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Supplementary balance sheet and cash flow information
12 Months Ended
Dec. 31, 2010
Notes to Financial Statements [Abstract] 
Supplementary balance sheet and cash flow information
Note 2: Supplementary balance sheet and cash flow information

Trade accounts receivable – Net trade accounts receivable was comprised of the following at December 31:

(in thousands)
 
2010
  
2009
 
Trade accounts receivable
 $70,601  $70,555 
Allowances for uncollectible accounts
  (4,130 )  (4,991 )
Trade accounts receivable – net
 $66,471  $65,564 

Changes in the allowances for uncollectible accounts were as follows:

(in thousands)
 
2010
  
2009
  
2008
 
Balance, beginning of year
 $4,991  $5,930  $6,877 
Bad debt expense
  4,686   5,842   7,756 
Write-offs, net of recoveries
  (5,547 )  (6,781 )  (8,703 )
Balance, end of year
 $4,130  $4,991  $5,930 

Inventories and supplies – Inventories and supplies were comprised of the following at December 31:

(in thousands)
 
2010
  
2009
 
Raw materials
 $4,879  $4,048 
Semi-finished goods
  8,393   8,750 
Finished goods
  5,083   5,602 
Total inventories
  18,355   18,400 
Supplies, primarily production
  3,305   3,722 
Inventories and supplies
 $21,660  $22,122 
 
Marketable securities – Available-for-sale marketable securities included within funds held for customers and other current assets were comprised of the following:

   
December 31, 2010
 
(in thousands)
 
Cost
  
Gross unrealized gains
  
Gross unrealized losses
  
Fair value
 
Corporate investments:
            
Money market securities
 $2,029  $—  $—  $2,029 
Funds held for customers:(1)
                
Money market securities
  5,078   —   —   5,078 
Canadian and provincial government securities
  5,148   23   —   5,171 
Marketable securities – funds held for customers
  10,226   23   —   10,249 
Total marketable securities
 $12,255  $23  $—  $12,278 

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2010, also included cash and cash equivalents of $25,471.
 
   
December 31, 2009
 
(in thousands)
 
Cost
  
Gross unrealized gains
  
Gross unrealized losses
  
Fair value
 
Corporate investments:
            
Money market securities
 $3,667  $—  $—  $3,667 
Funds held for customers:(1)
                
Money market securities
  9,522   —   —   9,522 
Total marketable securities
 $13,189  $—  $—  $13,189 

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2009, also included cash and cash equivalents of $17,379.

Proceeds from sales of available for sale marketable securities were $2.0 million in 2010 and $0.9 million in 2009. We did not hold marketable securities during 2008. For the investments in money market securities, cost equals fair value due to the short-term duration of the underlying instruments. As such, no realized gains or losses were recognized on sales of these securities. Realized gains and losses on the Canadian and provincial government securities were not significant during 2010. Unrealized gains and losses on these securities are reflected within other comprehensive loss on the consolidated balance sheet as of December 31, 2010.

Expected maturities of available-for-sale securities as of December 31, 2010 were as follows:

(in thousands)
 
Fair value
 
Due in one year or less
 $7,225 
Due in one to three years
  727 
Due in three to five years
  1,260 
Due after five years
  3,066 
Total marketable securities
 $12,278 

Further information regarding the fair value of marketable securities can be found in Note 7: Fair value measurements.
 
Property, plant and equipment – Property, plant and equipment was comprised of the following at December 31:

(in thousands)
 
2010
  
2009
 
Land and land improvements
 $33,981  $33,917 
Buildings and building improvements
  120,672   120,222 
Machinery and equipment
  303,987   303,073 
Total
  458,640   457,212 
Accumulated depreciation
  (338,419 )  (335,415 )
Property, plant and equipment – net
 $120,221  $121,797 
 
Intangibles – Intangibles were comprised of the following at December 31:

  
2010
  2009 
 
 
(in thousands)
 
Gross carrying amount
  
Accumulated amortization
  
Net carrying amount
  
Gross carrying amount
  
Accumulated amortization
  
Net carrying amount
 
Indefinite-lived:
                  
Trade name
 $19,100  $—  $19,100  $19,100  $—  $19,100 
Amortizable intangibles:
                        
