Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
31-May-14 | Jun. 30, 2014 | Nov. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'PAYCHEX INC | ' | ' |
Entity Central Index Key | '0000723531 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-May-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Current Fiscal Year End Date | '--05-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $14,236,029,018 |
Entity Common Stock, Shares Outstanding | ' | 363,099,317 | ' |
Consolidated_Statements_of_Inc
Consolidated Statements of Income and Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Revenue: | ' | ' | ' |
Service revenue | $2,478.20 | $2,285.20 | $2,186.20 |
Interest on funds held for clients | 40.7 | 41 | 43.6 |
Total revenue | 2,518.90 | 2,326.20 | 2,229.80 |
Expenses: | ' | ' | ' |
Operating expenses | 732.5 | 671.3 | 670.1 |
Selling, general and administrative expenses | 803.7 | 750.1 | 705.8 |
Total expenses | 1,536.20 | 1,421.40 | 1,375.90 |
Operating income | 982.7 | 904.8 | 853.9 |
Investment income, net | 5.4 | 6.6 | 6.4 |
Income before income taxes | 988.1 | 911.4 | 860.3 |
Income taxes | 360.6 | 342.4 | 312.3 |
Net income | 627.5 | 569 | 548 |
Other comprehensive (loss)/income, net of tax: | ' | ' | ' |
Unrealized (losses)/gains on securities, net of tax | -0.5 | -15.7 | 0.2 |
Total other comprehensive (loss)/income, net of tax | -0.5 | -15.7 | 0.2 |
Comprehensive income | $627 | $553.30 | $548.20 |
Basic earnings per share | $1.72 | $1.56 | $1.51 |
Diluted earnings per share | $1.71 | $1.56 | $1.51 |
Weighted-average common shares outstanding | 364.5 | 363.8 | 362.4 |
Weighted-average common shares outstanding, assuming dilution | 366.1 | 364.7 | 363 |
Cash dividends per common share | $1.40 | $1.31 | $1.27 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | 31-May-14 | 31-May-13 |
In Millions, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $152.50 | $107.30 |
Corporate investments | 398.7 | 398.2 |
Interest receivable | 36.3 | 32.4 |
Accounts receivable, net of allowance for doubtful accounts | 149.4 | 133.4 |
Deferred income taxes | 12 | 2.3 |
Prepaid income taxes | 17.2 | 49.9 |
Prepaid expenses and other current assets | 46.7 | 36.6 |
Current assets before funds held for clients | 812.8 | 760.1 |
Funds held for clients | 4,198.60 | 4,072.50 |
Total current assets | 5,011.40 | 4,832.60 |
Long-term corporate investments | 385.6 | 369.1 |
Property and equipment, net of accumulated depreciation | 342.2 | 346 |
Intangible assets, net of accumulated amortization | 40.6 | 45.2 |
Goodwill | 540.3 | 533.9 |
Deferred income taxes | 37.1 | 34.1 |
Other long-term assets | 12.9 | 2.8 |
Total assets | 6,370.10 | 6,163.70 |
LIABILITIES | ' | ' |
Accounts payable | 48.8 | 42.7 |
Accrued compensation and related items | 171.7 | 138.2 |
Deferred revenue | 6.9 | 5.2 |
Deferred income taxes | 6.6 | 8.1 |
Other current liabilities | 37.8 | 34.3 |
Current liabilities before client fund obligations | 271.8 | 228.5 |
Client fund obligations | 4,167.10 | 4,039.70 |
Total current liabilities | 4,438.90 | 4,268.20 |
Accrued income taxes | 28.6 | 19.7 |
Deferred income taxes | 69 | 53.3 |
Other long-term liabilities | 56.6 | 48.8 |
Total liabilities | 4,593.10 | 4,390 |
Commitments and contingencies - Note M | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock, $0.01 par value; Authorized: 600.0 shares; Issued and outstanding: 363.0 shares as of May 31, 2014 and 365.4 shares as of May 31, 2013, respectively. | 3.6 | 3.7 |
Additional paid-in capital | 794.4 | 659.5 |
Retained earnings | 957.5 | 1,088.50 |
Accumulated other comprehensive income | 21.5 | 22 |
Total stockholders' equity | 1,777 | 1,773.70 |
Total liabilities and stockholders' equity | $6,370.10 | $6,163.70 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | 31-May-14 | 31-May-13 |
In Millions, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 600 | 600 |
Common stock, shares issued | 363 | 365.4 |
Common stock, shares outstanding | 363 | 365.4 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] |
In Millions, unless otherwise specified | |||||
Beginning balance at May. 31, 2011 | $1,496.20 | $3.60 | $535.60 | $919.50 | $37.50 |
Beginning balance, shares at May. 31, 2011 | ' | 362.1 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 548 | ' | ' | 548 | ' |
Unrealized gains/(losses) on securities, net of tax | 0.2 | ' | ' | ' | 0.2 |
Cash dividends declared | -460.5 | ' | ' | -460.5 | ' |
Stock-based compensation | 23.1 | ' | 23.1 | ' | ' |
Stock-based award transactions, Shares | ' | 0.5 | ' | ' | ' |
Stock-based award transactions, Value | -2.5 | ' | -2.4 | -4.9 | ' |
Ending balance at May. 31, 2012 | 1,604.50 | 3.6 | 561.1 | 1,002.10 | 37.7 |
Ending balance, Shares at May. 31, 2012 | ' | 362.6 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 569 | ' | ' | 569 | ' |
Unrealized gains/(losses) on securities, net of tax | -15.7 | ' | ' | ' | -15.7 |
Cash dividends declared | -476.7 | ' | ' | -476.7 | ' |
Stock-based compensation | 22.9 | ' | 22.9 | ' | ' |
Stock-based award transactions, Shares | ' | 2.8 | ' | ' | ' |
Stock-based award transactions, Value | -69.7 | -0.1 | -75.5 | -5.9 | ' |
Ending balance at May. 31, 2013 | 1,773.70 | 3.7 | 659.5 | 1,088.50 | 22 |
Ending balance, Shares at May. 31, 2013 | 365.4 | 365.4 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 627.5 | ' | ' | 627.5 | ' |
Unrealized gains/(losses) on securities, net of tax | -0.5 | ' | ' | ' | -0.5 |
Cash dividends declared | -510.6 | ' | ' | -510.6 | ' |
Repurchases of common shares, Shares | ' | -6.2 | ' | ' | ' |
Repurchase of common shares, Value | -249.7 | -0.1 | -11.2 | -238.4 | ' |
Stock-based compensation | 26.4 | ' | 26.4 | ' | ' |
Stock-based award transactions, Shares | ' | 3.8 | ' | ' | ' |
Stock-based award transactions, Value | -110.2 | ' | -119.7 | -9.5 | ' |
Ending balance at May. 31, 2014 | $1,777 | $3.60 | $794.40 | $957.50 | $21.50 |
Ending balance, Shares at May. 31, 2014 | 363 | 363 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
OPERATING ACTIVITIES | ' | ' | ' |
Net income | $627.50 | $569 | $548 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization on property and equipment and intangible assets | 105 | 98.2 | 97.8 |
Amortization of premiums and discounts on available-for-sale securities | 70.3 | 56.2 | 42.5 |
Stock-based compensation costs | 26.3 | 22.8 | 22.9 |
(Benefit)/provision for deferred income taxes | -4.9 | 5.3 | 11.7 |
Provision for allowance for doubtful accounts | 2.5 | 1.7 | 1.2 |
Net realized gains on sales of available-for-sale securities | -0.6 | -0.9 | -1 |
Changes in operating assets and liabilities: | ' | ' | ' |
Interest receivable | -3.9 | -1.8 | -1.2 |
Accounts receivable | -18.2 | 8.3 | 17.6 |
Prepaid expenses and other current assets | 22.5 | -45.6 | -9.4 |
Accounts payable and other current liabilities | 45.1 | -16.6 | -26.9 |
Net change in other assets and liabilities | 9.3 | -21.3 | 3.4 |
Net cash provided by operating activities | 880.9 | 675.3 | 706.6 |
INVESTING ACTIVITIES | ' | ' | ' |
Purchases of available-for-sale securities | -29,850.50 | -28,332.80 | -10,180.50 |
Proceeds from sales and maturities of available-for-sale securities | 30,080.60 | 27,620.20 | 9,817.40 |
Net change in funds held for clientsb money market securities and other cash equivalents | -441.5 | 1,019.40 | -784.3 |
Purchases of property and equipment | -84.1 | -98.7 | -89.6 |
Acquisition of businesses, net of cash acquired | -9.3 | -21.3 | -6 |
Purchases of other assets | -11.3 | -5.1 | -1.3 |
Net cash (used in)/provided by investing activities | -316.1 | 181.7 | -1,244.30 |
FINANCING ACTIVITIES | ' | ' | ' |
Net change in client fund obligations | 127.4 | -454.6 | 980.5 |
Dividends paid | -510.6 | -476.7 | -460.5 |
Repurchases of common shares | -249.7 | 0 | 0 |
Equity activity related to stock-based awards | 113.3 | 72.8 | 7.5 |
Net cash (used in)/provided by financing activities | -519.6 | -858.5 | 527.5 |
Increase/(decrease) in cash and cash equivalents | 45.2 | -1.5 | -10.2 |
Cash and cash equivalents, beginning of fiscal year | 107.3 | 108.8 | 119 |
Cash and cash equivalents, end of fiscal year | $152.50 | $107.30 | $108.80 |
Description_of_Business_Basis_
Description of Business, Basis of Presentation, and Significant Accounting Policies | 12 Months Ended | ||
31-May-14 | |||
Accounting Policies [Abstract] | ' | ||
Description of Business, Basis of Presentation, and Significant Accounting Policies | ' | ||
Description of Business, Basis of Presentation, and Significant Accounting Policies | |||
Description of business: Paychex, Inc. and its wholly owned subsidiaries (the “Company” or “Paychex”) is a leading provider of integrated payroll, human resource, insurance, and benefits outsourcing solutions for small- to medium-sized businesses in the United States (“U.S.”). The Company also has a subsidiary in Germany. | |||
Paychex, a Delaware corporation formed in 1979, reports as one segment. Substantially all of the Company’s revenue is generated within the U.S. The Company also generates revenue within Germany, which was less than one percent of its total revenue for each of the years ended May 31, 2014 (“fiscal 2014”), 2013 (“fiscal 2013”), and 2012 (“fiscal 2012”). Long-lived assets in Germany are insignificant in relation to total long-lived assets of the Company as of May 31, 2014 and May 31, 2013. | |||
Total revenue is comprised of service revenue and interest on funds held for clients. Service revenue is comprised primarily of the payroll and Human Resource Services (“HRS”) portfolios of services and products. Payroll service revenue is earned primarily from payroll processing, payroll tax administration services, employee payment services, and other ancillary services. Payroll processing services include the calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients’ payroll obligations. | |||
In connection with the automated payroll tax administration services, the Company electronically collects payroll taxes from clients’ bank accounts, typically on payday, prepares and files the applicable tax returns, and remits taxes to the applicable tax or regulatory agencies on the respective due dates. These taxes are typically paid between one and 30 days after receipt of collections from clients, with some items extending to 90 days. The Company handles regulatory correspondence, amendments, and penalty and interest disputes, and is subject to cash penalties imposed by tax or regulatory agencies for late filings and late or under payment of taxes. With employee payment services, employers are offered the option of paying their employees by direct deposit, payroll debit card, a check drawn on a Paychex account (Readychex®), or a check drawn on the employer’s account and electronically signed by Paychex. For the first three methods, Paychex electronically collects net payroll from the clients’ bank accounts, typically one business day before payday, and provides payment to the employees on payday. | |||
In addition to service fees paid by clients, the Company earns interest on funds held for clients that are collected before due dates and invested until remittance to the applicable tax or regulatory agencies or client employees. The funds held for clients and related client fund obligations are included in the Consolidated Balance Sheets as current assets and current liabilities, respectively. The amount of funds held for clients and related client fund obligations varies significantly during the year. | |||
The HRS portfolio of services and products provides small- to medium-sized businesses with retirement services administration, insurance services, online HR administration services, and other human resource services and products. Paychex HR Services is available through Paychex HR Solutions, an administrative services organization (“ASO” ), and Paychex PEO, a professional employer organization (“PEO”). Both options offer businesses a combined package of services that includes payroll, employer compliance, human resource and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained human resource services representative, among other services. These comprehensive bundles of services are designed to make it easier for businesses to manage their payroll and related benefits costs while providing a benefits package equal to that of larger companies. The PEO differs from the ASO in that Paychex serves as a co-employer of the clients’ employees, offers health care coverage to PEO client employees, and assumes the risks and rewards of workers’ compensation insurance and certain health insurance products. PEO services are sold through the Company’s registered and licensed subsidiary, Paychex Business Solutions, Inc. Paychex HR Essentials is an ASO product that provides support to the Company’s clients over the phone or online to help manage employee-related topics. | |||
Basis of presentation: The consolidated financial statements include the accounts of Paychex, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date of issuance of these financial statements. | |||
Cash and cash equivalents: Cash and cash equivalents consist of available cash, money market securities, and other investments with a maturity of three months or less at acquisition. | |||
Accounts receivable, net of allowance for doubtful accounts: Accounts receivable balances are shown on the Consolidated Balance Sheets net of the allowance for doubtful accounts of $1.5 million as of May 31, 2014 and $1.0 million as of May 31, 2013. Accounts receivable are written off and charged against the allowance for doubtful accounts when the Company has exhausted all collection efforts without success. No single client had a material impact on total accounts receivable, service revenue, or results of operations. | |||
Funds held for clients and corporate investments: Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value obtained from an independent pricing service. The funds held for clients portfolio also includes cash, money market securities, and short-term investments. Unrealized gains and losses, net of applicable income taxes, are reported as other comprehensive income in the Consolidated Statements of Income and Comprehensive Income. Realized gains and losses on the sale of available-for-sale securities are determined by specific identification of the cost basis of each security. On the Consolidated Statements of Income and Comprehensive Income, realized gains and losses from their respective portfolios are included in interest on funds held for clients and investment income, net. | |||
Concentrations: Substantially all of the Company’s deposited cash is maintained at large well-capitalized (as defined by their regulators) financial institutions. These deposits may exceed the amount of any insurance provided. All of the Company’s deliverable securities, primarily municipal bond securities, are held in custody with certain of the aforementioned financial institutions, for which that institution bears the risk of custodial loss. Non-deliverable securities, primarily time deposits and money market funds, are restricted to well-capitalized financial institutions. | |||
Property and equipment, net of accumulated depreciation: Property and equipment is stated at cost, less accumulated depreciation. Depreciation is based on the estimated useful lives of property and equipment using the straight-line method. The estimated useful lives of depreciable assets are generally: | |||
Category | Depreciable life | ||
Buildings and improvements | Ten to 35 years or the remaining life, whichever is shorter | ||
Data processing equipment | Three to five years | ||
Furniture, fixtures, and equipment | Three to seven years | ||
Leasehold improvements | Ten years or the life of the lease, whichever is shorter | ||
Normal and recurring repairs and maintenance costs are charged to expense as incurred. The Company reviews the carrying value of property and equipment for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. | |||
Software development and enhancements: Expenditures for software purchases and software developed for internal use are capitalized and depreciated on a straight-line basis over the estimated useful lives, which are generally three to five years. Software developed as part of the Company's main processing platform is depreciated over fifteen years. For software developed for internal use, certain costs are capitalized, including external direct costs of materials and services associated with developing or obtaining the software, and payroll and payroll-related costs for employees who are directly associated with internal-use software projects. Capitalization of these costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs associated with preliminary project stage activities, training, maintenance, and other post-implementation stage activities are expensed as incurred. The carrying value of software and development costs is reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. | |||
Goodwill and other intangible assets, net of accumulated amortization: The Company has recorded goodwill in connection with the acquisitions of businesses. Goodwill is not amortized, but instead is tested for impairment on an annual basis and between annual tests if an event occurs or circumstances change in a way to indicate that there has been a potential decline in the fair value of a reporting unit. Impairment is determined by comparing the estimated fair value of a reporting unit to its carrying amount, including goodwill. The Company has the option to perform a qualitative assessment to determine if it is more-likely-than-not that the fair value of a reporting unit has declined below its carrying value. This assessment considers various financial, macroeconomic, industry, and reporting unit specific qualitative factors. The Company’s business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. The Company performs its annual impairment testing in its fiscal fourth quarter. Based on the results of the Company’s reviews, no impairment loss was recognized in the results of operations for fiscal years 2014, 2013, or 2012. Subsequent to the latest review, there have been no events or circumstances that indicate any potential impairment of the Company’s goodwill balance. | |||
Intangible assets are comprised primarily of client list acquisitions and are reported net of accumulated amortization on the Consolidated Balance Sheets. Intangible assets are amortized over periods generally ranging from three to twelve years. Client lists use the sum of the years digits method, while other intangible assets use the straight-line method of amortization. The Company tests intangible assets for potential impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. | |||
Revenue recognition: Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectibility is reasonably assured. Certain processing services are provided under annual service arrangements with revenue recognized ratably over the service period. The Company’s service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in service revenue, and the costs for the delivery are included in operating expenses on the Consolidated Statements of Income and Comprehensive Income. | |||
For certain of the Company's service offerings, it receives advance payments for set-up fees from its clients. The Company defers revenue associated with these advance payments and the related costs over the expected life of its clients. | |||
PEO revenue is included in service revenue and is reported net of certain direct pass-through costs billed and incurred, which primarily include payroll wages, payroll taxes, and certain benefit premiums. In fiscal 2014, with the addition of a new health care offering within the PEO, direct costs related to certain benefit plans where the Company retains risk were classified as operating expenses rather than as a reduction in service revenue. Direct pass-through costs billed and incurred that were a reduction in service revenue were $3.4 billion, $3.0 billion, and $3.3 billion for fiscal years 2014, 2013, and 2012, respectively. | |||
Interest on funds held for clients is earned primarily on funds that are collected from clients before due dates for payroll tax administration services and for employee payment services, and invested until remittance to the applicable tax or regulatory agencies or client employees. The interest earned on these funds is included in total revenue on the Consolidated Statements of Income and Comprehensive Income because the collecting, holding, and remitting of these funds are components of providing these services. Interest on funds held for clients also includes net realized gains and losses from the sales of available-for-sale securities. | |||
PEO insurance services: As part of the PEO service, the Company offers workers’ compensation insurance and health insurance to client companies for the benefit of client employees. Workers' compensation insurance is provided under a fully insured high deductible workers’ compensation policy with a national insurance carrier. Workers’ compensation insurance reserves are established to provide for the estimated costs of paying claims up to per occurrence liability limits. In establishing the workers' compensation insurance reserves, the Company uses an independent actuarial estimate of undiscounted future cash payments that would be made to settle the claims. | |||
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, workers' compensation insurance final claim settlements may vary from the present estimates, particularly when those payments may not occur until well into the future. | |||
The Company’s maximum individual claims liability was $1.0 million under both its fiscal 2014 and fiscal 2013 workers' compensation policies. As of May 31, 2014 and May 31, 2013, the Company had recorded current liabilities of $8.5 million and $6.8 million, respectively, and long-term liabilities of $16.0 million and $13.7 million, respectively, on its Consolidated Balance Sheets for workers’ compensation costs. | |||
With respect to the PEO health insurance, the Company offers various health insurance plans that take the form of either fully insured fixed cost plans with various national insurance carriers or a fully insured minimum premium insurance arrangement with coverage provided through a single national carrier. Under the minimum premium arrangement, the Company's health benefits insurance reserves are established to provide for the payment of claims liability charges in accordance with its service contract with the carrier. The claims liability charges include estimates for reported losses, plus amounts for those claims incurred but not reported, and estimates of certain expenses associated with processing and settling the claims. The Company's maximum individual claims liability was $0.3 million under its fiscal 2014 minimum premium health insurance plan. Amounts accrued related to the health benefits insurance reserves are considered immaterial as of May 31, 2014. | |||
