Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2019 | Jun. 30, 2019 | Nov. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PAYCHEX INC | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Central Index Key | 0000723531 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Amendment Flag | false | ||
Document Type | 10-K | ||
Document Fiscal Period Focus | FY | ||
Document Period End Date | May 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Common Stock, Shares Outstanding | 359,345,511 | ||
Entity Public Float | $ 22,652,311,624 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||||
May 31, 2019 | May 31, 2018 | [2] | May 31, 2017 | [2] | ||
Revenue: | ||||||
Total service revenue | $ 3,691.9 | $ 3,314.2 | [1] | $ 3,102.4 | [3] | |
Interest on funds held for clients | 80.6 | 63.5 | [1] | 50.6 | ||
Total revenue | 3,772.5 | 3,377.7 | [1] | 3,153 | ||
Expenses: | ||||||
Operating expenses | 1,177.8 | 1,018.2 | 919.4 | |||
Selling, general and administrative expenses | 1,223.4 | 1,068 | 979.7 | |||
Total expenses | 2,401.2 | 2,086.2 | 1,899.1 | |||
Operating income | 1,371.3 | 1,291.5 | [1] | 1,253.9 | ||
Interest (expense)/income, net | (3.3) | 8.6 | [1] | 5.2 | ||
Income before income taxes | 1,368 | 1,300.1 | [1] | 1,259.1 | ||
Income taxes | 333.6 | 306 | [1],[4] | 432.8 | [5] | |
Net income | 1,034.4 | 994.1 | [1],[6] | 826.3 | [3],[6] | |
Other comprehensive income/(loss), net of tax | 36.3 | (56.2) | (9.2) | |||
Comprehensive income | $ 1,070.7 | $ 937.9 | $ 817.1 | |||
Basic earnings per share | $ 2.88 | [7] | $ 2.77 | [1],[7] | $ 2.30 | [3] |
Diluted earnings per share | $ 2.86 | [7] | $ 2.75 | [1],[7] | $ 2.28 | [3],[8] |
Weighted-average common shares outstanding | 359.2 | 359 | [1] | 359.8 | [3] | |
Weighted-average common shares outstanding, assuming dilution | 361.8 | 361.5 | [1] | 362.6 | [3] | |
Management Solutions [Member] | ||||||
Revenue: | ||||||
Total service revenue | $ 2,877.7 | $ 2,758.4 | [3] | $ 2,680.7 | [3] | |
PEO And Insurance Services [Member] | ||||||
Revenue: | ||||||
Total service revenue | $ 814.2 | $ 555.8 | [3] | $ 421.7 | [3] | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | |||||
[3] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[4] | As a result of the Tax Act, the effective income tax rate for the three months ended February 28, 2018 was significantly impacted by certain one-time net tax benefits. Refer to Note K of this Item 8 for further details. | |||||
[5] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[6] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | |||||
[7] | 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. | |||||
[8] | Diluted earnings per share amounts may not add across by +/- $0.01 due to rounding. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 | [1] |
Assets | |||
Cash and cash equivalents | $ 673.6 | $ 358.2 | [2],[3] |
Restricted cash | 50.6 | ||
Corporate investments | 39 | 66 | |
Interest receivable | 27.4 | 32.2 | |
Accounts receivable, net of allowance for doubtful accounts | 420.5 | 374.6 | |
PEO unbilled receivables, net of advance collections | 406.3 | 117.8 | [4] |
Prepaid income taxes | 22.6 | 17 | |
Prepaid expenses and other current assets | 233.9 | 224 | |
Current assets before funds held for clients | 1,873.9 | 1,189.8 | |
Funds held for clients | 3,803.8 | 4,703.8 | |
Total current assets | 5,677.7 | 5,893.6 | |
Long-term restricted cash | 6.5 | ||
Long-term corporate investments | 10.2 | 295.5 | |
Property and equipment, net of accumulated depreciation | 408.7 | 393.5 | |
Intangible assets, net of accumulated amortization | 399.1 | 141.4 | |
Goodwill | 1,782.6 | 814 | |
Long-term deferred costs | 366.3 | 361 | [5] |
Other long-term assets | 24.9 | 16.4 | |
Total assets | 8,676 | 7,915.4 | |
Liabilities | |||
Accounts payable | 75.9 | 73.7 | |
Accrued corporate compensation and related items | 146.4 | 121.5 | |
Accrued worksite employee compensation and related items | 578.6 | 176.1 | |
Deferred revenue | 40.3 | 34.6 | |
Other current liabilities | 219.5 | 155.9 | |
Current liabilities before client fund obligations | 1,060.7 | 561.8 | |
Client fund obligations | 3,784.3 | 4,734.9 | |
Total current liabilities | 4,845 | 5,296.7 | |
Accrued income taxes | 27.3 | 18.4 | |
Deferred income taxes | 223.1 | 154.4 | |
Long-term borrowings, net of debt issuance costs | 796.4 | ||
Other long-term liabilities | 164.7 | 89.1 | |
Total liabilities | 6,056.5 | 5,558.6 | |
Commitments and contingencies - Note Q | |||
Stockholders' equity | |||
Common stock, $0.01 par value; Authorized: 600.0 shares; Issued and outstanding: 359.3 shares as of May 31, 2019 and 359.0 shares as of May 31, 2018, respectively. | 3.6 | 3.6 | |
Additional paid-in capital | 1,206.3 | 1,126.8 | |
Retained earnings | 1,409.5 | 1,262.6 | |
Accumulated other comprehensive income/(loss) | 0.1 | (36.2) | |
Total stockholders' equity | 2,619.5 | 2,356.8 | |
Total liabilities and stockholders' equity | $ 8,676 | $ 7,915.4 | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. | ||
[2] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||
[3] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | ||
[4] | Amounts were previously reported as a component of accounts receivable, net of allowance for doubtful accounts included in the Company's fiscal 2018 Form 10-K. PEO unbilled receivables, net of advance collections are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. | ||
[5] | Amounts were previously reported as a component of other long-term assets on the Consolidated Balance Sheets included in the Company's fiscal 2018 Form 10-K. Long-term deferred costs are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2019 | May 31, 2018 |
Stockholders' equity | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 359,300,000 | 359,000,000 |
Common stock, shares outstanding | 359,300,000 | 359,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | [1] | Accumulated Other Comprehensive Income/(Loss) [Member] | Total | |
Beginning balance, Shares at May. 31, 2016 | 360.4 | ||||||
Beginning balance at May. 31, 2016 | $ 3.6 | $ 952.7 | $ 926.2 | $ 29.2 | $ 1,911.7 | ||
Net income | 826.3 | 826.3 | [2],[3],[4] | ||||
Unrealized gains/(losses) on securities, net of tax | (9.2) | (9.2) | |||||
Cash dividends declared | (662.3) | (662.3) | |||||
Repurchases of common shares, Shares | (2.9) | ||||||
Repurchases of common shares | (5.4) | (160.8) | (166.2) | ||||
Stock-based compensation | 35.4 | 35.4 | |||||
Foreign currency translation adjustment | |||||||
Activity related to equity-based plans, Shares | 1.9 | ||||||
Activity related to equity-based plans | 47.3 | (18.7) | 28.6 | ||||
Ending balance, Shares at May. 31, 2017 | 359.4 | ||||||
Ending balance at May. 31, 2017 | $ 3.6 | 1,030 | 1,173.6 | 20 | 2,227.2 | ||
Cumulative impact of adoption of ASC Topic 606 | 262.9 | 262.9 | |||||
Net income | 994.1 | 994.1 | [3],[4],[5] | ||||
Unrealized gains/(losses) on securities, net of tax | (47.6) | (47.6) | |||||
Cash dividends declared | (739.7) | (739.7) | |||||
Repurchases of common shares, Shares | (2.5) | ||||||
Repurchases of common shares | (4.5) | (138.6) | (143.1) | ||||
Acquisition of businesses, Shares | 0.6 | ||||||
Acquisition of businesses | 33.2 | 33.2 | |||||
Stock-based compensation | 44.6 | 44.6 | |||||
Foreign currency translation adjustment | (8.6) | (8.6) | |||||
Activity related to equity-based plans, Shares | 1.5 | ||||||
Activity related to equity-based plans | 23.5 | (26.8) | $ (3.3) | ||||
Ending balance, Shares at May. 31, 2018 | 359 | 359 | |||||
Ending balance at May. 31, 2018 | $ 3.6 | 1,126.8 | 1,262.6 | (36.2) | $ 2,356.8 | [6] | |
Net income | 1,034.4 | 1,034.4 | |||||
Unrealized gains/(losses) on securities, net of tax | 44 | 44 | |||||
Cash dividends declared | (826.8) | (826.8) | |||||
Repurchases of common shares, Shares | (0.7) | ||||||
Repurchases of common shares | (1.4) | (55.5) | (56.9) | ||||
Stock-based compensation | 46.2 | 46.2 | |||||
Foreign currency translation adjustment | (7.7) | (7.7) | |||||
Activity related to equity-based plans, Shares | 1 | ||||||
Activity related to equity-based plans | 34.7 | (5.2) | $ 29.5 | ||||
Ending balance, Shares at May. 31, 2019 | 359.3 | 359.3 | |||||
Ending balance at May. 31, 2019 | $ 3.6 | $ 1,206.3 | $ 1,409.5 | $ 0.1 | $ 2,619.5 | ||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||||
[2] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||||
[3] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | ||||||
[4] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | ||||||
[5] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||||
[6] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Consolidated Statements of Stockholders' Equity [Abstract] | |||
Cash dividends per share | $ 2.30 | $ 2.06 | $ 1.84 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Millions | 12 Months Ended | |||||
May 31, 2019USD ($) | May 31, 2018USD ($) | [3] | May 31, 2017USD ($) | [3] | ||
Operating activities | ||||||
Net income | $ 1,034.4 | $ 994.1 | [1],[2] | $ 826.3 | [2],[4] | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization on property and equipment and intangible assets | 181.5 | 138 | [5] | 126.9 | [5] | |
Amortization of premiums and discounts on available-for-sale securities, net | 49 | 65.4 | [5] | 72.5 | [5] | |
Amortization of deferred contract costs | 180.2 | 174.7 | [5] | 169.4 | [5] | |
Stock-based compensation costs | 46.2 | 44.6 | [5] | 35.4 | [5] | |
Provision/(benefit) for deferred income taxes | 4.7 | (37.2) | [6] | 22.7 | [6] | |
Provision for allowance for doubtful accounts | 3.3 | 3.6 | [5] | 4.9 | [5] | |
Net realized gains on sales of available-for-sale securities | (0.1) | [5] | (0.1) | [5] | ||
Changes in operating assets and liabilities: | ||||||
Interest receivable | 4.8 | 3.7 | [5] | 0.2 | [5] | |
Accounts receivable and PEO unbilled receivables, net | (117.2) | 16.2 | [5] | (103.3) | [5] | |
Prepaid expenses and other current assets | 1 | 18 | [5] | (32.2) | [5] | |
Accounts payable and other current liabilities | 77.5 | 42.9 | [5] | 38.2 | [5] | |
Deferred costs | (188.5) | (181.8) | [5] | (185.6) | [5] | |
Net change in other long-term assets and liabilities | (5.4) | (5.7) | [5] | (14.9) | [5] | |
Net cash provided by operating activities | 1,271.5 | 1,276.4 | [5] | 960.4 | [5] | |
Investing activities | ||||||
Purchases of available-for-sale securities | (35,145.8) | (50,220.2) | [5] | (50,462.3) | [5] | |
Proceeds from sales and maturities of available-for-sale securities | 34,638.8 | 51,592.9 | [5] | 49,903 | [5] | |
Purchases of property and equipment | (123.8) | (154) | [5] | (94.3) | [5] | |
Acquisition of businesses, net of cash acquired | (992.2) | (180.4) | [5] | |||
Purchases of other assets | (5.3) | (39.8) | [5] | (8.6) | [5] | |
Net cash (used in)/provided by investing activities | (1,628.3) | 998.5 | [5] | (662.2) | [5] | |
Financing activities | ||||||
Net change in client fund obligations | (950.6) | 462.4 | [5] | 317.3 | [5] | |
Net proceeds from long-term borrowings | 796.3 | |||||
Dividends paid | (826.8) | (739.7) | [5] | (662.3) | [5] | |
Repurchases of common shares | (56.9) | (143.1) | [5] | (166.2) | [5] | |
Activity related to equity-based plans | 29.5 | (3.4) | [5] | 28.5 | [5] | |
Net cash used in financing activities | (1,008.5) | (423.8) | [5] | (482.7) | [5] | |
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | (1,365.3) | 1,851.1 | [5] | (184.5) | [5] | |
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year | 2,300.5 | [3],[5] | 449.4 | [5] | 633.9 | [5] |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of fiscal year | 935.2 | 2,300.5 | [5] | 449.4 | [5] | |
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the Consolidated Balance Sheets | ||||||
Cash and cash equivalents | 673.6 | 358.2 | [5],[7] | 184.6 | [5] | |
Restricted cash | 57.1 | |||||
Restricted cash and restricted cash equivalents included in funds held for clients | $ 204.5 | $ 1,942.3 | [5] | $ 264.8 | [5] | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | |||||
[3] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | |||||
[4] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[5] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[6] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[7] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. |
Description of Business, Basis
Description of Business, Basis of Presentation, and Significant Accounting Policies | 12 Months Ended |
May 31, 2019 | |
Description of Business, Basis of Presentation, and Significant Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation, and Significant Accounting Policies | Note A — Description of Business, Basis of Presentation, and Significant Accounting Policies Description of business: Paychex, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Paychex”) is a leading provider of integrated human capital management (“HCM”) solutions for payroll, benefits, human resource (“HR”), retirement, and insurance services for small- to medium-sized businesses in the United States (“U.S.”). The Company also has operations in Europe. Paychex, a Delaware corporation formed in 1979 , reports as one segment. Substantially all of the Company’s revenue is generated within the U.S. The Company also generates revenue within Europe, which represented one percent of the Company's total revenue for the fiscal year ended May 31, 2019 (“fiscal 2019 ”), and less than one percent for each of the fiscal years ended May 31, 2018 (“fiscal 2018 ”) and May 31, 2017 (“fiscal 2017 ”). Long-lived assets in Europe were approximately 5% and 10% of total long-lived assets of the Company as of May 31, 2019 and May 31, 2018 , respectively. Paychex offers a comprehensive portfolio of HCM services and products that allow its clients to meet their diverse payroll and HR needs. Clients can select services on an á la carte basis or as part of various product bundles. Paychex’s offerings often leverage the information gathered in its base payroll processing service, allowing the Company to provide comprehensive outsourcing services covering the HCM spectrum. Paychex supports its small business clients utilizing its proprietary, robust, Paychex Flex ® processing platform or SurePayroll ® online application. Both products are cloud-based software-as-a-service (“SaaS”) solutions that allow users to process payroll when they want, how they want, and on any device (desktop, tablet, and mobile phone). Clients with more complex payroll and benefits needs are serviced through the Paychex Flex Enterprise solution set, which offers an integrated suite of HCM solutions through the Paychex Flex platform, or through a legacy platform. The SaaS solution through Paychex Flex Enterprise integrates payroll processing with HR management, employee benefits administration, time and labor management, applicant tracking, onboarding solutions, and performance and learning management. Paychex Flex Enterprise allows clients to choose the services and software they need to meet the complexity of their business and have them integrated through one HCM solution. Total revenue is comprised of service revenue and interest on funds held for clients. Service revenue is comprised primarily of the fees earned on the portfolio of HCM services, which include payroll processing, complementary HR management and administration services, our PEO, and insurance agency commissions. Refer to Note B of this Item 8 for further discussion of the Company’s service revenue. 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. Certain disclosures are reported as zero balances due to rounding. Effective June 1, 2018, the Company adopted the requirements of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” and ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force),” as discussed in the “Recently adopted accounting pronouncements” section of this Item 8. All amounts and disclosures set forth in this Annual Report on Form 10-K (the “Form 10-K”) have been updated to comply with the new standards. Reclassifications: Certain prior period amounts have been reclassified to conform to the current period presentation in connection with the adoption of ASU Nos. 2014-09 and 2016-18 and to provide further detail related to certain PEO balances, and had no material effect on reported consolidated earnings. Subsequent Events: On July 11, 201 9 , Paychex announced that its Board of Directors (the “Board”) declared a regular quarterly dividend of $0. 62 per share payable August 22, 2019 to shareholders of record as of August 1, 2019 . The Company has also re purchased approximately 1.0 million shares of its common stock for $84.0 million subsequent to May 31, 2019. Cash and cash equivalents: Cash and cash equivalents consist of available cash, money market securities, and other investments with a maturity of 90 days or less at acquisition. Cash and cash equivalents include funds collected from the Company’s PEO clients for the payment of worksite employee payrolls and associated payroll taxes. Funds of $ 178.8 million and $44.2 million collected from PEO clients are included in cash and cash equivalents on the Company’s Consolidated Balance Sheets as of May 31, 2019 and May 31, 2018, respectively. Restricted cash and restricted cash equivalents: Restricted cash and restricted cash equivalents are recorded at fair value, and consist of cash and cash equivalents, primarily money market securities, included in funds held for clients and cash that is restricted in use for the payment of workers’ compensation claims. 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 $7.5 million and $7.0 million as of May 31, 2019 and May 31, 2018, respectively. These balances include: trade receivables for services provided to clients and purchased receivables related to payroll funding arrangements with clients in the temporary staffing industry. Trade receivables were $87. 0 million and $ 107.6 million as of May 31, 2019 and May 31, 2018, respectively. Purchased receivables were $333.5 million and $267.0 million as of May 31, 2019 and May 31, 2018, respectively. Accounts receivable are written off and charged against the allowance for doubtful accounts when the Company has exhausted all collection efforts without success. No single client had a material impact on total accounts receivable, service revenue, or results of operations. PEO unbilled receivables, net of advance collections: The Company recognizes a liability for worksite employee gross wages and related payroll tax liabilities at the end of the period in which the worksite employee performs work. When clients’ pay per iods cross reporting periods, the Company accrue s the portion of the unpaid worksite employee payroll where it assume s , under state regulations, the obligation for the payment of wages and the corresponding payroll tax liabilities associated with the work performed prior to period-end. The estimated payroll and payroll tax liabilities are recorded in accrued worksite employee compensation and related items on the Company’s Consolidated Balance Sheets. The associated unbilled receivables, including estimated revenues, offset by advance collections from clients, are recorded as PEO unbilled receivables, net of advance collections on the Company’s Consolidated Balance Sheets . As of May 31, 2019 and May 31, 2018, advance collections included in PEO unbilled receivables, net of advance collections were $4.2 million and $17.2 million, respectively. Funds held for clients and corporate investments: Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value obtained from an independent pricing service. The funds held for clients portfolio also includes cash and cash equivalents such as money market securities. Unrealized gains and losses, net of applicable income taxes, are reported as other comprehensive income in the Consolidated Statements of Income and Comprehensive Income. Realized gains and losses on the sale of available-for-sale securities are determined by specific identification of the cost basis of each security. On the Consolidated Statements of Income and Comprehensive Income, realized gains and losses from the funds held for clients portfolio and corporate investments portfolio are included in interest on funds held for clients and interest (expense)/income, net, respectively. Concentrations: Substantially all of the Company’s deposited cash is maintained at large well-capitalized (as defined by their regulators) financial institutions. These deposits may exceed the amount of any insurance provided. All of the Company’s deliverable securities, primarily municipal bond securities, are held in custody with certain of the aforementioned financial institutions, for which that institution bears the risk of custodial loss. Non-deliverable securities are primarily time deposits and money market funds. Property and equipment, net of accumulated depreciation: Property and equipment is stated at cost, less accumulated depreciation. Depreciation is based on the estimated useful lives of property and equipment using the straight-line method. The estimated useful lives of depreciable assets are generally as follows: Category Depreciable life Buildings and improvements 10 to 35 years or the remaining life, whichever is shorter Data processing equipment Three to four years Furniture, fixtures, and equipment Two to seven years Leasehold improvements 10 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 twelve years. For software developed for internal use, certain costs are capitalized, including external direct costs of materials and services associated with developing or obtaining the software, and payroll and payroll-related costs for employees who are directly associated with internal-use software projects. Capitalization of these costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs associated with preliminary project stage activities, training, maintenance, and other post-implementation stage activities are expensed as incurred. The carrying value of software and development costs is reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Goodwill and other intangible assets, net of accumulated amortization: The Company had $ 1.8 billion and $ 814.0 million of goodwill as of May 31, 2019 and May 31, 2018 , respectively. 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. The Company performs its annual impairment testing in its fiscal fourth quarter. For fiscal 2019, it was determined that the Company has three reporting units. A qualitative analysis was performed for all reporting units in fiscal 2019, to determine if it is more-likely-than-not that the fair value of the reporting units had declined below their carrying value. The qualitative assessment considered various financial, macroeconomic, industry, and reporting unit specific qualitative factors. For fiscal 2018, a qualitative analysis was performed for all reporting units to determine if it is more-likely-than-not that the fair value of the reporting units had declined below its carrying value. During fiscal 2017, a qualitative assessment was performed on the Company’s Paychex Advance , LLC reporting unit, and for all other reporting units a quantitative analysis was performed. Based on the results of the Company’s testing, no impairment loss was recognized in the results of operations for the fiscal years 2019, 2018, or 2017. 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. Certain client lists use an accelerated method, while other intangible assets use the straight-line method of amortization. Impairment of Long-Lived Assets: Long-lived assets, including intangible assets, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. The Company has determined that there was no impairment of long-lived assets for the fiscal years 2019 , 2018 , or 2017 . Foreign Currency : The financial statements of the Company’s foreign subsidiaries have been translated into U.S. dollars. Assets and liabilities are translated into U.S. dollars at period-end exchange rates. Income and expenses are translated at the average exchange rate for the reporting period. The resulting non-cash foreign currency translation adjustments, representing unrealized gains or losses, are included in Consolidated Statements of Stockholders’ Equity as a component of accumulated other comprehensive income/(loss) , net of tax . The Company did no t have any material realized gains or losses resulting from foreign exchange transactions during the fiscal years 2019 , 2018 , or 2017 . Revenue recognition: Revenues are primarily attributable to fees for providing services as well as investment income earned on funds held for clients. Fees associated with services are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. The Company’s service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. Insurance Services revenues are recognized when commissions are earned on premiums billed and collected. Fees earned for funding of payrolls for temporary staffing agency clients via the purchase of accounts receivable are based on a percentage of funding amounts as specified in the client contract. These fees are then recognized over the average collection period of 35 to 45 days. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in service revenue, and the costs for the delivery are included in operating expenses on the Consolidated Statements of Income and Comprehensive Income. The Company receives advance payments for set-up fees from its clients. Advance payments received for certain of the Company’s service offerings for set-up fees are considered a material right. Therefore, the Company defers the revenue associated with these advance payments, recognizing the revenue and related expenses over the expected period to which the material right exists. PEO revenue is included in service revenue and is reported net of certain pass-through costs billed and incurred, which primarily include payroll wages, payroll taxes, including federal and state unemployment insurance, and certain guaranteed cost benefit premiums. Direct costs related to certain benefit plans where the Company retains risk are recognized as operating expenses rather than as a reduction in service revenue. Refer to Note B of this Item 8 for further discussion of the PEO pass-through costs. 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. PEO insurance reserves: As part of the PEO service, the Company offers workers’ compensation insurance and health insurance for the benefit of client employees. Workers' compensation insurance is provided under fully insured high deductible workers’ compensation insurance policies. Workers’ compensation insurance reserves are established to provide for the estimated costs of paying claims up to per occurrence liability limits. In establishing the PEO workers' compensation insurance reserves, the Company uses an independent actuarial estimate of undiscounted future cash payments that would be made to settle the claims. The Company’s maximum individual claims liability, excluding Oasis Outsourcing Group Holdings, L.P. (“Oasis”) and HR Outsourcing Holdings, Inc. (“HROi”), was $1.0 million and $ 1.3 million under its fiscal 2019 and fiscal 2018 worker s' compensation insurance policies, respectively . Oasis’ maximum individual claims liability was $ 1.0 million under its workers’ compensation insurance policies for the annual fiscal period ended May 31, 2019. HROi’s maximum individual claims liability was $ 0.8 million and $ 0.5 million under its workers’ compensation insurance policies for the annual periods ending September 30, 2019 and ended September 30, 2018, respectively. As of May 31, 2019 and May 31, 2018 , the Company had recorded current liabilities of $71.1 million and $ 19.4 million, respectively, and long-term liabilities of $99.2 million and $31.2 million, respectively, on its Consolidated Balance Sheets for workers’ compensation insurance costs. With respect to PEO health insurance, the Company offers various health insurance plans that take the form of either fully insured guaranteed 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 medical premium insurance arrangement, the Company's health benefits in surance reserves are established to provide for the payment of claims in accordance with its service contract with the carrier. The claims liability includes 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, excluding Oasis and HROi, was $0.3 million under both its calendar 2019 and 2018 minimum premium insurance plan policies. HROi’s maximum individual claims liability was $0.3 million under its minimum premium insurance policy for the annual periods ending June 30, 2019 and ended June 30, 2018. Oasis has no minimum premium insurance plan policies in effect. In addition, the Company also provides self-insured dental and vision plans to certain of its PEO clients. Amounts accrued related to the health insurance and dental and vision plan reserves were $25.4 million as of both May 31, 2019 and May 31, 2018 . These amounts are included in current liabilities on the Consolidated Balance Sheets. Estimating the ultimate cost of future claims is an uncertain and complex process based upon historical loss experience and actuarial loss projections, and is subject to change due to multiple factors, including economic trends, changes in legal liability law, and damage awards, all of which could materially impact the reserves as reported in the consolidated financial statements. Accordingly, final claim settlements may vary from the present estimates, particularly with workers' compensation insurance where those payments may not occur until well into the future. The Company regularly reviews the adequacy of its estimated insurance reserves. Adjustments to previously established reserves are reflected in the results of operations for the period in which the adjustment is identified. Such adjustments could be significant, reflecting any combination of new and adverse or favorable trends. Adjustments to previously established reserves were not material for the fiscal years 2019, 2018, or 2017. Stock-based compensation costs: All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. This model requires various assumptions as inputs including expected volatility of the Paychex stock price and expected option life. Volatility is estimated based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. Expected option life is estimated based on historical exercise behavior. The Company periodically reassesses its assumptions as well as its choice of valuation model. The Company will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period or performance period. The Company’s policy is to estimate forfeitures and only record compensation costs for those awards that are expected to vest. The assumptions for forfeitures were determined based on type of award and historical experience. Forfeiture assumptions are adjusted at the point in time a significant change is identified, with any adjustment recorded in the period of change, and the final adjustment at the end of the requisite service period to equal actual forfeitures. The assumptions of volatility, expected option life, and forfeitures all require significant judgment and are subject to change in the future due to factors such as employee exercise behavior, stock price trends, and changes to type or provisions of stock-based awards. Any material change in one or more of these assumptions could have an impact on the estimated fair value of a future award. Refer to Note F of this Item 8 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 fiscal year in which the differences are expected to reverse. Refer to Note K of this Item 8 for further discussion on deferred taxes and the tax impacts of the Tax Cuts and Jobs Act (the “Tax Act”). 