Market Overview

Paychex, Inc. Reports Third Quarter Results

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Third Quarter Fiscal 2018 Highlights

  • Total revenue increased 9% to $866.5 million.
    • Payroll service revenue increased 2% to $455.0 million.
    • Human Resource Services revenue increased 17% to $393.4 million.
    • Interest on funds held for clients increased 37% to $18.1 million.
  • Operating income decreased 5% to $292.5 million and adjusted operating
    income(1) increased 6% to $325.1 million.
  • Net income increased 29% to $260.4 million and adjusted net income(1)
    increased 14% to $227.5 million.
  • Diluted earnings per share increased 29% to $0.72 per share and
    adjusted diluted earnings per share(1) increased 15% to
    $0.63 per share.

(1) Adjusted operating income, adjusted net income, and
adjusted diluted earnings per share are not United States ("U.S.")
generally accepted accounting principles ("GAAP") measures.
Please
refer to the "Non-GAAP Financial Measures" section starting on page 5 of
this press release for a discussion of these non-GAAP measures and a
reconciliation to the most comparable GAAP measures of operating income,
net income, and diluted earnings per share.

Paychex,
Inc
. ("Paychex," "we," "our," or "us") (NASDAQ:PAYX) today announced
total revenue of $866.5 million for the three months ended February 28,
2018 (the "third quarter"), an increase of 9% from $795.8 million for
the same period last year. The acquisition of HR Outsourcing Holdings,
Inc. ("HROI"), completed during August 2017, contributed approximately
3% to the total revenue growth for the third quarter. Net income and
diluted earnings per share each increased 29% to $260.4 million and
$0.72 per share, respectively, for the third quarter. Adjusted net
income increased 14% to $227.5 million and adjusted diluted earnings per
share increased 15% to $0.63 per share for the third quarter. Adjusted
net income and adjusted diluted earnings per share for the third quarter
exclude the impact of the termination of certain license agreements, the
impact of excess tax benefits related to employee stock-based
compensation payments recognized in income taxes, and certain one-time
net tax benefits recognized as a result of the Tax Cuts and Jobs Act
(the "Tax Act"). See the "Non-GAAP Financial Measures" section starting
on page 5 of this press release for further discussion of these non-GAAP
measures.

Martin Mucci, President and Chief Executive Officer, commented, "We
continued to experience solid growth in the third quarter across all
major human capital management ("HCM") product lines. In particular,
comprehensive human resource ("HR") outsourcing solutions, retirement
services, insurance services, and our time and attendance solutions have
performed well. Our service delivery also remained strong as we continue
to experience favorable client retention results. We benefited from the
Tax Act enacted in December 2017, the most comprehensive tax reform
legislation approved in more than two decades. The benefits of tax
reform and the products and solutions we provide to our clients continue
to strengthen and enhance our market-leading position.

At the end of the third quarter, we completed the acquisition of Lessor
Group ("Lessor"), a market-leading provider of payroll and HCM software
solutions headquartered in Denmark and serving clients in Northern
Europe. We believe the combination of Lessor's payroll and HCM software
products with our full-service business process outsourcing capabilities
will provide a complete technology-enabled services platform in the
markets they serve. We look forward to continued international market
expansion and welcome all of the Lessor employees to the Paychex family."

Payroll service revenue was $455.0 million for the third quarter, a 2%
increase compared to the same period last year. The increase was
primarily driven by growth in revenue per check, which improved as a
result of price increases, net of discounts.

Human Resource Services ("HRS") revenue was $393.4 million for the third
quarter, an increase of 17% compared to the same period last year. HRS
revenue growth was primarily driven by increases in client bases across
the following HCM services: comprehensive HR outsourcing services,
including HROI; retirement services; time and attendance; and insurance
services. Our largest HRS revenue stream is Paychex HR Services, which
includes our administrative services organization and our professional
employer organization ("PEO"). Demand for these services resulted in
strong growth in the number of client worksite employees served.
Retirement services revenue benefited from an increase in asset fee
revenue earned on the asset value of participants' funds as well as an
increase in the number of plans served. Insurance services revenue
benefited from an increase in the number of health and benefit
applicants, coupled with higher average premiums for workers'
compensation insurance services.