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 possibly be significant, reflecting any variety of new and adverse or favorable trends. | |||
Stock-based compensation costs: All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. This model requires various assumptions as inputs including expected volatility of the Paychex stock price and expected option life. Volatility is estimated based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. Expected option life is estimated based on historical exercise behavior. The Company periodically reassesses its assumptions as well as its choice of valuation model. The Company will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. | |||
The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period or performance period. | |||
The Company is required to estimate forfeitures and only record compensation costs for those awards that are expected to vest. The assumptions for forfeitures were determined based on type of award and historical experience. Forfeiture assumptions are adjusted at the point in time a significant change is identified, with any adjustment recorded in the period of change, and the final adjustment at the end of the requisite service period to equal actual forfeitures. | |||
The assumptions of volatility, expected option life, and forfeitures all require significant judgment and are subject to change in the future due to factors such as employee exercise behavior, stock price trends, and changes to type or provisions of stock-based awards. Any material change in one or more of these assumptions could have an impact on the estimated fair value of a future award. | |||
Refer to Note D for further discussion of the Company’s stock-based compensation plans. | |||
Income taxes: The Company accounts for deferred taxes by recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records a deferred tax asset related to the stock-based compensation costs recognized for certain stock-based awards. At the time of the exercise of non-qualified stock options or vesting of stock awards, the Company accounts for the resulting tax deduction by reducing its accrued income tax liability with an offset to the deferred tax asset and any excess of the tax benefit over the deferred tax asset as an increase to additional paid-in capital. The Company currently has a sufficient pool of excess tax benefits in additional paid-in capital to absorb any deficiency in tax benefits that fall short of the related deferred tax asset related to stock-based awards. | |||
The Company also maintains a reserve for uncertain tax positions. The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in its consolidated financial statements. Prior to recording the related tax benefit in the consolidated financial statements, the Company must conclude that tax positions will be more-likely-than-not to be sustained, assuming those positions will be examined by taxing authorities with full knowledge of all relevant information. The benefit recognized in the consolidated financial statements is the amount the Company expects to realize after examination by taxing authorities. If a tax position drops below the more-likely-than-not standard, the benefit can no longer be recognized. Assumptions, judgment, and the use of estimates are required in determining if the more-likely-than-not standard has been met when developing the provision for income taxes and in determining the expected benefit. A change in the assessment of the more-likely-than-not standard could materially impact the Company’s results of operations or financial position. The Company’s reserve for uncertain tax positions, including interest and net of federal benefits, was $29.8 million as of May 31, 2014 and $19.8 million as of May 31, 2013. Refer to Note I for further discussion of the Company’s reserve for uncertain tax positions. | |||
Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenue, and expenses during the reporting period. Actual amounts and results could differ from these estimates. | |||
Recently adopted accounting pronouncements: Effective June 1, 2013, the Company adopted Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment,” issued by the Financial Accounting Standards Board (“FASB”). This updated guidance allows companies the option to first assess qualitative factors to determine if it is more-likely-than-not that an indefinite-lived intangible asset might be impaired and whether it is necessary to perform the quantitative impairment test. The Company currently does not have any indefinite-lived intangible assets other than goodwill, so adoption of this guidance did not have a material effect on its consolidated financial statements. | |||
Effective June 1, 2013, the Company adopted ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This authoritative guidance requires the reporting of the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. There are no changes to the components that are recognized in net income or other comprehensive income. Adoption of this guidance did not have a material effect on the Company's consolidated financial statements. | |||
Recently issued accounting pronouncements: In June 2014, the FASB issued ASU No. 2014-12, “Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force).” This guidance requires a performance target that affects vesting and that could be achieved after the requisite service period to be treated as a performance condition. The current accounting standard for stock-based compensation as it applies to awards with performance conditions should be applied. This guidance is effective for fiscal years, including interim reporting periods, beginning after December 15, 2015, and is applicable to the Company's fiscal year beginning June 1, 2016. The Company is currently evaluating this guidance, but does not anticipate it will have a material impact to its consolidated financial statements. | |||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This guidance supersedes current guidance on revenue recognition in Topic 605, “Revenue Recognition.” In addition, there are disclosure requirements related to the nature, amount, timing, and uncertainty of revenue recognition. This guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim reporting periods, and will be required to be applied retrospectively. Early application of the guidance is not permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2017. The Company is currently evaluating this guidance and any potential impact to its consolidated financial statements. | |||
In January 2014, the FASB issued ASU 2014-01, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force).” This ASU permits a company to make an accounting policy election to account for investments in qualified affordable housing projects under a new proportional amortization method. If such an election is not made, the ASU requires use of the equity or cost method for investments. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company currently accounts for its investments in qualified affordable housing projects using the equity method for investments and does not anticipate that this ASU will have a material effect on its consolidated financial statements. | |||
In July 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force).” This ASU provides explicit guidance regarding the presentation in the statement of financial position of an unrecognized tax benefit when net operating losses or tax credit carryforwards exist. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted, and is applicable to the Company's fiscal year beginning June 1, 2014. The Company does not anticipate that the adoption of this guidance will have a material effect on its consolidated financial statements. | |||
Other recent authoritative guidance issued by the FASB (including technical corrections to the FASB Accounting Standards Codification), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not, or are not expected to have a material effect on the Company’s consolidated financial statements. |
Basic_and_Diluted_Earnings_Per
Basic and Diluted Earnings Per Share | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Basic and Diluted Earnings Per Share | ' | ||||||||||||
Basic and Diluted Earnings Per Share | |||||||||||||
Basic and diluted earnings per share were calculated as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||
Basic earnings per share: | |||||||||||||
Net income | $ | 627.5 | $ | 569 | $ | 548 | |||||||
Weighted-average common shares outstanding | 364.5 | 363.8 | 362.4 | ||||||||||
Basic earnings per share | $ | 1.72 | $ | 1.56 | $ | 1.51 | |||||||
Diluted earnings per share: | |||||||||||||
Net income | $ | 627.5 | $ | 569 | $ | 548 | |||||||
Weighted-average common shares outstanding | 364.5 | 363.8 | 362.4 | ||||||||||
Dilutive effect of common share equivalents | 1.6 | 0.9 | 0.6 | ||||||||||
Weighted-average common shares outstanding, assuming dilution | 366.1 | 364.7 | 363 | ||||||||||
Diluted earnings per share | $ | 1.71 | $ | 1.56 | $ | 1.51 | |||||||
Weighted-average anti-dilutive common share equivalents | 0.7 | 6.5 | 9.9 | ||||||||||
Weighted-average common share equivalents that had an anti-dilutive impact are excluded from the computation of diluted earnings per share. | |||||||||||||
In October 2012, the Company announced a program to repurchase up to $350 million of its common stock with authorization expiring on May 31, 2014. During fiscal 2014, the Company repurchased 6.2 million shares for $249.7 million under this program. Shares repurchased were retired. In May 2014, the Company announced that its Board of Directors (the “Board”) approved a new program to repurchase up to $350 million of the Company's common stock with authorization expiring on May 31, 2017. |
Investment_Income_Net_Notes
Investment Income, Net (Notes) | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Investment Income, Net [Abstract] | ' | ||||||||||||
Investment Income, Net | ' | ||||||||||||
Investment Income, Net | |||||||||||||
Investment income, net, consisted of the following items: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Interest income on corporate funds | $ | 6.9 | $ | 6.7 | $ | 6.5 | |||||||
Interest expense | (1.1 | ) | (0.1 | ) | (0.1 | ) | |||||||
Net loss from equity-method investments | (0.4 | ) | — | — | |||||||||
Investment income, net | $ | 5.4 | $ | 6.6 | $ | 6.4 | |||||||
StockBased_Compensation_Plans
Stock-Based Compensation Plans | 12 Months Ended | ||||||||||||||||||||||||
31-May-14 | |||||||||||||||||||||||||
Stock-Based Compensation Plans [Abstract] | ' | ||||||||||||||||||||||||
Stock-Based Compensation Plans | ' | ||||||||||||||||||||||||
Stock-Based Compensation Plans | |||||||||||||||||||||||||
The Paychex, Inc. 2002 Stock Incentive Plan, as amended and restated (the “2002 Plan”), effective on October 13, 2010 upon its approval by the Company’s stockholders, authorizes grants of up to 39.1 million shares of the Company’s common stock. As of May 31, 2014, there were 20.2 million shares available for future grants under the 2002 Plan. | |||||||||||||||||||||||||
All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. These costs are recognized as an expense in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the requisite service period and increase additional paid-in capital. | |||||||||||||||||||||||||
Stock-based compensation expense was $26.3 million, $22.8 million, and $22.9 million for fiscal years 2014, 2013, and 2012, respectively. Related income tax benefits recognized were $10.1 million, $8.5 million, and $8.3 million for the respective fiscal years. Capitalized stock-based compensation costs related to the development of internal use software for these same fiscal years were not significant. | |||||||||||||||||||||||||
As of May 31, 2014, the total unrecognized compensation cost related to all unvested stock-based awards was $52.4 million and is expected to be recognized over a weighted-average period of 2.9 years. | |||||||||||||||||||||||||
Black-Scholes fair value assumptions: The fair value of stock option grants and performance stock options was estimated at the date of grant using a Black-Scholes option pricing model. The weighted-average assumptions used for valuation under the Black-Scholes model are as follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
Performance stock options | Stock options | ||||||||||||||||||||||||
Risk-free interest rate | 1.5 | % | 0.7 | % | 1.9 | % | 2 | % | 1 | % | 2.2 | % | |||||||||||||
Dividend yield | 3.9 | % | 4.1 | % | 4.2 | % | 4.1 | % | 4.3 | % | 4.2 | % | |||||||||||||
Volatility factor | 0.2 | 0.22 | 0.24 | 0.22 | 0.23 | 0.24 | |||||||||||||||||||
Expected option life in years | 4.5 | 4.8 | 5.8 | 6.4 | 6.4 | 6.4 | |||||||||||||||||||
Weighted-average grant-date fair value of stock options granted (per share) | $ | 3.85 | $ | 3.55 | $ | 4.35 | $ | 4.9 | $ | 3.77 | $ | 4.46 | |||||||||||||
Risk-free interest rates are yields for zero coupon U.S. Treasury notes maturing approximately at the end of the expected option life. The estimated volatility factor is based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. The expected option life is based on historical exercise behavior. | |||||||||||||||||||||||||
The Company has determined that the Black-Scholes option pricing model, as well as the underlying assumptions used in its application, are appropriate in estimating the fair value of its stock option grants. The Company periodically assesses its assumptions as well as its choice of valuation model, and will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. | |||||||||||||||||||||||||
Stock options: Stock options entitle the holder to purchase, at the end of the vesting term, a specified number of shares of Paychex common stock at an exercise price per share set equal to the closing market price of the common stock on the date of grant. All stock options have a contractual life of ten years from the date of the grant and a vesting schedule as established by the Board. The Company issues new shares of common stock to satisfy stock option exercises. Non-qualified stock option grants to officers and outside directors are typically approved by the Board in July. Non-qualified stock option grants to officers and employees granted prior to July 2010 vest 20%, per annum while grants to the Board prior to October 2010 vested one-third per annum. Grants of non-qualified stock options to officers beginning in July 2010 vest 25% per annum. Grants to members of the Board beginning in October 2010 vest after one year. | |||||||||||||||||||||||||
The Company had granted stock options to virtually all non-management employees with at least ninety days of service, with the last broad-based grant in October 2006. As of May 31, 2014, 0.4 million shares remain outstanding on this grant. | |||||||||||||||||||||||||
The following table summarizes stock option activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Shares subject | Weighted-average | Weighted-average | Aggregate | |||||||||||||||||||||
to options | exercise price | remaining | intrinsic value(1) | ||||||||||||||||||||||
per share | contractual term | ||||||||||||||||||||||||
(years) | |||||||||||||||||||||||||
Outstanding as of May 31, 2013 | 8 | $ | 34.17 | ||||||||||||||||||||||
Granted | 0.9 | $ | 38.52 | ||||||||||||||||||||||
Exercised | (3.4 | ) | $ | 35.51 | |||||||||||||||||||||
Forfeited | — | $ | 29.26 | ||||||||||||||||||||||
Expired | (0.1 | ) | $ | 38.11 | |||||||||||||||||||||
Outstanding as of May 31, 2014 | 5.4 | $ | 34 | 5.3 | $ | 38.7 | |||||||||||||||||||
Exercisable as of May 31, 2014 | 3.4 | $ | 33.87 | 3.6 | $ | 24.7 | |||||||||||||||||||
(1) Market price of the underlying stock as of May 31, 2014 less the exercise price. | |||||||||||||||||||||||||
Other information pertaining to stock option grants is as follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Total intrinsic value of stock options exercised | $ | 18.9 | $ | 7.8 | $ | 0.8 | |||||||||||||||||||
Total grant-date fair value of stock options vested | $ | 3 | $ | 3 | $ | 10.4 | |||||||||||||||||||
Performance stock options: In July 2011, the Board approved a special award of performance-based stock options under a Long-Term Incentive Plan. Subsequent grants of this award have been made upon hire of new officers. Under this award, stock options were granted to officers with vesting dependent on achievement against long-term strategic and financial objectives. The awards will vest in full if performance targets for the fiscal year ending May 31, 2016 are achieved, with acceleration of up to one-half of the award if performance targets are achieved for fiscal 2014. Based on results for fiscal 2014, 23.5% of the award vested in July 2014. | |||||||||||||||||||||||||
The following table summarizes performance stock option activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Shares subject | Weighted-average | Weighted-average | Aggregate | |||||||||||||||||||||
to options | exercise price per | remaining | intrinsic value(2) | ||||||||||||||||||||||
share | contractual term | ||||||||||||||||||||||||
(years) | |||||||||||||||||||||||||
Outstanding as of May 31, 2013 | 2.7 | $ | 30.95 | ||||||||||||||||||||||
Granted (1) | 0.1 | $ | 36.66 | ||||||||||||||||||||||
Exercised | — | $ | — | ||||||||||||||||||||||
Forfeited | — | $ | — | ||||||||||||||||||||||
Expired | — | $ | — | ||||||||||||||||||||||
Outstanding as of May 31, 2014 | 2.8 | $ | 31.25 | 7.4 | $ | 27.8 | |||||||||||||||||||
Exercisable as of May 31, 2014 | — | $ | — | 0 | $ | — | |||||||||||||||||||
(1) | Performance stock options granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. | ||||||||||||||||||||||||
(2) | Market price of the underlying stock as of May 31, 2014 less the exercise price. | ||||||||||||||||||||||||
Restricted stock units: The Board grants restricted stock units (“RSUs”) to non-officer management. An RSU is an agreement to issue shares at the time of vesting with no associated exercise cost. For each unit granted, the holder will receive one share of stock at the time of vesting. RSUs do not have voting rights or earn dividend equivalents during the vesting period. These awards vest 20% per annum over five years with a small population of awards vesting on the fourth anniversary of the grant date. The fair value of RSUs is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the vesting period. | |||||||||||||||||||||||||
The following table summarizes RSU activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | RSUs | Weighted-average | Weighted-average | Aggregate | |||||||||||||||||||||
grant-date | remaining vesting | intrinsic value(1) | |||||||||||||||||||||||
fair value per | period (years) | ||||||||||||||||||||||||
share | |||||||||||||||||||||||||
Nonvested as of May 31, 2013 | 1.6 | $ | 26.29 | ||||||||||||||||||||||
Granted | 0.7 | $ | 36.37 | ||||||||||||||||||||||
Vested | (0.5 | ) | $ | 25.65 | |||||||||||||||||||||
Forfeited | (0.1 | ) | $ | 29.39 | |||||||||||||||||||||
Nonvested as of May 31, 2014 | 1.7 | $ | 30.52 | 3 | $ | 70.5 | |||||||||||||||||||
(1) | Intrinsic value for RSUs is the market price of the underlying stock as of May 31, 2014. | ||||||||||||||||||||||||
Other information pertaining to RSUs is as follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Weighted-average grant-date fair value of RSUs granted | $ | 36.37 | $ | 28.59 | $ | 27.67 | |||||||||||||||||||
Total intrinsic value of RSUs vested | $ | 18.3 | $ | 15.5 | $ | 11 | |||||||||||||||||||
Total grant-date fair value of RSUs vested | $ | 12.1 | $ | 13.4 | $ | 9.5 | |||||||||||||||||||
Restricted stock awards: The Board has approved grants of restricted stock awards to the Company’s officers and outside directors. All shares underlying awards of restricted stock are restricted in that they are not transferable until they vest. The recipients of the restricted stock have voting rights and earn dividends, which are paid to the recipient at the time of vesting of the awards. If the recipient leaves Paychex prior to the vesting date for any reason, the shares of restricted stock and the dividends accrued on those shares will be forfeited and returned to Paychex. | |||||||||||||||||||||||||
For restricted stock awards granted to officers prior to July 2010, the shares vest upon the fifth anniversary of the grant date provided the recipient is still an employee of the Company on that date. These awards have a provision for the acceleration of vesting based on achievement of performance targets established by the Board. If the established targets are met for a fiscal year, up to one-third of the award may vest. If all the targets are met for three consecutive years, the award will be fully vested. Beginning in July 2010, time-vested restricted stock awards were granted to officers, which vest one-third per annum. For grants to outside directors prior to October 2010, the shares vested on the third anniversary of the grant date. Beginning in October 2010, restricted stock granted to outside directors vest on the one-year anniversary of the grant date. The fair value of restricted stock awards is equal to the closing market price of the underlying common stock as of the date of grant and is expensed over the requisite service period on a straight-line basis. | |||||||||||||||||||||||||
The following table summarizes restricted stock activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Restricted | Weighted-average | |||||||||||||||||||||||
shares | grant-date | ||||||||||||||||||||||||
fair value per | |||||||||||||||||||||||||
share | |||||||||||||||||||||||||
Nonvested as of May 31, 2013 | 0.2 | $ | 29.83 | ||||||||||||||||||||||
Granted | 0.1 | $ | 38.53 | ||||||||||||||||||||||
Vested | (0.1 | ) | $ | 30.22 | |||||||||||||||||||||
Forfeited | — | $ | — | ||||||||||||||||||||||
Nonvested as of May 31, 2014 | 0.2 | $ | 33.55 | ||||||||||||||||||||||
Other information pertaining to restricted stock follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Weighted-average grant-date fair value of restricted stock granted | $ | 38.53 | $ | 31.76 | $ | 30.69 | |||||||||||||||||||