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 $21.6 million as of May 31, 2019 and $14.7 million as of May 31, 2018 . Refer to Note K of this Item 8 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 requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenue, and expenses during the reporting period. Actual amounts and results could differ from these estimates. Recently adopted accounting pronouncements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This guidance, as amended by subsequent ASUs on the topic, outlines a single comprehensive model for determining revenue recognition for contracts with customers, and supersedes guidance on revenue recognition in ASC Topic 605, “Revenue Recognition.” The Company adopted the new standard on June 1, 2018, utilizing the full retrospective method, which required the Company to recast each prior reporting period presented and included a cumulative adjustment to increase stockholders’ equity by $262.9 million as of June 1, 2016. See the “Impact on Previously Reported Results” section of this Item 8 for previously reported Consolidated Financial Statements related to this standard. The Company has updated its control framework for new internal controls and made changes to existing internal controls related to the new standard. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” This guidance requires that the Consolidated Statements of Cash Flows explain the change during the reporting period of the totals of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Consolidated Statements of Cash Flows. The guidance in this standard was effective for the Company on June 1, 2018 and was applied using the retrospective transition method to each period presented. See “Impact on Previously Reported Results” section of this Item 8 for the impact to previously reported Consolidated Statements of Cash Flows related to this standard. Impact on Previously Reported Results: The provisions of ASU No. 2014-09 do not materially impact the timing or the amount of revenue the Company recognizes on an annual basis in its Consolidated Statements of Income and Comprehensive Income. However, they do have an impact on the timing and amount of revenue the Company recognizes on a quarterly basis due to changes in the way it accounts for certain revenues where performance obligations are satisfied at a point in time. The provisions of the new standard had a material impact on the Company’s Consolidated Balance Sheets. The primary impact of adopting the new standard is on the Company’s treatment of certain costs to obtain and fulfill contracts. In relation to those items, the new standard resulted in the Company deferring additional costs on its Consolidated Balance Sheets and amortizing them in the Consolidated Statements of Income and Comprehensive Income over the estimated average life of the client. Refer to Note B of this Item 8 for further details. The provisions of ASU No. 2016-18 impacted the presentation of cash equivalents and money market securities included in funds held for clients on the Company’s Consolidated Statements of Cash Flows. Historically, the Company recorded the change in cash equivalents and money market securities included in funds held for clients as Investing Activities. Under the new guidance, amounts classified as restricted cash and restricted cash equivalents are included with cash and cash equivalents in the reconciliation of total cash balances during the period. The following tables present a recast of selected Consolidated Statements of Income and Comprehensive Income line items after giving effect to the adoption of ASU No. 2014-09: For the year ended May 31, 2018 As Previously In millions, except per share amounts Reported Adjustments As Adjusted Service revenue $ 3,317.4 $ (3.2) $ 3,314.2 Operating expenses 1,017.8 0.4 1,018.2 Selling, general and administrative expenses 1,075.6 (7.6) 1,068.0 Total expenses 2,093.4 (7.2) 2,086.2 Operating income 1,287.5 4.0 1,291.5 Income taxes 362.4 (56.4) 306.0 Net income $ 933.7 $ 60.4 $ 994.1 Basic earnings per share $ 2.60 $ 0.17 $ 2.77 Diluted earnings per share $ 2.58 $ 0.17 $ 2.75 For the year ended May 31, 2017 As Previously In millions, except per share amounts Reported Adjustments As Adjusted Service revenue $ 3,100.7 $ 1.7 $ 3,102.4 Operating expenses 919.6 (0.2) 919.4 Selling, general and administrative expenses 992.1 (12.4) 979.7 Total expenses 1,911.7 (12.6) 1,899.1 Operating income 1,239.6 14.3 1,253.9 Income taxes 427.5 5.3 432.8 Net income $ 817.3 $ 9.0 $ 826.3 Basic earnings per share $ 2.27 $ 0.03 $ 2.30 Diluted earnings per share (1) $ 2.25 $ 0.02 $ 2.28 (1) Diluted earnings per share amounts may not add across by +/- $0.01 due to rounding. The following table presents a recast of selected Consolidated Balance Sheet line items after giving effect to the adoption of ASU No. 2014-09: May 31, 2018 As Previously In millions Reported Adjustments As Adjusted Assets Accounts receivable, net of allowance for doubtful accounts $ 413.6 $ (39.0) $ 374.6 PEO unbilled receivables, net of advance collections (1) $ 117.8 $ — $ 117.8 Prepaid expenses and other current assets $ 75.8 $ 148.2 $ 224.0 Long-term deferred costs (2) $ 18.5 $ 342.5 $ 361.0 Liabilities and stockholders' equity Accounts payable $ 74.5 $ (0.8) $ 73.7 Deferred revenue $ 24.3 $ 10.3 $ 34.6 Deferred income taxes $ 48.8 $ 105.6 $ 154.4 Other long-term liabilities $ 84.8 $ 4.3 $ 89.1 Retained earnings $ 930.3 $ 332.3 $ 1,262.6 (1) Amounts were previously reported as a component of accounts receivable, net of allowance for doubtful accounts included in the Company’s fiscal 2018 Form 10-K. PEO unbilled receivables, net of advance collections are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. (2) Amounts were previously reported as a component of other long-term assets on the Consolidated Balance Sheets included in the Company’s fiscal 2018 Form 10-K. Long-term deferred costs are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. The following tables present a recast of selected Consolidated Statement of Cash Flow line items after giving effect to the adoption of ASU Nos. 2014-09 and 2016-18: For the year ended May 31, 2018 ASU No. ASU No. As Previously 2014-09 2016-18 In millions Reported Adjustments Adjustments As Adjusted Cash flows from operating activities Net income $ 933.7 $ 60.4 $ — $ 994.1 Amortization of deferred contract costs $ — $ 174.7 $ — $ 174.7 Provision/(benefit) for deferred income taxes $ 19.2 $ (56.4) $ — $ (37.2) Accounts receivable and PEO unbilled receivables, net $ 13.6 $ 2.6 $ — $ 16.2 Prepaid expenses and other current assets $ 17.7 $ 0.3 $ — $ 18.0 Accounts payable and other current liabilities $ 42.6 $ 0.3 $ — $ 42.9 Deferred costs $ — $ (181.8) $ — $ (181.8) Net change in other long-term assets and lia |
Service Revenue
Service Revenue | 12 Months Ended |
May 31, 2019 | |
Service Revenue [Abstract] | |
Service Revenue | Note B — Service Revenue Service revenue is primarily attributable to fees for providing services to the Company’s clients and is recognized when control of the promised services are transferred to its clients, in an amount that reflects the consideration it expects to receive in exchange for such services. The Company’s service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. Insurance Services revenue is recognized when commissions are earned on premiums billed and collected. The Company’s contracts generally have a term of 30 days as they are cancellable at any time by either party with 30-days’ notice of termination. Sales and other applicable non-payroll related taxes are excluded from service revenue. Based upon similar operational and economic characteristics, the Company’s service revenue is disaggregated by Management Solutions and PEO and Insurance Services as reported in the Company’s Consolidated Statements of Income and Comprehensive Income. The Company believes these revenue categories depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. The following table, consistent with the Consolidated Statements of Income and Comprehensive Income, disaggregates service revenue by Management Solutions and PEO and Insurance Services: Year ended May 31, 2018 2017 In millions 2019 As Adjusted (1) As Adjusted (1) Management Solutions $ 2,877.7 $ 2,758.4 $ 2,680.7 PEO and Insurance Services 814.2 555.8 421.7 Total service revenue $ 3,691.9 $ 3,314.2 $ 3,102.4 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. Management Solutions Revenue Management Solutions revenue is primarily derived from the Company’s payroll processing, payroll-related ancillary services, and HR outsourcing solutions. Clients can select services on an á la carte basis or as part of various product bundles. The Company’s offerings often leverage the information gathered in its base payroll processing service, allowing it to provide comprehensive outsourcing services covering the HCM spectrum. Management Solutions revenue is generally recognized over time as services are performed and the customer simultaneously receives and controls the benefits from these services. Revenue earned from delivery service for the distribution of certain client payroll checks and reports is also included in Management Solutions revenue in the Company’s Consolidated Statements of Income and Comprehensive Income. Delivery service revenue is recognized at a point in time following the delivery of payroll checks, reports, quarter-end packages, and tax returns to the Company’s clients. PEO and Insurance Services Revenue PEO services are sold through the Company’s registered and licensed subsidiaries, Paychex Business Solutions, LLC, Oasis, and HROi, and offer businesses a combined package of services that includes payroll, employer compliance, HR and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained HR representative, among other services. The Company serves as a co-employer of its clients’ employees, offers health insurance coverage to client employees, and assumes the risks and rewards of workers’ compensation insurance and certain health insurance benefit offerings. PEO revenue is recognized over time as the services are performed and the customer simultaneously receives and controls the benefits from these services. PEO revenue is reported net of certain pass-through costs billed and incurred, which include payroll wages, payroll taxes, including federal and state unemployment insurance, and certain health insurance benefit premiums, primarily costs related to the Company’s guaranteed cost benefit plans. Pass-through costs for payroll wages and payroll taxes were $14.5 billion, $7.7 billion, and $5.7 billion for fiscal years 2019 , 2018 , and 2017 , respectively, which includes costs related to state unemployment insurance of $82.3 million, $47.5 million, and $34.0 million, respectively. For guaranteed cost benefit plans where the Company does not retain risk, revenues are recorded net of the premiums paid to the insurance carrier. For fiscal 2019 , 2018 , and 2017 , the pass-through costs related to our guaranteed cost benefit plans were $ 451.8 million, $ 274.2 million, and $ 224.8 million, respectively. For workers’ compensation and certain benefit plans where the Company retains risk, revenues and costs are recorded on a gross basis. Insurance services are sold through the Company’s licensed insurance agency, Paychex Insurance Agency, Inc., which provides insurance through a variety of carriers, allowing companies to expand their employee benefit offerings at an affordable cost. Insurance offerings include property and casualty coverage such as workers’ compensation, business-owner policies, and commercial auto, and health and benefits coverage, including health, dental, vision, and life. Insurance services revenue is recognized over time as services are performed and the customer simultaneously receives and controls the benefits from these services and reflects commissions e arned on insurance services premiums billed . Contract Balances The timing of revenue recognition for Management Solutions and PEO and Insurance Services is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, the Company does not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing. Advance payments received for certain of the Company’s service offerings for set-up fees are considered a material right. Therefore, the Company defers revenue associated with these performance obligations, which exceed one year, and subsequently recognizes these as future services are provided, over approximately three to four years . Changes in deferred revenue related to material right performance obligations were as follows: Year ended In millions May 31, 2019 Balance, beginning of period $ 46.4 Deferral of revenue 27.6 Recognition of unearned revenue (28.3) Balance, end of period $ 45.7 Deferred revenue related to material right performance obligations is reported in the deferred revenue and other long-term liabilities line items on the Company’s Consolidated Balance Sheets. The Company expects to recognize $22.6 million of deferred revenue related to material right performance obligations during its fiscal year ending May 31, 2020 and $23.1 million of such deferred revenue thereafter . Assets Recognized from the Costs to Obtain and Fulfill Contracts The Company recognizes an asset for the incremental costs of obtaining a contract with a client if it is expected that the amortization period will be longer than one year. The Company determined that certain selling and commission costs meet the capitalization criteria under ASC Subtopic 340-40, “Other Assets and Deferred Costs: Contracts with Customers” (“ASC 340-40”). The Company also recognizes an asset for the costs to fulfill a contract with a client if the costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. The Company has determined that substantially all costs related to implementation activities are administrative in nature and meet the capitalization criteria under ASC 340-40. These capitalized costs to fulfill a contract principally relate to upfront direct costs that are expected to be recovered and enhance the Company’s ability to satisfy future performance obligations. The assets related to both costs to obtain and costs to fulfill contracts with clients are capitalized and amortized using an accelerated method over an eight -year life to closely align with the pattern of client attrition over the estimated life of the client relationship. Deferred costs to obtain and fulfill contracts are reported in the prepaid expenses and other current assets and long-term deferred costs line items on the Company’s Consolidated Balance Sheets. Amortization expense related to costs to obtain and fulfill a contract are included in operating and selling, general, and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income. The Company regularly reviews its deferred costs for potential impairment and did no t recognize an impairment loss during the fiscal year ended May 31, 2019. Changes in deferred costs to obtain and fulfill contracts were as follows: Year ended May 31, 2019 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 455.0 $ 166.5 $ (157.2) $ 464.3 Costs to fulfill a contact $ 65.4 $ 23.7 $ (23.0) $ 66.1 |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share | 12 Months Ended |
May 31, 2019 | |
Basic and Diluted Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | Note C — Basic and Diluted Earnings Per Share Basic and diluted earnings per share were calculated as follows: Year ended May 31, 2018 2017 In millions, except per share amounts 2019 As Adjusted (1) As Adjusted (1) Basic earnings per share: Net income $ 1,034.4 $ 994.1 $ 826.3 Weighted-average common shares outstanding 359.2 359.0 359.8 Basic earnings per share $ 2.88 $ 2.77 $ 2.30 Diluted earnings per share: Net income $ 1,034.4 $ 994.1 $ 826.3 Weighted-average common shares outstanding 359.2 359.0 359.8 Dilutive effect of common share equivalents 2.6 2.5 2.8 Weighted-average common shares outstanding, assuming dilution 361.8 361.5 362.6 Diluted earnings per share $ 2.86 $ 2.75 $ 2.28 Weighted-average anti-dilutive common share equivalents 0.4 0.7 0.7 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. Weighted-average common share equivalents that had an anti-dilutive impact are excluded from the computation of diluted earnings per share. The Company maintained a program to repurchase up to $350.0 million of the Company's common stock, with authorization that expired on May 31, 201 9 . During fiscal 2019 and fiscal 2018 , the Company repurchased 0.7 million shares for $56.9 million and 2.5 million shares for $143.1 million, respectively, under this repurchase program. All shares repurchased were retired. In May 2019, the Company announced that its Board approved a program to repurchase up to $400.0 million of the Company’s common stock, with authorization running from June 1, 2019 through May 31, 2022 . The purpose of these programs is to manage common stock dilution. |
Business Combinations
Business Combinations | 12 Months Ended |
May 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Note D — Business Combinations Effective December 20, 2018 , the Company acquired Oasis. Upon closing, Oasis became a wholly owned subsidiary of the Company. Oasis is an industry leader in providing HR outsourcing services. Oasis has experienced rapid growth over the last few years through acquisition of several smaller PEOs. The purchase price was $992.2 million, net of $262.3 million in cash acquired, including $132.1 million of restricted cash. The acquisition was financed through a combination of cash on hand and the issuance of long-term private placement debt totaling $800.0 million. The results of operations for Oasis have been included in the Company's Consolidated Statements of Income and Comprehensive Income since the date of acquisition. Oasis contributed $163.7 million of total revenues and $5.1 million of operating income, including the impact of certain one-time charges related to the acquisition and integration of the Oasis business, in the Company's consolidated results of operations during fiscal 2019. The Company incurred $5.3 million of acquisition and integration costs associated with Oasis during fiscal 2019, which was included within selling, general , and administrative expenses in the Company's Consolidated Statements of Income and Comprehensive Income. The Company accounted for the acquisition as a business combination using the acquisition method of accounting in accordance with the FASB ASC Topic 805, “Business Combinations.” The acquired assets and liabilities of Oasis were recorded at their preliminary acquisition-date fair values and were consolidated with those of the Company as of the acquisition date. The final determination of these preliminary fair values is subject to completion of an assessment of the acquisition-date fair values of acquired assets and liabilities. The following preliminary acquisition-date fair values were assigned to the acquired net assets (amounts in millions): Cash and cash equivalents $ 130.2 Restricted cash 66.6 Corporate investments 8.6 Accounts receivable, net of allowance for doubtful accounts 10.7 PEO unbilled receivables, net of advance collections 209.8 Prepaid income taxes 5.8 Prepaid expenses and other current assets 6.0 Long-term restricted cash 65.5 Property and equipment 15.4 Intangible assets 310.9 Goodwill 972.1 Other long-term assets 1.8 Total Assets 1,803.4 Accounts payable 46.0 Accrued corporate compensation and related items 11.6 Accrued worksite employee compensation and related items 311.1 Other current liabilities 49.8 Deferred income taxes 51.1 Other long-term liabilities 79.3 Net Assets $ 1,254.5 The Company assigned $ 310.9 million to amortizable intangible assets, including customer lists, tradenames and trademarks, and non-compete agreements, with a weighted-average amortization period of approximately 10 years. Goodwill in the amount of $ 972.1 million was recorded as a result of the acquisition, which is not tax-deductible. Any further adjustments to goodwill (in excess of the existing tax basis) is not expected to be deductible for tax purposes. The goodwill is provisional and subject to change, pending completion of the valuation of assets acquired and liabilities assumed. Goodwill is attributable to the future economic benefits the Company expects to achieve and expected synergies to be realized when combining the operations of this acquisition into our existing operations. Pro Forma Financial Results (Unaudited): The following table summarizes the Company’s unaudited pro forma operating results for fiscal 2019 and fiscal 2018 as if the acquisition of Oasis had been consummated as of June 1, 2017. The following pro forma information does not include the impact of any costs incurred to integrate the operations: Year ended May 31, 2019 2018 Revenues $ 3,958.0 $ 3,680.5 Net income $ 1,021.7 $ 984.2 The unaudited pro forma operating results have been calculated after applying the Company’s accounting policies and include the acquisition of Oasis adjusted, net of tax, for depreciation and amortization expense resulting from the determination of preliminary fair values of the acquired property and equipment and amortizable intangible assets, the inclusion of interest expense related to borrowings used to fund the acquisition, the amortization of debt issuance costs related to the permanent financing of debt, the elimination of interest income related to available cash used for the acquisition, and the elimination of Oasis’ interest expense related to debt not assumed in the acquisition. In addition, the net income above for the fiscal year ended May 31, 2018 includes a non-recurring one-time net tax benefit for the revaluation of net deferred tax liabilities as a result of the Tax Act. Since the pro forma financial results assume the acquisition was consummated on June 1, 2017, the unaudited pro forma operating results for fiscal 2019 excluded $2.7 million ( $2.0 million, net of tax) of costs incurred by the Company related to the acquisition of Oasis. The unaudited pro forma operating results for fiscal 2018 included $2.7 million ( $1.7 million, net of tax) of costs incurred by the Company related to the acquisition of Oasis. Oasis’ fiscal year end was the Sunday closest to the calendar year end. Since Oasis and the Company had different fiscal year end dates, the unaudited pro forma operating results were prepared based on comparable periods. The pro forma financial information does not purport to be indicative of the results that would have been obtained had the transactions been completed as of June 1, 2017 for the periods presented and are not intended to be a projection of future results or trends. Effective February 28, 2018 , the Company acquired Lessor Group (“Lessor”). Upon closing, Lessor became a wholly owned subsidiary of the Company. Lessor is a market-leading provider of payroll and HCM software solutions headquartered in Denmark and serving clients in Northern Europe. The purchase price was $162.5 million, net of $13.4 million in cash acquired. Goodwill in the amount of $112.3 million was recorded as a result of the acquisition, which is not tax-deductible. Effective August 18, 2017 , the Company acquired HROi and all of its operating subsidiaries. HROi is a national PEO that provides HR solutions to small- and medium-sized businesses in more than 35 states. The acquisition expands the Company’s presence in the PEO industry. The purchase price was $75.4 million and was comprised of $42.2 million of cash plus $33.2 million issued in the form of Paychex common stock. Goodwill in the amount of $51.1 million was recorded as a result of the acquisition, which is not tax-deductible. The financial results of Lessor and HROi are included in the Company’s consolidated financial statements from the respective dates of acquisition. Subsequent adjustments made to preliminary opening balance sheet amounts before finalization for these acquisitions were immaterial. The Company concluded that these acquisitions were not material to its results of operations and financial position. Therefore, pro forma financial information has been excluded. |
Interest (Expense)_Income, Net
Interest (Expense)/Income, Net | 12 Months Ended |
May 31, 2019 | |
Interest (Expense)/Income, Net [Abstract] | |
Interest (Expense)/Income, Net | Note E — Interest (Expense)/Income, Net Interest (expense)/income, net, consisted of the following items: Year ended May 31, In millions 2019 2018 2017 Interest income on corporate funds $ 13.3 $ 11.9 $ 9.9 Interest expense (17.6) (3.9) (2.5) Net gain/(loss) from equity-method investments 1.0 0.6 (2.2) Interest (expense)/income, net $ (3.3) $ 8.6 $ 5.2 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
May 31, 2019 | |
Stock-Based Compensation Plans [Abstract] | |
Stock-Based Compensation Plans | Note F — Stock- Based Compensation Plans The Paychex, Inc. 2002 Stock Incentive Plan, as amended and restated effective on October 14, 2015 (the “2002 Plan”), authorizes grants of up to 44.1 million shares of the Company’s common stock. As of May 31, 2019 , there were 18.2 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 an increase in additional paid-in capital. Stock-based compensation expense was $46.2 million, $44.6 million, and $35.4 million for fiscal years 2019 , 2018 , and 2017 , respectively. Additional stock-based compensation expense was recognized in fiscal 2018 when the Company made a decision to maximize its tax benefit by accelerating the vesting of restricted stock units (“RSUs”) into fiscal 2018 that would have otherwise vested in August 2018. Related income tax benefits recognized were $8.9 million, $14.5 million, and $13.4 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, 2019 , the total unrecognized compensation cost related to all unvested stock-based awards was $75.6 million and is expected to be recognized over a weighted-average period of 2.7 years. Black-Scholes fair value assumptions: The fair value of stock option grants and performance stock options was estimated at the date of grant using a Black-Scholes option pricing model. The weighted-average assumptions used for valuation under the Black-Scholes option pricing model are as follows: Year ended May 31, 2019 2018 2017 Stock options Risk-free interest rate 2.9 % 2.1 % 1.2 % Dividend yield 3.5 % 3.4 % 3.6 % Volatility factor 0.18 0.17 0.18 Expected option life in years 6.1 6.1 6.1 Weighted-average grant-date fair value of stock options granted (per share) $ 8.87 $ 6.47 $ 5.74 Year ended May 31, 2019 2018 2017 Performance stock options Risk-free interest rate 2.9 % 2.4 % 1.3 % Dividend yield 3.5 % 3.3 % 3.6 % Volatility factor 0.18 0.18 0.18 Expected option life in years 6.5 6.5 6.5 Weighted-average grant-date fair value of stock options granted (per share) $ 9.02 $ 7.45 $ 5.97 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. Prior to fiscal 2018, grants of non-qualified stock options to officers vested one -quarter per annum. Beginning in fiscal 2018, grants of non-qualified stock options to officers vest one -third per annum. Grants to members of the Board vest after one year. Vesting is achieved on these dates with active employment or participation as a member of the Board on the date of vesting. The following table summarizes stock option activity for fiscal 2019 : Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2018 4.4 $ 44.60 Granted 0.6 $ 69.71 Exercised (0.7) $ 36.73 Forfeited — $ 61.31 Expired — $ 31.00 Outstanding as of May 31, 2019 4.3 $ 49.23 5.9 $ 157.1 Exercisable as of May 31, 2019 2.9 $ 42.83 4.8 $ 123.2 (1) Total shares valued at the market price of the underlying stock as of May 31, 2019 less the exercise price. Other information pertaining to stock option grants is as follows: Year ended May 31, In millions 2019 2018 2017 Total intrinsic value of stock options exercised $ 25.7 $ 9.1 $ 23.8 Total grant-date fair value of stock options vested $ 4.3 $ 4.0 $ 4.1 Restricted stock units: The Board grants RSUs to certain non-officer employees. An RSU is an agreement to issue shares at the time of vesting with no associated exercise cost for the employee. For each unit granted, the holder will receive one share of stock at the time of vesting. RSUs do not have voting rights or earn dividend equivalents during the vesting period. These awards vest one -fifth per annum over five years. The Company made a decision in fiscal 2018 to accelerate the vesting of the August 2018 tranche into fiscal 2018. The fair value of RSUs is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the vesting period. The following table summarizes RSU activity for fiscal 2019 : Weighted- Weighted- average average remaining grant-date vesting Aggregate fair value period intrinsic In millions, except per share amounts RSUs per share (years) value (1) Nonvested as of May 31, 2018 1.1 $ 48.79 Granted 0.5 $ 62.20 Vested — $ 48.28 Forfeited (0.1) $ 52.68 Nonvested as of May 31, 2019 1.5 $ 53.45 2.9 $ 127.0 (1) Intrinsic value for RSUs is based on the market price of the underlying stock as of May 31, 2019 . Other information pertaining to RSUs is as follows: Year ended May 31, In millions, except per share amounts 2019 2018 2017 Weighted-average grant-date fair value per share of RSUs granted $ 62.20 $ 51.15 $ 53.76 Total intrinsic value of RSUs vested $ 1.2 $ 60.9 $ 32.3 Total grant-date fair value of RSUs vested $ 0.8 $ 42.4 $ 19.3 Restricted stock awards: The Board has approved grants of restricted stock awards to the Company’s officers and outside directors. All shares underlying awards of restricted stock are restricted in that they are not transferable until they vest. The recipients of the restricted stock have voting rights and earn dividends, which are paid to the recipient at the time the awards vest. If the recipient leaves Paychex prior to the vesting date for any reason, the shares of restricted stock and the dividends accrued on those shares will be forfeited and returned to Paychex. Restricted stock awards granted to officers vest one -third per annum. Restricted stock awards granted to outside directors vest on the one -year anniversary of the grant date. The fair value of restricted stock awards is equal to the closing market price of the underlying common stock as of the date of grant and is expensed over the requisite service period on a straight-line basis. Vesting is achieved on these dates with active employment or participation as a member of the Board on the date of vesting. The following table summarizes restricted stock activity for fiscal 2019 : Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2018 0.1 $ 56.89 Granted 0.1 $ 69.80 Vested (0.1) $ 55.50 Forfeited — $ 69.54 Nonvested as of May 31, 2019 0.1 $ 64.32 Other information pertaining to restricted stock is as follows: Year ended May 31, In millions, except per share amounts 2019 2018 2017 Weighted-average grant-date fair value per share of restricted stock granted $ 69.80 $ 57.50 $ 60.83 Total grant-date fair value of restricted stock vested $ 3.0 $ 3.0 $ 3.0 Performance shares: Performance shares primarily have a two -year performance period, after which the amount of restricted shares earned will be determined based on achievement against established performance targets. The restricted shares earned will then be subject to a one - year service period. Performance shares do not have voting rights or earn dividend equivalents during the performance period. The fair value of performance shares is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the performance period. The following table summarizes performance share activity for fiscal 2019 : Weighted- average grant-date Performance fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2018 0.4 $ 51.53 Granted (1) 0.1 $ 65.17 Vested (0.1) $ 44.53 Forfeited — $ 58.86 Nonvested as of May 31, 2019 0.4 $ 58.09 (1) Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. Other information pertaining to performance shares is as follows: Year ended May 31, In millions, except per share amounts 2019 2018 2017 Weighted-average grant-date fair value per share of performance shares granted $ 65.17 $ 53.08 $ 54.97 Total grant-date fair value of performance shares vested $ 5.3 $ 6.6 $ 7.8 Long-term Incentive Plan (“LTIP”): In July 2011, the Board approved a special award of performance-based non-qualified stock options under an LTIP. Subsequent grants of this award were made upon hire of new officers. Under this award, stock options were granted to officers with vesting dependent on achievement against long-term strategic and financial objectives. Total stock options earned and vested were based on achievement against pre-established targets for fiscal 2016. The performance period was completed in fiscal 2016. Although the performance period was completed and the stock options were earned and vested, there are still stock options outstanding as of May 31, 2019. In July 2016, the Board approved an LTIP award comprised of both performance-based non-qualified stock options and performance-based restricted stock. This award was granted to senior executives down to the vice president level with vesting dependent on achievement against long-term strategic and financial objectives. Total stock options and restricted shares to be earned are based on achievement against pre-established targets for the fiscal year ending May 31, 2020. The following table summarizes LTIP performance stock option activity for fiscal 2019 : Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2018 2.1 $ 49.26 Granted (2) 0.1 $ 69.54 Exercised (0.2) $ 33.80 Forfeited (0.1) $ 61.37 Expired — $ — Outstanding as of May 31, 2019 1.9 $ 51.09 5.5 $ 66.5 Exercisable as of May 31, 2019 0.6 $ 31.45 2.1 $ 35.3 (1) Shares valued at the market price of the underlying stock as of May 31, 2019 less the exercise price. (2) LTIP performance stock options granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. O ther information pertaining to LTIP performance stock options is as follows: Year ended May 31, In millions 2019 2018 2017 Total intrinsic value of stock options exercised $ 8.2 $ 7.9 $ 12.4 Total grant-date fair value of stock options vested $ — $ — $ 4.9 LTIP performance-based restricted stock do not have voting rights or earn dividend equivalents during the performance period. The fair value of LTIP performance-based restricted stock is equal to the closing market price of the underlying common stock as of the date of grant, adjusted for the present value of expected dividends over the performance period. If the recipient leaves Paychex prior to the vesting date for any reason, the shares of restricted stock will be forfeited and returned to Paychex. The following table summarizes LTIP performance restricted stock activity for fiscal 2019 : Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2018 0.2 $ 53.86 Granted (1) — $ 65.17 Vested — $ — Forfeited — $ 56.03 Nonvested as of May 31, 2019 0.2 $ 54.31 (1) LTIP performance shares granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. Non-compensatory employee benefit plan: The Company offers a qualified Employee Stock Purchase Plan (“ESPP”) to all employees. The Company’s common stock can be purchased through a payroll deduction at a discount to the market price. The qualified ESPP allows for a discount of up to 15% based on the sole discretion of the committee established to administer the plan. For offering periods during fiscal 2019, fiscal 2018, and fiscal 2017 the discount was set at 5% of the market price. Transactions under the non-qualified ESPP occurred directly through the Company’s transfer agent and no brokerage fees were charged to employees. Transactions under the qualified ESPP occur through the Company’s third-party stock plan administrator. The plans have been deemed non-compensatory and therefore, no stock-based compensation costs have been recognized for fiscal years 2019 , 2018 , or 2017 related to either plan. |
