What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-08-07 compared with 2023-08-03 · 82 added, 71 removed, 1100 unchanged (12% of the section changed)

6 unchanged sentences

We have audited the accompanying consolidated balance sheets of Automatic Data Processing, Inc.

and subsidiaries (the "Company") as of June 30, 2023 and 2022, and the related statements of consolidated earnings, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 2023, and the related notes and the schedule listed in the Index at Item 15(a)2 (collectively referred to as the “financial statements”).

and subsidiaries (the "Company") as of June 30, 2024 and 2023, the related statements of consolidated earnings, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 2024, and the related notes and the schedule listed in the Index at Item 15(a)2 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

64 unchanged sentences

Operating expenses 9,050.1 8,657.4 8,252.6

Systems development and programming costs 844.8 798.6 716.6

Research and development 955.7 844.8 798.6

Depreciation and amortization 470.9 451.2 410.7

21 unchanged sentences

Currency translation adjustments ( 38.0 ) 13.4 ( 127.4 )

Unrealized net (losses)/gains on available-for-sale securities ( 500.3 ) ( 2,228.0 ) ( 363.3 )

Tax effect 113.3 503.7 82.6

Reclassification of net losses/(gains) on available-for-sale securities to net earnings 14.7 4.4 ( 11.3 )

Unrealized net gains/(losses) on available-for-sale securities 685.2 ( 500.3 ) ( 2,228.0 )

Tax effect ( 162.2 ) 113.3 503.7

Unrealized (losses)/gains on cash flow hedging activities — — ( 3.3 )

Reclassification of net losses on available-for-sale securities to net earnings 5.9 14.7 4.4

Tax effect ( 1.3 ) ( 3.3 ) ( 1.0 )

1 unchanged sentence

Tax effect ( 1.1 ) ( 1.1 ) ( 1.1 )

Pension net (losses)/gains arising during the year 60.3 ( 229.8 ) 281.5

Pension net gains/(losses) arising during the year 5.6 60.3 ( 229.8 )

Tax effect ( 1.1 ) ( 13.3 ) 57.3

1 unchanged sentence

Tax effect — 0.2 ( 4.9 )

Other comprehensive (loss)/income, net of tax ( 312.1 ) ( 2,004.3 ) 25.4

Other comprehensive income/(loss), net of tax 497.5 ( 312.1 ) ( 2,004.3 )

Comprehensive income $ 4,249.5 $ 3,099.9 $ 944.6

56 unchanged sentences

Total liabilities and stockholders’ equity $ 54,362.7 $ 50,971.0

(A) As of June 30, 2023, $ 104.6 million of long-term marketable securities and $ 0.8 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements.

As of June 30, 2022, $ 14.3 million of short-term marketable securities and $ 122.1 million of long-term marketable securities have been pledged as collateral under the Company's reverse repurchase agreements (see Note 8).

(A) As of June 30, 2024, $ 384.0 million of short-term marketable securities and $ 1.4 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements.

As of June 30, 2023, $ 104.6 million of long-term marketable securities and $ 0.8 million of cash and cash equivalents have been pledged as collateral under the Company's reverse repurchase agreements (see Note 8).

See notes to the Consolidated Financial Statements.

46 unchanged sentences

Stock-based compensation expense 243.5 220.4 201.7

Bad debt expense 54.6 44.0 2.8

Net pension income ( 22.9 ) ( 42.6 ) ( 53.4 )

Net amortization of premiums and accretion of discounts on available-for-sale securities 23.0 101.0 69.5

Net accretion of discounts and amortization of premiums on available-for-sale securities ( 42.6 ) 23.0 101.0

Other ( 1.7 ) 27.4 29.9

Changes in operating assets and liabilities:

Decrease/(Increase) in accounts receivable 129.2 ( 486.5 ) ( 339.8 )

(Increase)/Decrease in accounts receivable ( 483.7 ) 129.2 ( 486.5 )

Increase in deferred contract costs ( 1,271.2 ) ( 1,189.2 ) ( 1,101.1 )

Increase in other assets ( 157.2 ) ( 168.2 ) ( 157.3 )

(Decrease)/Increase in accounts payable ( 11.8 ) ( 16.4 ) 36.9

Increase/(Decrease) in accounts payable 1.8 ( 11.8 ) ( 16.4 )

