Company defers revenue associated with these advance payments, recognizing the revenue and related expenses over the expected life of its clients. PEO revenue is included in service revenue and is reported net of certain direct pass-through costs billed and incurred, which primarily include payroll wages, payroll taxes, and certain benefit premiums. Direct costs related to certain benefit plans where the Company retains risk are recognized as operating expenses rather than as a reduction in service revenue. Direct pass-through costs billed and incurred recognized as a reduction in service revenue were $5.9 billion, $5.1 billion, and $4.2 billion for fiscal years 2017 , 2016 , and 2015 , respectively. Interest on funds held for clients is earned primarily on funds that are collected from clients before due dates for payroll tax administration services and for employee payment services, and invested until remittance to the applicable tax or regulatory agencies or client employees. The interest earned on these funds is included in total revenue on the Consolidated Statements of Income and Comprehensive Income because the collecting, holding, and remitting of these funds are components of providing these services. Interest on funds held for clients also includes net realized gains and losses from the sales of available-for-sale securities. PEO insurance reserves: As part of the PEO service, the Company offers workers’ compensation insurance and health insurance to client companies for the benefit of client employees. Workers' compensation insurance is provided under a fully insured high deductible workers’ compensation insurance policy with a national insurance carrier. Workers’ compensation insurance reserves are established to provide for the estimated costs of paying claims up to per occurrence liability limits. In establishing the PEO workers' compensation insurance reserves, the Company uses an independent actuarial estimate of undiscounted future cash payments that would be made to settle the claims. The Company’s maximum individual claims liability was $1.3 million under both its fiscal 2017 and 2016 workers' compensation insurance policies. As of May 31, 2017 and May 31, 2016 , the Company had recorded current liabilities of $18.0 million and $13.8 million, respectively, and long-term liabilities of $22.3 million and $18.4 million, respectively, on its Consolidated Balance Sheets for workers’ compensation insurance costs. With respect to the PEO health insurance, the Company offers various health insurance plans that take the form of either fully insured fixed cost plans with various national insurance carriers or a fully insured minimum premium insurance arrangement with coverage provided through a single national carrier. Under the minimum premium insurance arrangement, the Company's health benefits insurance reserves are established to provide for the payment of claims liability charges in accordance with its service contract with the carrier. The claims liability charges include estimates for reported losses, plus amounts for those claims incurred but not reported, and estimates of certain expenses associated with processing and settling the claims. The Company's maximum individual claims liability is $0.3 million under both its calendar 2017 and 2016 minimum premium insurance plan policies. Amounts accrued related to the health insurance reserves are $15.7 million and $9.5 million as of May 31, 2017 and May 31, 2016 , respectively. These amounts are included in current liabilities on the Consolidated Balance Sheets. Estimating the ultimate cost of future claims is an uncertain and complex process based upon historical loss experience and actuarial loss projections, and is subject to change due to multiple factors, including economic trends, changes in legal liability law, and damage awards, all of which could materially impact the reserves as reported in the consolidated financial statements. Accordingly, final claim settlements may vary from the present estimates, particularly with workers' compensation insurance where those payments may not occur until well into the future. The Company regularly reviews the adequacy of its estimated insurance reserves. Adjustments to previously established reserves are reflected in the results of operations for the period in which the adjustment is identified. Such adjustments could be significant, reflecting any combination of new and adverse or favorable trends. Stock-based compensation costs: All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. This model requires various assumptions as inputs including expected volatility of the Paychex stock price and expected option life. Volatility is estimated based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. Expected option life is estimated based on historical exercise behavior. The Company periodically reassesses its assumptions as well as its choice of valuation model. The Company will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period or performance period. The Company’s policy is to estimate forfeitures and only record compensation costs for those awards that are expected to vest. The assumptions for forfeitures were determined based on type of award and historical experience. Forfeiture assumptions are adjusted at the point in time a significant change is identified, with any adjustment recorded in the period of change, and the final adjustment at the end of the requisite service period to equal actual forfeitures. The assumptions of volatility, expected option life, and forfeitures all require significant judgment and are subject to change in the future due to factors such as employee exercise behavior, stock price trends, and changes to type or provisions of stock-based awards. Any material change in one or more of these assumptions could have an impact on the estimated fair value of a future award. Refer to Note E for further discussion of the Company’s stock-based compensation plans. Income taxes: The Company accounts for deferred taxes by recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records a deferred tax asset related to the stock-based compensation costs recognized for certain stock-based awards. In June 2016, the Company early-adopted new accounting guidance related to employee share-based payments . Under this new guidance, excess tax benefits or shortfalls related to employee share-based payments are recognized in income taxes on the Consolidated Statements of Income and Comprehensive Income, whereas they previously were recorded as additional paid-in capital on the Consolidated Balance Sheets. This new accounting guidance was adopted prospectively and decreased the Company’s effective income tax rate by approximately 150 basis points for fiscal 2017. The Company also maintains a reserve for uncertain tax positions. The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in its consolidated financial statements. Prior to recording the related tax benefit in the consolidated financial statements, the Company must conclude that tax positions will be more-likely-than-not to be sustained, assuming those positions will be examined by taxing authorities with full knowledge of all relevant information. The benefit recognized in the consolidated financial statements is the amount the Company expects to realize after examination by taxing authorities. If a tax position drops below the more-likely-than-not standard, the benefit can no longer be recognized. Assumptions, judgment, and the use of estimates are required in determining if the more-likely-than-not standard has been met when developing the provision for income taxes and in determining the expected benefit. A change in the assessment of the more-likely-than-not standard could materially impact the Company’s results of operations or financial position. The Company’s reserve for uncertain tax positions, including interest and net of federal benefits, was $39.2 million as of May 31, 2017 and $54.2 million as of May 31, 2016 . Refer to Note J for further discussion of the Company’s reserve for uncertain tax positions. Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenue, and expenses during the reporting period. Actual amounts and results could differ from these estimates. Recently adopted accounting pronouncements: In June 2016, the Company early-adopted Accounting Standards Update (“ASU”) No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” issued by the Financial Accounting Standards Board (“FASB”). ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Amendments related to accounting for excess tax benefits have been adopted prospectively, resulting in the recognition of $18.3 million of excess tax benefits within income tax expense in the Consolidated Statements of Income and Comprehensive Income for fiscal 2017, increasing diluted earnings per share by approximately $0.05 per share. Excess tax benefits related to share-based payments are now included in operating cash flows rather than financing cash flows. We have previously classified cash paid for tax withholding purposes as a financing activity in the statement of cash flows, therefore there was no change related to this requirement. The amendments allow for a one-time accounting policy election to either account for forfeitures as they occur or continue to estimate forfeitures as required by current guidance. The Company has elected to continue estimating forfeitures under the current guidance. The Company also adopted the following ASUs during fiscal 2017, none of which had a material impact on its consolidated financial statements: · ASU No. 2015-09, “Financial Services - Insurance (Topic 944): Disclosures about Short-Duration Contracts.” · ASU No. 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” · ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” · ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” · ASU No. 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” · ASU No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern.” Recently issued accounting pronouncements: In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU No. 2017-09 provides guidance concerning which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This guidance is effective for public companies for annual periods, and for interim periods within those annual periods, beginning after December 15, 2017 and is applicable to the Company’s fiscal year beginning June 1, 2018. Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not yet been issued. A mendments in this ASU will be applied prospectively to any award modified on or after the adoption date. The Company is currently evaluating this guidance, but does not anticipate it will have a material impact on its consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-08, “ Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities .” The amendments in ASU No. 2017-08 require that the premium on purchased callable debt securities to be amortized to the earliest call date. The amendments do not, however, require an accounting change for securities held at a discount; instead, the discount continues to be amortized to maturity. This guidance is effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, and is applicable to the Company’s fiscal year beginning June 1, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating this guidance but does not anticipate it will have a material impact on its consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, “Other Income - Gains and Losses From the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU No. 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it is deemed an “in substance non-financial asset.” ASU No. 2017-05 is effective at the same time the revenue standard in ASU No. 2014-09, “Revenue From Contracts With Customers (Topic 606)” goes into effect, which is for the Company’s fiscal year beginning June 1, 2018. The Company is currently evaluating this guidance as part of its revenue recognition implementation efforts, but does not anticipate it will have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairments.” ASU No. 2017-04 establishes a one-step process for testing goodwill for a decrease in value, requiring a goodwill impairment loss to be measured as the excess of the reporting unit’s carrying amount over its fair value. The guidance eliminates the second step of the current two-step process that requires the impairment to be measured as the difference between the implied value of a reporting unit’s goodwill with the goodwill’s carrying amount. ASU No. 2017-04 is effective for public entities for annual or interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual impairment tests after January 1, 2017. This guidance is applicable to the Company's fiscal year beginning June 1, 2020, and is not anticipated to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business.” ASU No. 2017-01 provides a more defined framework to use in determining when a set of assets and activities is a business. ASU No. 2017-01 also provides greater consistency in applying the guidance, making the definition of a business more operable. ASU No. 2017-01 is effective for public companies for annual periods, including interim periods, beginning after December 15, 2017. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash: a Consensus of the FASB Emerging Issues Task Force.” ASU No. 2016-18 will require a company’s cash flow statement to explain the changes during a reporting period of the totals for cash, cash equivalents, restricted cash, and restricted cash equivalents. Additionally, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents if the cash flow statement includes a reconciliation of the total cash balances for a reporting period. ASU No. 2016-18 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU No. 2016-16 will require that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs instead of when the asset is sold. ASU No. 2016-16 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company is currently evaluating this guidance to determine the potential impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU No. 2016-15 clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by current GAAP and ther |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share | 12 Months Ended |
May 31, 2017 | |
Basic and Diluted Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | Note B — Basic and Diluted Earnings Per Share Basic and diluted earnings per share were calculated as follows: Year ended May 31, In millions, except per share amounts 2017 2016 2015 Basic earnings per share: Net income $ 817.3 $ 756.8 $ 674.9 Weighted-average common shares outstanding 359.8 360.7 362.9 Basic earnings per share $ 2.27 $ 2.10 $ 1.86 Diluted earnings per share: Net income $ 817.3 $ 756.8 $ 674.9 Weighted-average common shares outstanding 359.8 360.7 362.9 Dilutive effect of common share equivalents 2.8 1.8 1.7 Weighted-average common shares outstanding, assuming dilution 362.6 362.5 364.6 Diluted earnings per share $ 2.25 $ 2.09 $ 1.85 Weighted-average anti-dilutive common share equivalents 0.7 0.5 0.3 Weighted-average common share equivalents that had an anti-dilutive impact are excluded from the computation of diluted earnings per share. In July 2016, the Company announced that its Board approved a program to repurchase up to $350.0 million of the Company's common stock, with authorization expiring in May 201 9 (the “July 2016 Program”) . In May 2014, the Board had previously approved a program to repurchase up to $350.0 million of the Company’s common stock with authorization that expired in May 2017 (the “May 2014 Program”). During fiscal 2017 , the Company repurchased 2.9 million shares for $166.2 million. Of the shares repurchased during fiscal 2017, $106.5 million were repurchased under the July 2016 Program and $59.7 million were repurchased under the May 2014 Program. During fiscal 2016, the Company repurchased 2.2 million shares for $107.9 million under the May 2014 Program. The purpose of both programs is to manage common stock dilution. All shares repurchased were retired. As of May 31, 2017, all amounts authorized under the May 2014 Program have been repurchased. |
Business Combination
Business Combination | 12 Months Ended |
May 31, 2017 | |
Business Combination [Abstract] | |
Business Combination | Note C — Business Combination Effective December 22, 2015 , substantially all of the net assets of Advance Partners, a leading provider of integrated financial, operational, and strategic services to support independent staffing firms, were acquired by a wholly owned subsidiary of the Company . Advance Partners offers customizable solutions to the temporary staffing industry, including payroll funding and outsourcing services, which include payroll, invoicing, and tax preparation. The acquisition consideration was comprised of a base purchase price of $190.5 million plus immediate settlement of debt totaling $118.4 million, net of $12.8 million in cash acquired. Accounts receivable balances acquired, net of allowance for doubtful accounts, and less amounts due to clients related to funding arrangements, totaled $164.8 million. This acquisition allows the Company access to a growing industry serving small- to medium-sized businesses. Goodwill in the amount of $95.6 million was recorded as a result of the acquisition, which is tax-deductible. The financial results of Advance Partners are included in the Company’s consolidated financial statements from the date of acquisition. The Company concluded that the acquisition was not material to its results of operations or financial position. Therefore, pro-forma financial information has been excluded. |
Investment Income, Net
Investment Income, Net | 12 Months Ended |
May 31, 2017 | |
Investment Income, Net [Abstract] | |
Investment Income, Net | Note D — Investment Income, Net Investment income, net, consisted of the following items: Year ended May 31, In millions 2017 2016 2015 Interest income on corporate funds $ 9.9 $ 8.4 $ 7.8 Interest expense (2.5) (1.1) (0.7) Net loss from equity-method investments (2.2) (2.8) (0.7) Investment income, net $ 5.2 $ 4.5 $ 6.4 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
May 31, 2017 | |
Stock-Based Compensation Plans [Abstract] | |
