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SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | 12 Months Ended
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Dec. 31, 2021
Supplemental balance sheet and cash flow information [Abstract] |
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | Trade accounts receivable – Net trade accounts receivable was comprised of the following at December 31:
(in thousands) |  | 2021 |  | 2020
Trade accounts receivable – gross |  | $ | 202,077 |  |  | $ | 168,387 |
Allowances for uncollectible accounts |  | (4,130) |  |  | (6,428) |
Trade accounts receivable – net(1) |  | $ | 197,947 |  |  | $ | 161,959 |
(1) Includes unbilled receivables of $47,420 as of December 31, 2021 and $21,319 as of December 31, 2020. Changes in the allowances for uncollectible accounts for the years ended December 31 were as follows:
(in thousands) |  | 2021 |  | 2020 |  | 2019
Balance, beginning of year |  | $ | 6,428 |  |  | $ | 4,985 |  |  | $ | 3,639 |
Bad debt expense |  | 223 |  |  | 5,003 |  |  | 5,213 |
Write-offs and other |  | (2,521) |  |  | (3,560) |  |  | (3,867) |
Balance, end of year |  | $ | 4,130 |  |  | $ | 6,428 |  |  | $ | 4,985 |
Inventories and supplies – Inventories and supplies were comprised of the following at December 31:
(in thousands) |  | 2021 |  | 2020
Raw materials |  | $ | 5,316 |  |  | $ | 5,412 |
Semi-finished goods |  | 6,708 |  |  | 7,943 |
Finished goods |  | 21,995 |  |  | 33,513 |
Supplies |  | 6,041 |  |  | 5,010 |
Reserve for excess and obsolete items |  | (5,132) |  |  | (11,748) |
Inventories and supplies, net of reserves |  | $ | 34,928 |  |  | $ | 40,130 |
Changes in the reserves for excess and obsolete items for the years ended December 31 were as follows:
(in thousands) |  | 2021 |  | 2020 |  | 2019
Balance, beginning of year |  | $ | 11,748 |  |  | $ | 6,600 |  |  | $ | 5,499 |
Amounts charged to expense |  | 3,513 |  |  | 6,713 |  |  | 1,831 |
Write-offs and sales |  | (10,129) |  |  | (1,565) |  |  | (730) |
Balance, end of year |  | $ | 5,132 |  |  | $ | 11,748 |  |  | $ | 6,600 |
Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following:
|  | December 31, 2021
(in thousands) |  | Cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Fair value
Funds held for customers:(1) |  |  |  |  |  |  |  |
Canadian and provincial government securities |  | $ | 9,724 |  |  | $ | — |  |  | $ | (374) |  |  | $ | 9,350 |
Canadian guaranteed investment certificate |  | 3,957 |  |  | — |  |  | — |  |  | 3,957 |
Available-for-sale debt securities |  | $ | 13,681 |  |  | $ | — |  |  | $ | (374) |  |  | $ | 13,307 |
(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2021, also included cash of $241,488.
|  | 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 as of December 31, 2021 were as follows:
(in thousands) |  | Fair value
Due in one year or less |  | $ | 6,780 |
Due in two to five years |  | 3,535 |
Due in six to ten years |  | 2,992 |
Available-for-sale debt securities |  | $ | 13,307 |
Further information regarding the fair value of available-for-sale debt securities can be found in Note 8. Revenue in excess of billings – Revenue in excess of billings was comprised of the following at December 31:
(in thousands) |  | 2021 |  | 2020
Conditional right to receive consideration |  | $ | 22,780 |  |  | $ | 13,950 |
Unconditional right to receive consideration(1) |  | 7,613 |  |  | 3,667 |
Revenue in excess of billings |  | $ | 30,393 |  |  | $ | 17,617 |
(1) Represents revenues that are earned but not currently billable under the related contract terms. Property, plant and equipment – Property, plant and equipment was comprised of the following at December 31:
|  | 2021 |  | 2020