Funds Held for Clients and Corp
Funds Held for Clients and Corporate Investments | 12 Months Ended |
May 31, 2019 | |
Funds Held for Clients and Corporate Investments [Abstract] | |
Funds Held for Clients and Corporate Investments | Note G — Funds Held for Clients and Corporate Investments Funds held for clients and corporate investments are as follows: May 31, 2019 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients' money market securities and other cash equivalents $ 204.5 $ — $ — $ 204.5 Available-for-sale securities: Asset-backed securities 5.3 — — 5.3 Corporate bonds 442.1 5.3 (0.9) 446.5 General obligation municipal bonds 840.6 7.5 (0.3) 847.8 Pre-refunded municipal bonds (1) 25.6 0.2 — 25.8 Revenue municipal bonds 545.4 4.7 (0.2) 549.9 U.S. government agency and treasury securities 612.5 4.7 (1.3) 615.9 Variable rate demand notes 1,129.6 — — 1,129.6 Total available-for-sale securities 3,601.1 22.4 (2.7) 3,620.8 Other 26.3 1.7 (0.3) 27.7 Total funds held for clients and corporate investments $ 3,831.9 $ 24.1 $ (3.0) $ 3,853.0 May 31, 2018 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients' money market securities and other cash equivalents $ 1,942.3 $ — $ — $ 1,942.3 Available-for-sale securities: Corporate bonds 328.6 0.1 (7.3) 321.4 General obligation municipal bonds 1,231.6 1.3 (11.2) 1,221.7 Pre-refunded municipal bonds (1) 50.9 0.1 (0.1) 50.9 Revenue municipal bonds 813.5 0.9 (8.0) 806.4 U.S. government agency and treasury securities 410.2 — (14.1) 396.1 Variable rate demand notes 308.3 — — 308.3 Total available-for-sale securities 3,143.1 2.4 (40.7) 3,104.8 Other 16.1 2.1 — 18.2 Total funds held for clients and corporate investments $ 5,101.5 $ 4.5 $ (40.7) $ 5,065.3 (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, 2019 were bank demand deposit accounts, commercial paper, and money market funds. Included in money market securities and other cash equivalents as of May 31, 2018 were bank demand deposit accounts, time deposits, commercial paper, and money market funds. Classification of investments on the Consolidated Balance Sheets is as follows: May 31, In millions 2019 2018 Funds held for clients $ 3,803.8 $ 4,703.8 Corporate investments 39.0 66.0 Long-term corporate investments 10.2 295.5 Total funds held for clients and corporate investments $ 3,853.0 $ 5,065.3 Funds held for clients’ money market securities and other cash equivalents is collected from payroll clients before due dates for payroll tax administration services and employee payment services, and is invested until remitted to the applicable tax or regulatory agencies or client employees. Based upon the Company’s intent and its contractual obligation to the client, these funds are considered restricted until they are remitted to fund these client obligations. The Company’s available-for-sale securities reflected a net unrealized gain of $19.7 million as of May 31, 2019 , compared to a net unrealized loss of $38.3 million as of May 31, 2018 . Included in the net unrealized gain as of May 31, 2019 were 269 available-for-sale securities in an unrealized loss position. Included in the net unrealized loss as of May 31, 2018 were 970 available-for-sale securities in an unrealized loss position. The available-for-sale securities in an unrealized loss position were as follows: May 31, 2019 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ — $ 1.5 $ (0.9) $ 133.8 $ (0.9) $ 135.3 General obligation municipal bonds — 3.0 (0.3) 168.3 (0.3) 171.3 Pre-refunded municipal bonds — 0.1 — 1.6 — 1.7 Revenue municipal bonds — 0.1 (0.2) 79.2 (0.2) 79.3 U.S. government agency and treasury securities — 4.7 (1.3) 175.6 (1.3) 180.3 Total $ — $ 9.4 $ (2.7) $ 558.5 $ (2.7) $ 567.9 May 31, 2018 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ (6.0) $ 271.5 $ (1.3) $ 34.6 $ (7.3) $ 306.1 General obligation municipal bonds (8.7) 856.4 (2.5) 68.9 (11.2) 925.3 Pre-refunded municipal bonds (0.1) 18.5 — 0.5 (0.1) 19.0 Revenue municipal bonds (6.3) 540.9 (1.7) 50.9 (8.0) 591.8 U.S. government agency and treasury securities (6.4) 219.7 (7.7) 176.4 (14.1) 396.1 Total $ (27.5) $ 1,907.0 $ (13.2) $ 331.3 $ (40.7) $ 2,238.3 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, 2019 that had gross unrealized losses of $2.7 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 majority of the securities in an unrealized loss position as of May 31, 2019 and May 31, 2018 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 2019 2018 2017 Gross realized gains $ 0.6 $ 0.3 $ 0.1 Gross realized losses (0.6) (0.2) — Net realized gains $ — $ 0.1 $ 0.1 The amortized cost and fair value of available-for-sale securities that had stated maturities as of May 31, 2019 are shown below by contractual maturity. Expected maturities can differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties. May 31, 2019 Amortized Fair In millions cost value Maturity date: Due in one year or less $ 183.5 $ 183.4 Due after one year through three years 898.9 903.1 Due after three years through five years 989.2 998.7 Due after five years 1,529.5 1,535.6 Total $ 3,601.1 $ 3,620.8 Variable rate demand notes are primarily categorized as due after five years in the table above as the contractual maturities on these securities are typically 20 to 30 years. Although these securities are issued as long-term securities, they are priced and traded as short-term instruments because of the liquidity provided through the tender feature. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
May 31, 2019 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note H — Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The accounting standards related to fair value measurements include a hierarchy for information and valuations used in measuring fair value that is broken down into three levels based on reliability, as follows: · Level 1 valuations are based on quoted prices in active markets for identical instruments that the Company can access at the measurement date. · Level 2 valuations are based on inputs other than quoted prices included in Level 1 that are observable for the instrument, either directly or indirectly, for substantially the full term of the asset or liability including the following: o quoted prices for similar, but not identical, instruments in active markets; o quoted prices for identical or similar instruments in markets that are not active; o inputs other than quoted prices that are observable for the instrument; or o inputs that are derived principally from or corroborated by observable market data by correlation or other means. · Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement. The carrying values of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, net of allowance for doubtful accounts, accounts payable and short-term borrowings, when used by the Company, approximate fair value due to the short maturities of these instruments. Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value on a recurring basis. The Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows: May 31, 2019 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Restricted cash equivalents: Commercial paper $ 10.0 $ — $ 10.0 $ — Money market securities 29.2 29.2 — — Total restricted cash equivalents $ 39.2 $ 29.2 $ 10.0 $ — Available-for-sale securities: Asset-backed securities $ 5.3 — $ 5.3 $ Corporate bonds 446.5 $ — 446.5 — General obligation municipal bonds 847.8 — 847.8 — Pre-refunded municipal bonds 25.8 — 25.8 — Revenue municipal bonds 549.9 — 549.9 — U.S. government agency and treasury securities 615.9 — 615.9 — Variable rate demand notes 1,129.6 — 1,129.6 — Total available-for-sale securities $ 3,620.8 $ — $ 3,620.8 $ — Other $ 27.7 $ 27.7 $ — $ — Liabilities: Other long-term liabilities $ 27.0 $ 27.0 $ — $ — May 31, 2018 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Restricted cash equivalents: Commercial paper $ 655.0 $ — $ 655.0 $ — Time deposits 200.0 — 200.0 — Money market securities 7.1 7.1 — — Total restricted cash equivalents $ 862.1 $ 7.1 $ 855.0 $ — Available-for-sale securities: Corporate bonds $ 321.4 $ — $ 321.4 $ — General obligation municipal bonds 1,221.7 — 1,221.7 — Pre-refunded municipal bonds 50.9 — 50.9 — Revenue municipal bonds 806.4 — 806.4 — U.S. government agency and treasury securities 396.1 — 396.1 — Variable rate demand notes 308.3 — 308.3 — Total available-for-sale securities $ 3,104.8 $ — $ 3,104.8 $ — Other $ 18.2 $ 18.2 $ — $ — Liabilities: Other long-term liabilities $ 18.2 $ 18.2 $ — $ — In determining the fair value of its assets and liabilities, the Company predominately uses the market approach. Money market securities, which are cash equivalents, are valued based on quoted market prices in active markets. Commercial paper and time deposits, which are cash equivalents, are considered Level 2 investments as they are valued based on similar, but not identical, instruments in active markets. Available-for-sale securities, including municipal bonds, asset-backed securities, variable rate demand notes, corporate bonds, and U.S. government agency and treasury securities, are included in Level 2 and are valued utilizing inputs obtained from an independent pricing service. To determine the fair value of the Company’s Level 2 available-for-sale securities, the independent pricing service uses a variety of inputs, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information. The Company has not adjusted the prices obtained from the independent pricing service because it believes that they are appropriately valued. Assets included as other are mutual fund investments, consisting of participants’ eligible deferral contributions under the Company’s non-qualified and unfunded deferred compensation plans. The related liability is reported as other long-term liabilities. The mutual funds are valued based on quoted market prices in active markets. The Company’s financial liabilities accounted for under historical cost but for which fair value measurements are periodically determined on a non-recurring basis were as follows: May 31, 2019 Amortized Fair In millions cost value Long-term borrowings Senior Notes, Series A $ 400.0 $ 418.4 Senior Notes, Series B 400.0 420.1 Total long-term borrowings 800.0 838.5 Less: Debt issuance costs, net of accumulated amortization (3.6) (3.6) Long-term borrowings, net of debt issuance costs $ 796.4 $ 834.9 There were no long-term borrowings outstanding as of May 31, 2018. The Company’s long-term borrowings are not traded in active markets and as a result its fair values were estimated using a market approach employing Level 2 valuation inputs, including borrowing rates the Company believes are currently available based on loans with similar terms and maturities. The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. |
Property and Equipment, Net of
Property and Equipment, Net of Accumulated Depreciation | 12 Months Ended |
May 31, 2019 | |
Property and Equipment, Net of Accumulated Depreciation [Abstract] | |
Property and Equipment, Net of Accumulated Depreciation | Note I — Property and Equipment, Net of Accumulated Depreciation The components of property and equipment, at cost, consisted of the following: May 31, In millions 2019 2018 Land and improvements $ 10.8 $ 10.6 Buildings and improvements 162.9 126.4 Data processing equipment 221.6 211.3 Software (1) 626.6 545.5 Furniture, fixtures, and equipment 117.2 114.5 Leasehold improvements 105.4 111.4 Construction in progress (1) 30.3 63.0 Total property and equipment, gross 1,274.8 1,182.7 Less: Accumulated depreciation 866.1 789.2 Property and equipment, net of accumulated depreciation $ 408.7 $ 393.5 (1) Software includes both purchased software and costs capitalized related to internally developed software placed in service. Capitalized costs related to internally developed software that has not yet been placed in service is included in construction in progress. Depreciation expense was $125.7 million, $116.9 million, and $108.8 million for fiscal years 2019 , 2018 , and 2017 , respectively. The Company has substantially completed its plan for a new multi-building Paychex campus, including the renovation of over 300,000 square feet based in Rochester, NY. The Company completed the purchase of five buildings during the three months ended November 30, 2017 for a combined cost of approximately $34.7 million and placed approximately $16.0 million in escrow for building renovations. As of May 31, 2018, the Company had $14.2 million remaining in escrow. There was no remaining balance in escrow as of May 31, 2019. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net of Accumulated Amortization | 12 Months Ended |
May 31, 2019 | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | |
Goodwill and Intangible Assets, Net of Accumulated Amortization | Note J — Goodwill and Intangible Assets, Net of Accumulated Amortization The change in goodwill for the years ended May 31, 2019 and May 31, 2018 are as follows: May 31, In millions 2019 2018 Balance, beginning of fiscal year $ 814.0 $ 657.1 Changes during the period: Goodwill acquired 972.1 162.6 Acquisition accounting adjustments 1.6 - Currency translation adjustment (5.1) (5.7) Balance, end of fiscal year $ 1,782.6 $ 814.0 Goodwill acquired in fiscal 2019 related to the December 2018 acquisition of Oasis. Goodwill acquired in fiscal 2018 related to the August 2017 acquisition of HROi and February 2018 acquisition of Lessor. Refer to Note D of this Item 8 for further details. The Company had certain intangible assets on its Consolidated Balance Sheets. The components of intangible assets, at cost, consisted of the following: May 31, In millions 2019 2018 Client lists (1) $ 608.2 $ 308.5 Other intangible assets 23.0 13.3 Total intangible assets, gross 631.2 321.8 Less: Accumulated amortization 232.1 180.4 Intangible assets, net of accumulated amortization $ 399.1 $ 141.4 (1) Client lists and other intangible assets include current estimates of amounts acquired from Oasis as of December 20, 2018. Refer to Note D of this Item 8 for further details. During fiscal 2019 , the Company acquired intangible assets with weighted-average amortization periods as follows: customer lists — 10.0 years; other intangible assets — 3.0 years ; and total — 9.7 years. Amortization expense relating to intangible assets was $55.8 million, $21.1 million, and $18.1 million for fiscal years 2019 , 2018 , and 2017 , respectively. The estimated amortization expense for the next five fiscal years relating to intangible asset balances is as follows: In millions Estimated amortization Year ending May 31, expense 2020 $ 67.1 2021 63.8 2022 57.4 2023 54.1 2024 51.7 |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note K — Income Taxes The components of deferred tax assets and liabilities are as follows: May 31, 2018 In millions 2019 As Adjusted (1) Deferred tax assets: Compensation and employee benefit liabilities $ 36.3 $ 15.0 Other current liabilities 8.8 6.5 Tax credit carry forward 0.2 0.2 Depreciation — 3.6 Stock-based compensation 17.5 11.6 Unrealized losses on available-for-sale securities — 9.2 Net operating loss ("NOL") carry forwards 10.6 5.9 Tax benefit of uncertain tax positions 5.7 3.7 Other 1.2 2.3 Gross deferred tax assets 80.3 58.0 Deferred tax liabilities: Deferred contract costs 119.7 105.6 Capitalized software 42.8 39.4 Depreciation 3.0 — Goodwill and intangible assets 127.5 49.0 Revenue not subject to current taxes 5.2 18.4 Unrealized gains on available-for-sale securities 5.2 — Gross deferred tax liabilities 303.4 212.4 Net deferred tax liability $ (223.1) $ (154.4) (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606 . The deferred tax asset related to NOL carry forward is comprised of $ 5.6 million of federal NOL carry forwards and $ 5.0 million of state NOL carry forwards. The federal NOL carry forwards were acquired through various acquisitions and expire between the fiscal years ending May 31, 2020 through May 31, 203 6 . The state NOL carry forwards expire between the fiscal years ending May 31, 20 20 through May 31, 2039 . The components of the provision for income taxes are as follows: Year ended May 31, 2018 2017 In millions 2019 As Adjusted (1) As Adjusted (1) Current: Federal $ 258.2 $ 289.1 $ 362.0 State 70.7 54.1 48.1 Total current 328.9 343.2 410.1 Deferred: Federal 0.7 (38.0) 21.2 State 4.0 0.8 1.5 Total deferred 4.7 (37.2) 22.7 Income taxes $ 333.6 $ 306.0 $ 432.8 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. 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, 2019 2018 2017 Federal statutory tax rate 21.0 % 29.2 % 35.0 % Increase/(decrease) resulting from: Statutory tax rate reduction resulting from the Tax Act — % (2.0) % — % State income taxes, net of federal tax benefit 4.3 % 3.0 % 2.8 % Section 199 - Qualified production activities — % (0.3) % (0.5) % Tax-exempt municipal bond interest (0.5) % (1.1) % (1.3) % Stock option windfall benefit (0.5) % (0.8) % (1.5) % Other items, including adoption of ASC 606 0.1 % (4.5) % (0.1) % Effective income tax rate 24.4 % 23.5 % 34.4 % The effective income tax rate for both fiscal 2019 and fiscal 2018 benefited from the enactment of the Tax Act. In addition, the effective income tax rates in all periods were impacted by recognition of net discrete tax benefits related to employee stock-based compensation payments. The Tax Act made broad and complex changes to U.S. federal corporate income taxation including, but not limited to: (i) reducing the statutory corporate tax rate from 35% to 21% (a blended statutory tax rate of 29.2% for fiscal 2018); (ii) repeal of the Section 199 qualified production activities deduction; (iii) creating new or furthering limitations to the deductibility of certain officer compensation, interest, meals, entertainment and other expenses; and (iv) changing from a worldwide to a territorial taxation system. As of May 31, 2019, the Company’s accounting for the impact of the Tax Act is complete. As a result of the Tax Act, the Company derived estimated tax benefits of $ 160.5 million, including a net tax benefit of $83.5 million related to the revaluation of the Company’s net deferred tax liabilities and a net tax benefit of $77.0 million related to the reduction in the Company’s statutory income tax rate for fiscal 2018 applied to income before taxes. These amounts totaled $0.23 per diluted share and $0.21 per diluted share, respectively. 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 taxes in Europe. The Company maintains a reserve for uncertain tax positions. As of May 31, 2019 and May 31, 2018 , the total reserve for uncertain tax positions, including interest and net of federal benefits, was $21.6 million and $14.7 million, respectively, and was included in long-term liabilities on the Consolidated Balance Sheets. A reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, not including interest or other potential offsetting effects, is as follows: Year ended May 31, In millions 2019 2018 2017 Balance as of beginning of fiscal year $ 14.9 $ 43.7 $ 64.7 Additions for tax positions of the current year 3.8 2.3 8.2 Additions for tax positions of prior years 5.2 0.1 4.8 Reductions for tax positions of prior years — (1.2) (2.5) Settlements with tax authorities (1.2) (28.6) (29.5) Expiration of the statute of limitations (0.6) (1.4) (2.0) Balance as of end of fiscal year $ 22.1 $ 14.9 $ 43.7 In December 2016, the Company executed a closing agreement that resolved tax matters related to the audits by New York State for the fiscal year ended May 31, 2012 (“fiscal 2012”) through the fiscal year ended May 31, 2014 (“fiscal 2014”). As a result, the reserve for uncertain tax positions was decreased by $28.9 million in December 2016. The resolution and execution of the closing agreement in December 2016 on the open tax matters for fiscal 2012 through fiscal 2014 had a minimal impact on the Company’s effective income tax rate for fiscal 2017. In May 2018, the Company settled its IRS examination for fiscal 2012 through fiscal 2017. As a result of the settlement, the reserve for uncertain tax positions was decreased by $27.2 million and income tax expense of $2.7 million was recorded. The reserve as of May 31, 2019 substantially relates to the Company’s uncertain tax positions for certain state income tax matters. The Company believes the reserve for uncertain tax positions, including interest and net of federal benefits, of $21.6 million as of May 31, 2019 adequately covers open tax years and uncertain tax positions up to and including fiscal 2019 for major taxing jurisdictions. As of May 31, 2019 and May 31, 2018 , the entire $21.6 million and $14.7 million, respectively, of unrecognized tax benefits, including interest and net of federal benefit, if recognized, would impact the Company’s effective income tax rate. The Company has concluded all U.S. federal income tax matters through fiscal 2017 . With limited exception, state income tax audits by taxing authorities are closed through fiscal 2014, 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 2019 , 2018 , and 2017 was immaterial to the Company’s results of operations. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income/(Loss) | 12 Months Ended |
May 31, 2019 | |
Accumulated Other Comprehensive Income/(Loss) [Abstract] | |
Accumulated Other Comprehensive Income/(Loss) | Note L — Accumulated Other Comprehensive Income/(Loss) The change in unrealized gains and losses, net of applicable taxes, related to investments in available-for-sale securities and foreign currency translation adjustments are the primary components reported in accumulated other comprehensive income/(loss) in the Company’s Consolidated Balance Sheets. The changes in accumulated other comprehensive income/(loss) are as follows: Year ended May 31, In millions 2019 2018 2017 Beginning balance $ (36.2) $ 20.0 $ 29.2 Other comprehensive income/(loss): Unrealized holding gains/(losses) 58.2 (70.2) (14.7) Income tax (expense)/benefit related to unrealized holding gains/(losses) (14.2) 22.6 5.6 Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income — — (0.1) Foreign currency translation adjustment (7.7) (8.6) — Total other comprehensive income/(loss), net of tax 36.3 (56.2) (9.2) Ending balance $ 0.1 $ (36.2) $ 20.0 Total tax expense/(benefit) included in other comprehensive income/(loss) $ 14.2 $ (22.6) $ (5.6) Reclassification adjustments out of accumulated other comprehensive income/(loss) are for realized gains and losses on the sale of available-for-sale securities and are reflected in interest on funds held for clients and interest (expense)/income on the Consolidated Statements of Income and Comprehensive Income. |
Short-term Financing
Short-term Financing | 12 Months Ended |
May 31, 2019 | |
Financing [Abstract] | |
Short-term Financing | Note M — Short-term Financing The Company maintains credit facilities and letters of credit as part of its normal and recurring business operations. Credit Facilities: The Company maintains three committed, unsecured credit facilities, as follows: Bank Borrower (1) Date Entered Expiration Date Maximum Amount Available Purpose JP Morgan Chase Bank, N.A. (2) Paychex of New York, LLC August 5, 2015 August 5, 2020 $1 Billion To meet short-term funding requirements. JP Morgan Chase Bank, N.A. (2) Paychex of New York, LLC August 17, 2017 August 17, 2022 $500 Million To meet short-term funding requirements. PNC Bank, National Association (“PNC”) Paychex Advance, LLC March 17, 2016 March 17, 2020 $150 Million To finance working capital needs and general corporate purposes. (1) Borrower is a wholly owned subsidiary of the Company. (2) JP Morgan Chase Bank, N.A. (“JPM”) acts as the administrative agent for this syndicated credit facility. For all credit facilities, obligations under any facility are guaranteed by the Company and certain of its subsidiaries and will bear interest at competitive rates based on options provided to the borrower. Upon the expiration date, any borrowings outstanding will mature and be payable on such date . JPM $1 Billion Credit Facility: There were no borrowings outstanding under this credit facility as of May 31, 2019 or May 31, 2018 . Details of borrowings under this credit facility during fiscal 2019 and fiscal 2018 are as follows: Year ended May 31, $ in millions 2019 2018 Number of days borrowed 95 22 Maximum amount borrowed $ 483.0 $ 700.0 Weighted-average amount borrowed $ 387.7 $ 319.1 Weighted-average interest rate 3.64 % 4.27 % The Company typically borrows on an overnight basis. In addition to overnight borrowings, the Company also borrowed: · Fiscal 2019 - $400.0 million for 84 day s at a weighted-average LIBOR-based interest rate of 3.45% to temporarily fund the acquisition of Oasis. This temporary borrowing was subsequently refinanced as outlined in Note N to the financial statements; · Fiscal 2018 - $100.0 million for three -day period at a weighted-average 4.25% . Subsequent to May 31, 2019 , the Company borrowed two times, on an overnight basis, $187.8 million on a weighted-average basis under this line. JPM $500 Million Credit Facility: There were no borrowings outstanding under this credit facility as of May 31, 2019 or May 31, 2018 . Details of borrowings under this credit facility during fiscal 2019 and fiscal 2018 is as follows: Year ended May 31, $ in millions 2019 2018 Number of days borrowed 92 42 Maximum amount borrowed $ 400.0 $ 400.0 Weighted-average amount borrowed $ 375.6 $ 144.8 Weighted-average interest rate 3.55 % 2.80 % The Company typically borrows on an overnight basis. In addition to overnight borrowings, the Company also borrowed: · Fiscal 2019 - $400 million for 84 days at a weighted-average LIBOR-based interest rate of 3.45% to temporarily fund the acquisition of Oasis. This temporary borrowing was subsequently refinanced as outlined in Note N to the financial statements; · Fiscal 2018 - $300.0 million for seven days and $75.0 million for 30 days at weighted average LIBOR-based interest rates of 2.13% and 2.19% , respectively. Subsequent to May 31, 2019 , the Company borrowed two times, on an overnight basis, $178.0 million on a weighted-average basis under this line. PNC $150 Million Credit Facility: There were no borrowings outstanding under this credit facility as of May 31, 2019 or May 31, 2018 . Details of borrowings under this credit facility during fiscal 2019 and fiscal 2018 are as follows: Year ended May 31, $ in millions 2019 2018 Number of days borrowed 359 358 Maximum amount borrowed $ 58.9 $ 59.9 Weighted-average amount borrowed $ 56.1 $ 57.2 Weighted-average interest rate 2.81 % 1.94 % Subsequent to May 31, 2019 , the Company borrowed approximate ly $54.9 mil lio n under this line, which remains outstanding as of the date of this report. All of the Company’s credit facilities contain various financial and operational covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of May 31, 2019 . Certain lenders under these credit facilities, and their respective affiliates, have performed, and may in the future perform for the Company, various commercial banking, investment banking, underwriting, and other financial advisory services, for which they have received, and will continue to receive in the future, customary fees and expenses. Letters of credit: The Company had irrevocable standby letters of credit outstanding totaling $148.9 million and $56.8 million as of May 31, 2019 and May 31, 2018 , respectively, required to secure commitments for certain insurance policies. The letters of credit expire at various dates between July 2019 and July 2020. No amounts were outstanding on these letters of credit during fiscal 2019 or fiscal 2018 , or as of May 31, 2019 and May 31, 2018 . Subsequent to May 31, 2019 , the letter of credit expiring in July 2019 was renewed through July 20 20. Lines of credit: Effective August 17, 2017, the Company terminated four uncommitted, secured, short-term lines of credit totaling $900.0 million. There were no amounts outstanding under these lines of credit during fiscal 2018 , or as of May 31, 2018 . The Company does not have any other open lines of credit as of the date of this report. |
Long-Term Financing
Long-Term Financing | 12 Months Ended |
May 31, 2019 | |
Financing [Abstract] | |
