Document and Entity Information
Document and Entity Information | 9 Months Ended |
Feb. 29, 2020shares | |
Document and Entity Information [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Current Fiscal Year End Date | --05-31 |
Document Period End Date | Feb. 29, 2020 |
Document Transition Report | false |
Entity File Number | 0-11330 |
Entity Registrant Name | PAYCHEX, INC. |
Entity Address, Address Line One | 911 Panorama Trail South |
Entity Address, City or Town | Rochester |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 14625-2396 |
City Area Code | 585 |
Local Phone Number | 385-6666 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 16-1124166 |
Title of 12(b) Security | Common Stock, $0.01 par value |
Trading Symbol | PAYX |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 358,715,435 |
Amendment Flag | false |
Document Fiscal Period Focus | Q3 |
Document Fiscal Year Focus | 2020 |
Entity Central Index Key | 0000723531 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Revenue: | ||||
Total service revenue | $ 1,121.5 | $ 1,047.4 | $ 3,063.8 | $ 2,733.7 |
Interest on funds held for clients | 21.2 | 23 | 61.6 | 58.4 |
Total revenue | 1,142.7 | 1,070.4 | 3,125.4 | 2,792.1 |
Expenses: | ||||
Operating expenses | 340.3 | 325.3 | 989.1 | 855.7 |
Selling, general and administrative expenses | 332.3 | 315.8 | 975.4 | 879.6 |
Total expenses | 672.6 | 641.1 | 1,964.5 | 1,735.3 |
Operating income | 470.1 | 429.3 | 1,160.9 | 1,056.8 |
Other (expense)/income, net | (5.9) | (3.7) | (15.4) | 0.7 |
Income before income taxes | 464.2 | 425.6 | 1,145.5 | 1,057.5 |
Income taxes | 109.7 | 101 | 268.1 | 253.5 |
Net income | 354.5 | 324.6 | 877.4 | 804 |
Other comprehensive income, net of tax | 33.6 | 28.1 | 45.1 | 16.9 |
Comprehensive income | $ 388.1 | $ 352.7 | $ 922.5 | $ 820.9 |
Basic earnings per share | $ 0.99 | $ 0.90 | $ 2.45 | $ 2.24 |
Diluted earnings per share | $ 0.98 | $ 0.90 | $ 2.43 | $ 2.22 |
Weighted-average common shares outstanding | 358.5 | 359.2 | 358.5 | 359.1 |
Weighted-average common shares outstanding, assuming dilution | 361 | 361.6 | 361.1 | 361.6 |
Management Solutions [Member] | ||||
Revenue: | ||||
Total service revenue | $ 850 | $ 801.6 | $ 2,301.2 | $ 2,174.7 |
PEO And Insurance Solutions [Member] | ||||
Revenue: | ||||
Total service revenue | $ 271.5 | $ 245.8 | $ 762.6 | $ 559 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 780 | $ 673.6 |
Restricted cash | 59.3 | 50.6 |
Corporate investments | 73.8 | 39 |
Interest receivable | 26.1 | 27.4 |
Accounts receivable, net of allowance for doubtful accounts | 436.3 | 420.5 |
PEO unbilled receivables, net of advance collections | 384.6 | 406.3 |
Prepaid income taxes | 23.6 | 22.6 |
Prepaid expenses and other current assets | 250 | 233.9 |
Current assets before funds held for clients | 2,033.7 | 1,873.9 |
Funds held for clients | 4,355.7 | 3,803.8 |
Total current assets | 6,389.4 | 5,677.7 |
Long-term restricted cash | 7.1 | 6.5 |
Long-term corporate investments | 10.2 | 10.2 |
Property and equipment, net of accumulated depreciation | 403.8 | 408.7 |
Operating lease right-of-use assets, net of accumulated amortization | 124.3 | |
Intangible assets, net of accumulated amortization | 348 | 399.1 |
Goodwill | 1,789.8 | 1,782.6 |
Long-term deferred costs | 366.5 | 366.3 |
Other long-term assets | 27.8 | 24.9 |
Total assets | 9,466.9 | 8,676 |
Liabilities | ||
Accounts payable | 67.7 | 75.9 |
Accrued corporate compensation and related items | 115 | 146.4 |
Accrued worksite employee compensation and related items | 567.9 | 578.6 |
Short-term borrowings | 51.2 | |
Deferred revenue | 38.8 | 40.3 |
Other current liabilities | 277.1 | 219.5 |
Current liabilities before client fund obligations | 1,117.7 | 1,060.7 |
Client fund obligations | 4,272 | 3,784.3 |
Total current liabilities | 5,389.7 | 4,845 |
Accrued income taxes | 32.6 | 27.3 |
Deferred income taxes | 232.7 | 223.1 |
Long-term borrowings, net of debt issuance costs | 796.7 | 796.4 |
Operating lease liabilities | 105.1 | 13 |
Other long-term liabilities | 150.3 | 151.7 |
Total liabilities | 6,707.1 | 6,056.5 |
Commitments and contingencies - Note N | ||
Stockholders' equity | ||
Common stock, $0.01 par value; Authorized: 600.0 shares; Issued and outstanding: 358.7 shares as of February 29, 2020 and 359.3 shares as of May 31, 2019 | 3.6 | 3.6 |
Additional paid-in capital | 1,277.7 | 1,206.3 |
Retained earnings | 1,433.3 | 1,409.5 |
Accumulated other comprehensive income | 45.2 | 0.1 |
Total stockholders' equity | 2,759.8 | 2,619.5 |
Total liabilities and stockholders' equity | $ 9,466.9 | $ 8,676 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 29, 2020 | May 31, 2019 |
Stockholders' equity | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 358,700,000 | 359,300,000 |
Common stock, shares outstanding | 358,700,000 | 359,300,000 |
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/(Loss) [Member] | Total |
Beginning balance, Shares at May. 31, 2018 | 359 | ||||
Beginning balance at May. 31, 2018 | $ 3.6 | $ 1,126.8 | $ 1,262.6 | $ (36.2) | $ 2,356.8 |
Net income | 804 | 804 | |||
Unrealized gains on securities, net of reclassification adjustment and tax | 22.2 | 22.2 | |||
Cash dividends declared | (603.9) | (603.9) | |||
Repurchases of common shares, Shares | (0.5) | ||||
Repurchases of common shares | (0.8) | (32) | (32.8) | ||
Stock-based compensation costs | 33.6 | 33.6 | |||
Foreign currency translation adjustment | (5.3) | (5.3) | |||
Activity related to equity-based plans, Shares | 0.9 | ||||
Activity related to equity-based plans | 28.3 | (4.9) | 23.4 | ||
Ending balance, Shares at Feb. 28, 2019 | 359.4 | ||||
Ending balance at Feb. 28, 2019 | $ 3.6 | 1,187.9 | 1,425.8 | (19.3) | 2,598 |
Beginning balance, Shares at Nov. 30, 2018 | 359.1 | ||||
Beginning balance at Nov. 30, 2018 | $ 3.6 | 1,165.7 | 1,302.6 | (47.4) | 2,424.5 |
Net income | 324.6 | 324.6 | |||
Unrealized gains on securities, net of reclassification adjustment and tax | 27.4 | 27.4 | |||
Cash dividends declared | (201.2) | (201.2) | |||
Stock-based compensation costs | 10.8 | 10.8 | |||
Foreign currency translation adjustment | 0.7 | 0.7 | |||
Activity related to equity-based plans, Shares | 0.3 | ||||
Activity related to equity-based plans | 11.4 | (0.2) | 11.2 | ||
Ending balance, Shares at Feb. 28, 2019 | 359.4 | ||||
Ending balance at Feb. 28, 2019 | $ 3.6 | 1,187.9 | 1,425.8 | (19.3) | $ 2,598 |
Beginning balance, Shares at May. 31, 2019 | 359.3 | 359.3 | |||
Beginning balance at May. 31, 2019 | $ 3.6 | 1,206.3 | 1,409.5 | 0.1 | $ 2,619.5 |
Net income | 877.4 | 877.4 | |||
Unrealized gains on securities, net of reclassification adjustment and tax | 48.4 | 48.4 | |||
Cash dividends declared | (666.8) | (666.8) | |||
Repurchases of common shares, Shares | (2) | ||||
Repurchases of common shares | (3.7) | (168.2) | (171.9) | ||
Stock-based compensation costs | 36.5 | 36.5 | |||
Foreign currency translation adjustment | (3.3) | (3.3) | |||
Activity related to equity-based plans, Shares | 1.4 | ||||
Activity related to equity-based plans | 38.6 | (18.6) | $ 20 | ||
Ending balance, Shares at Feb. 29, 2020 | 358.7 | 358.7 | |||
Ending balance at Feb. 29, 2020 | $ 3.6 | 1,277.7 | 1,433.3 | 45.2 | $ 2,759.8 |
Beginning balance, Shares at Nov. 30, 2019 | 358.4 | ||||
Beginning balance at Nov. 30, 2019 | $ 3.6 | 1,252.8 | 1,301.4 | 11.6 | 2,569.4 |
Net income | 354.5 | 354.5 | |||
Unrealized gains on securities, net of reclassification adjustment and tax | 34.1 | 34.1 | |||
Cash dividends declared | (222.5) | (222.5) | |||
Stock-based compensation costs | 12.7 | 12.7 | |||
Foreign currency translation adjustment | (0.5) | (0.5) | |||
Activity related to equity-based plans, Shares | 0.3 | ||||
Activity related to equity-based plans | 12.2 | (0.1) | $ 12.1 | ||
Ending balance, Shares at Feb. 29, 2020 | 358.7 | 358.7 | |||
Ending balance at Feb. 29, 2020 | $ 3.6 | $ 1,277.7 | $ 1,433.3 | $ 45.2 | $ 2,759.8 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Consolidated Statements of Stockholders' Equity [Abstract] | ||||
Cash dividends per share | $ 0.62 | $ 0.56 | $ 1.86 | $ 1.68 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Operating activities | ||
Net income | $ 877.4 | $ 804 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization on property and equipment and intangible assets | 158 | 125.7 |
Amortization of premiums and discounts on available-for-sale securities, net | 30.7 | 38.8 |
Amortization of deferred contract costs | 139.1 | 134.8 |
Stock-based compensation costs | 36.5 | 33.6 |
(Benefit)/provision for deferred income taxes | (7.7) | 10.7 |
Provision for allowance for doubtful accounts | 6 | 2.1 |
Net realized (gains)/losses on sales of available-for-sale securities | (2.4) | 0.1 |
Changes in operating assets and liabilities: | ||
Interest receivable | 1.3 | 8.5 |
Accounts receivable and PEO unbilled receivables, net | 0.1 | (110.2) |
Prepaid expenses and other current assets | (15.6) | 8.4 |
Accounts payable and other current liabilities | (26.5) | 108.4 |
Deferred costs | (141.4) | (134.1) |
Net change in other long-term assets and liabilities | (2.3) | (8) |
Net change in operating lease right-of-use assets and liabilities | (0.5) | |
Net cash provided by operating activities | 1,052.7 | 1,022.8 |
Investing activities | ||
Purchases of available-for-sale securities | (21,852.6) | (26,247.6) |
Proceeds from sales and maturities of available-for-sale securities | 22,323.4 | 26,784.6 |
Purchases of property and equipment | (91.9) | (88) |
Acquisition of businesses, net of cash acquired | (6.3) | (984.1) |
Purchases of other assets | (8.2) | (3.5) |
Net cash provided by/(used in) investing activities | 364.4 | (538.6) |
Financing activities | ||
Net change in client fund obligations | 487.7 | 680.5 |
Net proceeds from short-term borrowings | 51.2 | 53.6 |
Proceeds from borrowings to fund acquisition | 800 | |
Dividends paid | (666.8) | (603.9) |
Repurchases of common shares | (171.9) | (32.8) |
Activity related to equity-based plans | 20 | 23.4 |
Net cash (used in)/provided by financing activities | (279.8) | 920.8 |
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | 1,137.3 | 1,405 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 935.2 | 2,300.5 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 2,072.5 | 3,705.5 |
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the Consolidated Balance Sheets: | ||
Cash and cash equivalents | 780 | 696.4 |
Restricted cash | 66.4 | 134.4 |
Restricted cash and restricted cash equivalents included in funds held for clients | $ 1,226.1 | $ 2,874.7 |
Description of Business, Basis
Description of Business, Basis of Presentation, and Significant Accounting Policies | 9 Months Ended |
Feb. 29, 2020 | |
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 human resource (“HR”), payroll, benefits, and insurance services for small- to medium-sized businesses in the United States (“U.S.”). The Company also has operations in Europe. 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 Europe, which represented approximately one percent of the Company’s total revenue for both the three and nine months ended February 29, 2020 and February 28, 2019. Long-lived assets in Europe were approximately five percent of total long-lived assets of the Company as of both February 29, 2020 and May 31, 2019. Basis of presentation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statement presentation. The consolidated financial statements include the consolidated accounts of the Company with all intercompany transactions eliminated. Certain disclosures are reported as zero balances due to rounding. In the opinion of management, the information furnished herein reflects all adjustments (consisting of items of a normal recurring nature), which are necessary for a fair statement of the results for the interim period. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related Notes to Consolidated Financial Statements presented in the Company’s Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended May 31, 2019 (“fiscal 2019”). Operating results and cash flows for the nine months ended February 29, 2020 are not necessarily indicative of the results that may be expected for other interim periods or for the fiscal year ending May 31, 2020 (“fiscal 2020”). Restricted cash and restricted cash equivalents: Restricted cash and restricted cash equivalents are recorded at fair value, and consist of cash and cash equivalents, primarily money market securities, included in funds held for clients and cash that is restricted in use to secure certain workers’ compensation policies. 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 $ 12.1 million and $ 7.5 million as of February 29, 2020 and May 31, 2019, respectively. These balances include: trade receivables for services provided to clients and purchased receivables related to payroll funding arrangements with clients in the temporary staffing industry. Trade receivables were $ 98.7 million and $ 94.5 million as of February 29, 2020 and May 31, 2019, respectively. Purchased receivables were $ 349.7 million and $ 333.5 million as of February 29, 2020 and May 31, 2019, respectively. 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. Professional Employer Organization (“PEO”) unbilled receivables, net of advance collections: The Company recognizes a liability for worksite employee gross wages and related payroll tax liabilities at the end of the period in which the worksite employee performs work, and where it assumes, under state regulations, the obligation for the payment of payroll and payroll tax liabilities. The estimated payroll and payroll tax liabilities are recorded in accrued worksite employee compensation and related items on the Company’s Consolidated Balance Sheets. The associated unbilled receivables, including estimated revenues, offset by advance collections from clients, are recorded as PEO unbilled receivables, net of advance collections on the Company’s Consolidated Balance Sheets. As of February 29, 2020 and May 31, 2019, advance collections included in PEO unbilled receivables, net of advance collections were $ 8.1 million and $ 4.2 million, respectively. PEO insurance reserves: As part of the PEO solution, the Company offers workers’ compensation insurance and health insurance for the benefit of client employees. Workers’ compensation insurance is provided under fully insured high deductible workers’ compensation insurance policies. 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 under its PEO workers’ compensation insurance policies is $ 1.0 million for the annual fiscal period ending May 31, 2020. For the annual fiscal period ended May 31, 2019, the Company’s maximum individual claims liability ranged from $ 0.5 million to $ 1.0 million under its PEO workers’ compensation insurance policies. The Company offers minimum premium insurance plan arrangements for certain of its PEO clients for various medical benefits and self-insured plans for dental and vision benefits. The Company establishes insurance reserves to provide for the payment of claims in accordance with its service contract with the carriers. The Company’s maximum individual claims liability was $ 0.3 million under its policies during both the annual fiscal periods ending May 31, 2020 and ended May 31, 2019. 