Increase in accrued expenses and other liabilities 492.9 301.3 123.0

7 unchanged sentences

Proceeds from the sale of property, plant, and equipment and other assets 28.3 — 34.2

Other ( 24.5 ) — —

Net cash flows used in investing activities ( 1,389.0 ) ( 2,517.3 ) ( 7,014.4 )

Cash Flows from Financing Activities:

Net (decrease)/increase in client funds obligations ( 12,701.6 ) 17,057.9 8,336.2

Net increase/(decrease) in client funds obligations 1,014.1 ( 12,701.6 ) 17,057.9

Net cash received from the Internal Revenue Service 602.7 — —

Payments of debt ( 0.9 ) ( 1.0 ) ( 0.9 )

Proceeds from the issuance of debt — — 1,981.5

Settlement of cash flow hedges — — ( 44.6 )

Repurchases of common stock ( 1,231.7 ) ( 1,121.4 ) ( 1,969.4 )

1 unchanged sentence

Dividends paid ( 2,183.1 ) ( 1,903.6 ) ( 1,659.0 )

Net (payments)/proceeds related to reverse repurchase agreements ( 44.7 ) 128.3 9.9

Net cash flows (used in)/provided by financing activities ( 15,680.7 ) 13,653.4 6,437.5

Net proceeds/(payments) related to reverse repurchase agreements 320.0 ( 44.7 ) 128.3

Net cash flows provided by/(used in) financing activities ( 1,431.7 ) ( 15,680.7 ) 13,653.4

Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents ( 22.4 ) ( 21.1 ) ( 98.7 )

27 unchanged sentences

Actual results may differ from those estimates.

Certain amounts from the prior year's financial statements have been reclassified in order to conform to the current year's presentation.

We also updated the description of "Systems development and programming costs" to "Research and development" within the Statement of Consolidated Earnings, this change did not result in changes to current or previously reported amounts.

Description of Business.

21 unchanged sentences

Therefore, the Company defers revenue associated with these set up fees and records them over the period in which such clients are expected to benefit from the material right, which is approximately five to seven years .

Collection of consideration the Company expects to receive typically occurs within 30 to 60 days of billing.

Collection of consideration the Company expects to receive to perform it services typically occurs within 30 to 60 days of billing.

We assess the collectability of revenues based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer's payment history and their intention to pay the consideration.

9 unchanged sentences

These costs are included in operating expenses.

The Company has estimated the amortization periods for the deferred costs by using its historical retention by business units to estimate the pattern during which the service transfers.

The Company has estimated the amortization periods for the deferred costs by using its historical client retention by business units to estimate the pattern during which the service transfers.

Cash and Cash Equivalents.

31 unchanged sentences

The Company had no available-for-sale securities included in Level 1 and Level 3 at June 30, 2024.

The Company issued three series of fixed-rate notes with staggered maturities of 7 and 10 -years totaling $ 3.0 billion (collectively the “Notes”).

The Company issued three series of fixed-rate notes with staggered maturitie s of 7 and 10 -years totaling $ 3.0 billion (collectively the “Notes”).

The fair value of the Notes are estimated in Note 9 utilizing a variety of inputs obtained from an independent pricing service, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data.

7 unchanged sentences

Property, plant and equipment is stated at cost less accumulated depreciation on the Consolidated Balance Sheets.

Depreciation is recognized over the estimated useful lives of the assets using the straight-line method.

Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the

improvements.

Depreciation is recognized over the estimated useful lives of the assets using the straight-line

Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements.

The estimated useful lives of assets are primarily as follows:

5 unchanged sentences

ROU assets also include adjustments related to prepaid or deferred lease payments and lease incentives.

Lease ROU assets are amortized over the life of the lease and tested for impairment in the same manner as long-lived assets as described below.

Lease ROU assets are amortized over the life of the lease and assessed for impairment in the event there is a modification or an early termination .

Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of businesses acquired.

33 unchanged sentences

EPS $ 7.04 $ 7.00

Options to purchase 0.2 million, 0.6 million, and 1.1 million shares of common stock for fiscal 2023, 2022, and 2021, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

There were no stock options excluded from the calculation of diluted earnings per share due to anti-dilution.