Total grant-date fair value of restricted stock vested | $ | 3.3 | $ | 2.1 | $ | 3.2 | |||||||||||||||||||
Performance shares: Beginning in July 2010, the Board approved grants of restricted performance shares to officers. These awards have a two year performance period, after which the amount of restricted shares earned will be determined based on achievement against established performance targets. The restricted shares earned will then be subject to a one year service period. Performance shares do not have voting rights or earn dividend equivalents during the performance period. The fair value of performance shares is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the performance period. | |||||||||||||||||||||||||
The following table summarizes performance share activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Performance | Weighted-average | |||||||||||||||||||||||
shares | grant-date | ||||||||||||||||||||||||
fair value | |||||||||||||||||||||||||
per share | |||||||||||||||||||||||||
Nonvested as of May 31, 2013 | 0.4 | $ | 27.89 | ||||||||||||||||||||||
Granted (1) | 0.2 | $ | 35.69 | ||||||||||||||||||||||
Vested | (0.1 | ) | $ | 23.98 | |||||||||||||||||||||
Forfeited | — | $ | — | ||||||||||||||||||||||
Nonvested as of May 31, 2014 | 0.5 | $ | 31.61 | ||||||||||||||||||||||
(1) | Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. | ||||||||||||||||||||||||
Non-compensatory employee benefit plan: The Company offers an Employee Stock Purchase Plan to all employees under which the Company’s common stock can be purchased through a payroll deduction with no discount to the market price and no look-back provision. All transactions occur directly through the Company’s transfer agent and no brokerage fees are charged to employees, except for when stock is sold. The plan has been deemed non-compensatory and therefore, no stock-based compensation costs have been recognized for fiscal years 2014, 2013, or 2012 related to this plan. |
Funds_Held_for_Clients_and_Cor
Funds Held for Clients and Corporate Investments | 12 Months Ended | |||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
Funds Held for Clients and Corporate Investments [Abstract] | ' | |||||||||||||||||||||||
Funds Held For Clients and Corporate Investments | ' | |||||||||||||||||||||||
Funds Held for Clients and Corporate Investments | ||||||||||||||||||||||||
Funds held for clients and corporate investments are as follows: | ||||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
In millions | Amortized | Gross | Gross | Fair | ||||||||||||||||||||
cost | unrealized | unrealized | value | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,579.20 | $ | — | $ | — | $ | 1,579.20 | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
General obligation municipal bonds | 1,605.40 | 25 | (1.9 | ) | 1,628.50 | |||||||||||||||||||
Pre-refunded municipal bonds(1) | 140.4 | 2.4 | — | 142.8 | ||||||||||||||||||||
Revenue municipal bonds | 858.8 | 10.1 | (1.1 | ) | 867.8 | |||||||||||||||||||
Variable rate demand notes | 752.3 | — | — | 752.3 | ||||||||||||||||||||
Total available-for-sale securities | 3,356.90 | 37.5 | (3.0 | ) | 3,391.40 | |||||||||||||||||||
Other | 10.6 | 1.7 | — | 12.3 | ||||||||||||||||||||
Total funds held for clients and corporate investments | $ | 4,946.70 | $ | 39.2 | $ | (3.0 | ) | $ | 4,982.90 | |||||||||||||||
31-May-13 | ||||||||||||||||||||||||
In millions | Amortized | Gross | Gross | Fair | ||||||||||||||||||||
cost | unrealized | unrealized | value | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,137.70 | $ | — | $ | — | $ | 1,137.70 | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
General obligation municipal bonds | 1,432.90 | 27.4 | (3.5 | ) | 1,456.80 | |||||||||||||||||||
Pre-refunded municipal bonds(1) | 201 | 2.9 | — | 203.9 | ||||||||||||||||||||
Revenue municipal bonds | 746.1 | 10.1 | (2.2 | ) | 754 | |||||||||||||||||||
Variable rate demand notes | 1,276.70 | — | — | 1,276.70 | ||||||||||||||||||||
Total available-for-sale securities | 3,656.70 | 40.4 | (5.7 | ) | 3,691.40 | |||||||||||||||||||
Other | 9.5 | 1.2 | — | 10.7 | ||||||||||||||||||||
Total funds held for clients and corporate investments | $ | 4,803.90 | $ | 41.6 | $ | (5.7 | ) | $ | 4,839.80 | |||||||||||||||
(1) | Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. | |||||||||||||||||||||||
Included in money market securities and other cash equivalents as of May 31, 2014 and May 31, 2013 are money market funds and bank demand deposit accounts. Also included in money market securities and other cash equivalents as of May 31, 2014 were short-term municipal bonds and commercial paper. | ||||||||||||||||||||||||
Classification of investments on the Consolidated Balance Sheets is as follows: | ||||||||||||||||||||||||
May 31, | ||||||||||||||||||||||||
In millions | 2014 | 2013 | ||||||||||||||||||||||
Funds held for clients | $ | 4,198.60 | $ | 4,072.50 | ||||||||||||||||||||
Corporate investments | 398.7 | 398.2 | ||||||||||||||||||||||
Long-term corporate investments | 385.6 | 369.1 | ||||||||||||||||||||||
Total funds held for clients and corporate investments | $ | 4,982.90 | $ | 4,839.80 | ||||||||||||||||||||
The Company’s available-for-sale securities reflected a net unrealized gain of $34.5 million as of May 31, 2014 compared with a net unrealized gain of $34.7 million as of May 31, 2013. Included in the net unrealized gain total as of May 31, 2014 and May 31, 2013, there were, respectively, 98 and 147 available-for-sale securities in an unrealized loss position. The securities in an unrealized loss position were as follows: | ||||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
Less than twelve months | More than twelve months | Total | ||||||||||||||||||||||
In millions | Gross | Fair | Gross | Fair | Gross | Fair | ||||||||||||||||||
unrealized | value | unrealized | Value | unrealized | Value | |||||||||||||||||||
losses | losses | losses | ||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
General obligation municipal bonds | $ | (0.1 | ) | $ | 69.6 | $ | (1.8 | ) | $ | 164 | $ | (1.9 | ) | $ | 233.6 | |||||||||
Pre-refunded municipal bonds | — | 1.7 | — | — | — | 1.7 | ||||||||||||||||||
Revenue municipal bonds | — | 47.5 | (1.1 | ) | 112.4 | (1.1 | ) | 159.9 | ||||||||||||||||
Total | $ | (0.1 | ) | $ | 118.8 | $ | (2.9 | ) | $ | 276.4 | $ | (3.0 | ) | $ | 395.2 | |||||||||
31-May-13 | ||||||||||||||||||||||||
Less than twelve months | More than twelve months | Total | ||||||||||||||||||||||
In millions | Gross | Fair | Gross | Fair | Gross | Fair | ||||||||||||||||||
unrealized | value | unrealized | Value | unrealized | Value | |||||||||||||||||||
losses | losses | losses | ||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
General obligation municipal bonds | $ | (3.5 | ) | $ | 349.2 | $ | — | $ | — | $ | (3.5 | ) | $ | 349.2 | ||||||||||
Pre-refunded municipal bonds | — | 3.1 | — | — | — | 3.1 | ||||||||||||||||||
Revenue municipal bonds | (2.2 | ) | 225.3 | — | 2.1 | (2.2 | ) | 227.4 | ||||||||||||||||
Total | $ | (5.7 | ) | $ | 577.6 | $ | — | $ | 2.1 | $ | (5.7 | ) | $ | 579.7 | ||||||||||
The Company regularly reviews its investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. The Company believes that the investments held as of May 31, 2014 that had unrealized losses of $3.0 million were not other-than-temporarily impaired. The Company believes that it is probable that the principal and interest will be collected in accordance with contractual terms, and that the unrealized losses on these securities were due to changes in interest rates and were not due to increased credit risk or other valuation concerns. A substantial portion of the securities in an unrealized loss position as of May 31, 2014 and May 31, 2013 held an AA rating or better. The Company does not intend to sell these investments until the recovery of their amortized cost basis or maturity, and further believes that it is not more-likely-than-not that it will be required to sell these investments prior to that time. The Company’s assessment that an investment is not other-than-temporarily impaired could change in the future due to new developments or changes in the Company’s strategies or assumptions related to any particular investment. | ||||||||||||||||||||||||
Realized gains and losses from the sale of available-for-sale securities were as follows: | ||||||||||||||||||||||||
Year ended May 31, | ||||||||||||||||||||||||
In millions | 2014 | 2013 | 2012 | |||||||||||||||||||||
Gross realized gains | $ | 0.6 | $ | 0.9 | $ | 1 | ||||||||||||||||||
Gross realized losses | — | — | — | |||||||||||||||||||||
Net realized gains | $ | 0.6 | $ | 0.9 | $ | 1 | ||||||||||||||||||
The amortized cost and fair value of available-for-sale securities that had stated maturities as of May 31, 2014 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. | ||||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
In millions | Amortized | Fair | ||||||||||||||||||||||
cost | value | |||||||||||||||||||||||
Maturity date: | ||||||||||||||||||||||||
Due in one year or less | $ | 392 | $ | 394.3 | ||||||||||||||||||||
Due after one year through three years | 759.8 | 776 | ||||||||||||||||||||||
Due after three years through five years | 764.1 | 774.3 | ||||||||||||||||||||||
Due after five years | 1,441.00 | 1,446.80 | ||||||||||||||||||||||
Total | $ | 3,356.90 | $ | 3,391.40 | ||||||||||||||||||||
Variable rate demand notes are primarily categorized as due after five years in the table above as the contractual maturities on these securities are typically 20 to 30 years. Although these securities are issued as long-term securities, they are priced and traded as short-term instruments because of the liquidity provided through the tender feature. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
31-May-14 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
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: | ||||||||||||||||
◦ | quoted prices for similar, but not identical, instruments in active markets; | ||||||||||||||||
◦ | quoted prices for identical or similar instruments in markets that are not active; | ||||||||||||||||
◦ | inputs other than quoted prices that are observable for the instrument; or | ||||||||||||||||
◦ | 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, including money market securities, accounts receivable, net of allowance for doubtful accounts, and accounts payable 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: | |||||||||||||||||
31-May-14 | |||||||||||||||||
In millions | Carrying | Quoted | Significant | Significant | |||||||||||||
value | prices in | other | unobservable | ||||||||||||||
(Fair value) | active | observable | inputs | ||||||||||||||
markets | inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Commercial paper | $ | 6 | $ | — | $ | 6 | $ | — | |||||||||
General obligation municipal bonds | 10.9 | — | 10.9 | — | |||||||||||||
Pre-refunded municipal bonds | 31.2 | — | 31.2 | — | |||||||||||||
Revenue municipal bonds | 17.7 | — | 17.7 | — | |||||||||||||
Total cash equivalents | $ | 65.8 | $ | — | $ | 65.8 | $ | — | |||||||||
Available-for-sale securities: | |||||||||||||||||
General obligation municipal bonds | $ | 1,628.50 | $ | — | $ | 1,628.50 | $ | — | |||||||||
Pre-refunded municipal bonds | 142.8 | — | 142.8 | — | |||||||||||||
Revenue municipal bonds | 867.8 | — | 867.8 | — | |||||||||||||
Variable rate demand notes | 752.3 | — | 752.3 | — | |||||||||||||
Total available-for-sale securities | $ | 3,391.40 | $ | — | $ | 3,391.40 | $ | — | |||||||||
Other | $ | 12.3 | $ | 12.3 | $ | — | $ | — | |||||||||
Liabilities: | |||||||||||||||||
Other long-term liabilities | $ | 12.3 | $ | 12.3 | $ | — | $ | — | |||||||||
31-May-13 | |||||||||||||||||
In millions | Carrying | Quoted | Significant | Significant | |||||||||||||
value | prices in | other | unobservable | ||||||||||||||
(Fair value) | active | observable | inputs | ||||||||||||||
markets | inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
General obligation municipal bonds | $ | 1,456.80 | $ | — | $ | 1,456.80 | $ | — | |||||||||
Pre-refunded municipal bonds | 203.9 | — | 203.9 | — | |||||||||||||
Revenue municipal bonds | 754 | — | 754 | — | |||||||||||||
Variable rate demand notes | 1,276.70 | — | 1,276.70 | — | |||||||||||||
Total available-for-sale securities | $ | 3,691.40 | $ | — | $ | 3,691.40 | $ | — | |||||||||
Other | $ | 10.7 | $ | 10.7 | $ | — | $ | — | |||||||||
Liabilities: | |||||||||||||||||
Other long-term liabilities | $ | 10.7 | $ | 10.7 | $ | — | $ | — | |||||||||
In determining the fair value of its assets and liabilities, the Company predominately uses the market approach. Commercial paper is included in Level 2 because it may not trade on a daily basis. Available-for-sale securities and short-term municipal securities included in Level 2 are valued utilizing inputs obtained from an independent pricing service. To determine the fair value of the Company’s Level 2 investments, a variety of inputs are utilized, 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 reviews the values generated by the independent pricing service for reasonableness by comparing the valuations received from the independent pricing service to valuations from at least one other observable source for a sample of securities. The Company has not adjusted the prices obtained from the independent pricing service. | |||||||||||||||||
Assets included as other are mutual fund investments, consisting of participants’ eligible deferral contributions under the Company’s non-qualified and unfunded deferred compensation plans. The related liability is reported as other long-term liabilities. The mutual funds are valued based on quoted market prices in active markets. | |||||||||||||||||
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. |
Property_and_Equipment_Net_of_
Property and Equipment, Net of Accumulated Depreciation | 12 Months Ended | ||||||||
31-May-14 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment, Net of Accumulated Depreciation | ' | ||||||||
Property and Equipment, Net of Accumulated Depreciation | |||||||||
The components of property and equipment, at cost, consisted of the following: | |||||||||
May 31, | |||||||||
In millions | 2014 | 2013 | |||||||
Land and improvements | $ | 8.1 | $ | 8.1 | |||||
Buildings and improvements | 101.1 | 99.2 | |||||||
Data processing equipment | 180.8 | 175.6 | |||||||
Software | 344.8 | 290.1 | |||||||
Furniture, fixtures, and equipment | 145 | 145.2 | |||||||
Leasehold improvements | 101.7 | 99.5 | |||||||
Construction in progress | 25.3 | 32.8 | |||||||
Total property and equipment, gross | 906.8 | 850.5 | |||||||
Less: Accumulated depreciation | 564.6 | 504.5 | |||||||
Property and equipment, net of accumulated depreciation | $ | 342.2 | $ | 346 | |||||
Depreciation expense was $89.1 million, $79.2 million, and $74.8 million for fiscal years 2014, 2013, and 2012, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets, Net of Accumulated Amortization | 12 Months Ended | ||||||||
31-May-14 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
Goodwill and Intangible Assets, Net of Accumulated Amortization | ' | ||||||||
Goodwill and Intangible Assets, Net of Accumulated Amortization | |||||||||
The Company had goodwill balances on its Consolidated Balance Sheets of $540.3 million as of May 31, 2014, and $533.9 million as of May 31, 2013. The increase in goodwill since May 31, 2013 was the result of an immaterial business acquisition. | |||||||||
The Company has certain intangible assets with finite lives. The components of intangible assets, at cost, consisted of the following: | |||||||||
May 31, | |||||||||
In millions | 2014 | 2013 | |||||||
Client lists | $ | 240.9 | $ | 231 | |||||
Other intangible assets | 2.6 | 2.4 | |||||||
Total intangible assets, gross | 243.5 | 233.4 | |||||||
Less: Accumulated amortization | 202.9 | 188.2 | |||||||
Intangible assets, net of accumulated amortization | $ | 40.6 | $ | 45.2 | |||||
During fiscal 2014, the Company acquired intangible assets with weighted-average amortization periods as follows: customer lists — 7.4 years; other intangible assets — 3.0 years; and total — 7.3 years. Amortization expense relating to intangible assets was $15.9 million, $19.0 million, and $23.0 million for fiscal years 2014, 2013, and 2012, respectively. | |||||||||
The estimated amortization expense for the next five fiscal years relating to intangible asset balances is as follows: | |||||||||
In millions | Estimated amortization expense | ||||||||
Year ending May 31, | |||||||||
2015 | $ | 13.4 | |||||||
2016 | 9.9 | ||||||||
2017 | 7.3 | ||||||||
2018 | 4.9 | ||||||||
2019 | 2.9 | ||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes | |||||||||||||
The components of deferred tax assets and liabilities are as follows: | |||||||||||||
May 31, | |||||||||||||
In millions | 2014 | 2013 | |||||||||||
Deferred tax assets: | |||||||||||||
Compensation and employee benefit liabilities | $ | 18.7 | $ | 16.3 | |||||||||
Other current liabilities | 6.9 | 6.3 | |||||||||||
Tax credit carry forward | 38.3 | 35.3 | |||||||||||
Depreciation | 8.3 | 8.5 | |||||||||||
Stock-based compensation | 21.1 | 24.6 | |||||||||||
Other | 15.4 | 16.6 | |||||||||||
Gross deferred tax assets | 108.7 | 107.6 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Capitalized software | 50.1 | 45.8 | |||||||||||
Depreciation | 12.2 | 20.2 | |||||||||||
Goodwill and Intangible assets | 46.7 | 41 | |||||||||||
Revenue not subject to current taxes | 12.6 | 11.7 | |||||||||||
Unrealized gains on available-for-sale securities | 13.2 | 13.3 | |||||||||||
Other | 0.4 | 0.6 | |||||||||||
Gross deferred tax liabilities | 135.2 | 132.6 | |||||||||||
Net deferred tax liability | $ | (26.5 | ) | $ | (25.0 | ) | |||||||
The deferred tax asset related to tax credit carry forward consists of alternative minimum tax credits, which may be carried forward indefinitely. | |||||||||||||
The components of the provision for income taxes are as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Current: | |||||||||||||
Federal | $ | 314.5 | $ | 274.2 | $ | 259.8 | |||||||
State | 51 | 62.9 | 40.8 | ||||||||||
Total current | 365.5 | 337.1 | 300.6 | ||||||||||
Deferred: | |||||||||||||
Federal | (3.5 | ) | 5.5 | 9.3 | |||||||||
State | (1.4 | ) | (0.2 | ) | 2.4 | ||||||||
Total deferred | (4.9 | ) | 5.3 | 11.7 | |||||||||
Provision for income taxes | $ | 360.6 | $ | 342.4 | $ | 312.3 | |||||||
A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal statutory tax rate | 35 | % | 35 | % | 35 | % | |||||||
Increase/(decrease) resulting from: | |||||||||||||
State income taxes, net of federal tax benefit | 3.3 | % | 3 | % | 3.3 | % | |||||||
Tax settlement | — | % | 1.5 | % | — | % | |||||||
Tax-exempt municipal bond interest | (1.5 | )% | (1.7 | )% | (1.8 | )% | |||||||
Other items | (0.3 | )% | (0.2 | )% | (0.2 | )% | |||||||
Effective income tax rate | 36.5 | % | 37.6 | % | 36.3 | % | |||||||
Uncertain income tax positions: The Company is subject to U.S. federal income tax, numerous local and state tax jurisdictions within the U.S., and income taxes in Germany. The Company maintains a reserve for uncertain tax positions. As of May 31, 2014 and May 31, 2013, the total reserve for uncertain tax positions, including interest and net of federal benefits, was $29.8 million and $19.8 million, respectively. As of May 31, 2014 and May 31, 2013, $28.6 million and $19.7 million of the total reserves for uncertain tax positions, including interest and net of federal benefits, were included in long-term liabilities on the Consolidated Balance Sheets. | |||||||||||||
A reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, not including interest or other potential offsetting effects, is as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Balance as of beginning of fiscal year | $ | 26.7 | $ | 41.7 | $ | 41.2 | |||||||
Additions for tax positions of the current year | 11.2 | 28.5 | 0.4 | ||||||||||
Additions for tax positions of prior years | 4.2 | 12.2 | 1.3 | ||||||||||
Reductions for tax positions of prior years | (1.8 | ) | (0.5 | ) | (0.1 | ) | |||||||
Settlements with tax authorities | — | (55.0 | ) | (0.7 | ) | ||||||||
Expiration of the statute of limitations | (0.3 | ) | (0.2 | ) | (0.4 | ) | |||||||
Balance as of end of fiscal year | $ | 40 | $ | 26.7 | $ | 41.7 | |||||||
In May 2013, the Company executed a closing agreement that resolved tax matters related to the audits by New York State for the fiscal year ended May 31, 2004 (“fiscal 2004”) through the fiscal year ended May 31, 2011(“fiscal 2011”). As a result, the reserve for uncertain tax positions was increased by $21.2 million in May 2013. The resolution and execution of the closing agreement in May 2013 on the open tax matters for fiscal 2004 through fiscal 2011 impacted the Company's effective income tax rate for fiscal 2013, as noted in the reconciliation of the U.S. federal statutory rate to the Company's effective income tax rate. | |||||||||||||
The reserve as of May 31, 2014 substantially relates to uncertain tax positions for state income tax matters. The Company believes the reserve for uncertain tax positions, including interest and net of federal benefits, of $29.8 million as of May 31, 2014 adequately covers open tax years and uncertain tax positions up to and including fiscal 2014 for major taxing jurisdictions. As of May 31, 2014, $24.6 million of the $29.8 million unrecognized tax benefits, if recognized, would impact the Company’s effective income tax rate. As of May 31, 2013, $14.6 million of the $19.8 million unrecognized tax benefits, if recognized, would have impacted the Company’s effective income tax rate. | |||||||||||||
The Company has concluded all U.S. federal income tax matters through the fiscal year ended May 31, 2010. Fiscal 2013 is currently under audit by the IRS and fiscal years 2011, 2012, and 2014 are subject to potential audit. With limited exception, state income tax audits by taxing authorities are closed through the fiscal year ended May 31, 2009, primarily due to expiration of the statute of limitations. | |||||||||||||
The Company continues to follow its policy of recognizing interest and penalties accrued on tax positions as a component of income taxes on the Consolidated Statements of Income and Comprehensive Income. The amount of accrued interest and penalties associated with the Company’s tax positions is immaterial to the Consolidated Balance Sheets. The amount of interest and penalties recognized for fiscal years 2014, 2013, and 2012 was immaterial to the Company’s results of operations. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||||
