May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Funds held for clients | $ | 4,273.4 | $ | 4,198.6 | ||||
Corporate investments | 366.6 | 398.7 | ||||||
Long-term corporate investments | 399.8 | 385.6 | ||||||
Total funds held for clients and corporate investments | $ | 5,039.8 | $ | 4,982.9 |
May 31, 2015 | ||||||||||||||||
In millions | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Type of issue: | ||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,430.0 | $ | — | $ | — | $ | 1,430.0 | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | 1,694.0 | 14.0 | (4.3 | ) | 1,703.7 | |||||||||||
Pre-refunded municipal bonds(1) | 101.7 | 1.0 | — | 102.7 | ||||||||||||
Revenue municipal bonds | 960.7 | 6.1 | (3.2 | ) | 963.6 | |||||||||||
Variable rate demand notes | 825.6 | — | — | 825.6 | ||||||||||||
Total available-for-sale securities | 3,582.0 | 21.1 | (7.5 | ) | 3,595.6 | |||||||||||
Other | 12.7 | 1.5 | — | 14.2 | ||||||||||||
Total funds held for clients and corporate investments | $ | 5,024.7 | $ | 22.6 | $ | (7.5 | ) | $ | 5,039.8 |
May 31, 2014 | ||||||||||||||||
In millions | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Type of issue: | ||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,579.2 | $ | — | $ | — | $ | 1,579.2 | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | 1,605.4 | 25.0 | (1.9 | ) | 1,628.5 | |||||||||||
Pre-refunded municipal bonds(1) | 140.4 | 2.4 | — | 142.8 | ||||||||||||
Revenue municipal bonds | 858.8 | 10.1 | (1.1 | ) | 867.8 | |||||||||||
Variable rate demand notes | 752.3 | — | — | 752.3 | ||||||||||||
Total available-for-sale securities | 3,356.9 | 37.5 | (3.0 | ) | 3,391.4 | |||||||||||
Other | 10.6 | 1.7 | — | 12.3 | ||||||||||||
Total funds held for clients and corporate investments | $ | 4,946.7 | $ | 39.2 | $ | (3.0 | ) | $ | 4,982.9 |
(1) | Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
May 31, 2015 | ||||||||||||||||
In millions | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Type of issue: | ||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,430.0 | $ | — | $ | — | $ | 1,430.0 | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | 1,694.0 | 14.0 | (4.3 | ) | 1,703.7 | |||||||||||
Pre-refunded municipal bonds(1) | 101.7 | 1.0 | — | 102.7 | ||||||||||||
Revenue municipal bonds | 960.7 | 6.1 | (3.2 | ) | 963.6 | |||||||||||
Variable rate demand notes | 825.6 | — | — | 825.6 | ||||||||||||
Total available-for-sale securities | 3,582.0 | 21.1 | (7.5 | ) | 3,595.6 | |||||||||||
Other | 12.7 | 1.5 | — | 14.2 | ||||||||||||
Total funds held for clients and corporate investments | $ | 5,024.7 | $ | 22.6 | $ | (7.5 | ) | $ | 5,039.8 |
May 31, 2014 | ||||||||||||||||
In millions | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Type of issue: | ||||||||||||||||
Funds held for clients money market securities and other cash equivalents | $ | 1,579.2 | $ | — | $ | — | $ | 1,579.2 | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | 1,605.4 | 25.0 | (1.9 | ) | 1,628.5 | |||||||||||
Pre-refunded municipal bonds(1) | 140.4 | 2.4 | — | 142.8 | ||||||||||||
Revenue municipal bonds | 858.8 | 10.1 | (1.1 | ) | 867.8 | |||||||||||
Variable rate demand notes | 752.3 | — | — | 752.3 | ||||||||||||
Total available-for-sale securities | 3,356.9 | 37.5 | (3.0 | ) | 3,391.4 | |||||||||||
Other | 10.6 | 1.7 | — | 12.3 | ||||||||||||
Total funds held for clients and corporate investments | $ | 4,946.7 | $ | 39.2 | $ | (3.0 | ) | $ | 4,982.9 |
(1) | Pre-refunded municipal bonds are secured by an escrow fund of U.S. government obligations. |
May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Funds held for clients | $ | 4,273.4 | $ | 4,198.6 | ||||
Corporate investments | 366.6 | 398.7 | ||||||
Long-term corporate investments | 399.8 | 385.6 | ||||||
Total funds held for clients and corporate investments | $ | 5,039.8 | $ | 4,982.9 |
May 31, 2015 | |||||||||||||||||||||||
Securities in an unrealized loss position for less than twelve months | Securities in an unrealized loss position for more than twelve months | Total | |||||||||||||||||||||
In millions | Gross unrealized losses | Fair value | Gross unrealized losses | Fair Value | Gross unrealized losses | Fair Value | |||||||||||||||||
Type of issue: | |||||||||||||||||||||||
General obligation municipal bonds | $ | (3.8 | ) | $ | 535.1 | $ | (0.5 | ) | $ | 26.3 | $ | (4.3 | ) | $ | 561.4 | ||||||||
Revenue municipal bonds | (3.2 | ) | 361.6 | — | — | (3.2 | ) | 361.6 | |||||||||||||||
Total | $ | (7.0 | ) | $ | 896.7 | $ | (0.5 | ) | $ | 26.3 | $ | (7.5 | ) | $ | 923.0 |
May 31, 2014 | |||||||||||||||||||||||
Securities in an unrealized loss position for less than twelve months | Securities in an unrealized loss position for more than twelve months | Total | |||||||||||||||||||||
In millions | Gross unrealized losses | Fair value | Gross unrealized losses | Fair Value | Gross unrealized losses | Fair Value | |||||||||||||||||
Type of issue: | |||||||||||||||||||||||
General obligation municipal bonds | $ | (0.1 | ) | $ | 69.6 | $ | (1.8 | ) | $ | 164.0 | $ | (1.9 | ) | $ | 233.6 | ||||||||
Pre-refunded municipal bonds | — | 1.7 | — | — | — | 1.7 | |||||||||||||||||
Revenue municipal bonds | — | 47.5 | (1.1 | ) | 112.4 | (1.1 | ) | 159.9 | |||||||||||||||