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. Leases: On June 1, 2019, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”). As a result of this adoption, the following accounting policies were implemented or changed. At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease, the Company evaluates whether it should be classified as an operating or a finance lease. Currently, all of the Company’s leases have been classified as operating leases. Upon modification of the contract, the Company will reassess to determine if a contract is or contains a leasing arrangement. The Company records lease liabilities based on the future estimated cash payments discounted over the lease term, defined as the non-cancellable time period of the lease, together with all the following: periods covered by an option to extend the lease if the Company is reasonably certain to exercise the extension option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. Leases may also include options to terminate the arrangement or options to purchase the underlying lease property. The Company does not separate lease and non-lease components of contracts. Lease components provide the Company with the right to use an identified asset, which consist of the Company’s real estate properties and office equipment. Non-lease components consist primarily of maintenance services. As an implicit discount rate is not readily determinable in the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The incremental borrowing rate is determined using a portfolio approach utilizing publicly available information related to our unsecured borrowing rates. For certain leases with original terms of 12 months or less, the Company recognizes lease expense as incurred and does not recognize any lease liabilities. Short-term and long-term portions of operating lease liabilities are classified as other current liabilities and operating lease liabilities, respectively, in the Company’s Consolidated Balance Sheets. A right-of-use (“ROU”) asset is measured as the amount of the lease liability with adjustments, if applicable, for lease incentives, initial direct costs incurred by the Company, and lease prepayments made prior to or at lease commencement. ROU assets are classified as operating lease right-of-use assets, net of accumulated amortization, on the Company’s Consolidated Balance Sheets. The Company evaluates the carrying value of ROU assets if there are indicators of potential impairment, and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value of the asset group is determined to not be fully recoverable and is in excess of its estimated fair value, the Company will record an impairment loss in its Consolidated Statements of Income and Comprehensive Income. The Company did no t recognize an impairment loss during the nine months ended February 29, 2020. Fixed lease expense payments are recognized on a straight-line basis over the lease term. Variable lease payments vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time, and are often due to changes in an external market rate or the value of an index (e.g. Consumer Price Index). Variable lease payments are expensed as incurred in the Company’s Consolidated Statements of Income and Comprehensive Income. As part of the adoption of ASU No. 2016-02, the Company elected the following practical expedients: 1) lease vs. non-lease components relating to the real estate asset class; 2) the short-term lease exemption; and 3) the package of practical expedients, which permits the Company to not reassess prior conclusions about lease identification, lease classification, and initial direct costs under the new standard. In addition, the Company elected not to adopt the practical expedient related to hindsight. Stock-based compensation costs: The Company has issued stock-based awards to employees and members of its Board of Directors (the “Board”) consisting of stock options and restricted stock awards. In addition, the Company has issued stock-based awards to employees consisting of restricted stock units, performance shares, performance-based restricted stock, performance-based restricted stock units, and performance-based stock options. The Company accounts for all stock-based awards to employees and members of the Board as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. These costs are recognized over the requisite service period. Stock-based compensation costs recognized were $ 12.7 million and $ 36.5 million for the three and nine months ended February 29, 2020, respectively, as compared with $ 10.8 million and $ 33.6 million for the three and nine months ended February 28, 2019, respectively. The methods and assumptions used in the determination of the fair value of stock-based awards are consistent with those described in the Company’s fiscal 2019 Form 10-K. Recently adopted accounting pronouncements: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02. This guidance, as amended by subsequent ASUs on the topic, 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. The Company adopted the requirements of ASU No. 2016-02 on June 1, 2019, utilizing the alternative transition method provided by the FASB in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” and did not restate comparative periods as permitted under the standard. The adoption of ASU No. 2016-02 increased ROU lease-related assets and liabilities by $ 116.4 million and resulted in ROU asset and lease liability balances of $ 116.4 million and $ 135.3 million, respectively, on the Company’s Consolidated Balance Sheets as of June 1, 2019. The difference between the ROU assets and lease liabilities relates to $ 18.9 million of unamortized landlord allowances and lease incentives. The Company has updated its control framework for new internal controls and made changes to existing internal controls related to the new standard. The adoption of this standard did not have an impact on the financial covenants set forth in the Company’s credit facilities and long-term borrowing agreement. Refer to Note H for additional information on the new standard. In June 2019, the Company also adopted the following ASUs, none of which had a material impact on its consolidated financial statements: ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting;” ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income;” and ASU No. 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” Recently issued accounting pronouncements: In December 2019, the FASB issued ASU No. 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU No. 2019-12 is intended to simplify various aspects related to accounting for income taxes, eliminates certain exceptions to the general principles in ASC Topic 740 related to intra-period tax allocation, simplifies when companies recognize deferred taxes in an interim period, and clarifies certain aspects of the current guidance to promote consistent application. This guidance is effective for public entities for fiscal years beginning after December 15, 2020, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2021. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In November 2019, the FASB issued ASU No. 2019-08 “Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-Based Consideration Payable to a Customer.” ASU No. 2019-08 amends and clarifies ASU No. 2018-07, which was adopted by the Company on June 1, 2019, to require that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. For entities that have already adopted the amendments in ASU No. 2018-07, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The adoption of this guidance will not have a material impact on the consolidated financial statements. In April 2019, the FASB issued ASU No. 2019-04 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” ASU No. 2019-04 was issued as part of the FASB’s ongoing project to improve upon its Accounting Standards Codification (“ASC”), and to clarify and improve areas of guidance related to recently issued standards on credit losses, hedging, and recognition and measurement. This guidance contains several effective dates but is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606.” ASU No. 2018-18 was issued to resolve the diversity in practice concerning the manner in which entities account for transactions based on their assessment of the economics of a collaborative arrangement. This guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The adoption of this guidance will not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 modifies the disclosure requirements in Topic 820, “Fair Value Measurement,” based on the FASB Concepts Statement, “Conceptual Framework for Financial Reporting – Chapter 8: Notes to Financial Statements,” including consideration of costs and benefits. This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The adoption of this guidance will not have a material impact on the 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. This guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. 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. The Company has completed its assessment of the adoption of this guidance, including changes to internal controls, and it will not have a material impact on the 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 as amended by subsequent ASUs on the topic and commonly referred to as the current expected credit loss (“CECL”) model, requires an entity to measure expected credit losses for financial assets held at the reporting date based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. It also requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses. This guidance is effective for public business entities for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2020 and will be adopted using the modified retrospective approach through a cumulative-effect adjustment to retained earnings. The Company has formed a CECL implementation group (“CIG”) to manage the overall implementation of this guidance. The CIG has substantially completed its evaluation of the impact of the new guidance on its business processes, systems, and controls and is currently developing financial models that will determine the expected credit losses to its accounts receivable, PEO unbilled receivables, and available-for-sale debt securities. The Company will begin testing these new processes during the fiscal quarter ending May 31, 2020 and will estimate the possible impacts, if any, to its consolidated financial statements at that time. The extent of any changes in credit losses will depend upon the size, composition and credit quality of the Company’s accounts receivable, PEO unbilled receivables, and investment portfolios at the date of adoption and the macroeconomic conditions and forecasts at that date. Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission during the nine months ended February 29, 2020 did not, or are not expected to, have a material impact on the Company’s consolidated financial statements. |
Service Revenue
Service Revenue | 9 Months Ended |
Feb. 29, 2020 | |
Service Revenue [Abstract] | |
Service Revenue | Note B: Service Revenue Service revenue is primarily attributable to fees for providing services to the Company’s clients and is recognized when control of the promised services are transferred to its clients, in an amount that reflects the consideration it expects to receive in exchange for such services. 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. Insurance Solutions revenue is recognized when commissions are earned on premiums billed and collected. The Company’s contracts generally have a term of 30 days as they are cancellable at any time by either party with 30 days’ notice of termination. Sales and other applicable non-payroll related taxes are excluded from service revenue. Based upon similar operational and economic characteristics, the Company’s service revenue is disaggregated by Management Solutions and PEO and Insurance Solutions as reported in the Company’s Consolidated Statements of Income and Comprehensive Income. The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. The following table, consistent with the Consolidated Statements of Income and Comprehensive Income, disaggregates service revenue by Management Solutions and PEO and Insurance Solutions: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Management Solutions $ 850.0 $ 801.6 $ 2,301.2 $ 2,174.7 PEO and Insurance Solutions 271.5 245.8 762.6 559.0 Total service revenue $ 1,121.5 $ 1,047.4 $ 3,063.8 $ 2,733.7 Management Solutions Revenue Management Solutions revenue is primarily derived from the Company’s payroll processing, payroll-related ancillary services, and HR outsourcing solutions. Clients can select services on an á la carte basis or as part of various product bundles. The Company’s offerings often leverage the information gathered in its base payroll processing service, allowing it to provide comprehensive outsourcing services covering the HCM spectrum. Management Solutions revenue is generally recognized over time as services are performed and the customer simultaneously receives and controls the benefits from these services. Revenue earned from delivery service for the distribution of certain client payroll checks and reports is also included in Management Solutions revenue in the Company’s Consolidated Statements of Income and Comprehensive Income. Delivery service revenue is recognized at a point in time following the delivery of payroll checks, reports, quarter-end packages, and tax returns to the Company’s clients. PEO and Insurance Solutions Revenue PEO solutions are sold through the Company’s registered and licensed subsidiaries, Paychex Business Solutions, LLC, Oasis Outsourcing Group Holdings, L.P. (“Oasis”), and HR Outsourcing Holdings, Inc. (“HROi”), and 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 representative, among other services. The Company serves as a co-employer of its clients’ employees, offers health insurance coverage to client employees, and assumes the risks and rewards of workers’ compensation insurance and certain health insurance benefit offerings. PEO Solutions revenue is recognized over time as the services are performed and the customer simultaneously receives and controls the benefits from these services. PEO Solutions revenue is reported net of certain pass-through costs billed and incurred, which include payroll wages, payroll taxes, including federal and state unemployment insurance, and certain health insurance benefit premiums, primarily costs related to the Company’s guaranteed cost benefit plans. Pass-through costs for payroll wages and payroll taxes were $ 5.6 billion and $ 4.7 billion for the three months ended February 29, 2020 and February 28, 2019, respectively, which includes costs related to state unemployment insurance of $ 47.2 million and $ 46.3 million, respectively. Pass-through costs for payroll wages and payroll taxes were $ 15.9 billion and $ 9.2 billion for the nine months ended February 29, 2020 and February 28, 2019, respectively, which includes costs related to state unemployment insurance of $ 73.9 million and $ 59.7 million, respectively. For guaranteed cost benefit plans where the Company does not retain risk, revenues are recorded net of the premiums paid to the insurance carrier. For the three months ended February 29, 2020 and February 28, 2019, the pass-through costs related to the Company’s guaranteed cost benefit plans were $ 159.0 million and $ 139.4 million, respectively. For the nine months ended February 29, 2020 and February 28, 2019, the pass-through costs related to the Company’s guaranteed cost benefit plans were $ 489.8 million and $ 294.5 million, respectively. For workers’ compensation and certain benefit plans where the Company retains risk, revenues and costs are recorded on a gross basis. Insurance solutions are sold through the Company’s licensed insurance agency, Paychex Insurance Agency, Inc., which provides insurance through a variety of carriers, allowing companies to expand their employee benefit offerings at an affordable cost. Insurance offerings include property and casualty coverage such as workers’ compensation, business-owner policies, commercial auto, and health and benefits coverage, including health, dental, vision, and life. Insurance Solutions revenue reflects commissions earned on insurance services premiums billed and is recognized over time as services are performed and the customer simultaneously receives and controls the benefits from these services. Contract Balances The timing of revenue recognition for Management Solutions and PEO and Insurance Solutions is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing. Payments received for certain of the Company’s service offerings for set-up fees are considered a material right. Therefore, the Company defers revenue associated with these performance obligations, which exceed one year, and subsequently recognizes these as future services are provided, over approximately three year s to four year s . Changes in deferred revenue related to material right performance obligations that exceed one year were as follows: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Balance, beginning of period $ 45.1 $ 46.0 $ 45.7 $ 46.4 Deferral of revenue 7.4 7.7 20.3 20.9 Recognition of unearned revenue ( 7.4 ) ( 7.6 ) ( 20.9 ) ( 21.2 ) Balance, end of period $ 45.1 $ 46.1 $ 45.1 $ 46.1 Deferred revenue related to material right performance obligations is reported in the deferred revenue and other long-term liabilities line items on the Company’s Consolidated Balance Sheets. The Company expects to recognize an additional $ 6.7 million of deferred revenue related to material right performance obligations in the remainder of fiscal 2020 , $ 20.2 million of such deferred revenue during its fiscal year ending May 31 , 2021 , and $ 18.2 million of such deferred revenue thereafter. Assets Recognized from the Costs to Obtain and Fulfill Contracts The Company recognizes an asset for the incremental costs of obtaining a contract with a client if it is expected that the amortization period will be longer than one year. The Company determined that certain selling and commission costs meet the capitalization criteria under ASC Subtopic 340-40, “Other Assets and Deferred Costs: Contracts with Customers” (“ASC 340-40”). The Company also recognizes an asset for the costs to fulfill a contract with a client if the costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. The Company determined that substantially all costs related to implementation activities are administrative in nature and meet the capitalization criteria under ASC 340-40. These capitalized costs to fulfill a contract principally relate to upfront direct costs that are expected to be recovered and enhance the Company’s ability to satisfy future performance obligations. The assets related to both costs to obtain and costs to fulfill contracts with clients are capitalized and amortized using an accelerated method over an eight-year life to closely align with the pattern of client attrition over the estimated life of the client relationship. Deferred costs to obtain and fulfill contracts are reported in the prepaid expenses and other current assets and long-term deferred costs line items on the Company’s Consolidated Balance Sheets. Amortization expense related to costs to obtain and fulfill a contract are included in operating and selling, general, and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income. The Company regularly reviews its deferred costs for potential impairment and did no t recognize an impairment loss during the nine months ended February 29, 2020 or February 28, 2019. Changes in deferred costs to obtain and fulfill contracts were as follows: For the three months ended February 29, 2020 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 456.9 $ 49.4 $ ( 40.7 ) $ 465.6 Costs to fulfill a contract $ 66.4 $ 6.7 $ ( 6.0 ) $ 67.1 For the nine months ended February 29, 2020 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 464.3 $ 122.7 $ ( 121.4 ) $ 465.6 Costs to fulfill a contract $ 66.1 $ 18.7 $ ( 17.7 ) $ 67.1 For the three months ended February 28, 2019 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 447.3 $ 47.9 $ ( 39.6 ) $ 455.6 Costs to fulfill a contract $ 65.8 $ 5.9 $ ( 5.7 ) $ 66.0 For the nine months ended February 28, 2019 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 455.0 $ 118.2 $ ( 117.6 ) $ 455.6 Costs to fulfill a contract $ 65.4 $ 17.8 $ ( 17.2 ) $ 66.0 |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share | 9 Months Ended |