Accumulated Other Comprehensive Income | |||||||||||||
The change in unrealized gains and losses, net of applicable taxes, related to available-for-sale securities is the primary component reported in accumulated other comprehensive income in the Consolidated Balance Sheets. The changes in accumulated other comprehensive income are as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Beginning balance | $ | 22 | $ | 37.7 | $ | 37.5 | |||||||
Other comprehensive (loss)/income: | |||||||||||||
Unrealized holding gains/(losses) | 0.3 | (24.1 | ) | 1.3 | |||||||||
Income tax (expense)/benefit related to unrealized holding gains/(losses) | (0.4 | ) | 9 | (0.4 | ) | ||||||||
Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income | (0.6 | ) | (0.9 | ) | (1.0 | ) | |||||||
Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities | 0.2 | 0.3 | 0.3 | ||||||||||
Total other comprehensive (loss)/income, net of tax | (0.5 | ) | (15.7 | ) | 0.2 | ||||||||
Ending balance | $ | 21.5 | $ | 22 | $ | 37.7 | |||||||
The total tax impact in other comprehensive (loss)/income was tax expense of $0.2 million, tax benefit of $9.3 million, and tax expense of $0.1 million for fiscal years 2014, 2013, and 2012, respectively. Reclassification adjustments out of accumulated other comprehensive income are for realized gains on the sales of available-for-sale securities and impacted interest on funds held for clients on the Consolidated Statements of Income and Comprehensive Income. |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended |
31-May-14 | |
Supplemental Cash Flow Information [Abstract] | ' |
Supplemental Cash Flow Information | ' |
Supplemental Cash Flow Information | |
Income taxes paid were $317.8 million, $371.0 million, and $301.4 million for fiscal years 2014, 2013, and 2012, respectively. | |
Lease incentives received in the form of tenant allowances and free rent were $6.7 million, $6.4 million, and $12.8 million for fiscal years 2014, 2013, and 2012, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||
31-May-14 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Commitments and Contingencies | ' | |||||||
Commitments and Contingencies | ||||||||
Lines of credit: As of May 31, 2014, the Company had unused borrowing capacity available under uncommitted, secured, short-term lines of credit at market rates of interest with financial institutions as follows: | ||||||||
Financial institution | Amount available | Expiration date | ||||||
JP Morgan Chase Bank, N.A. | $350 million | 28-Feb-15 | ||||||
Bank of America, N.A. | $250 million | 28-Feb-15 | ||||||
PNC Bank, National Association | $150 million | 28-Feb-15 | ||||||
Wells Fargo Bank, National Association | $150 million | 28-Feb-15 | ||||||
The credit facilities are evidenced by promissory notes and are secured by separate pledge security agreements by and between Paychex and each of the financial institutions (the “Lenders”), pursuant to which the Company has granted each of the Lenders a security interest in certain investment securities accounts. The collateral is maintained in a pooled custody account pursuant to the terms of a control agreement and is to be administered under an intercreditor agreement among the Lenders. Under certain circumstances, individual Lenders may require that collateral be transferred from the pooled account into segregated accounts for the benefit of such individual Lenders. | ||||||||
The primary uses of the lines of credit would be to meet short-term funding requirements related to deposit account overdrafts and client fund obligations arising from electronic payment transactions on behalf of clients in the ordinary course of business, if necessary. No amounts were outstanding against these lines of credit during fiscal 2014 or as of May 31, 2014. | ||||||||
Certain of the financial institutions are also parties to the Company’s credit facility and irrevocable standby letters of credit, which are discussed below. | ||||||||
Credit facility: In June 2013, the Company entered into a committed, unsecured, five-year syndicated credit facility, expiring on June 21, 2018. Under the credit facility, Paychex of New York LLP (the “Borrower”) may, subject to certain restrictions, borrow up to $500 million to meet short-term funding requirements. The obligations under this facility have been guaranteed by the Company and certain of its subsidiaries. The outstanding obligations under this credit facility will bear interest at competitive rates to be elected by the Borrower. Upon expiration of the commitment in June 2018, any borrowings outstanding will mature and be payable on such date. | ||||||||
There were no amounts outstanding under this credit facility as of May 31, 2014. During fiscal 2014, the Company borrowed against this facility, for one day each, as follows: | ||||||||
$ in millions | Amount borrowed | Interest rate | ||||||
Fiscal quarter | ||||||||
First quarter | $ | 25 | 3.25 | % | ||||
Second quarter | $ | 175 | 3.25 | % | ||||
Certain lenders under this credit facility, and their respective affiliates, have performed, and may in the future perform for the Company and its subsidiaries, 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 $43.0 million and $36.8 million as of May 31, 2014 and May 31, 2013, respectively, required to secure commitments for certain insurance policies. The letters of credit expire at various dates between July 2014 and April 2015, and are collateralized by securities held in the Company’s investment portfolios. No amounts were outstanding on these letters of credit during fiscal 2014 or as of May 31, 2014. Subsequent to May 31, 2014, the letter of credit expiring in July 2014 was renewed, with the same terms and amount, and will expire in July 2015. | ||||||||
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, breach of fiduciary duty, employment-related claims, tax claims, and other matters. | ||||||||
The Company’s management currently believes that resolution of outstanding legal matters will not have a material adverse effect on the Company’s financial position or results of operations. However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse impact on the Company’s financial position and the results of operations in the period in which any such effect is recorded. | ||||||||
Lease commitments: The Company leases office space and data processing equipment under terms of various operating leases. Rent expense for fiscal years 2014, 2013, and 2012 was $39.1 million, $39.9 million, and $43.0 million, respectively. As of May 31, 2014, future minimum lease payments under various non-cancelable operating leases with terms of more than one year are as follows: | ||||||||
In millions | Minimum lease payments | |||||||
Year ending May 31, | ||||||||
2015 | $ | 37.5 | ||||||
2016 | 29 | |||||||
2017 | 23.9 | |||||||
2018 | 17 | |||||||
2019 | 10.6 | |||||||
Thereafter | 11.2 | |||||||
Other commitments: As of May 31, 2014, the Company had outstanding commitments under purchase orders and legally binding contractual arrangements with minimum future payment obligations of approximately $88.9 million, including $16.0 million of commitments to purchase capital assets. These minimum future payment obligations relate to the following fiscal years: | ||||||||
In millions | Minimum payment obligation | |||||||
Year ending May 31, | ||||||||
2015 | $ | 61.3 | ||||||
2016 | 16.6 | |||||||
2017 | 10.2 | |||||||
2018 | 0.3 | |||||||
2019 | 0.2 | |||||||
Thereafter | 0.3 | |||||||
In the normal course of business, the Company makes representations and warranties that guarantee the performance of services under service arrangements with clients. Historically, there have been no material losses related to such guarantees. In addition, the Company has entered into indemnification agreements with its officers and directors, which require the Company to defend and, if necessary, indemnify these individuals for certain pending or future claims as they relate to their services provided to the Company. | ||||||||
Paychex currently self-insures the deductible portion of various insured exposures under certain employee benefit plans. The Company’s estimated loss exposure under these insurance arrangements is recorded in other current liabilities on the Consolidated Balance Sheets. Historically, the amounts accrued have not been material and are not material as of the reporting date. The Company also maintains insurance coverage in addition to its purchased primary insurance policies for gap coverage for employment practices liability, errors and omissions, warranty liability, theft and embezzlement, cyber threats, and acts of terrorism; and capacity for deductibles and self-insured retentions through its captive insurance company. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
31-May-14 | |
Employee Benefit Plans [Abstract] | ' |
Employee Benefit Plans | ' |
Employee Benefit Plans | |
401(k) plan: The Company maintains a contributory savings plan that qualifies under section 401(k) of the Internal Revenue Code. The Paychex, Inc. 401(k) Incentive Retirement Plan (the “Plan”) allows all employees to immediately participate in the salary deferral portion of the Plan, contributing up to a maximum of 50% of their salary, subject to Internal Revenue Service limitations. Employees who have completed one year of service are eligible to receive a company matching contribution, when such contribution is in effect. The Company provided matching contributions as follows: 50% of up to 8% of eligible pay that an employee contributed to the Plan, effective for pay dates on or after November 15, 2013; 50% of up to 6% of eligible pay that an employee contributed to the Plan between February 2012 and November 2013; and 50% of up to 4% of eligible pay that an employee contributed to the Plan between January 2011 and February 2012. Company contributions to the Plan for fiscal years 2014, 2013, and 2012 were $16.4 million, $13.1 million, and $10.3 million, respectively. | |
The Plan is 100% participant directed. Plan participants can fully diversify their portfolios by choosing from any or all investment fund choices in the Plan. Transfers in and out of investment funds, including the Paychex, Inc. Employee Stock Ownership Plan (“ESOP”) Stock Fund, are not restricted, with the exception of certain restricted trading periods for individuals designated as insiders as specified in the Company’s Insider Trading Policy. The Company match contribution, when in effect, follows the same fund elections as the employee compensation deferrals. | |
Deferred compensation plans: The Company offers non-qualified and unfunded deferred compensation plans to a select group of key employees, executive officers, and outside directors. Eligible employees are provided with the opportunity to defer up to 50% of their annual base salary and bonus and outside directors may defer 100% of their Board cash compensation. Gains and losses are credited based on the participant’s election of a variety of investment choices. The Company does not match any participant deferral or guarantee its return. Distributions are paid at one of the following dates selected by the participant: the participant’s termination date, the date the participant retires from any active employment, or a designated specific date. The amounts accrued under these plans were $12.3 million and $10.7 million as of May 31, 2014 and May 31, 2013, respectively, and are reflected in other long-term liabilities on the accompanying Consolidated Balance Sheets. |
Related_Parties
Related Parties | 12 Months Ended |
31-May-14 | |
Related Party Transactions [Abstract] | ' |
Related Parties | ' |
Related Parties | |
During fiscal years 2014, 2013, and 2012, the Company purchased approximately $4.7 million, $6.5 million, and $2.6 million, respectively, of data processing equipment and software from EMC Corporation. The Chairman, President, and Chief Executive Officer of EMC Corporation is a member of the Company’s Board. | |
During fiscal years 2014, 2013, and 2012, the Company purchased approximately $1.3 million, $1.6 million, and $1.8 million, respectively, of office supplies from Staples, Inc. The Vice Chairman of Staples, Inc. is a member of the Company’s Board. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||||||
31-May-14 | |||||||||||||||||||||
Quarterly Financial Data (Unaudited) [Abstract] | ' | ||||||||||||||||||||
Quarterly Financial Data (Unaudited) | ' | ||||||||||||||||||||
Quarterly Financial Data (Unaudited) | |||||||||||||||||||||
In millions, except per share amounts | |||||||||||||||||||||
With the introduction of a new health insurance offering within the PEO during fiscal 2014, the Company began classifying PEO direct costs related to certain benefit plans where the Company retains risk as operating expenses rather than as a reduction in service revenue. This had no impact on operating income. The amounts below for service revenue and total revenue for fiscal 2014 reflect this change in classification. | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
Fiscal 2014 | 31-Aug | 30-Nov | 28-Feb | 31-May | Full Year | ||||||||||||||||
Service revenue (1) | $ | 603.1 | $ | 606.4 | $ | 639.9 | $ | 628.8 | $ | 2,478.20 | |||||||||||
Interest on funds held for clients | 10 | 10 | 10.5 | 10.2 | 40.7 | ||||||||||||||||
Total revenue (1) | 613.1 | 616.4 | 650.4 | 639 | 2,518.90 | ||||||||||||||||
Operating income | 255.1 | 248.6 | 250.7 | 228.3 | 982.7 | ||||||||||||||||
Investment income, net | 1.2 | 1.3 | 1.5 | 1.4 | 5.4 | ||||||||||||||||
Income before income taxes | 256.3 | 249.9 | 252.2 | 229.7 | 988.1 | ||||||||||||||||
Income taxes | 93.5 | 91.2 | 92.1 | 83.8 | 360.6 | ||||||||||||||||
Net income | $ | 162.8 | $ | 158.7 | $ | 160.1 | $ | 145.9 | $ | 627.5 | |||||||||||
Basic earnings per share(2) | $ | 0.45 | $ | 0.43 | $ | 0.44 | $ | 0.4 | $ | 1.72 | |||||||||||
Diluted earnings per share(2) | $ | 0.44 | $ | 0.43 | $ | 0.44 | $ | 0.4 | $ | 1.71 | |||||||||||
Weighted-average common shares outstanding | 365.3 | 364.9 | 364.2 | 363.5 | 364.5 | ||||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 366.7 | 366.4 | 365.8 | 365.3 | 366.1 | ||||||||||||||||
Cash dividends per common share | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 1.4 | |||||||||||
Total net realized gains(3) | $ | 0.2 | $ | — | $ | 0.3 | $ | 0.1 | $ | 0.6 | |||||||||||
Three Months Ended | |||||||||||||||||||||
Fiscal 2013 | 31-Aug | 30-Nov | 28-Feb | May 31(4) | Full Year | ||||||||||||||||
Service revenue | $ | 568.1 | $ | 559.4 | $ | 582.4 | $ | 575.3 | $ | 2,285.20 | |||||||||||
Interest on funds held for clients | 10.1 | 10 | 10.9 | 10 | 41 | ||||||||||||||||
Total revenue | 578.2 | 569.4 | 593.3 | 585.3 | 2,326.20 | ||||||||||||||||
Operating income | 238 | 230 | 225 | 211.8 | 904.8 | ||||||||||||||||
Investment income, net | 1.9 | 1.9 | 1.4 | 1.4 | 6.6 | ||||||||||||||||
Income before income taxes | 239.9 | 231.9 | 226.4 | 213.2 | 911.4 | ||||||||||||||||
Income taxes | 86.8 | 84 | 81.9 | 89.7 | 342.4 | ||||||||||||||||
Net income | $ | 153.1 | $ | 147.9 | $ | 144.5 | $ | 123.5 | $ | 569 | |||||||||||
Basic earnings per share(2) | $ | 0.42 | $ | 0.41 | $ | 0.4 | $ | 0.34 | $ | 1.56 | |||||||||||
Diluted earnings per share(2) | $ | 0.42 | $ | 0.41 | $ | 0.4 | $ | 0.34 | $ | 1.56 | |||||||||||
Weighted-average common shares outstanding | 363 | 363.6 | 363.8 | 364.6 | 363.8 | ||||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 363.8 | 364.4 | 364.6 | 365.9 | 364.7 | ||||||||||||||||
Cash dividends per common share (5) | $ | 0.32 | $ | 0.33 | $ | 0.66 | $ | — | $ | 1.31 | |||||||||||
Total net realized gains(3) | $ | 0.2 | $ | 0.1 | $ | 0.6 | $ | — | $ | 0.9 | |||||||||||
(1) | The amounts reported for service revenue and total revenue for the first through third quarters of fiscal 2014 differ from that reported in the Company's Quarterly Reports on Form 10-Q (“Form 10-Q”), as a result of the PEO direct cost adjustment. There was no impact to operating income from this change. The correction for the PEO direct cost adjustment was not material to any prior interim period in fiscal 2014. Service revenue, as reported in the Company's Form 10-Qs was $597.9 million, $600.5 million, and $626.0 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. Total revenue, as reported in the Company's Form 10-Qs was $607.9 million, $610.5 million, and $636.5 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. | ||||||||||||||||||||
(2) | Each quarter is a discrete period and the sum of the four quarters’ basic and diluted earnings per share amounts may not equal the full year amount. | ||||||||||||||||||||
(3) | Total net realized gains on the combined funds held for clients and corporate investment portfolios. | ||||||||||||||||||||
(4) | In the fourth quarter of fiscal 2013, the Company increased its tax provision related to the settlement of a state income tax matter. This reduced diluted earnings per share by approximately $0.04 per share. | ||||||||||||||||||||
(5) | In fiscal 2013, the Company accelerated the payment of dividends to December 2012. These dividends would have normally been paid in February 2013 and May 2013. |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
31-May-14 | |||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ' | ||||||||||||||||||||
Schedule of Valuation and Qualifying Accounts Disclosure | ' | ||||||||||||||||||||
Valuation and Qualifying Accounts | |||||||||||||||||||||
PAYCHEX, INC. | |||||||||||||||||||||
CONSOLIDATED FINANCIAL STATEMENT SCHEDULE | |||||||||||||||||||||
FOR THE YEAR ENDED MAY 31, | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
Description | Balance as of | Additions | (Deductions from)/ additions | Costs and | Balance as | ||||||||||||||||
beginning | charged to | to other accounts(1) | deductions(2) | of end | |||||||||||||||||
of fiscal year | expenses | of fiscal year | |||||||||||||||||||
2014 | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 1 | $ | 2.5 | $ | — | $ | 2 | $ | 1.5 | |||||||||||
Reserve for client fund losses | $ | 2.4 | $ | 2.2 | $ | — | $ | 2.7 | $ | 1.9 | |||||||||||
2013 | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 1.2 | $ | 1.7 | $ | — | $ | 1.9 | $ | 1 | |||||||||||
Reserve for client fund losses | $ | 2.1 | $ | 2.7 | $ | — | $ | 2.4 | $ | 2.4 | |||||||||||
2012 | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 2.1 | $ | 1.2 | $ | — | $ | 2.1 | $ | 1.2 | |||||||||||
Reserve for client fund losses | $ | 3.1 | $ | 2.3 | $ | (0.7 | ) | $ | 2.6 | $ | 2.1 | ||||||||||
(1) | Amounts related to business acquisitions. | ||||||||||||||||||||
(2) | Uncollectible amounts written off, net of recoveries. |
Description_of_Business_Basis_1
Description of Business, Basis of Presentation, and Significant Accounting Policies (Policies) | 12 Months Ended | ||
31-May-14 | |||
Accounting Policies [Abstract] | ' | ||
Description of business | ' | ||
Description of business: Paychex, Inc. and its wholly owned subsidiaries (the “Company” or “Paychex”) is a leading provider of integrated payroll, human resource, insurance, and benefits outsourcing solutions for small- to medium-sized businesses in the United States (“U.S.”). The Company also has a subsidiary in Germany. | |||
Paychex, a Delaware corporation formed in 1979, reports as one segment. Substantially all of the Company’s revenue is generated within the U.S. The Company also generates revenue within Germany, which was less than one percent of its total revenue for each of the years ended May 31, 2014 (“fiscal 2014”), 2013 (“fiscal 2013”), and 2012 (“fiscal 2012”). Long-lived assets in Germany are insignificant in relation to total long-lived assets of the Company as of May 31, 2014 and May 31, 2013. | |||
Total revenue is comprised of service revenue and interest on funds held for clients. Service revenue is comprised primarily of the payroll and Human Resource Services (“HRS”) portfolios of services and products. Payroll service revenue is earned primarily from payroll processing, payroll tax administration services, employee payment services, and other ancillary services. Payroll processing services include the calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients’ payroll obligations. | |||
In connection with the automated payroll tax administration services, the Company electronically collects payroll taxes from clients’ bank accounts, typically on payday, prepares and files the applicable tax returns, and remits taxes to the applicable tax or regulatory agencies on the respective due dates. These taxes are typically paid between one and 30 days after receipt of collections from clients, with some items extending to 90 days. The Company handles regulatory correspondence, amendments, and penalty and interest disputes, and is subject to cash penalties imposed by tax or regulatory agencies for late filings and late or under payment of taxes. With employee payment services, employers are offered the option of paying their employees by direct deposit, payroll debit card, a check drawn on a Paychex account (Readychex®), or a check drawn on the employer’s account and electronically signed by Paychex. For the first three methods, Paychex electronically collects net payroll from the clients’ bank accounts, typically one business day before payday, and provides payment to the employees on payday. | |||
In addition to service fees paid by clients, the Company earns interest on funds held for clients that are collected before due dates and invested until remittance to the applicable tax or regulatory agencies or client employees. The funds held for clients and related client fund obligations are included in the Consolidated Balance Sheets as current assets and current liabilities, respectively. The amount of funds held for clients and related client fund obligations varies significantly during the year. | |||
The HRS portfolio of services and products provides small- to medium-sized businesses with retirement services administration, insurance services, online HR administration services, and other human resource services and products. Paychex HR Services is available through Paychex HR Solutions, an administrative services organization (“ASO” ), and Paychex PEO, a professional employer organization (“PEO”). Both options offer businesses a combined package of services that includes payroll, employer compliance, human resource and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained human resource services representative, among other services. These comprehensive bundles of services are designed to make it easier for businesses to manage their payroll and related benefits costs while providing a benefits package equal to that of larger companies. The PEO differs from the ASO in that Paychex serves as a co-employer of the clients’ employees, offers health care coverage to PEO client employees, and assumes the risks and rewards of workers’ compensation insurance and certain health insurance products. PEO services are sold through the Company’s registered and licensed subsidiary, Paychex Business Solutions, Inc. Paychex HR Essentials is an ASO product that provides support to the Company’s clients over the phone or online to help manage employee-related topics. | |||