Options to purchase 0.2 million and 0.6 million shares of common stock for fiscal 2023 and 2022, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Stock-Based Compensation.

26 unchanged sentences

There is a financial statement recognition threshold and measurement attribute for tax positions taken or expected to be taken in a tax return.

Specifically, the likelihood of an entity's tax benefits being sustained must be “more likely than not,” assuming that these positions will be examined by taxing authorities with full knowledge of all relevant information prior to recording the related tax benefit in the financial statements.

Specifically, the likelihood of an entity's tax benefits being sustained must be “more likely than not,” assuming that these positions will be examined by tax authorities with full knowledge of all relevant information prior to recording the related tax benefit in the financial statements.

If a tax position drops below the “more likely than not” standard, the benefit can no longer be recognized.

26 unchanged sentences

Recently Issued Accounting Pronouncements

Standard Description Effective Date Effect on Financial Statements or Other Significant Matters

ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures This update enhances the transparency and decision usefulness of income tax disclosures to better assess how an entity’s operations and related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

June 30, 2026

(Fiscal 2026) The Company is assessing this guidance.

The adoption will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, and cash flows.

ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures This update improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and certain quantitative disclosures.

June 30, 2025

(Fiscal 2025) The Company is assessing this guidance.

The adoption will modify disclosures but will not have an impact on the Company's consolidated results of operations, financial condition, and cash flows.

Based upon similar operational and economic characteristics, the Company’s revenues are disaggregated by its three business pillars as follows:

63 unchanged sentences

Interest income on corporate funds $ ( 241.3 ) $ ( 149.5 ) $ ( 41.0 )

Realized losses/(gains) on available-for-sale securities, net 14.7 4.4 ( 11.3 )

Realized losses on available-for-sale securities, net 5.9 14.7 4.4

Impairment of assets — 2.1 23.0

3 unchanged sentences

In fiscal 2024, interest income on corporate funds increased as compared to fiscal 2023, due to higher average interest rates of 3.3 % for the year ended June 30, 2024, as compared to 2.4 % for the year ended June 30, 2023, coupled with higher average investment balances for the year ended June 30, 2024 as compared to the year ended June 30, 2023.

In fiscal 2024, the Company recognized a gain of $ 17.1 million, in relation to the sale of buildings and land.

In fiscal 2022, the Company recorded impairment charges of $ 23.0 million, which is comprised of $ 12.1 million related to software and customer lists which were determined to have no future use and impairment charges of $ 10.9 million related to operating right-of-use assets associated with exiting certain leases early.

In fiscal 2021, the Company recorded impairment charges of $ 19.9 million which is comprised of a write down o f $ 10.5 million related to internally developed software which was determined to have no future use, impairment charges of $ 9.4 million related to operating right-of-use assets and certain related fixed assets associated with exiting certain leased locations early, and recognizing certain owned facilities at fair value given intent to sell and accordingly classified as held for sale.

See Note 10 of our Consolidated Financial Statements for further details on non-service components of pension income, net.

27 unchanged sentences

Treasury securities 8,054.7 0.7 ( 290.4 ) 7,765.0

5,003.6 2.2 ( 171.1 ) 4,834.7

Asset-backed securities 1,995.7 0.5 ( 58.8 ) 1,937.4

Canadian government obligations and

Canadian government agency obligations 2,070.4 — ( 145.0 ) 1,925.4

2,022.9 0.1 ( 123.5 ) 1,899.5

government agency securities 1,670.0 0.2 ( 179.8 ) 1,490.4

Asset-backed securities 1,234.7 — ( 69.7 ) 1,165.0

Canadian provincial bonds 1,000.5 0.2 ( 78.1 ) 922.6

38 unchanged sentences

( 85.5 ) 4,629.4 ( 204.9 ) 2,876.3 ( 290.4 ) 7,505.7

Asset-backed securities ( 52.6 ) 1,444.9 ( 6.2 ) 59.9 ( 58.8 ) 1,504.8

Canadian government obligations and

3 unchanged sentences

( 0.6 ) 28.2 ( 179.2 ) 1,432.2 ( 179.8 ) 1,460.4

Asset-backed securities ( 2.0 ) 159.7 ( 67.7 ) 975.6 ( 69.7 ) 1,135.3

Canadian provincial bonds ( 2.7 ) 127.0 ( 75.4 ) 757.3 ( 78.1 ) 884.3

2 unchanged sentences

$ ( 179.8 ) $ 8,235.0 $ ( 2,034.6 ) $ 20,814.5 $ ( 2,214.4 ) $ 29,049.5

At June 30, 2023, Corporate bonds include investment-grade debt securities, with a wide variety of issuers, industries, and sectors, primarily carry credit ratings of A and above, and have maturities ranging from July 2023 through May 2033.

