Paychex 2011 Annual Report Download

Download and view the complete annual report

Please find the complete 2011 Paychex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

2011
ANNUAL
564,000
Clients
Nationwide
REPORT
N
a
$2.1 Billion
Total Revenue
PAYX 40th
Birthday
Celebration
at NASDAQ
Paychex
continues
as AICPA
accountants’
preferred payroll
and retirement
plan provider
America’s
Business Is
Our Business
The CEO’s message
to
shareholders
HEALTH-CARE
REFORM
Paychex Insurance
Agency, Inc.,
businesses, and the
Affordable Care Act
#1 in 401(k)
Recordkeeping
Plans

Table of contents

  • Page 1
    ... Is Our Business The CEO's message to shareholders 564,000 Clients Nationwide Na 1 in 401(k) Recordkeeping Plans HEALTH-CARE REFORM Paychex Insurance Agency, Inc., businesses, and the Affordable Care Act Paychex continues as AICPA accountants' preferred payroll and retirement plan provider

  • Page 2
    .... The company offers comprehensive payroll services, including payroll processing, payroll tax administration, and employee pay services, including direct deposit, check signing, and Readychex®. Human resource services include 401(k) plan recordkeeping, section 125 plans, a professional employer...

  • Page 3
    ... to the Overview section of Item 7 of our Annual Report on Form 10-K for the year ended May 31, 2011 for further information. 2,066.3 1,886.9 2,082.8 2,000.8 2,084.3 515.4 576.1 533.5 477.0 515.3 2007 2008 2009 (millions $) 2010 2011 2007 2008 2009 (millions $) 2010 2011 TOTA L RE...

  • Page 4
    ... Our Shareholders. W 2 2011 Annual Report hen I became CEO of Paychex last September, I knew my job was to build on our history of success by reinvigorating growth and delivering results. I am proud of the more than 12,000 Paychex employees who are joining me in carrying out our plans to do just...

  • Page 5
    We will continue to be the leading provider of payroll, human resource, and benefit services for companies and organizations across the country because America's business is our business. The results that our employees delivered in fiscal 2011 demonstrate that we are succeeding. YEAR IN REVIEW One ...

  • Page 6
    ... guidance to clients on the Tax Relief Act of 2010. f ) software as a service ( (SaaS) payroll processing, was ƤnaliœedǤ SEPTEMBER 2010 Paychex Insurance Agency, Inc. and the American Institute of Certified Public Accountants - the AICPA - co-hosted a continuing professional education seminar...

  • Page 7
    ... product development investments in our next generation, software-as-a-service (SaaS) application. We have combined our offerings in the mid-market space to help our clients handle every aspect of the "hire-to-retire" employee life cycle. Paychex One-Source Solutions brings payroll, HR and employee...

  • Page 8
    ... per share. Today - and ten stock splits later - one 1983 public share is worth $1,900. The approximate market cap of the company was nearly $12 billion at the end of fiscal 2011. P S a Sa PAYROLL 564,000 payroll clients as of May 31, 2011 Software as a Service for Financial Advisors One of the...

  • Page 9
    ...'s best employersponsored career development organizations. The Center delivered over 950,000 employee hours of instruction in fiscal 2011, while our knowledgeable and highly trained sales and service personnel also provided industry-leading training in support of our clients. 2011 Annual Report 7

  • Page 10
    ... 2011, Paychex has been named to Computerworld 's list of "100 Best Places to Work in IT" for seven consecutive years. The company's comprehensive employee wellness program earned recognition as one of the National Business Group on Health's "Best Employers for Healthy Lifestyles." PAYROLL Service...

  • Page 11
    .... Paychex, a flagship service offering of the AICPA Trusted Business Advisor Program since 2003, will remain the preferred payroll and retirement services provider for AICPA members and their clients through September 2016. Spotlight on Insurance Q Ranks among the 30 largest insurance agencies in...

  • Page 12
    ... The payroll tax holiday. ➤ Passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. ➤ Expiration of the HIRE Act. ➤ Expiration of the Making Work Pay tax credit. ➤ Repeal of the Form 1099 tax reporting requirement of the Affordable Care Act. argest...