Total | $ | (0.1 | ) | $ | 118.8 | $ | (2.9 | ) | $ | 276.4 | $ | (3.0 | ) | $ | 395.2 |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Gross realized gains | $ | 0.3 | $ | 0.6 | $ | 0.9 | ||||||
Gross realized losses | — | — | — | |||||||||
Net realized gains | $ | 0.3 | $ | 0.6 | $ | 0.9 |
May 31, 2015 | ||||||||
In millions | Amortized cost | Fair value | ||||||
Maturity date: | ||||||||
Due in one year or less | $ | 345.8 | $ | 347.8 | ||||
Due after one year through three years | 726.3 | 734.3 | ||||||
Due after three years through five years | 800.9 | 802.0 | ||||||
Due after five years | 1,709.0 | 1,711.5 | ||||||
Total | $ | 3,582.0 | $ | 3,595.6 |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Weighted-average grant-date fair value of restricted stock granted | $ | 41.70 | $ | 38.53 | $ | 31.76 | ||||||
Total grant-date fair value of restricted stock vested | $ | 3.5 | $ | 3.3 | $ | 2.1 |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Weighted-average grant-date fair value of RSUs granted | $ | 36.64 | $ | 36.37 | $ | 28.59 | ||||||
Total intrinsic value of RSUs vested | $ | 21.7 | $ | 18.3 | $ | 15.5 | ||||||
Total grant-date fair value of RSUs vested | $ | 14.8 | $ | 12.1 | $ | 13.4 |
In millions, except per share amounts | Shares subject to options | Weighted-average exercise price per share | Weighted-average remaining contractual term (years) | Aggregate intrinsic value(1) | |||||||||
Outstanding as of May 31, 2014 | 2.8 | $ | 31.25 | ||||||||||
Granted | — | $ | — | ||||||||||
Exercised | (0.1 | ) | $ | 30.17 | |||||||||
Forfeited | — | $ | — | ||||||||||
Expired | — | $ | — | ||||||||||
Outstanding as of May 31, 2015 | 2.7 | $ | 31.31 | 6.4 | $ | 48.2 | |||||||
Exercisable as of May 31, 2015 | 0.5 | $ | 31.20 | 6.3 | $ | 8.6 |
(1) | Market price of the underlying stock as of May 31, 2015 less the exercise price. |
Financial institution | Amount available | Expiration date |
JP Morgan Chase Bank, N.A. | $350 million | February 28, 2016 |
Bank of America, N.A. | $250 million | February 28, 2016 |
PNC Bank, National Association | $150 million | February 28, 2016 |
Wells Fargo Bank, National Association | $150 million | February 28, 2016 |
$ in millions Fiscal quarter | Amount borrowed | Interest rate | |||||
First quarter | $ | 100.0 | 3.25 | % | |||
Second quarter | $ | 150.0 | 3.25 | % | |||
Third quarter | $ | — | — | ||||
Fourth quarter | $ | — | — |
In millions Year ending May 31, | Minimum lease payments | |||
2016 | $ | 37.5 | ||
2017 | 31.2 | |||
2018 | 23.1 | |||
2019 | 16.1 | |||
2020 | 11.3 | |||
Thereafter | 8.5 |
In millions Year ending May 31, | Minimum payment obligation | |||
2016 | $ | 71.2 | ||
2017 | 26.8 | |||
2018 | 4.4 | |||
2019 | 1.9 | |||
2020 | 0.3 | |||
Thereafter | 0.2 |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Beginning balance | $ | 21.5 | $ | 22.0 | $ | 37.7 | ||||||
Other comprehensive loss: | ||||||||||||
Unrealized holding (losses)/gains | (21.5 | ) | 0.3 | (24.1 | ) | |||||||
Income tax benefit/(expense) related to unrealized holding gains/(losses) | 7.7 | (0.4 | ) | 9.0 | ||||||||
Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income | (0.3 | ) | (0.6 | ) | (0.9 | ) | ||||||
Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities | 0.1 | 0.2 | 0.3 | |||||||||
Total other comprehensive loss, net of tax | (14.0 | ) | (0.5 | ) | (15.7 | ) | ||||||
Ending balance | $ | 7.5 | $ | 21.5 | $ | 22.0 | ||||||
Total tax (benefit)/expense included in other comprehensive loss | $ | (7.8 | ) | $ | 0.2 | $ | (9.3 | ) |
Year ended May 31, | ||||||||||||||||||||
2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||
Performance stock options | Stock options | |||||||||||||||||||
Risk-free interest rate | 1.5 | % | 0.7 | % | 2.1 | % | 2.0 | % | 1.0 | % | ||||||||||
Dividend yield | 3.9 | % | 4.1 | % | 3.7 | % | 4.1 | % | 4.3 | % | ||||||||||
Volatility factor | .20 | .22 | .21 | .22 | .23 | |||||||||||||||
Expected option life in years | 4.5 | 4.8 | 6.0 | 6.4 | 6.4 | |||||||||||||||
Weighted-average grant-date fair value of stock options granted (per share) | $ | 3.85 | $ | 3.55 | $ | 5.68 | $ | 4.90 | $ | 3.77 |
In millions, except per share amounts | Shares subject to options | Weighted-average exercise price per share | Weighted-average remaining contractual term (years) | Aggregate intrinsic value(1) | |||||||||
Outstanding as of May 31, 2014 | 5.4 | $ | 34.00 | ||||||||||
Granted | 0.8 | $ | 41.70 | ||||||||||
Exercised | (1.5 | ) | $ | 33.84 | |||||||||
Forfeited | — | $ | 30.15 | ||||||||||
Expired | — | $ | 38.12 | ||||||||||
Outstanding as of May 31, 2015 | 4.7 | $ | 35.21 | 6.0 | $ | 66.3 | |||||||
Exercisable as of May 31, 2015 | 2.7 | $ | 33.42 | 4.4 | $ | 43.0 |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Total intrinsic value of stock options exercised | $ | 17.6 | $ | 18.9 | $ | 7.8 | ||||||
Total grant-date fair value of stock options vested | $ | 3.6 | $ | 3.0 | $ | 3.0 |
In millions, except per share amounts | Shares subject to options | Weighted-average exercise price per share | Weighted-average remaining contractual term (years) | Aggregate intrinsic value(1) | |||||||||
Outstanding as of May 31, 2014 | 2.8 | $ | 31.25 | ||||||||||
Granted | — | $ | — | ||||||||||
Exercised | (0.1 | ) | $ | 30.17 | |||||||||
Forfeited | — | $ | — | ||||||||||
Expired | — | $ | — | ||||||||||
Outstanding as of May 31, 2015 | 2.7 | $ | 31.31 | 6.4 | $ | 48.2 | |||||||