Stock-Based Compensation Plans | Note E — Stock- Based Compensation Plans The Paychex, Inc. 2002 Stock Incentive Plan, as amended and restated effective on October 14, 2015 (the “2002 Plan”), authorizes grants of up to 44.1 million shares of the Company’s common stock. As of May 31, 2017 , there were 20.6 million shares available for future grants under the 2002 Plan. All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. These costs are recognized as an expense in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the requisite service period and increase additional paid-in capital. Stock-based compensation expense was $35.4 million, $34.6 million, and $31.4 million for fiscal years 2017 , 2016 , and 2015 , respectively. Related income tax benefits recognized were $13.4 million, $12.9 million, and $11.7 million for the respective fiscal years. Capitalized stock-based compensation costs related to the development of internal use software for these same fiscal years were not significant. As of May 31, 2017 , the total unrecognized compensation cost related to all unvested stock-based awards was $69.6 million and is expected to be recognized over a weighted-average period of 2.9 years. Black-Scholes fair value assumptions: The fair value of stock option grants and performance stock options was estimated at the date of grant using a Black-Scholes option pricing model. The weighted-average assumptions used for valuation under the Black-Scholes option pricing model are as follows: Year ended May 31, 2017 2017 2016 2015 Performance stock options Stock options Risk-free interest rate 1.3 % 1.2 % 1.9 % 2.1 % Dividend yield 3.6 % 3.6 % 3.6 % 3.7 % Volatility factor 0.18 0.18 0.18 0.21 Expected option life in years 6.5 6.1 6.1 6.0 Weighted-average grant-date fair value of stock options granted (per share) $ 5.97 $ 5.74 $ 5.25 $ 5.68 Risk-free interest rates are yields for zero coupon U.S. Treasury notes maturing approximately at the end of the expected option life. The estimated volatility factor is based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. The expected option life is based on historical exercise behavior. The Company has determined that the Black-Scholes option pricing model, as well as the underlying assumptions used in its application, are appropriate in estimating the fair value of its stock option grants. The Company periodically assesses its assumptions as well as its choice of valuation model, and will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. Stock options: Stock options entitle the holder to purchase, at the end of the vesting term, a specified number of shares of Paychex common stock at an exercise price per share set equal to the closing market price of the common stock on the date of grant. All stock options have a contractual life of ten years from the date of the grant and a vesting schedule as established by the Board. The Company issues new shares of common stock to satisfy stock option exercises. Non-qualified stock option grants to officers and outside directors are typically approved by the Board in July. Grants of non-qualified stock options to officers vest 25% per annum and grants to members of the Board vest after one year. The following table summarizes stock option activity for fiscal 2017: Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2016 4.5 $ 37.42 Granted 0.7 $ 60.82 Exercised (0.9) $ 34.26 Forfeited (0.1) $ 45.95 Expired — $ 36.01 Outstanding as of May 31, 2017 4.2 $ 42.02 6.3 $ 73.4 Exercisable as of May 31, 2017 2.5 $ 35.80 5.1 $ 58.1 (1) Market price of the underlying stock as of May 31, 2017 less the exercise price. Other information pertaining to stock option grants is as follows: Year ended May 31, In millions 2017 2016 2015 Total intrinsic value of stock options exercised $ 23.8 $ 14.5 $ 17.6 Total grant-date fair value of stock options vested $ 4.1 $ 4.0 $ 3.6 Restricted stock units: The Board grants restricted stock units (“RSUs”) to non-officer management. A RSU is an agreement to issue shares at the time of vesting with no associated exercise cost for the employee. For each unit granted, the holder will receive one share of stock at the time of vesting. RSUs do not have voting rights or earn dividend equivalents during the vesting period. These awards vest 20% per annum over five years. The fair value of RSUs is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the vesting period. The following table summarizes RSU activity for fiscal 2017: Weighted- Weighted- average average remaining grant-date vesting Aggregate fair value period intrinsic In millions, except per share amounts RSUs per share (years) value (1) Nonvested as of May 31, 2016 1.8 $ 37.58 Granted 0.6 $ 53.76 Vested (0.6) $ 35.43 Forfeited (0.2) $ 42.23 Nonvested as of May 31, 2017 1.6 $ 43.53 2.9 $ 97.2 (1) Intrinsic value for RSUs is based on the market price of the underlying stock as of May 31, 2017 . Other information pertaining to RSUs is as follows: Year ended May 31, In millions, except per share amounts 2017 2016 2015 Weighted-average grant-date fair value per share of RSUs granted $ 53.76 $ 42.60 $ 36.64 Total intrinsic value of RSUs vested $ 32.3 $ 25.9 $ 21.7 Total grant-date fair value of RSUs vested $ 19.3 $ 17.3 $ 14.8 Restricted stock awards: The Board has approved grants of restricted stock awards to the Company’s officers and outside directors. All shares underlying awards of restricted stock are restricted in that they are not transferable until they vest. The recipients of the restricted stock have voting rights and earn dividends, which are paid to the recipient at the time the awards vest. If the recipient leaves Paychex prior to the vesting date for any reason, the shares of restricted stock and the dividends accrued on those shares will be forfeited and returned to Paychex. Time-vested restricted stock awards granted to officers vest one -third per annum. Restricted stock awards granted to outside directors vest on the one -year anniversary of the grant date. The fair value of restricted stock awards is equal to the closing market price of the underlying common stock as of the date of grant and is expensed over the requisite service period on a straight-line basis. The following table summarizes restricted stock activity for fiscal 2017: Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2016 0.1 $ 43.99 Granted 0.1 $ 60.83 Vested (0.1) $ 42.87 Forfeited — $ 48.61 Nonvested as of May 31, 2017 0.1 $ 53.05 Other information pertaining to restricted stock follows: Year ended May 31, In millions, except per share amounts 2017 2016 2015 Weighted-average grant-date fair value per share of restricted stock granted $ 60.83 $ 47.46 $ 41.70 Total grant-date fair value of restricted stock vested $ 3.0 $ 3.0 $ 3.5 Performance shares: Performance shares have a two -year performance period, after which the amount of restricted shares earned will be determined based on achievement against established performance targets. The restricted shares earned will then be subject to a one - year service period. Performance shares do not have voting rights or earn dividend equivalents during the performance period. The fair value of performance shares is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the performance period. The following table summarizes performance share activity for fiscal 2017: Weighted- average grant-date Performance fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2016 0.5 $ 38.89 Granted (1) 0.1 $ 54.97 Vested (0.2) $ 35.69 Forfeited — $ 40.99 Nonvested as of May 31, 2017 0.4 $ 45.66 (1) Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. Other information pertaining to performance shares follows: Year ended May 31, In millions, except per share amounts 2017 2016 2015 Weighted-average grant-date fair value per share of performance shares granted $ 54.97 $ 42.48 $ 37.61 Total grant-date fair value of performance shares vested $ 7.8 $ 5.9 $ 3.5 Long-term Incentive Plan (“LTIP”): The Company has two long-term incentive performance-based stock awards. In July 2011, the Board approved a special award of performance-based non-qualified stock options under a LTIP. Subsequent grants of this award were made upon hire of new officers. Under this award, stock options were granted to officers with vesting dependent on achievement against long-term strategic and financial objectives. Total stock options earned and vested were based on achievement against pre-established targets for fiscal 2016. The performance period was completed in fiscal 2016. Although the performance period was completed and the stock options were earned and vested, there are still stock options outstanding as of May 31, 2017. In July 2016, the Board approved a LTIP award comprised of both performance-based non-qualified stock options and performance-based restricted stock. This award was granted to senior executives down to the vice president level with vesting dependent on achievement against long-term strategic and financial objectives. Total stock options and restricted shares to be earned are based on achievement against pre-established targets for the fiscal year ending May 31, 2020. The following table summarizes performance stock option activity for fiscal 2017: Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2016 2.5 $ 31.36 Granted (2) 1.3 $ 60.89 Exercised (0.4) $ 30.65 Forfeited (1.0) $ 31.30 Expired — $ — Outstanding as of May 31, 2017 2.4 $ 47.52 6.9 $ 30.3 Exercisable as of May 31, 2017 1.1 $ 31.69 4.3 $ 30.3 (1) Market price of the underlying stock as of May 31, 2017 less the exercise price. (2) LTIP performance stock options granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. O ther information pertaining to performance stock options follows: Year ended May 31, In millions 2017 2016 2015 Total intrinsic value of stock options exercised $ 12.4 $ 1.0 $ 2.7 Total grant-date fair value of stock options vested $ 4.9 $ — $ 2.6 LTIP performance-based restricted stock do not have voting rights or earn dividend equivalents during the performance period. The fair value of these performance-based restricted stock is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the performance period. If the recipient leaves Paychex prior to the vesting date for any reason, the shares of restricted stock will be forfeited and returned to Paychex. The following table summarizes performance restricted stock activity for fiscal 2017: Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2016 — $ — Granted (1) 0.2 $ 53.74 Vested — $ — Forfeited — $ — Nonvested as of May 31, 2017 0.2 $ 53.74 (1) LTIP performance shares granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. Non-compensatory employee benefit plan: Prior to January 1, 2016, the Company offered a non-qualified Employee Stock Purchase Plan (“ESPP”) to all employees under which the Company’s common stock could be purchased through a payroll deduction with no discount to the market price and no look-back provision. This ESPP was discontinued as of December 31, 2015. Effective January 1, 2016, the Company began offering a qualified ESPP to all employees. Under this qualified ESPP, the Company’s common stock can be purchased through a payroll deduction at a discount to the market price. The qualified ESPP allows for a discount of up to 15% based on the sole discretion of the committee established to administer the plan. For offering periods during fiscal 2017 and fiscal 2016 the discount was set at 5% of the market price. Transactions under the non-qualified ESPP occurred directly through the Company’s transfer agent and no brokerage fees were charged to employees, except for when stock was sold. Transactions under the qualified ESPP occur through the Company’s third-party stock plan administrator. The plans have been deemed non-compensatory and therefore, no stock-based compensation costs have been recognized for fiscal years 2017 , 2016 , or 2015 related to either plan. |
Funds Held for Clients and Corp
Funds Held for Clients and Corporate Investments | 12 Months Ended |
May 31, 2017 | |
Funds Held for Clients and Corporate Investments [Abstract] | |
Funds Held for Clients and Corporate Investments | Note F — Funds Held for Clients and Corporate Investments Funds held for clients and corporate investments are as follows: May 31, 2017 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients money market securities and other cash equivalents $ 264.8 $ — $ — $ 264.8 Available-for-sale securities: Corporate bonds 208.6 2.7 (0.5) 210.8 General obligation municipal bonds 1,422.0 21.2 (0.9) 1,442.3 Pre-refunded municipal bonds (1) 54.6 0.9 — 55.5 Revenue municipal bonds 929.2 12.5 (0.8) 940.9 U.S. government agency securities 328.9 0.5 (3.6) 325.8 Variable rate demand notes 1,637.9 — — 1,637.9 Total available-for-sale securities 4,581.2 37.8 (5.8) 4,613.2 Other 14.8 1.9 — 16.7 Total funds held for clients and corporate investments $ 4,860.8 $ 39.7 $ (5.8) $ 4,894.7 May 31, 2016 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients money market securities and other cash equivalents $ 502.4 $ — $ — $ 502.4 Available-for-sale securities: Corporate bonds 128.4 2.9 (0.1) 131.2 General obligation municipal bonds 1,594.1 27.6 (0.1) 1,621.6 Pre-refunded municipal bonds (1) 60.2 1.4 — 61.6 Revenue municipal bonds 916.2 15.8 (0.2) 931.8 U.S. government agency securities 160.8 0.6 (0.3) 161.1 Variable rate demand notes 1,234.6 — — 1,234.6 Total available-for-sale securities 4,094.3 48.3 (0.7) 4,141.9 Other 14.2 0.8 (0.1) 14.9 Total funds held for clients and corporate investments $ 4,610.9 $ 49.1 $ (0.8) $ 4,659.2 (1) Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. Included in money market securities and other cash equivalents as of May 31, 2017 and May 31, 2016 are money market funds and bank demand deposit accounts. Classification of investments on the Consolidated Balance Sheets is as follows: May 31, In millions 2017 2016 Funds held for clients $ 4,301.9 $ 3,997.5 Corporate investments 138.8 220.6 Long-term corporate investments 454.0 441.1 Total funds held for clients and corporate investments $ 4,894.7 $ 4,659.2 The Company’s available-for-sale securities reflected a net unrealized gain of $32.0 million and $47.6 million as of May 31, 2017 and May 31, 2016 , respectively. Included in the net unrealized gain total as of May 31, 2017 and May 31, 2016 , there were 216 and 63 available-for-sale securities in an unrealized loss position, respectively. The available-for-sale securities in an unrealized loss position were as follows: May 31, 2017 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ (0.5) $ 43.6 $ — $ — $ (0.5) $ 43.6 General obligation municipal bonds (0.9) 188.8 — — (0.9) 188.8 Pre-refunded municipal bonds — 9.2 — — — 9.2 Revenue municipal bonds (0.8) 154.8 — 1.0 (0.8) 155.8 U.S. government agency securities (3.6) 210.0 — — (3.6) 210.0 Total $ (5.8) $ 606.4 $ — $ 1.0 $ (5.8) $ 607.4 May 31, 2016 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ (0.1) $ 14.7 $ — $ — $ (0.1) $ 14.7 General obligation municipal bonds (0.1) 48.9 — 2.8 (0.1) 51.7 Pre-refunded municipal bonds — 5.7 — — — 5.7 Revenue municipal bonds — 20.7 (0.2) 11.7 (0.2) 32.4 U.S. government agency securities (0.3) 51.1 — — (0.3) 51.1 Total $ (0.5) $ 141.1 $ (0.2) $ 14.5 $ (0.7) $ 155.6 The Company regularly reviews its investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. The Company believes that the investments held as of May 31, 2017 that had unrealized losses of $5.8 million were not other-than-temporarily impaired. The Company believes that it is probable that the principal and interest will be collected in accordance with contractual terms, and that the unrealized losses on these securities were due to changes in interest rates and were not due to increased credit risk or other valuation concerns. A substantial portion of the securities in an unrealized loss position as of May 31, 2017 and May 31, 2016 held an AA rating or better. The Company does not intend to sell these investments until the recovery of their amortized cost basis or maturity, and further believes that it is not more-likely-than-not that it will be required to sell these investments prior to that time. The Company’s assessment that an investment is not other-than-temporarily impaired could change in the future due to new developments or changes in the Company’s strategies or assumptions related to any particular investment. Realized gains and losses from the sale of available-for-sale securities were as follows: Year ended May 31, In millions 2017 2016 2015 Gross realized gains $ 0.1 $ 0.1 $ 0.3 Gross realized losses — — — Net realized gains $ 0.1 $ 0.1 $ 0.3 The amortized cost and fair value of available-for-sale securities that had stated maturities as of May 31, 2017 are shown below by contractual maturity. Expected maturities can differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties. May 31, 2017 Amortized Fair In millions cost value Maturity date: Due in one year or less $ 308.8 $ 309.3 Due after one year through three years 762.1 768.2 Due after three years through five years 1,067.0 1,086.2 Due after five years 2,443.3 2,449.5 Total $ 4,581.2 $ 4,613.2 Variable rate demand notes are primarily categorized as due after five years in the table above as the contractual maturities on these securities are typically 20 to 30 years. Although these securities are issued as long-term securities, they are priced and traded as short-term instruments because of the liquidity provided through the tender feature. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
May 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note G — Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The accounting standards related to fair value measurements include a hierarchy for information and valuations used in measuring fair value that is broken down into three levels based on reliability, as follows: · Level 1 valuations are based on quoted prices in active markets for identical instruments that the Company can access at the measurement date. · Level 2 valuations are based on inputs other than quoted prices included in Level 1 that are observable for the instrument, either directly or indirectly, for substantially the full term of the asset or liability including the following: o quoted prices for similar, but not identical, instruments in active markets; o quoted prices for identical or similar instruments in markets that are not active; o inputs other than quoted prices that are observable for the instrument; or o inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement. The carrying values of cash and cash equivalents, accounts receivable, net of allowance for doubtful accounts, accounts payable, and short-term borrowings, when used by the Company, approximate fair value due to the short maturities of these instruments. Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value on a recurring basis. The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows: May 31, 2017 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities: Corporate bonds $ 210.8 $ — $ 210.8 $ — General obligation municipal bonds 1,442.3 — 1,442.3 — Pre-refunded municipal bonds 55.5 — 55.5 — Revenue municipal bonds 940.9 — 940.9 — U.S. government agency securities 325.8 — 325.8 — Variable rate demand notes 1,637.9 — 1,637.9 — Total available-for-sale securities $ 4,613.2 $ — $ 4,613.2 $ — Other $ 16.7 $ 16.7 $ — $ — Liabilities: Other long-term liabilities $ 16.7 $ 16.7 $ — $ — May 31, 2016 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities: Corporate bonds $ 131.2 $ — $ 131.2 $ — General obligation municipal bonds 1,621.6 — 1,621.6 — Pre-refunded municipal bonds 61.6 — 61.6 — Revenue municipal bonds 931.8 — 931.8 — U.S. government agency securities 161.1 — 161.1 — Variable rate demand notes 1,234.6 — 1,234.6 — Total available-for-sale securities $ 4,141.9 $ — $ 4,141.9 $ — Other $ 14.9 $ 14.9 $ — $ — Liabilities: Other long-term liabilities $ 14.9 $ 14.9 $ — $ — In determining the fair value of its assets and liabilities, the Company predominately uses the market approach. Available-for-sale securities, including municipal bonds, corporate bonds, and U.S. government agency securities, included in Level 2 are valued utilizing inputs obtained from an independent pricing service. To determine the fair value of the Company’s Level 2 available-for-sale securities, the independent pricing service uses a variety of inputs, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information. The Company has not adjusted the prices obtained from the independent pricing service because it believes that they are appropriately valued. Assets included as other are mutual fund investments, consisting of participants’ eligible deferral contributions under the Company’s non-qualified and unfunded deferred compensation plans. The related liability is reported as other long-term liabilities. The mutual funds are valued based on quoted market prices in active markets. The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. |
Property and Equipment, Net of
Property and Equipment, Net of Accumulated Depreciation | 12 Months Ended |
May 31, 2017 | |
Property and Equipment, Net of Accumulated Depreciation [Abstract] | |
