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Supplemental balance sheet and cash flow information (Tables)

3 Months Ended

Mar. 31, 2021

Inventories and supplies

Inventories and supplies – Inventories and supplies were comprised of the following:

(in thousands)						March 31, 2021						December 31, 2020
Raw materials						$	5,415					$	5,412
Semi-finished goods						7,916						7,943
Finished goods						31,464						33,513
Supplies						5,263						5,010
Reserve for excess and obsolete items						(12,939)						(11,748)
Inventories and supplies						$	37,119					$	40,130

Changes in the reserve for excess and obsolete items were as follows for the quarters ended March 31, 2021 and 2020:

						Quarter Ended March 31,
(in thousands)						2021						2020
Balance, beginning of year						$	11,748					$	6,600
Amounts charged to expense						2,013						88
Write-offs						(822)						(335)
Balance, end of period						$	12,939					$	6,353

Available-for-sale debt securities

Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following:

						March 31, 2021
(in thousands)						Cost						Gross unrealized gains						Gross unrealized losses						Fair value
Funds held for customers:(1)
Domestic money market fund						$	12,000					$	—					$	—					$	12,000
Canadian and provincial government securities						9,722						—						(311)						9,411
Canadian guaranteed investment certificate						3,980						—						—						3,980
Available-for-sale debt securities						$	25,702					$	—					$	(311)					$	25,391

(1) Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2021, also included cash of $97,075.

						December 31, 2020
(in thousands)						Cost						Gross unrealized gains						Gross unrealized losses						Fair value
Funds held for customers:(1)
Domestic money market fund						$	15,000					$	—					$	—					$	15,000
Canadian and provincial government securities						9,566						—						(33)						9,533
Canadian guaranteed investment certificate						3,929						—						—						3,929
Available-for-sale debt securities						$	28,495					$	—					$	(33)					$	28,462

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2020, also included cash of $91,287.

Expected maturities of available-for-sale debt securities

Expected maturities of available-for-sale debt securities as of March 31, 2021 were as follows:

(in thousands)						Fair value
Due in one year or less						$	14,550
Due in two to five years						7,971
Due in six to ten years						2,870
Available-for-sale debt securities						$	25,391

Revenue in excess of billings

Revenue in excess of billings – Revenue in excess of billings was comprised of the following:

(in thousands)						March 31, 2021						December 31, 2020
Conditional right to receive consideration						$	20,072					$	13,950
Unconditional right to receive consideration(1)						7,583						3,667
Revenue in excess of billings						$	27,655					$	17,617

(1) Represents revenues that are earned but not currently billable under the related contract terms. Trade accounts receivable on the consolidated balance sheets included unbilled receivables of $19,295 as of March 31, 2021 and $21,319 as of December 31, 2020.

Intangibles

Intangibles – Intangibles were comprised of the following:

						March 31, 2021																		December 31, 2020
(in thousands)						Gross carrying amount						Accumulated amortization						Net carrying amount						Gross carrying amount						Accumulated amortization						Net carrying amount
Amortizable intangibles:
Internal-use software						$	397,675					$	(314,125)					$	83,550					$	380,144					$	(303,422)					$	76,722
Customer lists/relationships						366,241						(212,425)						153,816						352,895						(202,428)						150,467
Software to be sold						36,900						(24,941)						11,959						36,900						(23,884)						13,016
Technology-based intangibles						33,813						(29,163)						4,650						33,813						(27,613)						6,200
Trade names						30,230						(30,053)						177						30,281						(29,926)						355
Intangibles						$	864,859					$	(610,707)					$	254,152					$	834,033					$	(587,273)					$	246,760

Estimated future amortization expense

Based on the intangibles in service as of March 31, 2021, estimated future amortization expense is as follows:

(in thousands)						Estimated amortization expense
Remainder of 2021						$	65,583
2022						68,285
2023						48,720
2024						23,206
2025						17,327

Acquired intangibles

The following intangibles were acquired during the quarter ended March 31, 2021:

(in thousands)						Amount						Weighted-average amortization period (in years)
Internal-use software						$	17,321					3
Customer lists/relationships						13,302						8
Acquired intangibles						$	30,623					5

Goodwill

Goodwill – Changes in goodwill by reportable segment and in total for the quarter ended March 31, 2021 were as follows:

(in thousands)						Payments						Cloud Solutions						Promotional Solutions						Checks						Total
Balance, December 31, 2020:
Goodwill, gross						$	168,165					$	432,984					$	252,864					$	434,812					$	1,288,825
Accumulated impairment charges						—						(362,058)						(189,923)						—						(551,981)
Goodwill, net of accumulated impairment charges						168,165						70,926						62,941						434,812						736,844
Currency translation adjustment						—						—						18						—						18
Balance, March 31, 2021						$	168,165					$	70,926					$	62,959					$	434,812					$	736,862
Balance, March 31, 2021:
Goodwill, gross						$	168,165					$	432,984					$	252,882					$	434,812					$	1,288,843
Accumulated impairment charges						—						(362,058)						(189,923)						—						(551,981)
Goodwill, net of accumulated impairment charges						$	168,165					$	70,926					$	62,959					$	434,812					$	736,862

Other non-current assets

Other non-current assets – Other non-current assets were comprised of the following:

(in thousands)						March 31, 2021						December 31, 2020
Postretirement benefit plan asset						$	72,775					$	71,208
Prepaid product discounts						51,044						50,602
Cloud computing arrangements						38,249						29,242
Loans and notes receivable from distributors, net of allowances for doubtful accounts(1)						27,182						35,068
Deferred sales commissions(2)						15,461						9,199
Other						13,124						13,360
Other non-current assets						$	217,835					$	208,679

(1) Amount Includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,704 as of March 31, 2021 and $2,008 as of December 31, 2020.

(2) Amortization of deferred sales commissions was $972 for the quarter ended March 31, 2021 and $882 for the quarter ended March 31, 2020.

Loans and notes receivable by credit quality Indicator

The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of March 31, 2021. There were no write-offs or recoveries recorded during the quarter ended March 31, 2021.

						Loans and notes receivable from distributors amortized cost basis by origination year
(in thousands)						2020						2019						2018						2017						Prior						Total
Risk rating:
1-2 internal grade						$	1,310					$	587					$	14,546					$	11,744					$	1,481					$	29,668
3-4 internal grade						—						2,579						—						—						—						2,579
Loans and notes receivable						$	1,310					$	3,166					$	14,546					$	11,744					$	1,481					$	32,247

Changes in prepaid product discounts

Changes in prepaid product discounts during the quarters ended March 31, 2021 and 2020 were as follows:

						Quarter Ended March 31,
(in thousands)						2021						2020
Balance, beginning of year						$	50,602					$	51,145
Additions(1)						7,890						2,470
Amortization						(7,440)						(7,077)
Other						(8)						(544)
Balance, end of period						$	51,044					$	45,994

 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $9,590 for the quarter ended March 31, 2021 and $7,321 for the quarter ended March 31, 2020.

Accrued liabilities

Accrued liabilities – Accrued liabilities were comprised of the following:

(in thousands)						March 31, 2021						December 31, 2020
Deferred revenue(1)						$	49,469					$	42,104
Employee cash bonuses, including sales incentives						17,005						21,090
Prepaid product discounts due within one year						12,640						14,365
Operating lease liabilities						10,914						11,589
Customer rebates						7,046						8,179
Other						77,849						79,856
Accrued liabilities						$	174,923					$	177,183

(1) $16,121 of the December 31, 2020 amount was recognized as revenue during the quarter ended March 31, 2021.

Supplemental cash flow information

Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows:

(in thousands)						March 31, 2021						March 31, 2020
Cash and cash equivalents						$	125,440					$	310,146
Restricted cash and restricted cash equivalents included in funds held for customers						109,075						75,657
Total cash, cash equivalents, restricted cash and restricted cash equivalents						$	234,515					$	385,803

Trade accounts receivable [Member]

Allowances for uncollectible accounts

Trade accounts receivable – Changes in the allowances for uncollectible accounts included within trade accounts receivable were as follows for the quarters ended March 31, 2021 and 2020:

						Quarter Ended March 31,
(in thousands)						2021						2020
Balance, beginning of year						$	6,428					$	4,985
Bad debt (benefit) expense						(649)						1,059
Write-offs and other						(900)						(2,098)
Balance, end of period						$	4,879					$	3,946

Loans and notes receivable [Member]

Allowances for uncollectible accounts

Changes in the allowances for uncollectible accounts related to loans and notes receivable from distributors were as follows for the quarters ended March 31, 2021 and 2020:

						Quarter Ended March 31,
(in thousands)						2021						2020
Balance, beginning of year						$	3,995					$	284
Adoption of ASU No. 2016-13						—						4,749
Bad debt (benefit) expense						(634)						5,382
Balance, end of period						$	3,361					$	10,415

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