Exercisable as of May 31, 2015 | 0.5 | $ | 31.20 | 6.3 | $ | 8.6 |
(1) | Market price of the underlying stock as of May 31, 2015 less the exercise price. |
In millions, except per share amounts | RSUs | Weighted-average grant-date fair value per share | Weighted-average remaining vesting period (years) | Aggregate intrinsic value(1) | |||||||||
Nonvested as of May 31, 2014 | 1.7 | $ | 30.52 | ||||||||||
Granted | 0.7 | $ | 36.64 | ||||||||||
Vested | (0.5 | ) | $ | 28.11 | |||||||||
Forfeited | (0.1 | ) | $ | 32.60 | |||||||||
Nonvested as of May 31, 2015 | 1.8 | $ | 33.57 | 3.0 | $ | 88.8 |
(1) | Intrinsic value for RSUs is the market price of the underlying stock as of May 31, 2015. |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Weighted-average grant-date fair value of RSUs granted | $ | 36.64 | $ | 36.37 | $ | 28.59 | ||||||
Total intrinsic value of RSUs vested | $ | 21.7 | $ | 18.3 | $ | 15.5 | ||||||
Total grant-date fair value of RSUs vested | $ | 14.8 | $ | 12.1 | $ | 13.4 |
In millions, except per share amounts | Restricted shares | Weighted-average grant-date fair value per share | |||||
Nonvested as of May 31, 2014 | 0.2 | $ | 33.55 | ||||
Granted | 0.1 | $ | 41.70 | ||||
Vested | (0.1 | ) | $ | 31.79 | |||
Forfeited | — | $ | — | ||||
Nonvested as of May 31, 2015 | 0.2 | $ | 38.99 |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Weighted-average grant-date fair value of restricted stock granted | $ | 41.70 | $ | 38.53 | $ | 31.76 | ||||||
Total grant-date fair value of restricted stock vested | $ | 3.5 | $ | 3.3 | $ | 2.1 |
In millions, except per share amounts | Performance shares | Weighted-average grant-date fair value per share | |||||
Nonvested as of May 31, 2014 | 0.5 | $ | 31.61 | ||||
Granted (1) | 0.2 | $ | 37.61 | ||||
Vested | (0.1 | ) | $ | 28.87 | |||
Forfeited | — | $ | — | ||||
Nonvested as of May 31, 2015 | 0.6 | $ | 34.24 |
(1) | Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Basic earnings per share: | ||||||||||||
Net income | $ | 674.9 | $ | 627.5 | $ | 569.0 | ||||||
Weighted-average common shares outstanding | 362.9 | 364.5 | 363.8 | |||||||||
Basic earnings per share | $ | 1.86 | $ | 1.72 | $ | 1.56 | ||||||
Diluted earnings per share: | ||||||||||||
Net income | $ | 674.9 | $ | 627.5 | $ | 569.0 | ||||||
Weighted-average common shares outstanding | 362.9 | 364.5 | 363.8 | |||||||||
Dilutive effect of common share equivalents | 1.7 | 1.6 | 0.9 | |||||||||
Weighted-average common shares outstanding, assuming dilution | 364.6 | 366.1 | 364.7 | |||||||||
Diluted earnings per share | $ | 1.85 | $ | 1.71 | $ | 1.56 | ||||||
Weighted-average anti-dilutive common share equivalents | 0.3 | 0.7 | 6.5 |
• | Level 1 valuations are based on quoted prices in active markets for identical instruments that the Company can access at the measurement date. |
• | Level 2 valuations are based on inputs other than quoted prices included in Level 1 that are observable for the instrument, either directly or indirectly, for substantially the full term of the asset or liability including the following: |
◦ | quoted prices for similar, but not identical, instruments in active markets; |
◦ | quoted prices for identical or similar instruments in markets that are not active; |
◦ | inputs other than quoted prices that are observable for the instrument; or |
◦ | inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement. |
May 31, 2015 | ||||||||||||||||
In millions | Carrying value (Fair value) | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Commercial paper | $ | 15.0 | $ | — | $ | 15.0 | $ | — | ||||||||
General obligation municipal bonds | 55.1 | — | 55.1 | — | ||||||||||||
Pre-refunded municipal bonds | 20.5 | — | 20.5 | — | ||||||||||||
Revenue municipal bonds | 12.3 | — | 12.3 | — | ||||||||||||
Money market securities | 0.2 | 0.2 | — | — | ||||||||||||
Total cash equivalents | $ | 103.1 | $ | 0.2 | $ | 102.9 | $ | — | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | $ | 1,703.7 | $ | — | $ | 1,703.7 | $ | — | ||||||||
Pre-refunded municipal bonds | 102.7 | — | 102.7 | — | ||||||||||||
Revenue municipal bonds | 963.6 | — | 963.6 | — | ||||||||||||
Variable rate demand notes | 825.6 | — | 825.6 | — | ||||||||||||
Total available-for-sale securities | $ | 3,595.6 | $ | — | $ | 3,595.6 | $ | — | ||||||||
Other | $ | 14.2 | $ | 14.2 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Other long-term liabilities | $ | 14.2 | $ | 14.2 | $ | — | $ | — |
May 31, 2014 | ||||||||||||||||
In millions | Carrying value (Fair value) | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Commercial paper | $ | 6.0 | $ | — | $ | 6.0 | $ | — | ||||||||
General obligation municipal bonds | 10.9 | — | 10.9 | — | ||||||||||||
Pre-refunded municipal bonds | 31.2 | — | 31.2 | — | ||||||||||||
Revenue municipal bonds | 17.7 | — | 17.7 | — | ||||||||||||
Total cash equivalents | $ | 65.8 | $ | — | $ | 65.8 | $ | — | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | $ | 1,628.5 | $ | — | $ | 1,628.5 | $ | — | ||||||||
Pre-refunded municipal bonds | 142.8 | — | 142.8 | — | ||||||||||||
Revenue municipal bonds | 867.8 | — | 867.8 | — | ||||||||||||
Variable rate demand notes | 752.3 | — | 752.3 | — | ||||||||||||
Total available-for-sale securities | $ | 3,391.4 | $ | — | $ | 3,391.4 | $ | — | ||||||||