Feb. 29, 2020 | |
Basic and Diluted Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | Note C: Basic and Diluted Earnings Per Share Basic and diluted earnings per share were calculated as follows: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions, except per share amounts 2020 2019 2020 2019 Basic earnings per share: Net income $ 354.5 $ 324.6 $ 877.4 $ 804.0 Weighted-average common shares outstanding 358.5 359.2 358.5 359.1 Basic earnings per share $ 0.99 $ 0.90 $ 2.45 $ 2.24 Diluted earnings per share: Net income $ 354.5 $ 324.6 $ 877.4 $ 804.0 Weighted-average common shares outstanding 358.5 359.2 358.5 359.1 Dilutive effect of common share equivalents 2.5 2.4 2.6 2.5 Weighted-average common shares outstanding, assuming dilution 361.0 361.6 361.1 361.6 Diluted earnings per share $ 0.98 $ 0.90 $ 2.43 $ 2.22 Weighted-average anti-dilutive common share equivalents 0.6 0.6 0.5 0.5 Weighted-average common share equivalents that have an anti-dilutive impact are excluded from the computation of diluted earnings per share. For both the three months ended February 29, 2020 and February 28, 2019, 0.3 million shares of the Company’s common stock were issued in connection with the exercise or vesting of stock-based awards. For the nine months ended February 29, 2020 and February 28, 2019, 1.4 million shares and 0.9 million shares, respectively, of the Company’s common stock were issued in connection with the exercise or vesting of stock-based awards. In May 2019, the Company announced that its Board approved a program to repurchase up to $ 400.0 million of its common stock, with authorization expiring on May 31, 2022 . No shares were repurchased during the three months ended February 29, 2020 or February 28, 2019. During the nine months ended February 29, 2020, the Company repurchased 2.0 million shares for $ 171.9 million. During the nine months ended February 28, 2019, the Company repurchased 0.5 million shares for $ 32.8 million under a previously authorized program. The purpose of both programs is to manage common stock dilution. All shares of common stock repurchased were retired. |
Business Combinations
Business Combinations | 9 Months Ended |
Feb. 29, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Note D: Business Combinations Effective December 20, 2018 , the Company acquired Oasis. Upon closing, Oasis became a wholly owned subsidiary of the Company. Oasis is an industry leader in providing HR outsourcing services. The purchase price was $ 992.2 million, net of $ 262.3 million in cash acquired, including $ 132.1 million of restricted cash. The acquisition was financed through a combination of cash on hand and the issuance of long-term private placement debt totaling $ 800.0 million. The results of operations for Oasis have been included in the Company's Consolidated Statements of Income and Comprehensive Income since the date of acquisition. The Company accounted for the acquisition as a business combination using the acquisition method of accounting in accordance with FASB ASC Topic 805, “Business Combinations.” The acquired assets and liabilities of Oasis were recorded at their acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The purchase accounting was finalized during the three months ended February 29, 2020. The following acquisition-date fair values were assigned to the acquired net assets (amounts in millions): Cash and cash equivalents $ 130.2 Restricted cash 66.6 Corporate investments 8.6 Accounts receivable, net of allowance for doubtful accounts 10.7 PEO unbilled receivables, net of advance collections 209.8 Prepaid income taxes 4.8 Prepaid expenses and other current assets 6.0 Long-term restricted cash 65.5 Property and equipment 15.4 Intangible assets 310.9 Goodwill 976.6 Other long-term assets 1.8 Total Assets 1,806.9 Accounts payable 45.0 Accrued corporate compensation and related items 11.6 Accrued worksite employee compensation and related items 311.1 Other current liabilities 49.8 Deferred income taxes 55.6 Other long-term liabilities 79.3 Net Assets $ 1,254.5 The Company assigned $ 310.9 million to amortizable intangible assets, including customer lists, tradenames and trademarks, and non-compete agreements, with a weighted-average amortization period of approximately 10 years. Goodwill in the amount of $ 976.6 million was recorded as a result of the acquisition, which is not tax-deductible. Goodwill is attributable to the future economic benefits the Company expects to achieve and expected synergies to be realized when combining the operations of this acquisition into our existing operations. Pro Forma Financial Results (Unaudited) The following table summarizes the Company’s unaudited pro forma operating results for the three and nine months ended February 28, 2019 as if the acquisition of Oasis had been consummated as of June 1, 2017. The following pro forma information does not include the impact of any costs incurred to integrate Oasis’ operations: For the three months ended For the nine months ended February 28, February 28, 2019 2019 Revenues $ 1,091.4 $ 2,977.6 Net income $ 322.8 $ 791.3 The unaudited pro forma operating results have been calculated after applying the Company’s accounting policies and include the acquisition of Oasis adjusted, net of tax, for depreciation and amortization expense resulting from the determination of fair values of the acquired property and equipment and amortizable intangible assets, the inclusion of interest expense related to borrowings used to fund the acquisition, the amortization of debt issuance costs related to the permanent financing of debt, the elimination of interest income related to available cash used for the acquisition, and the elimination of Oasis’ interest expense related to debt not assumed in the acquisition. Since the pro forma financial results assume the acquisition was consummated on June 1, 2017, the unaudited pro forma operating results for the nine months ended February 28, 2019 excluded $ 2.7 million ($ 2.0 million, net of tax) of costs incurred by the Company related to the acquisition of Oasis. Oasis’ fiscal year end was the Sunday closest to the calendar year end. Since Oasis and the Company had different fiscal year end dates, the unaudited pro forma operating results were prepared based on comparable periods. The pro forma financial information does not purport to be indicative of the results that would have been obtained had the transactions been completed as of June 1, 2017 for the periods presented and are not intended to be a projection of future results or trends. |
Other (Expense)_Income, Net
Other (Expense)/Income, Net | 9 Months Ended |
Feb. 29, 2020 | |
Other (Expense)/Income, Net [Abstract] | |
Other (Expense)/Income, Net | Note E: Other (Expense)/Income, Net Other (expense)/income, net, consisted of the following items: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Interest income on corporate investments $ 3.1 $ 3.1 $ 10.9 $ 9.1 Interest expense ( 9.3 ) ( 6.7 ) ( 29.7 ) ( 8.4 ) Other 0.3 ( 0.1 ) 3.4 — Other (expense)/income, net $ ( 5.9 ) $ ( 3.7 ) $ ( 15.4 ) $ 0.7 |
Funds Held for Clients and Corp
Funds Held for Clients and Corporate Investments | 9 Months Ended |
Feb. 29, 2020 | |
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: February 29, 2020 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 $ 1,226.1 $ — $ — $ 1,226.1 Available-for-sale securities: Asset-backed securities 68.0 1.1 — 69.1 Corporate bonds 667.6 24.0 — 691.6 General obligation municipal bonds 741.8 16.9 — 758.7 Pre-refunded municipal bonds (1) 21.9 0.3 — 22.2 Revenue municipal bonds 586.9 14.5 — 601.4 U.S. government agency and treasury securities 866.2 27.3 — 893.5 Variable rate demand notes 149.9 — — 149.9 Total available-for-sale securities 3,102.3 84.1 — 3,186.4 Other 25.6 2.0 ( 0.4 ) 27.2 Total funds held for clients and corporate investments $ 4,354.0 $ 86.1 $ ( 0.4 ) $ 4,439.7 May 31, 2019 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 $ 204.5 $ — $ — $ 204.5 Available-for-sale securities: Asset-backed securities 5.3 — — 5.3 Corporate bonds 442.1 5.3 ( 0.9 ) 446.5 General obligation municipal bonds 840.6 7.5 ( 0.3 ) 847.8 Pre-refunded municipal bonds (1) 25.6 0.2 — 25.8 Revenue municipal bonds 545.4 4.7 ( 0.2 ) 549.9 U.S. government agency and treasury securities 612.5 4.7 ( 1.3 ) 615.9 Variable rate demand notes 1,129.6 — — 1,129.6 Total available-for-sale securities 3,601.1 22.4 ( 2.7 ) 3,620.8 Other 26.3 1.7 ( 0.3 ) 27.7 Total funds held for clients and corporate investments $ 3,831.9 $ 24.1 $ ( 3.0 ) $ 3,853.0 (1) Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. Included in f unds held for clients' money market securities and other cash equivalents as of February 29, 2020 and May 31, 2019 were bank demand deposit accounts, commercial paper, and money market funds. In addition, as of February 29, 2020, certain U.S. government agency and treasury securities with maturities of 90 days or less at acquisition and time deposits were included in f unds held for clients' money market securities and other cash equivalents. Classification of funds held for clients and investments on the Consolidated Balance Sheets is as follows: February 29, May 31, In millions 2020 2019 Funds held for clients $ 4,355.7 $ 3,803.8 Corporate investments 73.8 39.0 Long-term corporate investments 10.2 10.2 Total funds held for clients and corporate investments $ 4,439.7 $ 3,853.0 Funds held for clients’ money market securities and other cash equivalents is collected from clients before due dates for payroll tax administration services and employee payment services, and is invested until remitted to the applicable tax or regulatory agencies or client employees. Based upon the Company’s intent and its contractual obligation to clients, these funds are considered restricted until they are remitted to fund these client obligations. The Company’s available-for-sale securities reflected net unrealized gains of $ 84.1 million and $ 19.7 million as of February 29, 2020 and May 31, 2019, respectively. Included in the net unrealized gain totals as of February 29, 2020 and May 31, 2019 were two and 269 available-for-sale securities in an unrealized loss position, respectively. The available-for-sale securities with immaterial unrealized losses as of February 29, 2020 included two securities in an unrealized loss position with a fair value totaling $ 1.4 million for more than twelve months and no securities in an unrealized loss position for less than twelve months. The available-for-sale securities in an unrealized loss position as of May 31, 2019 were as follows: May 31, 2019 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 $ — $ 1.5 $ ( 0.9 ) $ 133.8 $ ( 0.9 ) $ 135.3 General obligation municipal bonds — 3.0 ( 0.3 ) 168.3 ( 0.3 ) 171.3 Pre-refunded municipal bonds — 0.1 — 1.6 — 1.7 Revenue municipal bonds — 0.1 ( 0.2 ) 79.2 ( 0.2 ) 79.3 U.S. government agency and treasury securities — 4.7 ( 1.3 ) 175.6 ( 1.3 ) 180.3 Total $ — $ 9.4 $ ( 2.7 ) $ 558.5 $ ( 2.7 ) $ 567.9 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 February 29, 2020 that had immaterial gross unrealized losses 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. All of the securities in an unrealized loss position as of February 29, 2020 held an A rating and all of the securities in an unrealized loss position as of May 31, 2019 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, including those developments related to COVID-19, or changes in the Company’s strategies or assumptions related to any particular investment. Realized gains and losses on the sales of securities are determined by specific identification of the amortized cost basis of each security. On the Consolidated Statements of Income and Comprehensive Income, realized gains and losses from funds held for clients are included in interest on funds held for clients and realized gains and losses from corporate investments are included in other (expense)/income, net. Realized gains and losses were as follows: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Realized gains $ 0.6 $ 0.4 $ 2.4 $ 0.5 Realized losses — ( 0.3 ) — ( 0.6 ) Net realized gains/(losses) $ 0.6 $ 0.1 $ 2.4 $ ( 0.1 ) The amortized cost and fair value of available-for-sale securities that had stated maturities as of February 29, 2020 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. February 29, 2020 Amortized Fair In millions cost value Maturity date: Due in one year or less $ 332.6 $ 333.9 Due after one year through three years 782.2 798.2 Due after three years through five years 890.2 917.9 Due after five years 1,097.3 1,136.4 Total $ 3,102.3 $ 3,186.4 Variable rate demand notes (“VRDNs”) are primarily categorized as due after five years in the table above as the contractual maturities on these securities are typically 20 years to 3 0 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 | 9 Months Ended |
Feb. 29, 2020 | |
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, restricted cash and restricted 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: February 29, 2020 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: Restricted and unrestricted cash equivalents: Commercial paper $ 200.0 $ — $ 200.0 $ — Time deposits 200.0 — 200.0 — U.S. government agency and treasury securities 770.9 — 770.9 — Money market securities 38.7 38.7 — — Total restricted and unrestricted cash equivalents $ 1,209.6 $ 38.7 $ 1,170.9 $ — Available-for-sale securities: Asset-backed securities $ 69.1 $ — $ 69.1 $ — Corporate bonds 691.6 — 691.6 — General obligation municipal bonds 758.7 — 758.7 — Pre-refunded municipal bonds 22.2 — 22.2 — Revenue municipal bonds 601.4 — 601.4 — U.S. government agency and treasury securities 893.5 — 893.5 — Variable rate demand notes 149.9 — 149.9 — Total available-for-sale securities $ 3,186.4 $ — $ 3,186.4 $ — Other $ 27.2 $ 27.2 $ — $ — Liabilities: Other long-term liabilities $ 26.7 $ 26.7 $ — $ — May 31, 2019 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: Restricted and unrestricted cash equivalents: Commercial paper $ 10.0 $ — $ 10.0 $ — Money market securities 29.2 29.2 — — Total restricted and unrestricted cash equivalents $ 39.2 $ 29.2 $ 10.0 $ — Available-for-sale securities: Asset-backed securities $ 5.3 $ — $ 5.3 $ — Corporate bonds 446.5 — 446.5 — General obligation municipal bonds 847.8 — 847.8 — Pre-refunded municipal bonds 25.8 — 25.8 — Revenue municipal bonds 549.9 — 549.9 — U.S. government agency and treasury securities 615.9 — 615.9 — Variable rate demand notes 1,129.6 — 1,129.6 — Total available-for-sale securities $ 3,620.8 $ — $ 3,620.8 $ — Other $ 27.7 $ 27.7 $ — $ — Liabilities: Other long-term liabilities $ 27.0 $ 27.0 $ — $ — In determining the fair value of its assets and liabilities, the Company predominately uses the market approach. Money market securities, which are cash equivalents, are considered Level 1 investments as they are valued based on quoted market prices in active markets. Cash equivalents also include commercial paper, time deposits, and U.S. government agency and treasury securities with a maturity of 90 days or less at acquisition , which are considered Level 2 investments as they are valued based on similar, but not identical, instruments in active markets. Available-for-sale securities, including municipal bonds, asset-backed securities, VRDNs, corporate bonds, and U.S. government agency and treasury securities, are included in Level 2 and 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 considered Level 1 investments as they are valued based on quoted market prices in active markets. The Company’s financial liabilities accounted for under historical cost, but for which fair value measurements are periodically determined on a non-recurring basis were as follows: February 29, 2020 May 31, 2019 Amortized Fair Amortized Fair In millions cost value cost value Long-term borrowings Senior Notes, Series A $ 400.0 $ 446.0 $ 400.0 $ 418.4 Senior Notes, Series B 400.0 456.5 400.0 420.1 Total long-term borrowings 800.0 902.5 800.0 838.5 Less: Debt issuance costs, net of accumulated amortization ( 3.3 ) ( 3.3 ) ( 3.6 ) ( 3.6 ) Long-term borrowings, net of debt issuance costs $ 796.7 $ 899.2 $ 796.4 $ 834.9 The Company’s long-term borrowings are not traded in active markets, and as a result, its fair values were estimated using a market approach employing Level 2 valuation inputs, including borrowing rates the Company believes are currently available based on loans with similar terms and maturities. 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. |
Leases
Leases | 9 Months Ended |
Feb. 29, 2020 | |
Leases [Abstract] | |
