Note G: Supplemental Information

Property and equipment, net of accumulated depreciation: Depreciation expense was $32.7 million and $95.8 million for the three and nine months ended February 28, 2023, compared to $34.9 million and $98.1 million for the three and nine months ended February 28, 2022.

Goodwill and intangible assets, net of accumulated amortization: Amortization expense relating to intangible assets was $11.5 million and $36.7 million for the three and nine months ended February 28, 2023, respectively, compared to $13.5 million and $44.6 million for the three and nine months ended February 28, 2022, respectively. The Company did not recognize an impairment loss as it relates to its goodwill or intangible assets during the nine months ended February 28, 2023 or February 28, 2022.

Short-term financing: Outstanding borrowings on the Company’s credit facilities had a weighted-average interest rate of 5.75% and 2.34% as of February 28, 2023 and May 31, 2022, respectively. The unused amount available under these credit facilities as of February 28, 2023 was approximately $2.0 billion.

On February 3, 2023, Paychex Advance LLC, a Paychex subsidiary and New York limited liability company, and Paychex entered into Amendment No. 2 (the “Amendment”) to the $250 million, three-year, unsecured, revolving credit facility established on February 6, 2020 (the “2020 Credit Facility”) for which PNC Bank, N.A. acts as administrative agent.

The Amendment, among other things, extended the maturity date of the 2020 Credit Facility from February 6, 2023 to February 6, 2026 at which time all borrowings thereunder will terminate. Except for extending the maturity date and making ministerial changes to the 2020 Credit Facility, the Amendment did not change the existing terms of the 2020 Credit Facility.

The credit facilities contain various financial and operational covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of February 28, 2023.

Letters of credit: The Company had irrevocable standby letters of credit available totaling $141.7 million and $140.2 million as of February 28, 2023 and May 31, 2022, respectively, required to secure commitments for certain insurance policies. The letters of credit expire at various dates between April 1, 2023 and February 5, 2024. No amounts were outstanding on these letters of credit as of, or during the nine months ended February 28, 2023 and February 28, 2022, or as of May 31, 2022.

Long-term debt: There have been no material changes to the Company's long-term debt agreement or balances subsequent to May 31, 2022. The Company’s long-term debt agreement contains customary representations, warranties, affirmative and negative covenants, including financial covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of February 28, 2023.