Property and Equipment, Net of Accumulated Depreciation | Note H — Property and Equipment, Net of Accumulated Depreciation The components of property and equipment, at cost, consisted of the following: May 31, In millions 2017 2016 Land and improvements $ 8.3 $ 8.3 Buildings and improvements 103.5 103.0 Data processing equipment 199.7 196.1 Software (1) 496.1 447.5 Furniture, fixtures, and equipment 115.2 125.0 Leasehold improvements 109.5 108.2 Construction in progress (1) 18.7 24.1 Total property and equipment, gross 1,051.0 1,012.2 Less: Accumulated depreciation 713.8 659.2 Property and equipment, net of accumulated depreciation $ 337.2 $ 353.0 (1) Software includes both purchased software and costs capitalized related to internally developed software placed in service. Capitalized costs related to internally developed software that has not yet been placed in service is included in construction in progress. Depreciation expense was $108.8 million, $99.2 million, and $92.1 million for fiscal years 2017 , 2016 , and 2015 , respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net of Accumulated Amortization | 12 Months Ended |
May 31, 2017 | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | |
Goodwill and Intangible Assets, Net of Accumulated Amortization | Note I — Goodwill and Intangible Assets, Net of Accumulated Amortization The Company had goodwill balances on its Consolidated Balance Sheets of $657.1 million as of both May 31, 2017 and May 31, 2016 . The Company has certain intangible assets with finite lives. The components of intangible assets, at cost, consisted of the following: May 31, In millions 2017 2016 Client lists $ 293.5 $ 289.2 Other intangible assets 5.4 5.4 Total intangible assets, gross 298.9 294.6 Less: Accumulated amortization 241.3 225.1 Intangible assets, net of accumulated amortization $ 57.6 $ 69.5 During fiscal 2017 , the Company acquired certain customer lists with weighted-average amortization periods of 8.0 years . Amortization expense relating to intangible assets was $18.1 million, $15.9 million, and $14.5 million for fiscal years 2017 , 2016 , and 2015 , respectively. The estimated amortization expense for the next five fiscal years relating to intangible asset balances is as follows: In millions Estimated amortization Year ending May 31, expense 2018 $ 15.4 2019 12.3 2020 9.5 2021 7.3 2022 5.2 |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note J — Income Taxes The components of deferred tax assets and liabilities are as follows: May 31, In millions 2017 2016 Deferred tax assets: Compensation and employee benefit liabilities $ 23.1 $ 21.4 Other current liabilities 9.1 7.9 Tax credit carry forward 39.3 40.0 Depreciation 7.3 8.8 Stock-based compensation 21.8 22.0 Tax benefit of uncertain tax positions 6.4 18.6 Other 7.6 7.1 Gross deferred tax assets 114.6 125.8 Deferred tax liabilities: Capitalized software 54.8 56.3 Depreciation 1.6 2.5 Goodwill and intangible assets 66.8 58.5 Revenue not subject to current taxes 13.6 13.3 Unrealized gains on available-for-sale securities 11.7 17.3 Gross deferred tax liabilities 148.5 147.9 Net deferred tax liability $ (33.9) $ (22.1) The deferred tax asset related to tax credit carry forward consists of alternative minimum tax credits, which may be carried forward indefinitely. The components of the provision for income taxes are as follows: Year ended May 31, In millions 2017 2016 2015 Current: Federal $ 362.0 $ 336.4 $ 341.4 State 48.1 50.8 47.8 Total current 410.1 387.2 389.2 Deferred: Federal 15.9 5.5 (5.1) State 1.5 1.6 1.0 Total deferred 17.4 7.1 (4.1) Income taxes $ 427.5 $ 394.3 $ 385.1 A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: Year ended May 31, 2017 2016 2015 Federal statutory tax rate 35.0 % 35.0 % 35.0 % Increase/(decrease) resulting from: State income taxes, net of federal tax benefit 2.8 % 3.0 % 3.0 % Section 199 - Qualified production activities (0.5) % (2.4) % — % Tax-exempt municipal bond interest (1.3) % (1.4) % (1.5) % Stock option windfall benefit (1.5) % — % — % Other items (0.2) % 0.1 % (0.2) % Effective income tax rate 34.3 % 34.3 % 36.3 % During fiscal 2016, the Company engaged tax specialists to assess the qualification of its customer-facing computer software for the federal “Qualified Production Activities Deduction” under Internal Revenue Code Section 199, and the regulations thereunder. Based on this assessment, the Company concluded that certain of its software offerings qualified for this tax deduction for fiscal 2016 and prior tax years that remain open to IRS examination. The Company submitted claims to recover these tax benefits for prior tax years and claimed the fiscal 2016 tax benefits when it filed its 2016 tax return. Accordingly, the Company recognized the tax benefits, and related tax reserves, for its qualified customer-facing activities for these years in fiscal 2016. Uncertain income tax positions: The Company is subject to U.S. federal income tax, numerous local and state tax jurisdictions within the U.S., and income taxes in Germany. The Company maintains a reserve for uncertain tax positions. As of May 31, 2017 and May 31, 2016 , the total reserve for uncertain tax positions, including interest and net of federal benefits, was $39.2 million and $54.2 million, respectively, and was included in long-term liabilities on the Consolidated Balance Sheets. A reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, not including interest or other potential offsetting effects, is as follows: Year ended May 31, In millions 2017 2016 2015 Balance as of beginning of fiscal year $ 64.7 $ 39.9 $ 40.0 Additions for tax positions of the current year 8.2 7.3 6.7 Additions for tax positions of prior years 4.8 20.7 0.8 Reductions for tax positions of prior years (2.5) (0.1) (0.4) Settlements with tax authorities (29.5) (2.2) (1.2) Expiration of the statute of limitations (2.0) (0.9) (6.0) Balance as of end of fiscal year $ 43.7 $ 64.7 $ 39.9 In December 2016, the Company executed a closing agreement that resolved tax matters related to the audits by New York State for the fiscal year ended May 31, 2012 (“fiscal 2012”) through the fiscal year ended May 31, 2014 (“fiscal 2014”). As a result, the reserve for uncertain tax positions was decreased by $28.9 million in December 2016. The resolution and execution of the closing agreement in December 2016 on the open tax matters for fiscal 2012 through fiscal 2014 has a minimal impact on the Company’s effective income tax rate for fiscal 2017. The reserve as of May 31, 2017 substantially relates to the Company’s uncertain tax positions for certain federal and state income tax matters. The Company believes the reserve for uncertain tax positions, including interest and net of federal benefits, of $39.2 million as of May 31, 2017 adequately covers open tax years and uncertain tax positions up to and including fiscal 2017 for major taxing jurisdictions. As of May 31, 2017 and May 31, 2016, the entire $39.2 million and $ 54.2 million, respectively, of unrecognized tax benefits, including interest and net of federal benefit, if recognized, would impact the Company’s effective income tax rate. The Company has concluded all U.S. federal income tax matters through the fiscal year ended May 31, 2011 (“fiscal 2011”). Fiscal years 2012 through 2014 are currently under audit by the IRS and fiscal years 2015 , 2016 , and 2017 are subject to potential audit. With limited exception, state income tax audits by taxing authorities are closed through fiscal 2011, primarily due to expiration of the statute of limitations. The Company continues to follow its policy of recognizing interest and penalties accrued on tax positions as a component of income taxes on the Consolidated Statements of Income and Comprehensive Income. The amount of accrued interest and penalties associated with the Company’s tax positions is immaterial to the Consolidated Balance Sheets. The amount of interest and penalties recognized for fiscal years 2017 , 2016 , and 2015 was immaterial to the Company’s results of operations. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
May 31, 2017 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | Note K — Accumulated Other Comprehensive Income The change in unrealized gains and losses, net of applicable taxes, related to investments in available-for-sale securities is the primary component reported in accumulated other comprehensive income in the Consolidated Balance Sheets. The changes in accumulated other comprehensive income are as follows: Year ended May 31, In millions 2017 2016 2015 Beginning balance $ 29.2 $ 7.5 $ 21.5 Other comprehensive (loss)/income: Unrealized holding (losses)/gains (14.7) 34.2 (21.5) Income tax benefit/(expense) related to unrealized holding (losses)/gains 5.6 (12.4) 7.7 Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income (0.1) (0.1) (0.3) Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities — — 0.1 Total other comprehensive (loss)/income, net of tax (9.2) 21.7 (14.0) Ending balance $ 20.0 $ 29.2 $ 7.5 Total tax (benefit)/expense included in other comprehensive (loss)/income $ (5.6) $ 12.4 $ (7.8) Reclassification adjustments out of accumulated other comprehensive income are for realized gains on the sales of available-for-sale securities and impacted interest on funds held for clients on the Consolidated Statements of Income and Comprehensive Income. |
Short-term Financing
Short-term Financing | 12 Months Ended |
May 31, 2017 | |
Short-term Financing [Abstract] | |
Short-term Financing | Note L — Short-term Financing The Company maintains lines of credit, letters of credit, and credit facilities as part of its normal and recurring business operations. Details of the Company’s short-term financing arrangements as of May 31, 2017 are discussed below. Lines of credit: As of May 31, 2017 , the Company had unused borrowing capacity available under four uncommitted, secured, short-term lines of credit at market rates of interest with financial institutions as follows: Financial institution Amount available Expiration date JP Morgan Chase Bank, N.A. $350 million February 28, 2018 Bank of America, N.A. $250 million February 28, 2018 PNC Bank, National Association $150 million February 28, 2018 Wells Fargo Bank, National Association $150 million February 28, 2018 The primary uses of the lines of credit would be to meet short-term funding requirements related to deposit account overdrafts and client fund obligations arising from electronic payment transactions on behalf of clients in the ordinary course of business. No amounts were outstanding under these lines of credit during fiscal 2017 or fiscal 2016, or as of May 31, 2017 and May 31, 2016. Certain of the financial institutions are also parties to the Company's credit facility and irrevocable standby letters of credit, which are discussed below. Letters of credit: The Company had irrevocable standby letters of credit outstanding totaling $47.3 million and $43.0 million as of May 31, 2017 and May 31, 2016 , respectively, required to secure commitments for certain insurance policies. The letters of credit expire at various dates between July 2017 and May 2018 and are collateralized by securities held in the Company’s investment portfolios. No amounts were outstanding on these letters of credit during fiscal 2017 or fiscal 2016, or as of May 31, 2017 and May 31, 2016. Subsequent to May 31, 2017, the letter of credit expiring in July 2017 was renewed through July 2018 . Credit facilities : The Company maintains a committed, unsecured, five -year syndicated credit facility, expiring on August 5, 2020 with JP Morgan Chase Bank, N.A. as the administrative agent. Under the credit facility, Paychex of New York LLC (the “Borrower”) may, subject to certain restrictions, borrow up to $1 billion to meet short-term funding requirements. The obligations under this facility have been guaranteed by the Company and certain of its subsidiaries. The outstanding obligations under this credit facility will bear interest at competitive rates based on options provided to the Borrower. Upon expiration of the commitment in August 2020, any borrowings outstanding will mature and be payable on such date. There were no borrowings outstanding under this credit facility as of May 31, 2017 and May 31, 2016 . During fiscal 2017 and fiscal 2016 , the Company borrowed against this credit facility as follows: Year ended May 31, $ in millions 2017 2016 Number of days borrowed 30 5 Maximum amount borrowed $ 450.0 $ 450.0 Weighted-average amount borrowed $ 196.7 $ 305.0 Weighted-average interest rate 2.89 % 3.39 % The Company typically borrows on an overnight basis. In addition to overnight borrowings, during fiscal 2017 , the Company borrowed $150.0 million for seven days and $50.0 million for a period of eighteen days at a weighted-average LIBOR-based interest rate of 1.40% . Subsequent to May 31, 2017, the Company borrowed four times, on an overnight basis, $335.0 million on a weighted-average basis under this line. In March 2016, the Company entered into a committed, unsecured, three -year credit facility with PNC Bank, National Association, expiring on March 17, 2019 . Under this facility, Paychex Advance LLC (“Paychex Advance”), a wholly owned subsidiary of the Company may, subject to certain restrictions, borrow up to $150.0 million to finance working capital needs and general corporate purposes. The obligations under this facility have been guaranteed by the Company and certain of its subsidiaries. The outstanding obligations under this credit facility will bear interest at competitive rates based on options provided to Paychex Advance. Upon expiration of the commitment in March 2019, any borrowings outstanding will mature and be payable on such date. As of May 31, 2017 and May 31, 2016 , Paychex Advance had no borrowings outstanding under this credit facility. There were no borrowings under this credit facility during fiscal 2016 . Details of borrowings under this credit facility during fiscal 2017 are as follows: Year ended May 31, $ in millions 2017 Number of days borrowed 353 Maximum amount borrowed $ 55.6 Weighted-average amount borrowed $ 52.8 Weighted-average interest rate 1.21 % Subsequent to May 31, 2017, Paychex Advance borrowed approximately $55.0 million under this line, which remains outstanding as of the date of this report. The credit facilities contain various financial and operational covenants that are usual and customary for such arrangements. The Company was in compliance with these covenants as of May 31, 2017. Certain lenders under these credit facilities, and their respective affiliates, have performed, and may in the future perform for the Company, various commercial banking, investment banking, underwriting, and other financial advisory services, for which they have received, and will continue to receive in the future, customary fees and expenses. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
May 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note M — Supplemental Cash Flow Information Income taxes paid were $462.6 million, $369.9 million, and $372.8 million for fiscal years 2017 , 2016 , and 2015 , respectively. Lease incentives received in the form of tenant allowances and free rent were $5.8 million, $4.3 million, and $8.5 million for fiscal years 2017 , 2016 , and 2015 , respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May 31, 2017 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note N — Employee Benefit Plans 401(k) plan: The Company maintains a contributory savings plan that qualifies under section 401(k) of the Internal Revenue Code. The Paychex, Inc. 401(k) Incentive Retirement Plan (the “Plan”) allows all employees to immediately participate in the salary deferral portion of the Plan, contributing up to a maximum of 50% of their salary, subject to Internal Revenue Service limitations. Employees who have completed one year of service and a minimum of 1,000 hours worked are eligible to receive a Company matching contribution, when such contribution is in effect. The Company provides matching contributions of 50% of up to 8% of eligible pay that an employee contributed to the Plan. Company contributions to the Plan for fiscal years 2017 , 2016 , and 2015 were $22.4 million, $21.4 million, and $19.6 million, respectively. The Plan is 100% participant directed. Plan participants can fully diversify their portfolios by choosing from any or all investment fund choices in the Plan. Transfers in and out of investment funds, including the Paychex, Inc. Employee Stock Ownership Plan Stock Fund, are not restricted, with the exception of certain restricted trading periods for individuals designated as insiders as specified in the Company’s Insider Trading Policy. The Company match contribution, when in effect, follows the same fund elections as the employee compensation deferrals. Deferred compensation plans: The Company offers non-qualified and unfunded deferred compensation plans to a select group of key employees, executive officers, and outside directors. Eligible employees are provided with the opportunity to defer up to 50% of their annual base salary and bonus and outside directors may defer 100% of their Board cash compensation. Gains and losses are credited based on the participant’s election of a variety of investment choices. The Company does not match any participant deferral or guarantee its return. Distributions are paid at one of the following dates selected by the participant: the participant’s termination date, the date the participant retires from any active employment, or a designated specific date. The amounts accrued under these plans were $16.7 million and $14.9 million as of May 31, 2017 and May 31, 2016 , respectively, and are reflected in other long-term liabilities on the accompanying Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note O — Commitments and Contingencies Contingencies: The Company is subject to various claims and legal matters that arise in the normal course of its business. These include disputes or potential disputes related to breach of contract, tort, patent, breach of fiduciary duty, employment-related claims, tax claims, and other matters. The Company’s management currently believes that resolution of outstanding legal matters will not have a material adverse effect on the Company’s financial position or results of operations. However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse impact on the Company’s financial position and the results of operations in the period in which any such effect is recorded. Lease commitments: The Company leases office space and data processing equipment under terms of various operating leases. Rent expense for fiscal years 2017 , 2016 , and 2015 was $39.7 million, $39.8 million, and $39.4 million, respectively. As of May 31, 2017 , future minimum lease payments under various non-cancelable operating leases with terms of more than one year are as follows: Minimum In millions lease Year ending May 31, payments 2018 $ 36.1 2019 27.3 2020 19.3 2021 13.2 2022 6.1 Thereafter 4.3 Other commitments: As of May 31, 2017 , the Company had outstanding commitments under purchase orders and legally binding contractual arrangements with minimum future payment obligations of approximately $127.4 million, including $7.4 million of commitments to purchase capital assets. Other commitments increased from $109.6 million as of May 31, 2016 largely due to the Company entering into new multi-year contracts for software subscriptions and related technology. These minimum future payment obligations relate to the following fiscal years: Minimum In millions payment Year ending May 31, obligation 2018 $ 78.8 2019 25.1 2020 19.3 2021 3.4 2022 0.8 Thereafter — In the normal course of business, the Company makes representations and warranties that guarantee the performance of services under service arrangements with clients. Historically, there have been no material losses related to such guarantees. In addition, the Company has entered into indemnification agreements with its officers and directors, which require the Company to defend and, if necessary, indemnify these individuals for certain pending or future claims as they relate to their services provided to the Company. Paychex currently self-insures the deductible portion of various insured exposures under certain employee benefit plans. The Company’s estimated loss exposure under these insurance arrangements is recorded in other current liabilities on the Consolidated Balance Sheets. Historically, the amounts accrued have not been material and are not material as of the reporting date. The Company also maintains insurance coverage in addition to its purchased primary insurance policies for gap coverage for employment practices liability, errors and omissions, warranty liability, theft and embezzlement, cyber threats, and acts of terrorism; and capacity for deductibles and self-insured retentions through its captive insurance company. |