Leases | Note H: Leases The Company’s lease portfolio consists primarily of operating leases for office space and equipment and has remaining terms from less than one year up to nine year s, with contractual terms expiring from 2020 to 2029 . Lease contracts may include one or more renewal options that allow the Company to extend the lease term, typically from one year to five year s per each renewal option. The exercise of lease options is generally at the discretion of the Company. None of the Company’s leases contain residual value guarantees, substantial restrictions, or covenants. Supplemental balance sheet information related to the Company’s leases were as follows: $ in millions February 29, 2020 Operating lease right-of-use assets, net of accumulated amortization $ 124.3 Operating lease liabilities, current (1) 37.6 Operating lease liabilities, non-current 105.1 Weighted average remaining lease term (in years) 4.71 Weighted average discount rate 2.06 % (1) The current portion of operating lease liabilities is reported in the other current liabilities line item on the Company’s Consolidated Balance Sheets. The components of lease expense were as follows: For the For the three months ended nine months ended In millions February 29, 2020 February 29, 2020 Fixed payment operating lease expense $ 9.7 $ 29.4 Variable payment operating lease expense — — Short-term lease expense — 0.2 Fixed payment lease expense was $ 42.9 million for fiscal 2019. Supplemental cash flow information related to the Company’s leases were as follows: For the nine months ended In millions February 29, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 31.4 Amortization of ROU assets 26.4 ROU assets obtained in exchange for new operating lease liabilities 18.0 Future lease payments are as follows: February 29, May 31, In millions 2020 2019 (1) 2020 $ 10.0 $ 37.7 2021 39.5 29.9 2022 31.2 21.3 2023 23.2 13.8 2024 18.4 10.5 Thereafter 27.8 10.7 Total future lease payments 150.1 123.9 Less: imputed interest 7.4 — Total operating lease liabilities $ 142.7 $ — Current portion $ 37.6 $ — Non-current portion $ 105.1 $ — (1) Presented in accordance with legacy GAAP, ASC Topic 840, Leases. As of February 29, 2020, the Company has no t entered into any lease agreements that have not yet commenced. |
Property and Equipment, Net of
Property and Equipment, Net of Accumulated Depreciation | 9 Months Ended |
Feb. 29, 2020 | |
Property and Equipment, Net of Accumulated Depreciation [Abstract] | |
Property and Equipment, Net of Accumulated Depreciation | Note I: Property and Equipment, Net of Accumulated Depreciation The components of property and equipment, at cost, consisted of the following: February 29, May 31, In millions 2020 2019 Land and improvements $ 10.8 $ 10.8 Buildings and improvements 166.3 162.9 Data processing equipment 225.3 221.6 Software (1) 678.4 626.6 Furniture, fixtures, and equipment 113.8 117.2 Leasehold improvements 106.3 105.4 Construction in progress (1) 37.7 30.3 Total property and equipment, gross 1,338.6 1,274.8 Less: Accumulated depreciation 934.8 866.1 Property and equipment, net of accumulated depreciation $ 403.8 $ 408.7 (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 $ 30.7 million and $ 95.6 million for the three and nine months ended February 29, 2020, respectively, compared to $ 32.1 million and $ 91.7 million for the three and nine months ended February 28, 2019, respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net of Accumulated Amortization | 9 Months Ended |
Feb. 29, 2020 | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | |
Goodwill and Intangible Assets, Net of Accumulated Amortization | Note J: Goodwill and Intangible Assets, Net of Accumulated Amortization Goodwill and changes in goodwill as of and for the nine months ended February 29, 2020 is as follows: February 29, In millions 2020 Balance, beginning of period $ 1,782.6 Changes during the period: Goodwill acquired 3.9 Acquisition accounting adjustments 4.5 Currency translation adjustment ( 1.2 ) Balance, end of period $ 1,789.8 The Company has certain intangible assets on its Consolidated Balance Sheets. The components of intangible assets, at cost, consisted of the following: February 29, May 31, In millions 2020 2019 Client lists $ 616.8 $ 608.2 Other intangible assets 23.2 23.0 Total intangible assets, gross 640.0 631.2 Less: Accumulated amortization 292.0 232.1 Intangible assets, net of accumulated amortization $ 348.0 $ 399.1 Amortization expense relating to intangible assets was $ 19.4 million and $ 62.4 million for the three and nine months ended February 29, 2020, respectively, compared to $ 20.9 million and $ 34.0 million for the three and nine months ended February 28, 2019 , respectively. The Company did no t recognize an impairment loss as it relates to its goodwill or intangible assets during the nine months ended February 29, 2020 or February 28, 2019. As of February 29, 2020, the estimated amortization expense relating to intangible asset balances for the full year fiscal 2020 and the following four fiscal years is as follows: In millions Estimated amortization Year ending May 31, expense 2020 $ 79.2 2021 64.5 2022 59.6 2023 55.0 2024 52.5 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income/(Loss) | 9 Months Ended |
Feb. 29, 2020 | |
Accumulated Other Comprehensive Income/(Loss) [Abstract] | |
Accumulated Other Comprehensive Income/(Loss) | Note K: Accumulated Other Comprehensive Income/(Loss) The change in unrealized gains and losses, net of applicable taxes, related to investments in available-for-sale securities and foreign currency translation adjustments are the primary components reported in accumulated other comprehensive income on the Company’s Consolidated Balance Sheets. The changes in accumulated other comprehensive income/(loss) are as follows: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Beginning balance $ 11.6 $ ( 47.4 ) $ 0.1 $ ( 36.2 ) Other comprehensive income: Unrealized gains on available-for-sale securities, net of tax 34.6 27.5 50.2 22.1 Reclassification adjustment for the (gain)/loss on sale of available-for-sale securities realized in net income, net of tax ( 0.5 ) ( 0.1 ) ( 1.8 ) 0.1 Foreign currency translation adjustment ( 0.5 ) 0.7 ( 3.3 ) ( 5.3 ) Total other comprehensive income, net of tax 33.6 28.1 45.1 16.9 Ending balance $ 45.2 $ ( 19.3 ) $ 45.2 $ ( 19.3 ) Total tax expense included in other comprehensive income $ 11.2 $ 9.1 $ 16.0 $ 6.8 Reclassification adjustments out of accumulated other comprehensive income/(loss) for realized gains, net of tax, on the sale of available-for-sale securities are reflected in interest on funds held for clients and other (expense)/income, net on the Consolidated Statements of Income and Comprehensive Income. |
Short-term Financing
Short-term Financing | 9 Months Ended |
Feb. 29, 2020 | |
Financing [Abstract] | |
Short-term Financing | Note L: Short-term Financing The Company maintains credit facilities and letters of credit as part of its normal and recurring business operations. Credit Facilities: The Company maintains three committed, unsecured credit facilities, as follows: Bank Borrower (1) Date Entered Expiration Date Maximum Amount Available Purpose JP Morgan Chase Bank, N.A. ("JPM") (2) Paychex of New York, LLC ("PoNY") July 31, 2019 July 31, 2024 $ 1 Billion To meet short-term funding requirements. JPM (2) PoNY August 17, 2017 August 17, 2022 $ 500 Million To meet short-term funding requirements. PNC Bank, National Association ("PNC") Paychex Advance, LLC February 6, 2020 February 6, 2023 $ 250 Million To finance working capital needs and general corporate purposes. (1) Borrower is a wholly owned subsidiary of the Company. (2) JPM acts as the administrative agent for this syndicated credit facility. On February 6, 2020, the Company and its subsidiary, Paychex Advance, LLC, entered into a credit agreement with a lender which established a new $ 250.0 million three-year unsecured revolving credit facility (“2020 credit facility”). Under this new credit facility, Paychex Advance, LLC may borrow at an alternate base rate provided by PNC or at an adjusted LIBOR-based interest rate provided by PNC. This revolving credit facility replaced the Paychex Advance, LLC predecessor $ 150.0 million four-year unsecured revolving credit facility that was entered into on March 17, 2016 (“2016 predecessor credit facility”) and terminated on February 6, 2020 . On July 31, 2019, the Company and its subsidiary, PoNY, entered into a credit agreement with a group of lenders which established a new $ 1.0 billion five-year unsecured revolving credit facility (“2019 credit facility”). Under this new credit facility, the Company may borrow at the alternate base rate provided by JPM or at an adjusted LIBOR-based interest rate provided by JPM. This revolving credit facility replaced the Company’s predecessor $ 1.0 billion five-year unsecured revolving credit facility that was entered into on August 5, 2015 (“2015 predecessor credit facility”) and terminated on July 31, 2019 . For all credit facilities, obligations under any facility are guaranteed by the Company and certain of its subsidiaries and will bear interest at competitive rates based on options provided to the borrower. Upon the expiration date, any borrowings outstanding will mature and be payable on such date . JPM $1 Billion Credit Facility: There were no borrowings outstanding under the 2019 credit facility as of February 29, 2020 or the 2015 predecessor credit facility as of May 31, 2019. Details of borrowings under the 2019 credit facility and the 2015 predecessor credit facility d uring the three and nine months ended February 29, 2020 and February 28, 2019 are as follows: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, $ in millions 2020 2019 2020 2019 Number of days borrowed — 71 16 81 Maximum amount borrowed $ — $ 400.0 $ 694.0 $ 483.0 Weighted-average amount borrowed $ — $ 400.0 $ 357.1 $ 385.9 Weighted-average interest rate — % 3.48 % 5.09 % 3.66 % The Company typically borrows on an overnight basis and only borrowed on an overnight basis during the nine months ended February 29, 2020. There were no borrowings during the three months ended February 29, 2020. During the three and nine months ended February 28, 2019, the Company borrowed $ 400.0 million for 71 days at a weighted-average LIBOR-based interest rate of 3.48 % to temporarily fund the acquisition of Oasis. JPM $500 Million Credit Facility: There were no borrowings outstanding under this credit facility as of February 29, 2020 or May 31, 2019. Details of borrowings under this credit facility during the three and nine months ended February 29, 2020 and February 28, 2019 are as follows: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, $ in millions 2020 2019 2020 2019 Number of days borrowed 3 71 27 78 Maximum amount borrowed $ 273.0 $ 400.0 $ 450.0 $ 400.0 Weighted-average amount borrowed $ 168.2 $ 400.0 $ 323.4 $ 374.1 Weighted-average interest rate 4.75 % 3.48 % 3.30 % 3.57 % The Company typically borrows on an overnight basis and only borrowed on an overnight basis d uring the three months ended February 29, 2020. In addition to overnight borrowings, during the nine months ended February 29, 2020, the Company borrowed: $ 400.0 million for ten day s at a weighted-average LIBOR-based interest rate of 3.00 %; $ 64.0 million for three day s at a weighted-average interest rate of 4.75 %; and $ 450.0 million for eight day s at a weighted-average LIBOR-based interest rate of 3.00 %. During the three and nine months ended February 28, 2019, the Company borrowed $ 400.0 million for 71 days at a weighted-average LIBOR-based interest rate of 3.48 % to temporarily fund the acquisition of Oasis. PNC $250 Million Credit Facility: As of February 29, 2020, the Company had $ 51.2 million outstanding under the 2020 credit facility, which remains outstanding as of the date of this report. There were no borrowings outstanding under the 2016 predecessor credit facility as of May 31, 2019. Details of borrowings under the 2020 credit facility and the 2016 predecessor credit facility during the three and nine months ended February 29, 2020 and February 28, 2019 are as follows: For the three months ended For the nine months ended February 29, February 28, February 29, February 28, $ in millions 2020 2019 2020 2019 Number of days borrowed 91 90 270 269 Maximum amount borrowed $ 141.3 $ 58.9 $ 141.3 $ 58.9 Weighted-average amount borrowed $ 52.3 $ 57.7 $ 53.8 $ 57.0 Weighted-average interest rate 2.55 % 2.94 % 2.79 % 2.72 % All of the Company’s credit facilities contain various financial and operational covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of February 29, 2020. 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. Letters of credit: The Company had irrevocable standby letters of credit outstanding totaling $ 147.4 million and $ 148.9 million as of February 29, 2020 and May 31, 2019, respectively, required to secure commitments for certain insurance policies. The letters of credit expire at various dates between April 1, 2020 and February 5, 2021 . No amounts were outstanding on these letters of credit as of, or during the nine months ended February 29, 2020 and February 28, 2019, or as of May 31, 2019. |
Long-Term Financing
Long-Term Financing | 9 Months Ended |
Feb. 29, 2020 | |
Financing [Abstract] | |
Long-Term Financing | Note M: Long-term Financing On March 13, 2019, the Company and its PoNY subsidiary completed the private placement of Senior Notes, Series A in an aggregate principal amount of $ 400.0 million due on March 13, 2026 , and Senior Notes, Series B in an aggregate principal amount of $ 400.0 million due on March 13, 2029 (collectively the “Notes”), pursuant to its Note Purchase and Guarantee Agreement (the “Agreement”) among the Company, PoNY, and the respective purchasers. Proceeds from the Notes were used to pay off $ 800.0 million in short-term borrowings under the Company’s JPM credit facilities used to temporarily finance the acquisition of Oasis. Long-term debt, at amortized cost, consisted of the following: February 29, May 31, In millions 2020 2019 Senior Notes, Series A $ 400.0 $ 400.0 Senior Notes, Series B 400.0 400.0 Total long-term borrowings 800.0 800.0 Less: Debt issuance costs, net of accumulated amortization ( 3.3 ) ( 3.6 ) Long-term borrowings, net of debt issuance costs $ 796.7 $ 796.4 Certain information related to the Senior Notes are as follows: Senior Notes Senior Notes Series A Series B Stated interest rate 4.07 % 4.25 % Effective interest rate 4.12 % 4.29 % Interest rate type Fixed Fixed Interest payment dates Semi-annual, in arrears Semi-annual, in arrears Principal payment dates March 13, 2026 March 13, 2029 Note type Unsecured Unsecured The effective interest rates for each note series include the interest on the note and amortization of debt issuance costs. Payment of all amounts due with respect to the Notes and performance under the Agreement is guaranteed by the Company, PoNY and certain other subsidiaries of the Company. The Company may, at its option, prepay at any time all, or any part of, the Notes, subject to certain conditions as described in the Agreement. The Agreement contains customary representations, warranties, affirmative and negative covenants, including financial covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of February 29, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Feb. 29, 2020 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note N: Commitments and Contingencies Other commitments: The Company enters into various purchase commitments with vendors in the ordinary course of business. The Company had outstanding commitments to purchase approximately $ 6.8 million and $ 5.6 million of capital assets as of February 29, 2020 and May 31, 2019, respectively. 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. The Company has also 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. The Company currently self-insures the deductible portion of various insured exposures under certain corporate employee benefit plans. The estimated loss exposure under these insurance arrangements is recorded in other current liabilities on the Company’s Consolidated Balance Sheets. Historically, the amounts accrued have not been material and were not material as of February 29, 2020. The Company also maintains corporate 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. 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, employment-related claims, tax claims, patent, statutory, and other matters. The Company’s management currently believes that resolution of any 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 results of operations in the period in which any such effects are recorded. |
Income Taxes
Income Taxes | 9 Months Ended |
Feb. 29, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | Note O: Income Taxes The Company’s effective income tax rate was 23.6 % and 23.7 % for the three months ended February 29, 2020 and February 28, 2019, respectively , and 23.4 % and 24.0 % for the nine months ended February 29, 2020 and February 28, 2019, respectively. The effective income tax rates in these periods were impacted by the recognition of net discrete tax benefits related to employee stock-based compensation payments. In addition, the effective income tax rate for the nine months ended February 28, 2019 included discrete tax expense related to the revaluation of deferred tax balances for legislative updates. |
Description of Business, Basi_2
Description of Business, Basis of Presentation, and Significant Accounting Policies (Policy) | 9 Months Ended |
Feb. 29, 2020 | |
