Company: ADP
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000008670-25-000015
Chunk: 46

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 46
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 portion(1,000.7)(1.1)Less: unamortized discount and debt issuance costs(20.0)(11.7)Total long-term debt$2,982.5 $2,991.3 The effective interest rates for the Notes include the interest on the Notes and amortization of the discount and debt issuance costs. As of March 31, 2025, the fair value of the Notes, based on Level 2 inputs, was $3,739.8 million. For a description of the fair value hierarchy and the Company's fair value methodologies, including the use of an independent third-party pricing service, see Note 1 “Summary of Significant Accounting Policies” in the Company's Annual Report on Form 10-K for fiscal 2024. In anticipation of the refinancing of our fixed-rate 3.375% notes due September 15, 2025, the Company entered into a series of treasury rate lock transactions from January 16, 2025 through April 24, 2025, with an aggregate notional amount totaling $400.0 million, of which $300.0 million were entered into during the third quarter ended March 31, 2025, $50.0 million entered into on April 2, 2025 and $50.0 million entered into on April 24, 2025, to hedge its exposure to changes in interest rates through the completion of the refinancing. The derivative contracts entered into during the fiscal year ended June 30, 2025 have been designated as cash-flow hedges and will be terminated upon completion of the refinancing. Changes in the derivatives’ fair value are recorded each period in other comprehensive income with a corresponding current asset or liability and, upon settlement, the aggregate amount in accumulated other comprehensive income will be amortized into net income over the term of the future debt instrument. Refer to Note 16 for the impact to accumulated other comprehensive income. There are no cash flows associated with the derivatives until settlement occurs with the counter-parties. The treasury rate lock derivatives are classified as Level 2 in the fair value hierarchy as their value is determined using observable inputs such as forward treasury rates.

Note 12. Employee Benefit Plans

A.  Stock-based Compensation PlansThe Company's share-based compensation consists of stock options, time-based restricted stock, time-based restricted stock units, performance-based restricted stock, and performance-based restricted stock units. The Company also offers an employee stock purchase plan