Related Parties
Related Parties | 12 Months Ended |
May 31, 2017 | |
Related Parties [Abstract] | |
Related Parties | Note P — Related Parties During fiscal years 2017 , 2016 , and 2015 , the Company purchased approximately $0.6 million, $4.9 million, and $6.9 million, respectively, of data processing equipment and software from EMC Corporation. The former Chairman, President, and Chief Executive Officer of EMC Corporation is a member of the Company’s Board. During fiscal years 2017 , 2016 , and 2015 , the Company purchased approximately $2. 9 million, $2.3 million, and $1.7 million, respectively, of office supplies from Staples, Inc. The Vice Chairman of Staples, Inc. is a member of the Company’s Board. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
May 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | Note Q — Quarterly Financial Data (Unaudited) In millions, except per share amounts Three Months Ended Fiscal 2017 August 31 November 30 February 28 May 31 Full Year Service revenue $ 773.5 $ 760.0 $ 782.6 $ 784.6 $ 3,100.7 Interest on funds held for clients 12.0 11.4 13.2 14.0 50.6 Total revenue $ 785.5 $ 771.4 $ 795.8 $ 798.6 $ 3,151.3 Operating income $ 323.0 $ 311.1 $ 306.6 $ 298.9 $ 1,239.6 Investment income, net 1.5 0.9 1.2 1.6 5.2 Income before income taxes 324.5 312.0 307.8 300.5 1,244.8 Income taxes 107.1 109.9 105.3 105.2 427.5 Net income $ 217.4 $ 202.1 $ 202.5 $ 195.3 $ 817.3 Basic earnings per share (1) $ 0.60 $ 0.56 $ 0.56 $ 0.54 $ 2.27 Diluted earnings per share (1) $ 0.60 $ 0.56 $ 0.56 $ 0.54 $ 2.25 Weighted-average common shares outstanding 361.0 360.2 359.0 359.3 359.8 Weighted-average common shares outstanding, assuming dilution 364.1 362.6 361.8 362.1 362.6 Cash dividends per common share $ 0.46 $ 0.46 $ 0.46 $ 0.46 $ 1.84 Total net realized gains (2) $ 0.1 $ — $ — $ — $ 0.1 Three Months Ended Fiscal 2016 August 31 November 30 February 29 May 31 Full Year Service revenue $ 712.2 $ 711.3 $ 740.7 $ 741.6 $ 2,905.8 Interest on funds held for clients 10.8 11.1 11.9 12.3 46.1 Total revenue $ 723.0 $ 722.4 $ 752.6 $ 753.9 $ 2,951.9 Operating income $ 296.1 $ 294.2 $ 280.0 $ 276.3 $ 1,146.6 Investment income/(loss), net 1.4 1.6 1.7 (0.2) 4.5 Income before income taxes 297.5 295.8 281.7 276.1 1,151.1 Income taxes 88.4 106.6 101.3 98.0 394.3 Net income $ 209.1 $ 189.2 $ 180.4 $ 178.1 $ 756.8 Basic earnings per share (1) $ 0.58 $ 0.52 $ 0.50 $ 0.49 $ 2.10 Diluted earnings per share (1) $ 0.58 $ 0.52 $ 0.50 $ 0.49 $ 2.09 Weighted-average common shares outstanding 361.1 360.7 360.5 360.3 360.7 Weighted-average common shares outstanding, assuming dilution 362.8 362.3 362.2 362.6 362.5 Cash dividends per common share $ 0.42 $ 0.42 $ 0.42 $ 0.42 $ 1.68 Total net realized gains (2) $ — $ — $ 0.1 $ — $ 0.1 (1) Each quarter is a discrete period and the sum of the four quarters’ basic and diluted earnings per share amounts may not equal the full year amount. (2) Total net realized gains on the combined funds held for clients and corporate investment portfolios. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
May 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Sch edule II — Valuation and Qualifying Accounts PAYCHEX, INC. CONSOLIDATED FINANCIAL STATEMENT SCHEDULE FOR THE YEAR ENDED MAY 31, (In millions) Additions to/ Balance as of Additions (deductions Balance as beginning charged to from) other Costs and of end Description of fiscal year expenses accounts (1) deductions (2) of fiscal year 2017 Allowance for doubtful accounts $ 4.2 $ 4.9 $ — $ 3.1 $ 6.0 Reserve for client fund losses $ 2.0 $ 4.1 $ — $ 3.1 $ 3.0 2016 Allowance for doubtful accounts $ 1.4 $ 2.5 $ 2.0 $ 1.7 $ 4.2 Reserve for client fund losses $ 1.8 $ 2.4 $ — $ 2.2 $ 2.0 2015 Allowance for doubtful accounts $ 1.5 $ 1.6 $ 0.1 $ 1.8 $ 1.4 Reserve for client fund losses $ 1.9 $ 2.0 $ (0.2) $ 1.9 $ 1.8 (1) Amounts related to business acquisitions. (2) Uncollectible amounts written off, net of recoveries. |
Description of Business, Basi25
Description of Business, Basis of Presentation, and Significant Accounting Policies (Policy) | 12 Months Ended |
May 31, 2017 | |
Description of Business, Basis of Presentation, and Significant Accounting Policies [Abstract] | |
Description of Business | Description of business: Paychex, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Paychex”) is a leading provider of integrated human capital management (“HCM”) solutions for payroll, human resource (“HR”), retirement, and insurance services for small- to medium-sized businesses in the United States (“U.S.”). The Company also has operations in Germany. Paychex, a Delaware corporation formed in 1979, reports as one segment. Substantially all of the Company’s revenue is generated within the U.S. The Company also generates revenue within Germany, which represented less than one percent of the Company's total revenue for each of the years ended May 31, 2017 (“fiscal 2017 ”), 2016 (“fiscal 2016 ”), and 2015 (“fiscal 2015 ”). Long-lived assets in Germany are insignificant in relation to total long-lived assets of the Company as of May 31, 2017 and May 31, 2016. During fiscal 2017, the Company disposed of equity-method investments for a joint-venture in Brazil and a minority investment in a Canadian entity, neither of which was significant. Total revenue is comprised of service revenue and interest on funds held for clients. Service revenue is comprised primarily of the fees earned on our portfolio of HCM services, which include payroll processing and complementary HR management and administration services. Payroll service revenue is earned primarily from payroll processing, payroll tax administration services, employee payment services, and other ancillary services. Payroll processing services include the calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients’ payroll obligations. Our Human Resource Services (“HRS”) portfolio of services and products provide small- to medium-sized businesses with retirement services administration, insurance services, HR administration services, and other HR services and products. Our comprehensive HR outsourcing service is available through Paychex HR Solutions, an administrative services organization (“ASO”), and Paychex PEO, a professional employer organization (“PEO”). Both options offer businesses a combined package of services that includes payroll, employer compliance, HR and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained HR services representative, among other services. These comprehensive bundles of services are designed to make it easier for businesses to manage their payroll and related benefits costs while providing a benefits package equal to that of larger companies. The PEO differs from the ASO in that Paychex serves as a co-employer of the clients’ employees, offers health care coverage to PEO client employees, and assumes the risks and rewards of workers’ compensation insurance and certain health insurance products. PEO services are sold through the Company’s registered and licensed subsidiary, Paychex Business Solutions, LLC. Paychex HR Essentials is an ASO product that provides support to the Company’s clients over the phone or online to help manage employee-related topics. In connection with the automated payroll tax administration services, the Company electronically collects payroll taxes from clients’ bank accounts, typically on payday, prepares and files the applicable tax returns, and remits taxes to the applicable tax or regulatory agencies on the respective due dates. These taxes are typically paid between one and 30 days after receipt of collections from clients, with some items extending to 90 days. The Company handles regulatory correspondence, amendments, and penalty and interest disputes, and is subject to cash penalties imposed by tax or regulatory agencies for late filings and late or under payment of taxes. With employee payment services, employers are offered the option of paying their employees by direct deposit, payroll debit card, a check drawn on a Paychex account (Readychex ® ), or a check drawn on the employer’s account and electronically signed by Paychex. For the first three methods, Paychex electronically collects net payroll from the clients’ bank accounts, typically one business day before payday, and provides payment to the employees on payday. Same day ACH functionality is also available for clients using direct deposit. The Company earns fees for funding of temporary staffing agencies’ payroll via purchasing of accounts receivable invoices. The fees are deducted from the funding payment and revenue is recognized over an average collection period of 35 to 45 days. In addition to service fees paid by clients, the Company earns interest on funds held for clients that are collected before due dates and invested until remittance to the applicable tax or regulatory agencies or client employees. The funds held for clients and related client fund obligations are included in the Consolidated Balance Sheets as current assets and current liabilities, respectively. The amount of funds held for clients and related client fund obligations varies significantly during the year. |
Basis of Presentation | Basis of presentation: The consolidated financial statements include the accounts of Paychex, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Subsequent Events | Subsequent Events: The Company has evaluated subsequent events for potential recognition and/or disclosure through the date of issuance of these financial statements. On July 13, 2017 , Paychex announced that its Board of Directors (the “Board”) approved a $0.04 per share increase in the Company’s regular quarterly dividend, an increase of 9% . The quarterly dividend will go from $0.46 per share to $0.50 per share and is payable on August 24, 2017 to shareholders of record on August 1, 2017 . |
Cash and Cash Equivalents | Cash and cash equivalents: Cash and cash equivalents consist of available cash, money market securities, and other investments with a maturity of 90 days or less at acquisition. |
Accounts Receivable, Net of Allowance for Doubtful Accounts | Accounts receivable, net of allowance for doubtful accounts: Accounts receivable balances are shown on the Consolidated Balance Sheets net of the allowance for doubtful accounts of $6.0 million as of May 31, 2017 and $4.2 million as of May 31, 2016 . Accounts receivable balances, net of allowance for doubtful accounts, include: 1) trade receivables for services provided to clients of $255.0 million as of May 31, 2017 and $221.6 million as of May 31, 2016 ; and 2) purchased receivables related to payroll funding arrangements with clients in the temporary staffing industry of $252.5 million as of May 31, 2017 and $187.0 million as of May 31, 2016 . Accounts receivable are written off and charged against the allowance for doubtful accounts when the Company has exhausted all collection efforts without success. No single client had a material impact on total accounts receivable, service revenue, or results of operations. |
Funds Held for Clients and Corporate Investments | Funds held for clients and corporate investments: Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value obtained from an independent pricing service. The funds held for clients portfolio also includes cash and cash equivalents such as money market securities. Unrealized gains and losses, net of applicable income taxes, are reported as other comprehensive income in the Consolidated Statements of Income and Comprehensive Income. Realized gains and losses on the sale of available-for-sale securities are determined by specific identification of the cost basis of each security. On the Consolidated Statements of Income and Comprehensive Income, realized gains and losses from the funds held for client portfolio and corporate investment portfolio are included in interest on funds held for clients and investment income, net, respectively. |
Concentrations | Concentrations: Substantially all of the Company’s deposited cash is maintained at large well-capitalized (as defined by their regulators) financial institutions. These deposits may exceed the amount of any insurance provided. All of the Company’s deliverable securities, primarily municipal bond securities, are held in custody with certain of the aforementioned financial institutions, for which that institution bears the risk of custodial loss. Non-deliverable securities, primarily money market funds, are held by well-capitalized financial institutions. |
Property and Equipment, Net of Accumulated Depreciation | Property and equipment, net of accumulated depreciation: Property and equipment is stated at cost, less accumulated depreciation. Depreciation is based on the estimated useful lives of property and equipment using the straight-line method. The estimated useful lives of depreciable assets are generally as follows: Category Depreciable life Buildings and improvements Ten to 35 years or the remaining life, whichever is shorter Data processing equipment Three to four years Furniture, fixtures, and equipment Three to seven years Leasehold improvements Ten years or the life of the lease, whichever is shorter Normal and recurring repairs and maintenance costs are charged to expense as incurred. The Company reviews the carrying value of property and equipment for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. |
Software Development and Enhancements | Software development and enhancements: Expenditures for software purchases and software developed for internal use are capitalized and depreciated on a straight-line basis over the estimated useful lives, which are generally three to five years. Software developed as part of the Company's main processing platform is depreciated over fifteen years. For software developed for internal use, certain costs are capitalized, including external direct costs of materials and services associated with developing or obtaining the software, and payroll and payroll-related costs for employees who are directly associated with internal-use software projects. Capitalization of these costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs associated with preliminary project stage activities, training, maintenance, and other post-implementation stage activities are expensed as incurred. The carrying value of software and development costs is reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. |
Goodwill and Other Intangible Assets, Net of Accumulated Amortization | Goodwill and other intangible assets, net of accumulated amortization: The Company had $657.1 million of goodwill as of both May 31, 2017 and 2016 . Goodwill is not amortized, but instead is tested for impairment on an annual basis and between annual tests if an event occurs or circumstances change in a way to indicate that there has been a potential decline in the fair value of a reporting unit. We perform our annual impairment testing in our fiscal fourth quarter. For fiscal 2017, it was determined that the Company has three reporting units. A qualitative analysis was performed for our Paychex Advance LLC (“Paychex Advance”) reporting unit in fiscal 2017. The assessment considered various financial, macroeconomic, industry, and reporting unit specific qualitative factors. For all other defined reporting units in fiscal 2017, a quantitative analysis was performed to determine if it was more-likely-than-not that the fair value of the reporting unit had declined below its carrying value. During fiscal years 2016 and 2015, a quantitative analysis was performed for our German reporting unit, and for all other reporting units a qualitative analysis was performed. Based on the results of our testing, no impairment loss was recognized in the results of operations for fiscal years 2017 , 2016 , or 2015 . Subsequent to the latest review, there have been no events or circumstances that indicate any potential impairment of the Company’s goodwill balance. Intangible assets are comprised primarily of client list acquisitions and are reported net of accumulated amortization on the Consolidated Balance Sheets. Intangible assets are amortized over periods generally ranging from three to twelve years. Client lists use an accelerated method, while other intangible assets use the straight-line method of amortization. The Company tests intangible assets for potential impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. |
Revenue Recognition | Revenue recognition: Revenues are primarily attributable to fees for providing services as well as investment income earned on funds held for clients. Fees associated with services are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Certain processing services are provided under annual service arrangements with revenue recognized ratably over the service period. The Company’s service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. Fees earned for funding of payrolls for temporary staffing agency clients via the purchase of accounts receivable are based on a percentage of funding amounts as specified in the client contract. These fees are then recognized over the average collection period of 45 to 60 days. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in service revenue, and the costs for the delivery are included in operating expenses on the Consolidated Statements of Income and Comprehensive Income. For certain of the Company's service offerings, it receives advance payments for set-up fees from its clients. The Company defers revenue associated with these advance payments, recognizing the revenue and related expenses over the expected life of its clients. PEO revenue is included in service revenue and is reported net of certain direct pass-through costs billed and incurred, which primarily include payroll wages, payroll taxes, and certain benefit premiums. Direct costs related to certain benefit plans where the Company retains risk are recognized as operating expenses rather than as a reduction in service revenue. Direct pass-through costs billed and incurred recognized as a reduction in service revenue were $5.9 billion, $5.1 billion, and $4.2 billion for fiscal years 2017 , 2016 , and 2015 , respectively. Interest on funds held for clients is earned primarily on funds that are collected from clients before due dates for payroll tax administration services and for employee payment services, and invested until remittance to the applicable tax or regulatory agencies or client employees. The interest earned on these funds is included in total revenue on the Consolidated Statements of Income and Comprehensive Income because the collecting, holding, and remitting of these funds are components of providing these services. Interest on funds held for clients also includes net realized gains and losses from the sales of available-for-sale securities. |