Other | $ | 12.3 | $ | 12.3 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Other long-term liabilities | $ | 12.3 | $ | 12.3 | $ | — | $ | — |
May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Client lists | $ | 244.6 | $ | 240.9 | ||||
Other intangible assets | 3.2 | 2.6 | ||||||
Total intangible assets, gross | 247.8 | 243.5 | ||||||
Less: Accumulated amortization | 215.4 | 202.9 | ||||||
Intangible assets, net of accumulated amortization | $ | 32.4 | $ | 40.6 |
In millions Year ending May 31, | Estimated amortization expense | |||
2016 | $ | 11.3 | ||
2017 | 8.2 | |||
2018 | 5.5 | |||
2019 | 3.6 | |||
2020 | 2.0 |
May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Deferred tax assets: | ||||||||
Compensation and employee benefit liabilities | $ | 20.9 | $ | 18.7 | ||||
Other current liabilities | 6.9 | 6.9 | ||||||
Tax credit carry forward | 40.1 | 38.3 | ||||||
Depreciation | 11.9 | 8.3 | ||||||
Stock-based compensation | 21.6 | 21.1 | ||||||
Other | 24.9 | 28.7 | ||||||
Gross deferred tax assets | 126.3 | 122.0 | ||||||
Deferred tax liabilities: | ||||||||
Capitalized software | 53.6 | 50.1 | ||||||
Depreciation | 3.8 | 12.2 | ||||||
Goodwill and Intangible assets | 52.0 | 46.7 | ||||||
Revenue not subject to current taxes | 13.1 | 12.6 | ||||||
Unrealized gains on available-for-sale securities | 5.3 | 13.2 | ||||||
Other | 0.3 | 0.4 | ||||||
Gross deferred tax liabilities | 128.1 | 135.2 | ||||||
Net deferred tax liability | $ | (1.8 | ) | $ | (13.2 | ) |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Current: | ||||||||||||
Federal | $ | 341.4 | $ | 314.5 | $ | 274.2 | ||||||
State | 47.8 | 51.0 | 62.9 | |||||||||
Total current | 389.2 | 365.5 | 337.1 | |||||||||
Deferred: | ||||||||||||
Federal | (5.1 | ) | (3.5 | ) | 5.5 | |||||||
State | 1.0 | (1.4 | ) | (0.2 | ) | |||||||
Total deferred | (4.1 | ) | (4.9 | ) | 5.3 | |||||||
Income taxes | $ | 385.1 | $ | 360.6 | $ | 342.4 |
Year ended May 31, | |||||||||
2015 | 2014 | 2013 | |||||||
Federal statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
Increase/(decrease) resulting from: | |||||||||
State income taxes, net of federal tax benefit | 3.0 | % | 3.3 | % | 3.0 | % | |||
Tax settlement | — | % | — | % | 1.5 | % | |||
Tax-exempt municipal bond interest | (1.5 | )% | (1.5 | )% | (1.7 | )% | |||
Other items | (0.2 | )% | (0.3 | )% | (0.2 | )% | |||
Effective income tax rate | 36.3 | % | 36.5 | % | 37.6 | % |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Balance as of beginning of fiscal year | $ | 40.0 | $ | 26.7 | $ | 41.7 | ||||||
Additions for tax positions of the current year | 6.7 | 11.2 | 28.5 | |||||||||
Additions for tax positions of prior years | 0.8 | 4.2 | 12.2 | |||||||||
Reductions for tax positions of prior years | (0.4 | ) | (1.8 | ) | (0.5 | ) | ||||||
Settlements with tax authorities | (1.2 | ) | — | (55.0 | ) | |||||||
Expiration of the statute of limitations | (6.0 | ) | (0.3 | ) | (0.2 | ) | ||||||
Balance as of end of fiscal year | $ | 39.9 | $ | 40.0 | $ | 26.7 |
May 31, 2015 | ||||||||
In millions | Amortized cost | Fair value | ||||||
Maturity date: | ||||||||
Due in one year or less | $ | 345.8 | $ | 347.8 | ||||
Due after one year through three years | 726.3 | 734.3 | ||||||
Due after three years through five years | 800.9 | 802.0 | ||||||
Due after five years | 1,709.0 | 1,711.5 | ||||||
Total | $ | 3,582.0 | $ | 3,595.6 |
In millions Year ending May 31, | Minimum lease payments | |||
2016 | $ | 37.5 | ||
2017 | 31.2 | |||
2018 | 23.1 | |||
2019 | 16.1 | |||
2020 | 11.3 | |||
Thereafter | 8.5 |
Category | Depreciable life | |
Buildings and improvements | Ten to 35 years or the remaining life, whichever is shorter | |
Data processing equipment | Three to four years | |
Furniture, fixtures, and equipment | Three to seven years | |
Leasehold improvements | Ten years or the life of the lease, whichever is shorter |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Interest income on corporate funds | $ | 7.8 | $ | 6.9 | $ | 6.7 | ||||||
Interest expense | (0.7 | ) | (1.1 | ) | (0.1 | ) | ||||||
Net loss from equity-method investments | (0.7 | ) | (0.4 | ) | — | |||||||
Investment income, net | $ | 6.4 | $ | 5.4 | $ | 6.6 |
May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Land and improvements | $ | 8.3 | $ | 8.1 | ||||
Buildings and improvements | 102.1 | 101.1 | ||||||
Data processing equipment | 190.9 | 180.8 | ||||||
Software | 391.8 | 344.8 | ||||||
Furniture, fixtures, and equipment | 145.6 | 145.0 | ||||||
Leasehold improvements | 106.2 | 101.7 | ||||||
Construction in progress | 28.5 | 25.3 | ||||||
Total property and equipment, gross | 973.4 | 906.8 | ||||||
Less: Accumulated depreciation | 619.5 | 564.6 | ||||||
Property and equipment, net of accumulated depreciation | $ | 353.9 | $ | 342.2 |
Category | Depreciable life | |
Buildings and improvements | Ten to 35 years or the remaining life, whichever is shorter | |
Data processing equipment | Three to four years | |
Furniture, fixtures, and equipment | Three to seven years | |
Leasehold improvements | Ten years or the life of the lease, whichever is shorter |
May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Land and improvements | $ | 8.3 | $ | 8.1 | ||||
Buildings and improvements | 102.1 | 101.1 | ||||||
Data processing equipment | 190.9 | 180.8 | ||||||
Software | 391.8 | 344.8 | ||||||
Furniture, fixtures, and equipment | 145.6 | 145.0 | ||||||