At June 30, 2023, asset-backed securities include AAA-rated senior tranches of securities with predominately prime collateral of fixed-rate auto loan, credit card, and equipment lease receivables with fair values of $ 569.5 million, $ 406.6 million, and $ 163.2 million, respectively.

At June 30, 2024, Corporate bonds include investment-grade debt securities, with a wide variety of issuers, industries, and sectors, primarily carry credit ratings of A and above, and have maturities ranging from July 2024 through June 2034.

At June 30, 2024, asset-backed securities include AAA-rated senior tranches of securities with predominately prime collateral of fixed-rate auto loan, credit card, and equipment lease receivables with fair values of $ 686.8 million, $ 413.3 million, and

$ 168.9 million, respectively.

These securities are collateralized by the cash flows of the underlying pools of receivables.

primary risk associated with these securities is the collection risk of the underlying receivables.

The primary risk associated with these securities is the collection risk of the underlying receivables.

All collateral on such asset-backed securities has performed as expected through June 30, 2024.

1 unchanged sentence

government agency securities primarily include debt directly issued by Federal Farm Credit Banks and Federal Home Loan Banks with fair values of $ 951.8 million and $ 473.6 million, respectively.

government agency securities represent senior, unsecured, non-callable debt that primarily carry ratings of Aaa by Moody's and AA+ by Standard & Poor's, with maturities ranging from December 2023 through March 2033.

At June 30, 2024, U.S.

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The Company has a $ 4.55 billion, 364 -day credit agreement that matures in June 2025 with a one-year term-out option.

T he Company also has a five year $ 3.2 billion credit facility maturing in June 2026 that contains an accordion feature under which the aggregate commitment can be increased by $ 500 million , subject to the availability of additional commitments.

In addition, t h e Company also has a $ 2.25 billion five year credit facility that matures in June 2028 that contains an accordion feature under which the aggregate commitment can be increased by $ 500 million , subject to the availability of additional commitments.

The Company also has a $ 2.25 billion five-year credit facility that matures in June 2028 that contains an accordion feature under which the aggregate commitment can be increased by $ 500 million, su bject to the availability of additional commitments.

In addition, t he Company also has a five-year $ 3.5 billion credit facility maturing in June 2029 that contains an accordion feature under which the aggregate commitment can be increased by $ 500 million, subject to the availability of additional commitments.

The interest rate applicable to committed borrowings is tied to SOFR, the effective federal funds rate, or the prime rate depending on the notification provided by the Company to the syndicated financial institutions prior to borrowing.

4 unchanged sentences

short-term funding requirements related to client funds are sometimes obtained on an unsecured basis through the issuance of commercial paper, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities.

This commercial paper program provides for the issuance of up to $ 9.7 billion in aggregate maturity value.

In June 2024, the company increased its U.S.

short-term commercial paper program to provide for the issuance of up to $ 10.3 billion from $ 9.7 billion in aggregate maturity value.

The Company’s commercial paper program is rated A-1+ by Standard & Poor’s, Prime-1 (“P-1”) by Moody’s and F1+ by Fitch.

6 unchanged sentences

Weighted average interest rates 5.3 % 3.7 %

Weighted average maturity (approximately in days) 2 days 1 day

Weighted average maturity (approximately in days) 2 days 2 days

The Company’s U.S., Canadian and United Kingdom short-term funding requirements related to client funds obligations are sometimes obtained on a secured basis through the use of reverse repurchase agreements, which are collateralized principally by government and government agency securities, rather than liquidating previously-collected client funds that have already been invested in available-for-sale securities.

1 unchanged sentence

At June 30, 2024 and 2023, the Company had $ 385.4 million and $ 105.4 million, respectively, of outstanding obligations related to the reverse repurchase agreements.