(in thousands) |  | Gross carrying amount |  | Accumulated depreciation |  | Net carrying amount |  | Gross carrying amount |  | Accumulated depreciation |  | Net carrying amount
Machinery and equipment |  | $ | 333,383 |  |  | $ | (276,914) |  |  | $ | 56,469 |  |  | $ | 340,032 |  |  | $ | (287,384) |  |  | $ | 52,648 |
Buildings and improvements |  | 118,219 |  |  | (58,202) |  |  | 60,017 |  |  | 89,875 |  |  | (68,510) |  |  | 21,365 |
Land and improvements |  | 12,981 |  |  | (3,501) |  |  | 9,480 |  |  | 19,680 |  |  | (5,013) |  |  | 14,667 |
Property, plant and equipment |  | $ | 464,583 |  |  | $ | (338,617) |  |  | $ | 125,966 |  |  | $ | 449,587 |  |  | $ | (360,907) |  |  | $ | 88,680 |
Intangibles – Amortizable intangibles were comprised of the following at December 31:
|  | 2021 |  | 2020
(in thousands) |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount
Customer lists/relationships |  | $ | 493,495 |  |  | $ | (255,178) |  |  | $ | 238,317 |  |  | $ | 352,895 |  |  | $ | (202,428) |  |  | $ | 150,467 |
Internal-use software |  | 456,133 |  |  | (342,656) |  |  | 113,477 |  |  | 380,144 |  |  | (303,422) |  |  | 76,722 |
Technology-based intangibles |  | 98,813 |  |  | (38,553) |  |  | 60,260 |  |  | 33,813 |  |  | (27,613) |  |  | 6,200 |
Partner relationships |  | 73,095 |  |  | (2,990) |  |  | 70,105 |  |  | — |  |  | — |  |  | — |
Trade names |  | 51,052 |  |  | (31,277) |  |  | 19,775 |  |  | 30,281 |  |  | (29,926) |  |  | 355 |
Software to be sold |  | 36,900 |  |  | (28,110) |  |  | 8,790 |  |  | 36,900 |  |  | (23,884) |  |  | 13,016 |
Intangibles |  | $ | 1,209,488 |  |  | $ | (698,764) |  |  | $ | 510,724 |  |  | $ | 834,033 |  |  | $ | (587,273) |  |  | $ | 246,760 |
Amortization expense related to intangibles was as follows for the years ended December 31:
(in thousands) |  | 2021 |  | 2020 |  | 2019
Customer lists/relationships |  | $ | 61,805 |  |  | $ | 41,377 |  |  | $ | 51,243 |
Internal-use software |  | 41,601 |  |  | 36,771 |  |  | 41,258 |
Technology-based intangibles |  | 10,940 |  |  | 6,291 |  |  | 7,415 |
Partner relationships |  | 2,990 |  |  | — |  |  | — |
Trade names |  | 1,580 |  |  | 1,884 |  |  | 5,391 |
Software to be sold |  | 4,226 |  |  | 4,227 |  |  | 4,227 |
Amortization of intangibles |  | $ | 123,142 |  |  | $ | 90,550 |  |  | $ | 109,534 |
Based on the intangibles in service as of December 31, 2021, estimated amortization expense for each of the next five years ending December 31 is as follows:
(in thousands) |  | Estimated amortization expense
2022 |  | $ | 136,451 |
2023 |  | 106,420 |
2024 |  | 66,626 |
2025 |  | 47,702 |
2026 |  | 37,954 |
We acquire internal-use software and certain partner relationships in the normal course of business. We also purchased customer lists and we acquired other intangible assets in conjunction with acquisitions (Note 6). The following intangible assets were acquired during the years ended December 31:
|  | 2021 |  | 2020 |  | 2019
(in thousands) |  | Amount |  | Weighted-average amortization period (in years) |  | Amount |  | Weighted-average amortization period (in years) |  | Amount |  | Weighted-average amortization period (in years)
Customer lists/relationships(1) |  | $ | 149,642 |  |  | 8 |  | $ | 45,470 |  |  | 7 |  | $ | 17,771 |  |  | 8
Internal-use software |  | 75,918 |  |  | 3 |  | 39,344 |  |  | 4 |  | 43,991 |  |  | 3
Partner relationships |  | 73,095 |  |  | 15 |  | — |  |  | — |  | — |  |  | —
Technology-based intangibles |  | 65,000 |  |  | 8 |  | — |  |  | — |  | — |  |  | —
Trade names |  | 21,000 |  |  | 10 |  | — |  |  | — |  | — |  |  | —
Acquired intangibles |  | $ | 384,655 |  |  | 8 |  | $ | 84,814 |  |  | 6 |  | $ | 61,762 |  |  | 5