Leasehold improvements | 106.2 | 101.7 | ||||||
Construction in progress | 28.5 | 25.3 | ||||||
Total property and equipment, gross | 973.4 | 906.8 | ||||||
Less: Accumulated depreciation | 619.5 | 564.6 | ||||||
Property and equipment, net of accumulated depreciation | $ | 353.9 | $ | 342.2 |
Three Months Ended | ||||||||||||||||||||
Fiscal 2015 | August 31 | November 30 | February 28 | May 31 | Full Year | |||||||||||||||
Service revenue | $ | 656.6 | $ | 665.9 | $ | 693.6 | $ | 681.4 | $ | 2,697.5 | ||||||||||
Interest on funds held for clients | 10.2 | 10.4 | 10.7 | 10.8 | 42.1 | |||||||||||||||
Total revenue | $ | 666.8 | $ | 676.3 | $ | 704.3 | $ | 692.2 | $ | 2,739.6 | ||||||||||
Operating income | $ | 267.5 | $ | 270.2 | $ | 264.3 | $ | 251.6 | $ | 1,053.6 | ||||||||||
Investment income, net | 1.4 | 1.4 | 1.6 | 2.0 | 6.4 | |||||||||||||||
Income before income taxes | 268.9 | 271.6 | 265.9 | 253.6 | 1,060.0 | |||||||||||||||
Income taxes | 97.6 | 98.6 | 96.5 | 92.4 | 385.1 | |||||||||||||||
Net income | $ | 171.3 | $ | 173.0 | $ | 169.4 | $ | 161.2 | $ | 674.9 | ||||||||||
Basic earnings per share(1) | $ | 0.47 | $ | 0.48 | $ | 0.47 | $ | 0.44 | $ | 1.86 | ||||||||||
Diluted earnings per share(1) | $ | 0.47 | $ | 0.47 | $ | 0.46 | $ | 0.44 | $ | 1.85 | ||||||||||
Weighted-average common shares outstanding | 363.1 | 363.0 | 363.2 | 362.3 | 362.9 | |||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 364.7 | 364.6 | 365.0 | 364.5 | 364.6 | |||||||||||||||
Cash dividends per common share | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 1.52 | ||||||||||
Total net realized gains(2) | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.3 |
Three Months Ended | ||||||||||||||||||||
Fiscal 2014 | August 31 | November 30 | February 28 | May 31 | Full Year | |||||||||||||||
Service revenue (3) | $ | 603.1 | $ | 606.4 | $ | 639.9 | $ | 628.8 | $ | 2,478.2 | ||||||||||
Interest on funds held for clients | 10.0 | 10.0 | 10.5 | 10.2 | 40.7 | |||||||||||||||
Total revenue (3) | $ | 613.1 | $ | 616.4 | $ | 650.4 | $ | 639.0 | $ | 2,518.9 | ||||||||||
Operating income | $ | 255.1 | $ | 248.6 | $ | 250.7 | $ | 228.3 | $ | 982.7 | ||||||||||
Investment income, net | 1.2 | 1.3 | 1.5 | 1.4 | 5.4 | |||||||||||||||
Income before income taxes | 256.3 | 249.9 | 252.2 | 229.7 | 988.1 | |||||||||||||||
Income taxes | 93.5 | 91.2 | 92.1 | 83.8 | 360.6 | |||||||||||||||
Net income | $ | 162.8 | $ | 158.7 | $ | 160.1 | $ | 145.9 | $ | 627.5 | ||||||||||
Basic earnings per share(1) | $ | 0.45 | $ | 0.43 | $ | 0.44 | $ | 0.40 | $ | 1.72 | ||||||||||
Diluted earnings per share(1) | $ | 0.44 | $ | 0.43 | $ | 0.44 | $ | 0.40 | $ | 1.71 | ||||||||||
Weighted-average common shares outstanding | 365.3 | 364.9 | 364.2 | 363.5 | 364.5 | |||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 366.7 | 366.4 | 365.8 | 365.3 | 366.1 | |||||||||||||||
Cash dividends per common share | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 1.40 | ||||||||||
Total net realized gains(2) | $ | 0.2 | $ | — | $ | 0.3 | $ | 0.1 | $ | 0.6 |
(1) | Each quarter is a discrete period and the sum of the four quarters’ basic and diluted earnings per share amounts may not equal the full year amount. |
(2) | Total net realized gains on the combined funds held for clients and corporate investment portfolios. |
(3) | With the introduction of the new health insurance offering within the PEO during fiscal 2014, the Company began classifying PEO direct costs related to certain benefit plans where the Company retains risk as operating expenses rather than as a reduction in service revenue. As a result, the amounts reported for service revenue and total revenue for the first through third quarters of fiscal 2014 differ from that reported in the Company's Quarterly Reports on Form 10-Q (“Form 10-Q”). There was no impact to operating income from this change. The correction for the PEO direct cost adjustment was not material to any prior interim period in fiscal 2014. Service revenue, as reported in the Company's Form 10-Qs was $597.9 million, $600.5 million, and $626.0 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. Total revenue, as reported in the Company's Form 10-Qs was $607.9 million, $610.5 million, and $636.5 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Gross realized gains | $ | 0.3 | $ | 0.6 | $ | 0.9 | ||||||
Gross realized losses | — | — | — | |||||||||
Net realized gains | $ | 0.3 | $ | 0.6 | $ | 0.9 |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Beginning balance | $ | 21.5 | $ | 22.0 | $ | 37.7 | ||||||
Other comprehensive loss: | ||||||||||||
Unrealized holding (losses)/gains | (21.5 | ) | 0.3 | (24.1 | ) | |||||||
Income tax benefit/(expense) related to unrealized holding gains/(losses) | 7.7 | (0.4 | ) | 9.0 | ||||||||
Reclassification adjustment for the net gain on sale of available-for-sale securities realized in net income | (0.3 | ) | (0.6 | ) | (0.9 | ) | ||||||
Income tax expense on reclassification adjustment for the net gain on sale of available-for-sale securities | 0.1 | 0.2 | 0.3 | |||||||||
Total other comprehensive loss, net of tax | (14.0 | ) | (0.5 | ) | (15.7 | ) | ||||||
Ending balance | $ | 7.5 | $ | 21.5 | $ | 22.0 | ||||||
Total tax (benefit)/expense included in other comprehensive loss | $ | (7.8 | ) | $ | 0.2 | $ | (9.3 | ) |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Current: | ||||||||||||
