Company: ADP
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000008670-25-000047
Chunk: 94

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
Chunk 94
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2.0 $1.5 Interest cost on projected benefits21.7 21.9 Expected return on plan assets(28.3)(29.0)Net amortization and deferral0.8 0.7 Net pension (income)/expense$(3.8)$(4.9)

Note 13. Income Taxes

The effective tax rate for the three months ended September 30, 2025 and 2024 was 22.5% and 22.6%, respectively. The decrease in the effective tax rate is primarily due to lower reserves for uncertain tax positions primarily offset by the cost of an intercompany transfer of certain assets and a lower excess tax benefit on stock-based compensation in the three months ended September 30, 2025.

Note 14. Commitments and Contingencies

In May 2020, a putative class action complaint was filed against ADP, TotalSource and related defendants in the U.S. District Court, District of New Jersey. The complaint asserts violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) in connection with the ADP TotalSource Retirement Savings Plan’s fiduciary administrative and investment decision-making. The complaint seeks statutory and other unspecified monetary damages, injunctive relief and attorney’s fees. The Company is unable to estimate any reasonably possible loss, or range of loss, with respect to this matter. The Company is vigorously defending against this lawsuit.The Company is subject to various claims, litigation, and regulatory compliance matters in the normal course of business. When a loss is considered probable and reasonably estimable, the Company records a liability in the amount of its best estimate for the ultimate loss. Management currently believes that the resolution of these claims, litigation and regulatory compliance matters against us, individually or in the aggregate, will not have a material adverse impact on our consolidated results of operations, financial condition or cash flows. These matters are subject to inherent uncertainties and management's view of these matters may change in the future.  It is not the Company’s business practice to enter into off-balance sheet arrangements. In the normal course of business, the Company may enter into contracts in which it makes representations and warranties that relate to the performance of the Company’s services and products. The Company does not expect any material losses related to such representations and warranties.

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Note 15. Stockholders' Equity

Changes in stockholders' equity by component are as follows:Three Months EndedSeptember 30, 2025Common StockCapital