Paychex 2012 Annual Report Download - page 72

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PAYCHEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note G — Property and Equipment, Net of Accumulated Depreciation
The components of property and equipment, at cost, consisted of the following:
May 31,
In millions 2012 2011
Land and improvements ............................................... $ 7.0 $ 7.0
Buildings and improvements ............................................ 96.8 95.2
Data processing equipment ............................................. 212.3 204.6
Software ........................................................... 263.5 231.2
Furniture, fixtures, and equipment ....................................... 154.2 152.0
Leasehold improvements ............................................... 96.0 93.3
Construction in progress ............................................... 28.2 20.9
Total property and equipment, gross .................................... 858.0 804.2
Less: Accumulated depreciation and amortization ........................... 533.7 495.5
Property and equipment, net of accumulated depreciation ................. $324.3 $308.7
Depreciation expense was $74.8 million, $68.4 million, and $65.4 million for fiscal years 2012, 2011, and
2010, respectively.
Note H — Goodwill and Intangible Assets, Net of Accumulated Amortization
The Company had goodwill balances on its Consolidated Balance Sheets of $517.4 million as of May 31,
2012, and $513.7 million as of May 31, 2011. The increase in goodwill since May 31, 2011 was the result of an
immaterial business acquisition. The increase in goodwill from May 31, 2010 to May 31, 2011 was the result of
the acquisition of two SaaS companies. Refer to Note C for further information on these acquisitions.
The Company has certain intangible assets with finite lives. The components of intangible assets, at cost,
consisted of the following:
May 31,
In millions 2012 2011
Client lists .......................................................... $223.6 $223.4
Other intangible assets ................................................ 2.0 2.0
Total intangible assets, gross .......................................... 225.6 225.4
Less: Accumulated amortization ......................................... 169.8 148.2
Intangible assets, net of accumulated amortization ........................ $ 55.8 $ 77.2
During fiscal 2012, the Company acquired intangible assets with weighted-average amortization periods as
follows: customer lists — 7.6 years; other intangible assets — 3.0 years; and total — 7.4 years. Amortization
expense relating to intangible assets was $23.0 million, $20.3 million, and $21.1 million for fiscal years 2012,
2011, and 2010, respectively.
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