  • Page 13
    ... of Major Market Services sales. Laurie Zaucha, a 20year human resources executive, has joined Paychex as our new vice president of human resources and and product development functions. In addition, Andy Childs, a 25-year marketing and business development veteran, joins our executive team in...

  • Page 14
    ... new product - Paychex HR Essentials - provides support to our clients online or over the phone to help manage employee-related topics. C A plug-and-play time and attendance solution was introduced for small businesses with up to twenty-five employees. C The MyPaychex single-sign-on portal allows...

  • Page 15
    ... AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31, 2011 Commission file number 0-11330 Paychex, Inc. 911 Panorama Trail South Rochester, New York 14625-2396 (585) 385-6666...

  • Page 16
    ...III Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters...Certain Relationships and Related Transactions, and Director Independence ...Principal Accounting Fees and Services...

  • Page 17
    ... of payroll, human resource, and benefits outsourcing solutions for small- to mediumsized businesses. As of May 31, 2011, we serviced approximately 564,000 clients and had approximately 12,400 employees. We maintain our corporate headquarters in Rochester, New York, and have more than 100 offices...

  • Page 18
    ... tax administration services; • employee payment services; • regulatory compliance services (new-hire reporting and garnishment processing); • Paychex HR Solutions; • retirement services administration; • insurance services; • eServices; and • other human resource services and products...

  • Page 19
    ... employees. MMS clients can select Paychex One-Source Solutions, which seamlessly integrates Preview, Paychex Time and Labor Online, and Paychex HR Online applications through a single, web-based client portal. MMS clients also have the option to select from a number of á la carte payroll and human...

  • Page 20
    ... ASO product that provides support to our clients over the phone or online to help manage employee-related topics. As of May 31, 2011, Paychex HR Solutions were utilized by 21,000 clients with approximately 567,000 client employees. Retirement services administration: Our retirement services product...

  • Page 21
    ... in the payroll process. Other human resource services and products: We offer the outsourcing of plan administration under section 125 of the Internal Revenue Code, allowing employees to use pre-tax dollars to pay for certain health insurance benefits and health and dependent care expenses not...

  • Page 22
    ... size (Number of employees) Estimated market distribution(1) Paychex, Inc. distribution of client base 1-4 5-19 20-49 50-99 100+ 80% 15% 3% 1% 1% 42% 40% 12% 4% 2% (1) Based on currently available market data from Dun & Bradstreet. The market for payroll processing and human resource services is...

  • Page 23
    ... third fiscal quarter, which ends in February, the number of new payroll clients, new retirement services clients, and new Paychex HR Solutions worksite employees tends to be higher than during the rest of the fiscal year, primarily because a majority of new clients begin using our services in the...

  • Page 24
    ... to deliver client payroll checks and banks used to electronically transfer funds from clients to their employees. Failure by these service providers, for any reason, to deliver their services in a timely manner could result in material interruptions to our operations, impact client relations, and...

  • Page 25
    ... distribution, processing, and technology functions; certain ancillary functions; a telemarketing unit; and other back-office functions. Facilities outside of Rochester, New York are at various locations throughout the U.S. and Germany and house our regional, branch, and sales offices and data...

  • Page 26
    ... the Paychex, Inc. Employee Stock Purchase Plan and 6,019 participants in the Paychex, Inc. Employee Stock Ownership Plan. The high and low sale prices for our common stock as reported on the NASDAQ Global Select Market and dividends for fiscal 2011 and fiscal 2010 are as follows: Fiscal 2011 Sales...

  • Page 27
    ...average market capitalization. The S&P S(DP) Index includes a representative peer group of companies, and includes Paychex. All comparisons of stock price performance shown assume reinvestment of dividends. STOCK PRICE PERFORMANCE GRAPH $140 $120 $100 $80 $60 $40 $20 $0 2006 2007 2008 2009 2010 2011...

  • Page 28
    ...Major Market Services ("MMS"), which is utilized by clients that have more sophisticated payroll and benefits needs, and include: • payroll processing; • payroll tax administration services; • employee payment services; and • regulatory compliance services (new-hire reporting and garnishment...

  • Page 29
    ... employer organization ("PEO"). We also offer Paychex HR Essentials, our new ASO product that provides support to our clients over the phone or online to help manage employee-related topics; • retirement services administration; • insurance services; • eServices; and • other human resource...