Basis of presentation | ' | ||
Basis of presentation: The consolidated financial statements include the accounts of Paychex, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date of issuance of these financial statements. | |||
Cash and cash equivalents | ' | ||
Cash and cash equivalents: Cash and cash equivalents consist of available cash, money market securities, and other investments with a maturity of three months or less at acquisition. | |||
Accounts receivable, net of allowance for doubtful accounts | ' | ||
Accounts receivable, net of allowance for doubtful accounts: Accounts receivable balances are shown on the Consolidated Balance Sheets net of the allowance for doubtful accounts of $1.5 million as of May 31, 2014 and $1.0 million as of May 31, 2013. Accounts receivable are written off and charged against the allowance for doubtful accounts when the Company has exhausted all collection efforts without success. No single client had a material impact on total accounts receivable, service revenue, or results of operations. | |||
Funds held for clients and corporate investments | ' | ||
Funds held for clients and corporate investments: Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value obtained from an independent pricing service. The funds held for clients portfolio also includes cash, money market securities, and short-term investments. Unrealized gains and losses, net of applicable income taxes, are reported as other comprehensive income in the Consolidated Statements of Income and Comprehensive Income. Realized gains and losses on the sale of available-for-sale securities are determined by specific identification of the cost basis of each security. On the Consolidated Statements of Income and Comprehensive Income, realized gains and losses from their respective portfolios are included in interest on funds held for clients and investment income, net. | |||
Concentrations | ' | ||
Concentrations: Substantially all of the Company’s deposited cash is maintained at large well-capitalized (as defined by their regulators) financial institutions. These deposits may exceed the amount of any insurance provided. All of the Company’s deliverable securities, primarily municipal bond securities, are held in custody with certain of the aforementioned financial institutions, for which that institution bears the risk of custodial loss. Non-deliverable securities, primarily time deposits and money market funds, are restricted to well-capitalized financial institutions. | |||
Property and equipment, net of accumulated depreciation | ' | ||
Property and equipment, net of accumulated depreciation: Property and equipment is stated at cost, less accumulated depreciation. Depreciation is based on the estimated useful lives of property and equipment using the straight-line method. The estimated useful lives of depreciable assets are generally: | |||
Category | Depreciable life | ||
Buildings and improvements | Ten to 35 years or the remaining life, whichever is shorter | ||
Data processing equipment | Three to five years | ||
Furniture, fixtures, and equipment | Three to seven years | ||
Leasehold improvements | Ten years or the life of the lease, whichever is shorter | ||
Normal and recurring repairs and maintenance costs are charged to expense as incurred. The Company reviews the carrying value of property and equipment for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. | |||
Software development and enhancements | ' | ||
Software development and enhancements: Expenditures for software purchases and software developed for internal use are capitalized and depreciated on a straight-line basis over the estimated useful lives, which are generally three to five years. Software developed as part of the Company's main processing platform is depreciated over fifteen years. For software developed for internal use, certain costs are capitalized, including external direct costs of materials and services associated with developing or obtaining the software, and payroll and payroll-related costs for employees who are directly associated with internal-use software projects. Capitalization of these costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs associated with preliminary project stage activities, training, maintenance, and other post-implementation stage activities are expensed as incurred. The carrying value of software and development costs is reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. | |||
Goodwill and other intangible assets, net of accumulated amortization | ' | ||
Goodwill and other intangible assets, net of accumulated amortization: The Company has recorded goodwill in connection with the acquisitions of businesses. Goodwill is not amortized, but instead is tested for impairment on an annual basis and between annual tests if an event occurs or circumstances change in a way to indicate that there has been a potential decline in the fair value of a reporting unit. Impairment is determined by comparing the estimated fair value of a reporting unit to its carrying amount, including goodwill. The Company has the option to perform a qualitative assessment to determine if it is more-likely-than-not that the fair value of a reporting unit has declined below its carrying value. This assessment considers various financial, macroeconomic, industry, and reporting unit specific qualitative factors. The Company’s business is largely homogeneous and, as a result, goodwill is associated with one reporting unit. The Company performs its annual impairment testing in its fiscal fourth quarter. Based on the results of the Company’s reviews, no impairment loss was recognized in the results of operations for fiscal years 2014, 2013, or 2012. Subsequent to the latest review, there have been no events or circumstances that indicate any potential impairment of the Company’s goodwill balance. | |||
Intangible assets are comprised primarily of client list acquisitions and are reported net of accumulated amortization on the Consolidated Balance Sheets. Intangible assets are amortized over periods generally ranging from three to twelve years. Client lists use the sum of the years digits method, while other intangible assets use the straight-line method of amortization. The Company tests intangible assets for potential impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. | |||
Revenue recognition | ' | ||
Revenue recognition: Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectibility is reasonably assured. Certain processing services are provided under annual service arrangements with revenue recognized ratably over the service period. The Company’s service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in service revenue, and the costs for the delivery are included in operating expenses on the Consolidated Statements of Income and Comprehensive Income. | |||
For certain of the Company's service offerings, it receives advance payments for set-up fees from its clients. The Company defers revenue associated with these advance payments and the related costs over the expected life of its clients. | |||
PEO revenue is included in service revenue and is reported net of certain direct pass-through costs billed and incurred, which primarily include payroll wages, payroll taxes, and certain benefit premiums. In fiscal 2014, with the addition of a new health care offering within the PEO, direct costs related to certain benefit plans where the Company retains risk were classified as operating expenses rather than as a reduction in service revenue. Direct pass-through costs billed and incurred that were a reduction in service revenue were $3.4 billion, $3.0 billion, and $3.3 billion for fiscal years 2014, 2013, and 2012, respectively. | |||
Interest on funds held for clients is earned primarily on funds that are collected from clients before due dates for payroll tax administration services and for employee payment services, and invested until remittance to the applicable tax or regulatory agencies or client employees. The interest earned on these funds is included in total revenue on the Consolidated Statements of Income and Comprehensive Income because the collecting, holding, and remitting of these funds are components of providing these services. Interest on funds held for clients also includes net realized gains and losses from the sales of available-for-sale securities. | |||
PEO insurance services | ' | ||
PEO insurance services: As part of the PEO service, the Company offers workers’ compensation insurance and health insurance to client companies for the benefit of client employees. Workers' compensation insurance is provided under a fully insured high deductible workers’ compensation policy with a national insurance carrier. Workers’ compensation insurance reserves are established to provide for the estimated costs of paying claims up to per occurrence liability limits. In establishing the workers' compensation insurance reserves, the Company uses an independent actuarial estimate of undiscounted future cash payments that would be made to settle the claims. | |||
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, workers' compensation insurance final claim settlements may vary from the present estimates, particularly when those payments may not occur until well into the future. | |||
The Company’s maximum individual claims liability was $1.0 million under both its fiscal 2014 and fiscal 2013 workers' compensation policies. As of May 31, 2014 and May 31, 2013, the Company had recorded current liabilities of $8.5 million and $6.8 million, respectively, and long-term liabilities of $16.0 million and $13.7 million, respectively, on its Consolidated Balance Sheets for workers’ compensation costs. | |||
With respect to the PEO health insurance, the Company offers various health insurance plans that take the form of either fully insured fixed cost plans with various national insurance carriers or a fully insured minimum premium insurance arrangement with coverage provided through a single national carrier. Under the minimum premium arrangement, the Company's health benefits insurance reserves are established to provide for the payment of claims liability charges in accordance with its service contract with the carrier. The claims liability charges include estimates for reported losses, plus amounts for those claims incurred but not reported, and estimates of certain expenses associated with processing and settling the claims. The Company's maximum individual claims liability was $0.3 million under its fiscal 2014 minimum premium health insurance plan. Amounts accrued related to the health benefits insurance reserves are considered immaterial as of May 31, 2014. | |||
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 possibly be significant, reflecting any variety of new and adverse or favorable trends. | |||
Stock-based compensation costs | ' | ||
Stock-based compensation costs: All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. This model requires various assumptions as inputs including expected volatility of the Paychex stock price and expected option life. Volatility is estimated based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. Expected option life is estimated based on historical exercise behavior. The Company periodically reassesses its assumptions as well as its choice of valuation model. The Company will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. | |||
The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period or performance period. | |||
The Company is required to estimate forfeitures and only record compensation costs for those awards that are expected to vest. The assumptions for forfeitures were determined based on type of award and historical experience. Forfeiture assumptions are adjusted at the point in time a significant change is identified, with any adjustment recorded in the period of change, and the final adjustment at the end of the requisite service period to equal actual forfeitures. | |||
The assumptions of volatility, expected option life, and forfeitures all require significant judgment and are subject to change in the future due to factors such as employee exercise behavior, stock price trends, and changes to type or provisions of stock-based awards. Any material change in one or more of these assumptions could have an impact on the estimated fair value of a future award. | |||
Refer to Note D for further discussion of the Company’s stock-based compensation plans. | |||
Income taxes | ' | ||
Income taxes: The Company accounts for deferred taxes by recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records a deferred tax asset related to the stock-based compensation costs recognized for certain stock-based awards. At the time of the exercise of non-qualified stock options or vesting of stock awards, the Company accounts for the resulting tax deduction by reducing its accrued income tax liability with an offset to the deferred tax asset and any excess of the tax benefit over the deferred tax asset as an increase to additional paid-in capital. The Company currently has a sufficient pool of excess tax benefits in additional paid-in capital to absorb any deficiency in tax benefits that fall short of the related deferred tax asset related to stock-based awards. | |||
The Company also maintains a reserve for uncertain tax positions. The Company evaluates tax positions taken or expected to be taken in a tax return for recognition in its consolidated financial statements. Prior to recording the related tax benefit in the consolidated financial statements, the Company must conclude that tax positions will be more-likely-than-not to be sustained, assuming those positions will be examined by taxing authorities with full knowledge of all relevant information. The benefit recognized in the consolidated financial statements is the amount the Company expects to realize after examination by taxing authorities. If a tax position drops below the more-likely-than-not standard, the benefit can no longer be recognized. Assumptions, judgment, and the use of estimates are required in determining if the more-likely-than-not standard has been met when developing the provision for income taxes and in determining the expected benefit. A change in the assessment of the more-likely-than-not standard could materially impact the Company’s results of operations or financial position. The Company’s reserve for uncertain tax positions, including interest and net of federal benefits, was $29.8 million as of May 31, 2014 and $19.8 million as of May 31, 2013. Refer to Note I for further discussion of the Company’s reserve for uncertain tax positions. | |||
Use of estimates | ' | ||
Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenue, and expenses during the reporting period. Actual amounts and results could differ from these estimates. | |||
Recently adopted and recently issued accounting pronouncements | ' | ||
Recently adopted accounting pronouncements: Effective June 1, 2013, the Company adopted Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment,” issued by the Financial Accounting Standards Board (“FASB”). This updated guidance allows companies the option to first assess qualitative factors to determine if it is more-likely-than-not that an indefinite-lived intangible asset might be impaired and whether it is necessary to perform the quantitative impairment test. The Company currently does not have any indefinite-lived intangible assets other than goodwill, so adoption of this guidance did not have a material effect on its consolidated financial statements. | |||
Effective June 1, 2013, the Company adopted ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This authoritative guidance requires the reporting of the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income. There are no changes to the components that are recognized in net income or other comprehensive income. Adoption of this guidance did not have a material effect on the Company's consolidated financial statements. | |||
Recently issued accounting pronouncements: In June 2014, the FASB issued ASU No. 2014-12, “Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force).” This guidance requires a performance target that affects vesting and that could be achieved after the requisite service period to be treated as a performance condition. The current accounting standard for stock-based compensation as it applies to awards with performance conditions should be applied. This guidance is effective for fiscal years, including interim reporting periods, beginning after December 15, 2015, and is applicable to the Company's fiscal year beginning June 1, 2016. The Company is currently evaluating this guidance, but does not anticipate it will have a material impact to its consolidated financial statements. | |||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This guidance supersedes current guidance on revenue recognition in Topic 605, “Revenue Recognition.” In addition, there are disclosure requirements related to the nature, amount, timing, and uncertainty of revenue recognition. This guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim reporting periods, and will be required to be applied retrospectively. Early application of the guidance is not permitted. This guidance is applicable to the Company's fiscal year beginning June 1, 2017. The Company is currently evaluating this guidance and any potential impact to its consolidated financial statements. | |||
In January 2014, the FASB issued ASU 2014-01, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force).” This ASU permits a company to make an accounting policy election to account for investments in qualified affordable housing projects under a new proportional amortization method. If such an election is not made, the ASU requires use of the equity or cost method for investments. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company currently accounts for its investments in qualified affordable housing projects using the equity method for investments and does not anticipate that this ASU will have a material effect on its consolidated financial statements. | |||
In July 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force).” This ASU provides explicit guidance regarding the presentation in the statement of financial position of an unrecognized tax benefit when net operating losses or tax credit carryforwards exist. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted, and is applicable to the Company's fiscal year beginning June 1, 2014. The Company does not anticipate that the adoption of this guidance will have a material effect on its consolidated financial statements. | |||
Other recent authoritative guidance issued by the FASB (including technical corrections to the FASB Accounting Standards Codification), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not, or are not expected to have a material effect on the Company’s consolidated financial statements. |
Basic_and_Diluted_Earnings_Per1
Basic and Diluted Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Basic and diluted earnings per share | ' | ||||||||||||
Basic and diluted earnings per share were calculated as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||
Basic earnings per share: | |||||||||||||
Net income | $ | 627.5 | $ | 569 | $ | 548 | |||||||
Weighted-average common shares outstanding | 364.5 | 363.8 | 362.4 | ||||||||||
Basic earnings per share | $ | 1.72 | $ | 1.56 | $ | 1.51 | |||||||
Diluted earnings per share: | |||||||||||||
Net income | $ | 627.5 | $ | 569 | $ | 548 | |||||||
Weighted-average common shares outstanding | 364.5 | 363.8 | 362.4 | ||||||||||
Dilutive effect of common share equivalents | 1.6 | 0.9 | 0.6 | ||||||||||
Weighted-average common shares outstanding, assuming dilution | 366.1 | 364.7 | 363 | ||||||||||
Diluted earnings per share | $ | 1.71 | $ | 1.56 | $ | 1.51 | |||||||
Weighted-average anti-dilutive common share equivalents | 0.7 | 6.5 | 9.9 | ||||||||||
Investment_Income_Net_Tables
Investment Income, Net (Tables) | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Investment Income, Net [Abstract] | ' | ||||||||||||
Schedule of Investment Income, Net | ' | ||||||||||||
Investment income, net, consisted of the following items: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Interest income on corporate funds | $ | 6.9 | $ | 6.7 | $ | 6.5 | |||||||
Interest expense | (1.1 | ) | (0.1 | ) | (0.1 | ) | |||||||
Net loss from equity-method investments | (0.4 | ) | — | — | |||||||||
Investment income, net | $ | 5.4 | $ | 6.6 | $ | 6.4 | |||||||
StockBased_Compensation_Plans_
Stock-Based Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||||||||||||
31-May-14 | |||||||||||||||||||||||||
Stock-Based Compensation Plans [Abstract] | ' | ||||||||||||||||||||||||
Weighted-average assumptions used for valuation under the Black-Scholes model | ' | ||||||||||||||||||||||||
The weighted-average assumptions used for valuation under the Black-Scholes model are as follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
Performance stock options | Stock options | ||||||||||||||||||||||||
Risk-free interest rate | 1.5 | % | 0.7 | % | 1.9 | % | 2 | % | 1 | % | 2.2 | % | |||||||||||||
Dividend yield | 3.9 | % | 4.1 | % | 4.2 | % | 4.1 | % | 4.3 | % | 4.2 | % | |||||||||||||
Volatility factor | 0.2 | 0.22 | 0.24 | 0.22 | 0.23 | 0.24 | |||||||||||||||||||
Expected option life in years | 4.5 | 4.8 | 5.8 | 6.4 | 6.4 | 6.4 | |||||||||||||||||||
Weighted-average grant-date fair value of stock options granted (per share) | $ | 3.85 | $ | 3.55 | $ | 4.35 | $ | 4.9 | $ | 3.77 | $ | 4.46 | |||||||||||||
Stock options activity | ' | ||||||||||||||||||||||||
The following table summarizes stock option activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Shares subject | Weighted-average | Weighted-average | Aggregate | |||||||||||||||||||||
