Company: PAYX
Filing Date: 2025-03-26
Form Type: 10-Q
Source: 0000950170-25-045216
Chunk: 32

Company: PAYCHEX INC
Filing Date: 2025-03-26
Form: 10-Q
Item: Part I, Item 8
Chunk 32
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 of stock options, restricted stock units, and restricted stock awards. The Company accounts for all stock-based awards to employees and members of the Board as compensation costs in the consolidated financial statements based on their fair values measured as of the date of grant. These costs are recognized over the requisite service period. Stock-based compensation costs recognized were $17.6 million and $50.5 million for the three and nine months ended February 28, 2025, and $14.4 million and $45.1 million for the three and nine months ended February 29, 2024.  Derivative Instruments: Interest rate swaption contracts (“Swaption Contracts”), qualifying as cash flow hedges of interest payments, are used to hedge a portion of the Company's exposure to fluctuations in benchmark interest rates related to the anticipated issuances of long-term fixed rate debt. At inception, a derivative asset is recorded for the fair value of the premiums paid. Changes to the fair value of these cash flow hedges is temporarily reported in Accumulated other comprehensive loss on the Company’s Consolidated Balance Sheets and reclassifed to earnings as the hedged item affects earnings. Refer to Note H Supplemental Information for additional information on the Company's Swaption Contracts. We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure.  Recently adopted accounting pronouncements: There were no recently adopted accounting pronouncements during the nine months ended February 28, 2025 that had a material impact on the Company's consolidated financial statements or disclosures. Recently issued accounting pronouncements: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public business entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The requirements are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are required to be applied retrospectively. This ASU is applicable to the Company’s Annual Report on Form 10-K for