  • Page 30
    ... paid to stockholders, representing 87% of net income. During fiscal 2011, we completed the acquisition of two software-as-a-service companies, opening up additional areas of the markets we serve. SurePayroll, Inc. ("SurePayroll"), a provider of payroll processing for small businesses, was acquired...

  • Page 31
    ... 31, 2011 (1) 2010 2009 Paychex HR Solutions client employees ...Paychex HR Solutions clients(1) ...Insurance services clients(2) ...Health and benefits services applicants ...Retirement services clients(3) ...(1) Includes Paychex HR Essentials as of May 31, 2011. ...567,000 ...21,000 ...100,000...

  • Page 32
    ..., we have funded our operations, capital purchases, business acquisitions, and dividend payments from our operating activities. Our positive cash flows in fiscal 2011 allowed us to support our business growth and to pay substantial dividends to our stockholders. During fiscal 2011, dividends paid to...

  • Page 33
    ..., except per share amounts 2011 Change 2010 Change 2009 Revenue: Payroll service revenue ...$1,438.8 Human Resource Services revenue ...597.4 Total service revenue ...Interest on funds held for clients ...Total revenue ...Combined operating and SG&A expenses ...Operating income ...As a % of total...

  • Page 34
    ...from Stromberg time and attendance operations ("Stromberg"), an immaterial component of Paychex, prior to its sale in October 2009. In addition, retirement services revenue growth for fiscal 2010 was impacted by billings in fiscal 2009 related to restatements of clients' retirement plans required by...

  • Page 35
    ... generated from the following: $ in billions As of May 31, (1) 2011 Change 2010 Change 2009 Paychex HR Solutions client employees . . 567,000 21,000 Paychex HR Solutions clients(1) ...Insurance services clients(2) ...100,000 Health and benefits services applicants ...99,000 Retirement services...

  • Page 36
    ... one-time costs related to the separation agreement entered into during the three months ended August 31, 2010 with Jonathan J. Judge, our former President and Chief Executive Officer. Expenses of SurePayroll and ePlan, which are included in our results since their respective acquisition dates...

  • Page 37
    ... was the result of investment of cash generated from operations, partially offset by cash utilized to fund the acquisitions of SurePayroll and ePlan during the second half of fiscal 2011. The increase in average interest rates earned on corporate investments was primarily driven by higher yields on...

  • Page 38
    ... it from the table above. We are currently under a state income tax audit for the fiscal years ended May 31, 2004 through 2009. On July 14, 2010, we received a summary of proposed tax adjustments from the New York State Department of Taxation and Finance, which was in excess of the reserve recorded...

  • Page 39
    ... operational functions, while Paychex and Advantage provide all centralized back-office payroll processing and payroll tax administration services. Under these arrangements, Advantage pays the Associates commissions based on processing activity for the related clients. When we acquired Advantage...

  • Page 40
    ..., of data processing equipment and software from EMC Corporation. The Chairman, President, and Chief Executive Officer of EMC Corporation is a member of our Board of Directors (the "Board"). During fiscal 2011, we paid $126.4 million for the acquisitions of SurePayroll and ePlan. During fiscal 2010...

  • Page 41
    ... in client fund obligations: The client fund obligations liability will vary based on the timing of collecting client funds, and the related required remittance of funds to applicable tax or regulatory agencies for payroll tax administration services and to employees of clients utilizing employee...

  • Page 42
    ... to payroll-related processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. The revenue earned from delivery service for the distribution of certain client payroll checks and reports...

  • Page 43
    ... expected to reverse. We record a deferred tax asset related to the stock-based compensation costs recognized for certain stock-based awards. At the time of exercise of non-qualified stock options or vesting of stock awards, we account for the resulting tax deduction by reducing our accrued income...

  • Page 44
    ... for uncertain tax positions. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Risk Factors Changes in interest rates and interest rate risk: Funds held for clients are primarily comprised of short-term funds and available-for-sale securities. Corporate investments are...

  • Page 45
    ... financial market conditions, a 25-basis-point change in taxable interest rates generally affects our tax-exempt interest rates by approximately 17 basis points. Our total investment portfolio (funds held for clients and corporate investments) averaged approximately $4.0 billion for fiscal 2011. Our...

