Paychex 2015 Annual Report Download - page 83

PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
and $39.9 million, respectively. As of May 31, 2015, future minimum lease payments under various non-
cancelable operating leases with terms of more than one year are as follows:
In millions
Year ending May 31, Minimum lease payments
2016 ........................................................... $37.5
2017 ........................................................... 31.2
2018 ........................................................... 23.1
2019 ........................................................... 16.1
2020 ........................................................... 11.3
Thereafter ....................................................... 8.5
Other commitments: As of May 31, 2015, the Company had outstanding commitments under purchase
orders and legally binding contractual arrangements with minimum future payment obligations of approximately
$104.8 million, including $9.5 million of commitments to purchase capital assets. These minimum future
payment obligations relate to the following fiscal years:
In millions
Year ending May 31, Minimum payment obligation
2016 ........................................................ $71.2
2017 ........................................................ 26.8
2018 ........................................................ 4.4
2019 ........................................................ 1.9
2020 ........................................................ 0.3
Thereafter .................................................... 0.2
In the normal course of business, the Company makes representations and warranties that guarantee the
performance of services under service arrangements with clients. Historically, there have been no material losses
related to such guarantees. In addition, the Company has entered into indemnification agreements with its
officers and directors, which require the Company to defend and, if necessary, indemnify these individuals for
certain pending or future claims as they relate to their services provided to the Company.
Paychex currently self-insures the deductible portion of various insured exposures under certain employee
benefit plans. The Company’s estimated loss exposure under these insurance arrangements is recorded in other
current liabilities on the Consolidated Balance Sheets. Historically, the amounts accrued have not been material
and are not material as of the reporting date. The Company also maintains insurance coverage in addition to its
purchased primary insurance policies for gap coverage for employment practices liability, errors and omissions,
warranty liability, theft and embezzlement, cyber threats, and acts of terrorism; and capacity for deductibles and
self-insured retentions through its captive insurance company.
Note N — Related Parties
During fiscal years 2015, 2014, and 2013, the Company purchased approximately $6.9 million, $4.7 million,
and $6.5 million, respectively, of data processing equipment and software from EMC Corporation. The
Chairman, President, and Chief Executive Officer of EMC Corporation is a member of the Company’s Board.
During fiscal years 2015, 2014, and 2013, the Company purchased approximately $1.7 million, $1.3 million,
and $1.6 million, respectively, of office supplies from Staples, Inc. The Vice Chairman of Staples, Inc. is a
member of the Company’s Board.
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