Paychex 2011 Annual Report Download - page 74

Note J — Other Comprehensive (Loss)/Income
Other comprehensive (loss)/income results from items deferred on the Consolidated Balance Sheets in
stockholders’ equity. The following table sets forth the components of other comprehensive (loss)/income:
In millions 2011 2010 2009
Year ended May 31,
Unrealized holding (losses)/gains ............................... $(6.0) $ 3.1 $ 43.0
Income tax benefit/(expense) related to unrealized holding (losses)/gains . . 1.9 (0.6) (16.4)
Reclassification adjustment for the net gain on sale of available-for-sale
securities realized in net income .............................. (1.3) (3.2) (1.1)
Income tax expense on reclassification adjustment for the net gain on sale
of available-for-sale securities ................................ 0.5 1.2 0.4
Other comprehensive (loss)/income............................. $(4.9) $ 0.5 $ 25.9
As of May 31, 2011, the accumulated other comprehensive income was $37.5 million, which was net of taxes
of $21.7 million. As of May 31, 2010, the accumulated other comprehensive income was $42.4 million, which was
net of taxes of $24.1 million.
Note K — Supplemental Cash Flow Information
Income taxes paid were $255.6 million, $258.0 million, and $261.8 million for 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
immediately participate in the salary deferral portion of the Plan, contributing up to a maximum of 50% of their
salary, subject to Internal Revenue Service limitations. Employees who have completed one year of service are
eligible to receive a company matching contribution, when such contribution is in effect. Prior to April 2009, the
Company matched up to 100% of the first 3% of eligible pay and up to 50% of the next 2% of eligible pay that an
employee contributed to the Plan. Effective April 3, 2009, the Company suspended the employer matching
contribution. A matching contribution was reinstated in the amount of 50% of up to 4% of eligible pay that an
employee contributes to the Plan for pay dates on or after January 1, 2011.
The Plan is 100% participant-directed. Plan participants can fully diversify their portfolios by choosing from
any or all investment fund choices in the Plan. Transfers in and out of investment funds, including the Paychex, Inc.
Employee Stock Ownership Plan (ESOP) Stock Fund, are not restricted, with the exception of certain restricted
trading periods for individuals designated as insiders as specified in the Company’s Insider Trading Policy. The
Company match contribution, when in effect, follows the same fund elections as the employee compensation
deferrals.
Company contributions to the Plan for fiscal 2011 and fiscal 2009 were $3.5 million and $14.3 million,
respectively. There were no Company contributions to the Plan for fiscal 2010 due to the suspension of the employer
matching contribution at that time.
Deferred compensation plans: The Company offers non-qualified and unfunded deferred compensation
plans to a select group of key employees, executive officers, and outside directors. Eligible employees are provided
with the opportunity to defer up to 50% of their annual base salary and bonus and outside directors to defer 100% of
their Board cash compensation. Gains and losses are credited based on the participant’s election of a variety of
investment choices. The Company does not match any participant deferral or guarantee its return. Distributions are
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PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)