Federal | $ | 341.4 | $ | 314.5 | $ | 274.2 | ||||||
State | 47.8 | 51.0 | 62.9 | |||||||||
Total current | 389.2 | 365.5 | 337.1 | |||||||||
Deferred: | ||||||||||||
Federal | (5.1 | ) | (3.5 | ) | 5.5 | |||||||
State | 1.0 | (1.4 | ) | (0.2 | ) | |||||||
Total deferred | (4.1 | ) | (4.9 | ) | 5.3 | |||||||
Income taxes | $ | 385.1 | $ | 360.6 | $ | 342.4 |
May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Deferred tax assets: | ||||||||
Compensation and employee benefit liabilities | $ | 20.9 | $ | 18.7 | ||||
Other current liabilities | 6.9 | 6.9 | ||||||
Tax credit carry forward | 40.1 | 38.3 | ||||||
Depreciation | 11.9 | 8.3 | ||||||
Stock-based compensation | 21.6 | 21.1 | ||||||
Other | 24.9 | 28.7 | ||||||
Gross deferred tax assets | 126.3 | 122.0 | ||||||
Deferred tax liabilities: | ||||||||
Capitalized software | 53.6 | 50.1 | ||||||
Depreciation | 3.8 | 12.2 | ||||||
Goodwill and Intangible assets | 52.0 | 46.7 | ||||||
Revenue not subject to current taxes | 13.1 | 12.6 | ||||||
Unrealized gains on available-for-sale securities | 5.3 | 13.2 | ||||||
Other | 0.3 | 0.4 | ||||||
Gross deferred tax liabilities | 128.1 | 135.2 | ||||||
Net deferred tax liability | $ | (1.8 | ) | $ | (13.2 | ) |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Basic earnings per share: | ||||||||||||
Net income | $ | 674.9 | $ | 627.5 | $ | 569.0 | ||||||
Weighted-average common shares outstanding | 362.9 | 364.5 | 363.8 | |||||||||
Basic earnings per share | $ | 1.86 | $ | 1.72 | $ | 1.56 | ||||||
Diluted earnings per share: | ||||||||||||
Net income | $ | 674.9 | $ | 627.5 | $ | 569.0 | ||||||
Weighted-average common shares outstanding | 362.9 | 364.5 | 363.8 | |||||||||
Dilutive effect of common share equivalents | 1.7 | 1.6 | 0.9 | |||||||||
Weighted-average common shares outstanding, assuming dilution | 364.6 | 366.1 | 364.7 | |||||||||
Diluted earnings per share | $ | 1.85 | $ | 1.71 | $ | 1.56 | ||||||
Weighted-average anti-dilutive common share equivalents | 0.3 | 0.7 | 6.5 |
Year ended May 31, | |||||||||
2015 | 2014 | 2013 | |||||||
Federal statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
Increase/(decrease) resulting from: | |||||||||
State income taxes, net of federal tax benefit | 3.0 | % | 3.3 | % | 3.0 | % | |||
Tax settlement | — | % | — | % | 1.5 | % | |||
Tax-exempt municipal bond interest | (1.5 | )% | (1.5 | )% | (1.7 | )% | |||
Other items | (0.2 | )% | (0.3 | )% | (0.2 | )% | |||
Effective income tax rate | 36.3 | % | 36.5 | % | 37.6 | % |
May 31, 2015 | ||||||||||||||||
In millions | Carrying value (Fair value) | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Commercial paper | $ | 15.0 | $ | — | $ | 15.0 | $ | — | ||||||||
General obligation municipal bonds | 55.1 | — | 55.1 | — | ||||||||||||
Pre-refunded municipal bonds | 20.5 | — | 20.5 | — | ||||||||||||
Revenue municipal bonds | 12.3 | — | 12.3 | — | ||||||||||||
Money market securities | 0.2 | 0.2 | — | — | ||||||||||||
Total cash equivalents | $ | 103.1 | $ | 0.2 | $ | 102.9 | $ | — | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | $ | 1,703.7 | $ | — | $ | 1,703.7 | $ | — | ||||||||
Pre-refunded municipal bonds | 102.7 | — | 102.7 | — | ||||||||||||
Revenue municipal bonds | 963.6 | — | 963.6 | — | ||||||||||||
Variable rate demand notes | 825.6 | — | 825.6 | — | ||||||||||||
Total available-for-sale securities | $ | 3,595.6 | $ | — | $ | 3,595.6 | $ | — | ||||||||
Other | $ | 14.2 | $ | 14.2 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Other long-term liabilities | $ | 14.2 | $ | 14.2 | $ | — | $ | — |
May 31, 2014 | ||||||||||||||||
In millions | Carrying value (Fair value) | Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Commercial paper | $ | 6.0 | $ | — | $ | 6.0 | $ | — | ||||||||
General obligation municipal bonds | 10.9 | — | 10.9 | — | ||||||||||||
Pre-refunded municipal bonds | 31.2 | — | 31.2 | — | ||||||||||||
Revenue municipal bonds | 17.7 | — | 17.7 | — | ||||||||||||
Total cash equivalents | $ | 65.8 | $ | — | $ | 65.8 | $ | — | ||||||||
Available-for-sale securities: | ||||||||||||||||
General obligation municipal bonds | $ | 1,628.5 | $ | — | $ | 1,628.5 | $ | — | ||||||||
Pre-refunded municipal bonds | 142.8 | — | 142.8 | — | ||||||||||||
Revenue municipal bonds | 867.8 | — | 867.8 | — | ||||||||||||
Variable rate demand notes | 752.3 | — | 752.3 | — | ||||||||||||
Total available-for-sale securities | $ | 3,391.4 | $ | — | $ | 3,391.4 | $ | — | ||||||||
Other | $ | 12.3 | $ | 12.3 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Other long-term liabilities | $ | 12.3 | $ | 12.3 | $ | — | $ | — |
May 31, | ||||||||
In millions | 2015 | 2014 | ||||||
Client lists | $ | 244.6 | $ | 240.9 | ||||
Other intangible assets | 3.2 | 2.6 | ||||||
Total intangible assets, gross | 247.8 | 243.5 | ||||||
Less: Accumulated amortization | 215.4 | 202.9 | ||||||
Intangible assets, net of accumulated amortization | $ | 32.4 | $ | 40.6 |
$ in millions Fiscal quarter | Amount borrowed | Interest rate | |||||
First quarter | $ | 100.0 | 3.25 | % | |||
Second quarter | $ | 150.0 | 3.25 | % | |||
Third quarter | $ | — | — | ||||
Fourth quarter | $ | — | — |
Financial institution | Amount available | Expiration date |
JP Morgan Chase Bank, N.A. | $350 million | February 28, 2016 |
