Long-Lived Assets (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Property and Equipment

Property and Equipment.  Property and equipment at December 31 consisted of the following (in thousands, except years):

	Useful Lives
	(Years)		2018			2017
Computer equipment	3-6		$	84,814		$	85,902
Leasehold improvements	5-10			22,494			15,463
Operating equipment	3-8			58,521			56,170
Furniture and fixtures		8		9,262			10,242
				175,091			167,777
Less - accumulated depreciation				(93,278	)		(123,126	)
Property and equipment, net			$	81,813		$	44,651

Rollforward of Goodwill

Goodwill. We do not have any intangible assets with indefinite lives other than goodwill.  A rollforward of goodwill in 2017 and 2018 is as follows (in thousands):

January 1, 2017 balance	$	201,094
Adjustments related to prior acquisitions		(60	)
Effects of changes in foreign currency exchange rates		9,046
December 31, 2017 balance		210,080
Adjustments related to prior acquisitions		(60	)
Goodwill acquired during period		51,591
Effects of changes in foreign currency exchange rates		(5,795	)
December 31, 2018 balance	$	255,816

Summary of Carrying Value of Other Intangible Assets

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

	December 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		148,148		(82,692	)		65,456		87,308		(77,288	)		10,020
Total client contracts		148,148		(82,692	)		65,456		140,735		(97,109	)		43,626
Acquired software (4)		75,156		(65,719	)		9,437		66,100		(64,268	)		1,832
Internal use software (5)		80,625		(53,662	)		26,963		69,792		(44,718	)		25,074
Total software		155,781		(119,381	)		36,400		135,892		(108,986	)		26,906
Total intangible assets	$	303,929	$	(202,073	)	$	101,856	$	276,627	$	(206,095	)	$	70,532

Summary of Aggregate Amortization Related to Intangible Assets

The aggregate amortization related to client contracts included in our operations for 2018, 2017, and 2016 was as follows (in thousands):

	2018		2017		2016
Investments in client contracts (1)	$	—	$	7,402	$	6,591
Capitalized costs (2)		—		5,141		2,755
Acquired client contracts (3)		7,898		5,406		6,683
Total client contracts	$	7,898	$	17,949	$	16,029

(1) Investments in client contracts consist principally of incentives provided to new or existing clients to convert their customer accounts to, or retain their customer’s accounts on, our customer care and billing systems.  As part of the adoption of ASC 606, in 2018 these were reclassified to client contract costs on our Balance Sheet.

(2) Capitalized costs are related to client conversion/set-up services related to long-term cloud-based or managed services arrangements.  As part of the adoption of ASC 606, in 2018 these were reclassified to client contract costs on our Balance Sheet.

(3) Acquired client contracts represent assets acquired in our prior business acquisitions.  Acquired client contracts are being amortized over their estimated useful lives ranging from two to twenty years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized.  Classification of the amortization of acquired client contracts generally follows where the acquired business’ cost of revenues is categorized in our Income Statements.

The aggregate amortization related to software included in our operations for 2018, 2017, and 2016 was as follows (in thousands):

	2018		2017		2016
Acquired software (4)	$	1,801	$	1,458	$	1,806
Internal use software (5)		9,517		7,845		7,510
Total software	$	11,318	$	9,303	$	9,316

(4) Acquired software represents the software intangible assets acquired in our prior business acquisitions, which are being amortized over their estimated useful lives ranging from two to fifteen years.

(5) Internal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of the third-party software licenses.  Internal use software is amortized over its estimated useful life ranging from twelve months to ten years.

Summary of Carrying Values of Contract Cost Assets

Client Contract Costs. As of December 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):

	December 31, 2018
	Gross
	Carrying		Accumulated			Net
	Amount		Amortization			Amount
Client contract incentives (6)	$	28,366	$	(20,833	)	$	7,533
Capitalized costs (7)		44,469		(20,230	)		24,239
Capitalized commission fees (8)		7,505		(1,988	)		5,517
Total client contract costs	$	80,340	$	(43,051	)	$	37,289

Summary of Aggregate Amortization Related to Client Contract Costs

The aggregate amortization related to our client contract costs included in our operations for 2018 was as follows (in thousands):

	2018
Client contract incentives (6)	$	11,052
Capitalized costs (7)		10,304
Capitalized commission fees (8)		2,025
Total client contract costs	$	23,381

(6) 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 December 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.

(7) 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 December 31, 2018 range from 2019 to 2023, and are included in cost of cloud and related solutions in our Income Statement.

(8) 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 December 31, 2018, range from 2019 to 2025, and are included in selling, general and administrative (“SG&A”) expenses in 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).  

The weighted-average remaining amortization period of client contract costs as of December 31, 2018 was approximately 31 months.