Interest on funds held for clients increased 37% to $18.1 million for
the third quarter, compared to the same period last year. The increase
resulted from higher average interest rates earned. The funds held for
clients average investment balances increased 1% for the third quarter
compared to the same period last year, primarily due to strong calendar
year-end bonus payments and wage inflation, partially offset by client
mix.

Average investment balances and interest rates are summarized below:

           
For the three months ended For the nine months ended
February 28, February 28,
$ in millions 2018 2017 Change 2018 2017 Change
Average investment balances:
Funds held for clients $ 4,551.6 $ 4,502.4 1 % $ 3,999.7 $ 3,985.0 %
Corporate investments $ 934.4 $ 833.9 12 % $ 919.3 $ 899.8 2 %
 
Average interest rates earned
(exclusive of net realized gains):
Funds held for clients 1.6 % 1.2 % 1.5 % 1.2 %
Corporate investments 1.4 % 1.1 % 1.3 % 1.1 %
 
Total net realized gains $ 0.1 $ $ 0.1 $ 0.1
 

Total expenses increased 17% to $574.0 million for the third quarter
compared to the same period last year. HROI contributed approximately 5%
to total expense growth for the third quarter. Compensation-related
costs increased 7% as compared to the prior year period. Higher
compensation was driven by higher wages together with additional
investments made in employees. A one-time bonus was paid to
non-management employees during the third quarter, which contributed
approximately 2% to total expense growth for the third quarter. An
additional one-time expense was recognized following the termination of
certain license agreements, contributing approximately 7% to total
expense growth for the third quarter. Investments in technology and
continued growth of our combined PEO business also contributed to the
overall increase in total expenses.

Operating income decreased 5% to $292.5 million and adjusted operating
income increased 6% to $325.1 million, respectively, for the third
quarter compared to the same period last year. Adjusted operating income
excludes the one-time charge following the termination of certain
license agreements during the third quarter. Adjusted operating income,
as a percent of total revenue, was 37.5% for the third quarter, compared
with 38.5% for the same period last year. See the "Non-GAAP Financial
Measures" section starting on page 5 of this press release for further
discussion of this non-GAAP measure.

Our effective income tax rate was 11.7% for the third quarter compared
to 34.2% for the same period last year. The effective income tax rate
for the third quarter was significantly impacted by the Tax Act. As it
relates to the Tax Act, we recorded a one-time net tax benefit of $20.8
million for the revaluation of our net deferred tax liabilities and a
net tax benefit of $36.1 million for the change in our annual effective
income tax rate for the first six months of the current fiscal year
ending May 31, 2018 ("fiscal 2018"). These amounts impacted diluted
earnings per share by approximately $0.06 per share and $0.10 per share,
respectively, for the third quarter.

Year-To-Date Fiscal 2018 Highlights

The highlights for the nine months ended February 28, 2018 (the "nine
months") are as follows:

  • Total revenue increased 7% to $2.5 billion.
    • Payroll service revenue increased 1% to $1.4 billion.
    • HRS revenue increased 13% to $1.1 billion.
    • HROI contributed approximately 2% to total revenue growth.
    • Interest on funds held for clients increased 25% to $45.8 million.
  • Operating income increased 3% to $969.7 million and adjusted operating
    income(1) increased 7% to $1.0 billion.
  • The effective income tax rate was 27.7% for the nine months, compared
    to 34.1% for the same period last year. The effective income tax rate
    was significantly impacted by the one-time net tax benefit recognized
    for the revaluation of net deferred tax liabilities as a result of the
    enactment of the Tax Act.
  • Net income increased 13% to $705.2 million and adjusted net income(1)
    increased 16% to $700.8 million.
  • Diluted earnings per share increased 14% to $1.95 per share and
    adjusted diluted earnings per share(1) increased 17% to
    $1.94 per share.

(1)

 

Adjusted operating income, adjusted net income, and adjusted
diluted earnings per share are not U.S. GAAP measures. Please
refer to the "Non-GAAP Financial Measures" section starting on the
next page of this press release for a discussion of these non-GAAP
measures and a reconciliation to the most comparable GAAP measures
of operating income, net income, and diluted earnings per share.

Financial Position and Liquidity

Our financial position as of February 28, 2018 remained strong with cash
and total corporate investments of $826.6 million. Our primary source of
cash is generated from ongoing operations. Short-term borrowings totaled
$57.7 million as of February 28, 2018. Our positive cash flows have
historically allowed us to support our business and to pay substantial
dividends to our stockholders. It is anticipated that cash and total
corporate investments as of February 28, 2018, along with projected
operating cash flows and available short-term financing, will support
normal business operations, capital purchases, share repurchases,
dividend payments, and business acquisitions, if any, for the
foreseeable future.