Bank of America, N.A. | $250 million | February 28, 2016 |
PNC Bank, National Association | $150 million | February 28, 2016 |
Wells Fargo Bank, National Association | $150 million | February 28, 2016 |
In millions, except per share amounts | Performance shares | Weighted-average grant-date fair value per share | |||||
Nonvested as of May 31, 2014 | 0.5 | $ | 31.61 | ||||
Granted (1) | 0.2 | $ | 37.61 | ||||
Vested | (0.1 | ) | $ | 28.87 | |||
Forfeited | — | $ | — | ||||
Nonvested as of May 31, 2015 | 0.6 | $ | 34.24 |
(1) | Performance shares granted assuming achievement of performance goals at target. Actual amount of shares to be earned may differ from this amount. |
In millions, except per share amounts | Restricted shares | Weighted-average grant-date fair value per share | |||||
Nonvested as of May 31, 2014 | 0.2 | $ | 33.55 | ||||
Granted | 0.1 | $ | 41.70 | ||||
Vested | (0.1 | ) | $ | 31.79 | |||
Forfeited | — | $ | — | ||||
Nonvested as of May 31, 2015 | 0.2 | $ | 38.99 |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Interest income on corporate funds | $ | 7.8 | $ | 6.9 | $ | 6.7 | ||||||
Interest expense | (0.7 | ) | (1.1 | ) | (0.1 | ) | ||||||
Net loss from equity-method investments | (0.7 | ) | (0.4 | ) | — | |||||||
Investment income, net | $ | 6.4 | $ | 5.4 | $ | 6.6 |
Three Months Ended | ||||||||||||||||||||
Fiscal 2015 | August 31 | November 30 | February 28 | May 31 | Full Year | |||||||||||||||
Service revenue | $ | 656.6 | $ | 665.9 | $ | 693.6 | $ | 681.4 | $ | 2,697.5 | ||||||||||
Interest on funds held for clients | 10.2 | 10.4 | 10.7 | 10.8 | 42.1 | |||||||||||||||
Total revenue | $ | 666.8 | $ | 676.3 | $ | 704.3 | $ | 692.2 | $ | 2,739.6 | ||||||||||
Operating income | $ | 267.5 | $ | 270.2 | $ | 264.3 | $ | 251.6 | $ | 1,053.6 | ||||||||||
Investment income, net | 1.4 | 1.4 | 1.6 | 2.0 | 6.4 | |||||||||||||||
Income before income taxes | 268.9 | 271.6 | 265.9 | 253.6 | 1,060.0 | |||||||||||||||
Income taxes | 97.6 | 98.6 | 96.5 | 92.4 | 385.1 | |||||||||||||||
Net income | $ | 171.3 | $ | 173.0 | $ | 169.4 | $ | 161.2 | $ | 674.9 | ||||||||||
Basic earnings per share(1) | $ | 0.47 | $ | 0.48 | $ | 0.47 | $ | 0.44 | $ | 1.86 | ||||||||||
Diluted earnings per share(1) | $ | 0.47 | $ | 0.47 | $ | 0.46 | $ | 0.44 | $ | 1.85 | ||||||||||
Weighted-average common shares outstanding | 363.1 | 363.0 | 363.2 | 362.3 | 362.9 | |||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 364.7 | 364.6 | 365.0 | 364.5 | 364.6 | |||||||||||||||
Cash dividends per common share | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 1.52 | ||||||||||
Total net realized gains(2) | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.3 |
Three Months Ended | ||||||||||||||||||||
Fiscal 2014 | August 31 | November 30 | February 28 | May 31 | Full Year | |||||||||||||||
Service revenue (3) | $ | 603.1 | $ | 606.4 | $ | 639.9 | $ | 628.8 | $ | 2,478.2 | ||||||||||
Interest on funds held for clients | 10.0 | 10.0 | 10.5 | 10.2 | 40.7 | |||||||||||||||
Total revenue (3) | $ | 613.1 | $ | 616.4 | $ | 650.4 | $ | 639.0 | $ | 2,518.9 | ||||||||||
Operating income | $ | 255.1 | $ | 248.6 | $ | 250.7 | $ | 228.3 | $ | 982.7 | ||||||||||
Investment income, net | 1.2 | 1.3 | 1.5 | 1.4 | 5.4 | |||||||||||||||
Income before income taxes | 256.3 | 249.9 | 252.2 | 229.7 | 988.1 | |||||||||||||||
Income taxes | 93.5 | 91.2 | 92.1 | 83.8 | 360.6 | |||||||||||||||
Net income | $ | 162.8 | $ | 158.7 | $ | 160.1 | $ | 145.9 | $ | 627.5 | ||||||||||
Basic earnings per share(1) | $ | 0.45 | $ | 0.43 | $ | 0.44 | $ | 0.40 | $ | 1.72 | ||||||||||
Diluted earnings per share(1) | $ | 0.44 | $ | 0.43 | $ | 0.44 | $ | 0.40 | $ | 1.71 | ||||||||||
Weighted-average common shares outstanding | 365.3 | 364.9 | 364.2 | 363.5 | 364.5 | |||||||||||||||
Weighted-average common shares outstanding, assuming dilution | 366.7 | 366.4 | 365.8 | 365.3 | 366.1 | |||||||||||||||
Cash dividends per common share | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 1.40 | ||||||||||
Total net realized gains(2) | $ | 0.2 | $ | — | $ | 0.3 | $ | 0.1 | $ | 0.6 |
(1) | Each quarter is a discrete period and the sum of the four quarters’ basic and diluted earnings per share amounts may not equal the full year amount. |
(2) | Total net realized gains on the combined funds held for clients and corporate investment portfolios. |
(3) | With the introduction of the new health insurance offering within the PEO during fiscal 2014, the Company began classifying PEO direct costs related to certain benefit plans where the Company retains risk as operating expenses rather than as a reduction in service revenue. As a result, the amounts reported for service revenue and total revenue for the first through third quarters of fiscal 2014 differ from that reported in the Company's Quarterly Reports on Form 10-Q (“Form 10-Q”). There was no impact to operating income from this change. The correction for the PEO direct cost adjustment was not material to any prior interim period in fiscal 2014. Service revenue, as reported in the Company's Form 10-Qs was $597.9 million, $600.5 million, and $626.0 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. Total revenue, as reported in the Company's Form 10-Qs was $607.9 million, $610.5 million, and $636.5 million for the first, second, and third fiscal quarters of fiscal 2014, respectively. |