The Company has $ 7.3 billion available on a committed basis under the U.S.

reverse repurchase agreements.

Details of the reverse repurchase agreements are as follows:

8 unchanged sentences

3.47 % 1,000.0 1,000.0

Fixed-rate 1.250 % notes due September 1, 2030

1.83 % 1,000.0 1,000.0

Fixed-rate 1.700 % notes due May 15, 2028

1.85 % 1,000.0 1,000.0

Fixed-rate 1.250 % notes due September 1, 2030

1.83 % 1,000.0 1,000.0

Other 4.1 4.9

44 unchanged sentences

Selling, general and administrative expenses 179.5 165.0 155.7

System development and programming costs 30.8 26.3 23.5

Research and development 34.0 30.8 26.3

Total pretax stock-based compensation expense $ 243.5 $ 220.4 $ 201.7

Income tax benefit $ 60.2 $ 54.5 $ 49.1

As of June 30, 2023, the total remaining unrecognized compensation cost related to unvested stock options, restricted stock units, and restricted stock awards amounted to $ 8.3 million, $ 137.1 million, and $ 53.5 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 1.8 years, 1.9 years, and 1.3 years, respectively.

As of June 30, 2024, the total remaining unrecognized compensation cost related to unvested stock options, restricted stock units, and restricted stock awards amounted to $ 2.9 million, $ 186.9 million, and $ 11.3 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 1.0 year, 1.8 years, and 0.7 years, respectively.

In fiscal 2024, the following activity occurred under the Company’s existing plans.

32 unchanged sentences

2024 2023 2022

Risk-free interest rate N/A 0 % 0.1 %

Dividend yield N/A 1.8 % 2.6 %

Weighted average volatility factor N/A 22.7 % 25.8 %

Weighted average expected life (in years) N/A 4.9 5.4

Weighted average fair value (in dollars) N/A $ 33.03 $ 21.66

The weighted average fair values of shares granted were as follows:

Risk-free interest rate N/A N/A — %

Dividend yield N/A N/A 1.8 %

Weighted average volatility factor N/A N/A 22.7 %

Weighted average expected life (in years) N/A N/A 4.9

Weighted average fair value (in dollars) N/A N/A $ 33.03

The weighted average fair values of shares/units granted were as follows:

Year ended June 30, 2024 2023 2022

Performance-based restricted stock $ 245.96 $ 206.86 $ 138.53

Time-based restricted stock $ 214.75 $ 208.08 $ 141.52

Performance-based restricted shares/units $ 262.56 $ 245.96 $ 206.86

Time-based restricted shares/units $ 255.29 $ 214.75 $ 208.08

Pension Plans

26 unchanged sentences

Currency translation adjustments 0.8 ( 2.0 )

Plan changes — 6.8

Acquisitions — 0.7

2 unchanged sentences

Funded status - plan assets less benefit obligations $ 173.4 $ 128.6

(a) The actuarial gain for fiscal 2023 was primarily due to a higher discount rate used to value plan liabilities.

(a) The actuarial gain for fiscal 2024 was primarily due to demographic changes.

The amounts recognized on the Consolidated Balance Sheets as of June 30, 2024 and 2023 consisted of:

33 unchanged sentences

Expected long-term rate of return on assets 6.00 % 6.75 % 6.75 %

Increase in compensation levels N/A N/A 4.00 %

Increase in compensation levels N/A N/A N/A

The discount rate is based upon published rates for high-quality fixed-income investments that produce cash flows that approximate the timing and amount of expected future benefit payments.

29 unchanged sentences

To determine the fair value of our Level 2 plan assets, a variety of inputs are utilized, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, new issue data, and monthly payment information.

The pension plans have no Level 3 investments at June 30, 2023.

The pension plans have no Level 1 and Level 3 investments at June 30, 2024.

The following table presents the investments of the pension plans measured at fair value at June 30, 2024:

2 unchanged sentences

Government securities — 490.4 — 490.4

Mutual funds 18.2 279.0 — 297.2

Corporate and municipal bonds — 695.4 — 695.4

50 unchanged sentences

The effective tax rate in fiscal 2024 and 2023 was 23.0 % and 23.1 %, respectively.