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 human resource (“HR”), payroll, benefits, and insurance services for small- to medium-sized businesses in the United States (“U.S.”). The Company also has operations in Europe. 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 Europe, which represented approximately one percent of the Company’s total revenue for both the three and nine months ended February 29, 2020 and February 28, 2019. Long-lived assets in Europe were approximately five percent of total long-lived assets of the Company as of both February 29, 2020 and May 31, 2019. |
Basis of Presentation | Basis of presentation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statement presentation. The consolidated financial statements include the consolidated accounts of the Company with all intercompany transactions eliminated. Certain disclosures are reported as zero balances due to rounding. In the opinion of management, the information furnished herein reflects all adjustments (consisting of items of a normal recurring nature), which are necessary for a fair statement of the results for the interim period. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related Notes to Consolidated Financial Statements presented in the Company’s Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended May 31, 2019 (“fiscal 2019”). Operating results and cash flows for the nine months ended February 29, 2020 are not necessarily indicative of the results that may be expected for other interim periods or for the fiscal year ending May 31, 2020 (“fiscal 2020”). |
Restricted Cash and Restricted Cash Equivalents | Restricted cash and restricted cash equivalents: Restricted cash and restricted cash equivalents are recorded at fair value, and consist of cash and cash equivalents, primarily money market securities, included in funds held for clients and cash that is restricted in use to secure certain workers’ compensation policies. |
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 $ 12.1 million and $ 7.5 million as of February 29, 2020 and May 31, 2019, respectively. These balances include: trade receivables for services provided to clients and purchased receivables related to payroll funding arrangements with clients in the temporary staffing industry. Trade receivables were $ 98.7 million and $ 94.5 million as of February 29, 2020 and May 31, 2019, respectively. Purchased receivables were $ 349.7 million and $ 333.5 million as of February 29, 2020 and May 31, 2019, respectively. 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. |
Professional Employer Organization ("PEO") Unbilled Receivables, Net of Advance Collections | Professional Employer Organization (“PEO”) unbilled receivables, net of advance collections: The Company recognizes a liability for worksite employee gross wages and related payroll tax liabilities at the end of the period in which the worksite employee performs work, and where it assumes, under state regulations, the obligation for the payment of payroll and payroll tax liabilities. The estimated payroll and payroll tax liabilities are recorded in accrued worksite employee compensation and related items on the Company’s Consolidated Balance Sheets. The associated unbilled receivables, including estimated revenues, offset by advance collections from clients, are recorded as PEO unbilled receivables, net of advance collections on the Company’s Consolidated Balance Sheets. As of February 29, 2020 and May 31, 2019, advance collections included in PEO unbilled receivables, net of advance collections were $ 8.1 million and $ 4.2 million, respectively. |
PEO Insurance Reserves | PEO insurance reserves: As part of the PEO solution, the Company offers workers’ compensation insurance and health insurance for the benefit of client employees. Workers’ compensation insurance is provided under fully insured high deductible workers’ compensation insurance policies. 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 under its PEO workers’ compensation insurance policies is $ 1.0 million for the annual fiscal period ending May 31, 2020. For the annual fiscal period ended May 31, 2019, the Company’s maximum individual claims liability ranged from $ 0.5 million to $ 1.0 million under its PEO workers’ compensation insurance policies. The Company offers minimum premium insurance plan arrangements for certain of its PEO clients for various medical benefits and self-insured plans for dental and vision benefits. The Company establishes insurance reserves to provide for the payment of claims in accordance with its service contract with the carriers. The Company’s maximum individual claims liability was $ 0.3 million under its policies during both the annual fiscal periods ending May 31, 2020 and ended May 31, 2019. 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. |
Leases | Leases: On June 1, 2019, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”). As a result of this adoption, the following accounting policies were implemented or changed. At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease, the Company evaluates whether it should be classified as an operating or a finance lease. Currently, all of the Company’s leases have been classified as operating leases. Upon modification of the contract, the Company will reassess to determine if a contract is or contains a leasing arrangement. The Company records lease liabilities based on the future estimated cash payments discounted over the lease term, defined as the non-cancellable time period of the lease, together with all the following: periods covered by an option to extend the lease if the Company is reasonably certain to exercise the extension option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. Leases may also include options to terminate the arrangement or options to purchase the underlying lease property. The Company does not separate lease and non-lease components of contracts. Lease components provide the Company with the right to use an identified asset, which consist of the Company’s real estate properties and office equipment. Non-lease components consist primarily of maintenance services. As an implicit discount rate is not readily determinable in the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The incremental borrowing rate is determined using a portfolio approach utilizing publicly available information related to our unsecured borrowing rates. For certain leases with original terms of 12 months or less, the Company recognizes lease expense as incurred and does not recognize any lease liabilities. Short-term and long-term portions of operating lease liabilities are classified as other current liabilities and operating lease liabilities, respectively, in the Company’s Consolidated Balance Sheets. A right-of-use (“ROU”) asset is measured as the amount of the lease liability with adjustments, if applicable, for lease incentives, initial direct costs incurred by the Company, and lease prepayments made prior to or at lease commencement. ROU assets are classified as operating lease right-of-use assets, net of accumulated amortization, on the Company’s Consolidated Balance Sheets. The Company evaluates the carrying value of ROU assets if there are indicators of potential impairment, and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value of the asset group is determined to not be fully recoverable and is in excess of its estimated fair value, the Company will record an impairment loss in its Consolidated Statements of Income and Comprehensive Income. The Company did no t recognize an impairment loss during the nine months ended February 29, 2020. Fixed lease expense payments are recognized on a straight-line basis over the lease term. Variable lease payments vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time, and are often due to changes in an external market rate or the value of an index (e.g. Consumer Price Index). Variable lease payments are expensed as incurred in the Company’s Consolidated Statements of Income and Comprehensive Income. As part of the adoption of ASU No. 2016-02, the Company elected the following practical expedients: 1) lease vs. non-lease components relating to the real estate asset class; 2) the short-term lease exemption; and 3) the package of practical expedients, which permits the Company to not reassess prior conclusions about lease identification, lease classification, and initial direct costs under the new standard. In addition, the Company elected not to adopt the practical expedient related to hindsight. |
Stock-Based Compensation Costs | Stock-based compensation costs: The Company has issued stock-based awards to employees and members of its Board of Directors (the “Board”) consisting of stock options and restricted stock awards. In addition, the Company has issued stock-based awards to employees consisting of restricted stock units, performance shares, performance-based restricted stock, performance-based restricted stock units, and performance-based stock options. The Company accounts for all stock-based awards to employees and members of the Board as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. These costs are recognized over the requisite service period. Stock-based compensation costs recognized were $ 12.7 million and $ 36.5 million for the three and nine months ended February 29, 2020, respectively, as compared with $ 10.8 million and $ 33.6 million for the three and nine months ended February 28, 2019, respectively. The methods and assumptions used in the determination of the fair value of stock-based awards are consistent with those described in the Company’s fiscal 2019 Form 10-K. |
Recently Adopted and Issued Accounting Pronouncements | Recently adopted accounting pronouncements: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02. This guidance, as amended by subsequent ASUs on the topic, 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. The Company adopted the requirements of ASU No. 2016-02 on June 1, 2019, utilizing the alternative transition method provided by the FASB in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” and did not restate comparative periods as permitted under the standard. The adoption of ASU No. 2016-02 increased ROU lease-related assets and liabilities by $ 116.4 million and resulted in ROU asset and lease liability balances of $ 116.4 million and $ 135.3 million, respectively, on the Company’s Consolidated Balance Sheets as of June 1, 2019. The difference between the ROU assets and lease liabilities relates to $ 18.9 million of unamortized landlord allowances and lease incentives. The Company has updated its control framework for new internal controls and made changes to existing internal controls related to the new standard. The adoption of this standard did not have an impact on the financial covenants set forth in the Company’s credit facilities and long-term borrowing agreement. Refer to Note H for additional information on the new standard. In June 2019, the Company also adopted the following ASUs, none of which had a material impact on its consolidated financial statements: ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting;” ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income;” and ASU No. 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” Recently issued accounting pronouncements: In December 2019, the FASB issued ASU No. 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU No. 2019-12 is intended to simplify various aspects related to accounting for income taxes, eliminates certain exceptions to the general principles in ASC Topic 740 related to intra-period tax allocation, simplifies when companies recognize deferred taxes in an interim period, and clarifies certain aspects of the current guidance to promote consistent application. This guidance is effective for public entities for fiscal years beginning after December 15, 2020, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2021. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In November 2019, the FASB issued ASU No. 2019-08 “Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements - Share-Based Consideration Payable to a Customer.” ASU No. 2019-08 amends and clarifies ASU No. 2018-07, which was adopted by the Company on June 1, 2019, to require that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. For entities that have already adopted the amendments in ASU No. 2018-07, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The adoption of this guidance will not have a material impact on the consolidated financial statements. In April 2019, the FASB issued ASU No. 2019-04 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” ASU No. 2019-04 was issued as part of the FASB’s ongoing project to improve upon its Accounting Standards Codification (“ASC”), and to clarify and improve areas of guidance related to recently issued standards on credit losses, hedging, and recognition and measurement. This guidance contains several effective dates but is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606.” ASU No. 2018-18 was issued to resolve the diversity in practice concerning the manner in which entities account for transactions based on their assessment of the economics of a collaborative arrangement. This guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The adoption of this guidance will not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 modifies the disclosure requirements in Topic 820, “Fair Value Measurement,” based on the FASB Concepts Statement, “Conceptual Framework for Financial Reporting – Chapter 8: Notes to Financial Statements,” including consideration of costs and benefits. This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The adoption of this guidance will not have a material impact on the 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. This guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. 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. The Company has completed its assessment of the adoption of this guidance, including changes to internal controls, and it will not have a material impact on the 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 as amended by subsequent ASUs on the topic and commonly referred to as the current expected credit loss (“CECL”) model, requires an entity to measure expected credit losses for financial assets held at the reporting date based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. It also requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses. This guidance is effective for public business entities for annual periods beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2020 and will be adopted using the modified retrospective approach through a cumulative-effect adjustment to retained earnings. The Company has formed a CECL implementation group (“CIG”) to manage the overall implementation of this guidance. The CIG has substantially completed its evaluation of the impact of the new guidance on its business processes, systems, and controls and is currently developing financial models that will determine the expected credit losses to its accounts receivable, PEO unbilled receivables, and available-for-sale debt securities. The Company will begin testing these new processes during the fiscal quarter ending May 31, 2020 and will estimate the possible impacts, if any, to its consolidated financial statements at that time. The extent of any changes in credit losses will depend upon the size, composition and credit quality of the Company’s accounts receivable, PEO unbilled receivables, and investment portfolios at the date of adoption and the macroeconomic conditions and forecasts at that date. Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission during the nine months ended February 29, 2020 did not, or are not expected to, have a material impact on the Company’s consolidated financial statements. |
Service Revenue (Tables)
Service Revenue (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Service Revenue [Abstract] | |
Summary of Disaggregates Revenue by Services | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Management Solutions $ 850.0 $ 801.6 $ 2,301.2 $ 2,174.7 PEO and Insurance Solutions 271.5 245.8 762.6 559.0 Total service revenue $ 1,121.5 $ 1,047.4 $ 3,063.8 $ 2,733.7 |
Summary of Changes in Deferred Revenue Related to Material Right Performance Obligations | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Balance, beginning of period $ 45.1 $ 46.0 $ 45.7 $ 46.4 Deferral of revenue 7.4 7.7 20.3 20.9 Recognition of unearned revenue ( 7.4 ) ( 7.6 ) ( 20.9 ) ( 21.2 ) Balance, end of period $ 45.1 $ 46.1 $ 45.1 $ 46.1 |
Summary of Changes in Deferred Costs to Obtain and Fulfill Contracts | For the three months ended February 29, 2020 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 456.9 $ 49.4 $ ( 40.7 ) $ 465.6 Costs to fulfill a contract $ 66.4 $ 6.7 $ ( 6.0 ) $ 67.1 For the nine months ended February 29, 2020 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 464.3 $ 122.7 $ ( 121.4 ) $ 465.6 Costs to fulfill a contract $ 66.1 $ 18.7 $ ( 17.7 ) $ 67.1 For the three months ended February 28, 2019 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 447.3 $ 47.9 $ ( 39.6 ) $ 455.6 Costs to fulfill a contract $ 65.8 $ 5.9 $ ( 5.7 ) $ 66.0 For the nine months ended February 28, 2019 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 455.0 $ 118.2 $ ( 117.6 ) $ 455.6 Costs to fulfill a contract $ 65.4 $ 17.8 $ ( 17.2 ) $ 66.0 |
Basic and Diluted Earnings Pe_2