PEO Insurance Reserves | PEO insurance reserves: As part of the PEO service, the Company offers workers’ compensation insurance and health insurance to client companies for the benefit of client employees. Workers' compensation insurance is provided under a fully insured high deductible workers’ compensation insurance policy with a national insurance carrier. Workers’ compensation insurance reserves are established to provide for the estimated costs of paying claims up to per occurrence liability limits. In establishing the PEO workers' compensation insurance reserves, the Company uses an independent actuarial estimate of undiscounted future cash payments that would be made to settle the claims. The Company’s maximum individual claims liability was $1.3 million under both its fiscal 2017 and 2016 workers' compensation insurance policies. As of May 31, 2017 and May 31, 2016 , the Company had recorded current liabilities of $18.0 million and $13.8 million, respectively, and long-term liabilities of $22.3 million and $18.4 million, respectively, on its Consolidated Balance Sheets for workers’ compensation insurance costs. With respect to the PEO health insurance, the Company offers various health insurance plans that take the form of either fully insured fixed cost plans with various national insurance carriers or a fully insured minimum premium insurance arrangement with coverage provided through a single national carrier. Under the minimum premium insurance arrangement, the Company's health benefits insurance reserves are established to provide for the payment of claims liability charges in accordance with its service contract with the carrier. The claims liability charges include estimates for reported losses, plus amounts for those claims incurred but not reported, and estimates of certain expenses associated with processing and settling the claims. The Company's maximum individual claims liability is $0.3 million under both its calendar 2017 and 2016 minimum premium insurance plan policies. Amounts accrued related to the health insurance reserves are $15.7 million and $9.5 million as of May 31, 2017 and May 31, 2016 , respectively. These amounts are included in current liabilities on the Consolidated Balance Sheets. Estimating the ultimate cost of future claims is an uncertain and complex process based upon historical loss experience and actuarial loss projections, and is subject to change due to multiple factors, including economic trends, changes in legal liability law, and damage awards, all of which could materially impact the reserves as reported in the consolidated financial statements. Accordingly, final claim settlements may vary from the present estimates, particularly with workers' compensation insurance where those payments may not occur until well into the future. The Company regularly reviews the adequacy of its estimated insurance reserves. Adjustments to previously established reserves are reflected in the results of operations for the period in which the adjustment is identified. Such adjustments could be significant, reflecting any combination of new and adverse or favorable trends. |
Stock-Based Compensation Costs | Stock-based compensation costs: All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. This model requires various assumptions as inputs including expected volatility of the Paychex stock price and expected option life. Volatility is estimated based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. Expected option life is estimated based on historical exercise behavior. The Company periodically reassesses its assumptions as well as its choice of valuation model. The Company will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period or performance period. The Company’s policy is to estimate forfeitures and only record compensation costs for those awards that are expected to vest. The assumptions for forfeitures were determined based on type of award and historical experience. Forfeiture assumptions are adjusted at the point in time a significant change is identified, with any adjustment recorded in the period of change, and the final adjustment at the end of the requisite service period to equal actual forfeitures. The assumptions of volatility, expected option life, and forfeitures all require significant judgment and are subject to change in the future due to factors such as employee exercise behavior, stock price trends, and changes to type or provisions of stock-based awards. Any material change in one or more of these assumptions could have an impact on the estimated fair value of a future award. Refer to Note E for further discussion of the Company’s stock-based compensation plans. |
Income Taxes | Income taxes: The Company accounts for deferred taxes by recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records a deferred tax asset related to the stock-based compensation costs recognized for certain stock-based awards. In June 2016, the Company early-adopted new accounting guidance related to employee share-based payments . Under this new guidance, excess tax benefits or shortfalls related to employee share-based payments are recognized in income taxes on the Consolidated Statements of Income and Comprehensive Income, whereas they previously were recorded as additional paid-in capital on the Consolidated Balance Sheets. This new accounting guidance was adopted prospectively and decreased the Company’s effective income tax rate by approximately 150 basis points for fiscal 2017. The Company also maintains a reserve for uncertain tax positions. The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in its consolidated financial statements. Prior to recording the related tax benefit in the consolidated financial statements, the Company must conclude that tax positions will be more-likely-than-not to be sustained, assuming those positions will be examined by taxing authorities with full knowledge of all relevant information. The benefit recognized in the consolidated financial statements is the amount the Company expects to realize after examination by taxing authorities. If a tax position drops below the more-likely-than-not standard, the benefit can no longer be recognized. Assumptions, judgment, and the use of estimates are required in determining if the more-likely-than-not standard has been met when developing the provision for income taxes and in determining the expected benefit. A change in the assessment of the more-likely-than-not standard could materially impact the Company’s results of operations or financial position. The Company’s reserve for uncertain tax positions, including interest and net of federal benefits, was $39.2 million as of May 31, 2017 and $54.2 million as of May 31, 2016 . Refer to Note J for further discussion of the Company’s reserve for uncertain tax positions. |
Use of Estimates | Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenue, and expenses during the reporting period. Actual amounts and results could differ from these estimates. |
Recently Adopted and Recently Issued Accounting Pronouncements | Recently adopted accounting pronouncements: In June 2016, the Company early-adopted Accounting Standards Update (“ASU”) No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” issued by the Financial Accounting Standards Board (“FASB”). ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Amendments related to accounting for excess tax benefits have been adopted prospectively, resulting in the recognition of $18.3 million of excess tax benefits within income tax expense in the Consolidated Statements of Income and Comprehensive Income for fiscal 2017, increasing diluted earnings per share by approximately $0.05 per share. Excess tax benefits related to share-based payments are now included in operating cash flows rather than financing cash flows. We have previously classified cash paid for tax withholding purposes as a financing activity in the statement of cash flows, therefore there was no change related to this requirement. The amendments allow for a one-time accounting policy election to either account for forfeitures as they occur or continue to estimate forfeitures as required by current guidance. The Company has elected to continue estimating forfeitures under the current guidance. The Company also adopted the following ASUs during fiscal 2017, none of which had a material impact on its consolidated financial statements: · ASU No. 2015-09, “Financial Services - Insurance (Topic 944): Disclosures about Short-Duration Contracts.” · ASU No. 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” · ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” · ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” · ASU No. 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” · ASU No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern.” Recently issued accounting pronouncements: In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU No. 2017-09 provides guidance concerning which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This guidance is effective for public companies for annual periods, and for interim periods within those annual periods, beginning after December 15, 2017 and is applicable to the Company’s fiscal year beginning June 1, 2018. Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not yet been issued. A mendments in this ASU will be applied prospectively to any award modified on or after the adoption date. The Company is currently evaluating this guidance, but does not anticipate it will have a material impact on its consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-08, “ Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities .” The amendments in ASU No. 2017-08 require that the premium on purchased callable debt securities to be amortized to the earliest call date. The amendments do not, however, require an accounting change for securities held at a discount; instead, the discount continues to be amortized to maturity. This guidance is effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, and is applicable to the Company’s fiscal year beginning June 1, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating this guidance but does not anticipate it will have a material impact on its consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, “Other Income - Gains and Losses From the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU No. 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it is deemed an “in substance non-financial asset.” ASU No. 2017-05 is effective at the same time the revenue standard in ASU No. 2014-09, “Revenue From Contracts With Customers (Topic 606)” goes into effect, which is for the Company’s fiscal year beginning June 1, 2018. The Company is currently evaluating this guidance as part of its revenue recognition implementation efforts, but does not anticipate it will have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairments.” ASU No. 2017-04 establishes a one-step process for testing goodwill for a decrease in value, requiring a goodwill impairment loss to be measured as the excess of the reporting unit’s carrying amount over its fair value. The guidance eliminates the second step of the current two-step process that requires the impairment to be measured as the difference between the implied value of a reporting unit’s goodwill with the goodwill’s carrying amount. ASU No. 2017-04 is effective for public entities for annual or interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual impairment tests after January 1, 2017. This guidance is applicable to the Company's fiscal year beginning June 1, 2020, and is not anticipated to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business.” ASU No. 2017-01 provides a more defined framework to use in determining when a set of assets and activities is a business. ASU No. 2017-01 also provides greater consistency in applying the guidance, making the definition of a business more operable. ASU No. 2017-01 is effective for public companies for annual periods, including interim periods, beginning after December 15, 2017. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash: a Consensus of the FASB Emerging Issues Task Force.” ASU No. 2016-18 will require a company’s cash flow statement to explain the changes during a reporting period of the totals for cash, cash equivalents, restricted cash, and restricted cash equivalents. Additionally, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents if the cash flow statement includes a reconciliation of the total cash balances for a reporting period. ASU No. 2016-18 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU No. 2016-16 will require that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs instead of when the asset is sold. ASU No. 2016-16 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company is currently evaluating this guidance to determine the potential impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU No. 2016-15 clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by current GAAP and thereby reduce the current diversity in practice. ASU No. 2016-15 is effective for public companies for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU No. 2016-13 requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. This guidance is applicable to the Company's fiscal year beginning June 1, 2020. The Company is currently evaluating this guidance to determine the potential impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” ASU No. 2016-02 improves transparency and comparability among companies by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. ASU No. 2016-02 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2019. The Company is currently evaluating this guidance to determine the potential impact on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01 “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU No. 2016-01 provides updated guidance for the recognition, measurement, presentation, and disclosure of certain financial assets and liabilities. ASU No. 2016-01 is effective for public business entities for annual and interim periods beginning after December 15, 2017, with early application permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2018. The Company is currently evaluating this guidance to determine the potential impact on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This guidance, as amended by subsequent ASUs on the topic, outlines a single comprehensive model for determining revenue recognition for contracts with customers, and supersedes current guidance on revenue recognition in Topic 605, “Revenue Recognition.” Entities have the option to apply the new guidance under a full retrospective approach to each prior reporting period presented or a modified retrospective approach with a cumulative effect of initially applying the new guidance recognized at the date of initial application within the consolidated financial statements. This guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods, with early adoption permitted effective for annual reporting periods beginning after December 15, 2016. The Company expects to adopt the new standard in its fiscal year beginning June 1, 2018 and currently anticipates applying the guidance under the full retrospective approach. The Company’s ability to adopt using the full retrospective method is dependent on system readiness and the completion of our analysis of information necessary to restate prior period consolidated financial statements. While the evaluation of the impact of the new revenue recognition standard on its consolidated financial statements has not yet been fully determined, the Company anticipates the provisions to primarily impact the manner in which it treats certain costs to obtain contracts and costs to fulfill contracts. Generally, in relation to these items, the new standard will result in the Company deferring additional costs on the Consolidated Balance Sheets and subsequently amortizing them to the Consolidated Statements of Income and Comprehensive Income over the estimated average life of a client. Other recent authoritative guidance issued by the FASB (including technical corrections to the FASB Accounting Standards Codification), the American Institute of Certified Public Accountants, and the SEC did not, or are not expected to have a material effect on the Company’s consolidated financial statements |
Description of Business, Basi26
Description of Business, Basis of Presentation, and Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2017 | |
Description of Business, Basis of Presentation, and Significant Accounting Policies [Abstract] | |
Estimated Useful Lives of Depreciable Assets | Category Depreciable life Buildings and improvements Ten to 35 years or the remaining life, whichever is shorter Data processing equipment Three to four years Furniture, fixtures, and equipment Three to seven years Leasehold improvements Ten years or the life of the lease, whichever is shorter |
Basic and Diluted Earnings Pe27
Basic and Diluted Earnings Per Share (Tables) | 12 Months Ended |
May 31, 2017 | |
Basic and Diluted Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | Year ended May 31, In millions, except per share amounts 2017 2016 2015 Basic earnings per share: Net income $ 817.3 $ 756.8 $ 674.9 Weighted-average common shares outstanding 359.8 360.7 362.9 Basic earnings per share $ 2.27 $ 2.10 $ 1.86 Diluted earnings per share: Net income $ 817.3 $ 756.8 $ 674.9 Weighted-average common shares outstanding 359.8 360.7 362.9 Dilutive effect of common share equivalents 2.8 1.8 1.7 Weighted-average common shares outstanding, assuming dilution 362.6 362.5 364.6 Diluted earnings per share $ 2.25 $ 2.09 $ 1.85 Weighted-average anti-dilutive common share equivalents 0.7 0.5 0.3 |
Investment Income, Net (Tables)
Investment Income, Net (Tables) | 12 Months Ended |
May 31, 2017 | |
Investment Income, Net [Abstract] | |
Schedule of Investment Income, Net | Year ended May 31, In millions 2017 2016 2015 Interest income on corporate funds $ 9.9 $ 8.4 $ 7.8 Interest expense (2.5) (1.1) (0.7) Net loss from equity-method investments (2.2) (2.8) (0.7) Investment income, net $ 5.2 $ 4.5 $ 6.4 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-Average Assumptions | Year ended May 31, 2017 2017 2016 2015 Performance stock options Stock options Risk-free interest rate 1.3 % 1.2 % 1.9 % 2.1 % Dividend yield 3.6 % 3.6 % 3.6 % 3.7 % Volatility factor 0.18 0.18 0.18 0.21 Expected option life in years 6.5 6.1 6.1 6.0 Weighted-average grant-date fair value of stock options granted (per share) $ 5.97 $ 5.74 $ 5.25 $ 5.68 |
Stock Option Activity | Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2016 4.5 $ 37.42 Granted 0.7 $ 60.82 Exercised (0.9) $ 34.26 Forfeited (0.1) $ 45.95 Expired — $ 36.01 Outstanding as of May 31, 2017 4.2 $ 42.02 6.3 $ 73.4 Exercisable as of May 31, 2017 2.5 $ 35.80 5.1 $ 58.1 (1) Market price of the underlying stock as of May 31, 2017 less the exercise price. |
Other Information Pertaining to Stock Option | Year ended May 31, In millions 2017 2016 2015 Total intrinsic value of stock options exercised $ 23.8 $ 14.5 $ 17.6 Total grant-date fair value of stock options vested $ 4.1 $ 4.0 $ 3.6 |
RSU Activity | Weighted- Weighted- average average remaining grant-date vesting Aggregate fair value period intrinsic In millions, except per share amounts RSUs per share (years) value (1) Nonvested as of May 31, 2016 1.8 $ 37.58 Granted 0.6 $ 53.76 Vested (0.6) $ 35.43 Forfeited (0.2) $ 42.23 Nonvested as of May 31, 2017 1.6 $ 43.53 2.9 $ 97.2 (1) Intrinsic value for RSUs is based on the market price of the underlying stock as of May 31, 2017 . |
Other Information Pertaining to RSUs | Year ended May 31, In millions, except per share amounts 2017 2016 2015 Weighted-average grant-date fair value per share of RSUs granted $ 53.76 $ 42.60 $ 36.64 Total intrinsic value of RSUs vested $ 32.3 $ 25.9 $ 21.7 Total grant-date fair value of RSUs vested $ 19.3 $ 17.3 $ 14.8 |