Long-Term Financing | Note N — Long-term Financing On March 13, 2019, the Company and its Paychex of New York LLC (“PoNY”) subsidiary completed the private placement of Senior Notes, Series A in an aggregate principal amount of $400.0 million due on March 13, 2026 , and Senior Notes, Series B in an aggregate principal amount of $400.0 million due on March 13, 2029 (collectively the “Notes”), pursuant to its Note Purchase and Guarantee Agreement (the “Agreement”) among the Company, PoNY, and the respective purchasers. Proceeds from the Notes were used to pay off $800.0 million in short-term borrowings under the Company’s JPM credit facilities used to temporarily finance the acquisition of Oasis. Long-term debt, at amortized cost, consisted of the following: May 31, In millions 2019 Senior Notes, Series A $ 400.0 Senior Notes, Series B 400.0 Total long-term borrowings 800.0 Less: Debt issuance costs, net of accumulated amortization (3.6) Long-term borrowings, net of debt issuance costs $ 796.4 There was no long-term debt outstanding as of May 31, 2018. Certain information related to the Senior Notes are as follows: Senior Notes Senior Notes Series A Series B Stated interest rate 4.07% 4.25% Effective interest rate 4.16% 4.32% Interest rate type Fixed Fixed Interest payment dates Semi-annual, in arrears Semi-annual, in arrears Principal payment dates March 13, 2026 March 13, 2029 Note type Unsecured Unsecured The effective interest rates for each note series includes the interest on the note and amortization of debt issuance costs. Payment of all amounts due with respect to the Notes and performance under the Agreement is guaranteed by the Company, PoNY and certain other subsidiaries of the Company. The Company may, at its option, prepay at any time all, or any part of, the Notes, subject to certain conditions as described in the Agreement. The Agreement contains customary representations, warranties, affirmative and negative covenants, including financial covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of May 31, 2019. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
May 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note O — Supplemental Cash Flow Information Income taxes paid were $317.9 million, $319.1 million, and $462.6 million for fiscal 2019 , 2018 , and 2017 , respectively. Interest expense paid was $10.4 million, $ 4.0 million, and $2.5 million for fiscal 2019 , 2018 , and 2017 , respectively . Lease incentives received in the form of tenant allowances and free rent were $3.5 million, $7.7 million, and $5.8 million for fiscal 2019 , 2018 , and 2017 , respectively. $33.2 million in Paychex common stock was issued in connection with the Company’s acquisition of HROi in fiscal 2018. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May 31, 2019 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note P — Employee Benefit Plans 401(k) plan: The Company maintains a contributory savings plan that qualifies under section 401(k) of the Internal Revenue Code. The Paychex, Inc. 401(k) Incentive Retirement Plan (the “Plan”) allows all employees to immediately participate in the salary deferral portion of the Plan, contributing up to a maximum of 50% of their salary, subject to Internal Revenue Service limitations. Employees who have completed one year of service and a minimum of 1,000 hours worked are eligible to receive a Company matching contribution, when such contribution is in effect. The Company provided a matching contribution of 50% of up to 8% of eligible pay that an employee contributed to the Plan through March 29, 2018. Beginning March 30, 2018, the Company provides a matching contribution of 100% of the first 3% and 50% on the next 2% of eligible pay for a total matching contribution of 4% . Company contributions to the Plan for fiscal years 2019 , 2018 , and 2017 were $29.3 million, $23.6 million, and $22.4 million, respectively. The Plan is 100% participant directed. Plan participants can fully diversify their portfolios by choosing from any or all investment fund choices in the Plan. Transfers in and out of investment funds, including the Paychex, Inc. Employee Stock Ownership Plan Stock Fund, are not restricted, with the exception of certain restricted trading periods for individuals designated as insiders as specified in the Company’s Insider Trading Policy. The Company match contribution, when in effect, follows the same fund elections as the employee compensation deferrals. Deferred compensation plans: The Company and certain subsidiaries offer 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 $27.0 million and $18.2 million as of May 31, 2019 and May 31, 2018 , respectively, and are reflected in other long-term liabilities on the accompanying Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note Q — Commitments and Contingencies Contingencies: The Company is subject to various claims and legal matters that arise in the normal course of its business. These include disputes or potential disputes related to breach of contract, tort, 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 2019 , 2018 , and 2017 was $42.9 million, $39.9 million, and $39.7 million, respectively. As of May 31, 2019 , future minimum lease payments under various non-cancelable operating leases with terms of more than one year are as follows: Minimum In millions lease Year ending May 31, payments 2020 $ 37.7 2021 29.9 2022 21.3 2023 13.8 2024 10.5 Thereafter 10.7 Other commitments: As of May 31, 2019 , the Company had outstanding commitments under purchase orders , legally binding contractual arrangements , and commitments under existing workers’ compensation insurance agreements with minimum future payment obligations of approximately $289.9 million, including $5.6 million of commitments to purchase capital assets. These minimum future payment obligations relate to the following fiscal years: Minimum In millions payment Year ending May 31, obligation 2020 $ 176.2 2021 44.8 2022 19.2 2023 11.5 2024 7.4 Thereafter 30.8 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 corporate employee benefit plans. The Company’s estimated loss exposure under these insurance arrangements is recorded in other current liabilities on the Consolidated Balance Sheets. Historically, the amounts accrued have not been material and are not material as of the reporting date. The Company also maintains insurance coverage in addition to its purchased primary insurance policies for gap coverage for employment practices liability, errors and omissions, warranty liability, theft and embezzlement, cyber threats, and acts of terrorism; and capacity for deductibles and self-insured retentions through its captive insurance company. |
Related Parties
Related Parties | 12 Months Ended |
May 31, 2019 | |
Related Parties [Abstract] | |
Related Parties | Note R — Related Parties During the fiscal years 2019, 2018, and 2017, the Company purchased approximately $2.0 million, $0.5 million, and $0.6 million, respectively, of data processing equipment and software from EMC Corporation. The former Chairman, President, and Chief Executive Officer of EMC Corporation is a member of the Company’s Board. During the fiscal years 2019 , 2018 , and 2017 , the Company purchased approximately $3.1 million, $2.7 million, and $2.9 million, respectively, of office supplies from Staples, Inc. The former Vice Chairman of Staples, Inc. is a member of the Company’s Board. During the fiscal year 2019, the Company purchased through negotiated transactions approximately $1.6 million of computer consulting and advisory services from Cognizant Technology Solutions Corporation. A board member of Cognizant Technology Solutions Corporation is a member of the Company’s Board. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
May 31, 2019 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | Note S — Quarterly Financial Data (Unaudited) In millions, except per share amounts Three Months Ended Fiscal 2019 August 31 November 30 February 28 May 31 Full Year Service revenue $ 845.7 $ 840.6 $ 1,047.4 $ 958.2 $ 3,691.9 Interest on funds held for clients 17.1 18.3 23.0 22.2 80.6 Total revenue $ 862.8 $ 858.9 $ 1,070.4 $ 980.4 $ 3,772.5 Operating income $ 320.3 $ 307.2 $ 429.3 $ 314.5 $ 1,371.3 Interest income/(expense), net 2.3 2.1 (3.7) (4.0) (3.3) Income before income taxes 322.6 309.3 425.6 310.5 1,368.0 Income taxes 79.0 73.5 101.0 80.1 333.6 Net income $ 243.6 $ 235.8 $ 324.6 $ 230.4 $ 1,034.4 Basic earnings per share (2) $ 0.68 $ 0.66 $ 0.90 $ 0.64 $ 2.88 Diluted earnings per share (2) $ 0.67 $ 0.65 $ 0.90 $ 0.64 $ 2.86 Weighted-average common shares outstanding 359.1 359.1 359.2 359.4 359.2 Weighted-average common shares outstanding, assuming dilution 361.5 361.5 361.6 362.5 361.8 Cash dividends per common share $ 0.56 $ 0.56 $ 0.56 $ 0.62 $ 2.30 Total net realized gains/(losses) (3) $ 0.1 $ (0.3) $ 0.1 $ 0.1 $ — Three Months Ended Fiscal 2018 August 31 (1) November 30 (1) February 28 (1) May 31 (1) Full Year (1) Service revenue $ 779.2 $ 789.0 $ 918.0 $ 828.0 $ 3,314.2 Interest on funds held for clients 13.7 14.0 18.1 17.7 63.5 Total revenue $ 792.9 $ 803.0 $ 936.1 $ 845.7 $ 3,377.7 Operating income $ 317.3 $ 303.1 $ 369.0 $ 302.1 $ 1,291.5 Interest income, net 2.1 1.7 2.3 2.5 8.6 Income before income taxes 319.4 304.8 371.3 304.6 1,300.1 Income taxes (4) 109.0 106.0 4.1 86.9 306.0 Net income $ 210.4 $ 198.8 $ 367.2 $ 217.7 $ 994.1 Basic earnings per share (2) $ 0.59 $ 0.55 $ 1.02 $ 0.61 $ 2.77 Diluted earnings per share (2) $ 0.58 $ 0.55 $ 1.01 $ 0.60 $ 2.75 Weighted-average common shares outstanding 358.9 359.1 359.2 359.0 359.0 Weighted-average common shares outstanding, assuming dilution 361.3 361.4 362.0 361.5 361.5 Cash dividends per common share $ 0.50 $ 0.50 $ 0.50 $ 0.56 $ 2.06 Total net realized gains (3) $ — $ — $ 0.1 $ — $ 0.1 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. (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/(losses) on the combined funds held for clients and corporate investment portfolios. (4) As a result of the Tax Act, the effective income tax rate for the three months ended February 28, 2018 was significantly impacted by certain one-time net tax benefits. Refer to Note K of this Item 8 for further details . |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
May 31, 2019 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Sch edule II — Valuation and Qualifying Accounts PAYCHEX, INC. CONSOLIDATED FINANCIAL STATEMENT SCHEDULE FOR THE YEAR ENDED MAY 31, (In millions) Additions to/ Balance as of Additions (deductions Balance as beginning charged to from) other Costs and of end Description of fiscal year expenses accounts (1) deductions (2) of fiscal year 2019 Allowance for doubtful accounts $ 7.0 $ 3.3 $ 0.7 $ 3.5 $ 7.5 Reserve for client fund losses $ 2.4 $ 3.7 $ — $ 3.4 $ 2.7 2018 Allowance for doubtful accounts $ 6.0 $ 3.6 $ — $ 2.6 $ 7.0 Reserve for client fund losses $ 3.0 $ 3.1 $ — $ 3.7 $ 2.4 2017 Allowance for doubtful accounts $ 4.2 $ 4.9 $ — $ 3.1 $ 6.0 Reserve for client fund losses $ 2.0 $ 4.1 $ — $ 3.1 $ 3.0 (1) Amounts related to business acquisitions. (2) Uncollectible amounts written off, net of recoveries. |
Description of Business, Basi_2
Description of Business, Basis of Presentation, and Significant Accounting Policies (Policy) | 12 Months Ended |
May 31, 2019 | |
Description of Business, Basis of Presentation, and Significant Accounting Policies [Abstract] | |
Description of Business | Description of business: Paychex, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Paychex”) is a leading provider of integrated human capital management (“HCM”) solutions for payroll, benefits, human resource (“HR”), retirement, and insurance services for small- to medium-sized businesses in the United States (“U.S.”). The Company also has operations in Europe. Paychex, a Delaware corporation formed in 1979 , reports as one segment. Substantially all of the Company’s revenue is generated within the U.S. The Company also generates revenue within Europe, which represented one percent of the Company's total revenue for the fiscal year ended May 31, 2019 (“fiscal 2019 ”), and less than one percent for each of the fiscal years ended May 31, 2018 (“fiscal 2018 ”) and May 31, 2017 (“fiscal 2017 ”). Long-lived assets in Europe were approximately 5% and 10% of total long-lived assets of the Company as of May 31, 2019 and May 31, 2018 , respectively. Paychex offers a comprehensive portfolio of HCM services and products that allow its clients to meet their diverse payroll and HR needs. Clients can select services on an á la carte basis or as part of various product bundles. Paychex’s offerings often leverage the information gathered in its base payroll processing service, allowing the Company to provide comprehensive outsourcing services covering the HCM spectrum. Paychex supports its small business clients utilizing its proprietary, robust, Paychex Flex ® processing platform or SurePayroll ® online application. Both products are cloud-based software-as-a-service (“SaaS”) solutions that allow users to process payroll when they want, how they want, and on any device (desktop, tablet, and mobile phone). Clients with more complex payroll and benefits needs are serviced through the Paychex Flex Enterprise solution set, which offers an integrated suite of HCM solutions through the Paychex Flex platform, or through a legacy platform. The SaaS solution through Paychex Flex Enterprise integrates payroll processing with HR management, employee benefits administration, time and labor management, applicant tracking, onboarding solutions, and performance and learning management. Paychex Flex Enterprise allows clients to choose the services and software they need to meet the complexity of their business and have them integrated through one HCM solution. Total revenue is comprised of service revenue and interest on funds held for clients. Service revenue is comprised primarily of the fees earned on the portfolio of HCM services, which include payroll processing, complementary HR management and administration services, our PEO, and insurance agency commissions. Refer to Note B of this Item 8 for further discussion of the Company’s service revenue. |
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. Certain disclosures are reported as zero balances due to rounding. Effective June 1, 2018, the Company adopted the requirements of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” and ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force),” as discussed in the “Recently adopted accounting pronouncements” section of this Item 8. All amounts and disclosures set forth in this Annual Report on Form 10-K (the “Form 10-K”) have been updated to comply with the new standards. |
Reclassifications | Reclassifications: Certain prior period amounts have been reclassified to conform to the current period presentation in connection with the adoption of ASU Nos. 2014-09 and 2016-18 and to provide further detail related to certain PEO balances, and had no material effect on reported consolidated earnings. |
Subsequent Events | Subsequent Events: On July 11, 201 9 , Paychex announced that its Board of Directors (the “Board”) declared a regular quarterly dividend of $0. 62 per share payable August 22, 2019 to shareholders of record as of August 1, 2019 . The Company has also re purchased approximately 1.0 million shares of its common stock for $84.0 million subsequent to May 31, 2019. |
Cash and Cash Equivalents | Cash and cash equivalents: Cash and cash equivalents consist of available cash, money market securities, and other investments with a maturity of 90 days or less at acquisition. Cash and cash equivalents include funds collected from the Company’s PEO clients for the payment of worksite employee payrolls and associated payroll taxes. Funds of $ 178.8 million and $44.2 million collected from PEO clients are included in cash and cash equivalents on the Company’s Consolidated Balance Sheets as of May 31, 2019 and May 31, 2018, respectively. |
Restricted Cash and Restricted Cash Equivalents | Restricted cash and restricted cash equivalents: Restricted cash and restricted cash equivalents are recorded at fair value, and consist of cash and cash equivalents, primarily money market securities, included in funds held for clients and cash that is restricted in use for the payment of workers’ compensation claims. |
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 $7.5 million and $7.0 million as of May 31, 2019 and May 31, 2018, respectively. These balances include: trade receivables for services provided to clients and purchased receivables related to payroll funding arrangements with clients in the temporary staffing industry. Trade receivables were $87. 0 million and $ 107.6 million as of May 31, 2019 and May 31, 2018, respectively. Purchased receivables were $333.5 million and $267.0 million as of May 31, 2019 and May 31, 2018, respectively. Accounts receivable are written off and charged against the allowance for doubtful accounts when the Company has exhausted all collection efforts without success. No single client had a material impact on total accounts receivable, service revenue, or results of operations. |
PEO Unbilled Receivables, Net of Advance Collections | PEO unbilled receivables, net of advance collections: The Company recognizes a liability for worksite employee gross wages and related payroll tax liabilities at the end of the period in which the worksite employee performs work. When clients’ pay per iods cross reporting periods, the Company accrue s the portion of the unpaid worksite employee payroll where it assume s , under state regulations, the obligation for the payment of wages and the corresponding payroll tax liabilities associated with the work performed prior to period-end. The estimated payroll and payroll tax liabilities are recorded in accrued worksite employee compensation and related items on the Company’s Consolidated Balance Sheets. The associated unbilled receivables, including estimated revenues, offset by advance collections from clients, are recorded as PEO unbilled receivables, net of advance collections on the Company’s Consolidated Balance Sheets . As of May 31, 2019 and May 31, 2018, advance collections included in PEO unbilled receivables, net of advance collections were $4.2 million and $17.2 million, respectively. |
Funds Held for Clients and Corporate Investments | Funds held for clients and corporate investments: Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value obtained from an independent pricing service. The funds held for clients portfolio also includes cash and cash equivalents such as money market securities. Unrealized gains and losses, net of applicable income taxes, are reported as other comprehensive income in the Consolidated Statements of Income and Comprehensive Income. Realized gains and losses on the sale of available-for-sale securities are determined by specific identification of the cost basis of each security. On the Consolidated Statements of Income and Comprehensive Income, realized gains and losses from the funds held for clients portfolio and corporate investments portfolio are included in interest on funds held for clients and interest (expense)/income, net, respectively. |
Concentrations | Concentrations: Substantially all of the Company’s deposited cash is maintained at large well-capitalized (as defined by their regulators) financial institutions. These deposits may exceed the amount of any insurance provided. All of the Company’s deliverable securities, primarily municipal bond securities, are held in custody with certain of the aforementioned financial institutions, for which that institution bears the risk of custodial loss. Non-deliverable securities are primarily time deposits and money market funds. |
Property and Equipment, Net of Accumulated Depreciation | Property and equipment, net of accumulated depreciation: Property and equipment is stated at cost, less accumulated depreciation. Depreciation is based on the estimated useful lives of property and equipment using the straight-line method. The estimated useful lives of depreciable assets are generally as follows: Category Depreciable life Buildings and improvements 10 to 35 years or the remaining life, whichever is shorter Data processing equipment Three to four years Furniture, fixtures, and equipment Two to seven years Leasehold improvements 10 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 twelve years. For software developed for internal use, certain costs are capitalized, including external direct costs of materials and services associated with developing or obtaining the software, and payroll and payroll-related costs for employees who are directly associated with internal-use software projects. Capitalization of these costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs associated with preliminary project stage activities, training, maintenance, and other post-implementation stage activities are expensed as incurred. The carrying value of software and development costs is reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. |
Goodwill and Other Intangible Assets, Net of Accumulated Amortization | Goodwill and other intangible assets, net of accumulated amortization: The Company had $ 1.8 billion and $ 814.0 million of goodwill as of May 31, 2019 and May 31, 2018 , respectively. 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. The Company performs its annual impairment testing in its fiscal fourth quarter. For fiscal 2019, it was determined that the Company has three reporting units. A qualitative analysis was performed for all reporting units in fiscal 2019, to determine if it is more-likely-than-not that the fair value of the reporting units had declined below their carrying value. The qualitative assessment considered various financial, macroeconomic, industry, and reporting unit specific qualitative factors. For fiscal 2018, a qualitative analysis was performed for all reporting units to determine if it is more-likely-than-not that the fair value of the reporting units had declined below its carrying value. During fiscal 2017, a qualitative assessment was performed on the Company’s Paychex Advance , LLC reporting unit, and for all other reporting units a quantitative analysis was performed. Based on the results of the Company’s testing, no impairment loss was recognized in the results of operations for the fiscal years 2019, 2018, or 2017. 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. Certain client lists use an accelerated method, while other intangible assets use the straight-line method of amortization. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: Long-lived assets, including intangible assets, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. The Company has determined that there was no impairment of long-lived assets for the fiscal years 2019 , 2018 , or 2017 . |
Foreign Currency | Foreign Currency : The financial statements of the Company’s foreign subsidiaries have been translated into U.S. dollars. Assets and liabilities are translated into U.S. dollars at period-end exchange rates. Income and expenses are translated at the average exchange rate for the reporting period. The resulting non-cash foreign currency translation adjustments, representing unrealized gains or losses, are included in Consolidated Statements of Stockholders’ Equity as a component of accumulated other comprehensive income/(loss) , net of tax . The Company did no t have any material realized gains or losses resulting from foreign exchange transactions during the fiscal years 2019 , 2018 , or 2017 . |
Revenue Recognition | Revenue recognition: Revenues are primarily attributable to fees for providing services as well as investment income earned on funds held for clients. Fees associated with services are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. The Company’s service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. Insurance Services revenues are recognized when commissions are earned on premiums billed and collected. Fees earned for funding of payrolls for temporary staffing agency clients via the purchase of accounts receivable are based on a percentage of funding amounts as specified in the client contract. These fees are then recognized over the average collection period of 35 to 45 days. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in service revenue, and the costs for the delivery are included in operating expenses on the Consolidated Statements of Income and Comprehensive Income. The Company receives advance payments for set-up fees from its clients. Advance payments received for certain of the Company’s service offerings for set-up fees are considered a material right. Therefore, the Company defers the revenue associated with these advance payments, recognizing the revenue and related expenses over the expected period to which the material right exists. PEO revenue is included in service revenue and is reported net of certain pass-through costs billed and incurred, which primarily include payroll wages, payroll taxes, including federal and state unemployment insurance, and certain guaranteed cost benefit premiums. Direct costs related to certain benefit plans where the Company retains risk are recognized as operating expenses rather than as a reduction in service revenue. Refer to Note B of this Item 8 for further discussion of the PEO pass-through costs. 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. |
PEO Insurance Reserves | PEO insurance reserves: As part of the PEO service, the Company offers workers’ compensation insurance and health insurance for the benefit of client employees. Workers' compensation insurance is provided under fully insured high deductible workers’ compensation insurance policies. Workers’ compensation insurance reserves are established to provide for the estimated costs of paying claims up to per occurrence liability limits. In establishing the PEO workers' compensation insurance reserves, the Company uses an independent actuarial estimate of undiscounted future cash payments that would be made to settle the claims. The Company’s maximum individual claims liability, excluding Oasis Outsourcing Group Holdings, L.P. (“Oasis”) and HR Outsourcing Holdings, Inc. (“HROi”), was $1.0 million and $ 1.3 million under its fiscal 2019 and fiscal 2018 worker s' compensation insurance policies, respectively . Oasis’ maximum individual claims liability was $ 1.0 million under its workers’ compensation insurance policies for the annual fiscal period ended May 31, 2019. HROi’s maximum individual claims liability was $ 0.8 million and $ 0.5 million under its workers’ compensation insurance policies for the annual periods ending September 30, 2019 and ended September 30, 2018, respectively. As of May 31, 2019 and May 31, 2018 , the Company had recorded current liabilities of $71.1 million and $ 19.4 million, respectively, and long-term liabilities of $99.2 million and $31.2 million, respectively, on its Consolidated Balance Sheets for workers’ compensation insurance costs. With respect to PEO health insurance, the Company offers various health insurance plans that take the form of either fully insured guaranteed 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 medical premium insurance arrangement, the Company's health benefits in surance reserves are established to provide for the payment of claims in accordance with its service contract with the carrier. The claims liability includes 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, excluding Oasis and HROi, was $0.3 million under both its calendar 2019 and 2018 minimum premium insurance plan policies. HROi’s maximum individual claims liability was $0.3 million under its minimum premium insurance policy for the annual periods ending June 30, 2019 and ended June 30, 2018. Oasis has no minimum premium insurance plan policies in effect. In addition, the Company also provides self-insured dental and vision plans to certain of its PEO clients. Amounts accrued related to the health insurance and dental and vision plan reserves were $25.4 million as of both May 31, 2019 and May 31, 2018 . These amounts are included in current liabilities on the Consolidated Balance Sheets. Estimating the ultimate cost of future claims is an uncertain and complex process based upon historical loss experience and actuarial loss projections, and is subject to change due to multiple factors, including economic trends, changes in legal liability law, and damage awards, all of which could materially impact the reserves as reported in the consolidated financial statements. Accordingly, final claim settlements may vary from the present estimates, particularly with workers' compensation insurance where those payments may not occur until well into the future. The Company regularly reviews the adequacy of its estimated insurance reserves. Adjustments to previously established reserves are reflected in the results of operations for the period in which the adjustment is identified. Such adjustments could be significant, reflecting any combination of new and adverse or favorable trends. Adjustments to previously established reserves were not material for the fiscal years 2019, 2018, or 2017. |