Basic and Diluted Earnings Per Share (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Basic and Diluted Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions, except per share amounts 2020 2019 2020 2019 Basic earnings per share: Net income $ 354.5 $ 324.6 $ 877.4 $ 804.0 Weighted-average common shares outstanding 358.5 359.2 358.5 359.1 Basic earnings per share $ 0.99 $ 0.90 $ 2.45 $ 2.24 Diluted earnings per share: Net income $ 354.5 $ 324.6 $ 877.4 $ 804.0 Weighted-average common shares outstanding 358.5 359.2 358.5 359.1 Dilutive effect of common share equivalents 2.5 2.4 2.6 2.5 Weighted-average common shares outstanding, assuming dilution 361.0 361.6 361.1 361.6 Diluted earnings per share $ 0.98 $ 0.90 $ 2.43 $ 2.22 Weighted-average anti-dilutive common share equivalents 0.6 0.6 0.5 0.5 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Business Combinations [Abstract] | |
Acquisition Date Fair Values to Acquired Net Assets | Cash and cash equivalents $ 130.2 Restricted cash 66.6 Corporate investments 8.6 Accounts receivable, net of allowance for doubtful accounts 10.7 PEO unbilled receivables, net of advance collections 209.8 Prepaid income taxes 4.8 Prepaid expenses and other current assets 6.0 Long-term restricted cash 65.5 Property and equipment 15.4 Intangible assets 310.9 Goodwill 976.6 Other long-term assets 1.8 Total Assets 1,806.9 Accounts payable 45.0 Accrued corporate compensation and related items 11.6 Accrued worksite employee compensation and related items 311.1 Other current liabilities 49.8 Deferred income taxes 55.6 Other long-term liabilities 79.3 Net Assets $ 1,254.5 |
Summary of Pro Forma Information | For the three months ended For the nine months ended February 28, February 28, 2019 2019 Revenues $ 1,091.4 $ 2,977.6 Net income $ 322.8 $ 791.3 |
Other (Expense)_Income, Net (Ta
Other (Expense)/Income, Net (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Other (Expense)/Income, Net [Abstract] | |
Schedule of Interest (Expense)/Income, Net | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Interest income on corporate investments $ 3.1 $ 3.1 $ 10.9 $ 9.1 Interest expense ( 9.3 ) ( 6.7 ) ( 29.7 ) ( 8.4 ) Other 0.3 ( 0.1 ) 3.4 — Other (expense)/income, net $ ( 5.9 ) $ ( 3.7 ) $ ( 15.4 ) $ 0.7 |
Funds Held for Clients and Co_2
Funds Held for Clients and Corporate Investments (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Funds Held for Clients and Corporate Investments [Abstract] | |
Funds Held for Clients and Corporate Investments | February 29, 2020 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 $ 1,226.1 $ — $ — $ 1,226.1 Available-for-sale securities: Asset-backed securities 68.0 1.1 — 69.1 Corporate bonds 667.6 24.0 — 691.6 General obligation municipal bonds 741.8 16.9 — 758.7 Pre-refunded municipal bonds (1) 21.9 0.3 — 22.2 Revenue municipal bonds 586.9 14.5 — 601.4 U.S. government agency and treasury securities 866.2 27.3 — 893.5 Variable rate demand notes 149.9 — — 149.9 Total available-for-sale securities 3,102.3 84.1 — 3,186.4 Other 25.6 2.0 ( 0.4 ) 27.2 Total funds held for clients and corporate investments $ 4,354.0 $ 86.1 $ ( 0.4 ) $ 4,439.7 May 31, 2019 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 $ 204.5 $ — $ — $ 204.5 Available-for-sale securities: Asset-backed securities 5.3 — — 5.3 Corporate bonds 442.1 5.3 ( 0.9 ) 446.5 General obligation municipal bonds 840.6 7.5 ( 0.3 ) 847.8 Pre-refunded municipal bonds (1) 25.6 0.2 — 25.8 Revenue municipal bonds 545.4 4.7 ( 0.2 ) 549.9 U.S. government agency and treasury securities 612.5 4.7 ( 1.3 ) 615.9 Variable rate demand notes 1,129.6 — — 1,129.6 Total available-for-sale securities 3,601.1 22.4 ( 2.7 ) 3,620.8 Other 26.3 1.7 ( 0.3 ) 27.7 Total funds held for clients and corporate investments $ 3,831.9 $ 24.1 $ ( 3.0 ) $ 3,853.0 (1) Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Classification of Investments on Consolidated Balance Sheets | February 29, May 31, In millions 2020 2019 Funds held for clients $ 4,355.7 $ 3,803.8 Corporate investments 73.8 39.0 Long-term corporate investments 10.2 10.2 Total funds held for clients and corporate investments $ 4,439.7 $ 3,853.0 |
Securities in Unrealized Loss Position | May 31, 2019 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 $ — $ 1.5 $ ( 0.9 ) $ 133.8 $ ( 0.9 ) $ 135.3 General obligation municipal bonds — 3.0 ( 0.3 ) 168.3 ( 0.3 ) 171.3 Pre-refunded municipal bonds — 0.1 — 1.6 — 1.7 Revenue municipal bonds — 0.1 ( 0.2 ) 79.2 ( 0.2 ) 79.3 U.S. government agency and treasury securities — 4.7 ( 1.3 ) 175.6 ( 1.3 ) 180.3 Total $ — $ 9.4 $ ( 2.7 ) $ 558.5 $ ( 2.7 ) $ 567.9 |
Realized Gains and Losses from Sale of Available-for-sale Securities | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Realized gains $ 0.6 $ 0.4 $ 2.4 $ 0.5 Realized losses — ( 0.3 ) — ( 0.6 ) Net realized gains/(losses) $ 0.6 $ 0.1 $ 2.4 $ ( 0.1 ) |
Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity | February 29, 2020 Amortized Fair In millions cost value Maturity date: Due in one year or less $ 332.6 $ 333.9 Due after one year through three years 782.2 798.2 Due after three years through five years 890.2 917.9 Due after five years 1,097.3 1,136.4 Total $ 3,102.3 $ 3,186.4 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Fair Value Measurements [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | February 29, 2020 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: Restricted and unrestricted cash equivalents: Commercial paper $ 200.0 $ — $ 200.0 $ — Time deposits 200.0 — 200.0 — U.S. government agency and treasury securities 770.9 — 770.9 — Money market securities 38.7 38.7 — — Total restricted and unrestricted cash equivalents $ 1,209.6 $ 38.7 $ 1,170.9 $ — Available-for-sale securities: Asset-backed securities $ 69.1 $ — $ 69.1 $ — Corporate bonds 691.6 — 691.6 — General obligation municipal bonds 758.7 — 758.7 — Pre-refunded municipal bonds 22.2 — 22.2 — Revenue municipal bonds 601.4 — 601.4 — U.S. government agency and treasury securities 893.5 — 893.5 — Variable rate demand notes 149.9 — 149.9 — Total available-for-sale securities $ 3,186.4 $ — $ 3,186.4 $ — Other $ 27.2 $ 27.2 $ — $ — Liabilities: Other long-term liabilities $ 26.7 $ 26.7 $ — $ — May 31, 2019 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: Restricted and unrestricted cash equivalents: Commercial paper $ 10.0 $ — $ 10.0 $ — Money market securities 29.2 29.2 — — Total restricted and unrestricted cash equivalents $ 39.2 $ 29.2 $ 10.0 $ — Available-for-sale securities: Asset-backed securities $ 5.3 $ — $ 5.3 $ — Corporate bonds 446.5 — 446.5 — General obligation municipal bonds 847.8 — 847.8 — Pre-refunded municipal bonds 25.8 — 25.8 — Revenue municipal bonds 549.9 — 549.9 — U.S. government agency and treasury securities 615.9 — 615.9 — Variable rate demand notes 1,129.6 — 1,129.6 — Total available-for-sale securities $ 3,620.8 $ — $ 3,620.8 $ — Other $ 27.7 $ 27.7 $ — $ — Liabilities: Other long-term liabilities $ 27.0 $ 27.0 $ — $ — |
Financial Liabilities Measured at Fair Value on Non-Recurring Basis | February 29, 2020 May 31, 2019 Amortized Fair Amortized Fair In millions cost value cost value Long-term borrowings Senior Notes, Series A $ 400.0 $ 446.0 $ 400.0 $ 418.4 Senior Notes, Series B 400.0 456.5 400.0 420.1 Total long-term borrowings 800.0 902.5 800.0 838.5 Less: Debt issuance costs, net of accumulated amortization ( 3.3 ) ( 3.3 ) ( 3.6 ) ( 3.6 ) Long-term borrowings, net of debt issuance costs $ 796.7 $ 899.2 $ 796.4 $ 834.9 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information Related to Leases | $ in millions February 29, 2020 Operating lease right-of-use assets, net of accumulated amortization $ 124.3 Operating lease liabilities, current (1) 37.6 Operating lease liabilities, non-current 105.1 Weighted average remaining lease term (in years) 4.71 Weighted average discount rate 2.06 % (1) The current portion of operating lease liabilities is reported in the other current liabilities line item on the Company’s Consolidated Balance Sheets. |
Components of Lease Expense | For the For the three months ended nine months ended In millions February 29, 2020 February 29, 2020 Fixed payment operating lease expense $ 9.7 $ 29.4 Variable payment operating lease expense — — Short-term lease expense — 0.2 |
Supplemental Cash Flow Information Related to Leases | For the nine months ended In millions February 29, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 31.4 Amortization of ROU assets 26.4 ROU assets obtained in exchange for new operating lease liabilities 18.0 |
Future Lease Payments | February 29, May 31, In millions 2020 2019 (1) 2020 $ 10.0 $ 37.7 2021 39.5 29.9 2022 31.2 21.3 2023 23.2 13.8 2024 18.4 10.5 Thereafter 27.8 10.7 Total future lease payments 150.1 123.9 Less: imputed interest 7.4 — Total operating lease liabilities $ 142.7 $ — Current portion $ 37.6 $ — Non-current portion $ 105.1 $ — (1) Presented in accordance with legacy GAAP, ASC Topic 840, Leases. |
Property and Equipment, Net o_2
Property and Equipment, Net of Accumulated Depreciation (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Property and Equipment, Net of Accumulated Depreciation [Abstract] | |
Components of Property and Equipment, at Cost | February 29, May 31, In millions 2020 2019 Land and improvements $ 10.8 $ 10.8 Buildings and improvements 166.3 162.9 Data processing equipment 225.3 221.6 Software (1) 678.4 626.6 Furniture, fixtures, and equipment 113.8 117.2 Leasehold improvements 106.3 105.4 Construction in progress (1) 37.7 30.3 Total property and equipment, gross 1,338.6 1,274.8 Less: Accumulated depreciation 934.8 866.1 Property and equipment, net of accumulated depreciation $ 403.8 $ 408.7 (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 Asset_2
Goodwill and Intangible Assets, Net of Accumulated Amortization (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | |
Change in Goodwill | February 29, In millions 2020 Balance, beginning of period $ 1,782.6 Changes during the period: Goodwill acquired 3.9 Acquisition accounting adjustments 4.5 Currency translation adjustment ( 1.2 ) Balance, end of period $ 1,789.8 |
Components of Intangible Assets, at Cost | February 29, May 31, In millions 2020 2019 Client lists $ 616.8 $ 608.2 Other intangible assets 23.2 23.0 Total intangible assets, gross 640.0 631.2 Less: Accumulated amortization 292.0 232.1 Intangible assets, net of accumulated amortization $ 348.0 $ 399.1 |
Estimated Amortization Expense | In millions Estimated amortization Year ending May 31, expense 2020 $ 79.2 2021 64.5 2022 59.6 2023 55.0 2024 52.5 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income/(Loss) (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Accumulated Other Comprehensive Income/(Loss) [Abstract] | |
Changes in Accumulated Other Comprehensive Income/(Loss) | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, In millions 2020 2019 2020 2019 Beginning balance $ 11.6 $ ( 47.4 ) $ 0.1 $ ( 36.2 ) Other comprehensive income: Unrealized gains on available-for-sale securities, net of tax 34.6 27.5 50.2 22.1 Reclassification adjustment for the (gain)/loss on sale of available-for-sale securities realized in net income, net of tax ( 0.5 ) ( 0.1 ) ( 1.8 ) 0.1 Foreign currency translation adjustment ( 0.5 ) 0.7 ( 3.3 ) ( 5.3 ) Total other comprehensive income, net of tax 33.6 28.1 45.1 16.9 Ending balance $ 45.2 $ ( 19.3 ) $ 45.2 $ ( 19.3 ) Total tax expense included in other comprehensive income $ 11.2 $ 9.1 $ 16.0 $ 6.8 |
Short-term Financing (Tables)
Short-term Financing (Tables) - Revolving Credit Facility [Member] | 9 Months Ended |
Feb. 29, 2020 | |
Line of Credit Facility [Line Items] | |
Description of Credit Facilities | Bank Borrower (1) Date Entered Expiration Date Maximum Amount Available Purpose JP Morgan Chase Bank, N.A. ("JPM") (2) Paychex of New York, LLC ("PoNY") July 31, 2019 July 31, 2024 $ 1 Billion To meet short-term funding requirements. JPM (2) PoNY August 17, 2017 August 17, 2022 $ 500 Million To meet short-term funding requirements. PNC Bank, National Association ("PNC") Paychex Advance, LLC February 6, 2020 February 6, 2023 $ 250 Million To finance working capital needs and general corporate purposes. (1) Borrower is a wholly owned subsidiary of the Company. (2) JPM acts as the administrative agent for this syndicated credit facility. |
JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | |
Line of Credit Facility [Line Items] | |
Credit Facility Amount Borrowed | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, $ in millions 2020 2019 2020 2019 Number of days borrowed — 71 16 81 Maximum amount borrowed $ — $ 400.0 $ 694.0 $ 483.0 Weighted-average amount borrowed $ — $ 400.0 $ 357.1 $ 385.9 Weighted-average interest rate — % 3.48 % 5.09 % 3.66 % |
JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | |
Line of Credit Facility [Line Items] | |
Credit Facility Amount Borrowed | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, $ in millions 2020 2019 2020 2019 Number of days borrowed 3 71 27 78 Maximum amount borrowed $ 273.0 $ 400.0 $ 450.0 $ 400.0 Weighted-average amount borrowed $ 168.2 $ 400.0 $ 323.4 $ 374.1 Weighted-average interest rate 4.75 % 3.48 % 3.30 % 3.57 % |
PNC $250 Million Credit Facility [Member] | PNC Bank, National Association [Member] | |
Line of Credit Facility [Line Items] | |
Credit Facility Amount Borrowed | For the three months ended For the nine months ended February 29, February 28, February 29, February 28, $ in millions 2020 2019 2020 2019 Number of days borrowed 91 90 270 269 Maximum amount borrowed $ 141.3 $ 58.9 $ 141.3 $ 58.9 Weighted-average amount borrowed $ 52.3 $ 57.7 $ 53.8 $ 57.0 Weighted-average interest rate 2.55 % 2.94 % 2.79 % 2.72 % |
Long-Term Financing (Tables)
Long-Term Financing (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Financing [Abstract] | |
Schedule Of Long-Term Debt | Long-term debt, at amortized cost, consisted of the following: February 29, May 31, In millions 2020 2019 Senior Notes, Series A $ 400.0 $ 400.0 Senior Notes, Series B 400.0 400.0 Total long-term borrowings 800.0 800.0 Less: Debt issuance costs, net of accumulated amortization ( 3.3 ) ( 3.6 ) Long-term borrowings, net of debt issuance costs $ 796.7 $ 796.4 Certain information related to the Senior Notes are as follows: Senior Notes Senior Notes Series A Series B Stated interest rate 4.07 % 4.25 % Effective interest rate 4.12 % 4.29 % Interest rate type Fixed Fixed Interest payment dates Semi-annual, in arrears Semi-annual, in arrears Principal payment dates March 13, 2026 March 13, 2029 Note type Unsecured Unsecured |
Description of Business, Basi_3
Description of Business, Basis of Presentation, and Significant Accounting Policies (Narrative) (Details) $ in Millions | Jun. 01, 2019USD ($) | Feb. 29, 2020USD ($) | Feb. 28, 2019USD ($) | Feb. 29, 2020USD ($)segment | Feb. 28, 2019USD ($) | May 31, 2020USD ($) | May 31, 2019USD ($) |
Accounting Policies [Line Items] | |||||||
Number of reportable segments | segment | 1 | ||||||
Allowance for doubtful accounts | $ 12.1 | $ 12.1 | $ 7.5 | ||||
Advance collections | 8.1 | 8.1 | 4.2 | ||||
Maximum individual health insurance claims liability | 0.3 | ||||||
Operating lease, impairment loss | 0 | ||||||
Stock-based compensation costs recognized | 12.7 | $ 10.8 | 36.5 | $ 33.6 | |||
Operating lease, right-of-use asset | 124.3 | 124.3 | |||||
Operating lease, liability | 142.7 | 142.7 | |||||
Forecast [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Maximum individual workers' compensation claims liability | $ 1 | ||||||
Maximum individual health insurance claims liability | $ 0.3 | ||||||
ASU 2016-02 [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Increase in lease-related assets and liabilities | $ 116.4 | ||||||
Operating lease, right-of-use asset | 116.4 | ||||||
Operating lease, liability | 135.3 | ||||||
Unamortized landlord allowances and lease incentives | $ 18.9 | ||||||
Trade Receivables [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Receivables | 98.7 | 98.7 | 94.5 | ||||
Purchased Receivables [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Receivables | $ 349.7 | $ 349.7 | 333.5 | ||||
Minimum [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Maximum individual workers' compensation claims liability | 0.5 | ||||||
Maximum [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Maximum individual workers' compensation claims liability | $ 1 | ||||||
Europe [Member] | Revenue [Member] | Geographic Concentration Risk [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Total percentage | 1.00% | 1.00% | 1.00% | 1.00% | |||
Europe [Member] | Long Lived Assets [Member] | Geographic Concentration Risk [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Total percentage | 5.00% | 5.00% |
Service Revenue (Narrative) (De
Service Revenue (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Service Revenue [Line Items] | ||||
Contracts term | 30 days | |||
Notice of termination period | 30 days | |||
Direct pass-through costs for payroll wages and payroll taxes | $ 5,600 | $ 4,700 | $ 15,900 | $ 9,200 |
Direct pass-through costs related to state unemployment insurance | 47.2 | 46.3 | 73.9 | 59.7 |
Direct pass-through costs related to guaranteed cost benefit plans | $ 159 | $ 139.4 | $ 489.8 | 294.5 |
Revenue performance obligations timing | the Company defers revenue associated with these performance obligations, which exceed one year, and subsequently recognizes these as future services are provided, over approximately three years to four years | |||
Capitalized contract cost, amortization period | 8 years | 8 years | ||
Impairment loss | $ 0 | $ 0 | ||
Minimum [Member] | ||||
Service Revenue [Line Items] | ||||
Revenue performance obligations timing, years | 3 years | |||
Maximum [Member] | ||||
Service Revenue [Line Items] | ||||
Revenue performance obligations timing, years | 4 years |
Service Revenue (Narrative) (Pe
