Company: ADP
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000008670-25-000047
Chunk: 114

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
Chunk 114
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 by Standard and Poor’s, P-1 by Moody’s, and F1+ by Fitch, the highest possible short-term credit ratings), our ability to engage in reverse repurchase agreement transactions ($7.5 billion of which is available on a committed basis in the U.S. as of September 30, 2025) and available borrowings under our $10.6 billion committed credit facilities. The reduced availability of financing during periods of economic turmoil, even to borrowers with the highest credit ratings, may limit our ability to access short-term debt markets to meet the liquidity needs of our business. In addition to liquidity risk, our investments are subject to interest rate risk and credit risk, as discussed below.

We have established credit quality, maturity, and exposure limits for our investments. The minimum allowed credit rating at time of purchase for corporate, Canadian government agency and Canadian provincial bonds is BBB, for asset-backed securities is AAA, and for municipal bonds is A. The maximum maturity at time of purchase for BBB-rated securities is 5 years, and for single A rated, AA-rated and AAA-rated securities it is 10 years. Time deposits and commercial paper must be rated A-1 and/or P-1. Money market funds must be rated AAA/Aaa-mf.

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Details regarding our overall investment portfolio are as follows:Three Months EndedSeptember 30,20252024Average investment balances at cost:  Corporate investments$11,393.8 $10,669.8 Funds held for clients34,928.7 32,787.0 Total$46,322.5 $43,456.8   Average interest rates earned exclusive of realized   (gains)/losses on:  Corporate investments3.6 %3.4 %Funds held for clients3.3 %3.1 %Total3.4 %3.2 %Realized (gains)/losses on available-for-sale securities, net$(1.5)$0.2 

 September 30, 2025June 30, 2025Net unrealized pre-tax losses on available-for-sale securities$(211.5)$(425.7)Total available-for-sale securities at fair value$35,652.3 $33,777.7 

We are exposed to interest rate risk in relation to securities that mature, as the proceeds from maturing securities are reinvested. Factors that influence the earnings impact of