Long-Lived Assets (Tables)

12 Months Ended

Dec. 31, 2019

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)		2019			2018
Computer equipment	3-6		$	88,701		$	84,814
Leasehold improvements	5-10			25,778			22,494
Operating equipment	3-8			59,864			58,521
Furniture and fixtures		8		8,115			9,262
				182,458			175,091
Less - accumulated depreciation				(98,029	)		(93,278	)
Property and equipment, net			$	84,429		$	81,813

Rollforward of Goodwill

Goodwill. We do not have any intangible assets with indefinite lives other than goodwill.  A rollforward of goodwill in 2018 and 2019 is as follows (in thousands):

January 1, 2018 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
Adjustments related to prior acquisitions		640
Effects of changes in foreign currency exchange rates		2,708
December 31, 2019 balance	$	259,164

Summary of Carrying Value of Other Intangible Assets

Other Intangible Assets. Our intangible assets subject to ongoing amortization consist of acquired client contracts and software.

Acquired Client Contracts.  As of December 31, 2019 and 2018, the carrying values of our acquired client contracts were as follows (in thousands):  

	December 31, 2019							December 31, 2018
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Acquired client contracts	$	148,872	$	(93,767	)	$	55,105	$	148,148	$	(82,692	)	$	65,456

Software.  Software consists of: (i) software and similar intellectual property rights from various business combinations; and (ii) internal use software.  As of December 31, 2019 and 2018, the carrying values of our software assets were as follows (in thousands):

	2019							2018
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Acquired software (4)	$	75,370	$	(68,157	)	$	7,213	$	75,156	$	(65,719	)	$	9,437
Internal use software (5)		82,593		(57,280	)		25,313		80,625		(53,662	)		26,963
Total software	$	157,963	$	(125,437	)	$	32,526	$	155,781	$	(119,381	)	$	36,400

Summary of Aggregate Amortization Related to Intangible Assets

The aggregate amortization related to client contracts included in our operations for 2019, 2018, and 2017 was as follows (in thousands):

	2019		2018		2017
Investments in client contracts (1)	$	-	$	-	$	7,402
Capitalized costs (2)		-		-		5,141
Acquired client contracts (3)		10,374		7,898		5,406
Total client contracts	$	10,374	$	7,898	$	17,949

(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 Sheets.

(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 Sheets.

(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, with the amortization expense included as cost of revenues in our Income Statements.

The aggregate amortization related to software included in our operations for 2019, 2018, and 2017 was as follows (in thousands):

	2019		2018		2017
Acquired software (4)	$	2,229	$	1,801	$	1,458
Internal use software (5)		10,641		9,517		7,845
Total software	$	12,870	$	11,318	$	9,303

(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 Client Contract Cost Assets

Client Contract Costs.  As of December 31, 2019 and 2018, the carrying values of our client contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):

	December 31, 2019							December 31, 2018
	Gross							Gross
	Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Client contract incentives (6)	$	4,626	$	(1,612	)	$	3,014	$	28,366	$	(20,833	)	$	7,533
Capitalized costs (7)		68,085		(26,482	)		41,603		44,469		(20,230	)		24,239
Capitalized commission fees (8)		9,561		(3,432	)		6,129		7,505		(1,988	)		5,517
Total client contact costs	$	82,272	$	(31,526	)	$	50,746	$	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 2019 and 2018 was as follows (in thousands):

	2019		2018
Client contract incentives (6)	$	6,018	$	11,052
Capitalized costs (7)		12,625		10,304
Capitalized commission fees (8)		2,136		2,025
Total client contract costs	$	20,779	$	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, 2019, have termination dates that range from 2023 to 2025.  The amortization of client contract incentives is reflected as a reduction in cloud and related solutions revenues.

(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, 2019, range from 2020 to 2028, and are included in cost of cloud and related solutions.

(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, 2019, range from 2020 to 2026, and are included in selling, general and administrative (“SG&A”) expenses.  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).