Stock-Based Compensation Costs | Stock-based compensation costs: All stock-based awards to employees are recognized as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. This model requires various assumptions as inputs including expected volatility of the Paychex stock price and expected option life. Volatility is estimated based on a combination of historical volatility, using stock prices over a period equal to the expected option life, and implied market volatility. Expected option life is estimated based on historical exercise behavior. The Company periodically reassesses its assumptions as well as its choice of valuation model. The Company will reconsider use of this model if additional information becomes available in the future indicating that another model would provide a more accurate estimate of fair value, or if characteristics of future grants would warrant such a change. The fair value of stock awards is determined based on the stock price at the date of grant. For grants that do not accrue dividends or dividend equivalents, the fair value is the stock price reduced by the present value of estimated dividends over the vesting period or performance period. The Company’s policy is to estimate forfeitures and only record compensation costs for those awards that are expected to vest. The assumptions for forfeitures were determined based on type of award and historical experience. Forfeiture assumptions are adjusted at the point in time a significant change is identified, with any adjustment recorded in the period of change, and the final adjustment at the end of the requisite service period to equal actual forfeitures. The assumptions of volatility, expected option life, and forfeitures all require significant judgment and are subject to change in the future due to factors such as employee exercise behavior, stock price trends, and changes to type or provisions of stock-based awards. Any material change in one or more of these assumptions could have an impact on the estimated fair value of a future award. Refer to Note F of this Item 8 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 fiscal year in which the differences are expected to reverse. Refer to Note K of this Item 8 for further discussion on deferred taxes and the tax impacts of the Tax Cuts and Jobs Act (the “Tax Act”). 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 $21.6 million as of May 31, 2019 and $14.7 million as of May 31, 2018 . Refer to Note K of this Item 8 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 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 Issued Accounting Pronouncements and Impact on Previously Reported Results | Recently adopted accounting pronouncements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This guidance, as amended by subsequent ASUs on the topic, outlines a single comprehensive model for determining revenue recognition for contracts with customers, and supersedes guidance on revenue recognition in ASC Topic 605, “Revenue Recognition.” The Company adopted the new standard on June 1, 2018, utilizing the full retrospective method, which required the Company to recast each prior reporting period presented and included a cumulative adjustment to increase stockholders’ equity by $262.9 million as of June 1, 2016. See the “Impact on Previously Reported Results” section of this Item 8 for previously reported Consolidated Financial Statements related to this standard. The Company has updated its control framework for new internal controls and made changes to existing internal controls related to the new standard. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” This guidance requires that the Consolidated Statements of Cash Flows explain the change during the reporting period of the totals of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Consolidated Statements of Cash Flows. The guidance in this standard was effective for the Company on June 1, 2018 and was applied using the retrospective transition method to each period presented. See “Impact on Previously Reported Results” section of this Item 8 for the impact to previously reported Consolidated Statements of Cash Flows related to this standard. Impact on Previously Reported Results: The provisions of ASU No. 2014-09 do not materially impact the timing or the amount of revenue the Company recognizes on an annual basis in its Consolidated Statements of Income and Comprehensive Income. However, they do have an impact on the timing and amount of revenue the Company recognizes on a quarterly basis due to changes in the way it accounts for certain revenues where performance obligations are satisfied at a point in time. The provisions of the new standard had a material impact on the Company’s Consolidated Balance Sheets. The primary impact of adopting the new standard is on the Company’s treatment of certain costs to obtain and fulfill contracts. In relation to those items, the new standard resulted in the Company deferring additional costs on its Consolidated Balance Sheets and amortizing them in the Consolidated Statements of Income and Comprehensive Income over the estimated average life of the client. Refer to Note B of this Item 8 for further details. The provisions of ASU No. 2016-18 impacted the presentation of cash equivalents and money market securities included in funds held for clients on the Company’s Consolidated Statements of Cash Flows. Historically, the Company recorded the change in cash equivalents and money market securities included in funds held for clients as Investing Activities. Under the new guidance, amounts classified as restricted cash and restricted cash equivalents are included with cash and cash equivalents in the reconciliation of total cash balances during the period. The following tables present a recast of selected Consolidated Statements of Income and Comprehensive Income line items after giving effect to the adoption of ASU No. 2014-09: For the year ended May 31, 2018 As Previously In millions, except per share amounts Reported Adjustments As Adjusted Service revenue $ 3,317.4 $ (3.2) $ 3,314.2 Operating expenses 1,017.8 0.4 1,018.2 Selling, general and administrative expenses 1,075.6 (7.6) 1,068.0 Total expenses 2,093.4 (7.2) 2,086.2 Operating income 1,287.5 4.0 1,291.5 Income taxes 362.4 (56.4) 306.0 Net income $ 933.7 $ 60.4 $ 994.1 Basic earnings per share $ 2.60 $ 0.17 $ 2.77 Diluted earnings per share $ 2.58 $ 0.17 $ 2.75 For the year ended May 31, 2017 As Previously In millions, except per share amounts Reported Adjustments As Adjusted Service revenue $ 3,100.7 $ 1.7 $ 3,102.4 Operating expenses 919.6 (0.2) 919.4 Selling, general and administrative expenses 992.1 (12.4) 979.7 Total expenses 1,911.7 (12.6) 1,899.1 Operating income 1,239.6 14.3 1,253.9 Income taxes 427.5 5.3 432.8 Net income $ 817.3 $ 9.0 $ 826.3 Basic earnings per share $ 2.27 $ 0.03 $ 2.30 Diluted earnings per share (1) $ 2.25 $ 0.02 $ 2.28 (1) Diluted earnings per share amounts may not add across by +/- $0.01 due to rounding. The following table presents a recast of selected Consolidated Balance Sheet line items after giving effect to the adoption of ASU No. 2014-09: May 31, 2018 As Previously In millions Reported Adjustments As Adjusted Assets Accounts receivable, net of allowance for doubtful accounts $ 413.6 $ (39.0) $ 374.6 PEO unbilled receivables, net of advance collections (1) $ 117.8 $ — $ 117.8 Prepaid expenses and other current assets $ 75.8 $ 148.2 $ 224.0 Long-term deferred costs (2) $ 18.5 $ 342.5 $ 361.0 Liabilities and stockholders' equity Accounts payable $ 74.5 $ (0.8) $ 73.7 Deferred revenue $ 24.3 $ 10.3 $ 34.6 Deferred income taxes $ 48.8 $ 105.6 $ 154.4 Other long-term liabilities $ 84.8 $ 4.3 $ 89.1 Retained earnings $ 930.3 $ 332.3 $ 1,262.6 (1) Amounts were previously reported as a component of accounts receivable, net of allowance for doubtful accounts included in the Company’s fiscal 2018 Form 10-K. PEO unbilled receivables, net of advance collections are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. (2) Amounts were previously reported as a component of other long-term assets on the Consolidated Balance Sheets included in the Company’s fiscal 2018 Form 10-K. Long-term deferred costs are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. The following tables present a recast of selected Consolidated Statement of Cash Flow line items after giving effect to the adoption of ASU Nos. 2014-09 and 2016-18: For the year ended May 31, 2018 ASU No. ASU No. As Previously 2014-09 2016-18 In millions Reported Adjustments Adjustments As Adjusted Cash flows from operating activities Net income $ 933.7 $ 60.4 $ — $ 994.1 Amortization of deferred contract costs $ — $ 174.7 $ — $ 174.7 Provision/(benefit) for deferred income taxes $ 19.2 $ (56.4) $ — $ (37.2) Accounts receivable and PEO unbilled receivables, net $ 13.6 $ 2.6 $ — $ 16.2 Prepaid expenses and other current assets $ 17.7 $ 0.3 $ — $ 18.0 Accounts payable and other current liabilities $ 42.6 $ 0.3 $ — $ 42.9 Deferred costs $ — $ (181.8) $ — $ (181.8) Net change in other long-term assets and liabilities $ (5.6) $ (0.1) $ — $ (5.7) Cash flows from investing activities Net change in funds held for clients' money market securities and other cash equivalents $ (1,677.5) $ — $ 1,677.5 $ — Net cash (used in)/provided by investing activities $ (679.0) $ — $ 1,677.5 $ 998.5 Net change in cash, cash equivalents, restricted cash and restricted cash equivalents $ 173.6 $ — $ 1,677.5 $ 1,851.1 Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year $ 184.6 $ — $ 264.8 $ 449.4 Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period $ 358.2 $ — $ 1,942.3 $ 2,300.5 For the year ended May 31, 2017 ASU No. ASU No. As Previously 2014-09 2016-18 In millions Reported Adjustments Adjustments As Adjusted Cash flows from operating activities Net income $ 817.3 $ 9.0 $ — $ 826.3 Amortization of deferred contract costs $ — $ 169.4 $ — $ 169.4 Provision for deferred income taxes $ 17.4 $ 5.3 $ — $ 22.7 Accounts receivable and PEO unbilled receivables, net $ (103.7) $ 0.4 $ — $ (103.3) Prepaid expenses and other current assets $ (34.1) $ 1.9 $ — $ (32.2) Accounts payable and other current liabilities $ 39.1 $ (0.9) $ — $ 38.2 Deferred costs $ — $ (185.6) $ — $ (185.6) Net change in other long-term assets and liabilities $ (15.4) $ 0.5 $ — $ (14.9) Cash flows from investing activities Net change in funds held for clients' money market securities and other cash equivalents $ 237.6 $ — $ (237.6) $ — Net cash used in investing activities $ (424.6) $ — $ (237.6) $ (662.2) Net change in cash, cash equivalents, restricted cash and restricted cash equivalents $ 53.1 $ — $ (237.6) $ (184.5) Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year $ 131.5 $ — $ 502.4 $ 633.9 Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period $ 184.6 $ — $ 264.8 $ 449.4 In June 2018, the Company also adopted the following ASUs, none of which had a material impact on its consolidated financial statements : · ASU No. 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” · ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” · ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” · ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” Recently issued accounting pronouncements: In April 2019, the FASB issued ASU No. 2019-04 “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” ASU No. 2019-04 was issued as part of the FASB’s ongoing project to improve upon its ASC, and to clarify and improve areas of guidance related to recently issued standards on credit losses, hedging and recognition and measurement. This guidance contains several effective dates, but is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606.” ASU No. 2018-18 was issued to resolve the diversity in practice concerning the manner in which entities account for transactions based on their assessment of the economics of a collaborative arrangement. This guidance is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 modifies the disclosure requirements in Topic 820, “Fair Value Measurement,” based on the FASB Concepts Statement, “Conceptual Framework for Financial Reporting – Chapter 8: Notes to Financial Statements,” including consideration of costs and benefits. This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2020. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” ASU No 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. This guidance is applicable to the Company’s fiscal year beginning June 1, 2019. The Company believes that this guidance will not have a material effect on its consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU No. 2018-02 allows entities to reclassify certain stranded income tax effects from accumulated other comprehensive income to retained earnings resulting from the Tax Act, enacted on December 22, 2017. The guidance also requires additional financial statement disclosures to clarify the effects of adoption. ASU No. 2018-02 should be applied either in the period of adoption or retrospectively to each period or periods in which the effect of the change in the U.S. federal corporate income tax rate from the Tax Act was recognized. This guidance is effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years, with early adoption permitted. This guidance is applicable to the Company’s fiscal year beginning June 1, 2019. The Company believes that this guidance will not have a material effect on its consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-08, “ Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities .” The amendments in ASU No. 2017-08 require that the premium on purchased callable debt securities be amortized to the earliest call date. The amendments do not, however, require an accounting change for securities held at a discount; instead, the discount continues to be amortized to maturity. This guidance is effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, and is applicable to the Company’s fiscal year beginning June 1, 2019. Early adoption is permitted, including adoption in an interim period. The Company believes that this guidance will not have a material effect on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairments.” ASU No. 2017-04 establishes a one-step process for testing goodwill for a decrease in value, requiring a goodwill impairment loss to be measured as the excess of the reporting unit’s carrying amount over its fair value. The guidance eliminates the second step of the current two-step process that requires the impairment to be measured as the difference between the implied value of a reporting unit’s goodwill with the goodwill’s carrying amount. ASU No. 2017-04 is effective for public entities for annual or interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual impairment tests after January 1, 2017. This guidance is applicable to the Company's fiscal year beginning June 1, 2020, and is not anticipated to have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU No. 2016-13, as amended by subsequent ASUs of the topic, requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. This guidance is applicable to the Company's fiscal year beginning June 1, 2020. The Company is currently evaluating this guidance to determine the potential impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This guidance, as amended by subsequent ASUs on the topic, improves transparency and comparability among companies by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU No. 2016-02 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. The Company will adopt and begin reporting under the new standard in its fiscal year beginning June 1, 2019, using the alternative transition method provided by the FASB in ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” Under this transition method, the Company will apply the new standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings on June 1, 2019. The Company will elect the lease vs. non-lease components practical expedient relating to the asset class of real estate, the short-term lease exemption practical expedient, and the package of practical expedients, which permits the Company to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company determined that it will not elect the practical expedient related to hindsight. The Company estimates the provisions of the new standard will result in an increase in lease-related assets and liabilities recognized on the Consolidated Balance Sheets in the range of $125.0 million to $135.0 million. The Company does not believe the standard will have a material impact on its Consolidated Statements of Income and Comprehensive Income. In connection with the adoption of this standard, the Company is updating its control framework for new internal controls related to leases that will be required, as well a s any updates to existing controls, effective with the June 1, 2019 adoption. The adoption of this standard will not have an impact on the financial covenants set forth in the Company’s credit and borrowing agreements. Other recent authoritative guidance issued by the FASB (including technical corrections to the FASB ASC), 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. |
Description of Business, Basi_3
Description of Business, Basis of Presentation, and Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2019 | |
Description of Business, Basis of Presentation, and Significant Accounting Policies [Abstract] | |
Schedule of Recast of Selected Consolidated Statements of Income and Comprehensive Income | For the year ended May 31, 2018 As Previously In millions, except per share amounts Reported Adjustments As Adjusted Service revenue $ 3,317.4 $ (3.2) $ 3,314.2 Operating expenses 1,017.8 0.4 1,018.2 Selling, general and administrative expenses 1,075.6 (7.6) 1,068.0 Total expenses 2,093.4 (7.2) 2,086.2 Operating income 1,287.5 4.0 1,291.5 Income taxes 362.4 (56.4) 306.0 Net income $ 933.7 $ 60.4 $ 994.1 Basic earnings per share $ 2.60 $ 0.17 $ 2.77 Diluted earnings per share $ 2.58 $ 0.17 $ 2.75 For the year ended May 31, 2017 As Previously In millions, except per share amounts Reported Adjustments As Adjusted Service revenue $ 3,100.7 $ 1.7 $ 3,102.4 Operating expenses 919.6 (0.2) 919.4 Selling, general and administrative expenses 992.1 (12.4) 979.7 Total expenses 1,911.7 (12.6) 1,899.1 Operating income 1,239.6 14.3 1,253.9 Income taxes 427.5 5.3 432.8 Net income $ 817.3 $ 9.0 $ 826.3 Basic earnings per share $ 2.27 $ 0.03 $ 2.30 Diluted earnings per share (1) $ 2.25 $ 0.02 $ 2.28 (1) Diluted earnings per share amounts may not add across by +/- $0.01 due to rounding. |
Schedule of Recast of Selected Consolidated Balance Sheet | May 31, 2018 As Previously In millions Reported Adjustments As Adjusted Assets Accounts receivable, net of allowance for doubtful accounts $ 413.6 $ (39.0) $ 374.6 PEO unbilled receivables, net of advance collections (1) $ 117.8 $ — $ 117.8 Prepaid expenses and other current assets $ 75.8 $ 148.2 $ 224.0 Long-term deferred costs (2) $ 18.5 $ 342.5 $ 361.0 Liabilities and stockholders' equity Accounts payable $ 74.5 $ (0.8) $ 73.7 Deferred revenue $ 24.3 $ 10.3 $ 34.6 Deferred income taxes $ 48.8 $ 105.6 $ 154.4 Other long-term liabilities $ 84.8 $ 4.3 $ 89.1 Retained earnings $ 930.3 $ 332.3 $ 1,262.6 (1) Amounts were previously reported as a component of accounts receivable, net of allowance for doubtful accounts included in the Company’s fiscal 2018 Form 10-K. PEO unbilled receivables, net of advance collections are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. (2) Amounts were previously reported as a component of other long-term assets on the Consolidated Balance Sheets included in the Company’s fiscal 2018 Form 10-K. Long-term deferred costs are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. |
Schedule of Recast of Selected Consolidated Statement of Cash Flow | For the year ended May 31, 2018 ASU No. ASU No. As Previously 2014-09 2016-18 In millions Reported Adjustments Adjustments As Adjusted Cash flows from operating activities Net income $ 933.7 $ 60.4 $ — $ 994.1 Amortization of deferred contract costs $ — $ 174.7 $ — $ 174.7 Provision/(benefit) for deferred income taxes $ 19.2 $ (56.4) $ — $ (37.2) Accounts receivable and PEO unbilled receivables, net $ 13.6 $ 2.6 $ — $ 16.2 Prepaid expenses and other current assets $ 17.7 $ 0.3 $ — $ 18.0 Accounts payable and other current liabilities $ 42.6 $ 0.3 $ — $ 42.9 Deferred costs $ — $ (181.8) $ — $ (181.8) Net change in other long-term assets and liabilities $ (5.6) $ (0.1) $ — $ (5.7) Cash flows from investing activities Net change in funds held for clients' money market securities and other cash equivalents $ (1,677.5) $ — $ 1,677.5 $ — Net cash (used in)/provided by investing activities $ (679.0) $ — $ 1,677.5 $ 998.5 Net change in cash, cash equivalents, restricted cash and restricted cash equivalents $ 173.6 $ — $ 1,677.5 $ 1,851.1 Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year $ 184.6 $ — $ 264.8 $ 449.4 Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period $ 358.2 $ — $ 1,942.3 $ 2,300.5 For the year ended May 31, 2017 ASU No. ASU No. As Previously 2014-09 2016-18 In millions Reported Adjustments Adjustments As Adjusted Cash flows from operating activities Net income $ 817.3 $ 9.0 $ — $ 826.3 Amortization of deferred contract costs $ — $ 169.4 $ — $ 169.4 Provision for deferred income taxes $ 17.4 $ 5.3 $ — $ 22.7 Accounts receivable and PEO unbilled receivables, net $ (103.7) $ 0.4 $ — $ (103.3) Prepaid expenses and other current assets $ (34.1) $ 1.9 $ — $ (32.2) Accounts payable and other current liabilities $ 39.1 $ (0.9) $ — $ 38.2 Deferred costs $ — $ (185.6) $ — $ (185.6) Net change in other long-term assets and liabilities $ (15.4) $ 0.5 $ — $ (14.9) Cash flows from investing activities Net change in funds held for clients' money market securities and other cash equivalents $ 237.6 $ — $ (237.6) $ — Net cash used in investing activities $ (424.6) $ — $ (237.6) $ (662.2) Net change in cash, cash equivalents, restricted cash and restricted cash equivalents $ 53.1 $ — $ (237.6) $ (184.5) Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year $ 131.5 $ — $ 502.4 $ 633.9 Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period $ 184.6 $ — $ 264.8 $ 449.4 |
Estimated Useful Lives of Depreciable Assets | Category Depreciable life Buildings and improvements 10 to 35 years or the remaining life, whichever is shorter Data processing equipment Three to four years Furniture, fixtures, and equipment Two to seven years Leasehold improvements 10 years or the life of the lease, whichever is shorter |
Service Revenue (Tables)
Service Revenue (Tables) | 12 Months Ended |
May 31, 2019 | |
Service Revenue [Abstract] | |
Summary of Disaggregates Revenue by Services | Year ended May 31, 2018 2017 In millions 2019 As Adjusted (1) As Adjusted (1) Management Solutions $ 2,877.7 $ 2,758.4 $ 2,680.7 PEO and Insurance Services 814.2 555.8 421.7 Total service revenue $ 3,691.9 $ 3,314.2 $ 3,102.4 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Summary of Changes in Deferred Revenue Related to Material Right Performance Obligations | Year ended In millions May 31, 2019 Balance, beginning of period $ 46.4 Deferral of revenue 27.6 Recognition of unearned revenue (28.3) Balance, end of period $ 45.7 |
Summary of Changes in Deferred Costs to Obtain and Fulfill Contracts | Year ended May 31, 2019 Beginning Capitalization Ending In millions balance of costs Amortization balance Costs to obtain a contract $ 455.0 $ 166.5 $ (157.2) $ 464.3 Costs to fulfill a contact $ 65.4 $ 23.7 $ (23.0) $ 66.1 |
Basic and Diluted Earnings Pe_2
Basic and Diluted Earnings Per Share (Tables) | 12 Months Ended |
May 31, 2019 | |
Basic and Diluted Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | Year ended May 31, 2018 2017 In millions, except per share amounts 2019 As Adjusted (1) As Adjusted (1) Basic earnings per share: Net income $ 1,034.4 $ 994.1 $ 826.3 Weighted-average common shares outstanding 359.2 359.0 359.8 Basic earnings per share $ 2.88 $ 2.77 $ 2.30 Diluted earnings per share: Net income $ 1,034.4 $ 994.1 $ 826.3 Weighted-average common shares outstanding 359.2 359.0 359.8 Dilutive effect of common share equivalents 2.6 2.5 2.8 Weighted-average common shares outstanding, assuming dilution 361.8 361.5 362.6 Diluted earnings per share $ 2.86 $ 2.75 $ 2.28 Weighted-average anti-dilutive common share equivalents 0.4 0.7 0.7 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
May 31, 2019 | |
Business Combinations [Abstract] | |
Preliminary Acquisition Date Fair Values to Acquired Net Assets | Cash and cash equivalents $ 130.2 Restricted cash 66.6 Corporate investments 8.6 Accounts receivable, net of allowance for doubtful accounts 10.7 PEO unbilled receivables, net of advance collections 209.8 Prepaid income taxes 5.8 Prepaid expenses and other current assets 6.0 Long-term restricted cash 65.5 Property and equipment 15.4 Intangible assets 310.9 Goodwill 972.1 Other long-term assets 1.8 Total Assets 1,803.4 Accounts payable 46.0 Accrued corporate compensation and related items 11.6 Accrued worksite employee compensation and related items 311.1 Other current liabilities 49.8 Deferred income taxes 51.1 Other long-term liabilities 79.3 Net Assets $ 1,254.5 |
Summary of Pro Forma Information | Year ended May 31, 2019 2018 Revenues $ 3,958.0 $ 3,680.5 Net income $ 1,021.7 $ 984.2 |
Interest (Expense)_Income, Net
Interest (Expense)/Income, Net (Tables) | 12 Months Ended |
May 31, 2019 | |
Interest (Expense)/Income, Net [Abstract] | |
Schedule of Interest (Expense)/Income, Net | Year ended May 31, In millions 2019 2018 2017 Interest income on corporate funds $ 13.3 $ 11.9 $ 9.9 Interest expense (17.6) (3.9) (2.5) Net gain/(loss) from equity-method investments 1.0 0.6 (2.2) Interest (expense)/income, net $ (3.3) $ 8.6 $ 5.2 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
May 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-Average Assumptions | Year ended May 31, 2019 2018 2017 Stock options Risk-free interest rate 2.9 % 2.1 % 1.2 % Dividend yield 3.5 % 3.4 % 3.6 % Volatility factor 0.18 0.17 0.18 Expected option life in years 6.1 6.1 6.1 Weighted-average grant-date fair value of stock options granted (per share) $ 8.87 $ 6.47 $ 5.74 Year ended May 31, 2019 2018 2017 Performance stock options Risk-free interest rate 2.9 % 2.4 % 1.3 % Dividend yield 3.5 % 3.3 % 3.6 % Volatility factor 0.18 0.18 0.18 Expected option life in years 6.5 6.5 6.5 Weighted-average grant-date fair value of stock options granted (per share) $ 9.02 $ 7.45 $ 5.97 |
Stock Option Activity | Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2018 4.4 $ 44.60 Granted 0.6 $ 69.71 Exercised (0.7) $ 36.73 Forfeited — $ 61.31 Expired — $ 31.00 Outstanding as of May 31, 2019 4.3 $ 49.23 5.9 $ 157.1 Exercisable as of May 31, 2019 2.9 $ 42.83 4.8 $ 123.2 (1) Total shares valued at the market price of the underlying stock as of May 31, 2019 less the exercise price. |
Other Information Pertaining to Stock Option | Year ended May 31, In millions 2019 2018 2017 Total intrinsic value of stock options exercised $ 25.7 $ 9.1 $ 23.8 Total grant-date fair value of stock options vested $ 4.3 $ 4.0 $ 4.1 |
RSU Activity | Weighted- Weighted- average average remaining grant-date vesting Aggregate fair value period intrinsic In millions, except per share amounts RSUs per share (years) value (1) Nonvested as of May 31, 2018 1.1 $ 48.79 Granted 0.5 $ 62.20 Vested — $ 48.28 Forfeited (0.1) $ 52.68 Nonvested as of May 31, 2019 1.5 $ 53.45 2.9 $ 127.0 (1) Intrinsic value for RSUs is based on the market price of the underlying stock as of May 31, 2019 . |
Other Information Pertaining to RSUs | Year ended May 31, In millions, except per share amounts 2019 2018 2017 Weighted-average grant-date fair value per share of RSUs granted $ 62.20 $ 51.15 $ 53.76 Total intrinsic value of RSUs vested $ 1.2 $ 60.9 $ 32.3 Total grant-date fair value of RSUs vested $ 0.8 $ 42.4 $ 19.3 |
Restricted Stock Activity | Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2018 0.1 $ 56.89 Granted 0.1 $ 69.80 Vested (0.1) $ 55.50 Forfeited — $ 69.54 Nonvested as of May 31, 2019 0.1 $ 64.32 |
Other Information Pertaining to Restricted Stock | Year ended May 31, In millions, except per share amounts 2019 2018 2017 Weighted-average grant-date fair value per share of restricted stock granted $ 69.80 $ 57.50 $ 60.83 Total grant-date fair value of restricted stock vested $ 3.0 $ 3.0 $ 3.0 |
Performance Share Activity | Weighted- average grant-date Performance fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2018 0.4 $ 51.53 Granted (1) 0.1 $ 65.17 Vested (0.1) $ 44.53 Forfeited — $ 58.86 Nonvested as of May 31, 2019 0.4 $ 58.09 (1) Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Other Information Pertaining to Performance Shares | Year ended May 31, In millions, except per share amounts 2019 2018 2017 Weighted-average grant-date fair value per share of performance shares granted $ 65.17 $ 53.08 $ 54.97 Total grant-date fair value of performance shares vested $ 5.3 $ 6.6 $ 7.8 |
Performance Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Option Activity | Weighted- Weighted- average Shares average remaining Aggregate subject exercise price contractual intrinsic In millions, except per share amounts to options per share term (years) value (1) Outstanding as of May 31, 2018 2.1 $ 49.26 Granted (2) 0.1 $ 69.54 Exercised (0.2) $ 33.80 Forfeited (0.1) $ 61.37 Expired — $ — Outstanding as of May 31, 2019 1.9 $ 51.09 5.5 $ 66.5 Exercisable as of May 31, 2019 0.6 $ 31.45 2.1 $ 35.3 (1) Shares valued at the market price of the underlying stock as of May 31, 2019 less the exercise price. (2) LTIP performance stock options granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Other Information Pertaining to Stock Option | Year ended May 31, In millions 2019 2018 2017 Total intrinsic value of stock options exercised $ 8.2 $ 7.9 $ 12.4 Total grant-date fair value of stock options vested $ — $ — $ 4.9 |
Performance-Based Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Stock Activity | Weighted- average grant-date Restricted fair value In millions, except per share amounts shares per share Nonvested as of May 31, 2018 0.2 $ 53.86 Granted (1) — $ 65.17 Vested — $ — Forfeited — $ 56.03 Nonvested as of May 31, 2019 0.2 $ 54.31 (1) LTIP performance shares granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Funds Held for Clients and Co_2
Funds Held for Clients and Corporate Investments (Tables) | 12 Months Ended |
May 31, 2019 | |
Funds Held for Clients and Corporate Investments [Abstract] | |
Funds Held for Clients and Corporate Investments | May 31, 2019 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients' money market securities and other cash equivalents $ 204.5 $ — $ — $ 204.5 Available-for-sale securities: Asset-backed securities 5.3 — — 5.3 Corporate bonds 442.1 5.3 (0.9) 446.5 General obligation municipal bonds 840.6 7.5 (0.3) 847.8 Pre-refunded municipal bonds (1) 25.6 0.2 — 25.8 Revenue municipal bonds 545.4 4.7 (0.2) 549.9 U.S. government agency and treasury securities 612.5 4.7 (1.3) 615.9 Variable rate demand notes 1,129.6 — — 1,129.6 Total available-for-sale securities 3,601.1 22.4 (2.7) 3,620.8 Other 26.3 1.7 (0.3) 27.7 Total funds held for clients and corporate investments $ 3,831.9 $ 24.1 $ (3.0) $ 3,853.0 May 31, 2018 Gross Gross Amortized unrealized unrealized Fair In millions cost gains losses value Type of issue: Funds held for clients' money market securities and other cash equivalents $ 1,942.3 $ — $ — $ 1,942.3 Available-for-sale securities: Corporate bonds 328.6 0.1 (7.3) 321.4 General obligation municipal bonds 1,231.6 1.3 (11.2) 1,221.7 Pre-refunded municipal bonds (1) 50.9 0.1 (0.1) 50.9 Revenue municipal bonds 813.5 0.9 (8.0) 806.4 U.S. government agency and treasury securities 410.2 — (14.1) 396.1 Variable rate demand notes 308.3 — — 308.3 Total available-for-sale securities 3,143.1 2.4 (40.7) 3,104.8 Other 16.1 2.1 — 18.2 Total funds held for clients and corporate investments $ 5,101.5 $ 4.5 $ (40.7) $ 5,065.3 (1) Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Classification of Investments on Consolidated Balance Sheets | May 31, In millions 2019 2018 Funds held for clients $ 3,803.8 $ 4,703.8 Corporate investments 39.0 66.0 Long-term corporate investments 10.2 295.5 Total funds held for clients and corporate investments $ 3,853.0 $ 5,065.3 |
Securities in Unrealized Loss Position | May 31, 2019 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ — $ 1.5 $ (0.9) $ 133.8 $ (0.9) $ 135.3 General obligation municipal bonds — 3.0 (0.3) 168.3 (0.3) 171.3 Pre-refunded municipal bonds — 0.1 — 1.6 — 1.7 Revenue municipal bonds — 0.1 (0.2) 79.2 (0.2) 79.3 U.S. government agency and treasury securities — 4.7 (1.3) 175.6 (1.3) 180.3 Total $ — $ 9.4 $ (2.7) $ 558.5 $ (2.7) $ 567.9 May 31, 2018 Securities in an unrealized loss position for less than twelve months Securities in an unrealized loss position for more than twelve months Total Gross Gross Gross unrealized Fair unrealized Fair unrealized Fair In millions losses value losses value losses value Type of issue: Corporate bonds $ (6.0) $ 271.5 $ (1.3) $ 34.6 $ (7.3) $ 306.1 General obligation municipal bonds (8.7) 856.4 (2.5) 68.9 (11.2) 925.3 Pre-refunded municipal bonds (0.1) 18.5 — 0.5 (0.1) 19.0 Revenue municipal bonds (6.3) 540.9 (1.7) 50.9 (8.0) 591.8 U.S. government agency and treasury securities (6.4) 219.7 (7.7) 176.4 (14.1) 396.1 Total $ (27.5) $ 1,907.0 $ (13.2) $ 331.3 $ (40.7) $ 2,238.3 |
Realized Gains and Losses from Sale of Available-for-sale Securities | Year ended May 31, In millions 2019 2018 2017 Gross realized gains $ 0.6 $ 0.3 $ 0.1 Gross realized losses (0.6) (0.2) — Net realized gains $ — $ 0.1 $ 0.1 |
Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity | May 31, 2019 Amortized Fair In millions cost value Maturity date: Due in one year or less $ 183.5 $ 183.4 Due after one year through three years 898.9 903.1 Due after three years through five years 989.2 998.7 Due after five years 1,529.5 1,535.6 Total $ 3,601.1 $ 3,620.8 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
May 31, 2019 | |