(1) We acquired customer lists that did not qualify as business combinations of $22,642 during 2021, $45,470 during 2020 and $11,956 during 2019. Goodwill – Changes in goodwill by reportable business segment and in total were as follows:
(in thousands) |  | Payments |  | Cloud Solutions |  | Promotional Solutions |  | Checks |  | Total
Balance, December 31, 2019: |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  | $ | 168,165 |  |  | $ | 432,984 |  |  | $ | 252,834 |  |  | $ | 434,812 |  |  | $ | 1,288,795 |
Accumulated impairment charges |  | — |  |  | (387,851) |  |  | (126,567) |  |  | — |  |  | (514,418) |
Goodwill, net of accumulated impairment charges |  | 168,165 |  |  | 45,133 |  |  | 126,267 |  |  | 434,812 |  |  | 774,377 |
Impairment charges (Note 8) |  | — |  |  | (4,317) |  |  | (67,132) |  |  | — |  |  | (71,449) |
Currency translation adjustment |  | — |  |  | — |  |  | 30 |  |  | — |  |  | 30 |
Balance, December 31, 2020 |  | $ | 168,165 |  |  | $ | 40,816 |  |  | $ | 59,165 |  |  | $ | 434,812 |  |  | $ | 702,958 |
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) |  | 727,173 |  |  | — |  |  | — |  |  | — |  |  | 727,173 |
Currency translation adjustment |  | — |  |  | — |  |  | 10 |  |  | — |  |  | 10 |
Balance, December 31, 2021 |  | $ | 895,338 |  |  | $ | 40,816 |  |  | $ | 59,175 |  |  | $ | 434,812 |  |  | $ | 1,430,141 |
Balance, December 31, 2021: |  |  |  |  |  |  |  |  |  |
Goodwill, gross |  | $ | 895,338 |  |  | $ | 432,984 |  |  | $ | 252,874 |  |  | $ | 434,812 |  |  | $ | 2,016,008 |
Accumulated impairment charges |  | — |  |  | (392,168) |  |  | (193,699) |  |  | — |  |  | (585,867) |
Goodwill, net of accumulated impairment charges |  | $ | 895,338 |  |  | $ | 40,816 |  |  | $ | 59,175 |  |  | $ | 434,812 |  |  | $ | 1,430,141 |
Other non-current assets – Other non-current assets were comprised of the following at December 31:
(in thousands) |  | 2021 |  | 2020
Postretirement benefit plan asset (Note 13) |  | $ | 87,019 |  |  | $ | 71,208 |
Cloud computing arrangements |  | 63,806 |  |  | 29,242 |
Prepaid product discounts |  | 56,527 |  |  | 50,602 |
Loans and notes receivable from distributors, net of allowances for uncollectible accounts(1) |  | 20,201 |  |  | 35,068 |
Deferred contract acquisition costs(2) |  | 17,975 |  |  | 9,199 |
Other |  | 33,935 |  |  | 13,360 |
Other non-current assets |  | $ | 279,463 |  |  | $ | 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 $1,317 as of December 31, 2021 and $2,008 as of December 31, 2020. During 2021, we utilized $15,528 of these notes receivable, along with current and future cash payments, to acquire related customer list intangible assets. (2) Amortization of deferred contract acquisition costs was $4,975 for 2021, $3,739 for 2020 and $3,108 for 2019. Changes in prepaid product discounts were as follows for the years ended December 31:
(in thousands) |  | 2021 |  | 2020 |  | 2019
Balance, beginning of year |  | $ | 50,602 |  |  | $ | 51,145 |  |  | $ | 54,642 |
Additions(1) |  | 37,882 |  |  | 30,346 |  |  | 21,068 |
Amortization |  | (31,784) |  |  | (29,235) |  |  | (24,055) |
Other |  | (173) |  |  | (1,654) |  |  | (510) |
Balance, end of year |  | $ | 56,527 |  |  | $ | 50,602 |  |  | $ | 51,145 |
(1) Prepaid product discounts are generally accrued upon contract execution. Cash payments made for prepaid product discounts were $40,920 for 2021, $33,613 for 2020 and $25,637 for 2019. Changes in the allowances for uncollectible accounts related to loans and notes receivable from distributors for the years ended December 31 were as follows:
(in thousands) |  | 2021 |  | 2020 |  | 2019
Balance, beginning of year |  | $ | 3,995 |  |  | $ | 284 |  |  | $ | 284 |