Restricted Stock Activity | Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2016 0.1 $ 43.99 Granted 0.1 $ 60.83 Vested (0.1) $ 42.87 Forfeited — $ 48.61 Nonvested as of May 31, 2017 0.1 $ 53.05 |
Other Information Pertaining to Restricted Stock | Year ended May 31, In millions, except per share amounts 2017 2016 2015 Weighted-average grant-date fair value per share of restricted stock granted $ 60.83 $ 47.46 $ 41.70 Total grant-date fair value of restricted stock vested $ 3.0 $ 3.0 $ 3.5 |
Performance Share Activity | Weighted- average grant-date Performance fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2016 0.5 $ 38.89 Granted (1) 0.1 $ 54.97 Vested (0.2) $ 35.69 Forfeited — $ 40.99 Nonvested as of May 31, 2017 0.4 $ 45.66 (1) Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Other Information Pertaining to Performance Shares | Year ended May 31, In millions, except per share amounts 2017 2016 2015 Weighted-average grant-date fair value per share of performance shares granted $ 54.97 $ 42.48 $ 37.61 Total grant-date fair value of performance shares vested $ 7.8 $ 5.9 $ 3.5 |
Performance Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Option Activity | Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2016 2.5 $ 31.36 Granted (2) 1.3 $ 60.89 Exercised (0.4) $ 30.65 Forfeited (1.0) $ 31.30 Expired — $ — Outstanding as of May 31, 2017 2.4 $ 47.52 6.9 $ 30.3 Exercisable as of May 31, 2017 1.1 $ 31.69 4.3 $ 30.3 (1) Market price of the underlying stock as of May 31, 2017 less the exercise price. (2) LTIP performance stock options granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Other Information Pertaining to Stock Option | Year ended May 31, In millions 2017 2016 2015 Total intrinsic value of stock options exercised $ 12.4 $ 1.0 $ 2.7 Total grant-date fair value of stock options vested $ 4.9 $ — $ 2.6 |
Performance-Based Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Stock Activity | Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2016 — $ — Granted (1) 0.2 $ 53.74 Vested — $ — Forfeited — $ — Nonvested as of May 31, 2017 0.2 $ 53.74 (1) LTIP performance shares granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Funds Held for Clients and Co30
Funds Held for Clients and Corporate Investments (Tables) | 12 Months Ended |
May 31, 2017 | |
Funds Held for Clients and Corporate Investments [Abstract] | |
Funds Held for Clients and Corporate Investments | May 31, 2017 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients money market securities and other cash equivalents $ 264.8 $ — $ — $ 264.8 Available-for-sale securities: Corporate bonds 208.6 2.7 (0.5) 210.8 General obligation municipal bonds 1,422.0 21.2 (0.9) 1,442.3 Pre-refunded municipal bonds (1) 54.6 0.9 — 55.5 Revenue municipal bonds 929.2 12.5 (0.8) 940.9 U.S. government agency securities 328.9 0.5 (3.6) 325.8 Variable rate demand notes 1,637.9 — — 1,637.9 Total available-for-sale securities 4,581.2 37.8 (5.8) 4,613.2 Other 14.8 1.9 — 16.7 Total funds held for clients and corporate investments $ 4,860.8 $ 39.7 $ (5.8) $ 4,894.7 May 31, 2016 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients money market securities and other cash equivalents $ 502.4 $ — $ — $ 502.4 Available-for-sale securities: Corporate bonds 128.4 2.9 (0.1) 131.2 General obligation municipal bonds 1,594.1 27.6 (0.1) 1,621.6 Pre-refunded municipal bonds (1) 60.2 1.4 — 61.6 Revenue municipal bonds 916.2 15.8 (0.2) 931.8 U.S. government agency securities 160.8 0.6 (0.3) 161.1 Variable rate demand notes 1,234.6 — — 1,234.6 Total available-for-sale securities 4,094.3 48.3 (0.7) 4,141.9 Other 14.2 0.8 (0.1) 14.9 Total funds held for clients and corporate investments $ 4,610.9 $ 49.1 $ (0.8) $ 4,659.2 (1) Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Classification of Investments on Consolidated Balance Sheets | May 31, In millions 2017 2016 Funds held for clients $ 4,301.9 $ 3,997.5 Corporate investments 138.8 220.6 Long-term corporate investments 454.0 441.1 Total funds held for clients and corporate investments $ 4,894.7 $ 4,659.2 |
Securities in Unrealized Loss Position | May 31, 2017 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ (0.5) $ 43.6 $ — $ — $ (0.5) $ 43.6 General obligation municipal bonds (0.9) 188.8 — — (0.9) 188.8 Pre-refunded municipal bonds — 9.2 — — — 9.2 Revenue municipal bonds (0.8) 154.8 — 1.0 (0.8) 155.8 U.S. government agency securities (3.6) 210.0 — — (3.6) 210.0 Total $ (5.8) $ 606.4 $ — $ 1.0 $ (5.8) $ 607.4 May 31, 2016 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ (0.1) $ 14.7 $ — $ — $ (0.1) $ 14.7 General obligation municipal bonds (0.1) 48.9 — 2.8 (0.1) 51.7 Pre-refunded municipal bonds — 5.7 — — — 5.7 Revenue municipal bonds — 20.7 (0.2) 11.7 (0.2) 32.4 U.S. government agency securities (0.3) 51.1 — — (0.3) 51.1 Total $ (0.5) $ 141.1 $ (0.2) $ 14.5 $ (0.7) $ 155.6 |
Realized Gains and Losses from Sale of Available-for-sale Securities | Year ended May 31, In millions 2017 2016 2015 Gross realized gains $ 0.1 $ 0.1 $ 0.3 Gross realized losses — — — Net realized gains $ 0.1 $ 0.1 $ 0.3 |
Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity | May 31, 2017 Amortized Fair In millions cost value Maturity date: Due in one year or less $ 308.8 $ 309.3 Due after one year through three years 762.1 768.2 Due after three years through five years 1,067.0 1,086.2 Due after five years 2,443.3 2,449.5 Total $ 4,581.2 $ 4,613.2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
May 31, 2017 | |
Fair Value Measurements [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | May 31, 2017 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities: Corporate bonds $ 210.8 $ — $ 210.8 $ — General obligation municipal bonds 1,442.3 — 1,442.3 — Pre-refunded municipal bonds 55.5 — 55.5 — Revenue municipal bonds 940.9 — 940.9 — U.S. government agency securities 325.8 — 325.8 — Variable rate demand notes 1,637.9 — 1,637.9 — Total available-for-sale securities $ 4,613.2 $ — $ 4,613.2 $ — Other $ 16.7 $ 16.7 $ — $ — Liabilities: Other long-term liabilities $ 16.7 $ 16.7 $ — $ — May 31, 2016 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities: Corporate bonds $ 131.2 $ — $ 131.2 $ — General obligation municipal bonds 1,621.6 — 1,621.6 — Pre-refunded municipal bonds 61.6 — 61.6 — Revenue municipal bonds 931.8 — 931.8 — U.S. government agency securities 161.1 — 161.1 — Variable rate demand notes 1,234.6 — 1,234.6 — Total available-for-sale securities $ 4,141.9 $ — $ 4,141.9 $ — Other $ 14.9 $ 14.9 $ — $ — Liabilities: Other long-term liabilities $ 14.9 $ 14.9 $ — $ — |
Property and Equipment, Net o32
Property and Equipment, Net of Accumulated Depreciation (Tables) | 12 Months Ended |
May 31, 2017 | |
Property and Equipment, Net of Accumulated Depreciation [Abstract] | |
Components of Property and Equipment, at Cost | May 31, In millions 2017 2016 Land and improvements $ 8.3 $ 8.3 Buildings and improvements 103.5 103.0 Data processing equipment 199.7 196.1 Software (1) 496.1 447.5 Furniture, fixtures, and equipment 115.2 125.0 Leasehold improvements 109.5 108.2 Construction in progress (1) 18.7 24.1 Total property and equipment, gross 1,051.0 1,012.2 Less: Accumulated depreciation 713.8 659.2 Property and equipment, net of accumulated depreciation $ 337.2 $ 353.0 (1) Software includes both purchased software and costs capitalized related to internally developed software placed in service. Capitalized costs related to internally developed software that has not yet been placed in service is included in construction in progress. |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets, Net of Accumulated Amortization (Tables) | 12 Months Ended |
May 31, 2017 | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | |
Components of Intangible Assets, at Cost | May 31, In millions 2017 2016 Client lists $ 293.5 $ 289.2 Other intangible assets 5.4 5.4 Total intangible assets, gross 298.9 294.6 Less: Accumulated amortization 241.3 225.1 Intangible assets, net of accumulated amortization $ 57.6 $ 69.5 |
Estimated Amortization Expense | In millions Estimated amortization Year ending May 31, expense 2018 $ 15.4 2019 12.3 2020 9.5 2021 7.3 2022 5.2 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2017 | |
Income Taxes [Abstract] | |
Components of Deferred Tax Assets and Liabilities | May 31, In millions 2017 2016 Deferred tax assets: Compensation and employee benefit liabilities $ 23.1 $ 21.4 Other current liabilities 9.1 7.9 Tax credit carry forward 39.3 40.0 Depreciation 7.3 8.8 Stock-based compensation 21.8 22.0 Tax benefit of uncertain tax positions 6.4 18.6 Other 7.6 7.1 Gross deferred tax assets 114.6 125.8 Deferred tax liabilities: Capitalized software 54.8 56.3 Depreciation 1.6 2.5 Goodwill and intangible assets 66.8 58.5 Revenue not subject to current taxes 13.6 13.3 Unrealized gains on available-for-sale securities 11.7 17.3 Gross deferred tax liabilities 148.5 147.9 Net deferred tax liability $ (33.9) $ (22.1) |
Components of Provision for Income Taxes | Year ended May 31, In millions 2017 2016 2015 Current: Federal $ 362.0 $ 336.4 $ 341.4 State 48.1 50.8 47.8 Total current 410.1 387.2 389.2 Deferred: Federal 15.9 5.5 (5.1) State 1.5 1.6 1.0 Total deferred 17.4 7.1 (4.1) Income taxes $ 427.5 $ 394.3 $ 385.1 |
Reconciliation of U.S. Federal Statutory Tax Rate | Year ended May 31, 2017 2016 2015 Federal statutory tax rate 35.0 % 35.0 % 35.0 % Increase/(decrease) resulting from: State income taxes, net of federal tax benefit 2.8 % 3.0 % 3.0 % Section 199 - Qualified production activities (0.5) % (2.4) % — % Tax-exempt municipal bond interest (1.3) % (1.4) % (1.5) % Stock option windfall benefit (1.5) % — % — % Other items (0.2) % 0.1 % (0.2) % Effective income tax rate 34.3 % 34.3 % 36.3 % |
Reconciliation of Gross Unrecognized Tax Benefits, Not Including Interest or Other Potential Offsetting Effects | Year ended May 31, In millions 2017 2016 2015 Balance as of beginning of fiscal year $ 64.7 $ 39.9 $ 40.0 Additions for tax positions of the current year 8.2 7.3 6.7 Additions for tax positions of prior years 4.8 20.7 0.8 Reductions for tax positions of prior years (2.5) (0.1) (0.4) Settlements with tax authorities (29.5) (2.2) (1.2) Expiration of the statute of limitations (2.0) (0.9) (6.0) Balance as of end of fiscal year $ 43.7 $ 64.7 $ 39.9 |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
May 31, 2017 | |
Accumulated Other Comprehensive Income [Abstract] | |
Changes in Accumulated Other Comprehensive Income | Year ended May 31, In millions 2017 2016 2015 Beginning balance $ 29.2 $ 7.5 $ 21.5 Other comprehensive (loss)/income: Unrealized holding (losses)/gains (14.7) 34.2 (21.5) Income tax benefit/(expense) related to unrealized holding (losses)/gains 5.6 (12.4) 7.7 Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income (0.1) (0.1) (0.3) Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities — — 0.1 Total other comprehensive (loss)/income, net of tax (9.2) 21.7 (14.0) Ending balance $ 20.0 $ 29.2 $ 7.5 Total tax (benefit)/expense included in other comprehensive (loss)/income $ (5.6) $ 12.4 $ (7.8) |
Short-term Financing (Tables)
Short-term Financing (Tables) | 12 Months Ended |
May 31, 2017 | |
Line of Credit [Member] | |
Line of Credit Facility [Line Items] | |
Lines of Credit Facility Amount Available or Amount Borrowed | Financial institution Amount available Expiration date JP Morgan Chase Bank, N.A. $350 million February 28, 2018 Bank of America, N.A. $250 million February 28, 2018 PNC Bank, National Association $150 million February 28, 2018 Wells Fargo Bank, National Association $150 million February 28, 2018 |
JP Morgan Chase Bank, N.A. [Member] | Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Lines of Credit Facility Amount Available or Amount Borrowed | Year ended May 31, $ in millions 2017 2016 Number of days borrowed 30 5 Maximum amount borrowed $ 450.0 $ 450.0 Weighted-average amount borrowed $ 196.7 $ 305.0 Weighted-average interest rate 2.89 % 3.39 % |
PNC Bank, National Association [Member] | Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Lines of Credit Facility Amount Available or Amount Borrowed | Year ended May 31, $ in millions 2017 Number of days borrowed 353 Maximum amount borrowed $ 55.6 Weighted-average amount borrowed $ 52.8 Weighted-average interest rate 1.21 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Operating Lease Payments | Minimum In millions lease Year ending May 31, payments 2018 $ 36.1 2019 27.3 2020 19.3 2021 13.2 2022 6.1 Thereafter 4.3 |
Minimum Future Payment Obligations | Minimum In millions payment Year ending May 31, obligation 2018 $ 78.8 2019 25.1 2020 19.3 2021 3.4 2022 0.8 Thereafter — |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
May 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | Three Months Ended Fiscal 2017 August 31 November 30 February 28 May 31 Full Year Service revenue $ 773.5 $ 760.0 $ 782.6 $ 784.6 $ 3,100.7 Interest on funds held for clients 12.0 11.4 13.2 14.0 50.6 Total revenue $ 785.5 $ 771.4 $ 795.8 $ 798.6 $ 3,151.3 Operating income $ 323.0 $ 311.1 $ 306.6 $ 298.9 $ 1,239.6 Investment income, net 1.5 0.9 1.2 1.6 5.2 Income before income taxes 324.5 312.0 307.8 300.5 1,244.8 Income taxes 107.1 109.9 105.3 105.2 427.5 Net income $ 217.4 $ 202.1 $ 202.5 $ 195.3 $ 817.3 Basic earnings per share (1) $ 0.60 $ 0.56 $ 0.56 $ 0.54 $ 2.27 Diluted earnings per share (1) $ 0.60 $ 0.56 $ 0.56 $ 0.54 $ 2.25 Weighted-average common shares outstanding 361.0 360.2 359.0 359.3 359.8 Weighted-average common shares outstanding, assuming dilution 364.1 362.6 361.8 362.1 362.6 Cash dividends per common share $ 0.46 $ 0.46 $ 0.46 $ 0.46 $ 1.84 Total net realized gains (2) $ 0.1 $ — $ — $ — $ 0.1 Three Months Ended Fiscal 2016 August 31 November 30 February 29 May 31 Full Year Service revenue $ 712.2 $ 711.3 $ 740.7 $ 741.6 $ 2,905.8 Interest on funds held for clients 10.8 11.1 11.9 12.3 46.1 Total revenue $ 723.0 $ 722.4 $ 752.6 $ 753.9 $ 2,951.9 Operating income $ 296.1 $ 294.2 $ 280.0 $ 276.3 $ 1,146.6 Investment income/(loss), net 1.4 1.6 1.7 (0.2) 4.5 Income before income taxes 297.5 295.8 281.7 276.1 1,151.1 Income taxes 88.4 106.6 101.3 98.0 394.3 Net income $ 209.1 $ 189.2 $ 180.4 $ 178.1 $ 756.8 Basic earnings per share (1) $ 0.58 $ 0.52 $ 0.50 $ 0.49 $ 2.10 Diluted earnings per share (1) $ 0.58 $ 0.52 $ 0.50 $ 0.49 $ 2.09 Weighted-average common shares outstanding 361.1 360.7 360.5 360.3 360.7 Weighted-average common shares outstanding, assuming dilution 362.8 362.3 362.2 362.6 362.5 Cash dividends per common share $ 0.42 $ 0.42 $ 0.42 $ 0.42 $ 1.68 Total net realized gains (2) $ — $ — $ 0.1 $ — $ 0.1 (1) Each quarter is a discrete period and the sum of the four quarters’ basic and diluted earnings per share amounts may not equal the full year amount. (2) Total net realized gains on the combined funds held for clients and corporate investment portfolios. |
Description of Business, Basi39
Description of Business, Basis of Presentation, and Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Millions | Jul. 13, 2017$ / shares | May 31, 2017USD ($)segment$ / shares | May 31, 2016USD ($) | May 31, 2015USD ($) |
Accounting Policies [Line Items] | ||||
Number of reportable segments | segment | 1 | |||
Maximum period in which payroll taxes will be remitted after receipt of collections from clients | 90 days | |||
Quarterly dividend per share | $ / shares | $ 0.46 | |||
Allowance for doubtful accounts | $ 6 | $ 4.2 | ||
Accounts receivable, net of allowance for doubtful accounts | 507.5 | 408.6 | ||
Goodwill | 657.1 | 657.1 | ||
Goodwill impairment loss | 0 | 0 | $ 0 | |
Direct pass-through costs | 5,900 | 5,100 | 4,200 | |
Maximum individual workers' compensation claims liability | 1.3 | 1.3 | ||
Workers' compensation insurance costs in current liabilities | 18 | 13.8 | ||
Workers' compensation insurance costs in long-term liabilities | 22.3 | 18.4 | ||
Maximum individual health insurance claims liability | 0.3 | 0.3 | ||
PEO accrued health insurance reserves in current liabilities | 15.7 | 9.5 | ||
Stock-based compensation costs recognized | $ 35.4 | 34.6 | $ 31.4 | |
Decrease in effective income tax rate | (1.50%) | |||
Reserve for uncertain tax positions | $ 39.2 | 54.2 | ||
Excess tax benefit in income tax expense | $ 18.3 | |||
Diluted earnings per share increase | $ / shares | $ 0.05 | |||
Subsequent Event [Member] | ||||
Accounting Policies [Line Items] | ||||
Declared date | Jul. 13, 2017 | |||
Quarterly dividend per share increase | $ / shares | $ 0.04 | |||
Quarterly dividend percentage increase | 9.00% | |||
Quarterly dividend per share | $ / shares | $ 0.50 | |||
Payable date | Aug. 24, 2017 | |||
Record date | Aug. 1, 2017 | |||
Trade Receivables [Member] | ||||
Accounting Policies [Line Items] | ||||
Accounts receivable, net of allowance for doubtful accounts | $ 255 | 221.6 | ||
Purchased Receivables [Member] | ||||
Accounting Policies [Line Items] | ||||
Accounts receivable, net of allowance for doubtful accounts | $ 252.5 | $ 187 | ||
Software Development [Member] | ||||
Accounting Policies [Line Items] | ||||
Estimated useful lives | 15 years | |||
Minimum [Member] | ||||
Accounting Policies [Line Items] | ||||
Period in which payroll taxes are typically remitted after receipt of collections from clients | 1 day | |||
Payroll funding fees average collection period | 35 days | |||
Minimum [Member] | Finite-Lived Intangible Assets [Member] | ||||
Accounting Policies [Line Items] | ||||
Amortization period | 3 years | |||
Minimum [Member] | Software [Member] | ||||
Accounting Policies [Line Items] | ||||
Estimated useful lives | 3 years | |||
Maximum [Member] | ||||
Accounting Policies [Line Items] | ||||
Period in which payroll taxes are typically remitted after receipt of collections from clients | 30 days | |||
Payroll funding fees average collection period | 45 days | |||
Short-term investments maturity at acquisition | 90 days | |||
Maximum [Member] | Finite-Lived Intangible Assets [Member] | ||||
Accounting Policies [Line Items] | ||||
Amortization period | 12 years | |||
Maximum [Member] | Software [Member] | ||||
Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Germany [Member] | Total Revenue [Member] | Geographic Concentration Risk [Member] | ||||
Accounting Policies [Line Items] | ||||
Percentage of total revenue less than one percent | 1.00% | 1.00% | 1.00% |
Description of Business, Basi40
Description of Business, Basis of Presentation, and Significant Accounting Policies (Estimated Useful Lives of Depreciable Assets) (Details) | 12 Months Ended |
May 31, 2017 | |
Minimum [Member] | Buildings and Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Minimum [Member] | Data Processing Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Minimum [Member] | Furniture, Fixtures, and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | Buildings and Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 35 years |
Maximum [Member] | Data Processing Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 4 years |
Maximum [Member] | Furniture, Fixtures, and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Basic and Diluted Earnings Pe41
Basic and Diluted Earnings Per Share (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||
Common stock repurchased and retired, shares | 2.9 | ||
Common stock repurchased and retired, values | $ 166.2 | $ 107.9 | $ 182.4 |
Authorized in May 2014 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Expiration date | May 31, 2017 | ||
Approved repurchase amount | $ 350 | ||
Common stock repurchased and retired, shares | 2.2 | ||
Common stock repurchased and retired, values | $ 59.7 | $ 107.9 | |
Authorized in July 2016 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Expiration date | May 31, 2019 | ||
Approved repurchase amount | $ 350 | ||
Common stock repurchased and retired, values | $ 106.5 |
