Company: ADP
Filing Date: 2025-01-30
Form Type: 10-Q
Source: 0000008670-25-000007
Chunk: 128

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-01-30
Form: 10-Q
Item: Part I, Item 8
Chunk 128
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 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 securities, AA-rated and AAA-rated securities 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 EndedSix Months EndedDecember 31,December 31,2024202320242023Average investment balances at cost:    Corporate investments$9,964.9 $7,823.0 $10,317.3 $7,475.7 Funds held for clients35,281.9 32,646.3 34,034.4 31,887.8 Total$45,246.8 $40,469.3 $44,351.7 $39,363.5     Average interest rates earned exclusive of realized   (gains)/losses on:    Corporate investments3.4 %2.9 %3.4 %2.8 %Funds held for clients3.1 %2.8 %3.1 %2.7 %Total3.2 %2.8 %3.2 %2.7 %Net realized losses on available-for-sale securities$0.6 $2.0 $0.8 $4.0 

 December 31, 2024June 30, 2024Net unrealized pre-tax losses on available-for-sale securities$(1,074.5)$(1,515.8)Total available-for-sale securities at fair value$33,019.9 $31,207.5 

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 interest rate changes include, among others, the amount of invested funds and the overall portfolio mix between short-term and long-term investments