Fair Value Measurements [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | May 31, 2019 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Restricted cash equivalents: Commercial paper $ 10.0 $ — $ 10.0 $ — Money market securities 29.2 29.2 — — Total restricted cash equivalents $ 39.2 $ 29.2 $ 10.0 $ — Available-for-sale securities: Asset-backed securities $ 5.3 — $ 5.3 $ Corporate bonds 446.5 $ — 446.5 — General obligation municipal bonds 847.8 — 847.8 — Pre-refunded municipal bonds 25.8 — 25.8 — Revenue municipal bonds 549.9 — 549.9 — U.S. government agency and treasury securities 615.9 — 615.9 — Variable rate demand notes 1,129.6 — 1,129.6 — Total available-for-sale securities $ 3,620.8 $ — $ 3,620.8 $ — Other $ 27.7 $ 27.7 $ — $ — Liabilities: Other long-term liabilities $ 27.0 $ 27.0 $ — $ — May 31, 2018 Quoted Significant prices in other Significant Carrying active observable unobservable value markets inputs inputs In millions (Fair value) (Level 1) (Level 2) (Level 3) Assets: Restricted cash equivalents: Commercial paper $ 655.0 $ — $ 655.0 $ — Time deposits 200.0 — 200.0 — Money market securities 7.1 7.1 — — Total restricted cash equivalents $ 862.1 $ 7.1 $ 855.0 $ — Available-for-sale securities: Corporate bonds $ 321.4 $ — $ 321.4 $ — General obligation municipal bonds 1,221.7 — 1,221.7 — Pre-refunded municipal bonds 50.9 — 50.9 — Revenue municipal bonds 806.4 — 806.4 — U.S. government agency and treasury securities 396.1 — 396.1 — Variable rate demand notes 308.3 — 308.3 — Total available-for-sale securities $ 3,104.8 $ — $ 3,104.8 $ — Other $ 18.2 $ 18.2 $ — $ — Liabilities: Other long-term liabilities $ 18.2 $ 18.2 $ — $ — |
Financial Liabilities Measured at Fair Value on Non-Recurring Basis | May 31, 2019 Amortized Fair In millions cost value Long-term borrowings Senior Notes, Series A $ 400.0 $ 418.4 Senior Notes, Series B 400.0 420.1 Total long-term borrowings 800.0 838.5 Less: Debt issuance costs, net of accumulated amortization (3.6) (3.6) Long-term borrowings, net of debt issuance costs $ 796.4 $ 834.9 |
Property and Equipment, Net o_2
Property and Equipment, Net of Accumulated Depreciation (Tables) | 12 Months Ended |
May 31, 2019 | |
Property and Equipment, Net of Accumulated Depreciation [Abstract] | |
Components of Property and Equipment, at Cost | May 31, In millions 2019 2018 Land and improvements $ 10.8 $ 10.6 Buildings and improvements 162.9 126.4 Data processing equipment 221.6 211.3 Software (1) 626.6 545.5 Furniture, fixtures, and equipment 117.2 114.5 Leasehold improvements 105.4 111.4 Construction in progress (1) 30.3 63.0 Total property and equipment, gross 1,274.8 1,182.7 Less: Accumulated depreciation 866.1 789.2 Property and equipment, net of accumulated depreciation $ 408.7 $ 393.5 (1) Software includes both purchased software and costs capitalized related to internally developed software placed in service. Capitalized costs related to internally developed software that has not yet been placed in service is included in construction in progress. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net of Accumulated Amortization (Tables) | 12 Months Ended |
May 31, 2019 | |
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | |
Change in Goodwill | May 31, In millions 2019 2018 Balance, beginning of fiscal year $ 814.0 $ 657.1 Changes during the period: Goodwill acquired 972.1 162.6 Acquisition accounting adjustments 1.6 - Currency translation adjustment (5.1) (5.7) Balance, end of fiscal year $ 1,782.6 $ 814.0 |
Components of Intangible Assets, at Cost | May 31, In millions 2019 2018 Client lists (1) $ 608.2 $ 308.5 Other intangible assets 23.0 13.3 Total intangible assets, gross 631.2 321.8 Less: Accumulated amortization 232.1 180.4 Intangible assets, net of accumulated amortization $ 399.1 $ 141.4 (1) Client lists and other intangible assets include current estimates of amounts acquired from Oasis as of December 20, 2018. Refer to Note D of this Item 8 for further details. |
Estimated Amortization Expense | In millions Estimated amortization Year ending May 31, expense 2020 $ 67.1 2021 63.8 2022 57.4 2023 54.1 2024 51.7 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2019 | |
Income Taxes [Abstract] | |
Components of Deferred Tax Assets and Liabilities | May 31, 2018 In millions 2019 As Adjusted (1) Deferred tax assets: Compensation and employee benefit liabilities $ 36.3 $ 15.0 Other current liabilities 8.8 6.5 Tax credit carry forward 0.2 0.2 Depreciation — 3.6 Stock-based compensation 17.5 11.6 Unrealized losses on available-for-sale securities — 9.2 Net operating loss ("NOL") carry forwards 10.6 5.9 Tax benefit of uncertain tax positions 5.7 3.7 Other 1.2 2.3 Gross deferred tax assets 80.3 58.0 Deferred tax liabilities: Deferred contract costs 119.7 105.6 Capitalized software 42.8 39.4 Depreciation 3.0 — Goodwill and intangible assets 127.5 49.0 Revenue not subject to current taxes 5.2 18.4 Unrealized gains on available-for-sale securities 5.2 — Gross deferred tax liabilities 303.4 212.4 Net deferred tax liability $ (223.1) $ (154.4) (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606 . |
Components of Provision for Income Taxes | Year ended May 31, 2018 2017 In millions 2019 As Adjusted (1) As Adjusted (1) Current: Federal $ 258.2 $ 289.1 $ 362.0 State 70.7 54.1 48.1 Total current 328.9 343.2 410.1 Deferred: Federal 0.7 (38.0) 21.2 State 4.0 0.8 1.5 Total deferred 4.7 (37.2) 22.7 Income taxes $ 333.6 $ 306.0 $ 432.8 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Reconciliation of U.S. Federal Statutory Tax Rate | Year ended May 31, 2019 2018 2017 Federal statutory tax rate 21.0 % 29.2 % 35.0 % Increase/(decrease) resulting from: Statutory tax rate reduction resulting from the Tax Act — % (2.0) % — % State income taxes, net of federal tax benefit 4.3 % 3.0 % 2.8 % Section 199 - Qualified production activities — % (0.3) % (0.5) % Tax-exempt municipal bond interest (0.5) % (1.1) % (1.3) % Stock option windfall benefit (0.5) % (0.8) % (1.5) % Other items, including adoption of ASC 606 0.1 % (4.5) % (0.1) % Effective income tax rate 24.4 % 23.5 % 34.4 % |
Reconciliation of Gross Unrecognized Tax Benefits, Not Including Interest or Other Potential Offsetting Effects | Year ended May 31, In millions 2019 2018 2017 Balance as of beginning of fiscal year $ 14.9 $ 43.7 $ 64.7 Additions for tax positions of the current year 3.8 2.3 8.2 Additions for tax positions of prior years 5.2 0.1 4.8 Reductions for tax positions of prior years — (1.2) (2.5) Settlements with tax authorities (1.2) (28.6) (29.5) Expiration of the statute of limitations (0.6) (1.4) (2.0) Balance as of end of fiscal year $ 22.1 $ 14.9 $ 43.7 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income/(Loss) (Tables) | 12 Months Ended |
May 31, 2019 | |
Accumulated Other Comprehensive Income/(Loss) [Abstract] | |
Changes in Accumulated Other Comprehensive Income/(Loss) | Year ended May 31, In millions 2019 2018 2017 Beginning balance $ (36.2) $ 20.0 $ 29.2 Other comprehensive income/(loss): Unrealized holding gains/(losses) 58.2 (70.2) (14.7) Income tax (expense)/benefit related to unrealized holding gains/(losses) (14.2) 22.6 5.6 Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income — — (0.1) Foreign currency translation adjustment (7.7) (8.6) — Total other comprehensive income/(loss), net of tax 36.3 (56.2) (9.2) Ending balance $ 0.1 $ (36.2) $ 20.0 Total tax expense/(benefit) included in other comprehensive income/(loss) $ 14.2 $ (22.6) $ (5.6) |
Short-term Financing (Tables)
Short-term Financing (Tables) - Revolving Credit Facility [Member] | 12 Months Ended |
May 31, 2019 | |
Line of Credit Facility [Line Items] | |
Description of Credit Facilities | Bank Borrower (1) Date Entered Expiration Date Maximum Amount Available Purpose JP Morgan Chase Bank, N.A. (2) Paychex of New York, LLC August 5, 2015 August 5, 2020 $1 Billion To meet short-term funding requirements. JP Morgan Chase Bank, N.A. (2) Paychex of New York, LLC August 17, 2017 August 17, 2022 $500 Million To meet short-term funding requirements. PNC Bank, National Association (“PNC”) Paychex Advance, LLC March 17, 2016 March 17, 2020 $150 Million To finance working capital needs and general corporate purposes. (1) Borrower is a wholly owned subsidiary of the Company. (2) JP Morgan Chase Bank, N.A. (“JPM”) acts as the administrative agent for this syndicated credit facility. |
JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | |
Line of Credit Facility [Line Items] | |
Credit Facility Amount Borrowed | Year ended May 31, $ in millions 2019 2018 Number of days borrowed 95 22 Maximum amount borrowed $ 483.0 $ 700.0 Weighted-average amount borrowed $ 387.7 $ 319.1 Weighted-average interest rate 3.64 % 4.27 % |
JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | |
Line of Credit Facility [Line Items] | |
Credit Facility Amount Borrowed | Year ended May 31, $ in millions 2019 2018 Number of days borrowed 92 42 Maximum amount borrowed $ 400.0 $ 400.0 Weighted-average amount borrowed $ 375.6 $ 144.8 Weighted-average interest rate 3.55 % 2.80 % |
PNC $150 Million Credit Facility [Member] | PNC Bank, National Association [Member] | |
Line of Credit Facility [Line Items] | |
Credit Facility Amount Borrowed | Year ended May 31, $ in millions 2019 2018 Number of days borrowed 359 358 Maximum amount borrowed $ 58.9 $ 59.9 Weighted-average amount borrowed $ 56.1 $ 57.2 Weighted-average interest rate 2.81 % 1.94 % |
Long-Term Financing (Tables)
Long-Term Financing (Tables) | 12 Months Ended |
May 31, 2019 | |
Financing [Abstract] | |
Schedule Of Long-Term Debt | Long-term debt, at amortized cost, consisted of the following: May 31, In millions 2019 Senior Notes, Series A $ 400.0 Senior Notes, Series B 400.0 Total long-term borrowings 800.0 Less: Debt issuance costs, net of accumulated amortization (3.6) Long-term borrowings, net of debt issuance costs $ 796.4 There was no long-term debt outstanding as of May 31, 2018. Certain information related to the Senior Notes are as follows: Senior Notes Senior Notes Series A Series B Stated interest rate 4.07% 4.25% Effective interest rate 4.16% 4.32% Interest rate type Fixed Fixed Interest payment dates Semi-annual, in arrears Semi-annual, in arrears Principal payment dates March 13, 2026 March 13, 2029 Note type Unsecured Unsecured |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Operating Lease Payments | Minimum In millions lease Year ending May 31, payments 2020 $ 37.7 2021 29.9 2022 21.3 2023 13.8 2024 10.5 Thereafter 10.7 |
Minimum Future Payment Obligations | Minimum In millions payment Year ending May 31, obligation 2020 $ 176.2 2021 44.8 2022 19.2 2023 11.5 2024 7.4 Thereafter 30.8 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
May 31, 2019 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | Three Months Ended Fiscal 2019 August 31 November 30 February 28 May 31 Full Year Service revenue $ 845.7 $ 840.6 $ 1,047.4 $ 958.2 $ 3,691.9 Interest on funds held for clients 17.1 18.3 23.0 22.2 80.6 Total revenue $ 862.8 $ 858.9 $ 1,070.4 $ 980.4 $ 3,772.5 Operating income $ 320.3 $ 307.2 $ 429.3 $ 314.5 $ 1,371.3 Interest income/(expense), net 2.3 2.1 (3.7) (4.0) (3.3) Income before income taxes 322.6 309.3 425.6 310.5 1,368.0 Income taxes 79.0 73.5 101.0 80.1 333.6 Net income $ 243.6 $ 235.8 $ 324.6 $ 230.4 $ 1,034.4 Basic earnings per share (2) $ 0.68 $ 0.66 $ 0.90 $ 0.64 $ 2.88 Diluted earnings per share (2) $ 0.67 $ 0.65 $ 0.90 $ 0.64 $ 2.86 Weighted-average common shares outstanding 359.1 359.1 359.2 359.4 359.2 Weighted-average common shares outstanding, assuming dilution 361.5 361.5 361.6 362.5 361.8 Cash dividends per common share $ 0.56 $ 0.56 $ 0.56 $ 0.62 $ 2.30 Total net realized gains/(losses) (3) $ 0.1 $ (0.3) $ 0.1 $ 0.1 $ — Three Months Ended Fiscal 2018 August 31 (1) November 30 (1) February 28 (1) May 31 (1) Full Year (1) Service revenue $ 779.2 $ 789.0 $ 918.0 $ 828.0 $ 3,314.2 Interest on funds held for clients 13.7 14.0 18.1 17.7 63.5 Total revenue $ 792.9 $ 803.0 $ 936.1 $ 845.7 $ 3,377.7 Operating income $ 317.3 $ 303.1 $ 369.0 $ 302.1 $ 1,291.5 Interest income, net 2.1 1.7 2.3 2.5 8.6 Income before income taxes 319.4 304.8 371.3 304.6 1,300.1 Income taxes (4) 109.0 106.0 4.1 86.9 306.0 Net income $ 210.4 $ 198.8 $ 367.2 $ 217.7 $ 994.1 Basic earnings per share (2) $ 0.59 $ 0.55 $ 1.02 $ 0.61 $ 2.77 Diluted earnings per share (2) $ 0.58 $ 0.55 $ 1.01 $ 0.60 $ 2.75 Weighted-average common shares outstanding 358.9 359.1 359.2 359.0 359.0 Weighted-average common shares outstanding, assuming dilution 361.3 361.4 362.0 361.5 361.5 Cash dividends per common share $ 0.50 $ 0.50 $ 0.50 $ 0.56 $ 2.06 Total net realized gains (3) $ — $ — $ 0.1 $ — $ 0.1 (1) Amounts have been adjusted to reflect the adoption of ASC Topic 606. (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/(losses) on the combined funds held for clients and corporate investment portfolios. (4) As a result of the Tax Act, the effective income tax rate for the three months ended February 28, 2018 was significantly impacted by certain one-time net tax benefits. Refer to Note K of this Item 8 for further details . |
Description of Business, Basi_4
Description of Business, Basis of Presentation, and Significant Accounting Policies (Narrative) (Details) $ / shares in Units, shares in Millions, $ in Millions | Jul. 11, 2019$ / shares | Jun. 01, 2019USD ($)shares | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | May 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | May 31, 2018USD ($) | May 31, 2017USD ($) | Dec. 20, 2018USD ($) | Aug. 18, 2017USD ($) | Jun. 01, 2016USD ($) | ||
Accounting Policies [Line Items] | ||||||||||||||||
Number of reportable segments | segment | 1 | |||||||||||||||
Cash and cash equivalents | $ 673.6 | $ 358.2 | [1],[2],[3] | $ 184.6 | [2],[3] | |||||||||||
Allowance for doubtful accounts | 7.5 | 7 | ||||||||||||||
Advance collections | 4.2 | 17.2 | ||||||||||||||
Goodwill | 1,782.6 | 814 | [1] | 657.1 | ||||||||||||
Goodwill impairment loss | 0 | 0 | 0 | |||||||||||||
Impairment of long-lived assets | 0 | 0 | 0 | |||||||||||||
Realized gains or losses from foreign exchange transactions | 0 | 0 | 0 | |||||||||||||
Maximum individual workers' compensation claims liability | 1 | 1.3 | ||||||||||||||
Workers' compensation insurance costs in current liabilities | 71.1 | 19.4 | ||||||||||||||
Workers' compensation insurance costs in long-term liabilities | 99.2 | 31.2 | ||||||||||||||
Maximum individual health insurance claims liability | $ 0.3 | $ 0.3 | ||||||||||||||
PEO accrued health insurance and dental and vision plan reserves in current liabilities | 25.4 | 25.4 | ||||||||||||||
Reserve for uncertain tax positions | 21.6 | 14.7 | ||||||||||||||
Cumulative adjustment to increase stockholder's equity | $ 262.9 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Declared date | Jul. 11, 2019 | |||||||||||||||
Quarterly dividend per share | $ / shares | $ 0.62 | |||||||||||||||
Payable date | Aug. 22, 2019 | |||||||||||||||
Record date | Aug. 1, 2019 | |||||||||||||||
Common stock purchased, shares | shares | 1 | |||||||||||||||
Common stock purchased, value | $ 84 | |||||||||||||||
ASU 2014-09 [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Cumulative adjustment to increase stockholder's equity | $ 262.9 | |||||||||||||||
Trade Receivables [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Receivables | 87 | 107.6 | ||||||||||||||
Purchased Receivables [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Receivables | $ 333.5 | $ 267 | ||||||||||||||
Software Development [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful lives | 12 years | |||||||||||||||
Minimum [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Payroll funding fees average collection period | 35 days | |||||||||||||||
Minimum [Member] | ASU 2016-02 [Member] | Subsequent Event [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Estimates increase in lease-related assets and liabilities | 125 | |||||||||||||||
Minimum [Member] | Finite Lived Assets [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Amortization period | 3 years | |||||||||||||||
Minimum [Member] | Software [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful lives | 3 years | |||||||||||||||
Maximum [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Short-term investments maturity at acquisition | 90 days | |||||||||||||||
Payroll funding fees average collection period | 45 days | |||||||||||||||
Maximum [Member] | ASU 2016-02 [Member] | Subsequent Event [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Estimates increase in lease-related assets and liabilities | $ 135 | |||||||||||||||
Maximum [Member] | Finite Lived Assets [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Amortization period | 12 years | |||||||||||||||
Maximum [Member] | Software [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Estimated useful lives | 5 years | |||||||||||||||
Oasis Outsourcing Group Holdings, L.P. [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Goodwill | $ 972.1 | |||||||||||||||
Maximum individual workers' compensation claims liability | $ 1 | |||||||||||||||
HR Outsourcing Holdings, Inc. [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Goodwill | $ 51.1 | |||||||||||||||
Maximum individual workers' compensation claims liability | $ 0.8 | $ 0.5 | ||||||||||||||
Maximum individual health insurance claims liability | $ 0.3 | $ 0.3 | ||||||||||||||
Europe [Member] | Revenue [Member] | Geographic Concentration Risk [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Total percentage | 1.00% | |||||||||||||||
Europe [Member] | Revenue [Member] | Geographic Concentration Risk [Member] | Maximum [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Total percentage | 1.00% | 1.00% | ||||||||||||||
Europe [Member] | Long Lived Assets [Member] | Geographic Concentration Risk [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Total percentage | 5.00% | 10.00% | ||||||||||||||
PEO And Insurance Services [Member] | ||||||||||||||||
Accounting Policies [Line Items] | ||||||||||||||||
Cash and cash equivalents | $ 178.8 | $ 44.2 | ||||||||||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. | |||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." |
Description of Business, Basi_5
Description of Business, Basis of Presentation, and Significant Accounting Policies (Estimated Useful Lives of Depreciable Assets) (Details) | 12 Months Ended |
May 31, 2019 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Minimum [Member] | Buildings and Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Minimum [Member] | Data Processing Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Minimum [Member] | Furniture, Fixtures, and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 2 years |
Maximum [Member] | Buildings and Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 35 years |
Maximum [Member] | Data Processing Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 4 years |
Maximum [Member] | Furniture, Fixtures, and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Description of Business, Basi_6
Description of Business, Basis of Presentation, and Significant Accounting Policies (Schedule of Recast of Selected Consolidated Statements of Income and Comprehensive Income) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | [1] | Feb. 28, 2018 | [1] | Nov. 30, 2017 | [1] | Aug. 31, 2017 | [1] | May 31, 2019 | May 31, 2018 | May 31, 2017 | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||
Service revenue | $ 958.2 | $ 1,047.4 | $ 840.6 | $ 845.7 | $ 828 | $ 918 | $ 789 | $ 779.2 | $ 3,691.9 | $ 3,314.2 | [1],[2] | $ 3,102.4 | [2],[3] | |||||||||
Operating expenses | 1,177.8 | 1,018.2 | [2] | 919.4 | [2] | |||||||||||||||||
Selling, general and administrative expenses | 1,223.4 | 1,068 | [2] | 979.7 | [2] | |||||||||||||||||
Total expenses | 2,401.2 | 2,086.2 | [2] | 1,899.1 | [2] | |||||||||||||||||
Operating income | 314.5 | 429.3 | 307.2 | 320.3 | 302.1 | 369 | 303.1 | 317.3 | 1,371.3 | 1,291.5 | [1],[2] | 1,253.9 | [2] | |||||||||
Income taxes | 80.1 | 101 | 73.5 | 79 | 86.9 | [4] | 4.1 | [4] | 106 | [4] | 109 | [4] | 333.6 | 306 | [1],[2],[4] | 432.8 | [2],[5] | |||||
Net income | $ 230.4 | $ 324.6 | $ 235.8 | $ 243.6 | $ 217.7 | $ 367.2 | $ 198.8 | $ 210.4 | $ 1,034.4 | $ 994.1 | [1],[2],[6] | $ 826.3 | [2],[3],[6] | |||||||||
Basic earnings per share | $ 0.64 | [7] | $ 0.90 | [7] | $ 0.66 | [7] | $ 0.68 | [7] | $ 0.61 | [7] | $ 1.02 | [7] | $ 0.55 | [7] | $ 0.59 | [7] | $ 2.88 | [7] | $ 2.77 | [1],[2],[7] | $ 2.30 | [2],[3] |
Diluted earnings per share | $ 0.64 | [7] | $ 0.90 | [7] | $ 0.65 | [7] | $ 0.67 | [7] | $ 0.60 | [7] | $ 1.01 | [7] | $ 0.55 | [7] | $ 0.58 | [7] | $ 2.86 | [7] | $ 2.75 | [1],[2],[7] | 2.28 | [2],[3],[8] |
Impact diluted earnings per share amount +/- due to rounding | $ 0.01 | |||||||||||||||||||||
As Previously Reported [Member] | ||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||
Service revenue | $ 3,317.4 | $ 3,100.7 | ||||||||||||||||||||
Operating expenses | 1,017.8 | 919.6 | ||||||||||||||||||||
Selling, general and administrative expenses | 1,075.6 | 992.1 | ||||||||||||||||||||
Total expenses | 2,093.4 | 1,911.7 | ||||||||||||||||||||
Operating income | 1,287.5 | 1,239.6 | ||||||||||||||||||||
Income taxes | 362.4 | 427.5 | ||||||||||||||||||||
Net income | $ 933.7 | $ 817.3 | ||||||||||||||||||||
Basic earnings per share | $ 2.60 | $ 2.27 | ||||||||||||||||||||
Diluted earnings per share | $ 2.58 | $ 2.25 | [8] | |||||||||||||||||||
Adjustments [Member] | ASU 2014-09 [Member] | ||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||
Service revenue | $ (3.2) | $ 1.7 | ||||||||||||||||||||
Operating expenses | 0.4 | (0.2) | ||||||||||||||||||||
Selling, general and administrative expenses | (7.6) | (12.4) | ||||||||||||||||||||
Total expenses | (7.2) | (12.6) | ||||||||||||||||||||
Operating income | 4 | 14.3 | ||||||||||||||||||||
Income taxes | (56.4) | 5.3 | ||||||||||||||||||||
Net income | $ 60.4 | $ 9 | ||||||||||||||||||||
Basic earnings per share | $ 0.17 | $ 0.03 | ||||||||||||||||||||
Diluted earnings per share | $ 0.17 | $ 0.02 | [8] | |||||||||||||||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | |||||||||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[4] | As a result of the Tax Act, the effective income tax rate for the three months ended February 28, 2018 was significantly impacted by certain one-time net tax benefits. Refer to Note K of this Item 8 for further details. | |||||||||||||||||||||
[5] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[6] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | |||||||||||||||||||||
[7] | 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. | |||||||||||||||||||||
[8] | Diluted earnings per share amounts may not add across by +/- $0.01 due to rounding. |
Description of Business, Basi_7
Description of Business, Basis of Presentation, and Significant Accounting Policies (Schedule of Recast of Selected Consolidated Balance Sheet) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 | ||
Assets | ||||
Accounts receivable, net of allowance for doubtful accounts | $ 420.5 | $ 374.6 | [1] | |
PEO unbilled receivables, net of advance collections | 406.3 | 117.8 | [1],[2] | |
Prepaid expenses and other current assets | 233.9 | 224 | [1] | |
Long-term deferred costs | 366.3 | 361 | [1],[3] | |
Liabilities and stockholders' equity | ||||
Accounts payable | 75.9 | 73.7 | [1] | |
Deferred revenue | 40.3 | 34.6 | [1] | |
Deferred income taxes | 223.1 | 154.4 | [1] | |
Other long-term liabilities | 164.7 | 89.1 | [1] | |
Retained earnings | $ 1,409.5 | 1,262.6 | [1] | |
As Previously Reported [Member] | ||||
Assets | ||||
Accounts receivable, net of allowance for doubtful accounts | 413.6 | |||
PEO unbilled receivables, net of advance collections | [2] | 117.8 | ||
Prepaid expenses and other current assets | 75.8 | |||
Long-term deferred costs | [3] | 18.5 | ||
Liabilities and stockholders' equity | ||||
Accounts payable | 74.5 | |||
Deferred revenue | 24.3 | |||
Deferred income taxes | 48.8 | |||
Other long-term liabilities | 84.8 | |||
Retained earnings | 930.3 | |||
ASU 2014-09 [Member] | Adjustments [Member] | ||||
Assets | ||||
Accounts receivable, net of allowance for doubtful accounts | (39) | |||
Prepaid expenses and other current assets | 148.2 | |||
Long-term deferred costs | [3] | 342.5 | ||
Liabilities and stockholders' equity | ||||
Accounts payable | (0.8) | |||
Deferred revenue | 10.3 | |||
Deferred income taxes | 105.6 | |||
Other long-term liabilities | 4.3 | |||
Retained earnings | $ 332.3 | |||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. | |||
[2] | Amounts were previously reported as a component of accounts receivable, net of allowance for doubtful accounts included in the Company's fiscal 2018 Form 10-K. PEO unbilled receivables, net of advance collections are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. | |||
[3] | Amounts were previously reported as a component of other long-term assets on the Consolidated Balance Sheets included in the Company's fiscal 2018 Form 10-K. Long-term deferred costs are separately presented on the Consolidated Balance Sheets contained in this Form 10-K. |
Description of Business, Basi_8
Description of Business, Basis of Presentation, and Significant Accounting Policies (Schedule of Recast of Selected Consolidated Statement of Cash Flow) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||||
May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | Feb. 28, 2018 | [1] | Nov. 30, 2017 | [1] | Aug. 31, 2017 | May 31, 2019 | May 31, 2018 | May 31, 2017 | ||||||
Cash flows from operating activities | ||||||||||||||||||
Net income | $ 230.4 | $ 324.6 | $ 235.8 | $ 243.6 | $ 217.7 | [1] | $ 367.2 | $ 198.8 | $ 210.4 | [1] | $ 1,034.4 | $ 994.1 | [1],[2],[3] | $ 826.3 | [2],[3],[4] | |||
Amortization of deferred contract costs | 180.2 | 174.7 | [3],[5] | 169.4 | [3],[5] | |||||||||||||
Provision/(benefit) for deferred income taxes | 4.7 | (37.2) | [3],[6] | 22.7 | [3],[6] | |||||||||||||
Accounts receivable and PEO unbilled receivables, net | (117.2) | 16.2 | [3],[5] | (103.3) | [3],[5] | |||||||||||||
Prepaid expenses and other current assets | 1 | 18 | [3],[5] | (32.2) | [3],[5] | |||||||||||||
Accounts payable and other current liabilities | 77.5 | 42.9 | [3],[5] | 38.2 | [3],[5] | |||||||||||||
Deferred costs | (188.5) | (181.8) | [3],[5] | (185.6) | [3],[5] | |||||||||||||
Net change in other long-term assets and liabilities | (5.4) | (5.7) | [3],[5] | (14.9) | [3],[5] | |||||||||||||
Cash flows from investing activities | ||||||||||||||||||
Net cash (used in)/provided by investing activities | (1,628.3) | 998.5 | [3],[5] | (662.2) | [3],[5] | |||||||||||||
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | (1,365.3) | 1,851.1 | [3],[5] | (184.5) | [3],[5] | |||||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year | [3],[5] | 2,300.5 | 449.4 | 2,300.5 | 449.4 | 633.9 | ||||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of fiscal year | $ 935.2 | 2,300.5 | [3],[5] | 935.2 | 2,300.5 | [3],[5] | 449.4 | [3],[5] | ||||||||||
As Previously Reported [Member] | ||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||
Net income | 933.7 | 817.3 | ||||||||||||||||
Provision/(benefit) for deferred income taxes | 19.2 | 17.4 | ||||||||||||||||
Accounts receivable and PEO unbilled receivables, net | 13.6 | (103.7) | ||||||||||||||||
Prepaid expenses and other current assets | 17.7 | (34.1) | ||||||||||||||||
Accounts payable and other current liabilities | 42.6 | 39.1 | ||||||||||||||||
Net change in other long-term assets and liabilities | (5.6) | (15.4) | ||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||
Net change in funds held for clients’ money market securities and other cash equivalents | (1,677.5) | 237.6 | ||||||||||||||||
Net cash (used in)/provided by investing activities | (679) | (424.6) | ||||||||||||||||
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | 173.6 | 53.1 | ||||||||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year | 358.2 | 184.6 | 358.2 | 184.6 | 131.5 | |||||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of fiscal year | 358.2 | 358.2 | 184.6 | |||||||||||||||
ASU 2014-09 [Member] | Adjustments [Member] | ||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||
Net income | 60.4 | 9 | ||||||||||||||||
Amortization of deferred contract costs | 174.7 | 169.4 | ||||||||||||||||
Provision/(benefit) for deferred income taxes | (56.4) | 5.3 | ||||||||||||||||
Accounts receivable and PEO unbilled receivables, net | 2.6 | 0.4 | ||||||||||||||||
Prepaid expenses and other current assets | 0.3 | 1.9 | ||||||||||||||||
Accounts payable and other current liabilities | 0.3 | (0.9) | ||||||||||||||||
Deferred costs | (181.8) | (185.6) | ||||||||||||||||
Net change in other long-term assets and liabilities | (0.1) | 0.5 | ||||||||||||||||
ASU 2016-18 [Member] | Adjustments [Member] | ||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||
Net change in funds held for clients’ money market securities and other cash equivalents | 1,677.5 | (237.6) | ||||||||||||||||
Net cash (used in)/provided by investing activities | 1,677.5 | (237.6) | ||||||||||||||||
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | 1,677.5 | (237.6) | ||||||||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year | $ 1,942.3 | $ 264.8 | $ 1,942.3 | 264.8 | 502.4 | |||||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of fiscal year | $ 1,942.3 | $ 1,942.3 | $ 264.8 | |||||||||||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | |||||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | |||||||||||||||||
[4] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||
[5] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||
[6] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Service Revenue (Narrative) (De
Service Revenue (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Service Revenue [Line Items] | |||
Direct pass-through costs for payroll wages and payroll taxes | $ 14.5 | $ 7.7 | $ 5.7 |
Direct pass-through costs related to state unemployment insurance | 82.3 | 47.5 | 34 |
Direct pass-through costs related to guaranteed cost benefit plans | $ 451.8 | $ 274.2 | $ 224.8 |
Revenue performance obligations timing | the Company defers revenue associated with these performance obligations, which exceed one year, and subsequently recognizes these as future services are provided, over approximately three to four years | ||
Capitalized contract cost, amortization period | 8 years | ||
Impairment loss | $ 0 | ||
Minimum [Member] | |||
Service Revenue [Line Items] | |||
Revenue performance obligations timing, years | 3 years | ||
Maximum [Member] | |||
Service Revenue [Line Items] | |||
Revenue performance obligations timing, years | 4 years |
Service Revenue (Narrative) (Pe
Service Revenue (Narrative) (Performance Obligation) (Details) $ in Millions | May 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-06-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue, performance obligations | $ 22.6 |
Deferred revenue, timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-06-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue, performance obligations | $ 23.1 |
Deferred revenue, timing of satisfaction | 2 years |
Service Revenue (Summary of Dis
Service Revenue (Summary of Disaggregates Revenue by Services) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||
May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | [1] | Feb. 28, 2018 | [1] | Nov. 30, 2017 | [1] | Aug. 31, 2017 | [1] | May 31, 2019 | May 31, 2018 | [2] | May 31, 2017 | [2],[3] | |
Disaggregation of Revenue [Line Items] | |||||||||||||||||
Total service revenue | $ 958.2 | $ 1,047.4 | $ 840.6 | $ 845.7 | $ 828 | $ 918 | $ 789 | $ 779.2 | $ 3,691.9 | $ 3,314.2 | [1] | $ 3,102.4 | |||||
Management Solutions [Member] | |||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||
Total service revenue | 2,877.7 | 2,758.4 | [3] | 2,680.7 | |||||||||||||
PEO And Insurance Services [Member] | |||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||
Total service revenue | $ 814.2 | $ 555.8 | [3] | $ 421.7 | |||||||||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | ||||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Service Revenue (Summary of Cha
Service Revenue (Summary of Changes in Deferred Revenue Related to Material Right Performance Obligations) (Details) $ in Millions | 12 Months Ended |
May 31, 2019USD ($) | |
Service Revenue [Abstract] | |
Balance, beginning of period | $ 46.4 |