Basic and Diluted Earnings Pe42
Basic and Diluted Earnings Per Share (Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2017 | May 31, 2016 | May 31, 2015 | |||||||||||
Basic and Diluted Earnings Per Share [Abstract] | |||||||||||||||||||||
Net income | $ 195.3 | $ 202.5 | $ 202.1 | $ 217.4 | $ 178.1 | $ 180.4 | $ 189.2 | $ 209.1 | $ 817.3 | $ 756.8 | $ 674.9 | ||||||||||
Basic earnings per share: | |||||||||||||||||||||
Weighted-average common shares outstanding | 359.3 | 359 | 360.2 | 361 | 360.3 | 360.5 | 360.7 | 361.1 | 359.8 | 360.7 | 362.9 | ||||||||||
Basic earnings per share | $ 0.54 | [1] | $ 0.56 | [1] | $ 0.56 | [1] | $ 0.60 | [1] | $ 0.49 | [1] | $ 0.50 | [1] | $ 0.52 | [1] | $ 0.58 | [1] | $ 2.27 | [1] | $ 2.10 | [1] | $ 1.86 |
Diluted earnings per share: | |||||||||||||||||||||
Dilutive effect of common share equivalents | 2.8 | 1.8 | 1.7 | ||||||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 362.1 | 361.8 | 362.6 | 364.1 | 362.6 | 362.2 | 362.3 | 362.8 | 362.6 | 362.5 | 364.6 | ||||||||||
Diluted earnings per share | $ 0.54 | [1] | $ 0.56 | [1] | $ 0.56 | [1] | $ 0.60 | [1] | $ 0.49 | [1] | $ 0.50 | [1] | $ 0.52 | [1] | $ 0.58 | [1] | $ 2.25 | [1] | $ 2.09 | [1] | $ 1.85 |
Weighted-average anti-dilutive common share equivalents | 0.7 | 0.5 | 0.3 | ||||||||||||||||||
[1] | Each quarter is a discrete period and the sum of the four quarters' basic and diluted earnings per share amounts may not equal the full year amount. |
Business Combination (Narrative
Business Combination (Narrative) (Details) - Advance Partners [Member] $ in Millions | 12 Months Ended |
May 31, 2016USD ($) | |
Business Acquisition [Line Items] | |
Effective acquisition date | Dec. 22, 2015 |
Base purchase price | $ 190.5 |
Settlement of debt | 118.4 |
Cash acquired | 12.8 |
Accounts receivable balances acquired, net | 164.8 |
Goodwill acquired | $ 95.6 |
Investment Income, Net (Schedul
Investment Income, Net (Schedule of Investment Income, Net) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Investment Income, Net [Abstract] | |||||||||||
Interest income on corporate funds | $ 9.9 | $ 8.4 | $ 7.8 | ||||||||
Interest expense | (2.5) | (1.1) | (0.7) | ||||||||
Net loss from equity-method investments | (2.2) | (2.8) | (0.7) | ||||||||
Investment income, net | $ 1.6 | $ 1.2 | $ 0.9 | $ 1.5 | $ (0.2) | $ 1.7 | $ 1.6 | $ 1.4 | $ 5.2 | $ 4.5 | $ 6.4 |
Stock-Based Compensation Plan45
Stock-Based Compensation Plans (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized for grant | 44.1 | ||
Shares available for future grants | 20.6 | ||
Stock-based compensation expense | $ 35.4 | $ 34.6 | $ 31.4 |
Income tax benefits related to stock-based compensation | 13.4 | 12.9 | 11.7 |
Total unrecognized compensation cost related to all unvested stock-based awards | $ 69.6 | ||
Weighted-average period in years of all unvested stock-based awards | 2 years 10 months 24 days | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted | 0.7 | ||
Contractual life | 10 years | ||
Total intrinsic value of stock options exercised | $ 23.8 | 14.5 | 17.6 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Service period | 2 years | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Service period | 1 year | ||
Director [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Director [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Management [Member] | Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Tranche One [Member] | Officer [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% | ||
Tranche One [Member] | Officer [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.30% | ||
Tranche One [Member] | Management [Member] | Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 20.00% | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 |
Discount to the market price | 5.00% | 5.00% | |
Maximum [Member] | Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Discount to the market price | 15.00% |
Stock-Based Compensation Plan46
Stock-Based Compensation Plans (Weighted-Average Assumptions) (Details) - $ / shares | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Performance Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.30% | ||
Dividend yield | 3.60% | ||
Volatility factor | 18.00% | ||
Expected option life in years | 6 years 6 months | ||
Weighted-average grant-date fair value of stock options granted (per share) | $ 5.97 | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.20% | 1.90% | 2.10% |
Dividend yield | 3.60% | 3.60% | 3.70% |
Volatility factor | 18.00% | 18.00% | 21.00% |
Expected option life in years | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years |
Weighted-average grant-date fair value of stock options granted (per share) | $ 5.74 | $ 5.25 | $ 5.68 |
Stock-Based Compensation Plan47
Stock-Based Compensation Plans (Stock Option Activity) (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
May 31, 2017USD ($)$ / sharesshares | ||
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, Beginning balance, Shares subject to options | shares | 4.5 | |
Granted, Shares subject to options | shares | 0.7 | |
Exercised, Shares subject to options | shares | (0.9) | |
Forfeited, Shares subject to options | shares | (0.1) | |
Expired, Shares subject to options | shares | ||
Outstanding, Ending balance, Shares subject to options | shares | 4.2 | |
Exercisable, Shares subject to options | shares | 2.5 | |
Outstanding, Beginning balance, Weighted-average exercise price per share | $ / shares | $ 37.42 | |
Granted, Weighted-average exercise price per share | $ / shares | 60.82 | |
Exercised, Weighted-average exercise price per share | $ / shares | 34.26 | |
Forfeited, Weighted-average exercise price per share | $ / shares | 45.95 | |
Expired, Weighted-average exercise price per share | $ / shares | 36.01 | |
Outstanding, Ending balance, Weighted-average exercise price per share | $ / shares | 42.02 | |
Exercisable, Weighted-average exercise price per share | $ / shares | $ 35.80 | |
Outstanding, Weighted-average remaining contractual term (years) | 6 years 3 months 18 days | |
Exercisable, Weighted-average remaining contractual term (years) | 5 years 1 month 6 days | |
Outstanding, Aggregate intrinsic value | $ | $ 73.4 | [1] |
Exercisable, Aggregate intrinsic value | $ | $ 58.1 | [1] |
Performance Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, Beginning balance, Shares subject to options | shares | 2.5 | |
Granted, Shares subject to options | shares | 1.3 | [2] |
Exercised, Shares subject to options | shares | (0.4) | |
Forfeited, Shares subject to options | shares | (1) | |
Expired, Shares subject to options | shares | ||
Outstanding, Ending balance, Shares subject to options | shares | 2.4 | |
Exercisable, Shares subject to options | shares | 1.1 | |
Outstanding, Beginning balance, Weighted-average exercise price per share | $ / shares | $ 31.36 | |
Granted, Weighted-average exercise price per share | $ / shares | 60.89 | [2] |
Exercised, Weighted-average exercise price per share | $ / shares | 30.65 | |
Forfeited, Weighted-average exercise price per share | $ / shares | 31.30 | |
Expired, Weighted-average exercise price per share | $ / shares | ||
Outstanding, Ending balance, Weighted-average exercise price per share | $ / shares | 47.52 | |
Exercisable, Weighted-average exercise price per share | $ / shares | $ 31.69 | |
Outstanding, Weighted-average remaining contractual term (years) | 6 years 10 months 24 days | |
Exercisable, Weighted-average remaining contractual term (years) | 4 years 3 months 18 days | |
Outstanding, Aggregate intrinsic value | $ | $ 30.3 | [3] |
Exercisable, Aggregate intrinsic value | $ | $ 30.3 | [3] |
[1] | Market price of the underlying stock as of May 31, 2017 less the exercise price. | |
[2] | LTIP performance stock options granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. | |
[3] | Market price of the underlying stock as of May 31, 2017 less the exercise price. |
Stock-Based Compensation Plan48
Stock-Based Compensation Plans (Other Information Pertaining to Stock Option) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of stock options exercised | $ 23.8 | $ 14.5 | $ 17.6 |
Total grant-date fair value of stock options vested | 4.1 | 4 | 3.6 |
Performance Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of stock options exercised | 12.4 | $ 1 | 2.7 |
Total grant-date fair value of stock options vested | $ 4.9 | $ 2.6 |
Stock-Based Compensation Plan49
Stock-Based Compensation Plans (RSU Activity) (Details) - Restricted Stock Units [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested, Beginning balance, Awards | 1.8 | |||
Granted, Awards | 0.6 | |||
Vested, Awards | (0.6) | |||
Forfeited, Awards | (0.2) | |||
Nonvested, Ending balance, Awards | 1.6 | 1.8 | ||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | $ 37.58 | |||
Granted, Weighted-average grant-date fair value per share | 53.76 | $ 42.60 | $ 36.64 | |
Vested, Weighted-average grant-date fair value per share | 35.43 | |||
Forfeited, Weighted-average grant-date fair value per share | 42.23 | |||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 43.53 | $ 37.58 | ||
Nonvested, Weighted-average remaining vesting period (years) | 2 years 10 months 24 days | |||
Nonvested, Aggregate intrinsic value | [1] | $ 97.2 | ||
[1] | Intrinsic value for RSUs is based on the market price of the underlying stock as of May 31, 2017. |
Stock-Based Compensation Plan50
Stock-Based Compensation Plans (Other Information Pertaining to RSUs) (Details) - Restricted Stock Units [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value per share | $ 53.76 | $ 42.60 | $ 36.64 |
Total intrinsic value of RSUs vested | $ 32.3 | $ 25.9 | $ 21.7 |
Total grant-date fair value of RSUs vested | $ 19.3 | $ 17.3 | $ 14.8 |
Stock-Based Compensation Plan51
Stock-Based Compensation Plans (Restricted Stock Activity) (Details) - $ / shares shares in Millions | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested, Beginning balance, Awards | 0.1 | |||
Granted, Awards | 0.1 | |||
Vested, Awards | (0.1) | |||
Forfeited, Awards | ||||
Nonvested, Ending balance, Awards | 0.1 | 0.1 | ||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | $ 43.99 | |||
Granted, Weighted-average grant-date fair value per share | 60.83 | $ 47.46 | $ 41.70 | |
Vested, Weighted-average grant-date fair value per share | 42.87 | |||
Forfeited, Weighted-average grant-date fair value per share | 48.61 | |||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 53.05 | $ 43.99 | ||
Performance Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested, Beginning balance, Awards | ||||
Granted, Awards | [1] | 0.2 | ||
Vested, Awards | ||||
Forfeited, Awards | ||||
Nonvested, Ending balance, Awards | 0.2 | |||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | ||||
Granted, Weighted-average grant-date fair value per share | [1] | 53.74 | ||
Vested, Weighted-average grant-date fair value per share | ||||
Forfeited, Weighted-average grant-date fair value per share | ||||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 53.74 | |||
[1] | LTIP performance shares granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Stock-Based Compensation Plan52
Stock-Based Compensation Plans (Other Information Pertaining to Restricted Stock) (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value per share | $ 60.83 | $ 47.46 | $ 41.70 |
Total grant-date fair value of shares vested | $ 3 | $ 3 | $ 3.5 |
Stock-Based Compensation Plan53
Stock-Based Compensation Plans (Performance Share Activity) (Details) - Performance Shares [Member] - $ / shares shares in Millions | 12 Months Ended | ||||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Nonvested, Beginning balance, Awards | 0.5 | ||||
Granted, Awards | [1] | 0.1 | |||
Vested, Awards | (0.2) | ||||
Forfeited, Awards | |||||
Nonvested, Ending balance, Awards | 0.4 | 0.5 | |||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | $ 38.89 | ||||
Granted, Weighted-average grant-date fair value per share | 54.97 | [1] | $ 42.48 | $ 37.61 | |
Vested, Weighted-average grant-date fair value per share | 35.69 | ||||
Forfeited, Weighted-average grant-date fair value per share | 40.99 | ||||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 45.66 | $ 38.89 | |||
[1] | Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Stock-Based Compensation Plan54
Stock-Based Compensation Plans (Other Information Pertaining to Performance Shares) (Details) - Performance Shares [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average grant-date fair value per share | $ 54.97 | [1] | $ 42.48 | $ 37.61 |
Total grant-date fair value of shares vested | $ 7.8 | $ 5.9 | $ 3.5 | |
[1] | Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Funds Held for Clients and Co55
Funds Held for Clients and Corporate Investments (Narrative) (Details) $ in Millions | 12 Months Ended | |
May 31, 2017USD ($)security | May 31, 2016USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | ||
Net unrealized gain on available-for-sale securities | $ 32 | $ 47.6 |
Number of available-for-sale securities in an unrealized loss position | security | 216 | 63 |
Gross unrealized losses on available-for-sale securities | $ 5.8 | $ 0.7 |
Variable Rate Demand Notes [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities contractual maturities | 20 years | |
Variable Rate Demand Notes [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities contractual maturities | 30 years |
Funds Held for Clients and Co56
Funds Held for Clients and Corporate Investments (Funds Held for Clients and Corporate Investments) (Details) - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Funds held for clients money market securities and other cash equivalents, Amortized cost | $ 264.8 | $ 502.4 | |
Funds held for clients money market securities and other cash equivalents, Gross unrealized gains | |||
Funds held for clients money market securities and other cash equivalents, Gross unrealized losses | |||
Funds held for clients money market securities and other cash equivalents, Fair value | 264.8 | 502.4 | |
Available-for-sale securities, Amortized cost | 4,581.2 | 4,094.3 | |
Available-for-sale securities, Gross unrealized gains | 37.8 | 48.3 | |
Available-for-sale securities, Gross unrealized losses | (5.8) | (0.7) | |
Available-for-sale securities, Fair value | 4,613.2 | 4,141.9 | |
Other, Amortized cost | 14.8 | 14.2 | |
Other, Gross unrealized gains | 1.9 | 0.8 | |
Other, Gross unrealized losses | (0.1) | ||
Other, Fair value | 16.7 | 14.9 | |
Total funds held for clients and corporate investments, Amortized cost | 4,860.8 | 4,610.9 | |
Total funds held for clients and corporate investments, Gross unrealized gains | 39.7 | 49.1 | |
Total funds held for clients and corporate investments, Gross unrealized losses | (5.8) | (0.8) | |
Total funds held for clients and corporate investments, Fair value | 4,894.7 | 4,659.2 | |
Corporate Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 208.6 | 128.4 | |
Available-for-sale securities, Gross unrealized gains | 2.7 | 2.9 | |
Available-for-sale securities, Gross unrealized losses | (0.5) | (0.1) | |
Available-for-sale securities, Fair value | 210.8 | 131.2 | |
General Obligation Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 1,422 | 1,594.1 | |
Available-for-sale securities, Gross unrealized gains | 21.2 | 27.6 | |
Available-for-sale securities, Gross unrealized losses | (0.9) | (0.1) | |
Available-for-sale securities, Fair value | 1,442.3 | 1,621.6 | |
Pre-Refunded Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | [1] | 54.6 | 60.2 |
Available-for-sale securities, Gross unrealized gains | [1] | 0.9 | 1.4 |
Available-for-sale securities, Gross unrealized losses | [1] | ||
Available-for-sale securities, Fair value | [1] | 55.5 | 61.6 |
Revenue Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 929.2 | 916.2 | |
Available-for-sale securities, Gross unrealized gains | 12.5 | 15.8 | |
Available-for-sale securities, Gross unrealized losses | (0.8) | (0.2) | |
Available-for-sale securities, Fair value | 940.9 | 931.8 | |
U.S. Government Agency Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 328.9 | 160.8 | |
Available-for-sale securities, Gross unrealized gains | 0.5 | 0.6 | |
Available-for-sale securities, Gross unrealized losses | (3.6) | (0.3) | |
Available-for-sale securities, Fair value | 325.8 | 161.1 | |
Variable Rate Demand Notes [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 1,637.9 | 1,234.6 | |
Available-for-sale securities, Gross unrealized gains | |||
Available-for-sale securities, Gross unrealized losses | |||
Available-for-sale securities, Fair value | $ 1,637.9 | $ 1,234.6 | |
[1] | Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Funds Held for Clients and Co57
Funds Held for Clients and Corporate Investments (Classification of Investments on Consolidated Balance Sheets) (Details) - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 |
Funds Held for Clients and Corporate Investments [Abstract] | ||
Funds held for clients | $ 4,301.9 | $ 3,997.5 |
Corporate investments | 138.8 | 220.6 |
Long-term corporate investments | 454 | 441.1 |
Total funds held for clients and corporate investments, Fair value | $ 4,894.7 | $ 4,659.2 |
Funds Held for Clients and Co58
Funds Held for Clients and Corporate Investments (Securities in Unrealized Loss Position) (Details) - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | $ (5.8) | $ (0.5) |
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.2) | |
Total, Gross unrealized losses | (5.8) | (0.7) |
Securities in an unrealized loss position for less than twelve months, Fair value | 606.4 | 141.1 |
Securities in an unrealized loss position for more than twelve months, Fair value | 1 | 14.5 |
Total, Fair value | 607.4 | 155.6 |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (0.5) | (0.1) |
Total, Gross unrealized losses | (0.5) | (0.1) |
Securities in an unrealized loss position for less than twelve months, Fair value | 43.6 | 14.7 |
Total, Fair value | 43.6 | 14.7 |
General Obligation Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (0.9) | (0.1) |
Total, Gross unrealized losses | (0.9) | (0.1) |
Securities in an unrealized loss position for less than twelve months, Fair value | 188.8 | 48.9 |
Securities in an unrealized loss position for more than twelve months, Fair value | 2.8 | |
Total, Fair value | 188.8 | 51.7 |
Pre-Refunded Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Fair value | 9.2 | 5.7 |
Total, Fair value | 9.2 | 5.7 |
Revenue Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (0.8) | |
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.2) | |
Total, Gross unrealized losses | (0.8) | (0.2) |
Securities in an unrealized loss position for less than twelve months, Fair value | 154.8 | 20.7 |
Securities in an unrealized loss position for more than twelve months, Fair value | 1 | 11.7 |
Total, Fair value | 155.8 | 32.4 |
U.S. Government Agency Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (3.6) | (0.3) |
Total, Gross unrealized losses | (3.6) | (0.3) |
Securities in an unrealized loss position for less than twelve months, Fair value | 210 | 51.1 |
Total, Fair value | $ 210 | $ 51.1 |
Funds Held for Clients and Co59
Funds Held for Clients and Corporate Investments (Realized Gains and Losses from Sale of Available-for-sale Securities) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2016 | [1] | Feb. 29, 2016 | [1] | May 31, 2017 | May 31, 2016 | May 31, 2015 | |||
Funds Held for Clients and Corporate Investments [Abstract] | |||||||||
Gross realized gains | $ 0.1 | $ 0.1 | $ 0.3 | ||||||
Gross realized losses | |||||||||
Net realized gains | $ 0.1 | $ 0.1 | $ 0.1 | [1] | $ 0.1 | [1] | $ 0.3 | ||
[1] | Total net realized gains on the combined funds held for clients and corporate investment portfolios. |
Funds Held for Clients and Co60