to options | exercise price | remaining | intrinsic value(1) | ||||||||||||||||||||||
per share | contractual term | ||||||||||||||||||||||||
(years) | |||||||||||||||||||||||||
Outstanding as of May 31, 2013 | 8 | $ | 34.17 | ||||||||||||||||||||||
Granted | 0.9 | $ | 38.52 | ||||||||||||||||||||||
Exercised | (3.4 | ) | $ | 35.51 | |||||||||||||||||||||
Forfeited | — | $ | 29.26 | ||||||||||||||||||||||
Expired | (0.1 | ) | $ | 38.11 | |||||||||||||||||||||
Outstanding as of May 31, 2014 | 5.4 | $ | 34 | 5.3 | $ | 38.7 | |||||||||||||||||||
Exercisable as of May 31, 2014 | 3.4 | $ | 33.87 | 3.6 | $ | 24.7 | |||||||||||||||||||
(1) Market price of the underlying stock as of May 31, 2014 less the exercise price. | |||||||||||||||||||||||||
Stock option plan other information | ' | ||||||||||||||||||||||||
Other information pertaining to stock option grants is as follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Total intrinsic value of stock options exercised | $ | 18.9 | $ | 7.8 | $ | 0.8 | |||||||||||||||||||
Total grant-date fair value of stock options vested | $ | 3 | $ | 3 | $ | 10.4 | |||||||||||||||||||
Performance stock options activity | ' | ||||||||||||||||||||||||
The following table summarizes performance stock option activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Shares subject | Weighted-average | Weighted-average | Aggregate | |||||||||||||||||||||
to options | exercise price per | remaining | intrinsic value(2) | ||||||||||||||||||||||
share | contractual term | ||||||||||||||||||||||||
(years) | |||||||||||||||||||||||||
Outstanding as of May 31, 2013 | 2.7 | $ | 30.95 | ||||||||||||||||||||||
Granted (1) | 0.1 | $ | 36.66 | ||||||||||||||||||||||
Exercised | — | $ | — | ||||||||||||||||||||||
Forfeited | — | $ | — | ||||||||||||||||||||||
Expired | — | $ | — | ||||||||||||||||||||||
Outstanding as of May 31, 2014 | 2.8 | $ | 31.25 | 7.4 | $ | 27.8 | |||||||||||||||||||
Exercisable as of May 31, 2014 | — | $ | — | 0 | $ | — | |||||||||||||||||||
(1) | Performance stock options granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. | ||||||||||||||||||||||||
(2) | Market price of the underlying stock as of May 31, 2014 less the exercise price. | ||||||||||||||||||||||||
RSU Activity | ' | ||||||||||||||||||||||||
The following table summarizes RSU activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | RSUs | Weighted-average | Weighted-average | Aggregate | |||||||||||||||||||||
grant-date | remaining vesting | intrinsic value(1) | |||||||||||||||||||||||
fair value per | period (years) | ||||||||||||||||||||||||
share | |||||||||||||||||||||||||
Nonvested as of May 31, 2013 | 1.6 | $ | 26.29 | ||||||||||||||||||||||
Granted | 0.7 | $ | 36.37 | ||||||||||||||||||||||
Vested | (0.5 | ) | $ | 25.65 | |||||||||||||||||||||
Forfeited | (0.1 | ) | $ | 29.39 | |||||||||||||||||||||
Nonvested as of May 31, 2014 | 1.7 | $ | 30.52 | 3 | $ | 70.5 | |||||||||||||||||||
(1) | Intrinsic value for RSUs is the market price of the underlying stock as of May 31, 2014. | ||||||||||||||||||||||||
Other information pertaining to RSUs | ' | ||||||||||||||||||||||||
Other information pertaining to RSUs is as follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Weighted-average grant-date fair value of RSUs granted | $ | 36.37 | $ | 28.59 | $ | 27.67 | |||||||||||||||||||
Total intrinsic value of RSUs vested | $ | 18.3 | $ | 15.5 | $ | 11 | |||||||||||||||||||
Total grant-date fair value of RSUs vested | $ | 12.1 | $ | 13.4 | $ | 9.5 | |||||||||||||||||||
Restricted stock award activity | ' | ||||||||||||||||||||||||
The following table summarizes restricted stock activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Restricted | Weighted-average | |||||||||||||||||||||||
shares | grant-date | ||||||||||||||||||||||||
fair value per | |||||||||||||||||||||||||
share | |||||||||||||||||||||||||
Nonvested as of May 31, 2013 | 0.2 | $ | 29.83 | ||||||||||||||||||||||
Granted | 0.1 | $ | 38.53 | ||||||||||||||||||||||
Vested | (0.1 | ) | $ | 30.22 | |||||||||||||||||||||
Forfeited | — | $ | — | ||||||||||||||||||||||
Nonvested as of May 31, 2014 | 0.2 | $ | 33.55 | ||||||||||||||||||||||
Other information pertaining to restricted stock awards | ' | ||||||||||||||||||||||||
Other information pertaining to restricted stock follows: | |||||||||||||||||||||||||
Year ended May 31, | |||||||||||||||||||||||||
In millions, except per share amounts | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Weighted-average grant-date fair value of restricted stock granted | $ | 38.53 | $ | 31.76 | $ | 30.69 | |||||||||||||||||||
Total grant-date fair value of restricted stock vested | $ | 3.3 | $ | 2.1 | $ | 3.2 | |||||||||||||||||||
Performance shares activity | ' | ||||||||||||||||||||||||
The following table summarizes performance share activity for the year ended May 31, 2014: | |||||||||||||||||||||||||
In millions, except per share amounts | Performance | Weighted-average | |||||||||||||||||||||||
shares | grant-date | ||||||||||||||||||||||||
fair value | |||||||||||||||||||||||||
per share | |||||||||||||||||||||||||
Nonvested as of May 31, 2013 | 0.4 | $ | 27.89 | ||||||||||||||||||||||
Granted (1) | 0.2 | $ | 35.69 | ||||||||||||||||||||||
Vested | (0.1 | ) | $ | 23.98 | |||||||||||||||||||||
Forfeited | — | $ | — | ||||||||||||||||||||||
Nonvested as of May 31, 2014 | 0.5 | $ | 31.61 | ||||||||||||||||||||||
(1) | Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Funds_Held_for_Clients_and_Cor1
Funds Held for Clients and Corporate Investments (Tables) | 12 Months Ended | |||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
Funds Held for Clients and Corporate Investments [Abstract] | ' | |||||||||||||||||||||||
Funds held for clients and corporate investments | ' | |||||||||||||||||||||||
Funds held for clients and corporate investments are as follows: | ||||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
In millions | Amortized | Gross | Gross | Fair | ||||||||||||||||||||
cost | unrealized | unrealized | value | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,579.20 | $ | — | $ | — | $ | 1,579.20 | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
General obligation municipal bonds | 1,605.40 | 25 | (1.9 | ) | 1,628.50 | |||||||||||||||||||
Pre-refunded municipal bonds(1) | 140.4 | 2.4 | — | 142.8 | ||||||||||||||||||||
Revenue municipal bonds | 858.8 | 10.1 | (1.1 | ) | 867.8 | |||||||||||||||||||
Variable rate demand notes | 752.3 | — | — | 752.3 | ||||||||||||||||||||
Total available-for-sale securities | 3,356.90 | 37.5 | (3.0 | ) | 3,391.40 | |||||||||||||||||||
Other | 10.6 | 1.7 | — | 12.3 | ||||||||||||||||||||
Total funds held for clients and corporate investments | $ | 4,946.70 | $ | 39.2 | $ | (3.0 | ) | $ | 4,982.90 | |||||||||||||||
31-May-13 | ||||||||||||||||||||||||
In millions | Amortized | Gross | Gross | Fair | ||||||||||||||||||||
cost | unrealized | unrealized | value | |||||||||||||||||||||
gains | losses | |||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,137.70 | $ | — | $ | — | $ | 1,137.70 | ||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
General obligation municipal bonds | 1,432.90 | 27.4 | (3.5 | ) | 1,456.80 | |||||||||||||||||||
Pre-refunded municipal bonds(1) | 201 | 2.9 | — | 203.9 | ||||||||||||||||||||
Revenue municipal bonds | 746.1 | 10.1 | (2.2 | ) | 754 | |||||||||||||||||||
Variable rate demand notes | 1,276.70 | — | — | 1,276.70 | ||||||||||||||||||||
Total available-for-sale securities | 3,656.70 | 40.4 | (5.7 | ) | 3,691.40 | |||||||||||||||||||
Other | 9.5 | 1.2 | — | 10.7 | ||||||||||||||||||||
Total funds held for clients and corporate investments | $ | 4,803.90 | $ | 41.6 | $ | (5.7 | ) | $ | 4,839.80 | |||||||||||||||
(1) | Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. | |||||||||||||||||||||||
Classification of investments on the Consolidated Balance Sheets | ' | |||||||||||||||||||||||
Classification of investments on the Consolidated Balance Sheets is as follows: | ||||||||||||||||||||||||
May 31, | ||||||||||||||||||||||||
In millions | 2014 | 2013 | ||||||||||||||||||||||
Funds held for clients | $ | 4,198.60 | $ | 4,072.50 | ||||||||||||||||||||
Corporate investments | 398.7 | 398.2 | ||||||||||||||||||||||
Long-term corporate investments | 385.6 | 369.1 | ||||||||||||||||||||||
Total funds held for clients and corporate investments | $ | 4,982.90 | $ | 4,839.80 | ||||||||||||||||||||
Securities in an unrealized loss position | ' | |||||||||||||||||||||||
The securities in an unrealized loss position were as follows: | ||||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
Less than twelve months | More than twelve months | Total | ||||||||||||||||||||||
In millions | Gross | Fair | Gross | Fair | Gross | Fair | ||||||||||||||||||
unrealized | value | unrealized | Value | unrealized | Value | |||||||||||||||||||
losses | losses | losses | ||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
General obligation municipal bonds | $ | (0.1 | ) | $ | 69.6 | $ | (1.8 | ) | $ | 164 | $ | (1.9 | ) | $ | 233.6 | |||||||||
Pre-refunded municipal bonds | — | 1.7 | — | — | — | 1.7 | ||||||||||||||||||
Revenue municipal bonds | — | 47.5 | (1.1 | ) | 112.4 | (1.1 | ) | 159.9 | ||||||||||||||||
Total | $ | (0.1 | ) | $ | 118.8 | $ | (2.9 | ) | $ | 276.4 | $ | (3.0 | ) | $ | 395.2 | |||||||||
31-May-13 | ||||||||||||||||||||||||
Less than twelve months | More than twelve months | Total | ||||||||||||||||||||||
In millions | Gross | Fair | Gross | Fair | Gross | Fair | ||||||||||||||||||
unrealized | value | unrealized | Value | unrealized | Value | |||||||||||||||||||
losses | losses | losses | ||||||||||||||||||||||
Type of issue: | ||||||||||||||||||||||||
General obligation municipal bonds | $ | (3.5 | ) | $ | 349.2 | $ | — | $ | — | $ | (3.5 | ) | $ | 349.2 | ||||||||||
Pre-refunded municipal bonds | — | 3.1 | — | — | — | 3.1 | ||||||||||||||||||
Revenue municipal bonds | (2.2 | ) | 225.3 | — | 2.1 | (2.2 | ) | 227.4 | ||||||||||||||||
Total | $ | (5.7 | ) | $ | 577.6 | $ | — | $ | 2.1 | $ | (5.7 | ) | $ | 579.7 | ||||||||||
Realized gain (loss) on investments | ' | |||||||||||||||||||||||
Realized gains and losses from the sale of available-for-sale securities were as follows: | ||||||||||||||||||||||||
Year ended May 31, | ||||||||||||||||||||||||
In millions | 2014 | 2013 | 2012 | |||||||||||||||||||||
Gross realized gains | $ | 0.6 | $ | 0.9 | $ | 1 | ||||||||||||||||||
Gross realized losses | — | — | — | |||||||||||||||||||||
Net realized gains | $ | 0.6 | $ | 0.9 | $ | 1 | ||||||||||||||||||
Amortized cost and fair value of available-for-sale securities by contractual maturity | ' | |||||||||||||||||||||||
The amortized cost and fair value of available-for-sale securities that had stated maturities as of May 31, 2014 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. | ||||||||||||||||||||||||
31-May-14 | ||||||||||||||||||||||||
In millions | Amortized | Fair | ||||||||||||||||||||||
cost | value | |||||||||||||||||||||||
Maturity date: | ||||||||||||||||||||||||
Due in one year or less | $ | 392 | $ | 394.3 | ||||||||||||||||||||
Due after one year through three years | 759.8 | 776 | ||||||||||||||||||||||
Due after three years through five years | 764.1 | 774.3 | ||||||||||||||||||||||
Due after five years | 1,441.00 | 1,446.80 | ||||||||||||||||||||||
Total | $ | 3,356.90 | $ | 3,391.40 | ||||||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
31-May-14 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Financial assets and liabilities measured 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: | |||||||||||||||||
31-May-14 | |||||||||||||||||
In millions | Carrying | Quoted | Significant | Significant | |||||||||||||
value | prices in | other | unobservable | ||||||||||||||
(Fair value) | active | observable | inputs | ||||||||||||||
markets | inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Commercial paper | $ | 6 | $ | — | $ | 6 | $ | — | |||||||||
General obligation municipal bonds | 10.9 | — | 10.9 | — | |||||||||||||
Pre-refunded municipal bonds | 31.2 | — | 31.2 | — | |||||||||||||
Revenue municipal bonds | 17.7 | — | 17.7 | — | |||||||||||||
Total cash equivalents | $ | 65.8 | $ | — | $ | 65.8 | $ | — | |||||||||
Available-for-sale securities: | |||||||||||||||||
General obligation municipal bonds | $ | 1,628.50 | $ | — | $ | 1,628.50 | $ | — | |||||||||
Pre-refunded municipal bonds | 142.8 | — | 142.8 | — | |||||||||||||
Revenue municipal bonds | 867.8 | — | 867.8 | — | |||||||||||||
Variable rate demand notes | 752.3 | — | 752.3 | — | |||||||||||||
Total available-for-sale securities | $ | 3,391.40 | $ | — | $ | 3,391.40 | $ | — | |||||||||
Other | $ | 12.3 | $ | 12.3 | $ | — | $ | — | |||||||||
Liabilities: | |||||||||||||||||
Other long-term liabilities | $ | 12.3 | $ | 12.3 | $ | — | $ | — | |||||||||
31-May-13 | |||||||||||||||||
In millions | Carrying | Quoted | Significant | Significant | |||||||||||||
value | prices in | other | unobservable | ||||||||||||||
(Fair value) | active | observable | inputs | ||||||||||||||
markets | inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
General obligation municipal bonds | $ | 1,456.80 | $ | — | $ | 1,456.80 | $ | — | |||||||||
Pre-refunded municipal bonds | 203.9 | — | 203.9 | — | |||||||||||||
Revenue municipal bonds | 754 | — | 754 | — | |||||||||||||
Variable rate demand notes | 1,276.70 | — | 1,276.70 | — | |||||||||||||
Total available-for-sale securities | $ | 3,691.40 | $ | — | $ | 3,691.40 | $ | — | |||||||||
Other | $ | 10.7 | $ | 10.7 | $ | — | $ | — | |||||||||
Liabilities: | |||||||||||||||||
Other long-term liabilities | $ | 10.7 | $ | 10.7 | $ | — | $ | — | |||||||||
Property_and_Equipment_Net_of_1
Property and Equipment, Net of Accumulated Depreciation (Tables) | 12 Months Ended | ||||||||
31-May-14 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Components of property and equipment, at cost | ' | ||||||||
The components of property and equipment, at cost, consisted of the following: | |||||||||
May 31, | |||||||||
In millions | 2014 | 2013 | |||||||
Land and improvements | $ | 8.1 | $ | 8.1 | |||||
Buildings and improvements | 101.1 | 99.2 | |||||||
Data processing equipment | 180.8 | 175.6 | |||||||
Software | 344.8 | 290.1 | |||||||
Furniture, fixtures, and equipment | 145 | 145.2 | |||||||
Leasehold improvements | 101.7 | 99.5 | |||||||
Construction in progress | 25.3 | 32.8 | |||||||
Total property and equipment, gross | 906.8 | 850.5 | |||||||
Less: Accumulated depreciation | 564.6 | 504.5 | |||||||
Property and equipment, net of accumulated depreciation | $ | 342.2 | $ | 346 | |||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets, Net of Accumulated Amortization (Tables) | 12 Months Ended | ||||||||
31-May-14 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
Components of intangible assets, at cost | ' | ||||||||
The components of intangible assets, at cost, consisted of the following: | |||||||||
May 31, | |||||||||
In millions | 2014 | 2013 | |||||||
Client lists | $ | 240.9 | $ | 231 | |||||
Other intangible assets | 2.6 | 2.4 | |||||||
Total intangible assets, gross | 243.5 | 233.4 | |||||||
Less: Accumulated amortization | 202.9 | 188.2 | |||||||
Intangible assets, net of accumulated amortization | $ | 40.6 | $ | 45.2 | |||||
Estimated future amortization expense relating to intangible assets | ' | ||||||||
The estimated amortization expense for the next five fiscal years relating to intangible asset balances is as follows: | |||||||||
In millions | Estimated amortization expense | ||||||||
Year ending May 31, | |||||||||
2015 | $ | 13.4 | |||||||
2016 | 9.9 | ||||||||
2017 | 7.3 | ||||||||
2018 | 4.9 | ||||||||
2019 | 2.9 | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Components of deferred tax assets and liabilities | ' | ||||||||||||
The components of deferred tax assets and liabilities are as follows: | |||||||||||||
May 31, | |||||||||||||
In millions | 2014 | 2013 | |||||||||||
Deferred tax assets: | |||||||||||||
Compensation and employee benefit liabilities | $ | 18.7 | $ | 16.3 | |||||||||
Other current liabilities | 6.9 | 6.3 | |||||||||||
Tax credit carry forward | 38.3 | 35.3 | |||||||||||
Depreciation | 8.3 | 8.5 | |||||||||||
Stock-based compensation | 21.1 | 24.6 | |||||||||||
Other | 15.4 | 16.6 | |||||||||||
Gross deferred tax assets | 108.7 | 107.6 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Capitalized software | 50.1 | 45.8 | |||||||||||
Depreciation | 12.2 | 20.2 | |||||||||||
Goodwill and Intangible assets | 46.7 | 41 | |||||||||||
Revenue not subject to current taxes | 12.6 | 11.7 | |||||||||||
Unrealized gains on available-for-sale securities | 13.2 | 13.3 | |||||||||||
Other | 0.4 | 0.6 | |||||||||||
Gross deferred tax liabilities | 135.2 | 132.6 | |||||||||||
Net deferred tax liability | $ | (26.5 | ) | $ | (25.0 | ) | |||||||
Components of provision for income taxes | ' | ||||||||||||
The components of the provision for income taxes are as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Current: | |||||||||||||
Federal | $ | 314.5 | $ | 274.2 | $ | 259.8 | |||||||
State | 51 | 62.9 | 40.8 | ||||||||||
Total current | 365.5 | 337.1 | 300.6 | ||||||||||
Deferred: | |||||||||||||
Federal | (3.5 | ) | 5.5 | 9.3 | |||||||||
State | (1.4 | ) | (0.2 | ) | 2.4 | ||||||||
Total deferred | (4.9 | ) | 5.3 | 11.7 | |||||||||
Provision for income taxes | $ | 360.6 | $ | 342.4 | $ | 312.3 | |||||||
Reconciliation of U.S. federal statutory tax rate | ' | ||||||||||||
A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal statutory tax rate | 35 | % | 35 | % | 35 | % | |||||||
Increase/(decrease) resulting from: | |||||||||||||
State income taxes, net of federal tax benefit | 3.3 | % | 3 | % | 3.3 | % | |||||||
Tax settlement | — | % | 1.5 | % | — | % | |||||||
Tax-exempt municipal bond interest | (1.5 | )% | (1.7 | )% | (1.8 | )% | |||||||
Other items | (0.3 | )% | (0.2 | )% | (0.2 | )% | |||||||
Effective income tax rate | 36.5 | % | 37.6 | % | 36.3 | % | |||||||
Reconciliation of gross unrecognized tax benefits, not including interest or other potential offsetting effects | ' | ||||||||||||
A reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, not including interest or other potential offsetting effects, is as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Balance as of beginning of fiscal year | $ | 26.7 | $ | 41.7 | $ | 41.2 | |||||||
Additions for tax positions of the current year | 11.2 | 28.5 | 0.4 | ||||||||||
Additions for tax positions of prior years | 4.2 | 12.2 | 1.3 | ||||||||||
Reductions for tax positions of prior years | (1.8 | ) | (0.5 | ) | (0.1 | ) | |||||||
Settlements with tax authorities | — | (55.0 | ) | (0.7 | ) | ||||||||
Expiration of the statute of limitations | (0.3 | ) | (0.2 | ) | (0.4 | ) | |||||||
Balance as of end of fiscal year | $ | 40 | $ | 26.7 | $ | 41.7 | |||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | ||||||||||||
31-May-14 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Changes in accumulated other comprehensive income | ' | ||||||||||||
The changes in accumulated other comprehensive income are as follows: | |||||||||||||
Year ended May 31, | |||||||||||||
In millions | 2014 | 2013 | 2012 | ||||||||||
Beginning balance | $ | 22 | $ | 37.7 | $ | 37.5 | |||||||
Other comprehensive (loss)/income: | |||||||||||||
Unrealized holding gains/(losses) | 0.3 | (24.1 | ) | 1.3 | |||||||||
Income tax (expense)/benefit related to unrealized holding gains/(losses) | (0.4 | ) | 9 | (0.4 | ) | ||||||||
Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income | (0.6 | ) | (0.9 | ) | (1.0 | ) | |||||||
Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities | 0.2 | 0.3 | 0.3 | ||||||||||
Total other comprehensive (loss)/income, net of tax | (0.5 | ) | (15.7 | ) | 0.2 | ||||||||
Ending balance | $ | 21.5 | $ | 22 | $ | 37.7 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||
31-May-14 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Lines of credit facility unused borrowing capacity, amount borrowed, and interest rate | ' | |||||||
There were no amounts outstanding under this credit facility as of May 31, 2014. During fiscal 2014, the Company borrowed against this facility, for one day each, as follows: | ||||||||
$ in millions | Amount borrowed | Interest rate | ||||||
Fiscal quarter | ||||||||
First quarter | $ | 25 | 3.25 | % | ||||
Second quarter | $ | 175 | 3.25 | % | ||||
As of May 31, 2014, the Company had unused borrowing capacity available under uncommitted, secured, short-term lines of credit at market rates of interest with financial institutions as follows: | ||||||||
Financial institution | Amount available | Expiration date | ||||||
JP Morgan Chase Bank, N.A. | $350 million | 28-Feb-15 | ||||||
Bank of America, N.A. | $250 million | 28-Feb-15 | ||||||
PNC Bank, National Association | $150 million | 28-Feb-15 | ||||||
Wells Fargo Bank, National Association | $150 million | 28-Feb-15 | ||||||
Summary of future minimum lease payments under various non-cancelable operating leases | ' | |||||||
As of May 31, 2014, future minimum lease payments under various non-cancelable operating leases with terms of more than one year are as follows: | ||||||||
In millions | Minimum lease payments | |||||||
Year ending May 31, | ||||||||
2015 | $ | 37.5 | ||||||
2016 | 29 | |||||||
2017 | 23.9 | |||||||
2018 | 17 | |||||||
2019 | 10.6 | |||||||
Thereafter | 11.2 | |||||||
Summary of minimum future payment obligations | ' | |||||||
These minimum future payment obligations relate to the following fiscal years: | ||||||||
In millions | Minimum payment obligation | |||||||
Year ending May 31, | ||||||||
2015 | $ | 61.3 | ||||||
2016 | 16.6 | |||||||
2017 | 10.2 | |||||||
2018 | 0.3 | |||||||
2019 | 0.2 | |||||||
Thereafter | 0.3 | |||||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
31-May-14 | |||||||||||||||||||||
Quarterly Financial Data (Unaudited) [Abstract] | ' | ||||||||||||||||||||
Quarterly Financial Data (Unaudited) | ' | ||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
Fiscal 2014 | 31-Aug | 30-Nov | 28-Feb | 31-May | Full Year | ||||||||||||||||
Service revenue (1) | $ | 603.1 | $ | 606.4 | $ | 639.9 | $ | 628.8 | $ | 2,478.20 | |||||||||||
Interest on funds held for clients | 10 | 10 | 10.5 | 10.2 | 40.7 | ||||||||||||||||
Total revenue (1) | 613.1 | 616.4 | 650.4 | 639 | 2,518.90 | ||||||||||||||||
Operating income | 255.1 | 248.6 | 250.7 | 228.3 | 982.7 | ||||||||||||||||
Investment income, net | 1.2 | 1.3 | 1.5 | 1.4 | 5.4 | ||||||||||||||||
Income before income taxes | 256.3 | 249.9 | 252.2 | 229.7 | 988.1 | ||||||||||||||||
Income taxes | 93.5 | 91.2 | 92.1 | 83.8 | 360.6 | ||||||||||||||||