The increase in the effective tax rate is primarily due to an intercompany transfer of certain assets that resulted in a lower effective tax rate in fiscal 2022 and higher reserves for uncertain tax positions in fiscal 2023.

The decrease in the effective tax rate is primarily due to a valuation allowance release and an intercompany transfer of certain assets offset by a lower benefit for adjustments to prior year tax liabilities in fiscal 2024.

The effective tax rate for fiscal 2023 and 2022 was 23.1 % and 22.5 %, respectively.

The decrease in the effective tax rate is primarily due to a favorable earnings mix, lower reserves for uncertain tax positions, and an intercompany transfer of certain assets in fiscal 2022, partially offset by favorable adjustments to prior year tax liabilities and a foreign tax election in fiscal 2021.

The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:

12 unchanged sentences

Deferred tax liabilities:

Deferred revenue $ 578.1 $ 529.9

Fixed and intangible assets — 6.5

Deferred contract costs $ 620.7 $ 578.1

Prepaid expenses 88.8 78.9

3 unchanged sentences

Deferred tax liabilities 780.8 718.6

Net deferred tax (assets)/liabilities $ ( 257.5 ) $ ( 90.4 )

Net deferred tax assets $ 135.9 $ 257.5

There are $ 200.2 million and $ 331.1 million of long-term deferred tax assets included in other assets on the Consolidated Balance Sheets at June 30, 2024 and 2023, respectively.

24 unchanged sentences

During fiscal year 2022, the Company recorded penalties of $ 0.3 million.

At June 30, 2023, the Company had accrued interest of $ 30.0 million recorded on the Consolidated Balance Sheets within other liabilities.

At June 30, 2022, the Company had accrued interest of $ 21.9 million recorded on the Consolidated Balance Sheets, of which $ 4.5 million was recorded within income taxes payable, and the remainder was recorded within other liabilities.

At June 30, 2023 and June 30, 2022, the Company’s accrued penalties recorded on the Consolidated Balance Sheets within other liabilities were not material.

At June 30, 2024 and June 30, 2023, the Company had accrued interest of $ 32.6 million and $ 30.0 million, respectively, recorded on the Consolidated Balance Sheets within other liabilities.

At June 30, 2024, the Company had no accrued penalties.

At June 30, 2023, the Company's accrued penalties recorded on the Consolidated Balance Sheets within other liabilities were no t material.

At June 30, 2022, the Company's accrued penalties of $ 0.3 million, were recorded on the Consolidated Balance Sheets within income taxes payable.

3 unchanged sentences

Taxing Jurisdiction Fiscal Years under Examination

(IRS) 2023 - 2024

Arizona 2016 - 2020

Illinois 2019 - 2020

Massachusetts 2016 - 2020

9 unchanged sentences

COMMITMENTS AND CONTINGENCIES

As of June 30, 2023 , the Company has purchase commitm ents of approximately $ 1,067.9 million, including a reinsurance premium with Chubb for the fiscal 2024 policy year, as well as obligations related to software license agreements, and purchase and maintenance agreements on our software, equipment, and other assets, of which $ 297.5 million relates to fiscal 2024, $ 406.8 million relates to the fiscal years ending June 30, 2025 through fiscal 2026 and the remaining relates to fiscal years ending June 30, 2027 through fiscal 2028.

As of June 30, 2024, the Company has purchase commitments of approximately $ 1,191.6 million, including a reinsurance premium with Chubb for the fiscal 2025 policy year, as well as obligations related to software license agreements, and purchase and maintenance agreements on our software, equipment, and other assets, of which $ 322.1 million relates to fiscal 2025, $ 426.7 million relates to the fiscal years ending June 30, 2026 through fiscal 2027, $ 117.7 million relates to fiscal years ending June 30, 2028 through fiscal 2029, and the remaining relates to fiscal years thereafter.

In May 2020, a putative class action complaint was filed against ADP, TotalSource and related defendants in the U.S.

2 unchanged sentences

The complaint seeks statutory and other unspecified monetary damages, injunctive relief and attorney’s fees.

These claims are still in their early stages and the Company is unable to estimate any reasonably possible loss, or range of loss, with respect to this matter.

The Company intends to vigorously defend against this lawsuit.

A second putative class action complaint, also filed in May 2020 against TotalSource and covering similar claims, has been dismissed.

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.

65 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data