Paychex 2011 Annual Report Download - page 70

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Note G — Property and Equipment, Net of Accumulated Depreciation
The components of property and equipment, at cost, consisted of the following:
In millions 2011 2010
May 31,
Land and improvements ........................................... $ 7.0 $ 5.8
Buildings and improvements ........................................ 95.2 82.5
Data processing equipment ......................................... 204.6 186.8
Software ...................................................... 231.2 182.6
Furniture, fixtures, and equipment .................................... 152.0 147.1
Leasehold improvements........................................... 93.3 91.4
Construction in progress ........................................... 20.9 17.9
Total property and equipment, gross ................................ 804.2 714.1
Less: Accumulated depreciation and amortization ........................ 495.5 444.8
Property and equipment, net of accumulated depreciation ............... $308.7 $269.3
Depreciation expense was $68.4 million, $65.4 million, and $64.8 million for fiscal years 2011, 2010, and
2009, respectively.
Note H — Goodwill and Intangible Assets, Net of Accumulated Amortization
The Company had goodwill balances on its Consolidated Balance Sheets of $513.7 million as of May 31, 2011,
and $421.6 million as of May 31, 2010. The increase in goodwill since May 31, 2010 was the result of the
acquisition of two software-as-a-service companies in fiscal 2011. The acquisition of SurePayroll resulted in
$84.6 million of goodwill and the acquisition of ePlan resulted in $7.5 million of goodwill.
The Company has certain intangible assets with finite lives. The components of intangible assets, at cost,
consisted of the following:
In millions 2011 2010
May 31,
Client lists ..................................................... $223.4 $194.4
Other intangible assets ............................................ 2.0 1.1
Total intangible assets, gross ...................................... 225.4 195.5
Less: Accumulated amortization ..................................... 148.2 133.9
Intangible assets, net of accumulated amortization ..................... $ 77.2 $ 61.6
The increase in intangible assets from May 31, 2010 to May 31, 2011 is largely attributable to the acquisitions
of SurePayroll and ePlan. Amortization expense relating to intangible assets was $20.3 million, $21.1 million, and
$21.0 million for fiscal years 2011, 2010, and 2009, respectively.
54
PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)