Net income | $ | 162.8 | $ | 158.7 | $ | 160.1 | $ | 145.9 | $ | 627.5 | |||||||||||
Basic earnings per share(2) | $ | 0.45 | $ | 0.43 | $ | 0.44 | $ | 0.4 | $ | 1.72 | |||||||||||
Diluted earnings per share(2) | $ | 0.44 | $ | 0.43 | $ | 0.44 | $ | 0.4 | $ | 1.71 | |||||||||||
Weighted-average common shares outstanding | 365.3 | 364.9 | 364.2 | 363.5 | 364.5 | ||||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 366.7 | 366.4 | 365.8 | 365.3 | 366.1 | ||||||||||||||||
Cash dividends per common share | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 1.4 | |||||||||||
Total net realized gains(3) | $ | 0.2 | $ | — | $ | 0.3 | $ | 0.1 | $ | 0.6 | |||||||||||
Three Months Ended | |||||||||||||||||||||
Fiscal 2013 | 31-Aug | 30-Nov | 28-Feb | May 31(4) | Full Year | ||||||||||||||||
Service revenue | $ | 568.1 | $ | 559.4 | $ | 582.4 | $ | 575.3 | $ | 2,285.20 | |||||||||||
Interest on funds held for clients | 10.1 | 10 | 10.9 | 10 | 41 | ||||||||||||||||
Total revenue | 578.2 | 569.4 | 593.3 | 585.3 | 2,326.20 | ||||||||||||||||
Operating income | 238 | 230 | 225 | 211.8 | 904.8 | ||||||||||||||||
Investment income, net | 1.9 | 1.9 | 1.4 | 1.4 | 6.6 | ||||||||||||||||
Income before income taxes | 239.9 | 231.9 | 226.4 | 213.2 | 911.4 | ||||||||||||||||
Income taxes | 86.8 | 84 | 81.9 | 89.7 | 342.4 | ||||||||||||||||
Net income | $ | 153.1 | $ | 147.9 | $ | 144.5 | $ | 123.5 | $ | 569 | |||||||||||
Basic earnings per share(2) | $ | 0.42 | $ | 0.41 | $ | 0.4 | $ | 0.34 | $ | 1.56 | |||||||||||
Diluted earnings per share(2) | $ | 0.42 | $ | 0.41 | $ | 0.4 | $ | 0.34 | $ | 1.56 | |||||||||||
Weighted-average common shares outstanding | 363 | 363.6 | 363.8 | 364.6 | 363.8 | ||||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 363.8 | 364.4 | 364.6 | 365.9 | 364.7 | ||||||||||||||||
Cash dividends per common share (5) | $ | 0.32 | $ | 0.33 | $ | 0.66 | $ | — | $ | 1.31 | |||||||||||
Total net realized gains(3) | $ | 0.2 | $ | 0.1 | $ | 0.6 | $ | — | $ | 0.9 | |||||||||||
(1) | The amounts reported for service revenue and total revenue for the first through third quarters of fiscal 2014 differ from that reported in the Company's Quarterly Reports on Form 10-Q (“Form 10-Q”), as a result of the PEO direct cost adjustment. There was no impact to operating income from this change. The correction for the PEO direct cost adjustment was not material to any prior interim period in fiscal 2014. Service revenue, as reported in the Company's Form 10-Qs was $597.9 million, $600.5 million, and $626.0 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. Total revenue, as reported in the Company's Form 10-Qs was $607.9 million, $610.5 million, and $636.5 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. | ||||||||||||||||||||
(2) | Each quarter is a discrete period and the sum of the four quarters’ basic and diluted earnings per share amounts may not equal the full year amount. | ||||||||||||||||||||
(3) | Total net realized gains on the combined funds held for clients and corporate investment portfolios. | ||||||||||||||||||||
(4) | In the fourth quarter of fiscal 2013, the Company increased its tax provision related to the settlement of a state income tax matter. This reduced diluted earnings per share by approximately $0.04 per share. | ||||||||||||||||||||
(5) | In fiscal 2013, the Company accelerated the payment of dividends to December 2012. These dividends would have normally been paid in February 2013 and May 2013. |
Description_of_Business_Basis_2
Description of Business, Basis of Presentation, and Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Accounting Policies [Abstract] | ' | ' | ' |
Disclosure on geographic areas, Description of revenue from external customers | 'revenue within Germany, which represented less than one percent of the Company's total revenue | 'revenue within Germany, which represented less than one percent of the Company's total revenue | 'revenue within Germany, which represented less than one percent of the Company's total revenue |
Disclosure on geographic areas, Long-lived assets | 'Long-lived assets in Germany are insignificant in relation to total long-lived assets of the Company | 'Long-lived assets in Germany are insignificant in relation to total long-lived assets of the Company | ' |
Minimum period in which payroll taxes are typically remitted after receipt of collections from client | '1 day | ' | ' |
Maximum period in which payroll taxes are typically remitted after receipt of collections from client | '30 days | ' | ' |
Maximum Days in Which Payroll Taxes Will Be Remitted After Receipt Of Collections From Client | '90 days | ' | ' |
Allowance for doubtful accounts | $1,500,000 | $1,000,000 | ' |
Direct costs billed and incurred | 3,400,000,000 | 3,000,000,000 | 3,300,000,000 |
Maximum individual workers' compensation claims liability | 1,000,000 | 1,000,000 | ' |
Maximum Individual Claims Liability Health Insurance | 300,000 | ' | ' |
Workers' compensation insurance costs in current liabilities | 8,500,000 | 6,800,000 | ' |
Workers' compensation insurance costs in long-term liabilities | 16,000,000 | 13,700,000 | ' |
Reserve for uncertain tax positions | $29,800,000 | $19,800,000 | ' |
Software Development [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '15 years | ' | ' |
Minimum [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years | ' | ' |
Minimum [Member] | Building and Building Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '10 years | ' | ' |
Minimum [Member] | Data Processing Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' | ' |
Minimum [Member] | Furniture Fixtures And Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' | ' |
Minimum [Member] | Software and Software Development Costs [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '12 years | ' | ' |
Maximum [Member] | Building and Building Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '35 years | ' | ' |
Maximum [Member] | Data Processing Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' | ' |
Maximum [Member] | Furniture Fixtures And Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '7 years | ' | ' |
Maximum [Member] | Leasehold Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '10 years | ' | ' |
Maximum [Member] | Software and Software Development Costs [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' | ' |
Basic_and_Diluted_Earnings_Per2
Basic and Diluted Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 |
Basic earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $145.90 | $160.10 | $158.70 | $162.80 | $123.50 | $144.50 | $147.90 | $153.10 | $627.50 | $569 | $548 |
Weighted-average common shares outstanding | 363.5 | 364.2 | 364.9 | 365.3 | 364.6 | 363.8 | 363.6 | 363 | 364.5 | 363.8 | 362.4 |
Basic earnings per share | $0.40 | $0.44 | $0.43 | $0.45 | $0.34 | $0.40 | $0.41 | $0.42 | $1.72 | $1.56 | $1.51 |
Diluted earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $145.90 | $160.10 | $158.70 | $162.80 | $123.50 | $144.50 | $147.90 | $153.10 | $627.50 | $569 | $548 |
Weighted-average common shares outstanding | 363.5 | 364.2 | 364.9 | 365.3 | 364.6 | 363.8 | 363.6 | 363 | 364.5 | 363.8 | 362.4 |
Dilutive effect of common share equivalents | ' | ' | ' | ' | ' | ' | ' | ' | 1.6 | 0.9 | 0.6 |
Weighted-average common shares outstanding, assuming dilution | 365.3 | 365.8 | 366.4 | 366.7 | 365.9 | 364.6 | 364.4 | 363.8 | 366.1 | 364.7 | 363 |
Diluted earnings per share | $0.40 | $0.44 | $0.43 | $0.44 | $0.34 | $0.40 | $0.41 | $0.42 | $1.71 | $1.56 | $1.51 |
Weighted-average anti-dilutive common share equivalents | ' | ' | ' | ' | ' | ' | ' | ' | 0.7 | 6.5 | 9.9 |
Basic_and_Diluted_Earnings_Per3
Basic and Diluted Earnings Per Share Basic and Diluted Earnings Per Share (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | 31-May-14 | Oct. 31, 2012 | 31-May-14 | 31-May-14 |
Share Repurchase Program 1 [Member] | Share Repurchase Program 1 [Member] | Share Repurchase Program 2 [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ' | ' | ' | ' |
Stock Repurchased and Retired During Period, Shares | ' | ' | 6.2 | ' |
Share Repurchase Program, Authorized Amount | ' | $350 | ' | $350 |
Stock Repurchased and Retired During Period, Value | $249.70 | ' | $249.70 | ' |
Investment_Income_Net_Details
Investment Income, Net (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 |
Investment Income, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest income on corporate funds | ' | ' | ' | ' | ' | ' | ' | ' | $6.90 | $6.70 | $6.50 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -1.1 | -0.1 | -0.1 |
Net loss from equity-method Investments | ' | ' | ' | ' | ' | ' | ' | ' | -0.4 | 0 | 0 |
Investment income, net | $1.40 | $1.50 | $1.30 | $1.20 | $1.40 | $1.40 | $1.90 | $1.90 | $5.40 | $6.60 | $6.40 |
StockBased_Compensation_Plans_1
Stock-Based Compensation Plans (Details) (USD $) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Performance Stock Options [Member] | ' | ' | ' |
Weighted-average assumptions used for valuation under the Black-Scholes model | ' | ' | ' |
Risk-free interest rate | 1.50% | 0.70% | 1.90% |
Dividend yield | 3.90% | 4.10% | 4.20% |
Volatility factor | 20.00% | 22.00% | 24.00% |
Expected option life in years | '4 years 6 months | '4 years 9 months 18 days | '5 years 9 months 18 days |
Weighted-average grant-date fair value of stock options granted (per share) | $3.85 | $3.55 | $4.35 |
Employee Stock Option [Member] | ' | ' | ' |
Weighted-average assumptions used for valuation under the Black-Scholes model | ' | ' | ' |
Risk-free interest rate | 2.00% | 1.00% | 2.20% |
Dividend yield | 4.10% | 4.30% | 4.20% |
Volatility factor | 22.00% | 23.00% | 24.00% |
Expected option life in years | '6 years 4 months 24 days | '6 years 4 months 24 days | '6 years 4 months 24 days |
Weighted-average grant-date fair value of stock options granted (per share) | $4.90 | $3.77 | $4.46 |
StockBased_Compensation_Plans_2
Stock-Based Compensation Plans (Details 1) (Employee Stock Option [Member], USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | 31-May-14 |
Employee Stock Option [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Options outstanding, Beginning balance, Shares | 8 |
Options outstanding, Beginning balance, Weighted-average exercise price per share | $34.17 |
Options granted | 0.9 |
Options granted, Weighted-average exercise price per share | $38.52 |
Options exercised | -3.4 |
Options exercised, Weighted-average exercise price per share | $35.51 |
Options forfeited | 0 |
Options forfeited, Weighted-average exercise price per share | $29.26 |
Options expired | -0.1 |
Options expired, Weighted-average exercise price per share | $38.11 |
Options outstanding, Ending balance, Shares | 5.4 |
Options outstanding, Ending balance, Weighted-average exercise price per share | $34 |
Options outstanding, Ending balance, Weighted-average remaining contractual term | '5 years 3 months |
Options outstanding, Ending balance, Aggregate intrinsic value | $38.70 |
Options exercisable, Ending balance, Shares | 3.4 |
Options exercisable, Ending balance, Weighted-average exercise price per share | $33.87 |
Options exercisable, Ending balance, Weighted-average remaining contractual term | '3 years 7 months 18 days |
Options exercisable, Ending balance, Aggregate intrinsic value | $24.70 |
StockBased_Compensation_Plans_3
Stock-Based Compensation Plans (Details 2) (Employee Stock Option [Member], USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Employee Stock Option [Member] | ' | ' | ' |
Stock options, other information | ' | ' | ' |
Total intrinsic value of stock options exercised | $18.90 | $7.80 | $0.80 |
Total grant-date fair value of stock options vested | $3 | $3 | $10.40 |
StockBased_Compensation_Plans_4
Stock-Based Compensation Plans (Details 3) (Performance Stock Options [Member], USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | 31-May-14 |
Performance Stock Options [Member] | ' |
Performance stock option activity [Roll Forward] | ' |
Options outstanding, Beginning balance, Shares | 2.7 |
Options outstanding, Beginning balance, Weighted-average exercise price per share | $30.95 |
Options granted | 0.1 |
Options granted, Weighted-average exercise price per share | $36.66 |
Options exercised | 0 |
Options exercised, Weighted-average exercise price per share | $0 |
Options forfeited | 0 |
Options forfeited, Weighted-average exercise price per share | $0 |
Options expired | 0 |
Options expired, Weighted-average exercise price per share | $0 |
Options outstanding, Ending balance, Shares | 2.8 |
Options outstanding, Ending balance, Weighted-average exercise price per share | $31.25 |
Options outstanding, Ending balance, Weighted-average remaining contractual term | '7 years 4 months 18 days |
Options outstanding, Ending balance, Aggregate intrinsic value | $27.80 |
Options exercisable, Ending balance, Shares | 0 |
Options exercisable, Ending balance, Weighted-average exercise price per share | $0 |
Options exercisable, Ending balance, Weighted-average remaining contractual term | '0 years |
Options exercisable, Ending balance, Aggregate intrinsic value | $0 |
StockBased_Compensation_Plans_5
Stock-Based Compensation Plans (Details 4) (Restricted Stock Unit [Member], USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Restricted Stock Unit [Member] | ' | ' | ' |
RSU Activity [Roll Forward] | ' | ' | ' |
Nonvested/unearned shares, Beginning balance | 1.6 | ' | ' |
Nonvested/unearned shares, Beginning balance, Weighted-average grant-date fair value per share | $26.29 | ' | ' |
Granted | 0.7 | ' | ' |
Granted, Weighted-average grant-date fair value per share | $36.37 | $28.59 | $27.67 |
Vested | -0.5 | ' | ' |
Vested, Weighted-average grant-date fair value per share | $25.65 | ' | ' |
Forfeited | -0.1 | ' | ' |
Forfeited, Weighted-average grant-date fair value per share | $29.39 | ' | ' |
Nonvested/unearned shares, Ending balance | 1.7 | 1.6 | ' |
Nonvested/unearned shares, Ending balance, Weighted-average grant-date fair value per share | $30.52 | $26.29 | ' |
Weighted-average remaining vesting period (years) | '3 years 0 months | ' | ' |
Aggregate intrinsic value, Ending balance | $70.50 | ' | ' |
StockBased_Compensation_Plans_6
Stock-Based Compensation Plans (Details 5) (Restricted Stock Unit [Member], USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Restricted Stock Unit [Member] | ' | ' | ' |
RSUs, other information | ' | ' | ' |
Weighted-average grant-date fair value for RSUs granted | $36.37 | $28.59 | $27.67 |
Total intrinsic value of RSUs vested | $18.30 | $15.50 | $11 |
Total grant-date fair value of RSUs vested | $12.10 | $13.40 | $9.50 |
StockBased_Compensation_Plans_7
Stock-Based Compensation Plans (Details 6) (Restricted Stock [Member], USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Restricted Stock [Member] | ' | ' | ' |
Restricted Stock Award activity [Roll Forward] | ' | ' | ' |
Nonvested/unearned shares, Beginning balance | 0.2 | ' | ' |
Nonvested/unearned shares, Beginning balance, Weighted-average grant-date fair value per share | $29.83 | ' | ' |
Granted | 0.1 | ' | ' |
Granted, Weighted-average grant-date fair value per share | $38.53 | $31.76 | $30.69 |
Vested | -0.1 | ' | ' |
Vested, Weighted-average grant-date fair value per share | $30.22 | ' | ' |
Forfeited | 0 | ' | ' |
Forfeited, Weighted-average grant-date fair value per share | $0 | ' | ' |
Nonvested/unearned shares, Ending balance | 0.2 | 0.2 | ' |
Nonvested/unearned shares, Ending balance, Weighted-average grant-date fair value per share | $33.55 | $29.83 | ' |
StockBased_Compensation_Plans_8
Stock-Based Compensation Plans (Details 7) (Restricted Stock [Member], USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Restricted Stock [Member] | ' | ' | ' |
Nonvested/unearned shares, other information | ' | ' | ' |
Granted, Weighted-average grant-date fair value per share | $38.53 | $31.76 | $30.69 |
Total grant-date fair value of restricted stock vested | $3.30 | $2.10 | $3.20 |
StockBased_Compensation_Plans_9
Stock-Based Compensation Plans (Details 8) (Unearned Performance Shares [Member], USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | 31-May-14 |
Unearned Performance Shares [Member] | ' |
Unearned Performance Shares Activity [Roll Forward] | ' |
Nonvested/unearned shares, Beginning balance | 0.4 |
Nonvested/unearned shares, Beginning balance, Weighted-average grant-date fair value per share | $27.89 |
Granted | 0.2 |
Granted, Weighted-average grant-date fair value per share | $35.69 |
Vested | -0.1 |
Vested, Weighted-average grant-date fair value per share | $23.98 |
Forfeited | 0 |
Forfeited, Weighted-average grant-date fair value per share | $0 |
Nonvested/unearned shares, Ending balance | 0.5 |
Nonvested/unearned shares, Ending balance, Weighted-average grant-date fair value per share | $31.61 |
Recovered_Sheet1
Stock-Based Compensation Plans (Details Textuals) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-14 | 31-May-13 | 31-May-14 | 31-May-13 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | Jul. 31, 2014 | 31-May-14 |
Employee Stock Option [Member] | Employee Stock Option [Member] | Performance Stock Options [Member] | Performance Stock Options [Member] | Officer [Member] | Management [Member] | Prior to July 2010 [Member] | Prior to July 2010 [Member] | Prior to October 2010 [Member] | Beginning in October 2010 [Member] | Beginning in July 2010 [Member] | Beginning in July 2010 [Member] | October 2006 Broad-based Grant [Member] | Subsequent Event [Member] | Achievement of Performance Targets for Fiscal 2014 [Member] | ||||
Unearned Performance Shares [Member] | Restricted Stock Unit [Member] | Officers and Employees [Member] | Officer [Member] | Director [Member] | Director [Member] | Officer [Member] | Officer [Member] | Non-management employees [Member] | Officer [Member] | Officer [Member] | ||||||||
Employee Stock Option [Member] | Restricted Stock [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Restricted Stock [Member] | Employee Stock Option [Member] | Performance Stock Options [Member] | Performance Stock Options [Member] | ||||||||||
Stock Based Compensation Plans (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares authorized for issuance under stock plan | 39.1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares available for future grants | 20.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation costs | $26.30 | $22.80 | $22.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax benefits related to stock-based compensation | 10.1 | 8.5 | 8.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation costs related to all unvested stock-based awards | $52.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average period in years of all unvested stock-based awards | '2 years 10 months 25 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual life of stock option grants | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days of service needed to be eligible for new hire grant, Non-management employee | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Achievement of performance targets for fiscal 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23.50% | ' |
Vesting percentage | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | 0.00% | 33.00% | 33.00% | ' | 25.00% | 33.00% | ' | ' | 50.00% |
Performance period for unearned performance shares | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding, Ending balance, Shares | ' | ' | ' | 5.4 | 8 | 2.8 | 2.7 | ' | ' | ' | ' | ' | ' | ' | ' | 0.4 | ' | ' |
Vesting period | ' | ' | ' | ' | ' | ' | ' | '1 year | '5 years | ' | '3 years | ' | '1 year | ' | ' | ' | ' | ' |
Funds_Held_for_Clients_and_Cor2
Funds Held for Clients and Corporate Investments (Details) (USD $) | 31-May-14 | 31-May-13 | ||
In Millions, unless otherwise specified | ||||
Type of issue: | ' | ' | ||
Funds held for clients money market securities and other cash equivalents, Amortized cost | $1,579.20 | $1,137.70 | ||
Funds held for clients money market securities and other cash equivalents, Gross unrealized gains | 0 | 0 | ||
Funds held for clients money market securities and other cash equivalents, Gross unrealized losses | 0 | 0 | ||
Funds held for clients money market securities and other cash equivalents, Fair value | 1,579.20 | 1,137.70 | ||
Available-for-sale securities: | ' | ' | ||
Amortized cost | 3,356.90 | 3,656.70 | ||
Gross unrealized gains | 37.5 | 40.4 | ||
Gross unrealized losses | -3 | -5.7 | ||
Fair value | 3,391.40 | 3,691.40 | ||
Other, Amortized cost | 10.6 | 9.5 | ||
Other, Gross unrealized gains | 1.7 | 1.2 | ||
Other, Gross unrealized losses | 0 | 0 | ||
Other, Fair value | 12.3 | 10.7 | ||
Total funds held for clients and corporate investments, Amortized cost | 4,946.70 | 4,803.90 | ||
Total funds held for clients and corporate investments, Gross unrealized gains | 39.2 | 41.6 | ||
Total funds held for clients and corporate investments, Gross unrealized losses | -3 | -5.7 | ||
Total funds held for clients and corporate investments, Fair value | 4,982.90 | 4,839.80 | ||
General obligation municipal bonds [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Amortized cost | 1,605.40 | 1,432.90 | ||
Gross unrealized gains | 25 | 27.4 | ||
Gross unrealized losses | -1.9 | -3.5 | ||
Fair value | 1,628.50 | 1,456.80 | ||
Pre-refunded municipal bonds [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Amortized cost | 140.4 | [1] | 201 | [1] |
Gross unrealized gains | 2.4 | [1] | 2.9 | [1] |
Gross unrealized losses | 0 | [1] | 0 | [1] |
Fair value | 142.8 | [1] | 203.9 | [1] |
Revenue municipal bonds [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Amortized cost | 858.8 | 746.1 | ||
Gross unrealized gains | 10.1 | 10.1 | ||
Gross unrealized losses | -1.1 | -2.2 | ||
Fair value | 867.8 | 754 | ||
Variable rate demand notes [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Amortized cost | 752.3 | 1,276.70 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | $752.30 | $1,276.70 | ||
[1] | (1)B Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Funds_Held_for_Clients_and_Cor3
Funds Held for Clients and Corporate Investments (Details 1) (USD $) | 31-May-14 | 31-May-13 |
In Millions, unless otherwise specified | ||
Classification of investments on the Consolidated Balance Sheets | ' | ' |
Funds held for clients | $4,198.60 | $4,072.50 |
Corporate investments | 398.7 | 398.2 |
Long-term corporate investments | 385.6 | 369.1 |
Total funds held for clients and corporate investments, Fair value | 4,982.90 | 4,839.80 |
Securities in an unrealized loss position | ' | ' |
Less than twelve months, Gross unrealized losses | -0.1 | -5.7 |