Adoption of ASU No. 2016-13 |  | — |  |  | 4,749 |  |  | — |
Bad debt (benefit) expense |  | (1,165) |  |  | 5,412 |  |  | — |
Exchange for customer lists |  | — |  |  | (6,402) |  |  | — |
Write-offs |  | — |  |  | (48) |  |  | — |
Balance, end of year |  | $ | 2,830 |  |  | $ | 3,995 |  |  | $ | 284 |
Bad debt expense for 2020 included loan-specific allowances primarily related to Promotional Solutions distributors that were underperforming. In calculating these reserves, we utilized various valuation techniques to determine the value of the underlying collateral. During the quarter ended September 30, 2020, these notes receivable were exchanged for the underlying collateral, which consisted of customer list intangible assets. We categorize loans and notes receivable into risk categories based on information about the ability of the borrowers to service their debt, including current financial information, historical payment experience, current economic trends and other factors. The highest quality receivables are assigned a 1-2 internal grade. Those that have a potential weakness requiring management's attention are assigned a 3-4 internal grade. 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 December 31, 2021. There were no write-offs during the year ended December 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 |  | $ | 1,229 |  |  | $ | 484 |  |  | $ | 7,061 |  |  | $ | 11,744 |  |  | $ | 1,231 |  |  | $ | 21,749 |
3-4 internal grade |  | — |  |  | 2,599 |  |  | — |  |  | — |  |  | — |  |  | 2,599 |
Loans and notes receivable |  | $ | 1,229 |  |  | $ | 3,083 |  |  | $ | 7,061 |  |  | $ | 11,744 |  |  | $ | 1,231 |  |  | $ | 24,348 |
Accrued liabilities – Accrued liabilities were comprised of the following at December 31:
(in thousands) |  | 2021 |  | 2020
Deferred revenue(1) |  | $ | 52,645 |  |  | $ | 42,104 |
Employee cash bonuses, including sales incentives |  | 45,006 |  |  | 21,090 |
Operating lease liabilities (Note 15) |  | 14,852 |  |  | 11,589 |
Prepaid product discounts due within one year |  | 11,866 |  |  | 14,365 |
Customer rebates |  | 9,036 |  |  | 8,179 |
Other |  | 83,427 |  |  | 79,856 |
Accrued liabilities |  | $ | 216,832 |  |  | $ | 177,183 |
(1) $39,366 of the December 31, 2020 amount was recognized as revenue during 2021. Supplemental cash flow information – Supplemental cash flow information was as follows for the years ended December 31:
(in thousands) |  | 2021 |  | 2020 |  | 2019
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 41,231 |  |  | $ | 123,122 |  |  | $ | 73,620 |
Restricted cash and restricted cash equivalents included in funds held for customers |  | 241,488 |  |  | 106,287 |  |  | 101,191 |
Non-current restricted cash included in other non-current assets |  | 2,772 |  |  | — |  |  | — |
Total cash, cash equivalents, restricted cash and restricted cash equivalents |  | $ | 285,491 |  |  | $ | 229,409 |  |  | $ | 174,811 |
Income taxes paid |  | $ | 18,761 |  |  | $ | 24,701 |  |  | $ | 60,764 |
Interest paid |  | 46,621 |  |  | 22,853 |  |  | 33,227 |
Non-cash investing activities: |  |  |  |  |  |
Non-cash consideration for customer list purchases(1) |  | $ | 15,528 |  |  | $ | 21,439 |  |  | $ | 10,680 |
Non-cash financing activities: |  |  |  |  |  |
Liabilities for holdback payments on asset purchases and acquisitions |  | $ | 4,121 |  |  | $ | 12,949 |  |  | $ | 3,405 |
Vesting of restricted stock unit awards |  | 16,646 |  |  | 7,839 |  |  | 4,374 |
(1) Consists of pre-acquisition amounts owed to us by the sellers. Information regarding operating and finance leases executed in each period can be found in Note 15.

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