Paychex 2014 Annual Report Download - page 71

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PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Classification of investments on the Consolidated Balance Sheets is as follows:
May 31,
In millions 2014 2013
Funds held for clients .............................................. $4,198.6 $4,072.5
Corporate investments .............................................. 398.7 398.2
Long-term corporate investments ..................................... 385.6 369.1
Total funds held for clients and corporate investments ................. $4,982.9 $4,839.8
The Company’s available-for-sale securities reflected a net unrealized gain of $34.5 million as of May 31,
2014 compared with a net unrealized gain of $34.7 million as of May 31, 2013. Included in the net unrealized
gain total as of May 31, 2014 and May 31, 2013, there were, respectively, 98 and 147 available-for-sale securities
in an unrealized loss position. The securities in an unrealized loss position were as follows:
May 31, 2014
Less than twelve months More than twelve months Total
In millions
Gross
unrealized
losses
Fair
value
Gross
unrealized
losses
Fair
Value
Gross
unrealized
losses
Fair
Value
Type of issue:
General obligation municipal
bonds .................... $(0.1) $ 69.6 $(1.8) $164.0 $(1.9) $233.6
Pre-refunded municipal bonds . . . — 1.7 — — — 1.7
Revenue municipal bonds ...... — 47.5 (1.1) 112.4 (1.1) 159.9
Total ....................... $(0.1) $118.8 $(2.9) $276.4 $(3.0) $395.2
May 31, 2013
Less than twelve months More than twelve months Total
In millions
Gross
unrealized
losses
Fair
value
Gross
unrealized
losses
Fair
Value
Gross
unrealized
losses
Fair
Value
Type of issue:
General obligation municipal
bonds .................... $(3.5) $349.2 $— $ — $(3.5) $349.2
Pre-refunded municipal bonds . . — 3.1 — — — 3.1
Revenue municipal bonds ...... (2.2) 225.3 — 2.1 (2.2) 227.4
Total ...................... $(5.7) $577.6 $— $2.1 $(5.7) $579.7
The Company regularly reviews its investment portfolios to determine if any investment is other-than-temporarily
impaired due to changes in credit risk or other potential valuation concerns. The Company believes that the
investments held as of May 31, 2014 that had unrealized losses of $3.0 million were not other-than-temporarily
impaired. The Company believes that it is probable that the principal and interest will be collected in accordance with
contractual terms, and that the unrealized losses on these securities were due to changes in interest rates and were not
due to increased credit risk or other valuation concerns. A substantial portion of the securities in an unrealized loss
position as of May 31, 2014 and May 31, 2013 held an AA rating or better. The Company does not intend to sell these
investments until the recovery of their amortized cost basis or maturity, and further believes that it is not more-likely-
than-not that it will be required to sell these investments prior to that time. The Company’s assessment that an
investment is not other-than-temporarily impaired could change in the future due to new developments or changes in
the Company’s strategies or assumptions related to any particular investment.
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