Less than twelve months, Fair value | 118.8 | 577.6 |
Twelve months or longer, Gross unrealized losses | -2.9 | 0 |
Twelve months or longer, Fair value | 276.4 | 2.1 |
Total, Gross unrealized losses | 3 | 5.7 |
Total, Fair value | 395.2 | 579.7 |
General obligation municipal bonds [Member] | ' | ' |
Securities in an unrealized loss position | ' | ' |
Less than twelve months, Gross unrealized losses | -0.1 | -3.5 |
Less than twelve months, Fair value | 69.6 | 349.2 |
Twelve months or longer, Gross unrealized losses | -1.8 | 0 |
Twelve months or longer, Fair value | 164 | 0 |
Total, Gross unrealized losses | 1.9 | 3.5 |
Total, Fair value | 233.6 | 349.2 |
Pre-refunded municipal bonds [Member] | ' | ' |
Securities in an unrealized loss position | ' | ' |
Less than twelve months, Gross unrealized losses | 0 | 0 |
Less than twelve months, Fair value | 1.7 | 3.1 |
Twelve months or longer, Gross unrealized losses | 0 | 0 |
Twelve months or longer, Fair value | 0 | 0 |
Total, Gross unrealized losses | 0 | 0 |
Total, Fair value | 1.7 | 3.1 |
Revenue municipal bonds [Member] | ' | ' |
Securities in an unrealized loss position | ' | ' |
Less than twelve months, Gross unrealized losses | 0 | -2.2 |
Less than twelve months, Fair value | 47.5 | 225.3 |
Twelve months or longer, Gross unrealized losses | -1.1 | 0 |
Twelve months or longer, Fair value | 112.4 | 2.1 |
Total, Gross unrealized losses | 1.1 | 2.2 |
Total, Fair value | $159.90 | $227.40 |
Funds_Held_for_Clients_and_Cor4
Funds Held for Clients and Corporate Investments (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 |
Security | Security | Security | Security | ||||||||
Funds Held for Clients and Corporate Investments [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross realized gains | ' | ' | ' | ' | ' | ' | ' | ' | $0.60 | $0.90 | $1 |
Gross realized losses | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 |
Net realized gains | 0.1 | 0.3 | 0 | 0.2 | 0 | 0.6 | 0.1 | 0.2 | 0.6 | 0.9 | 1 |
Maturity Date: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due in one year or less, Amortized cost | 392 | ' | ' | ' | ' | ' | ' | ' | 392 | ' | ' |
Due in one year or less, Fair value | 394.3 | ' | ' | ' | ' | ' | ' | ' | 394.3 | ' | ' |
Due after one year through three years, Amortized cost | 759.8 | ' | ' | ' | ' | ' | ' | ' | 759.8 | ' | ' |
Due after one year through three years, Fair value | 776 | ' | ' | ' | ' | ' | ' | ' | 776 | ' | ' |
Due after three years through five years, Amortized cost | 764.1 | ' | ' | ' | ' | ' | ' | ' | 764.1 | ' | ' |
Due after three years through five years, Fair value | 774.3 | ' | ' | ' | ' | ' | ' | ' | 774.3 | ' | ' |
Due after five years, Amortized cost | 1,441 | ' | ' | ' | ' | ' | ' | ' | 1,441 | ' | ' |
Due after five years, Fair value | 1,446.80 | ' | ' | ' | ' | ' | ' | ' | 1,446.80 | ' | ' |
Total, Amortized cost | 3,356.90 | ' | ' | ' | ' | ' | ' | ' | 3,356.90 | ' | ' |
Fair value | 3,391.40 | ' | ' | ' | 3,691.40 | ' | ' | ' | 3,391.40 | 3,691.40 | ' |
Funds Held for Clients and Corporate Investments (Textual) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net unrealized gain on available-for-sale securities | 34.5 | ' | ' | ' | 34.7 | ' | ' | ' | 34.5 | 34.7 | ' |
Number of available-for-sale securities in an unrealized loss position | 98 | ' | ' | ' | 147 | ' | ' | ' | 98 | 147 | ' |
Minimum maturity period for VRDNs primarily categorized as due after five years (in years) | ' | ' | ' | ' | ' | ' | ' | ' | '20 years | ' | ' |
Maximum maturity period for VRDNs primarily categorized as due after five years (in years) | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' |
Total, Gross unrealized losses | $3 | ' | ' | ' | $5.70 | ' | ' | ' | $3 | $5.70 | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 31-May-14 | 31-May-13 | ||
In Millions, unless otherwise specified | ||||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | $3,391.40 | $3,691.40 | ||
Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 65.8 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 3,391.40 | 3,691.40 | ||
Other | 12.3 | 10.7 | ||
Liabilities: | ' | ' | ||
Other long-term liabilities | 12.3 | 10.7 | ||
Commercial Paper [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 6 | ' | ||
General obligation municipal bonds [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 1,628.50 | 1,456.80 | ||
General obligation municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 10.9 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 1,628.50 | 1,456.80 | ||
Pre-refunded municipal bonds [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 142.8 | [1] | 203.9 | [1] |
Pre-refunded municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 31.2 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 142.8 | 203.9 | ||
Revenue municipal bonds [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 867.8 | 754 | ||
Revenue municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 17.7 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 867.8 | 754 | ||
Variable Rate Demand Obligation [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 752.3 | 1,276.70 | ||
Variable Rate Demand Obligation [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 752.3 | 1,276.70 | ||
Quoted prices in active markets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Other | 12.3 | 10.7 | ||
Liabilities: | ' | ' | ||
Other long-term liabilities | 12.3 | 10.7 | ||
Quoted prices in active markets (Level 1) [Member] | Commercial Paper [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Quoted prices in active markets (Level 1) [Member] | General obligation municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Quoted prices in active markets (Level 1) [Member] | Pre-refunded municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Quoted prices in active markets (Level 1) [Member] | Revenue municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Quoted prices in active markets (Level 1) [Member] | Variable Rate Demand Obligation [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Significant other observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 65.8 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 3,391.40 | 3,691.40 | ||
Other | 0 | 0 | ||
Liabilities: | ' | ' | ||
Other long-term liabilities | 0 | 0 | ||
Significant other observable Inputs (Level 2) [Member] | Commercial Paper [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 6 | ' | ||
Significant other observable Inputs (Level 2) [Member] | General obligation municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 10.9 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 1,628.50 | 1,456.80 | ||
Significant other observable Inputs (Level 2) [Member] | Pre-refunded municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 31.2 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 142.8 | 203.9 | ||
Significant other observable Inputs (Level 2) [Member] | Revenue municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 17.7 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 867.8 | 754 | ||
Significant other observable Inputs (Level 2) [Member] | Variable Rate Demand Obligation [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 752.3 | 1,276.70 | ||
Significant unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Other | 0 | 0 | ||
Liabilities: | ' | ' | ||
Other long-term liabilities | 0 | 0 | ||
Significant unobservable Inputs (Level 3) [Member] | Commercial Paper [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Significant unobservable Inputs (Level 3) [Member] | General obligation municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Significant unobservable Inputs (Level 3) [Member] | Pre-refunded municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Significant unobservable Inputs (Level 3) [Member] | Revenue municipal bonds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Assets: | ' | ' | ||
Cash Equivalents | 0 | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | 0 | 0 | ||
Significant unobservable Inputs (Level 3) [Member] | Variable Rate Demand Obligation [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ||
Available-for-sale securities: | ' | ' | ||
Available-for-sale securities | $0 | $0 | ||
[1] | (1)B Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Property_and_Equipment_Net_of_2
Property and Equipment, Net of Accumulated Depreciation (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Components of property and equipment, at cost | ' | ' | ' |
Land and improvements | $8.10 | $8.10 | ' |
Buildings and improvements | 101.1 | 99.2 | ' |
Data processing equipment | 180.8 | 175.6 | ' |
Software | 344.8 | 290.1 | ' |
Furniture, fixtures, and equipment | 145 | 145.2 | ' |
Leasehold improvements | 101.7 | 99.5 | ' |
Construction in progress | 25.3 | 32.8 | ' |
Total property and equipment, gross | 906.8 | 850.5 | ' |
Less: Accumulated depreciation | 564.6 | 504.5 | ' |
Property and equipment, net of accumulated depreciation | 342.2 | 346 | ' |
Property and Equipment, Net of Accumulated Depreciation (Textual) | ' | ' | ' |
Depreciation expense | $89.10 | $79.20 | $74.80 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets, Net of Accumulated Amortization (Details) (USD $) | 31-May-14 | 31-May-13 |
In Millions, unless otherwise specified | ||
Components of intangible assets, at cost | ' | ' |
Client lists | $240.90 | $231 |
Other intangible assets | 2.6 | 2.4 |
Total intangible assets, gross | 243.5 | 233.4 |
Less: Accumulated amortization | 202.9 | 188.2 |
Intangible assets, net of accumulated amortization | 40.6 | 45.2 |
Estimated future amortization expense relating to intangible assets | ' | ' |
Fiscal year ending May 31, 2015 | 13.4 | ' |
Fiscal year ending May 31, 2016 | 9.9 | ' |
Fiscal year ending May 31, 2017 | 7.3 | ' |
Fiscal year ending May 31, 2018 | 4.9 | ' |
Fiscal year ending May 31, 2019 | $2.90 | ' |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets, Net of Accumulated Amortization (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Goodwill and Intangible Assets, Net of Accumulated Amortization (Textual) | ' | ' | ' |
Goodwill | $540.30 | $533.90 | ' |
Amortization expense relating to intangible assets | $15.90 | $19 | $23 |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Acquired intangible assets, Weighted average amortization period | '7 years 3 months 19 days | ' | ' |
Customer Lists [Member] | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Acquired intangible assets, Weighted average amortization period | '7 years 4 months 24 days | ' | ' |
Other Intangible Assets [Member] | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Acquired intangible assets, Weighted average amortization period | '3 years | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 31-May-14 | 31-May-13 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Compensation and employee benefit liabilities | $18.70 | $16.30 |
Other current liabilities | 6.9 | 6.3 |
Tax credit carry forward | 38.3 | 35.3 |
Depreciation | 8.3 | 8.5 |
Stock-based compensation | 21.1 | 24.6 |
Other | 15.4 | 16.6 |
Gross deferred tax assets | 108.7 | 107.6 |
Deferred tax liabilities: | ' | ' |
Capitalized software | 50.1 | 45.8 |
Depreciation | 12.2 | 20.2 |
Goodwill and Intangible assets | 46.7 | 41 |
Revenue not subject to current taxes | 12.6 | 11.7 |
Unrealized gains on available-for-sale securities | 13.2 | 13.3 |
Other | 0.4 | 0.6 |
Gross deferred tax liabilities | 135.2 | 132.6 |
Net deferred tax liability | ($26.50) | ($25) |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 |
Current: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | ' | ' | ' | ' | ' | ' | $314.50 | $274.20 | $259.80 |
State | ' | ' | ' | ' | ' | ' | ' | ' | 51 | 62.9 | 40.8 |
Total current | ' | ' | ' | ' | ' | ' | ' | ' | 365.5 | 337.1 | 300.6 |
Deferred: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | ' | ' | ' | ' | ' | ' | -3.5 | 5.5 | 9.3 |
State | ' | ' | ' | ' | ' | ' | ' | ' | -1.4 | -0.2 | 2.4 |
Total deferred | ' | ' | ' | ' | ' | ' | ' | ' | -4.9 | 5.3 | 11.7 |
Provision for income taxes | $83.80 | $92.10 | $91.20 | $93.50 | $89.70 | $81.90 | $84 | $86.80 | $360.60 | $342.40 | $312.30 |
Income_Taxes_Details_2
Income Taxes (Details 2) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
Increase/(decrease) resulting from: | ' | ' | ' |
State income taxes, net of federal tax benefit | 3.30% | 3.00% | 3.30% |
Tax settlement | 0.00% | 1.50% | 0.00% |
Tax-exempt municipal bond interest | -1.50% | -1.70% | -1.80% |
Other items | -0.30% | -0.20% | -0.20% |
Effective income tax rate | 36.50% | 37.60% | 36.30% |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Reconciliation of gross unrecognized tax benefits | ' | ' | ' |
Balance as of beginning of fiscal year | $26.70 | $41.70 | $41.20 |
Additions for tax positions of the current year | 11.2 | 28.5 | 0.4 |
Additions for tax positions of prior years | 4.2 | 12.2 | 1.3 |
Reductions for tax positions of prior years | -1.8 | -0.5 | -0.1 |
Settlements with tax authorities | 0 | -55 | -0.7 |
Expiration of the statute of limitations | -0.3 | -0.2 | -0.4 |
Balance as of end of fiscal year | $40 | $26.70 | $41.70 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | 31-May-13 | 31-May-14 |
Income Taxes (Details Textual) [Abstract] | ' | ' |
Total reserve for uncertain tax positions | $19.80 | $29.80 |
Total reserve for uncertain tax positions included in long-term liabilities | 19.7 | 28.6 |
Reserve for uncertain tax positions, increase in May 2013 | 21.2 | ' |
Impact of uncertain tax positions, if recognized, on company's effective income tax rate | $14.60 | $24.60 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' |
Beginning balance | $22 | $37.70 | $37.50 |
Unrealized holding gains/(losses) | 0.3 | -24.1 | 1.3 |
Income tax (expense)/benefit related to unrealized holding gains/(losses) | -0.4 | 9 | -0.4 |
Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income | -0.6 | -0.9 | -1 |
Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities | 0.2 | 0.3 | 0.3 |
Total other comprehensive (loss)/income, net of tax | -0.5 | -15.7 | 0.2 |
Ending balance | 21.5 | 22 | 37.7 |
Other Comprehensive (Loss)/Income (Textual) | ' | ' | ' |
Other comprehensive (loss)/income tax expense/(benefit) | $0.20 | ($9.30) | $0.10 |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Supplemental Cash Flow Information [Abstract] | ' | ' | ' |
Income taxes paid | $317.80 | $371 | $301.40 |
Lease incentives received | $6.70 | $6.40 | $12.80 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-14 |
Line of Credit [Member] | JP Morgan Chase Bank, N.A. [Member] | ' | ' | ' |
Lines of credit | ' | ' | ' |
Amount available | ' | ' | 350 |
Expiration date | ' | ' | 28-Feb-15 |
Line of Credit [Member] | Bank of America, N.A. [Member] | ' | ' | ' |
Lines of credit | ' | ' | ' |
Amount available | ' | ' | 250 |
Expiration date | ' | ' | 28-Feb-15 |
Line of Credit [Member] | PNC Bank, National Association [Member] | ' | ' | ' |
Lines of credit | ' | ' | ' |
Amount available | ' | ' | 150 |
Expiration date | ' | ' | 28-Feb-15 |
Line of Credit [Member] | Wells Fargo Bank, National Association [Member] | ' | ' | ' |
Lines of credit | ' | ' | ' |
Amount available | ' | ' | 150 |
Expiration date | ' | ' | 28-Feb-15 |
Revolving Credit Facility [Member] | ' | ' | ' |
Lines of credit | ' | ' | ' |
Expiration date | ' | ' | 21-Jun-18 |
Maximum Amount Outstanding During Period | $175 | $25 | ' |
Interest Rate on amount borrowed | 3.25% | 3.25% | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 1) (USD $) | 31-May-14 |
In Millions, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Operating Leases, Future Minimum Payments Due in Fiscal 2015 | $37.50 |
Operating Leases, Future Minimum Payments, Due in Fiscal 2016 | 29 |
Operating Leases, Future Minimum Payments, Due in Fiscal 2017 | 23.9 |
Operating Leases, Future Minimum Payments, Due in Fiscal 2018 | 17 |
Operating Leases, Future Minimum Payments, Due in Fiscal 2019 | 10.6 |
Operating Leases, Future Minimum Payments, Due Thereafter | $11.20 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 2) (USD $) | 31-May-14 |
In Millions, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Future minimum payment obligations under purchase orders and contractual arrangements, Due in Fiscal 2015 | $61.30 |
Future minimum payment obligations under purchase orders and contractual arrangements, Due in Fiscal 2016 | 16.6 |
Future minimum payment obligations under purchase orders and contractual arrangements, Due in Fiscal 2017 | 10.2 |
Future minimum payment obligations under purchase orders and contractual arrangements, Due in Fiscal 2018 | 0.3 |
Future minimum payment obligations under purchase orders and contractual arrangements, Due in Fiscal 2019 | 0.2 |
Future minimum payment obligations under purchase orders and contractual arrangements, Due Thereafter | $0.30 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Commitments and Contingencies (Textual) [Abstract] | ' | ' | ' |
Rent expense | $39,100,000 | $39,900,000 | $43,000,000 |
Minimum future payment obligations under purchase orders and contractual arrangements | 88,900,000 | ' | ' |
Commitments to purchase capital assets | 16,000,000 | ' | ' |
Line of Credit [Member] | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' |
Amount outstanding | 0 | ' | ' |
Standby Letters of Credit [Member] | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' |
Amount available | 43,000,000 | 36,800,000 | ' |
Expiration date range of letters of credit | 'July 2014 and April 2015 | ' | ' |
Irrevocable stand by letters of credit amount outstanding | 0 | ' | ' |
Revolving Credit Facility [Member] | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' |
Amount outstanding | 0 | ' | ' |
Line of credit facility, expiration period | '5 years | ' | ' |
Expiration date | 21-Jun-18 | ' | ' |
Maximum borrowing capacity | $500,000,000 | ' | ' |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 6 Months Ended | 12 Months Ended | 13 Months Ended | 21 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-14 | 31-May-13 | 31-May-12 | Feb. 01, 2012 | Nov. 14, 2013 |
Employee Benefit Plans [Abstract] | ' | ' | ' | ' | ' | ' |
Years of service to be eligible for Company match contribution | ' | '1 year | ' | ' | ' | ' |
Maximum percentage of salary deferral under 401(k) plan | ' | 50.00% | ' | ' | ' | ' |
Company contributions to the plan | ' | $16.40 | $13.10 | $10.30 | ' | ' |
Amounts accrued under deferred compensation plans | $12.30 | $12.30 | $10.70 | ' | ' | ' |
Percentage of eligible pay that is matched by the employer | ' | 50.00% | ' | ' | ' | ' |
Percentage of employee pay eligible for employer matching contribution | 8.00% | ' | ' | ' | 4.00% | 6.00% |
Percentage of annual base salary that eligible employees can defer under Deferred Compensation Plan | ' | 50.00% | ' | ' | ' | ' |
Percentage of board cash compensation that may be deferred under Deferred Compensation Plan | ' | 100.00% | ' | ' | ' | ' |
Related_Parties_Details
Related Parties (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
EMC Corporation [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Purchases from related parties | $4.70 | $6.50 | $2.60 |
Staples, Inc. [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Purchases from related parties | $1.30 | $1.60 | $1.80 |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 |
Quarterly Financial Data (Unaudited) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service revenue | $628.80 | $639.90 | $606.40 | $603.10 | $575.30 | $582.40 | $559.40 | $568.10 | $2,478.20 | $2,285.20 | $2,186.20 |
Interest on funds held for clients | 10.2 | 10.5 | 10 | 10 | 10 | 10.9 | 10 | 10.1 | 40.7 | 41 | 43.6 |
Total revenue | 639 | 650.4 | 616.4 | 613.1 | 585.3 | 593.3 | 569.4 | 578.2 | 2,518.90 | 2,326.20 | 2,229.80 |
Operating income | 228.3 | 250.7 | 248.6 | 255.1 | 211.8 | 225 | 230 | 238 | 982.7 | 904.8 | 853.9 |
Investment income, net | 1.4 | 1.5 | 1.3 | 1.2 | 1.4 | 1.4 | 1.9 | 1.9 | 5.4 | 6.6 | 6.4 |
Income before income taxes | 229.7 | 252.2 | 249.9 | 256.3 | 213.2 | 226.4 | 231.9 | 239.9 | 988.1 | 911.4 | 860.3 |
Income taxes | 83.8 | 92.1 | 91.2 | 93.5 | 89.7 | 81.9 | 84 | 86.8 | 360.6 | 342.4 | 312.3 |
Net income | 145.9 | 160.1 | 158.7 | 162.8 | 123.5 | 144.5 | 147.9 | 153.1 | 627.5 | 569 | 548 |
Basic earnings per share | $0.40 | $0.44 | $0.43 | $0.45 | $0.34 | $0.40 | $0.41 | $0.42 | $1.72 | $1.56 | $1.51 |
Diluted earnings per share | $0.40 | $0.44 | $0.43 | $0.44 | $0.34 | $0.40 | $0.41 | $0.42 | $1.71 | $1.56 | $1.51 |
Weighted-average common shares outstanding | 363.5 | 364.2 | 364.9 | 365.3 | 364.6 | 363.8 | 363.6 | 363 | 364.5 | 363.8 | 362.4 |
Weighted-average common shares outstanding, assuming dilution | 365.3 | 365.8 | 366.4 | 366.7 | 365.9 | 364.6 | 364.4 | 363.8 | 366.1 | 364.7 | 363 |
Cash dividends per common share | $0.35 | $0.35 | $0.35 | $0.35 | $0 | $0.66 | $0.33 | $0.32 | $1.40 | $1.31 | $1.27 |
Total net realized gains | $0.10 | $0.30 | $0 | $0.20 | $0 | $0.60 | $0.10 | $0.20 | $0.60 | $0.90 | $1 |
Quarterly_Financial_Data_Unaud3
Quarterly Financial Data (Unaudited) - Additional Disclosures (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 |
Service revenue | $628.80 | $639.90 | $606.40 | $603.10 | $575.30 | $582.40 | $559.40 | $568.10 | $2,478.20 | $2,285.20 | $2,186.20 |
Total revenue | 639 | 650.4 | 616.4 | 613.1 | 585.3 | 593.3 | 569.4 | 578.2 | 2,518.90 | 2,326.20 | 2,229.80 |
Scenario, Previously Reported [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service revenue | ' | 626 | 600.5 | 597.9 | ' | ' | ' | ' | ' | ' | ' |
Total revenue | ' | $636.50 | $610.50 | $607.90 | ' | ' | ' | ' | ' | ' | ' |
Settlement of State Income Tax Matter [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impact to diluted earnings per share from settlement of state tax item | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($0.04) | ' |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Allowance for Doubtful Accounts [Member] | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Balance as of beginning of fiscal year | $1 | $1.20 | $2.10 |
Additions charged to expenses | 2.5 | 1.7 | 1.2 |
(Deductions from)/ additions to other accounts | 0 | 0 | 0 |
Costs and deductions | 2 | 1.9 | 2.1 |
Balance as of end of fiscal year | 1.5 | 1 | 1.2 |
Reserve For Client Fund Losses [Member] | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Balance as of beginning of fiscal year | 2.4 | 2.1 | 3.1 |
Additions charged to expenses | 2.2 | 2.7 | 2.3 |
(Deductions from)/ additions to other accounts | 0 | 0 | -0.7 |
Costs and deductions | 2.7 | 2.4 | 2.6 |
Balance as of end of fiscal year | $1.90 | $2.40 | $2.10 |