Year ended May 31, | ||||||||||||
In millions, except per share amounts | 2015 | 2014 | 2013 | |||||||||
Total intrinsic value of stock options exercised | $ | 17.6 | $ | 18.9 | $ | 7.8 | ||||||
Total grant-date fair value of stock options vested | $ | 3.6 | $ | 3.0 | $ | 3.0 |
In millions, except per share amounts | RSUs | Weighted-average grant-date fair value per share | Weighted-average remaining vesting period (years) | Aggregate intrinsic value(1) | |||||||||
Nonvested as of May 31, 2014 | 1.7 | $ | 30.52 | ||||||||||
Granted | 0.7 | $ | 36.64 | ||||||||||
Vested | (0.5 | ) | $ | 28.11 | |||||||||
Forfeited | (0.1 | ) | $ | 32.60 | |||||||||
Nonvested as of May 31, 2015 | 1.8 | $ | 33.57 | 3.0 | $ | 88.8 |
(1) | Intrinsic value for RSUs is the market price of the underlying stock as of May 31, 2015. |
In millions, except per share amounts | Shares subject to options | Weighted-average exercise price per share | Weighted-average remaining contractual term (years) | Aggregate intrinsic value(1) | |||||||||
Outstanding as of May 31, 2014 | 5.4 | $ | 34.00 | ||||||||||
Granted | 0.8 | $ | 41.70 | ||||||||||
Exercised | (1.5 | ) | $ | 33.84 | |||||||||
Forfeited | — | $ | 30.15 | ||||||||||
Expired | — | $ | 38.12 | ||||||||||
Outstanding as of May 31, 2015 | 4.7 | $ | 35.21 | 6.0 | $ | 66.3 | |||||||
Exercisable as of May 31, 2015 | 2.7 | $ | 33.42 | 4.4 | $ | 43.0 |
Year ended May 31, | ||||||||||||||||||||
2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||
Performance stock options | Stock options | |||||||||||||||||||
Risk-free interest rate | 1.5 | % | 0.7 | % | 2.1 | % | 2.0 | % | 1.0 | % | ||||||||||
Dividend yield | 3.9 | % | 4.1 | % | 3.7 | % | 4.1 | % | 4.3 | % | ||||||||||
Volatility factor | .20 | .22 | .21 | .22 | .23 | |||||||||||||||
Expected option life in years | 4.5 | 4.8 | 6.0 | 6.4 | 6.4 | |||||||||||||||
Weighted-average grant-date fair value of stock options granted (per share) | $ | 3.85 | $ | 3.55 | $ | 5.68 | $ | 4.90 | $ | 3.77 |
May 31, 2015 | |||||||||||||||||||||||
Securities in an unrealized loss position for less than twelve months | Securities in an unrealized loss position for more than twelve months | Total | |||||||||||||||||||||
In millions | Gross unrealized losses | Fair value | Gross unrealized losses | Fair Value | Gross unrealized losses | Fair Value | |||||||||||||||||
Type of issue: | |||||||||||||||||||||||
General obligation municipal bonds | $ | (3.8 | ) | $ | 535.1 | $ | (0.5 | ) | $ | 26.3 | $ | (4.3 | ) | $ | 561.4 | ||||||||
Revenue municipal bonds | (3.2 | ) | 361.6 | — | — | (3.2 | ) | 361.6 | |||||||||||||||
Total | $ | (7.0 | ) | $ | 896.7 | $ | (0.5 | ) | $ | 26.3 | $ | (7.5 | ) | $ | 923.0 |
May 31, 2014 | |||||||||||||||||||||||
Securities in an unrealized loss position for less than twelve months | Securities in an unrealized loss position for more than twelve months | Total | |||||||||||||||||||||
In millions | Gross unrealized losses | Fair value | Gross unrealized losses | Fair Value | Gross unrealized losses | Fair Value | |||||||||||||||||
Type of issue: | |||||||||||||||||||||||
General obligation municipal bonds | $ | (0.1 | ) | $ | 69.6 | $ | (1.8 | ) | $ | 164.0 | $ | (1.9 | ) | $ | 233.6 | ||||||||
Pre-refunded municipal bonds | — | 1.7 | — | — | — | 1.7 | |||||||||||||||||
Revenue municipal bonds | — | 47.5 | (1.1 | ) | 112.4 | (1.1 | ) | 159.9 | |||||||||||||||
Total | $ | (0.1 | ) | $ | 118.8 | $ | (2.9 | ) | $ | 276.4 | $ | (3.0 | ) | $ | 395.2 |
Year ended May 31, | ||||||||||||
In millions | 2015 | 2014 | 2013 | |||||||||
Balance as of beginning of fiscal year | $ | 40.0 | $ | 26.7 | $ | 41.7 | ||||||
Additions for tax positions of the current year | 6.7 | 11.2 | 28.5 | |||||||||
Additions for tax positions of prior years | 0.8 | 4.2 | 12.2 | |||||||||
Reductions for tax positions of prior years | (0.4 | ) | (1.8 | ) | (0.5 | ) | ||||||
Settlements with tax authorities | (1.2 | ) | — | (55.0 | ) | |||||||
Expiration of the statute of limitations | (6.0 | ) | (0.3 | ) | (0.2 | ) | ||||||
Balance as of end of fiscal year | $ | 39.9 | $ | 40.0 | $ | 26.7 |
Description | Balance as of beginning of fiscal year | Additions charged to expenses | Additions to/(Deductions from) other accounts(1) | Costs and deductions(2) | Balance as of end of fiscal year | |||||||||||||||
2015 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1.5 | $ | 1.6 | $ | 0.1 | $ | 1.8 | $ | 1.4 | ||||||||||
Reserve for client fund losses | $ | 1.9 | $ | 2.0 | $ | (0.2 | ) | $ | 1.9 | $ | 1.8 | |||||||||
2014 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1.0 | $ | 2.5 | $ | — | $ | 2.0 | $ | 1.5 | ||||||||||
Reserve for client fund losses | $ | 2.4 | $ | 2.2 | $ | — | $ | 2.7 | $ | 1.9 | ||||||||||
2013 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1.2 | $ | 1.7 | $ | — | $ | 1.9 | $ | 1.0 | ||||||||||
Reserve for client fund losses | $ | 2.1 | $ | 2.7 | $ | — | $ | 2.4 | $ | 2.4 |
(1) | Amounts related to business acquisitions. |
(2) | Uncollectible amounts written off, net of recoveries. |
In millions Year ending May 31, | Estimated amortization expense | |||
2016 | $ | 11.3 | ||
2017 | 8.2 | |||
2018 | 5.5 | |||
2019 | 3.6 | |||
2020 | 2.0 |
In millions Year ending May 31, | Minimum payment obligation | |||
2016 | $ | 71.2 | ||
2017 | 26.8 | |||
2018 | 4.4 | |||
2019 | 1.9 | |||
2020 | 0.3 | |||
Thereafter | 0.2 |