Cash flows from operations were $988.9 million for the nine months, an
increase of 29% from the same period last year. Operating cash flows
were higher due to higher net income along with positive cash flow
impacts from timing related to income taxes and PEO payroll accruals and
unbilled receivables, which can fluctuate based on timing of period end
compared to payroll check dates.

Cash flows from investing activities of $24.4 million for the nine
months includes a net cash outflow for the acquisition of Lessor on
February 28, 2018.

During the nine months, we repurchased 1.6 million shares of our common
stock for a total of $94.1 million. In the respective prior year period,
we repurchased 2.9 million shares for a total of $166.2 million.

Non-GAAP Financial Measures

           
For the three months ended For the nine months ended
February 28, February 28,
$ in millions 2018 2017 Change 2018 2017 Change
Operating income $ 292.5 $ 306.6 (5) % $ 969.7 $ 940.7 3 %
Non-GAAP adjustments:
Termination of license
agreements (1)
  32.6         32.6      
Total non-GAAP adjustments   32.6         32.6      
Adjusted operating income $ 325.1   $ 306.6   6 % $ 1,002.3   $ 940.7   7 %
 
Net income $ 260.4 $ 202.5 29 % $ 705.2 $ 622.0 13 %
Non-GAAP adjustments:

Excess tax benefit related to employee stock-based
compensation
payments (2)

(0.7) (3.2) (8.3) (17.3)
Revaluation of net deferred tax liabilities (3) (20.8) (20.8)
Change in annual effective income tax rate (3) (36.1)
Termination of license
agreements (1)
  24.7         24.7      
Total non-GAAP adjustments   (32.9)     (3.2)     (4.4)     (17.3)  
Adjusted net income $ 227.5   $ 199.3   14 % $ 700.8   $ 604.7   16 %
 
Diluted earnings per share $ 0.72 $ 0.56 29 % $ 1.95 $ 1.71 14 %
Non-GAAP adjustments:

Excess tax benefit related to employee stock-based
compensation
payments (2)

(0.01) (0.02) (0.05)
Revaluation of net deferred tax liabilities (3) (0.06) (0.06)
Change in annual effective income tax rate (3) (0.10)
Termination of license
agreements (1)
  0.07         0.07      
Total non-GAAP adjustments   (0.09)     (0.01)     (0.01)     (0.05)  
Adjusted diluted earnings per share $ 0.63   $ 0.55   15 % $ 1.94   $ 1.66   17 %
 

(1)

 

Additional expense and corresponding tax benefit recognized
in the third quarter as a result of the termination of certain
license agreements. This event is not expected to recur.

(2)

Net tax windfall or shortfall benefits related to employee
stock-based compensation payments recognized in income taxes. This
item is subject to volatility and will vary based on employee
decisions on exercising employee stock options and fluctuations in
our stock price, neither of which is within the control of
management.

(3)

One-time tax benefits recognized in the third quarter as a
result of the Tax Act, including $20.8 million related to the
revaluation of net deferred tax liabilities and $36.1 million
related to the change in our annual effective tax rate for fiscal
2018. The tax benefit related to the change in our annual
effective tax rate represents amounts recognized in the third
quarter to reflect the fiscal year-to-date effective tax rate.
These events are not expected to recur.

In addition to reporting operating income, net income, and diluted
earnings per share, which are U.S. GAAP measures, we present adjusted
operating income, adjusted net income, and adjusted diluted earnings per
share, which are non-GAAP measures. We believe adjusted operating
income, adjusted net income, and adjusted diluted earnings per share are
appropriate additional measures, as they are indicators of our core
business operations performance period over period. Adjusted operating
income, adjusted net income, and adjusted diluted earnings per share are
not calculated through the application of GAAP and are not a required
form of disclosure by the Securities and Exchange Commission ("SEC"). As
such, they should not be considered as a substitute for the GAAP
measures of operating income, net income, and diluted earnings per
share, and therefore should not be used in isolation, but in conjunction
with the GAAP measures. The use of any non-GAAP measure may produce
results that vary from the GAAP measure and may not be comparable to a
similarly defined non-GAAP measure used by other companies.