Deferral of revenue | 27.6 |
Recognition of unearned revenue | (28.3) |
Balance, end of period | $ 45.7 |
Service Revenue (Summary of C_2
Service Revenue (Summary of Changes in Deferred Costs to Obtain and Fulfill Contracts) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
May 31, 2019 | May 31, 2018 | May 31, 2017 | [1],[2] | ||
Capitalized Contract Cost [Line Items] | |||||
Amortization | $ 180.2 | $ 174.7 | [1],[2] | $ 169.4 | |
Costs To Obtain A Contract [Member] | |||||
Capitalized Contract Cost [Line Items] | |||||
Beginning balance | 455 | ||||
Capitalization of costs | 166.5 | ||||
Amortization | (157.2) | ||||
Ending balance | 464.3 | 455 | |||
Costs To Fulfill A Contract [Member] | |||||
Capitalized Contract Cost [Line Items] | |||||
Beginning balance | 65.4 | ||||
Capitalization of costs | 23.7 | ||||
Amortization | (23) | ||||
Ending balance | $ 66.1 | $ 65.4 | |||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." |
Basic and Diluted Earnings Pe_3
Basic and Diluted Earnings Per Share (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Equity, Class of Treasury Stock [Line Items] | |||
Common stock repurchased and retired, values | $ 56.9 | $ 143.1 | $ 166.2 |
Authorized in July 2016 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Expiration date | May 31, 2019 | ||
Common stock repurchased and retired, shares | 0.7 | 2.5 | |
Common stock repurchased and retired, values | $ 56.9 | $ 143.1 | |
Authorized In May 2019 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Expiration date | May 31, 2022 | ||
Maximum [Member] | Authorized in July 2016 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Approved repurchase amount | $ 350 | ||
Maximum [Member] | Authorized In May 2019 [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Approved repurchase amount | $ 400 |
Basic and Diluted Earnings Pe_4
Basic and Diluted Earnings Per Share (Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | [1] | Feb. 28, 2018 | [1] | Nov. 30, 2017 | [1] | Aug. 31, 2017 | [1] | May 31, 2019 | May 31, 2018 | May 31, 2017 | [4] | |||||||
Basic earnings per share: | ||||||||||||||||||||||
Net income | $ 230.4 | $ 324.6 | $ 235.8 | $ 243.6 | $ 217.7 | $ 367.2 | $ 198.8 | $ 210.4 | $ 1,034.4 | $ 994.1 | [1],[2],[3] | $ 826.3 | [2],[3] | |||||||||
Weighted-average common shares outstanding | 359.4 | 359.2 | 359.1 | 359.1 | 359 | 359.2 | 359.1 | 358.9 | 359.2 | 359 | [1],[2] | 359.8 | [2] | |||||||||
Basic earnings per share | $ 0.64 | [5] | $ 0.90 | [5] | $ 0.66 | [5] | $ 0.68 | [5] | $ 0.61 | [5] | $ 1.02 | [5] | $ 0.55 | [5] | $ 0.59 | [5] | $ 2.88 | [5] | $ 2.77 | [1],[2],[5] | $ 2.30 | [2] |
Diluted earnings per share: | ||||||||||||||||||||||
Net income | $ 230.4 | $ 324.6 | $ 235.8 | $ 243.6 | $ 217.7 | $ 367.2 | $ 198.8 | $ 210.4 | $ 1,034.4 | $ 994.1 | [1],[2],[3] | $ 826.3 | [2],[3] | |||||||||
Weighted-average common shares outstanding | 359.4 | 359.2 | 359.1 | 359.1 | 359 | 359.2 | 359.1 | 358.9 | 359.2 | 359 | [1],[2] | 359.8 | [2] | |||||||||
Dilutive effect of common share equivalents | 2.6 | 2.5 | [4] | 2.8 | ||||||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 362.5 | 361.6 | 361.5 | 361.5 | 361.5 | 362 | 361.4 | 361.3 | 361.8 | 361.5 | [1],[2] | 362.6 | [2] | |||||||||
Diluted earnings per share | $ 0.64 | [5] | $ 0.90 | [5] | $ 0.65 | [5] | $ 0.67 | [5] | $ 0.60 | [5] | $ 1.01 | [5] | $ 0.55 | [5] | $ 0.58 | [5] | $ 2.86 | [5] | $ 2.75 | [1],[2],[5] | $ 2.28 | [2],[6] |
Weighted-average anti-dilutive common share equivalents | 0.4 | 0.7 | [4] | 0.7 | ||||||||||||||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | |||||||||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | |||||||||||||||||||||
[4] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[5] | 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. | |||||||||||||||||||||
[6] | Diluted earnings per share amounts may not add across by +/- $0.01 due to rounding. |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) $ in Millions | Dec. 20, 2018USD ($) | Feb. 28, 2018USD ($) | Aug. 18, 2017USD ($)state | May 31, 2019USD ($) | Feb. 28, 2019USD ($) | Nov. 30, 2018USD ($) | Aug. 31, 2018USD ($) | May 31, 2018USD ($) | Feb. 28, 2018USD ($) | Nov. 30, 2017USD ($) | [1] | Aug. 31, 2017USD ($) | [1] | May 31, 2019USD ($) | May 31, 2018USD ($) | May 31, 2017USD ($) | ||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Restricted cash | $ 57.1 | $ 57.1 | ||||||||||||||||||
Revenues | 980.4 | $ 1,070.4 | $ 858.9 | $ 862.8 | $ 845.7 | [1] | $ 936.1 | [1] | $ 803 | $ 792.9 | 3,772.5 | $ 3,377.7 | [1],[2] | $ 3,153 | [2] | |||||
Net income | 230.4 | $ 324.6 | $ 235.8 | $ 243.6 | 217.7 | [1] | 367.2 | [1] | $ 198.8 | $ 210.4 | 1,034.4 | 994.1 | [1],[2],[3] | 826.3 | [2],[3],[4] | |||||
Goodwill | $ 1,782.6 | $ 814 | [5] | $ 1,782.6 | 814 | [5] | $ 657.1 | |||||||||||||
Oasis Outsourcing Group Holdings, L.P. [Member] | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Effective acquisition date | Dec. 20, 2018 | |||||||||||||||||||
Purchase price | $ 992.2 | |||||||||||||||||||
Restricted cash | 132.1 | |||||||||||||||||||
Credit facility portion of purchase price | 800 | |||||||||||||||||||
Cash acquired | 262.3 | |||||||||||||||||||
Revenues | $ 163.7 | |||||||||||||||||||
Net income | 5.1 | |||||||||||||||||||
Incurred acquisition and integration costs | 5.3 | |||||||||||||||||||
Intangible assets | 310.9 | |||||||||||||||||||
Goodwill | $ 972.1 | |||||||||||||||||||
Excluded incurred costs related to acquisition | 2.7 | |||||||||||||||||||
Excluded incurred costs related to acquisition, net of tax | $ 2 | |||||||||||||||||||
Included incurred costs related to acquisition | 2.7 | |||||||||||||||||||
Included incurred costs related to acquisition, net of tax | $ 1.7 | |||||||||||||||||||
Oasis Outsourcing Group Holdings, L.P. [Member] | Weighted Average [Member] | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Amortization period | 10 years | |||||||||||||||||||
Lessor Group [Member] | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Effective acquisition date | Feb. 28, 2018 | |||||||||||||||||||
Purchase price | $ 162.5 | |||||||||||||||||||
Cash acquired | 13.4 | |||||||||||||||||||
Goodwill | $ 112.3 | $ 112.3 | ||||||||||||||||||
HR Outsourcing Holdings, Inc. [Member] | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Effective acquisition date | Aug. 18, 2017 | |||||||||||||||||||
Purchase price | $ 75.4 | |||||||||||||||||||
Cash portion of purchase price | 42.2 | |||||||||||||||||||
Common stock issued portion of purchase price | 33.2 | |||||||||||||||||||
Goodwill | $ 51.1 | |||||||||||||||||||
HR Outsourcing Holdings, Inc. [Member] | Minimum [Member] | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Number of states | state | 35 | |||||||||||||||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | |||||||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | |||||||||||||||||||
[4] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||
[5] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. |
Business Combinations (Prelimin
Business Combinations (Preliminary Acquisition Date Fair Values To Acquired Net Assets) (Details) - USD ($) $ in Millions | May 31, 2019 | Dec. 20, 2018 | May 31, 2018 | [1] | May 31, 2017 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,782.6 | $ 814 | $ 657.1 | ||
Oasis Outsourcing Group Holdings, L.P. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 130.2 | ||||
Restricted cash | 66.6 | ||||
Corporate investments | 8.6 | ||||
Accounts receivable, net of allowance for doubtful accounts | 10.7 | ||||
PEO unbilled receivables, net of advance collections | 209.8 | ||||
Prepaid income taxes | 5.8 | ||||
Prepaid expenses and other current assets | 6 | ||||
Long-term restricted cash | 65.5 | ||||
Property and equipment | 15.4 | ||||
Intangible assets | 310.9 | ||||
Goodwill | 972.1 | ||||
Other long-term assets | 1.8 | ||||
Total Assets | 1,803.4 | ||||
Accounts payable | 46 | ||||
Accrued corporate compensation and related items | 11.6 | ||||
Accrued worksite employee compensation and related items | 311.1 | ||||
Other current liabilities | 49.8 | ||||
Deferred income taxes | 51.1 | ||||
Other long-term liabilities | 79.3 | ||||
Net Assets | $ 1,254.5 | ||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. |
Business Combinations (Summary
Business Combinations (Summary Of Pro Forma Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Business Combinations [Abstract] | ||
Revenues | $ 3,958 | $ 3,680.5 |
Net income | $ 1,021.7 | $ 984.2 |
Interest (Expense)_Income, Ne_2
Interest (Expense)/Income, Net (Schedule of Interest (Expense)/Income, Net) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||
May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | [1] | Feb. 28, 2018 | [1] | Nov. 30, 2017 | [1] | Aug. 31, 2017 | [1] | May 31, 2019 | May 31, 2018 | May 31, 2017 | |||
Interest (Expense)/Income, Net [Abstract] | |||||||||||||||||
Interest income on corporate funds | $ 13.3 | $ 11.9 | $ 9.9 | ||||||||||||||
Interest expense | (17.6) | (3.9) | (2.5) | ||||||||||||||
Net gain/(loss) from equity-method investments | 1 | 0.6 | (2.2) | ||||||||||||||
Interest (expense)/income, net | $ (4) | $ (3.7) | $ 2.1 | $ 2.3 | $ 2.5 | $ 2.3 | $ 1.7 | $ 2.1 | $ (3.3) | $ 8.6 | [1],[2] | $ 5.2 | [2] | ||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized for grant | 44.1 | ||
Shares available for future grants | 18.2 | ||
Stock-based compensation expense | $ 46.2 | $ 44.6 | $ 35.4 |
Income tax benefits related to stock-based compensation | 8.9 | $ 14.5 | $ 13.4 |
Total unrecognized compensation cost related to all unvested stock-based awards | $ 75.6 | ||
Weighted-average period in years of all unvested stock-based awards | 2 years 8 months 12 days | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual life | 10 years | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance period | 2 years | ||
Service period | 1 year | ||
Director [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Director [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Management [Member] | Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Tranche One [Member] | Officer [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.30% | 25.00% | |
Tranche One [Member] | Officer [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.30% | ||
Tranche One [Member] | Management [Member] | Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 20.00% | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 |
Discount to the market price | 5.00% | 5.00% | 5.00% |
Maximum [Member] | Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Discount to the market price | 15.00% |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans (Weighted-Average Assumptions) (Details) - $ / shares | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.90% | 2.10% | 1.20% |
Dividend yield | 3.50% | 3.40% | 3.60% |
Volatility factor | 0.18% | 0.17% | 0.18% |
Expected option life in years | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Weighted-average grant-date fair value of stock options granted (per share) | $ 8.87 | $ 6.47 | $ 5.74 |
Performance Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.90% | 2.40% | 1.30% |
Dividend yield | 3.50% | 3.30% | 3.60% |
Volatility factor | 0.18% | 0.18% | 0.18% |
Expected option life in years | 6 years 6 months | 6 years 6 months | 6 years 6 months |
Weighted-average grant-date fair value of stock options granted (per share) | $ 9.02 | $ 7.45 | $ 5.97 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans (Stock Option Activity) (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
May 31, 2019USD ($)$ / sharesshares | ||
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, Beginning balance, Shares subject to options | shares | 4.4 | |
Granted, Shares subject to options | shares | 0.6 | |
Exercised, Shares subject to options | shares | (0.7) | |
Forfeited, Shares subject to options | shares | ||
Expired, Shares subject to options | shares | ||
Outstanding, Ending balance, Shares subject to options | shares | 4.3 | |
Exercisable, Shares subject to options | shares | 2.9 | |
Outstanding, Beginning balance, Weighted-average exercise price per share | $ / shares | $ 44.60 | |
Granted, Weighted-average exercise price per share | $ / shares | 69.71 | |
Exercised, Weighted-average exercise price per share | $ / shares | 36.73 | |
Forfeited, Weighted-average exercise price per share | $ / shares | 61.31 | |
Expired, Weighted-average exercise price per share | $ / shares | 31 | |
Outstanding, Ending balance, Weighted-average exercise price per share | $ / shares | 49.23 | |
Exercisable, Weighted-average exercise price per share | $ / shares | $ 42.83 | |
Outstanding, Weighted-average remaining contractual term (years) | 5 years 10 months 24 days | |
Exercisable, Weighted-average remaining contractual term (years) | 4 years 9 months 18 days | |
Outstanding, Aggregate intrinsic value | $ | $ 157.1 | [1] |
Exercisable, Aggregate intrinsic value | $ | $ 123.2 | [1] |
Performance Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, Beginning balance, Shares subject to options | shares | 2.1 | |
Granted, Shares subject to options | shares | 0.1 | [2] |
Exercised, Shares subject to options | shares | (0.2) | |
Forfeited, Shares subject to options | shares | (0.1) | |
Expired, Shares subject to options | shares | ||
Outstanding, Ending balance, Shares subject to options | shares | 1.9 | |
Exercisable, Shares subject to options | shares | 0.6 | |
Outstanding, Beginning balance, Weighted-average exercise price per share | $ / shares | $ 49.26 | |
Granted, Weighted-average exercise price per share | $ / shares | 69.54 | [2] |
Exercised, Weighted-average exercise price per share | $ / shares | 33.80 | |
Forfeited, Weighted-average exercise price per share | $ / shares | 61.37 | |
Expired, Weighted-average exercise price per share | $ / shares | ||
Outstanding, Ending balance, Weighted-average exercise price per share | $ / shares | 51.09 | |
Exercisable, Weighted-average exercise price per share | $ / shares | $ 31.45 | |
Outstanding, Weighted-average remaining contractual term (years) | 5 years 6 months | |
Exercisable, Weighted-average remaining contractual term (years) | 2 years 1 month 6 days | |
Outstanding, Aggregate intrinsic value | $ | $ 66.5 | [3] |
Exercisable, Aggregate intrinsic value | $ | $ 35.3 | [3] |
[1] | Total shares valued at the market price of the underlying stock as of May 31, 2019 less the exercise price. | |
[2] | LTIP performance stock options granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. | |
[3] | Shares valued at the market price of the underlying stock as of May 31, 2019 less the exercise price. |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans (Other Information Pertaining to Stock Option) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of stock options exercised | $ 25.7 | $ 9.1 | $ 23.8 |
Total grant-date fair value of stock options vested | 4.3 | 4 | 4.1 |
Performance Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of stock options exercised | $ 8.2 | $ 7.9 | 12.4 |
Total grant-date fair value of stock options vested | $ 4.9 |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans (RSU Activity) (Details) - Restricted Stock Units [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested, Beginning balance, Awards | 1.1 | |||
Granted, Awards | 0.5 | |||
Vested, Awards | ||||
Forfeited, Awards | (0.1) | |||
Nonvested, Ending balance, Awards | 1.5 | 1.1 | ||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | $ 48.79 | |||
Granted, Weighted-average grant-date fair value per share | 62.20 | $ 51.15 | $ 53.76 | |
Vested, Weighted-average grant-date fair value per share | 48.28 | |||
Forfeited, Weighted-average grant-date fair value per share | 52.68 | |||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 53.45 | $ 48.79 | ||
Nonvested, Weighted-average remaining vesting period (years) | 2 years 10 months 24 days | |||
Nonvested, Aggregate intrinsic value | [1] | $ 127 | ||
[1] | Intrinsic value for RSUs is based on the market price of the underlying stock as of May 31, 2019. |
Stock-Based Compensation Plan_7
Stock-Based Compensation Plans (Other Information Pertaining to RSUs) (Details) - Restricted Stock Units [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value per share | $ 62.20 | $ 51.15 | $ 53.76 |
Total intrinsic value of RSUs vested | $ 1.2 | $ 60.9 | $ 32.3 |
Total grant-date fair value of RSUs vested | $ 0.8 | $ 42.4 | $ 19.3 |
Stock-Based Compensation Plan_8
Stock-Based Compensation Plans (Restricted Stock Activity) (Details) - $ / shares shares in Millions | 12 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2017 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested, Beginning balance, Awards | 0.1 | |||
Granted, Awards | 0.1 | |||
Vested, Awards | (0.1) | |||
Forfeited, Awards | ||||
Nonvested, Ending balance, Awards | 0.1 | 0.1 | ||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | $ 56.89 | |||
Granted, Weighted-average grant-date fair value per share | 69.80 | $ 57.50 | $ 60.83 | |
Vested, Weighted-average grant-date fair value per share | 55.50 | |||
Forfeited, Weighted-average grant-date fair value per share | 69.54 | |||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 64.32 | $ 56.89 | ||
Performance Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested, Beginning balance, Awards | 0.2 | |||
Granted, Awards | [1] | |||
Vested, Awards | ||||
Forfeited, Awards | ||||
Nonvested, Ending balance, Awards | 0.2 | 0.2 | ||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | $ 53.86 | |||
Granted, Weighted-average grant-date fair value per share | [1] | 65.17 | ||
Vested, Weighted-average grant-date fair value per share | ||||
Forfeited, Weighted-average grant-date fair value per share | 56.03 | |||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 54.31 | $ 53.86 | ||
[1] | LTIP performance shares granted assumes achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Stock-Based Compensation Plan_9
Stock-Based Compensation Plans (Other Information Pertaining to Restricted Stock) (Details) - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value per share | $ 69.80 | $ 57.50 | $ 60.83 |
Total grant-date fair value of shares vested | $ 3 | $ 3 | $ 3 |
Stock-Based Compensation Pla_10
Stock-Based Compensation Plans (Performance Share Activity) (Details) - Performance Shares [Member] - $ / shares shares in Millions | 12 Months Ended | ||||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Nonvested, Beginning balance, Awards | 0.4 | ||||
Granted, Awards | [1] | 0.1 | |||
Vested, Awards | (0.1) | ||||
Forfeited, Awards | |||||
Nonvested, Ending balance, Awards | 0.4 | 0.4 | |||
Nonvested, Beginning balance, Weighted-average grant-date fair value per share | $ 51.53 | ||||
Granted, Weighted-average grant-date fair value per share | 65.17 | [1] | $ 53.08 | $ 54.97 | |
Vested, Weighted-average grant-date fair value per share | 44.53 | ||||
Forfeited, Weighted-average grant-date fair value per share | 58.86 | ||||
Nonvested, Ending balance, Weighted-average grant-date fair value per share | $ 58.09 | $ 51.53 | |||
[1] | Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Stock-Based Compensation Pla_11
Stock-Based Compensation Plans (Other Information Pertaining to Performance Shares) (Details) - Performance Shares [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average grant-date fair value per share | $ 65.17 | [1] | $ 53.08 | $ 54.97 |
Total grant-date fair value of shares vested | $ 5.3 | $ 6.6 | $ 7.8 | |
[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 Co_3
Funds Held for Clients and Corporate Investments (Narrative) (Details) $ in Millions | 12 Months Ended | |
May 31, 2019USD ($)security | May 31, 2018USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | ||
Net unrealized (loss) gain on available-for-sale securities | $ 19.7 | $ (38.3) |
Number of available-for-sale securities in an unrealized loss position | security | 269 | 970 |
Gross unrealized losses on available-for-sale securities | $ 2.7 | $ 40.7 |
Variable Rate Demand Notes [Member] | Minimum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities contractual maturities | 20 years | |
Variable Rate Demand Notes [Member] | Maximum [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities contractual maturities | 30 years |
Funds Held for Clients and Co_4
Funds Held for Clients and Corporate Investments (Funds Held for Clients and Corporate Investments) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Funds held for clients' money market securities and other cash equivalents, Amortized cost | $ 204.5 | $ 1,942.3 | |
Funds held for clients' money market securities and other cash equivalents, Gross unrealized gains | |||
Funds held for clients' money market securities and other cash equivalents, Gross unrealized losses | |||
Funds held for clients' money market securities and other cash equivalents, Fair value | 204.5 | 1,942.3 | |
Available-for-sale securities, Amortized cost | 3,601.1 | 3,143.1 | |
Available-for-sale securities, Gross unrealized gains | 22.4 | 2.4 | |
Available-for-sale securities, Gross unrealized losses | (2.7) | (40.7) | |
Available-for-sale securities, Fair value | 3,620.8 | 3,104.8 | |
Other, Amortized cost | 26.3 | 16.1 | |
Other, Gross unrealized gains | 1.7 | 2.1 | |
Other, Gross unrealized losses | (0.3) | ||
Other, Fair value | 27.7 | 18.2 | |
Total funds held for clients and corporate investments, Amortized cost | 3,831.9 | 5,101.5 | |
Total funds held for clients and corporate investments, Gross unrealized gains | 24.1 | 4.5 | |
Total funds held for clients and corporate investments, Gross unrealized losses | (3) | (40.7) | |
Total funds held for clients and corporate investments, Fair value | 3,853 | 5,065.3 | |
Asset-backed Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 5.3 | ||
Available-for-sale securities, Gross unrealized gains | |||
Available-for-sale securities, Gross unrealized losses | |||
Available-for-sale securities, Fair value | 5.3 | ||
Corporate Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 442.1 | 328.6 | |
Available-for-sale securities, Gross unrealized gains | 5.3 | 0.1 | |
Available-for-sale securities, Gross unrealized losses | (0.9) | (7.3) | |
Available-for-sale securities, Fair value | 446.5 | 321.4 | |
General Obligation Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 840.6 | 1,231.6 | |
Available-for-sale securities, Gross unrealized gains | 7.5 | 1.3 | |
Available-for-sale securities, Gross unrealized losses | (0.3) | (11.2) | |
Available-for-sale securities, Fair value | 847.8 | 1,221.7 | |
Pre-Refunded Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | [1] | 25.6 | 50.9 |
Available-for-sale securities, Gross unrealized gains | [1] | 0.2 | 0.1 |
Available-for-sale securities, Gross unrealized losses | [1] | (0.1) | |
Available-for-sale securities, Fair value | [1] | 25.8 | 50.9 |
Revenue Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 545.4 | 813.5 | |
Available-for-sale securities, Gross unrealized gains | 4.7 | 0.9 | |
Available-for-sale securities, Gross unrealized losses | (0.2) | (8) | |
Available-for-sale securities, Fair value | 549.9 | 806.4 | |
U.S. Government Agency And Treasury Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 612.5 | 410.2 | |
Available-for-sale securities, Gross unrealized gains | 4.7 | ||
Available-for-sale securities, Gross unrealized losses | (1.3) | (14.1) | |
Available-for-sale securities, Fair value | 615.9 | 396.1 | |
Variable Rate Demand Notes [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, Amortized cost | 1,129.6 | 308.3 | |
Available-for-sale securities, Gross unrealized gains | |||
Available-for-sale securities, Gross unrealized losses | |||
Available-for-sale securities, Fair value | $ 1,129.6 | $ 308.3 | |
[1] | Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
Funds Held for Clients and Co_5
Funds Held for Clients and Corporate Investments (Classification of Investments on Consolidated Balance Sheets) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 | |
Funds Held for Clients and Corporate Investments [Abstract] | |||
Funds held for clients | $ 3,803.8 | $ 4,703.8 | [1] |
Corporate investments | 39 | 66 | [1] |
Long-term corporate investments | 10.2 | 295.5 | [1] |
Total funds held for clients and corporate investments, Fair value | $ 3,853 | $ 5,065.3 | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. |
Funds Held for Clients and Co_6
Funds Held for Clients and Corporate Investments (Securities in Unrealized Loss Position) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 |
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | $ (27.5) | |
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | $ (2.7) | (13.2) |
Total, Gross unrealized losses | (2.7) | (40.7) |
Securities in an unrealized loss position for less than twelve months, Fair value | 9.4 | 1,907 |
Securities in an unrealized loss position for more than twelve months, Fair value | 558.5 | 331.3 |
Total, Fair value | 567.9 | 2,238.3 |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (6) | |
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.9) | (1.3) |
Total, Gross unrealized losses | (0.9) | (7.3) |
Securities in an unrealized loss position for less than twelve months, Fair value | 1.5 | 271.5 |
Securities in an unrealized loss position for more than twelve months, Fair value | 133.8 | 34.6 |
Total, Fair value | 135.3 | 306.1 |
General Obligation Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (8.7) | |
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.3) | (2.5) |
Total, Gross unrealized losses | (0.3) | (11.2) |
Securities in an unrealized loss position for less than twelve months, Fair value | 3 | 856.4 |
Securities in an unrealized loss position for more than twelve months, Fair value | 168.3 | 68.9 |
Total, Fair value | 171.3 | 925.3 |
Pre-Refunded Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (0.1) | |
Total, Gross unrealized losses | (0.1) | |
Securities in an unrealized loss position for less than twelve months, Fair value | 0.1 | 18.5 |
Securities in an unrealized loss position for more than twelve months, Fair value | 1.6 | 0.5 |
Total, Fair value | 1.7 | 19 |
Revenue Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (6.3) | |
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (0.2) | (1.7) |
Total, Gross unrealized losses | (0.2) | (8) |
Securities in an unrealized loss position for less than twelve months, Fair value | 0.1 | 540.9 |
Securities in an unrealized loss position for more than twelve months, Fair value | 79.2 | 50.9 |
Total, Fair value | 79.3 | 591.8 |
U.S. Government Agency And Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Securities in an unrealized loss position for less than twelve months, Gross unrealized losses | (6.4) | |
Securities in an unrealized loss position for more than twelve months, Gross unrealized losses | (1.3) | (7.7) |
Total, Gross unrealized losses | (1.3) | (14.1) |
Securities in an unrealized loss position for less than twelve months, Fair value | 4.7 | 219.7 |
Securities in an unrealized loss position for more than twelve months, Fair value | 175.6 | 176.4 |
Total, Fair value | $ 180.3 | $ 396.1 |
Funds Held for Clients and Co_7
Funds Held for Clients and Corporate Investments (Realized Gains and Losses from Sale of Available-for-sale Securities) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||
May 31, 2019 | [1] | Feb. 28, 2019 | [1] | Nov. 30, 2018 | [1] | Aug. 31, 2018 | [1] | Feb. 28, 2018 | [1],[2] | May 31, 2019 | May 31, 2018 | May 31, 2017 | ||
Funds Held for Clients and Corporate Investments [Abstract] | ||||||||||||||
Gross realized gains | $ 0.6 | $ 0.3 | $ 0.1 | |||||||||||
Gross realized losses | $ (0.6) | (0.2) | ||||||||||||
Net realized gains | $ 0.1 | $ 0.1 | $ (0.3) | $ 0.1 | $ 0.1 | $ 0.1 | [1],[2] | $ 0.1 | ||||||
[1] | Total net realized gains/(losses) on the combined funds held for clients and corporate investment portfolios. | |||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Funds Held for Clients and Co_8
Funds Held for Clients and Corporate Investments (Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 |
Funds Held for Clients and Corporate Investments [Abstract] | ||
Due in one year or less, Amortized cost | $ 183.5 | |
Due after one year through three years, Amortized cost | 898.9 | |
Due after three years through five years, Amortized cost | 989.2 | |
Due after five years, Amortized cost | 1,529.5 | |
Available-for-sale securities, Amortized cost | 3,601.1 | $ 3,143.1 |
Due in one year or less, Fair value | 183.4 | |
Due after one year through three years, Fair value | 903.1 | |
Due after three years through five years, Fair value | 998.7 | |
Due after five years, Fair value | 1,535.6 | |
Available-for-sale securities, Fair value | $ 3,620.8 | $ 3,104.8 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Millions | May 31, 2018USD ($) |
Fair Value Measurements [Abstract] | |
Long-term borrowings outstanding | $ 0 |
Fair Value Measurements (Financ
Fair Value Measurements (Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | $ 39.2 | $ 862.1 |
Available-for-sale securities | 3,620.8 | 3,104.8 |
Other | 27.7 | 18.2 |
Other long-term liabilities | 27 | 18.2 |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 10 | 655 |
Time Deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 200 | |
Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 5.3 | |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 446.5 | 321.4 |
General Obligation Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 847.8 | 1,221.7 |
Pre-Refunded Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 25.8 | 50.9 |
Revenue Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 549.9 | 806.4 |
U.S. Government Agency And Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 615.9 | 396.1 |
Money Market Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 29.2 | 7.1 |
Variable Rate Demand Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,129.6 | 308.3 |
Quoted Prices in Active Markets (Level 1) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 29.2 | 7.1 |
Available-for-sale securities | ||
Other | 27.7 | 18.2 |
Other long-term liabilities | 27 | 18.2 |
Quoted Prices in Active Markets (Level 1) [Member] | Commercial Paper [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | ||
Quoted Prices in Active Markets (Level 1) [Member] | Time Deposits [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | ||
Quoted Prices in Active Markets (Level 1) [Member] | Asset-backed Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Quoted Prices in Active Markets (Level 1) [Member] | Corporate Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Quoted Prices in Active Markets (Level 1) [Member] | General Obligation Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Quoted Prices in Active Markets (Level 1) [Member] | Pre-Refunded Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Quoted Prices in Active Markets (Level 1) [Member] | Revenue Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Quoted Prices in Active Markets (Level 1) [Member] | U.S. Government Agency And Treasury Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Quoted Prices in Active Markets (Level 1) [Member] | Money Market Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 29.2 | 7.1 |
Quoted Prices in Active Markets (Level 1) [Member] | Variable Rate Demand Notes [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 10 | 855 |
Available-for-sale securities | 3,620.8 | 3,104.8 |
Other | ||
Other long-term liabilities | ||
Significant Other Observable Inputs (Level 2) [Member] | Commercial Paper [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 10 | 655 |
Significant Other Observable Inputs (Level 2) [Member] | Time Deposits [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | 200 | |
Significant Other Observable Inputs (Level 2) [Member] | Asset-backed Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 5.3 | |
Significant Other Observable Inputs (Level 2) [Member] | Corporate Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 446.5 | 321.4 |