  • Page 46
    ...funds held for clients and corporate available-for-sale securities reflected a net unrealized gain of $59.3 million as of May 31, 2011, compared with an unrealized gain of $66.6 million as of May 31, 2010. In determining fair value, we utilize the Interactive Data Pricing Service. During fiscal 2011...

  • Page 47
    ... Data TABLE OF CONTENTS Report on Management's Assessment of Internal Control Over Financial Reporting ...Reports of Independent Registered Public Accounting Firm ...Consolidated Statements of Income for the Years Ended May 31, 2011, 2010, and 2009 ...Consolidated Balance Sheets as of May 31, 2011...

  • Page 48
    ...of Paychex, Inc. and the effectiveness of the Company's internal control over financial reporting. The reports of the independent accountants are contained in this Annual Report on Form 10-K. /s/ Martin Mucci Martin Mucci President and Chief Executive Officer /s/ John M. Morphy John M. Morphy Vice...

  • Page 49
    ... over financial reporting as of May 31, 2011, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of May 31, 2011 and 2010, and the related consolidated statements...

  • Page 50
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Paychex, Inc. We have audited the accompanying consolidated balance sheets of Paychex, Inc. as of May 31, 2011 and 2010, and the related consolidated statements of income, stockholders' equity, and ...

  • Page 51
    ...May 31, 2011 2010 2009 Revenue: Service revenue ...Interest on funds held for clients ...Total revenue ...Expenses: Operating expenses ...Selling, general and administrative expenses ...Total expenses ...Operating income ...Investment income, net ...Income before income taxes ...Income taxes ...Net...

  • Page 52
    ...31, 2011 2010 Assets Cash and cash equivalents ...Corporate investments ...Interest receivable ...Accounts receivable, net of allowance for doubtful accounts ...Deferred income taxes ...Prepaid income taxes ...Prepaid expenses and other current assets ...Current assets before funds held for clients...

  • Page 53
    ....4 (1.7) 829.5 477.0 41.9 Balance as of May 31, 2009 ...Net income ...Unrealized gains on securities, net of tax ...Total comprehensive income ...Cash dividends declared ...Stock-based compensation ...Stock-based award transactions ... 1,341.4 477.0 0.5 477.5 (448.6) 25.7 6.0 0.5 (448.6) 0.5 361...

  • Page 54
    ... cash (used in)/provided by investing activities ...Financing activities Net change in client fund obligations ...Dividends paid ...Proceeds from exercise and excess tax benefit related to stock-based awards ...Net cash used in financing activities ...(Decrease)/increase in cash and cash equivalents...

  • Page 55
    ...compensation insurance, and provides health care coverage to PEO client employees. PEO services are sold through the Company's registered and licensed subsidiary, Paychex Business Solutions, Inc. Paychex HR Essentials is a new ASO product that provides support to the Company's clients over the phone...

  • Page 56
    ... lives, which are generally three to fifteen years. For software developed for internal use, certain costs are capitalized, including external direct costs of materials and services associated with developing or obtaining the software, and payroll and payroll-related costs for employees who are...

  • Page 57
    ... to payroll-related processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. The revenue earned from delivery service for the distribution of certain client payroll checks and reports...

  • Page 58
    ...for the related clients. Revenue generated from customers as a result of these relationships and commissions paid to Associates are included in the Consolidated Statements of Income as service revenue and selling, general and administrative expenses, respectively. PEO workers' compensation insurance...

  • Page 59
    ... to reverse. The Company records a deferred tax asset related to the stock-based compensation costs recognized for certain stock-based awards. At the time of the exercise of non-qualified stock options or vesting of stock awards, the Company accounts for the resulting tax deduction by reducing its...

  • Page 60
    ... guidance is effective prospectively for public entities for interim and annual reporting periods beginning after December 15, 2011, with early adoption by public entities prohibited, and is applicable to the Company's fiscal quarter beginning March 1, 2012. The Company is currently evaluating this...

  • Page 61
    ... acquired. The acquisition of SurePayroll allows the Company entry into a new area of the online market for small businesses, and resulted in approximately $84.6 million of goodwill, which is not tax-deductible. Effective May 3, 2011, the Company acquired ePlan Services, Inc. ("ePlan"), a provider...

