Company: ADP
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000008670-25-000015
Chunk: 108

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 8
Chunk 108
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$9.0 $7.8 $27.3 $22.6 Selling, general and administrative expenses45.5 39.2 147.4 139.6 Research and development8.3 9.3 27.8 26.5 Total stock-based compensation expense$62.8 $56.3 $202.5 $188.7 

B.  Pension PlansThe components of net pension income were as follows:Three Months EndedNine Months EndedMarch 31,March 31, 2025202420252024Service cost – benefits earned during the period$1.5 $1.3 $4.5 $3.9 Interest cost on projected benefits21.8 21.2 65.5 63.4 Expected return on plan assets(29.0)(29.0)(87.0)(86.9)Net amortization and deferral0.7 0.7 2.2 2.2 Net pension income$(5.0)$(5.8)$(14.8)$(17.4)

Note 13. Income Taxes

The effective tax rate for the three months ended March 31, 2025 and 2024 was 23.0% and 23.4%, respectively. The decrease in the effective tax rate is primarily due to a benefit for a decrease in uncertain tax position activity and a higher excess tax benefit on stock-based compensation in the three months ended March 31, 2025, partially offset by the benefits of an intercompany transfer of certain assets in the three months ended March 31, 2024.The effective tax rate for the nine months ended March 31, 2025 and 2024 was 23.1% and 22.7%, respectively. The increase in the effective tax rate is primarily due to a benefit for adjustments to prior year tax liabilities and a valuation allowance release in the nine months ended March 31, 2024.

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