Service Revenue (Narrative) (Performance Obligation) (Details) $ in Millions | Feb. 29, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-06-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue, performance obligations | $ 6.7 |
Deferred revenue, timing of satisfaction | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-06-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue, performance obligations | $ 20.2 |
Deferred revenue, timing of satisfaction | 1 year 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-06-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue, performance obligations | $ 18.2 |
Deferred revenue, timing of satisfaction | 2 years 3 months |
Service Revenue (Summary of Dis
Service Revenue (Summary of Disaggregates Revenue by Services) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total service revenue | $ 1,121.5 | $ 1,047.4 | $ 3,063.8 | $ 2,733.7 |
Management Solutions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total service revenue | 850 | 801.6 | 2,301.2 | 2,174.7 |
PEO And Insurance Solutions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total service revenue | $ 271.5 | $ 245.8 | $ 762.6 | $ 559 |
Service Revenue (Summary of Cha
Service Revenue (Summary of Changes in Deferred Revenue Related to Material Right Performance Obligations) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Service Revenue [Abstract] | ||||
Balance, beginning of period | $ 45.1 | $ 46 | $ 45.7 | $ 46.4 |
Deferral of revenue | 7.4 | 7.7 | 20.3 | 20.9 |
Recognition of unearned revenue | (7.4) | (7.6) | (20.9) | (21.2) |
Balance, end of period | $ 45.1 | $ 46.1 | $ 45.1 | $ 46.1 |
Service Revenue (Summary of C_2
Service Revenue (Summary of Changes in Deferred Costs to Obtain and Fulfill Contracts) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Capitalized Contract Cost [Line Items] | ||||
Amortization | $ 139.1 | $ 134.8 | ||
Costs To Obtain A Contract [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning balance | $ 456.9 | $ 447.3 | 464.3 | 455 |
Capitalization of costs | 49.4 | 47.9 | 122.7 | 118.2 |
Amortization | (40.7) | (39.6) | (121.4) | (117.6) |
Ending balance | 465.6 | 455.6 | 465.6 | 455.6 |
Costs To Fulfill A Contract [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning balance | 66.4 | 65.8 | 66.1 | 65.4 |
Capitalization of costs | 6.7 | 5.9 | 18.7 | 17.8 |
Amortization | (6) | (5.7) | (17.7) | (17.2) |
Ending balance | $ 67.1 | $ 66 | $ 67.1 | $ 66 |
Basic and Diluted Earnings Pe_3
Basic and Diluted Earnings Per Share (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May 31, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock repurchased and retired, values | $ 171.9 | $ 32.8 | |||
Authorized in July 2016 [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock repurchased and retired, shares | 0 | 0.5 | |||
Common stock repurchased and retired, values | $ 32.8 | ||||
Authorized In May 2019 [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Expiration date | May 31, 2022 | ||||
Common stock repurchased and retired, shares | 0 | 2 | |||
Common stock repurchased and retired, values | $ 171.9 | ||||
Maximum [Member] | Authorized In May 2019 [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Approved repurchase amount | $ 400 | ||||
Common Stock [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock issued in connection with exercise or vesting of stock-based awards | 0.3 | 0.3 | 1.4 | 0.9 | |
Common stock repurchased and retired, shares | 2 | 0.5 |
Basic and Diluted Earnings Pe_4
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 | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Basic earnings per share: | ||||
Net income | $ 354.5 | $ 324.6 | $ 877.4 | $ 804 |
Weighted-average common shares outstanding | 358.5 | 359.2 | 358.5 | 359.1 |
Basic earnings per share | $ 0.99 | $ 0.90 | $ 2.45 | $ 2.24 |
Diluted earnings per share: | ||||
Net income | $ 354.5 | $ 324.6 | $ 877.4 | $ 804 |
Weighted-average common shares outstanding | 358.5 | 359.2 | 358.5 | 359.1 |
Dilutive effect of common share equivalents | 2.5 | 2.4 | 2.6 | 2.5 |
Weighted-average common shares outstanding, assuming dilution | 361 | 361.6 | 361.1 | 361.6 |
Diluted earnings per share | $ 0.98 | $ 0.90 | $ 2.43 | $ 2.22 |
Weighted-average anti-dilutive common share equivalents | 0.6 | 0.6 | 0.5 | 0.5 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) $ in Millions | Dec. 20, 2018 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 |
Business Acquisition [Line Items] | ||||
Restricted cash | $ 66.4 | $ 134.4 | ||
Goodwill | $ 1,789.8 | $ 1,782.6 | ||
Oasis Outsourcing Group Holdings, L.P. [Member] | ||||
Business Acquisition [Line Items] | ||||
Effective acquisition date | Dec. 20, 2018 | |||
Purchase price | $ 992.2 | |||
Restricted cash | 132.1 | |||
Acquisition financed amount | 800 | |||
Cash acquired | 262.3 | |||
Amortizable intangible assets | 310.9 | |||
Goodwill | $ 976.6 | |||
Excluded incurred costs related to acquisition | 2.7 | |||
Excluded incurred costs related to acquisition, net of tax | $ 2 | |||
Oasis Outsourcing Group Holdings, L.P. [Member] | Weighted Average [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 10 years |
Business Combinations (Acquisit
Business Combinations (Acquisition Date Fair Values To Acquired Net Assets) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 | Dec. 20, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,789.8 | $ 1,782.6 | |
Oasis Outsourcing Group Holdings, L.P. [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 130.2 | ||
Restricted cash | 66.6 | ||
Corporate investments | 8.6 | ||
Accounts receivable, net of allowance for doubtful accounts | 10.7 | ||
PEO unbilled receivables, net of advance collections | 209.8 | ||
Prepaid income taxes | 4.8 | ||
Prepaid expenses and other current assets | 6 | ||
Long-term restricted cash | 65.5 | ||
Property and equipment | 15.4 | ||
Intangible assets | 310.9 | ||
Goodwill | 976.6 | ||
Other long-term assets | 1.8 | ||
Total Assets | 1,806.9 | ||
Accounts payable | 45 | ||
Accrued corporate compensation and related items | 11.6 | ||
Accrued worksite employee compensation and related items | 311.1 | ||
Other current liabilities | 49.8 | ||
Deferred income taxes | 55.6 | ||
Other long-term liabilities | 79.3 | ||
Net Assets | $ 1,254.5 |
Business Combinations (Summary
Business Combinations (Summary Of Pro Forma Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Feb. 28, 2019 | Feb. 28, 2019 | |
Business Combinations [Abstract] | ||
Revenues | $ 1,091.4 | $ 2,977.6 |
Net income | $ 322.8 | $ 791.3 |
Other (Expense)_Income, Net (Sc
Other (Expense)/Income, Net (Schedule of Interest (Expense)/Income, Net) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Other (Expense)/Income, Net [Abstract] | ||||
Interest income on corporate investments | $ 3.1 | $ 3.1 | $ 10.9 | $ 9.1 |
Interest expense | (9.3) | (6.7) | (29.7) | (8.4) |
Other | 0.3 | (0.1) | 3.4 | |
Other (expense)/income, net | $ (5.9) | $ (3.7) | $ (15.4) | $ 0.7 |
Funds Held for Clients and Co_3
Funds Held for Clients and Corporate Investments (Narrative) (Details) $ in Millions | 9 Months Ended | |
Feb. 29, 2020USD ($)security | May 31, 2019USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | ||
Net unrealized gains on available-for-sale securities | $ | $ 84.1 | $ 19.7 |
Number of available-for-sale securities in an unrealized loss position | security | 2 | 269 |
Number of available-for-sale securities in an unrealized loss position for more than twelve months | security | 2 | |
Securities in an unrealized loss position for more than twelve months, fair value | $ | $ 1.4 | $ 558.5 |
Number of available-for-sale securities in an unrealized loss position for less than twelve months | security | 0 | |
U.S. Government Agency And Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for more than twelve months, fair value | $ | $ 175.6 | |
Available-for-sale securities contractual maturities | 90 days | |
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 Co_4
Funds Held for Clients and Corporate Investments (Funds Held for Clients and Corporate Investments) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Funds held for clients' money market securities and other cash equivalents, Amortized cost | $ 1,226.1 | $ 204.5 | |
Funds held for clients' money market securities and other cash equivalents, Fair value | 1,226.1 | 204.5 | |
Available-for-sale securities, Amortized cost | 3,102.3 | 3,601.1 | |
Available-for-sale securities, Gross unrealized gains | 84.1 | 22.4 | |
Available-for-sale securities, Gross unrealized losses | (2.7) | ||
Available-for-sale securities, Fair value | 3,186.4 | 3,620.8 | |
Other, Amortized cost | 25.6 | 26.3 | |
Other, Gross unrealized gains | 2 | 1.7 | |
Other, Gross unrealized losses | (0.4) | (0.3) | |
Other, Fair value | 27.2 | 27.7 | |
Total funds held for clients and corporate investments, Amortized cost | 4,354 | 3,831.9 | |
Total funds held for clients and corporate investments, Gross unrealized gains | 86.1 | 24.1 | |
Total funds held for clients and corporate investments, Gross unrealized losses | (0.4) | (3) | |
Total funds held for clients and corporate investments, Fair value | 4,439.7 | 3,853 | |
Asset-Backed Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 68 | 5.3 | |
Available-for-sale securities, Gross unrealized gains | 1.1 | ||
Available-for-sale securities, Fair value | 69.1 | 5.3 | |
Corporate Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 667.6 | 442.1 | |
Available-for-sale securities, Gross unrealized gains | 24 | 5.3 | |
Available-for-sale securities, Gross unrealized losses | (0.9) | ||
Available-for-sale securities, Fair value | 691.6 | 446.5 | |
General Obligation Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 741.8 | 840.6 | |
Available-for-sale securities, Gross unrealized gains | 16.9 | 7.5 | |
Available-for-sale securities, Gross unrealized losses | (0.3) | ||
Available-for-sale securities, Fair value | 758.7 | 847.8 | |
Pre-Refunded Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | [1] | 21.9 | 25.6 |
Available-for-sale securities, Gross unrealized gains | [1] | 0.3 | 0.2 |
Available-for-sale securities, Fair value | [1] | 22.2 | 25.8 |
Revenue Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 586.9 | 545.4 | |
Available-for-sale securities, Gross unrealized gains | 14.5 | 4.7 | |
Available-for-sale securities, Gross unrealized losses | (0.2) | ||
Available-for-sale securities, Fair value | 601.4 | 549.9 | |
U.S. Government Agency And Treasury Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 866.2 | 612.5 | |
Available-for-sale securities, Gross unrealized gains | 27.3 | 4.7 | |
Available-for-sale securities, Gross unrealized losses | (1.3) | ||
Available-for-sale securities, Fair value | 893.5 | 615.9 | |
Variable Rate Demand Notes [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 149.9 | 1,129.6 | |
Available-for-sale securities, Fair value | $ 149.9 | $ 1,129.6 | |
[1] | Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Funds Held for Clients and Co_5
Funds Held for Clients and Corporate Investments (Classification of Investments on Consolidated Balance Sheets) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Funds Held for Clients and Corporate Investments [Abstract] | ||
Funds held for clients | $ 4,355.7 | $ 3,803.8 |
Corporate investments | 73.8 | 39 |
Long-term corporate investments | 10.2 | 10.2 |
Total funds held for clients and corporate investments, Fair value | $ 4,439.7 | $ 3,853 |
Funds Held for Clients and Co_6
Funds Held for Clients and Corporate Investments (Securities in Unrealized Loss Position) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | $ (2.7) | |
Total, Gross unrealized losses | (2.7) | |
Securities in an unrealized loss position for less than twelve months, Fair value | 9.4 | |
Securities in an unrealized loss position for more than twelve months, Fair value | $ 1.4 | 558.5 |
Total, Fair value | 567.9 | |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.9) | |
Total, Gross unrealized losses | (0.9) | |
Securities in an unrealized loss position for less than twelve months, Fair value | 1.5 | |
Securities in an unrealized loss position for more than twelve months, Fair value | 133.8 | |
Total, Fair value | 135.3 | |
General Obligation Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.3) | |
Total, Gross unrealized losses | (0.3) | |
Securities in an unrealized loss position for less than twelve months, Fair value | 3 | |
Securities in an unrealized loss position for more than twelve months, Fair value | 168.3 | |
Total, Fair value | 171.3 | |
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 | 0.1 | |
Securities in an unrealized loss position for more than twelve months, Fair value | 1.6 | |
Total, Fair value | 1.7 | |
Revenue Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.2) | |
Total, Gross unrealized losses | (0.2) | |
Securities in an unrealized loss position for less than twelve months, Fair value | 0.1 | |
Securities in an unrealized loss position for more than twelve months, Fair value | 79.2 | |
Total, Fair value | 79.3 | |
U.S. Government Agency And Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (1.3) | |
Total, Gross unrealized losses | (1.3) | |
Securities in an unrealized loss position for less than twelve months, Fair value | 4.7 | |
Securities in an unrealized loss position for more than twelve months, Fair value | 175.6 | |
Total, Fair value | $ 180.3 |
Funds Held for Clients and Co_7
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 | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Funds Held for Clients and Corporate Investments [Abstract] | ||||
Realized gains | $ 0.6 | $ 0.4 | $ 2.4 | $ 0.5 |
Realized losses | (0.3) | (0.6) | ||
Net realized gains/(losses) | $ 0.6 | $ 0.1 | $ 2.4 | $ (0.1) |
Funds Held for Clients and Co_8
Funds Held for Clients and Corporate Investments (Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Funds Held for Clients and Corporate Investments [Abstract] | ||
Due in one year or less, Amortized cost | $ 332.6 | |
Due after one year through three years, Amortized cost | 782.2 | |
Due after three years through five years, Amortized cost | 890.2 | |
Due after five years, Amortized cost | 1,097.3 | |
Available-for-sale securities, Amortized cost | 3,102.3 | $ 3,601.1 |
Due in one year or less, Fair value | 333.9 | |
Due after one year through three years, Fair value | 798.2 | |
Due after three years through five years, Fair value | 917.9 | |
Due after five years, Fair value | 1,136.4 | |
Available-for-sale securities, Fair value | $ 3,186.4 | $ 3,620.8 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) | 9 Months Ended |
Feb. 29, 2020 | |
Maximum [Member] | U.S. Government Agency And Treasury Securities [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Short-term investments considered cash equivalents, maturity at acquisition | 90 days |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | $ 1,209.6 | $ 39.2 |
Available-for-sale securities | 3,186.4 | 3,620.8 |
Other | 27.2 | 27.7 |
Other long-term liabilities | 26.7 | 27 |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 200 | 10 |
Time Deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 200 | |
Asset-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 69.1 | 5.3 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 691.6 | 446.5 |
General Obligation Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 758.7 | 847.8 |
Pre-Refunded Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 22.2 | 25.8 |
Revenue Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 601.4 | 549.9 |
U.S. Government Agency And Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 770.9 | |
Available-for-sale securities | 893.5 | 615.9 |
Money Market Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 38.7 | 29.2 |
Variable Rate Demand Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 149.9 | 1,129.6 |
Quoted Prices in Active Markets (Level 1) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 38.7 | 29.2 |
Other | 27.2 | 27.7 |
Other long-term liabilities | 26.7 | 27 |
Quoted Prices in Active Markets (Level 1) [Member] | Money Market Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 38.7 | 29.2 |
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 1,170.9 | 10 |
Available-for-sale securities | 3,186.4 | 3,620.8 |
Significant Other Observable Inputs (Level 2) [Member] | Commercial Paper [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 200 | 10 |
Significant Other Observable Inputs (Level 2) [Member] | Time Deposits [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 200 | |
Significant Other Observable Inputs (Level 2) [Member] | Asset-Backed Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 69.1 | 5.3 |
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 | 691.6 | 446.5 |
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 | 758.7 | 847.8 |
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 | 22.2 | 25.8 |
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 | 601.4 | 549.9 |
Significant Other Observable Inputs (Level 2) [Member] | U.S. Government Agency And Treasury Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted and unrestricted cash equivalents | 770.9 | |
Available-for-sale securities | 893.5 | 615.9 |
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 | $ 149.9 | $ 1,129.6 |
Fair Value Measurements (Fina_2
Fair Value Measurements (Financial Liabilities Measured at Fair Value on Non-Recurring Basis) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | $ 800 | $ 800 |
Less: Debt issuance costs, net of accumulated amortization, Amortized cost | (3.3) | (3.6) |
Long-term borrowings, net of debt issuance costs, Amortized cost | 796.7 | 796.4 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | 800 | 800 |