  • Page 62
    ...The Company has granted stock options to virtually all non-management employees with at least 90 days of service, and shares remain outstanding for the following broad-based stock option grants: Shares granted (millions) Exercise price per share Shares outstanding as of May 31, 2011 (millions) Date...

  • Page 63
    ... to Paychex. For restricted stock awards granted to officers prior to July 2010, the shares vest upon the fifth anniversary of the grant date provided the recipient is still an employee of the Company on that date. These awards have a provision for the acceleration of vesting based on achievement...

  • Page 64
    ..., 2011 ... Restricted stock units: Beginning in July 2007, the Board approved grants of restricted stock units ("RSUs") to non-officer management as a replacement of non-qualified stock options. RSUs do not have voting rights or earn dividend equivalents during the vesting period. These awards vest...

  • Page 65
    ...to employees, except for when stock is sold. The plan has been deemed non-compensatory and therefore, no stock-based compensation costs have been recognized for fiscal years 2011, 2010, or 2009 related to this plan. Note E - Funds Held for Clients and Corporate Investments Funds held for clients and...

  • Page 66
    ... Balance Sheets is as follows: May 31, In millions 2011 2010 Funds held for clients ...Corporate investments ...Long-term corporate investments ...Total funds held for clients and corporate investments ... $3,566.7 345.0 207.3 $4,119.0 $3,541.0 82.5 290.1 $3,913.6 The Company is exposed...

  • Page 67
    ... the future due to new developments or changes in the Company's strategies or assumptions related to any particular investment. Realized gains and losses from the sale of available-for-sale securities were as follows: In millions Year ended May 31, 2011 2010 2009 Gross realized gains ...$1.3 Gross...

  • Page 68
    ... short maturities of these instruments. Marketable securities included in funds held for clients and corporate investments consist primarily of securities classified as available-for-sale and are recorded at fair value on a recurring basis. The accounting standards related to fair value measurements...

  • Page 69
    ... securities are mutual fund investments, consisting of participants' eligible deferral contributions under the Company's non-qualified and unfunded deferred compensation plans. The related liability is reported as other long-term liabilities. The mutual funds are valued based on quoted market prices...

  • Page 70
    ...balances on its Consolidated Balance Sheets of $513.7 million as of May 31, 2011, and $421.6 million as of May 31, 2010. The increase in goodwill since May 31, 2010 was the result of the acquisition of two software-as-a-service companies in fiscal 2011. The acquisition of SurePayroll resulted in $84...

  • Page 71
    ... 31, 2011 2010 Deferred tax assets: Compensation and employee benefit liabilities ...Other current liabilities ...Tax credit carry forward ...Depreciation ...Stock-based compensation...Other ...Gross deferred tax assets ...Deferred tax liabilities: Capitalized software ...Depreciation ...Intangible...

  • Page 72
    ... of the U.S. federal statutory tax rate to the Company's effective income tax rate is as follows: Year ended May 31, 2011 2010 2009 Federal statutory tax rate ...Increase/(decrease) resulting from: State income taxes, net of federal tax benefit...Tax-exempt municipal bond interest ...Other...

  • Page 73
    ... of Income. The amount of accrued interest and penalties associated with the Company's tax positions is immaterial to the Consolidated Balance Sheets. The amount of interest and penalties recognized for fiscal years 2011, 2010, and 2009 was immaterial to the Company's results of operations. 57

  • Page 74
    ... fiscal years 2011, 2010, and 2009, respectively. Note L - Employee Benefit Plans 401(k) plan: The Company maintains a contributory savings plan that qualifies under section 401(k) of the Internal Revenue Code. The Paychex, Inc. 401(k) Incentive Retirement Plan (the "Plan") allows all employees to...

  • Page 75
    ... date, the date the participant retires from any active employment, or a designated specific date. In fiscal 2009, participants were allowed to make a one-time election for a distribution under the Internal Revenue Service Section 409A transition rules. The amounts accrued under these plans...

  • Page 76
    ... 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 2011, 2010, and 2009, the Company purchased approximately $1.8 million, $1.5 million...

  • Page 77
    ... years 2011, 2010, and 2009, the Company purchased approximately $0.4 million, $0.4 million, and $0.5 million, respectively, of services from Dun & Bradstreet Corporation. Jonathan J. Judge, the Company's former President and Chief Executive Officer and former director, is a member of the Board of...

