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Depreciation expense, including amortization of assets recorded under capital leases, was $59.7 million, $64.0 million
and $72.7 million for the years ended November 30, 2011, 2010 and 2009, respectively. This includes depreciation expense
associated with held-for-sale property of $0.8 million for the year ended November 30, 2009. Amortization expense on
capitalized software was $29.7 million, $25.2 million and $24.9 million for the years ended November 30, 2011, 2010 and
2009, respectively.
9. Goodwill and Intangible Assets
Goodwill
As of November 30, 2011 and 2010, the Company had goodwill of $255.4 million recorded in connection with its
acquisition of PULSE in January 2005, which was allocated to the Payment Services segment. Subsequent to the acquisition
date, no adjustments have been made to the Company's goodwill balance. The Company conducted its annual goodwill
impairment testing on June 1, 2011 and 2010, at which times management concluded that there was no impairment to goodwill.
Intangible Assets
The Company's amortizable intangible assets consist primarily of acquired customer relationships recognized in the
December 2010 acquisition of SLC, which is allocated to the Direct Banking segment, and acquired customer relationships and
trade name intangibles recognized in the acquisition of PULSE in January 2005, which is allocated to the Payment Services
segment. Non-amortizable intangible assets consist of trade name intangibles recognized in the acquisition of SLC, along with
international transaction processing rights and trade name intangibles recognized in the acquisition of Diners Club in June
2008. Acquired customer relationships for SLC consist of those relationships in existence between SLC and the numerous
students that carry student loan balances, while for PULSE they consist of those relationships in existence between PULSE and
the numerous financial institutions that participate in its network, as valued at the date of the respective acquisitions. For more
information on the Company's acquisition of SLC, see Note 4: Business Combinations.
The following table summarizes the Company's intangible assets (dollars in thousands):
Amortizable intangible assets:
Customer relationships
Trade name and other
Total amortizable intangible assets
Non-amortizable intangible assets
Trade names
International transaction processing rights
Total non-amortizable intangible assets
Total intangible assets
Weighted
Average
Amortization
Period
14.6 years
25 years
N/A
N/A
November 30, 2011
Gross
Carrying
Amount
$ 72,598
7,700
80,298
131,780
23,047
154,827
$235,125
Accumulated
Amortization
$ 45,431
1,676
47,107
—
—
—
$ 47,107
Net
Book
Value
$ 27,167
6,024
33,191
131,780
23,047
154,827
$ 188,018
November 30, 2010
Gross
Carrying
Amount
$ 69,400
7,700
77,100
127,980
23,047
151,027
$228,127
Accumulated
Amortization
$ 37,786
1,368
39,154
—
—
—
$ 39,154
Net
Book
Value
$ 31,614
6,332
37,946
127,980
23,047
151,027
$ 188,973
Amortization expense related to the Company's intangible assets was $8.0 million, $6.7 million and $7.7 million for the
years ended November 30, 2011, 2010 and 2009, respectively.
The following table presents expected intangible asset amortization expense for the next five years based on intangible
assets at November 30, 2011 (dollars in thousands):
Year
2012
2013
2014
2015
2016
Amount
$6,953
$5,213
$4,106
$3,431
$2,909
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