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Supplemental balance sheet and cash flow information (Tables)

9 Months Ended

Sep. 30, 2021

Inventories and supplies

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

(in thousands)						September 30, 2021						December 31, 2020
Raw materials						$	5,327					$	5,412
Semi-finished goods						7,156						7,943
Finished goods						22,788						33,513
Supplies						5,580						5,010
Reserve for excess and obsolete items						(5,496)						(11,748)
Inventories and supplies						$	35,355					$	40,130

Changes in the reserve for excess and obsolete items were as follows for the nine months ended September 30, 2021 and 2020:

						Nine Months Ended September 30,
(in thousands)						2021						2020
Balance, beginning of year						$	11,748					$	6,600
Amounts charged to expense						2,884						1,270
Write-offs and sales						(9,136)						(1,188)
Balance, end of period						$	5,496					$	6,682

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:

						September 30, 2021
(in thousands)						Cost						Gross unrealized gains						Gross unrealized losses						Fair value
Funds held for customers:(1)
Canadian and provincial government securities						$	9,674					$	—					$	(315)					$	9,359
Canadian guaranteed investment certificate						3,943						—						—						3,943
Available-for-sale debt securities						$	13,617					$	—					$	(315)					$	13,302

(1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2021, also included cash of $129,180.

						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 September 30, 2021 were as follows:

(in thousands)						Fair value
Due in one year or less						$	7,041
Due in two to five years						3,453
Due in six to ten years						2,808
Available-for-sale debt securities						$	13,302

Revenue in excess of billings

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

(in thousands)						September 30, 2021						December 31, 2020
Conditional right to receive consideration						$	28,157					$	13,950
Unconditional right to receive consideration(1)						13,032						3,667
Revenue in excess of billings						$	41,189					$	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 $29,993 as of September 30, 2021 and $21,319 as of December 31, 2020.

Intangibles

Intangibles – Intangibles were comprised of the following:

						September 30, 2021																		December 31, 2020
(in thousands)						Gross carrying amount						Accumulated amortization						Net carrying amount						Gross carrying amount						Accumulated amortization						Net carrying amount
Amortizable intangibles:
Customer lists/relationships						$	495,416					$	(243,817)					$	251,599					$	352,895					$	(202,428)					$	150,467
Internal-use software						439,785						(337,242)						102,543						380,144						(303,422)						76,722
Technology-based intangibles						99,813						(35,013)						64,800						33,813						(27,613)						6,200
Partner relationships						67,406						(1,525)						65,881						—						—						—
Trade names						52,033						(30,766)						21,267						30,281						(29,926)						355
Software to be sold						36,900						(27,054)						9,846						36,900						(23,884)						13,016
Intangibles						$	1,191,353					$	(675,417)					$	515,936					$	834,033					$	(587,273)					$	246,760

Estimated future amortization expense

Based on the intangibles in service as of September 30, 2021, estimated future amortization expense is as follows:

(in thousands)						Estimated amortization expense
Remainder of 2021						$	41,235
2022						130,462
2023						101,863
2024						62,576
2025						46,791

Acquired intangibles

The following intangibles were acquired during the nine months ended September 30, 2021, including assets acquired in conjunction with the acquisition of First American (Note 6):

(in thousands)						Amount						Weighted-average amortization period (in years)
Customer lists/relationships(1)						$	142,514					8
Partner relationships						67,406						15
Technology-based intangibles						66,000						8
Internal-use software						59,429						3
Trade names						22,000						10
Acquired intangibles						$	357,349					9

(1) Included $118,000 acquired via the First American acquisition (Note 6) with a weighted-average useful life of 8 years.

Goodwill

Goodwill – Changes in goodwill by reportable segment and in total for the nine months ended September 30, 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						—						(392,168)						(193,699)						—						(585,867)
Goodwill, net of accumulated impairment charges						168,165						40,816						59,165						434,812						702,958
Goodwill resulting from acquisition (Note 6)						732,520						—						—						—						732,520
Currency translation adjustment						—						—						5						—						5
Balance, September 30, 2021						$	900,685					$	40,816					$	59,170					$	434,812					$	1,435,483
Balance, September 30, 2021:
Goodwill, gross						$	900,685					$	432,984					$	252,869					$	434,812					$	2,021,350
Accumulated impairment charges						—						(392,168)						(193,699)						—						(585,867)
Goodwill, net of accumulated impairment charges						$	900,685					$	40,816					$	59,170					$	434,812					$	1,435,483

Other non-current assets

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

(in thousands)						September 30, 2021						December 31, 2020
Postretirement benefit plan asset						$	76,435					$	71,208
Cloud computing arrangements						52,900						29,242
Prepaid product discounts						51,270						50,602
Loans and notes receivable from distributors, net of allowances for uncollectible accounts(1)						20,424						35,068
Deferred contract acquisition costs(2)						17,480						9,199
Other						31,463						13,360
Other non-current assets						$	249,972					$	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 $1,305 as of September 30, 2021 and $2,008 as of December 31, 2020.

(2) Amortization of deferred contract acquisition costs was $3,366 for the nine months ended September 30, 2021 and $2,756 for the nine months ended September 30, 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 September 30, 2021. There were no write-offs or recoveries recorded during the nine months ended September 30, 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						$	1,256					$	497					$	7,187					$	11,705					$	1,322					$	21,967
3-4 internal grade						—						2,599						—						—						—						2,599
Loans and notes receivable						$	1,256					$	3,096					$	7,187					$	11,705					$	1,322					$	24,566

Changes in prepaid product discounts

Changes in prepaid product discounts during the nine months ended September 30, 2021 and 2020 were as follows:

						Nine Months Ended September 30,
(in thousands)						2021						2020
Balance, beginning of year						$	50,602					$	51,145
Additions(1)						24,284						13,259
Amortization						(23,425)						(21,725)
Other						(191)						(1,430)
Balance, end of period						$	51,270					$	41,249

 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $27,049 for the nine months ended September 30, 2021 and $24,947 for the nine months ended September 30, 2020.

Accrued liabilities

Accrued liabilities – Accrued liabilities were comprised of the following:

(in thousands)						September 30, 2021						December 31, 2020
Deferred revenue(1)						$	43,081					$	42,104
Employee cash bonuses, including sales incentives						35,341						21,090
Operating lease liabilities (Note 13)						12,884						11,589
Prepaid product discounts due within one year						11,805						14,365
Customer rebates						8,715						8,179
Other						91,958						79,856
Accrued liabilities						$	203,784					$	177,183

(1) $33,088 of the December 31, 2020 amount was recognized as revenue during the nine months ended September 30, 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)						September 30, 2021						September 30, 2020
Cash and cash equivalents						$	121,064					$	310,430
Restricted cash and restricted cash equivalents included in funds held for customers						129,180						89,586
Non-current restricted cash included in other non-current assets						2,860						—
Total cash, cash equivalents, restricted cash and restricted cash equivalents						$	253,104					$	400,016

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 nine months ended September 30, 2021 and 2020:

						Nine Months Ended September 30,
(in thousands)						2021						2020
Balance, beginning of year						$	6,428					$	4,985
Bad debt (benefit) expense						(412)						4,174
Write-offs and other						(2,555)						(2,671)
Balance, end of period						$	3,461					$	6,488

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 nine months ended September 30, 2021 and 2020:

						Nine Months Ended September 30,
(in thousands)						2021						2020
Balance, beginning of year						$	3,995					$	284
Adoption of ASU No. 2016-13						—						4,749
Bad debt (benefit) expense						(1,158)						5,647
Exchange for customer lists						—						(6,402)
Balance, end of period						$	2,837					$	4,278

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