Outlook

Our outlook for fiscal 2018 is based upon current market, economic, and
interest rate conditions continuing with no significant changes. Our
guidance for fiscal 2018 has been updated from what we disclosed last
quarter, now including the impact of the Tax Act and the acquisition of
Lessor, and is summarized as follows:

  • Payroll service revenue is anticipated to increase approximately 2%;
  • HRS revenue is anticipated to increase in the range of 13% to 14%;
  • Interest on funds held for clients is expected to increase in the
    range of 20% to 25%;
  • Total revenue is expected to grow approximately 7%;
  • Operating income, as a percent of total revenue, is expected to be
    approximately 38%;
  • Investment income, net is expected to be approximately $8.0 million;
  • The effective income tax rate is anticipated to be in the range of
    28.5% to 29%;
  • Net income is expected to increase approximately 13% and adjusted net
    income(1) is expected to increase approximately 15%; and
  • Diluted earnings per share is expected to increase in the range of 13%
    to 14% and adjusted diluted earnings per share(1) is
    expected to increase in the range of 15% to 16%.

(1)

 

Adjusted net income and adjusted diluted earnings per share
are not U.S. GAAP measures. Please refer to the "Non-GAAP
Financial Measures" section beginning on the previous page of this
press release for a discussion of these non-GAAP measures. The
difference between our guidance for the GAAP measures of net
income and diluted earnings per share and the related non-GAAP
measures of adjusted net income and adjusted diluted earnings per
share is the exclusion of the impact of excess tax benefits
related to employee stock-based compensation payments recognized
in income taxes, the impact of termination of certain license
agreements recognized during the third quarter, and certain
one-time net tax benefits recognized during the third quarter as a
result of the Tax Act. We have not incorporated any assumptions
regarding the discrete tax item related to stock-based
compensation payments in our fiscal 2018 projections for the
remainder of the fiscal year, as factors impacting the amount are
subject to uncertainty. The uncertainty primarily relates to
employee decisions regarding exercise of stock-based awards and
the market price of our common stock at the time.

Quarterly Report on Form 10-Q

We anticipate filing our Quarterly Report on Form 10-Q ("Form 10-Q") for
the three and nine months ended February 28, 2018 within the next few
days, and it will be available at our Investor
Relations page
. This press release should be read in conjunction
with the Form 10-Q and the related Notes to Consolidated Financial
Statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in that Form 10-Q.

Conference Call

Interested parties may access the webcast
of our Earnings Release Conference Call, scheduled for March 26, 2018 at
9:30 a.m. Eastern Time at our investor relations page. The webcast will
also be archived for approximately one month. Our news releases, current
financial information, SEC filings, and investor presentation are also
accessible at our Investor
Relations page
.

About Paychex

Paychex, Inc. (NASDAQ:PAYX) is a leading provider of integrated human
capital management solutions for payroll, human resources, retirement,
and insurance services. By combining its innovative
software-as-a-service technology and mobility platform with dedicated,
personal service, Paychex empowers small- and medium-sized business
owners to focus on the growth and management of their business. Backed
by 45 years of industry expertise, Paychex serves approximately 605,000
payroll clients as of May 31, 2017 across more than 100 locations and
pays one out of every 12 American private sector employees. Learn more
about Paychex by visiting paychex.com
and stay connected on Twitter
and LinkedIn.

Cautionary Note Regarding Forward-Looking Statements Pursuant to the
U.S. Private Securities Litigation Reform Act of 1995

Certain written and oral statements made by us may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by such words and phrases
as "we expect," "expected to," "estimates," "estimated," "overview,"
"current outlook," "we look forward to," "would equate to," "projects,"
"projections," "projected," "projected to be," "anticipates,"
"anticipated," "we believe," "believes," "could be," and other similar
words or phrases. Examples of forward-looking statements include, among
others, statements we make regarding operating performance, events, or
developments that we expect or anticipate will occur in the future,
including statements relating to our outlook, revenue growth, earnings,
earnings-per-share growth, or similar projections.