Funds Held for Clients and Corporate Investments (Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity) (Details) - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 |
Funds Held for Clients and Corporate Investments [Abstract] | ||
Due in one year or less, Amortized cost | $ 308.8 | |
Due after one year through three years, Amortized cost | 762.1 | |
Due after three years through five years, Amortized cost | 1,067 | |
Due after five years, Amortized cost | 2,443.3 | |
Available-for-sale securities, Amortized cost | 4,581.2 | $ 4,094.3 |
Due in one year or less, Fair value | 309.3 | |
Due after one year through three years, Fair value | 768.2 | |
Due after three years through five years, Fair value | 1,086.2 | |
Due after five years, Fair value | 2,449.5 | |
Available-for-sale securities, Fair value | $ 4,613.2 | $ 4,141.9 |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 4,613.2 | $ 4,141.9 |
Other | 16.7 | 14.9 |
Other long-term liabilities | 16.7 | 14.9 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 210.8 | 131.2 |
General Obligation Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,442.3 | 1,621.6 |
Pre-Refunded Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 55.5 | 61.6 |
Revenue Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 940.9 | 931.8 |
U.S. Government Agency Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 325.8 | 161.1 |
Variable Rate Demand Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,637.9 | 1,234.6 |
Quoted Prices in Active Markets (Level 1) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other | 16.7 | 14.9 |
Other long-term liabilities | 16.7 | 14.9 |
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 4,613.2 | 4,141.9 |
Significant Other Observable Inputs (Level 2) [Member] | Corporate Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 210.8 | 131.2 |
Significant Other Observable Inputs (Level 2) [Member] | General Obligation Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,442.3 | 1,621.6 |
Significant Other Observable Inputs (Level 2) [Member] | Pre-Refunded Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 55.5 | 61.6 |
Significant Other Observable Inputs (Level 2) [Member] | Revenue Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 940.9 | 931.8 |
Significant Other Observable Inputs (Level 2) [Member] | U.S. Government Agency Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 325.8 | 161.1 |
Significant Other Observable Inputs (Level 2) [Member] | Variable Rate Demand Notes [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,637.9 | 1,234.6 |
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Other | ||
Other long-term liabilities | ||
Significant Unobservable Inputs (Level 3) [Member] | Corporate Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | General Obligation Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | Pre-Refunded Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | Revenue Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | U.S. Government Agency Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | Variable Rate Demand Notes [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities |
Property and Equipment, Net o62
Property and Equipment, Net of Accumulated Depreciation (Components of Property and Equipment, at Cost) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | $ 1,051 | $ 1,012.2 | ||
Less: Accumulated depreciation | 713.8 | 659.2 | ||
Property and equipment, net of accumulated depreciation | 337.2 | 353 | ||
Depreciation expense | 108.8 | 99.2 | $ 92.1 | |
Land and Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 8.3 | 8.3 | ||
Buildings and Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 103.5 | 103 | ||
Data Processing Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 199.7 | 196.1 | ||
Software [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | [1] | 496.1 | 447.5 | |
Furniture, Fixtures, and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 115.2 | 125 | ||
Leasehold Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 109.5 | 108.2 | ||
Construction in Progress [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | [1] | $ 18.7 | $ 24.1 | |
[1] | Software includes both purchased software and costs capitalized related to internally developed software placed in service. Capitalized costs related to internally developed software that has not yet been placed in service is included in construction in progress. |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets, Net of Accumulated Amortization (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 657.1 | $ 657.1 | |
Amortization expense | $ 18.1 | $ 15.9 | $ 14.5 |
Client Lists [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets with weighted-average amortization periods | 8 years |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets, Net of Accumulated Amortization (Components of Intangible Assets, at Cost) (Details) - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, gross | $ 298.9 | $ 294.6 |
Less: Accumulated amortization | 241.3 | 225.1 |
Intangible assets, net of accumulated amortization | 57.6 | 69.5 |
Client Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, gross | 293.5 | 289.2 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, gross | $ 5.4 | $ 5.4 |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets, Net of Accumulated Amortization (Estimated Amortization Expense) (Details) $ in Millions | May 31, 2017USD ($) |
Year ending May 31 | |
2,018 | $ 15.4 |
2,019 | 12.3 |
2,020 | 9.5 |
2,021 | 7.3 |
2,022 | $ 5.2 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | May 31, 2017 | May 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Reserve for uncertain tax positions | $ 39.2 | $ 54.2 | |
Decreased reserve for uncertain tax positions | $ 28.9 | ||
Impact of uncertain tax positions, if recognized, on effective income tax rate | $ 39.2 | $ 54.2 | |
IRS [Member] | Earliest Tax Year [Member] | |||
Income Tax Contingency [Line Items] | |||
Fiscal year currently under audit | 2,012 | ||
Fiscal years subject to potential audit | 2,015 | ||
IRS [Member] | Latest Tax Year [Member] | |||
Income Tax Contingency [Line Items] | |||
Fiscal year currently under audit | 2,014 | ||
Fiscal years subject to potential audit | 2,017 |
Income Taxes (Components of Def
Income Taxes (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | May 31, 2017 | May 31, 2016 |
Income Taxes [Abstract] | ||
Compensation and employee benefit liabilities | $ 23.1 | $ 21.4 |
Other current liabilities | 9.1 | 7.9 |
Tax credit carry forward | 39.3 | 40 |
Depreciation | 7.3 | 8.8 |
Stock-based compensation | 21.8 | 22 |
Tax benefit of uncertain tax positions | 6.4 | 18.6 |
Other | 7.6 | 7.1 |
Gross deferred tax assets | 114.6 | 125.8 |
Capitalized software | 54.8 | 56.3 |
Depreciation | 1.6 | 2.5 |
Goodwill and Intangible assets | 66.8 | 58.5 |
Revenue not subject to current taxes | 13.6 | 13.3 |
Unrealized gains on available-for-sale securities | 11.7 | 17.3 |
Gross deferred tax liabilities | 148.5 | 147.9 |
Net deferred tax liability | $ (33.9) | $ (22.1) |
Income Taxes (Components of Pro
Income Taxes (Components of Provision for Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Taxes [Abstract] | |||||||||||
Federal | $ 362 | $ 336.4 | $ 341.4 | ||||||||
State | 48.1 | 50.8 | 47.8 | ||||||||
Total current | 410.1 | 387.2 | 389.2 | ||||||||
Federal | 15.9 | 5.5 | (5.1) | ||||||||
State | 1.5 | 1.6 | 1 | ||||||||
Total deferred | 17.4 | 7.1 | (4.1) | ||||||||
Income taxes | $ 105.2 | $ 105.3 | $ 109.9 | $ 107.1 | $ 98 | $ 101.3 | $ 106.6 | $ 88.4 | $ 427.5 | $ 394.3 | $ 385.1 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of U.S. Federal Statutory Tax Rate) (Details) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Taxes [Abstract] | |||
Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal tax benefit | 2.80% | 3.00% | 3.00% |
Section 199 - Qualified production activities | (0.50%) | (2.40%) | |
Tax-exempt municipal bond interest | (1.30%) | (1.40%) | (1.50%) |
Stock option windfall benefit | (1.50%) | ||
Other items | (0.20%) | 0.10% | (0.20%) |
Effective income tax rate | 34.30% | 34.30% | 36.30% |
Income Taxes (Reconciliation 70
Income Taxes (Reconciliation of Gross Unrecognized Tax Benefits, Not Including Interest or Other Potential Offsetting Effects) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Taxes [Abstract] | |||
Balance as of beginning of fiscal year | $ 64.7 | $ 39.9 | $ 40 |
Additions for tax positions of the current year | 8.2 | 7.3 | 6.7 |
Additions for tax positions of prior years | 4.8 | 20.7 | 0.8 |
Reductions for tax positions of prior years | (2.5) | (0.1) | (0.4) |
Settlements with tax authorities | (29.5) | (2.2) | (1.2) |
Expiration of the statute of limitations | (2) | (0.9) | (6) |
Balance as of end of fiscal year | $ 43.7 | $ 64.7 | $ 39.9 |
Accumulated Other Comprehensi71
Accumulated Other Comprehensive Income (Changes in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Accumulated Other Comprehensive Income [Abstract] | |||
Beginning balance | $ 29.2 | $ 7.5 | $ 21.5 |
Unrealized holding (losses)/gains | (14.7) | 34.2 | (21.5) |
Income tax benefit/(expense) related to unrealized holding (losses)/gains | 5.6 | (12.4) | 7.7 |
Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income | (0.1) | (0.1) | (0.3) |
Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities | 0.1 | ||
Total other comprehensive (loss)/income, net of tax | (9.2) | 21.7 | (14) |
Ending balance | 20 | 29.2 | 7.5 |
Total tax (benefit)/expense included in other comprehensive (loss)/income | $ (5.6) | $ 12.4 | $ (7.8) |
Short-term Financing (Narrative
Short-term Financing (Narrative) (Details) $ in Millions | Jun. 01, 2017USD ($) | May 31, 2017USD ($)loan | May 31, 2016USD ($) |
Line of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Number of lines of credit | loan | 4 | ||
Amounts outstanding | $ 0 | $ 0 | |
Line of Credit [Member] | PNC Bank, National Association [Member] | |||
Line of Credit Facility [Line Items] | |||
Expiration date | Feb. 28, 2018 | ||
Line of Credit [Member] | JP Morgan Chase Bank, N.A. [Member] | |||
Line of Credit Facility [Line Items] | |||
Expiration date | Feb. 28, 2018 | ||
Standby Letters of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 47.3 | 43 | |
Amounts outstanding | $ 0 | 0 | |
Standby Letters of Credit [Member] | Extended [Member] | Subsequent Event [Member] | |||
Line of Credit Facility [Line Items] | |||
Expiration date | Jul. 1, 2018 | ||
Revolving Credit Facility [Member] | PNC Bank, National Association [Member] | |||
Line of Credit Facility [Line Items] | |||
Expiration term | 3 years | ||
Maximum borrowing capacity | $ 150 | ||
Expiration date | Mar. 17, 2019 | ||
Maximum amount borrowed | $ 55.6 | ||
Weighted-average amount borrowed | $ 52.8 | ||
Number of days borrowed | 353 days | ||
Weighted-average interest rate | 1.21% | ||
Amounts outstanding | $ 0 | 0 | |
Revolving Credit Facility [Member] | PNC Bank, National Association [Member] | Subsequent Event [Member] | |||
Line of Credit Facility [Line Items] | |||
Amounts outstanding | $ 55 | ||
Revolving Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | |||
Line of Credit Facility [Line Items] | |||
Expiration term | 5 years | ||
Maximum borrowing capacity | $ 1,000 | ||
Expiration date | Aug. 5, 2020 | ||
Maximum amount borrowed | $ 450 | 450 | |
Weighted-average amount borrowed | $ 196.7 | $ 305 | |
Number of days borrowed | 30 days | 5 days | |
Weighted-average interest rate | 2.89% | 3.39% | |
Amounts outstanding | $ 0 | $ 0 | |
Revolving Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seven Days [Member] | |||
Line of Credit Facility [Line Items] | |||
Maximum amount borrowed | $ 150 | ||
Number of days borrowed | 7 days | ||
Revolving Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Eighteen Days [Member] | |||
Line of Credit Facility [Line Items] | |||
Maximum amount borrowed | $ 50 | ||
Number of days borrowed | 18 days | ||
Revolving Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seven And Eighteen Days [Member] | |||
Line of Credit Facility [Line Items] | |||
Weighted-average interest rate | 1.40% | ||
Revolving Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Overnight Basis [Member] | Subsequent Event [Member] | |||
Line of Credit Facility [Line Items] | |||
Weighted-average amount borrowed | $ 335 | ||
Minimum [Member] | Standby Letters of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Expiration date | Jul. 1, 2017 | ||
Maximum [Member] | Standby Letters of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Expiration date | May 1, 2018 |
Short-term Financing (Lines of
Short-term Financing (Lines of Credit Facility Amount Available) (Details) - Line of Credit [Member] $ in Millions | 12 Months Ended |
May 31, 2017USD ($) | |
JP Morgan Chase Bank, N.A. [Member] | |
Line of Credit Facility [Line Items] | |
Amount available | $ 350 |
Expiration date | Feb. 28, 2018 |
Bank of America, N.A. [Member] | |
Line of Credit Facility [Line Items] | |
Amount available | $ 250 |
Expiration date | Feb. 28, 2018 |
PNC Bank, National Association [Member] | |
Line of Credit Facility [Line Items] | |
Amount available | $ 150 |
Expiration date | Feb. 28, 2018 |
Wells Fargo Bank, National Association [Member] | |
Line of Credit Facility [Line Items] | |
Amount available | $ 150 |
Expiration date | Feb. 28, 2018 |
Short-term Financing (Lines o74
Short-term Financing (Lines of Credit Facility Amount Borrowed) (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
JP Morgan Chase Bank, N.A. [Member] | ||
Line of Credit Facility [Line Items] | ||
Number of days borrowed | 30 days | 5 days |
Maximum amount borrowed | $ 450 | $ 450 |
Weighted-average amount borrowed | $ 196.7 | $ 305 |
Weighted-average interest rate | 2.89% | 3.39% |
PNC Bank, National Association [Member] | ||
Line of Credit Facility [Line Items] | ||
Number of days borrowed | 353 days | |
Maximum amount borrowed | $ 55.6 | |
Weighted-average amount borrowed | $ 52.8 | |
Weighted-average interest rate | 1.21% |
Supplemental Cash Flow Inform75
Supplemental Cash Flow Information (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | |||
Income taxes paid | $ 462.6 | $ 369.9 | $ 372.8 |
Lease incentives received | $ 5.8 | $ 4.3 | $ 8.5 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Deferred Compensation Plans [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percentage of annual base salary and bonus that eligible employees may defer | 50.00% | ||
Percentage of Board cash compensation that eligible outside directors may defer | 100.00% | ||
Amounts accrued under deferred compensation plans | $ 16.7 | $ 14.9 | |
401 (K) Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum percentage of salary deferral | 50.00% | ||
Years of service to be eligible for matching contribution | 1 year | ||
Minimum number of hours worked for eligibility | 41 days 16 hours | ||
Percentage of employer matching contributions of eligible employee pay | 50.00% | ||
Percentage of employee pay eligible for employer matching contributions | 8.00% | ||
Company contributions to the plan | $ 22.4 | $ 21.4 | $ 19.6 |
Percentage participant directed | 100.00% |
Commitments and Contingencies77
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Commitments and Contingencies [Abstract] | |||
Rent expense | $ 39.7 | $ 39.8 | $ 39.4 |
Minimum future payment obligations under purchase orders and legally binding contractual arrangements | 127.4 | $ 109.6 | |
Commitments to purchase capital assets | $ 7.4 |
Commitments and Contingencies78
Commitments and Contingencies (Future Minimum Operating Lease Payments) (Details) $ in Millions | May 31, 2017USD ($) |
Commitments and Contingencies [Abstract] | |
Year ending May 31, 2018 | $ 36.1 |
Year ending May 31, 2019 | 27.3 |
Year ending May 31, 2020 | 19.3 |
Year ending May 31, 2021 | 13.2 |
Year ending May 31, 2022 | 6.1 |
Year ending May 31, Thereafter | $ 4.3 |
Commitments and Contingencies79
Commitments and Contingencies (Minimum Future Payment Obligations) (Details) $ in Millions | May 31, 2017USD ($) |
Commitments and Contingencies [Abstract] | |
Year ending May 31, 2018 | $ 78.8 |
Year ending May 31, 2019 | 25.1 |
Year ending May 31, 2020 | 19.3 |
Year ending May 31, 2021 | 3.4 |
Year ending May 31, 2022 | 0.8 |
Year ending May 31, Thereafter |
Related Parties (Narrative) (De
Related Parties (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
EMC Corporation [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related parties | $ 0.6 | $ 4.9 | $ 6.9 |
Staples, Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related parties | $ 2.9 | $ 2.3 | $ 1.7 |
Quarterly Financial Data (Quart
Quarterly Financial Data (Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2017 | May 31, 2016 | May 31, 2015 | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||
Service revenue | $ 784.6 | $ 782.6 | $ 760 | $ 773.5 | $ 741.6 | $ 740.7 | $ 711.3 | $ 712.2 | $ 3,100.7 | $ 2,905.8 | $ 2,697.5 | ||||||||||
Interest on funds held for clients | 14 | 13.2 | 11.4 | 12 | 12.3 | 11.9 | 11.1 | 10.8 | 50.6 | 46.1 | 42.1 | ||||||||||
Total revenue | 798.6 | 795.8 | 771.4 | 785.5 | 753.9 | 752.6 | 722.4 | 723 | 3,151.3 | 2,951.9 | 2,739.6 | ||||||||||
Operating income | 298.9 | 306.6 | 311.1 | 323 | 276.3 | 280 | 294.2 | 296.1 | 1,239.6 | 1,146.6 | 1,053.6 | ||||||||||
Investment income/(loss), net | 1.6 | 1.2 | 0.9 | 1.5 | (0.2) | 1.7 | 1.6 | 1.4 | 5.2 | 4.5 | 6.4 | ||||||||||
Income before income taxes | 300.5 | 307.8 | 312 | 324.5 | 276.1 | 281.7 | 295.8 | 297.5 | 1,244.8 | 1,151.1 | 1,060 | ||||||||||
Income taxes | 105.2 | 105.3 | 109.9 | 107.1 | 98 | 101.3 | 106.6 | 88.4 | 427.5 | 394.3 | 385.1 | ||||||||||
Net income | $ 195.3 | $ 202.5 | $ 202.1 | $ 217.4 | $ 178.1 | $ 180.4 | $ 189.2 | $ 209.1 | $ 817.3 | $ 756.8 | $ 674.9 | ||||||||||
Basic earnings per share | $ 0.54 | [1] | $ 0.56 | [1] | $ 0.56 | [1] | $ 0.60 | [1] | $ 0.49 | [1] | $ 0.50 | [1] | $ 0.52 | [1] | $ 0.58 | [1] | $ 2.27 | [1] | $ 2.10 | [1] | $ 1.86 |
Diluted earnings per share | $ 0.54 | [1] | $ 0.56 | [1] | $ 0.56 | [1] | $ 0.60 | [1] | $ 0.49 | [1] | $ 0.50 | [1] | $ 0.52 | [1] | $ 0.58 | [1] | $ 2.25 | [1] | $ 2.09 | [1] | $ 1.85 |
Weighted-average common shares outstanding | 359.3 | 359 | 360.2 | 361 | 360.3 | 360.5 | 360.7 | 361.1 | 359.8 | 360.7 | 362.9 | ||||||||||
Weighted-average common shares outstanding, assuming dilution | 362.1 | 361.8 | 362.6 | 364.1 | 362.6 | 362.2 | 362.3 | 362.8 | 362.6 | 362.5 | 364.6 | ||||||||||
Cash dividends per common share | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.42 | $ 1.84 | $ 1.68 | $ 1.52 | ||||||||||
Total net realized gains | $ 0.1 | [2] | $ 0.1 | [2] | $ 0.1 | [2] | $ 0.1 | [2] | $ 0.3 | ||||||||||||
[1] | Each quarter is a discrete period and the sum of the four quarters' basic and diluted earnings per share amounts may not equal the full year amount. | ||||||||||||||||||||
[2] | Total net realized gains on the combined funds held for clients and corporate investment portfolios. |
Valuation and Qualifying Acco82
Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Allowance for Doubtful Accounts [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance as of beginning of fiscal year | $ 4.2 | $ 1.4 | $ 1.5 | |
Additions charged to expenses | 4.9 | 2.5 | 1.6 | |
Additions to/(deductions from) other accounts | [1] | 2 | 0.1 | |
Costs and deductions | [2] | 3.1 | 1.7 | 1.8 |
Balance as of end of fiscal year | 6 | 4.2 | 1.4 | |
Reserve for Client Fund Losses [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance as of beginning of fiscal year | 2 | 1.8 | 1.9 | |
Additions charged to expenses | 4.1 | 2.4 | 2 | |
Additions to/(deductions from) other accounts | [1] | (0.2) | ||
Costs and deductions | [2] | 3.1 | 2.2 | 1.9 |
Balance as of end of fiscal year | $ 3 | $ 2 | $ 1.8 | |
[1] | Amounts related to business acquisitions. | |||
[2] | Uncollectible amounts written off, net of recoveries. |