Senior Notes, Series A [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | 400 | 400 |
Senior Notes, Series B [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | 400 | 400 |
Non-Recurring Basis [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Fair value | 902.5 | 838.5 |
Less: Debt issuance costs, net of accumulated amortization, Fair value | (3.3) | (3.6) |
Long-term borrowings, net of debt issuance costs, Fair value | 899.2 | 834.9 |
Non-Recurring Basis [Member] | Senior Notes, Series A [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Fair value | 446 | 418.4 |
Non-Recurring Basis [Member] | Senior Notes, Series B [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Fair value | $ 456.5 | $ 420.1 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Feb. 29, 2020USD ($)item | Feb. 29, 2020USD ($)item | May 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Fixed payment operating lease expense | $ | $ 9.7 | $ 29.4 | $ 42.9 |
Number of lease agreements, not yet commenced | item | 0 | 0 | |
Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating leases, remaining term of contract | 1 year | 1 year | |
Operating leases, contractual term | 2020 | ||
Operating leases, renewal term | 1 year | 1 year | |
Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating leases, remaining term of contract | 9 years | 9 years | |
Operating leases, contractual term | 2029 | ||
Operating leases, renewal term | 5 years | 5 years |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 | |
Leases [Abstract] | |||
Operating lease right-of-use assets, net of accumulated amortization | $ 124.3 | ||
Operating lease liabilities, current | [1] | 37.6 | |
Operating lease liabilities, non-current | $ 105.1 | $ 13 | |
Weighted average remaining lease term (in years) | 4 years 8 months 15 days | ||
Weighted average discount rate | 2.06% | ||
[1] | The current portion of operating lease liabilities is reported in the other current liabilities line item on the Company’s Consolidated Balance Sheets. |
Leases (Components of Lease Exp
Leases (Components of Lease Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Feb. 29, 2020 | Feb. 29, 2020 | May 31, 2019 | |
Leases [Abstract] | |||
Fixed payment operating lease expense | $ 9.7 | $ 29.4 | $ 42.9 |
Variable payment operating lease expense | |||
Short-term lease expense | $ 0.2 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information Related to Leases) (Details) $ in Millions | 9 Months Ended |
Feb. 29, 2020USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 31.4 |
Amortization of ROU assets | 26.4 |
ROU assets obtained in exchange for new operating lease liabilities | $ 18 |
Leases (Future Lease Payments)
Leases (Future Lease Payments) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 | ||
Leases [Abstract] | ||||
2020 | $ 10 | $ 37.7 | [1] | |
2021 | 39.5 | 29.9 | [1] | |
2022 | 31.2 | 21.3 | [1] | |
2023 | 23.2 | 13.8 | [1] | |
2024 | 18.4 | 10.5 | [1] | |
Thereafter | 27.8 | 10.7 | [1] | |
Total future lease payments | 150.1 | 123.9 | [1] | |
Less: imputed interest | 7.4 | |||
Total operating lease liabilities | 142.7 | |||
Current portion | [2] | 37.6 | ||
Non-current portion | $ 105.1 | $ 13 | ||
[1] | Presented in accordance with legacy GAAP, ASC Topic 840, Leases. | |||
[2] | The current portion of operating lease liabilities is reported in the other current liabilities line item on the Company’s Consolidated Balance Sheets. |
Property and Equipment, Net o_3
Property and Equipment, Net of Accumulated Depreciation (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Property and Equipment, Net of Accumulated Depreciation [Abstract] | ||||
Depreciation expense | $ 30.7 | $ 32.1 | $ 95.6 | $ 91.7 |
Property and Equipment, Net o_4
Property and Equipment, Net of Accumulated Depreciation (Components of Property and Equipment, at Cost) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 1,338.6 | $ 1,274.8 | |
Less: Accumulated depreciation | 934.8 | 866.1 | |
Property and equipment, net of accumulated depreciation | 403.8 | 408.7 | |
Land and Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 10.8 | 10.8 | |
Buildings and Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 166.3 | 162.9 | |
Data Processing Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 225.3 | 221.6 | |
Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | [1] | 678.4 | 626.6 |
Furniture, Fixtures, and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 113.8 | 117.2 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 106.3 | 105.4 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | [1] | $ 37.7 | $ 30.3 |
[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 Asset_3
Goodwill and Intangible Assets, Net of Accumulated Amortization (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | ||||
Amortization expense | $ 19.4 | $ 20.9 | $ 62.4 | $ 34 |
Impairment loss relates to goodwill or intangible assets | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net of Accumulated Amortization (Change in Goodwill) (Details) $ in Millions | 9 Months Ended |
Feb. 29, 2020USD ($) | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | |
Goodwill Balance, beginning of period | $ 1,782.6 |
Changes during the period: | |
Goodwill acquired | 3.9 |
Acquisition accounting adjustments | 4.5 |
Currency translation adjustment | (1.2) |
Goodwill Balance, end of period | $ 1,789.8 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net of Accumulated Amortization (Components of Intangible Assets, at Cost) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Intangible Assets [Line Items] | ||
Total intangible assets, gross | $ 640 | $ 631.2 |
Less: Accumulated amortization | 292 | 232.1 |
Intangible assets, net of accumulated amortization | 348 | 399.1 |
Other Intangible Assets [Member] | ||
Intangible Assets [Line Items] | ||
Total intangible assets, gross | 23.2 | 23 |
Client Lists [Member] | ||
Intangible Assets [Line Items] | ||
Total intangible assets, gross | $ 616.8 | $ 608.2 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net of Accumulated Amortization (Estimated Amortization Expense) (Details) $ in Millions | Feb. 29, 2020USD ($) |
Year ending May 31 | |
2020 | $ 79.2 |
2021 | 64.5 |
2022 | 59.6 |
2023 | 55 |
2024 | $ 52.5 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income/(Loss) (Changes in Accumulated Other Comprehensive Income/(Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Accumulated Other Comprehensive Income/(Loss) [Abstract] | ||||
Beginning balance | $ 11.6 | $ (47.4) | $ 0.1 | $ (36.2) |
Unrealized gains on available-for-sale securities, net of tax | 34.6 | 27.5 | 50.2 | 22.1 |
Reclassification adjustment for the (gain)/loss on sale of available-for-sale securities realized in net income, net of tax | (0.5) | (0.1) | (1.8) | 0.1 |
Foreign currency translation adjustment | (0.5) | 0.7 | (3.3) | (5.3) |
Total other comprehensive income, net of tax | 33.6 | 28.1 | 45.1 | 16.9 |
Ending balance | 45.2 | (19.3) | 45.2 | (19.3) |
Total tax expense included in other comprehensive income | $ 11.2 | $ 9.1 | $ 16 | $ 6.8 |
Short-term Financing (Narrative
Short-term Financing (Narrative) (Details) - USD ($) $ in Thousands | Feb. 06, 2020 | Jul. 31, 2019 | Mar. 17, 2016 | Aug. 05, 2015 | Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 | |
JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Paychex of New York, LLC [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Maximum borrowing capacity | [1],[2] | $ 1,000,000 | $ 1,000,000 | |||||||
Expiration date | [1],[2] | Jul. 31, 2024 | ||||||||
JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Paychex of New York, LLC [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Maximum borrowing capacity | [1],[2] | 500,000 | $ 500,000 | |||||||
Expiration date | [1],[2] | Aug. 17, 2022 | ||||||||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | Paychex of New York, LLC [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Maximum borrowing capacity | $ 1,000,000 | |||||||||
Term | 5 years | |||||||||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | Paychex of New York, LLC [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Maximum borrowing capacity | $ 1,000,000 | |||||||||
Term | 5 years | |||||||||
Expiration date | Jul. 31, 2019 | |||||||||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amounts outstanding | 0 | $ 0 | $ 0 | |||||||
Amount borrowed | $ 400,000 | $ 694,000 | $ 483,000 | |||||||
Number of days borrowed | 71 days | 16 days | 81 days | |||||||
Weighted-average interest rate | 3.48% | 5.09% | 3.66% | |||||||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seventy-One Days [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amount borrowed | $ 400,000 | $ 400,000 | ||||||||
Number of days borrowed | 71 days | 71 days | ||||||||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seventy-One Days [Member] | LIBOR [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Weighted-average interest rate | 3.48% | 3.48% | ||||||||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Overnight Basis [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amount borrowed | 0 | |||||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amounts outstanding | 0 | $ 0 | 0 | |||||||
Amount borrowed | $ 273,000 | $ 400,000 | $ 450,000 | $ 400,000 | ||||||
Number of days borrowed | 3 days | 71 days | 27 days | 78 days | ||||||
Weighted-average interest rate | 4.75% | 3.48% | 3.30% | 3.57% | ||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Three Days [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amount borrowed | $ 64,000 | $ 64,000 | ||||||||
Number of days borrowed | 3 days | 3 days | ||||||||
Weighted-average interest rate | 4.75% | 4.75% | ||||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Eight Days [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amount borrowed | $ 450,000 | |||||||||
Number of days borrowed | 8 days | |||||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Eight Days [Member] | LIBOR [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Weighted-average interest rate | 3.00% | |||||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Ten Days [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amount borrowed | $ 400,000 | $ 400,000 | ||||||||
Number of days borrowed | 10 days | 10 days | ||||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Ten Days [Member] | LIBOR [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Weighted-average interest rate | 3.00% | 3.00% | ||||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seventy-One Days [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amount borrowed | $ 400,000 | $ 400,000 | ||||||||
Number of days borrowed | 71 days | 71 days | ||||||||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seventy-One Days [Member] | LIBOR [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Weighted-average interest rate | 3.48% | 3.48% | ||||||||
Revolving Credit Facility [Member] | PNC $250 Million Credit Facility [Member] | PNC Bank, National Association [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amounts outstanding | $ 51,200 | $ 51,200 | ||||||||
Maximum borrowing capacity | $ 250,000 | |||||||||
Term | 3 years | |||||||||
Amount borrowed | $ 141,300 | $ 141,300 | ||||||||
Number of days borrowed | 91 days | 270 days | ||||||||
Weighted-average interest rate | 2.55% | 2.79% | ||||||||
Revolving Credit Facility [Member] | PNC $150 Million Credit Facility [Member] | PNC Bank, National Association [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Amounts outstanding | 0 | |||||||||
Maximum borrowing capacity | $ 150,000 | |||||||||
Term | 4 years | |||||||||
Expiration date | Feb. 6, 2020 | |||||||||
Amount borrowed | $ 58,900 | $ 58,900 | ||||||||
Number of days borrowed | 90 days | 269 days | ||||||||
Weighted-average interest rate | 2.94% | 2.72% | ||||||||
Standby Letters of Credit [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Maximum borrowing capacity | $ 147,400 | $ 147,400 | 148,900 | |||||||
Amounts outstanding | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Minimum [Member] | Standby Letters of Credit [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Expiration date | Apr. 1, 2020 | |||||||||
Maximum [Member] | Standby Letters of Credit [Member] | ||||||||||
Financing [Line Items] | ||||||||||
Expiration date | Feb. 5, 2021 | |||||||||
[1] | Borrower is a wholly owned subsidiary of the Company. | |||||||||
[2] | JPM acts as the administrative agent for this syndicated credit facility. |
Short-term Financing (Descripti
Short-term Financing (Description of Credit Facilities) (Details) $ in Millions | 9 Months Ended | |
Feb. 29, 2020USD ($) | [1] | |
Paychex of New York, LLC [Member] | JP Morgan Chase Bank, N.A. [Member] | JPM $1 Billion Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Date Entered | Jul. 31, 2019 | [2] |
Expiration Date | Jul. 31, 2024 | [2] |
Maximum Amount Available | $ 1,000 | [2] |
Paychex of New York, LLC [Member] | JP Morgan Chase Bank, N.A. [Member] | JPM $500 Million Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Date Entered | Aug. 17, 2017 | [2] |
Expiration Date | Aug. 17, 2022 | [2] |
Maximum Amount Available | $ 500 | [2] |
Paychex Advance, LLC [Member] | PNC Bank, National Association [Member] | PNC $250 Million Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Date Entered | Feb. 6, 2020 | |
Expiration Date | Feb. 6, 2023 | |
Maximum Amount Available | $ 250 | |
[1] | Borrower is a wholly owned subsidiary of the Company. | |
[2] | JPM acts as the administrative agent for this syndicated credit facility. |
Short-term Financing (Credit Fa
Short-term Financing (Credit Facility Amount Borrowed) (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Number of days borrowed | 71 days | 16 days | 81 days | |
Maximum amount borrowed | $ 400 | $ 694 | $ 483 | |
Weighted-average amount borrowed | $ 400 | $ 357.1 | $ 385.9 | |
Weighted-average interest rate | 3.48% | 5.09% | 3.66% | |
JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Number of days borrowed | 3 days | 71 days | 27 days | 78 days |
Maximum amount borrowed | $ 273 | $ 400 | $ 450 | $ 400 |
Weighted-average amount borrowed | $ 168.2 | $ 400 | $ 323.4 | $ 374.1 |
Weighted-average interest rate | 4.75% | 3.48% | 3.30% | 3.57% |
PNC $250 Million Credit Facility [Member] | PNC Bank, National Association [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Number of days borrowed | 91 days | 270 days | ||
Maximum amount borrowed | $ 141.3 | $ 141.3 | ||
Weighted-average amount borrowed | $ 52.3 | $ 53.8 | ||
Weighted-average interest rate | 2.55% | 2.79% | ||
PNC $150 Million Credit Facility [Member] | PNC Bank, National Association [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Number of days borrowed | 90 days | 269 days | ||
Maximum amount borrowed | $ 58.9 | $ 58.9 | ||
Weighted-average amount borrowed | $ 57.7 | $ 57 | ||
Weighted-average interest rate | 2.94% | 2.72% |
Long-Term Financing (Narrative)
Long-Term Financing (Narrative) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 | Mar. 13, 2019 |
Aggregate principal amount | $ 800 | $ 800 | |
Senior Notes [Member] | |||
Aggregate principal amount | 800 | 800 | |
Senior Notes [Member] | Company And Paychex Of New York [Member] | |||
Aggregate principal amount | $ 800 | ||
Senior Notes, Series A [Member] | Senior Notes [Member] | |||
Aggregate principal amount | $ 400 | 400 | |
Principal payment dates | Mar. 13, 2026 | ||
Senior Notes, Series A [Member] | Senior Notes [Member] | Company And Paychex Of New York [Member] | |||
Aggregate principal amount | $ 400 | ||
Principal payment dates | Mar. 13, 2026 | ||
Senior Notes, Series B [Member] | Senior Notes [Member] | |||
Aggregate principal amount | $ 400 | $ 400 | |
Principal payment dates | Mar. 13, 2029 | ||
Senior Notes, Series B [Member] | Senior Notes [Member] | Company And Paychex Of New York [Member] | |||
Aggregate principal amount | $ 400 | ||
Principal payment dates | Mar. 13, 2029 |
Long-Term Financing (Schedule O
Long-Term Financing (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | $ 800 | $ 800 |
Less: Debt issuance costs, net of accumulated amortization, Amortized cost | (3.3) | (3.6) |
Long-term borrowings, net of debt issuance costs, Amortized cost | 796.7 | 796.4 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | 800 | 800 |
Senior Notes, Series A [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | 400 | 400 |
Senior Notes, Series B [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term borrowings, Amortized cost | $ 400 | $ 400 |
Long-Term Financing (Informatio
Long-Term Financing (Information Related To Senior Notes) (Details) - Senior Notes [Member] | 9 Months Ended |
Feb. 29, 2020 | |
Senior Notes, Series A [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 4.07% |
Effective interest rate | 4.12% |
Interest rate type | Fixed |
Interest payment dates | Semi-annual, in arrears |
Principal payment dates | Mar. 13, 2026 |
Note type | Unsecured |
Senior Notes, Series B [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 4.25% |
Effective interest rate | 4.29% |
Interest rate type | Fixed |
Interest payment dates | Semi-annual, in arrears |
Principal payment dates | Mar. 13, 2029 |
Note type | Unsecured |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | Feb. 29, 2020 | May 31, 2019 |
Commitments and Contingencies [Abstract] | ||
Commitments to purchase capital assets | $ 6.8 | $ 5.6 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Income Taxes [Abstract] | ||||
Effective income tax rate | 23.60% | 23.70% | 23.40% | 24.00% |