Company: PAYX
Filing Date: 2025-03-26
Form Type: 10-Q
Source: 0000950170-25-045216
Chunk: 63

Company: PAYCHEX INC
Filing Date: 2025-03-26
Form: 10-Q
Item: Part I, Item 8
Chunk 63
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 environment, earnings will decrease from our short-term investments, and over time, decrease from our longer-term AFS securities. Earnings from AFS securities, which as of February 28, 2025 had an average duration of 2.2 years, would not reflect decreases in interest rates until the investments are sold or mature and the proceeds are reinvested at lower rates.

31 

The amortized cost and fair value of AFS securities that had stated maturities as of February 28, 2025 are shown below by expected maturity.

    February 28, 2025

    Amortized

    Fair

    In millions
     
    cost

    value

    Maturity date:

    Due in one year or less
     
    $
     
    460.1

    $
     
    455.4

    Due after one year through three years

    1,921.7

    1,868.4

    Due after three years through five years

    879.5

    867.9

    Due after five years

    211.7

    213.4

    Total
     
    $
     
    3,473.0

    $
     
    3,405.1

VRDNs, when held by us, are primarily categorized as due after five years in the table above as the contractual maturities on these securities are typically 20 to 30 years. Although these securities are issued as long-term securities, they are priced and traded as short-term instruments because of the liquidity provided through the tender feature.

As of February 28, 2025, the Federal Funds rate was in the range of 4.25% to 4.50%. There continues to be uncertainty in the changing market and economic conditions, including the possibility of additional measures that could be taken by the U.S. President, the Federal Reserve and other government agencies related to the overall macroeconomic environment. We will continue to monitor the market and economic conditions. 

Calculating the future effects of changing interest rates involves many factors. These factors include, but are not limited to:

•governmental action to address inflation and/or intervene to support financial markets;

•daily interest rate changes;

•seasonal variations in investment balances;

•actual duration of short-term and AFS securities; 

•the proportion of taxable and tax-exempt investments;

•changes in tax-exempt municipal rates versus taxable investment rates