Significant Other Observable Inputs (Level 2) [Member] | General Obligation Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 847.8 | 1,221.7 |
Significant Other Observable Inputs (Level 2) [Member] | Pre-Refunded Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 25.8 | 50.9 |
Significant Other Observable Inputs (Level 2) [Member] | Revenue Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 549.9 | 806.4 |
Significant Other Observable Inputs (Level 2) [Member] | U.S. Government Agency And Treasury Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 615.9 | 396.1 |
Significant Other Observable Inputs (Level 2) [Member] | Money Market Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | ||
Significant Other Observable Inputs (Level 2) [Member] | Variable Rate Demand Notes [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,129.6 | 308.3 |
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | ||
Available-for-sale securities | ||
Other | ||
Other long-term liabilities | ||
Significant Unobservable Inputs (Level 3) [Member] | Commercial Paper [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | ||
Significant Unobservable Inputs (Level 3) [Member] | Time Deposits [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | ||
Significant Unobservable Inputs (Level 3) [Member] | Asset-backed Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | Corporate Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | General Obligation Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | Pre-Refunded Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | Revenue Municipal Bonds [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | U.S. Government Agency And Treasury Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | ||
Significant Unobservable Inputs (Level 3) [Member] | Money Market Securities [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted cash equivalents | ||
Significant Unobservable Inputs (Level 3) [Member] | Variable Rate Demand Notes [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities |
Fair Value Measurements (Fina_2
Fair Value Measurements (Financial Liabilities Measured at Fair Value on Non-Recurring Basis) (Details) $ in Millions | May 31, 2019USD ($) |
Debt Instrument [Line Items] | |
Total long-term borrowings, Amortized cost | $ 800 |
Less: Debt issuance costs, net of accumulated amortization, Amortized cost | (3.6) |
Long-term borrowings, net of debt issuance costs, Amortized cost | 796.4 |
Senior Notes, Series A [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Total long-term borrowings, Amortized cost | 400 |
Senior Notes, Series B [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Total long-term borrowings, Amortized cost | 400 |
Non-Recurring Basis [Member] | |
Debt Instrument [Line Items] | |
Total long-term borrowings, Fair value | 838.5 |
Less: Debt issuance costs, net of accumulated amortization, Fair value | (3.6) |
Long-term borrowings, net of debt issuance costs, Fair value | 834.9 |
Non-Recurring Basis [Member] | Senior Notes, Series A [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Total long-term borrowings, Fair value | 418.4 |
Non-Recurring Basis [Member] | Senior Notes, Series B [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Total long-term borrowings, Fair value | $ 420.1 |
Property and Equipment, Net o_3
Property and Equipment, Net of Accumulated Depreciation (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Nov. 30, 2017USD ($)ft²item | May 31, 2019USD ($) | May 31, 2018USD ($) | May 31, 2017USD ($) | |||
Property, Plant and Equipment [Line Items] | ||||||
Depreciation expense | $ 125.7 | $ 116.9 | $ 108.8 | |||
Cost of building purchased | 123.8 | 154 | [1],[2] | $ 94.3 | [1],[2] | |
Multi-Building Campus [Member] | Rochester, NY [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of buildings purchased | item | 5 | |||||
Cost of building purchased | $ 34.7 | |||||
Escrow for building renovations | $ 16 | $ 0 | $ 14.2 | |||
Multi-Building Campus [Member] | Rochester, NY [Member] | Minimum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Renovation square feet | ft² | 300,000 | |||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." |
Property and Equipment, Net o_4
Property and Equipment, Net of Accumulated Depreciation (Components of Property and Equipment, at Cost) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 | ||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | $ 1,274.8 | $ 1,182.7 | ||
Less: Accumulated depreciation | 866.1 | 789.2 | ||
Property and equipment, net of accumulated depreciation | 408.7 | 393.5 | [1] | |
Land and Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 10.8 | 10.6 | ||
Buildings and Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 162.9 | 126.4 | ||
Data Processing Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 221.6 | 211.3 | ||
Software [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | [2] | 626.6 | 545.5 | |
Furniture, Fixtures, and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 117.2 | 114.5 | ||
Leasehold Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | 105.4 | 111.4 | ||
Construction in Progress [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, gross | [2] | $ 30.3 | $ 63 | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. | |||
[2] | Software includes both purchased software and costs capitalized related to internally developed software placed in service. Capitalized costs related to internally developed software that has not yet been placed in service is included in construction in progress. |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net of Accumulated Amortization (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
May 31, 2019 | May 31, 2018 | May 31, 2017 | Dec. 20, 2018 | ||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 1,782.6 | $ 814 | [1] | $ 657.1 | |
Acquired intangible assets with weighted-average amortization periods | 9 years 8 months 12 days | ||||
Amortization expense | $ 55.8 | $ 21.1 | $ 18.1 | ||
Client Lists [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Acquired intangible assets with weighted-average amortization periods | 10 years | ||||
Other Intangible Assets [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Acquired intangible assets with weighted-average amortization periods | 3 years | ||||
Oasis Outsourcing Group Holdings, L.P. [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 972.1 | ||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net of Accumulated Amortization (Change in Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
May 31, 2019 | May 31, 2018 | |||
Goodwill and Intangible Assets, Net of Accumulated Amortization [Abstract] | ||||
Goodwill Balance, beginning of fiscal year | $ 814 | [1] | $ 657.1 | |
Changes during the period: | ||||
Goodwill acquired | 972.1 | 162.6 | ||
Acquisition accounting adjustments | 1.6 | |||
Currency translation adjustment | (5.1) | (5.7) | ||
Goodwill Balance, end of fiscal year | $ 1,782.6 | $ 814 | [1] | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net of Accumulated Amortization (Components of Intangible Assets, at Cost) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 | ||
Intangible Assets [Line Items] | ||||
Total intangible assets, gross | $ 631.2 | $ 321.8 | ||
Less: Accumulated amortization | 232.1 | 180.4 | ||
Intangible assets, net of accumulated amortization | 399.1 | 141.4 | [1] | |
Other Intangible Assets [Member] | ||||
Intangible Assets [Line Items] | ||||
Total intangible assets, gross | 23 | 13.3 | ||
Client Lists [Member] | ||||
Intangible Assets [Line Items] | ||||
Total intangible assets, gross | [2] | $ 608.2 | $ 308.5 | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. | |||
[2] | Client lists and other intangible assets include current estimates of amounts acquired from Oasis as of December 20, 2018. Refer to Note D of this Item 8 for further details. |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net of Accumulated Amortization (Estimated Amortization Expense) (Details) $ in Millions | May 31, 2019USD ($) |
Year ending May 31 | |
2020 | $ 67.1 |
2021 | 63.8 |
2022 | 57.4 |
2023 | 54.1 |
2024 | $ 51.7 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||
May 31, 2018 | Dec. 31, 2016 | May 31, 2019 | May 31, 2018 | May 31, 2017 | ||||
Income Tax Contingency [Line Items] | ||||||||
NOL carry forwards | $ 5.9 | [1] | $ 10.6 | $ 5.9 | [1] | |||
Corporate income tax rate | 21.00% | 29.20% | 35.00% | |||||
Blended statutory tax rate | 29.20% | |||||||
Estimated tax benefits from Tax Act | $ 160.5 | |||||||
Net tax benefit related to revaluation of net deferred tax liabilities | 83.5 | |||||||
Net tax benefit related to change in annual effective tax rate | $ 77 | |||||||
Diluted earnings per share related to revaluation of net deferred tax liabilities | $ 0.23 | |||||||
Diluted earnings per share related to change in annual effective tax rate | $ 0.21 | |||||||
Reserve for uncertain tax positions | 14.7 | $ 21.6 | $ 14.7 | |||||
Income tax expense, current | 328.9 | 343.2 | [1] | $ 410.1 | [1] | |||
Impact of uncertain tax positions, if recognized, on effective income tax rate | 14.7 | 21.6 | $ 14.7 | |||||
Fiscal 2012 Through Fiscal 2014 [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Decreased reserve for uncertain tax positions | $ 28.9 | |||||||
Fiscal 2012 Through Fiscal 2017 [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Decreased reserve for uncertain tax positions | 27.2 | |||||||
Income tax expense, current | $ 2.7 | |||||||
Federal [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
NOL carry forwards | $ 5.6 | |||||||
Federal [Member] | Minimum [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
NOL carry forwards, Expiration date | May 31, 2020 | |||||||
Federal [Member] | Maximum [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
NOL carry forwards, Expiration date | May 31, 2036 | |||||||
State [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
NOL carry forwards | $ 5 | |||||||
State [Member] | Minimum [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
NOL carry forwards, Expiration date | May 31, 2020 | |||||||
State [Member] | Maximum [Member] | ||||||||
Income Tax Contingency [Line Items] | ||||||||
NOL carry forwards, Expiration date | May 31, 2039 | |||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Income Taxes (Components of Def
Income Taxes (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | May 31, 2019 | May 31, 2018 | ||
Income Taxes [Abstract] | ||||
Compensation and employee benefit liabilities | $ 36.3 | $ 15 | [1] | |
Other current liabilities | 8.8 | 6.5 | [1] | |
Tax credit carry forward | 0.2 | 0.2 | [1] | |
Depreciation | [1] | 3.6 | ||
Stock-based compensation | 17.5 | 11.6 | [1] | |
Unrealized losses on available-for-sale securities | [1] | 9.2 | ||
Net operating loss ("NOL") carry forwards | 10.6 | 5.9 | [1] | |
Tax benefit of uncertain tax positions | 5.7 | 3.7 | [1] | |
Other | 1.2 | 2.3 | [1] | |
Gross deferred tax assets | 80.3 | 58 | [1] | |
Deferred contract costs | 119.7 | 105.6 | [1] | |
Capitalized software | 42.8 | 39.4 | [1] | |
Depreciation | 3 | |||
Goodwill and Intangible assets | 127.5 | 49 | [1] | |
Revenue not subject to current taxes | 5.2 | 18.4 | [1] | |
Unrealized gains on available-for-sale securities | 5.2 | |||
Gross deferred tax liabilities | 303.4 | 212.4 | [1] | |
Net deferred tax liability | $ (223.1) | $ (154.4) | [1] | |
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. |
Income Taxes (Components of Pro
Income Taxes (Components of Provision for Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||
May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | [3],[4] | Feb. 28, 2018 | [3],[4] | Nov. 30, 2017 | [3],[4] | Aug. 31, 2017 | [3],[4] | May 31, 2019 | May 31, 2018 | May 31, 2017 | [1] | ||
Income Taxes [Abstract] | |||||||||||||||||
Federal | $ 258.2 | $ 289.1 | [1] | $ 362 | |||||||||||||
State | 70.7 | 54.1 | [1] | 48.1 | |||||||||||||
Total current | 328.9 | 343.2 | [1] | 410.1 | |||||||||||||
Federal | 0.7 | (38) | [1] | 21.2 | |||||||||||||
State | 4 | 0.8 | [1] | 1.5 | |||||||||||||
Total deferred | 4.7 | (37.2) | [1],[2] | 22.7 | [2] | ||||||||||||
Income taxes | $ 80.1 | $ 101 | $ 73.5 | $ 79 | $ 86.9 | $ 4.1 | $ 106 | $ 109 | $ 333.6 | $ 306 | [3],[4],[5] | $ 432.8 | [5] | ||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | ||||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | ||||||||||||||||
[4] | As a result of the Tax Act, the effective income tax rate for the three months ended February 28, 2018 was significantly impacted by certain one-time net tax benefits. Refer to Note K of this Item 8 for further details. | ||||||||||||||||
[5] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of U.S. Federal Statutory Tax Rate) (Details) | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Income Taxes [Abstract] | |||
Federal statutory tax rate | 21.00% | 29.20% | 35.00% |
Increase/(decrease) resulting from: | |||
Statutory tax rate reduction resulting from the Tax Act | (2.00%) | ||
State income taxes, net of federal tax benefit | 4.30% | 3.00% | 2.80% |
Section 199 - Qualified production activities | (0.30%) | (0.50%) | |
Tax-exempt municipal bond interest | (0.50%) | (1.10%) | (1.30%) |
Stock option windfall benefit | (0.50%) | (0.80%) | (1.50%) |
Other items, including adoption of ASC 606 | 0.10% | (4.50%) | (0.10%) |
Effective income tax rate | 24.40% | 23.50% | 34.40% |
Income Taxes (Reconciliation _2
Income Taxes (Reconciliation of Gross Unrecognized Tax Benefits, Not Including Interest or Other Potential Offsetting Effects) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Income Taxes [Abstract] | |||
Balance as of beginning of fiscal year | $ 14.9 | $ 43.7 | $ 64.7 |
Additions for tax positions of the current year | 3.8 | 2.3 | 8.2 |
Additions for tax positions of prior years | 5.2 | 0.1 | 4.8 |
Reductions for tax positions of prior years | (1.2) | (2.5) | |
Settlements with tax authorities | (1.2) | (28.6) | (29.5) |
Expiration of the statute of limitations | (0.6) | (1.4) | (2) |
Balance as of end of fiscal year | $ 22.1 | $ 14.9 | $ 43.7 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income/(Loss) (Changes in Accumulated Other Comprehensive Income/(Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
May 31, 2019 | May 31, 2018 | May 31, 2017 | ||||
Accumulated Other Comprehensive Income/(Loss) [Abstract] | ||||||
Beginning balance | $ (36.2) | [1] | $ 20 | $ 29.2 | ||
Unrealized holding gains/(losses) | 58.2 | (70.2) | (14.7) | |||
Income tax (expense)/benefit related to unrealized holding gains/(losses) | (14.2) | 22.6 | 5.6 | |||
Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income | (0.1) | |||||
Foreign currency translation adjustment | (7.7) | (8.6) | ||||
Total other comprehensive income/(loss), net of tax | 36.3 | (56.2) | [2] | (9.2) | [2] | |
Ending balance | 0.1 | (36.2) | [1] | 20 | ||
Total tax expense/(benefit) included in other comprehensive income/(loss) | $ 14.2 | $ (22.6) | $ (5.6) | |||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606 and to provide further detail related to certain professional employer organization ("PEO") balances. | |||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). |
Short-term Financing (Narrative
Short-term Financing (Narrative) (Details) $ in Millions | Jun. 01, 2019USD ($) | May 31, 2019USD ($) | May 31, 2018USD ($) | Aug. 17, 2017USD ($)loan |
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||||
Financing [Line Items] | ||||
Amounts outstanding | $ 0 | $ 0 | ||
Amount borrowed | $ 483 | $ 700 | ||
Number of days borrowed | 95 days | 22 days | ||
Weighted-average interest rate | 3.64% | 4.27% | ||
Weighted-average amount borrowed | $ 387.7 | $ 319.1 | ||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Eighty Four Days [Member] | ||||
Financing [Line Items] | ||||
Amount borrowed | $ 400 | |||
Number of days borrowed | 84 days | |||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Eighty Four Days [Member] | LIBOR [Member] | ||||
Financing [Line Items] | ||||
Weighted-average interest rate | 3.45% | |||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Three Days [Member] | ||||
Financing [Line Items] | ||||
Amount borrowed | $ 100 | |||
Number of days borrowed | 3 days | |||
Weighted-average interest rate | 4.25% | |||
Revolving Credit Facility [Member] | JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Two Overnight Basis [Member] | Subsequent Event [Member] | ||||
Financing [Line Items] | ||||
Weighted-average amount borrowed | $ 187.8 | |||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||||
Financing [Line Items] | ||||
Amounts outstanding | $ 0 | $ 0 | ||
Amount borrowed | $ 400 | $ 400 | ||
Number of days borrowed | 92 days | 42 days | ||
Weighted-average interest rate | 3.55% | 2.80% | ||
Weighted-average amount borrowed | $ 375.6 | $ 144.8 | ||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Eighty Four Days [Member] | ||||
Financing [Line Items] | ||||
Amount borrowed | $ 400 | |||
Number of days borrowed | 84 days | |||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Eighty Four Days [Member] | LIBOR [Member] | ||||
Financing [Line Items] | ||||
Weighted-average interest rate | 3.45% | |||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seven Days [Member] | ||||
Financing [Line Items] | ||||
Amount borrowed | $ 300 | |||
Number of days borrowed | 7 days | |||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Seven Days [Member] | LIBOR [Member] | ||||
Financing [Line Items] | ||||
Weighted-average interest rate | 2.13% | |||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Thirty Days [Member] | ||||
Financing [Line Items] | ||||
Amount borrowed | $ 75 | |||
Number of days borrowed | 30 days | |||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Thirty Days [Member] | LIBOR [Member] | ||||
Financing [Line Items] | ||||
Weighted-average interest rate | 2.19% | |||
Revolving Credit Facility [Member] | JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | Two Overnight Basis [Member] | Subsequent Event [Member] | ||||
Financing [Line Items] | ||||
Weighted-average amount borrowed | 178 | |||
Revolving Credit Facility [Member] | PNC $150 Million Credit Facility [Member] | PNC Bank, National Association [Member] | ||||
Financing [Line Items] | ||||
Amounts outstanding | $ 0 | $ 0 | ||
Amount borrowed | $ 58.9 | $ 59.9 | ||
Number of days borrowed | 359 days | 358 days | ||
Weighted-average interest rate | 2.81% | 1.94% | ||
Weighted-average amount borrowed | $ 56.1 | $ 57.2 | ||
Revolving Credit Facility [Member] | PNC $150 Million Credit Facility [Member] | PNC Bank, National Association [Member] | Subsequent Event [Member] | ||||
Financing [Line Items] | ||||
Amounts outstanding | $ 54.9 | |||
Standby Letters of Credit [Member] | ||||
Financing [Line Items] | ||||
Maximum borrowing capacity | 148.9 | 56.8 | ||
Amounts outstanding | $ 0 | 0 | ||
Standby Letters of Credit [Member] | Extended [Member] | Subsequent Event [Member] | ||||
Financing [Line Items] | ||||
Expiration date | Jul. 1, 2020 | |||
Line of Credit [Member] | ||||
Financing [Line Items] | ||||
Number of terminated lines of credit | loan | 4 | |||
Amounts outstanding | $ 0 | |||
Maximum borrowing capacity | $ 900 | |||
Minimum [Member] | Standby Letters of Credit [Member] | ||||
Financing [Line Items] | ||||
Expiration date | Jul. 1, 2019 | |||
Maximum [Member] | Standby Letters of Credit [Member] | ||||
Financing [Line Items] | ||||
Expiration date | Jul. 1, 2020 |
Short-term Financing (Descripti
Short-term Financing (Description of Credit Facilities) (Details) $ in Millions | 12 Months Ended | |
May 31, 2019USD ($) | [1] | |
Paychex of New York, LLC [Member] | JP Morgan Chase Bank, N.A. [Member] | JPM $1 Billion Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Date Entered | Aug. 5, 2015 | [2] |
Expiration Date | Aug. 5, 2020 | [2] |
Maximum Amount Available | $ 1,000 | [2] |
Paychex of New York, LLC [Member] | JP Morgan Chase Bank, N.A. [Member] | JPM $500 Million Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Date Entered | Aug. 17, 2017 | [2] |
Expiration Date | Aug. 17, 2022 | [2] |
Maximum Amount Available | $ 500 | [2] |
Paychex Advance, LLC [Member] | PNC Bank, National Association [Member] | PNC $150 Million Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Date Entered | Mar. 17, 2016 | |
Expiration Date | Mar. 17, 2020 | |
Maximum Amount Available | $ 150 | |
[1] | Borrower is a wholly owned subsidiary of the Company. | |
[2] | JP Morgan Chase Bank, N.A. ("JPM") acts as the administrative agent for this syndicated credit facility. |
Short-term Financing (Credit Fa
Short-term Financing (Credit Facility Amount Borrowed) (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
JPM $1 Billion Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||
Line of Credit Facility [Line Items] | ||
Number of days borrowed | 95 days | 22 days |
Maximum amount borrowed | $ 483 | $ 700 |
Weighted-average amount borrowed | $ 387.7 | $ 319.1 |
Weighted-average interest rate | 3.64% | 4.27% |
JPM $500 Million Credit Facility [Member] | JP Morgan Chase Bank, N.A. [Member] | ||
Line of Credit Facility [Line Items] | ||
Number of days borrowed | 92 days | 42 days |
Maximum amount borrowed | $ 400 | $ 400 |
Weighted-average amount borrowed | $ 375.6 | $ 144.8 |
Weighted-average interest rate | 3.55% | 2.80% |
PNC $150 Million Credit Facility [Member] | PNC Bank, National Association [Member] | ||
Line of Credit Facility [Line Items] | ||
Number of days borrowed | 359 days | 358 days |
Maximum amount borrowed | $ 58.9 | $ 59.9 |
Weighted-average amount borrowed | $ 56.1 | $ 57.2 |
Weighted-average interest rate | 2.81% | 1.94% |
Long-Term Financing (Narrative)
Long-Term Financing (Narrative) (Details) - USD ($) $ in Millions | May 31, 2019 | Mar. 13, 2019 | May 31, 2018 |
Aggregate principal amount | $ 800 | ||
Long-term debt outstanding | $ 0 | ||
Company And Paychex Of New York [Member] | |||
Aggregate principal amount | $ 800 | ||
Senior Notes, Series A [Member] | Senior Notes [Member] | |||
Aggregate principal amount | $ 400 | ||
Principal payment dates | Mar. 13, 2026 | ||
Senior Notes, Series A [Member] | Senior Notes [Member] | Company And Paychex Of New York [Member] | |||
Aggregate principal amount | $ 400 | ||
Principal payment dates | Mar. 13, 2026 | ||
Senior Notes, Series B [Member] | Senior Notes [Member] | |||
Aggregate principal amount | $ 400 | ||
Principal payment dates | Mar. 13, 2029 | ||
Senior Notes, Series B [Member] | Senior Notes [Member] | Company And Paychex Of New York [Member] | |||
Aggregate principal amount | $ 400 | ||
Principal payment dates | Mar. 13, 2029 |
Long-Term Financing (Schedule O
Long-Term Financing (Schedule Of Long-Term Debt) (Details) $ in Millions | May 31, 2019USD ($) |
Debt Instrument [Line Items] | |
Total long-term borrowings, Amortized cost | $ 800 |
Less: Debt issuance costs, net of accumulated amortization, Amortized cost | (3.6) |
Long-term borrowings, net of debt issuance costs, Amortized cost | 796.4 |
Senior Notes, Series A [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Total long-term borrowings, Amortized cost | 400 |
Senior Notes, Series B [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Total long-term borrowings, Amortized cost | $ 400 |
Long-Term Financing (Informatio
Long-Term Financing (Information Related To Senior Notes) (Details) - Senior Notes [Member] | 12 Months Ended |
May 31, 2019 | |
Senior Notes, Series A [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 4.07% |
Effective interest rate | 4.16% |
Interest rate type | Fixed |
Interest payment dates | Semi-annual, in arrears |
Principal payment dates | Mar. 13, 2026 |
Note type | Unsecured |
Senior Notes, Series B [Member] | |
Debt Instrument [Line Items] | |
Stated interest rate | 4.25% |
Effective interest rate | 4.32% |
Interest rate type | Fixed |
Interest payment dates | Semi-annual, in arrears |
Principal payment dates | Mar. 13, 2029 |
Note type | Unsecured |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |||
Income taxes paid | $ 317.9 | $ 319.1 | $ 462.6 |
Interest expense paid | 10.4 | 4 | 2.5 |
Lease incentives received | $ 3.5 | 7.7 | $ 5.8 |
Common stock issued in connection to aquisition | $ 33.2 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 10 Months Ended | 12 Months Ended | 14 Months Ended | ||
Mar. 29, 2018 | May 31, 2019 | May 31, 2018 | May 31, 2017 | May 31, 2019 | |
Deferred Compensation Plans [Member] | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Percentage of annual base salary and bonus that eligible employees may defer | 50.00% | ||||
Percentage of Board cash compensation that eligible outside directors may defer | 100.00% | ||||
Amounts accrued under deferred compensation plans | $ 27 | $ 18.2 | $ 27 | ||
401(K) Plan [Member] | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Maximum percentage of salary deferral | 50.00% | ||||
Years of service to be eligible for matching contribution | 1 year | ||||
Minimum number of hours worked for eligibility | 1000 hours | ||||
Employer's matching contribution as a percent of the first 3% of employees' salary contributed | 100.00% | ||||
Percentage of employees' salary contributed matched 100% by employer | 3.00% | ||||
Employer's matching contribution as a percent of the next 2% of employees' salary contributed | 50.00% | ||||
Percentage of employees' salary contributed matched 50% by employer | 2.00% | ||||
Percentage of employer matching contributions of eligible employee pay | 50.00% | ||||
Total percentage of employees' salary contributed matched by employer | 4.00% | ||||
Company contributions to the plan | $ 29.3 | $ 23.6 | $ 22.4 | ||
Percentage participant directed | 100.00% | ||||
401(K) Plan [Member] | Maximum [Member] | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Percentage of employees' salary contributed matched by employer | 8.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
Commitments and Contingencies [Abstract] | |||
Rent expense | $ 42.9 | $ 39.9 | $ 39.7 |
Minimum future payment obligations under purchase orders, legally binding contractual arrangements, and under existing workers' compensation insurance agreements | 289.9 | ||
Commitments to purchase capital assets | $ 5.6 |
Commitments and Contingencies_3
Commitments and Contingencies (Future Minimum Operating Lease Payments) (Details) $ in Millions | May 31, 2019USD ($) |
Commitments and Contingencies [Abstract] | |
Year ending May 31, 2020 | $ 37.7 |
Year ending May 31, 2021 | 29.9 |
Year ending May 31, 2022 | 21.3 |
Year ending May 31, 2023 | 13.8 |
Year ending May 31, 2024 | 10.5 |
Year ending May 31, Thereafter | $ 10.7 |
Commitments and Contingencies_4
Commitments and Contingencies (Minimum Future Payment Obligations) (Details) $ in Millions | May 31, 2019USD ($) |
Commitments and Contingencies [Abstract] | |
Year ending May 31, 2020 | $ 176.2 |
Year ending May 31, 2021 | 44.8 |
Year ending May 31, 2022 | 19.2 |
Year ending May 31, 2023 | 11.5 |
Year ending May 31, 2024 | 7.4 |
Year ending May 31, Thereafter | $ 30.8 |
Related Parties (Narrative) (De
Related Parties (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2019 | May 31, 2018 | May 31, 2017 | |
EMC Corporation [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related parties | $ 2 | $ 0.5 | $ 0.6 |
Staples, Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related parties | 3.1 | $ 2.7 | $ 2.9 |
Cognizant Technology Solutions Corporation [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases from related parties | $ 1.6 |
Quarterly Financial Data (Quart
Quarterly Financial Data (Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 | [1] | Feb. 28, 2018 | [1] | Nov. 30, 2017 | [1] | Aug. 31, 2017 | [1] | May 31, 2019 | May 31, 2018 | [1] | May 31, 2017 | |||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||||||||
Service revenue | $ 958.2 | $ 1,047.4 | $ 840.6 | $ 845.7 | $ 828 | $ 918 | $ 789 | $ 779.2 | $ 3,691.9 | $ 3,314.2 | [2] | $ 3,102.4 | [2],[3] | |||||||||
Interest on funds held for clients | 22.2 | 23 | 18.3 | 17.1 | 17.7 | 18.1 | 14 | 13.7 | 80.6 | 63.5 | [2] | 50.6 | [2] | |||||||||
Total revenue | 980.4 | 1,070.4 | 858.9 | 862.8 | 845.7 | 936.1 | 803 | 792.9 | 3,772.5 | 3,377.7 | [2] | 3,153 | [2] | |||||||||
Operating income | 314.5 | 429.3 | 307.2 | 320.3 | 302.1 | 369 | 303.1 | 317.3 | 1,371.3 | 1,291.5 | [2] | 1,253.9 | [2] | |||||||||
Interest (expense)/income, net | (4) | (3.7) | 2.1 | 2.3 | 2.5 | 2.3 | 1.7 | 2.1 | (3.3) | 8.6 | [2] | 5.2 | [2] | |||||||||
Income before income taxes | 310.5 | 425.6 | 309.3 | 322.6 | 304.6 | 371.3 | 304.8 | 319.4 | 1,368 | 1,300.1 | [2] | 1,259.1 | [2] | |||||||||
Income taxes | 80.1 | 101 | 73.5 | 79 | 86.9 | [4] | 4.1 | [4] | 106 | [4] | 109 | [4] | 333.6 | 306 | [2],[4] | 432.8 | [2],[5] | |||||
Net income | $ 230.4 | $ 324.6 | $ 235.8 | $ 243.6 | $ 217.7 | $ 367.2 | $ 198.8 | $ 210.4 | $ 1,034.4 | $ 994.1 | [2],[6] | $ 826.3 | [2],[3],[6] | |||||||||
Earnings per share, basic | $ 0.64 | [7] | $ 0.90 | [7] | $ 0.66 | [7] | $ 0.68 | [7] | $ 0.61 | [7] | $ 1.02 | [7] | $ 0.55 | [7] | $ 0.59 | [7] | $ 2.88 | [7] | $ 2.77 | [2],[7] | $ 2.30 | [2],[3] |
Diluted earnings per share | $ 0.64 | [7] | $ 0.90 | [7] | $ 0.65 | [7] | $ 0.67 | [7] | $ 0.60 | [7] | $ 1.01 | [7] | $ 0.55 | [7] | $ 0.58 | [7] | $ 2.86 | [7] | $ 2.75 | [2],[7] | $ 2.28 | [2],[3],[8] |
Weighted-average common shares outstanding | 359.4 | 359.2 | 359.1 | 359.1 | 359 | 359.2 | 359.1 | 358.9 | 359.2 | 359 | [2] | 359.8 | [2],[3] | |||||||||
Weighted-average common shares outstanding, assuming dilution | 362.5 | 361.6 | 361.5 | 361.5 | 361.5 | 362 | 361.4 | 361.3 | 361.8 | 361.5 | [2] | 362.6 | [2],[3] | |||||||||
Quarterly dividend per share | $ 0.62 | $ 0.56 | $ 0.56 | $ 0.56 | $ 0.56 | $ 0.50 | $ 0.50 | $ 0.50 | $ 2.30 | $ 2.06 | ||||||||||||
Total net realized gains | $ 0.1 | [9] | $ 0.1 | [9] | $ (0.3) | [9] | $ 0.1 | [9] | $ 0.1 | [9] | $ 0.1 | [9] | $ 0.1 | |||||||||
[1] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[2] | Amounts have been adjusted to reflect the adoption of Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC Topic 606"). | |||||||||||||||||||||
[3] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[4] | As a result of the Tax Act, the effective income tax rate for the three months ended February 28, 2018 was significantly impacted by certain one-time net tax benefits. Refer to Note K of this Item 8 for further details. | |||||||||||||||||||||
[5] | Amounts have been adjusted to reflect the adoption of ASC Topic 606. | |||||||||||||||||||||
[6] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update ("ASU") No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)." | |||||||||||||||||||||
[7] | 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. | |||||||||||||||||||||
[8] | Diluted earnings per share amounts may not add across by +/- $0.01 due to rounding. | |||||||||||||||||||||
[9] | Total net realized gains/(losses) on the combined funds held for clients and corporate investment portfolios. |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |||
May 31, 2019 | May 31, 2018 | May 31, 2017 | ||
Allowance for Doubtful Accounts [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance as of beginning of fiscal year | $ 7 | $ 6 | $ 4.2 | |
Additions charged to expenses | 3.3 | 3.6 | 4.9 | |
Additions to/(deductions from) other accounts | [1] | 0.7 | ||
Costs and deductions | [2] | 3.5 | 2.6 | 3.1 |
Balance as of end of fiscal year | 7.5 | 7 | 6 | |
Reserve for Client Fund Losses [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance as of beginning of fiscal year | 2.4 | 3 | 2 | |
Additions charged to expenses | 3.7 | 3.1 | 4.1 | |
Additions to/(deductions from) other accounts | [1] | |||
Costs and deductions | [2] | 3.4 | 3.7 | 3.1 |
Balance as of end of fiscal year | $ 2.7 | $ 2.4 | $ 3 | |
[1] | Amounts related to business acquisitions. | |||
[2] | Uncollectible amounts written off, net of recoveries. |