Forward-looking statements are neither historical facts nor assurances
of future performance. Instead, they are based only on our current
beliefs, expectations, and assumptions regarding the future of our
business, future plans and strategies, projections, anticipated events
and trends, the economy, and other future conditions. Because
forward-looking statements relate to the future, they are subject to
inherent uncertainties, risks, and changes in circumstances that are
difficult to predict, many of which are outside our control. Our actual
results and financial conditions may differ materially from those
indicated in the forward-looking statements. Therefore, you should not
place undue reliance upon any of these forward-looking statements.
Important factors that could cause our actual results and financial
condition to differ materially from those indicated in the
forward-looking statements include, among others, the following:

  • general market and economic conditions including, among others,
    changes in U.S. employment and wage levels, changes to new hiring
    trends, legislative changes to stimulate the economy, changes in
    short- and long-term interest rates, changes in the fair value and the
    credit rating of securities held by us, and accessibility of financing;
  • changes in demand for our services and products, ability to develop
    and market new services and products effectively, pricing changes, and
    the impact of competition;
  • changes in the availability of skilled workers, in particular those
    supporting our technology and product development;
  • changes in the laws regulating collection and payment of payroll
    taxes, PEOs, and employee benefits, including retirement plans,
    workers' compensation insurance, health insurance (including health
    care reform legislation), state unemployment, and section 125 plans;
  • changes in health insurance and workers' compensation insurance rates
    and underlying claims trends;
  • changes in technology that adversely affect our products and services
    and impact our ability to provide timely enhancements to services and
    products;
  • the possibility of cyber-attacks, security breaches, or other security
    vulnerabilities that could disrupt operations or expose confidential
    client data, and could also result in reduced revenues, increased
    costs, liability claims, or harm to our competitive position;
  • the possibility of failure of our operating facilities, or the failure
    of our computer systems, and communication systems during a
    catastrophic event;
  • the possibility of third-party service providers failing to perform
    their functions;
  • the possibility of a failure of internal controls or our inability to
    implement business processing improvements;
  • the possibility that we may be subject to liability for violations of
    employment or discrimination laws by our clients and acts or omissions
    of client employees who may be deemed to be our agents, even if we do
    not participate in any such acts or violations, including possible
    liability related to our co-employment relationship with our PEO;
  • potential outcomes related to pending or future legal and legislative
    matters;
  • the expected impacts of the Tax Act; and
  • risks related to the integration of the businesses we acquire.

Any of these factors, as well as such other factors as discussed in our
SEC filings, could cause our actual results to differ materially from
our anticipated results. The information provided in this document is
based upon the facts and circumstances known at this time, and any
forward-looking statement made by us in this document speaks only as of
the date on which it is made. Except as required by law, we undertake no
obligation to update these forward-looking statements after the date of
issuance of this press release to reflect events or circumstances after
such date, or to reflect the occurrence of unanticipated events.

 
PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per share amounts)
           
For the three months ended For the nine months ended
February 28, February 28,
2018 2017 Change 2018 2017 Change
Revenue:
Payroll service revenue $ 455.0 $ 446.6 2 % $ 1,357.6 $ 1,338.4 1 %
Human Resource Services revenue   393.4     336.0 17 %   1,106.4   977.7 13 %
Total service revenue 848.4 782.6 8 % 2,464.0 2,316.1 6 %
Interest on funds held for clients (1)   18.1     13.2 37 %   45.8   36.6 25 %
Total revenue 866.5 795.8 9 % 2,509.8 2,352.7 7 %
Expenses:
Operating expenses 270.7 236.8 14 % 751.5 688.2 9 %
Selling, general and administrative expenses   303.3     252.4 20 %   788.6   723.8 9 %
Total expenses   574.0     489.2 17 %   1,540.1   1,412.0 9 %
Operating income 292.5 306.6 (5) % 969.7 940.7 3 %
Investment income, net (1)   2.3     1.2 94 %   6.1   3.6 70 %
Income before income taxes 294.8 307.8 (4) % 975.8 944.3 3 %
Income taxes   34.4   105.3 (67) %   270.6   322.3 (16) %
Net income $ 260.4 $ 202.5 29 % $ 705.2 $ 622.0 13 %
 
Basic earnings per share $ 0.72 $ 0.56 29 % $ 1.96 $ 1.73 13 %
Diluted earnings per share $ 0.72 $ 0.56 29 % $ 1.95 $ 1.71 14 %
Weighted-average common shares outstanding 359.2 359.0 359.1 360.0
Weighted-average common shares outstanding, assuming dilution 362.0 361.8 361.6 362.8
Cash dividends per common share $ 0.50 $ 0.46 $ 1.50 $ 1.38
 

(1)

 

Further information on interest on funds held for clients and
investment income, net, and the short- and long-term effects of
changing interest rates can be found in our filings with the SEC,
including our Form 10-Q and our Annual Report on Form 10-K, as
applicable, under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
subheadings "Results of Operations" and "Market Risk Factors."
These filings are accessible at
www.paychex.com.