  • Page 78
    ...) Three Months Ended November 30 February 28(3) Fiscal 2010 August 31 May 31 Full Year Service revenue ...Interest on funds held for clients ...Total revenue ...Operating income ...Investment income, net ...Income before income taxes ...Income taxes ...Net income ...Basic earnings per share...

  • Page 79
    ... information required to be disclosed in the Company's reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures are also designed with the objective of...

  • Page 80
    ... she worked for Bausch & Lomb Incorporated, first as Vice President of Human Resources for the U.S., Canada, and Latin America, and then as Vice President of Global Compensation and Benefits. John M. Morphy ...63 Jennifer Vossler ...48 Laurie L. Zaucha ...46 On May 4, 2011, the Company announced...

  • Page 81
    ... the form of stock incentive plans. Under the Paychex, Inc. 2002 Stock Incentive Plan, as amended and restated (the "2002 Plan"), non-qualified or incentive stock options, restricted stock, restricted stock units, and performance shares have been awarded to employees and the Board of Directors (the...

  • Page 82
    ... by reference from Exhibit 10.1 to the Company's Form 8-K filed with the Commission on July 16, 2008. Paychex, Inc. 2002 Stock Incentive Plan (as amended and restated effective October 12, 2005) Form of Non-Qualified Stock Option Award Agreement, incorporated herein by reference from Exhibit 10...

  • Page 83
    ... on July 20, 2009. Paychex, Inc. Employee Deferred Compensation Plan, incorporated herein by reference from Exhibit 10.30 to the Company's Form 10-K filed with the Commission on July 20, 2009. Subsidiaries of the Registrant. Consent of Independent Registered Public Accounting Firm. Power of Attorney...

  • Page 84
    ... linkbase document. Exhibit filed with this report. ** As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Exchange Act. # Management contract or compensatory plan. 68

  • Page 85
    ... by the undersigned, thereunto duly authorized, on July 15, 2011. PAYCHEX, INC. By: /s/ Martin Mucci Martin Mucci President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the...

  • Page 86
    PAYCHEX, INC. ELEVEN-YEAR SUMMARY OF SELECTED FINANCIAL DATA In millions, except per share amounts Year ended May 31, 2011 2010 2009 2008 2007 Results of operations Revenue: Service revenue ...Interest on funds held for clients ...Total revenue ...Total expenses ...Operating income ...As a % of ...

  • Page 87
    2006 2005 2004 2003 2002 2001 $1,573.8 100.8 1,674.6 1,025.0 $ 649.6 39% $ 25.2 40% $ 464.9 28% $ $ 1.23 1.22 379.5 381.4 $ $ 0.61 81.1 $1,384.7 60.5 1,445.2 911.4 $ 533.8 37% $ 12.4 38% $ 368.8 26% $ $ 0.97 0....

  • Page 88
    ...OF DIRECTORS • B. Thomas Golisano Chairman, Retired President and Chief Executive Officer of Paychex, Inc. • Joseph G. Doody President, Staples North American Delivery • David J. S. Flaschen Investor and advisor to privately held companies • Phillip Horsley Founder of Horsley Bridge Partners...

  • Page 89
    ... contact: Paychex Investor Relations 911 Panorama Trail South Rochester, NY 14625-2396 or call 1-800-828-4411 Paychex, Inc. financial materials can be accessed at investor.paychex.com. Independent Auditors Ernst & Young LLP 155 North Wacker Drive Chicago, Illinois 60606 Direct Reinvestment and Stock...

  • Page 90
    ... Nebraska Omaha Nevada Las Vegas Reno New Hampshire Manchester New Jersey Northern New Jersey Piscataway Southern New Jersey New Mexico Albuquerque New York Albany Binghamton Brooklyn Buffalo Lake Success Long Island Manhattan Mid Hudson Valley Rochester Syracuse North Carolina Charlotte Greensboro...

  • Page 91

  • Page 92
    ...South Rochester, New York 14625 www.paychex.com PAYX BIRTHDAY at NASDAQ In March, as part of the company's forty-year anniversary, CEO Marty Mucci rang the opening bell at The NASDAQ® stock market in the heart of New York City's Times Square. He was accompanied by fifty guests that included sales...