Long-Lived Assets (Tables)

3 Months Ended

Mar. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Carrying Amount of Goodwill

Goodwill. The changes in the carrying amount of goodwill for the first quarter of 2018, were as follows (in thousands):


January 1, 2018 balance	$	210,080
Business Ink acquisition		8,025
Adjustments related to prior acquisitions		(9	)
Effects of changes in foreign currency exchange rates		4,819
March 31, 2018 balance	$	222,915

See Note 5 for discussion regarding the Business Ink acquisition.

Summary of Carrying Value of Assets

As of March 31, 2018 and December 31, 2017, the carrying values of our other intangible assets were as follows (in thousands):

	March 31, 2018							December 31, 2017
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Investments in client contracts	$	-	$	-		$	-	$	26,616	$	(9,782	)	$	16,834
Capitalized costs		-		-			-		26,811		(10,039	)		16,772
Acquired client contracts		120,306		(80,618	)		39,688		87,308		(77,288	)		10,020
Total client contracts		120,306		(80,618	)		39,688		140,735		(97,109	)		43,626
Software		142,775		(111,881	)		30,894		135,892		(108,986	)		26,906
Total intangible assets	$	263,081	$	(192,499	)	$	70,582	$	276,627	$	(206,095	)	$	70,532

Summary of Carrying Values of Contract Cost Assets

As of March 31, 2018, the carrying values of our contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):

	March 31, 2018
	Gross
	Carrying		Accumulated			Net
	Amount		Amortization			Amount
Client contract incentives (1)	$	26,617	$	(12,508	)	$	14,109
Capitalized costs (2)		32,099		(12,440	)		19,659
Capitalized commission fees (3)		4,945		(356	)		4,589
Total client contract costs	$	63,661	$	(25,304	)	$	38,357

Summary of Aggregate Amortization Related to Client Contract Costs

The aggregate amortization related to our client contract costs include in our operations for the first quarter of 2018 was as follows (in thousands):

Client contract incentives (1)	$	2,727
Capitalized costs (2)		2,395
Capitalized commission fees (3)		356
Total client contract costs	$	5,478

(1)

Client contract incentives consist principally of incentives provided to new or existing clients to convert their customer accounts to, or retain their customer’s account on, our outsourced solutions and are amortized ratably over the contract period to include renewal periods if applicable, which as of March 31, 2018, have termination dates that range from 2019 to 2025. The amortization of client contract incentives is reflected as a reduction in cloud and related solutions revenue in our Income Statement.

(2)

Capitalized costs are related to client conversion/set-up activities and direct material costs to fulfill long-term cloud-based or managed services arrangements. These costs are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of March 31, 2018, range from 2019 to 2023, and are included in cost of cloud and related solutions in our Income Statement.

(3)

Capitalized commission fees are incremental commissions paid as a result of obtaining a customer contract. These fees are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of March 31, 2018, range from 2019 to 2021, and are included in selling, general and administrative expenses on our Income Statement. Incremental commission fees incurred as a result of obtaining a customer contract are expensed when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less (a practical expedient allowed under ASC 606). These costs were not significant in the first quarter of 2018 and are included in selling, general and administrative expenses.