 
PAYCHEX, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except per share amount)
   
February 28, May 31,
2018 2017
ASSETS
Cash and cash equivalents $ 323.9 $ 184.6
Corporate investments 97.3 138.8
Interest receivable 31.5 35.9
Accounts receivable, net of allowance for doubtful accounts 550.5 507.5
Prepaid income taxes 22.9 45.0
Prepaid expenses and other current assets   77.9   58.3
Current assets before funds held for clients 1,104.0 970.1
Funds held for clients   3,944.7   4,301.9
Total current assets 5,048.7 5,272.0
Long-term corporate investments 405.4 454.0
Property and equipment, net of accumulated depreciation 397.2 337.2
Intangible assets, net of accumulated amortization 105.1 57.6
Goodwill 827.4 657.1
Prepaid income taxes 24.9 24.9
Other long-term assets   34.1   30.9
Total assets $ 6,842.8 $ 6,833.7
 
LIABILITIES
Accounts payable $ 71.9 $ 57.2
Accrued compensation and related items 356.3 280.5
Short-term borrowings 57.7
Deferred revenue 23.7 22.9
Other current liabilities   142.2   91.9
Current liabilities before client fund obligations 651.8 452.5
Client fund obligations   3,971.9   4,272.6
Total current liabilities 4,623.7 4,725.1
Accrued income taxes 51.8 45.6
Deferred income taxes 41.9 33.9
Other long-term liabilities   79.9   73.8
Total liabilities 4,797.3 4,878.4
 
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value; Authorized: 600.0 shares;
Issued
and outstanding: 359.3 shares as of February 28, 2018
and 359.4
shares as of May 31, 2017
3.6 3.6
Additional paid-in capital 1,107.2 1,030.0
Retained earnings 961.4 901.7
Accumulated other comprehensive (loss)/income   (26.7)   20.0
Total stockholders' equity   2,045.5   1,955.3
Total liabilities and stockholders' equity $ 6,842.8 $ 6,833.7
 
 
PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
   
For the nine months ended
February 28,
2018 2017
OPERATING ACTIVITIES
Net income $ 705.2 $ 622.0
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization on property and equipment and
intangible assets
102.3 90.7
Amortization of premiums and discounts on available-for-sale
securities, net
50.1 55.0
Stock-based compensation costs 29.4 26.5
Provision for deferred income taxes 6.5
Provision for allowance for doubtful accounts 3.3 3.4
Net realized gains on sales of available-for-sale securities (0.1) (0.1)
Changes in operating assets and liabilities:
Interest receivable 4.4 4.1
Accounts receivable (6.2) (24.6)
Prepaid expenses and other current assets 9.7 (32.1)
Accounts payable and other current liabilities 80.9 37.5
Net change in other long-term assets and liabilities   3.4   (13.1)
Net cash provided by operating activities 988.9 769.3
INVESTING ACTIVITIES
Purchases of available-for-sale securities (36,422.2) (36,029.5)
Proceeds from sales and maturities of available-for-sale securities 37,162.9 35,617.4
Net change in funds held for clients' money market securities and
other cash equivalents
(409.1) (459.8)
Purchases of property and equipment (122.0) (66.8)
Acquisition of businesses, net of cash acquired (178.5)
Purchases of other assets   (6.7)   (8.4)
Net cash provided by/(used in) investing activities 24.4 (947.1)
FINANCING ACTIVITIES
Net change in client fund obligations (300.7) 819.8
Net proceeds from short-term borrowings 57.7 55.4
Dividends paid (538.7) (496.9)
Repurchases of common shares (94.1) (166.2)
Activity related to equity-based plans   1.8   24.1
Net cash (used in)/provided by financing activities   (874.0)   236.2
Increase in cash and cash equivalents 139.3 58.4
Cash and cash equivalents, beginning of period   184.6   131.5
Cash and cash equivalents, end of period $ 323.9 $ 189.9
 

© 2018 Paychex, Inc.

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