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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The following table illustrates the adoption impact of Topic 326:


	January 1, 2020
(In thousands)	Prior to Adoption		Impact of Topic 326		As Reported
Allowance for accounts receivable1	$	52,274	$	11,577	$	63,851
Deferred income taxes, net (within total assets)	$	12,833	$	570	$	13,403
Deferred income taxes, net (within total liabilities)	$	218,740	$	(2,230)	$	216,510
Retained earnings	$	1,539,201	$	(8,587)	$	1,530,614
Non-controlling interest	$	9,575	$	(190)	$	9,385

1 This impact does not reflect the economic disruption resulting from the COVID-19 pandemic since it occurred subsequent to January 1, 2020.

The following table provides a brief description of recent accounting pronouncements that have had, or could have, a material effect on our financial statements:

Standard

Description

Date/Method of Adoption

Effect on financial statements or other significant matters

Adopted During the Year Ended December 31, 2020

ASU 2016–13, Financial Instruments–Credit Losses: Measurement of Credit Losses on Financial Instruments

This standard amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables and off-balance sheet credit exposures. The standard requires entities to consider a broader range of information to estimate expected credit losses, including historical experience, current conditions and reasonable and supportable forecasts that impact the collectability of the reported amount.

The Company adopted ASU 2016–13 effective January 1, 2020 using the modified-retrospective approach.

The amendments of this new standard were applied through a cumulative-effect adjustment to total stockholders’ equity of $8.8 million, net of a $2.8 million income tax benefit, as of January 1, 2020. This adjustment was driven by the incorporation of economic forecasts into the Company’s expected credit loss reserve methodology. The consolidated financial statements for the year ended December 31, 2020 are presented under the new standard. Comparative periods presented have not been adjusted. Refer to Note 1, Basis of Presentation and Significant Accounting Policies, for discussion of the Company’s credit loss methodology.

Not Yet Adopted as of December 31, 2020

ASU 2020–04, Reference Rate Reform

This standard provides optional guidance for a limited period of time to ease the potential financial reporting burden in accounting for (or recognizing the effects of) the discontinuation of LIBOR resulting from reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to contracts and other transactions impacted by reference rate reform. If certain criteria are met, an entity will not be required to remeasure or reassess contracts impacted by reference rate reform.

Election is available through December 31, 2022.

The Company is currently evaluating the implications of these amendments to its current efforts for reference rate reform implementation and any impact the adoption of this ASU would have on its financial condition and results of operations.

ASU 2020–06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging –Contracts in Entity's Own Equity (Subtopic 815-40)

This standard simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity's own equity. Among other changes, this standard removes from GAAP the liability and equity separation model for convertible instruments with a cash conversion feature. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible debt instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. The standard also requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share.

Effective for fiscal years beginning after December 15, 2021 and may be early adopted for the fiscal year beginning after December 15, 2020 using a modified retrospective or fully retrospective method of transition.

The Company will early adopt this ASU effective January 1, 2021. Adoption will eliminate the bifurcation of the equity component associated with our Convertible Notes, which was originally recorded within equity. Going forward, this equity component will be included as part of the carrying value of the Convertible Notes. Additionally, interest expense is expected to decline approximately $6 million during the year ended December 31, 2021 as result of the adoption of this ASU.

Estimated Useful Lives

Depreciation and amortization for all other property, equipment and capitalized software is primarily computed using the straight-line method over the estimated useful lives shown below.


			Estimated Useful Lives
Furniture, fixtures and equipment			3 to 5 years
Internal-use computer software			1.5 to 5 years
Computer software			3 years

Property, equipment and capitalized software, net consist of the following:


	December 31,
(In thousands)	2020		2019
Furniture, fixtures and equipment	$	87,111	$	94,478
Computer software, including internal-use software	463,614		411,308
Leasehold improvements	32,111		32,406
Construction in progress	7,910		18,495
Total	590,746		556,687
Less: accumulated depreciation	(402,406)		(344,212)
Total property, equipment and capitalized software, net	$	188,340	$	212,475

Schedule of Internal-Use Software

Below are the amounts of internal-use computer software capitalized within property, equipment and capitalized software and the related amortization expense incurred on all internal-use computer software during the years ended December 31:


(in thousands)	2020		2019		2018
Gross amounts capitalized for internal-use computer software (including construction-in-process)	$	58,881	$	74,432	$	46,382
Amounts expensed for amortization of internal-use computer software	$	72,363	$	57,821	$	38,632

Schedule of Capitalized Contract Cost

the Company had the following costs capitalized with respect to cloud computing arrangements on the consolidated balance sheet:


(in thousands)	2020
Gross cloud computing costs (inclusive of in-process amounts)	$	6,360
Accumulated amortization	387
Net cloud computing costs	$	5,973

Included in prepaid expenses and other current assets	$	4,570
Included in other assets	$	1,403

Schedule of Net Earnings Attributable to Shareholders and Reconciliation of Basic and Diluted Shares

The following table summarizes net (loss) income attributable to shareholders and reconciles basic and diluted shares outstanding used in the earnings per share computations:


	Year ended December 31,
(In thousands)	2020		2019		2018
Net (loss) income attributable to shareholders	$	(243,638)	$	99,006	$	168,295

Weighted average common shares outstanding – Basic	43,842		43,316		43,156
Dilutive impact of share-based compensation awards1	—		453		418
Weighted average common shares outstanding – Diluted	43,842		43,769		43,574

1 Due to the Company’s net loss position for the year ended December 31, 2020, 0.5 million incremental shares, are excluded from the table above as the effect of including those shares would be anti-dilutive. For the years ended December 31, 2019 and 2018, an immaterial number of outstanding share-based compensation awards were excluded from the computation of diluted earnings per share, as the effect of including these awards would be anti-dilutive.