Note H: Supplemental Information

Leases: As of February 28, 2026, the Company entered into one lease agreement that had not yet commenced for a term of 7.58 years. This lease will require aggregate lease payments over the term of approximately $14.5 million.

Property and equipment, net of accumulated depreciation: Depreciation expense was $36.2 million and $105.5 million for the three and nine months ended February 28, 2026 compared to $30.3 million and $86.8 million for the three and nine months ended February 28, 2025.

Goodwill and intangible assets, net of accumulated amortization: Amortization expense relating to intangible assets was $74.8 million and $223.9 million for the three and nine months ended February 28, 2026 compared to $12.8 million and $37.0 million for the three and nine months ended February 28, 2025. During the nine months ended February 28, 2026, goodwill related to the acquisition of Paycor increased $3.4 million, primarily due to the write-down of a building by $4.9 million, net of deferred taxes of $1.9 million as a result of an updated valuation, offset by a further reduction in deferred tax liability of $3.9 million related to return-to-provision adjustments from the predecessor's final tax return. Refer to Note D Business Combinations for additional information regarding this acquisition and the impact it had on goodwill and intangible assets. The Company did not recognize an impairment loss as it relates to its goodwill or intangible assets during the nine months ended February 28, 2026 or February 28, 2025.

Short-term financing: The Company had no outstanding short-term borrowings as of February 28, 2026. Outstanding borrowings on the Company’s credit facilities had a weighted-average interest rate of 3.87% as of May 31, 2025. The unused amount available under these credit facilities as of February 28, 2026 was approximately $2.0 billion.

Effective January 23, 2026, the Company and its Paychex of New York LLC ("PoNY") subsidiary, 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, increases the aggregate amount of principal available under the 2017 Credit Facility from $750 million to $1.0 billion and extends its maturity date from September 17, 2026 to January 23, 2031, and amends certain interest provisions and covenants under both credit facilities. In connection with these amendments, Paychex and its Paychex Advance, LLC subsidiary terminated its three-year, $250 million, unsecured, revolving credit facility for which PNC Bank, N.A. acted as administrative agent. As of the date of its termination, there were no outstanding loans under the PNC Bank, N.A. 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, 2026.

Letters of credit: The Company had irrevocable standby letters of credit available totaling $179.1 million and $165.0 million as of February 28, 2026 and May 31, 2025, respectively, primarily to secure commitments for certain insurance policies. The letters of credit expire at various dates between March 03, 2026 and February 28, 2027. No amounts were outstanding on these letters of credit as of, or during the nine months ended February 28, 2026 and February 28, 2025, or as of May 31, 2025.

Long-term debt: There were no material changes to the Company's long-term debt agreements or balances during the nine months ended February 28, 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 February 28, 2026.

Subsequent to February 28, 2026, the Company repaid its long-term private placement debt Senior Notes, Series A for $400.0 million, which matured on March 13, 2026.

Bridge Loan Commitment: On January 7, 2025, the Company and its PoNY subsidiary entered into a bridge loan commitment with JPM, pursuant to which JPM committed to provide a 364-day senior unsecured credit facility not to exceed $3.5 billion for the acquisition of Paycor, including related fees and expenses. The Company incurred $11.4 million in debt financing fees, during the three months ended February 28, 2025, including structuring and commitment fees, which were capitalized as prepaid expenses and other current assets on the Company's Consolidated Balance Sheets and recognized as interest expense on a straight-line basis through the issuance date of the Corporate Bonds. The bridge loan commitment expired upon the issuance of the Company's Corporate Bonds.

Interest Rate Swaption Contracts: On January 31, 2025, the Company executed three interest rate swaption contracts ("Swaption Contracts") with JPM. The Swaption Contracts qualified as cash flow hedges, had an aggregate notional amount of $3.0 billion, and were utilized to manage exposure to fluctuations in benchmark interest rates associated with the issuance of Corporate Bonds to fund the Company's acquisition of Paycor. At inception, the Company recorded Swaption Contract assets related to paid premiums of $19.2 million. The fair value of the Swaption Contract assets were classified as prepaid expenses and other current assets on the Company's Consolidated Balance Sheets. Upon issuance of the Corporate Bonds, the Swaption Contracts expired unexercised.