Note G: Supplemental Information

Property and equipment, net of accumulated depreciation: Depreciation expense was $39.1 million for the three months ended August 31, 2026 compared to $34.5 million for the three months ended August 31, 2025.

Goodwill and intangible assets, net of accumulated amortization: Amortization expense relating to intangible assets was $70.7 million for the three months ended August 31, 2026 compared to $74.8 million for the three months ended August 31, 2025. During the three months ended August 31, 2026, goodwill was impacted by an immaterial acquisition and immaterial foreign currency translation. The Company did not recognize an impairment loss as it relates to its goodwill or intangible assets during the three months ended August 31, 2026 or August 31, 2025.

Short-term financing: The Company had no outstanding short-term borrowings as of August 31, 2026 or May 31, 2026. The unused amount available under these credit facilities as of August 31, 2026 was approximately $2.0 billion.

Effective January 23, 2026, the Company entered into amendments of its $750.0 million, five-year, unsecured, revolving credit facility ("the 2017 Credit Facility") and its $1.0 billion, five-year, unsecured, revolving credit facility ("the 2019 Credit Facility") with a syndicate of lenders for which JPMorgan Chase Bank, N.A. ("JPM") acts as administrative agent. The amendments to these credit facilities, among other things, increase the aggregate amount of principal available under the 2017 Credit Facility from $750 million to $1.0 billion, extend the maturity date for the 2017 Credit Facility from September 17, 2026 to January 23, 2031, and amend certain interest provisions and covenants under both credit facilities. In connection with these amendments, Paychex terminated its three-year, $250 million, unsecured, revolving credit facility for which PNC Bank, N.A. ("PNC") acted as administrative agent. As of the date of its termination, there were no outstanding loans under the PNC 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 August 31, 2026.

Letters of credit: The Company had irrevocable standby letters of credit available totaling $173.0 million and $176.5 million as of August 31, 2026 and May 31, 2026, respectively, primarily to secure commitments for certain insurance policies. The letters of credit expire at various dates between September 01, 2026 and December 24, 2027. No amounts were outstanding on these letters of credit as of, or during the three months ended August 31, 2026 and August 31, 2025, or as of May 31, 2026.

Long-term debt: There were no material changes to the Company's long-term debt agreements or balances during the three months ended August 31, 2026. The Company's long-term debt agreements and Corporate Bonds contain 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 August 31, 2026.

During fiscal 2026, the Company repaid its long-term private placement debt Senior Notes, Series A for $400.0 million, which matured on March 13, 2026.