Internal-use software
  378,269   (314,267 )  64,002   341,822   (285,181 )  56,641 
Customer lists/ relationships
  72,292   (43,660 )  28,632   55,745   (25,777 )  29,968 
Distributor contracts
  30,900   (26,396 )  4,504   30,900   (24,594 )  6,306 
Trade names
  59,361   (22,009 )  37,352   51,861   (20,375 )  31,486 
Other
  8,602   (7,080 )  1,522   8,683   (6,274 )  2,409 
Amortizable intangibles
  549,424   (413,412 )  136,012   489,011   (362,201 )  126,810 
Intangibles
 $568,524  $(413,412) $155,112  $508,111  $(362,201) $145,910 

As of December 31, 2010, we held a distributor contract asset which was recorded in conjunction with the acquisition of New England Business Service, Inc. (NEBS) in June 2004. This asset had a carrying value of $4.5 million as of December 31, 2010 and $6.3 million as of December 31, 2009 and is being amortized over nine years. In general, the distributor contracts have an initial five-year term and may be renewed for successive five-year periods upon mutual agreement of both parties. At the time the fair value of the contracts was determined, an annual 90% contract retention rate was assumed based on historical experience. As of December 31, 2010, the average period remaining to the next contract renewal for our recognized distributor contracts was 2.5 years. Costs related to renewing or extending these contracts are not material and are expensed as incurred. We had no other intangible assets as of December 31, 2010 or 2009 which have legal, regulatory or contractual provisions that potentially limit our use of the asset.
 
Total amortization of intangibles was $53.0 million in 2010, $45.3 million in 2009 and $42.1 million in 2008. Of these amounts, amortization of internal-use software was $29.1 million in 2010, $25.2 million in 2009 and $17.5 million in 2008. Based on the intangibles in service as of December 31, 2010, estimated amortization expense for each of the next five years ending December 31 is as follows:

(in thousands)
   
2011
 $36,675 
2012
  22,898 
2013
  12,695 
2014
  8,004 
2015
  5,136 
 
 
We acquire internal-use software in the normal course of business. In conjunction with acquisitions (see Note 4), we also acquired certain other amortizable intangible assets. The following intangible assets were acquired during the years indicated:

  2010  2009  2008
(in thousands)
 
Amount
  
Weighted-average amortization period
  
Amount
  
Weighted-average amortization period
  
Amount
  
Weighted-average amortization period
Internal-use software
 $36,442  
4 years
  $24,911  
3 years
  $39,418  
3 years
Customer lists/ relationships
  16,690  
1 year
   13,943  
7 years
   19,292  
11 years
Trade names
  9,100  
10 years
   900  
10 years
   1,016  
9 years
Other
  —   —   —   —   900  
3 years
Acquired intangibles
 $62,232  
4 years
  $39,754  
5 years
  $60,626  
6 years
 
Goodwill – Information regarding the acquisitions completed during the past three years can be found in Note 4. As of December 31, 2010, goodwill was comprised of the following:

(in thousands)
   
Acquisition of NEBS in June 2004
 $472,082 
Acquisition of Designer Checks in February 2000(1)
  77,970 
Acquisition of Hostopia.com Inc. in August 2008
  68,555 
Acquisition of Custom Direct, Inc. in April 2010
  66,269 
Acquisition of Abacus America, Inc. in July 2009
  24,225 
Acquisition of the Johnson Group in October 2006(1)
  7,320 
Acquisition of Direct Checks in December 1987
  4,267 
Acquisition of Logo Design Mojo in April 2008(1)
  1,363 
Acquisition of MerchEngines.com in July 2009(1)
  1,140 
Acquisition of Dots and Pixels, Inc. in July 2005
  1,045 
Acquisition of Cornerstone Customer Solutions in March 2010(1)
  897 
Acquisition of All Trade Computer Forms, Inc. in February 2007
  804 
Goodwill
 $725,937 

(1) This goodwill is deductible for income tax purposes.
 
 
Changes in goodwill by reportable segment and in total were as follows:
(in thousands)
 
Small Business Services
  
Financial Services
  
Direct Checks
  
Total
 
Balance, December 31, 2008
 $570,807  $—  $82,237  $653,044 
Impairment charge (see Note 7)
  (20,000 )  —   —   (20,000 )
Acquisition of Abacus America, Inc. (see Note 4)
  24,225   —   —   24,225 
Acquisition of MerchEngines.com (see Note 4)
  1,140   —   —   1,140 
Currency translation adjustment
  257   —   —   257 
Balance, December 31, 2009:
                
Goodwill
  596,429   —   82,237   678,666 
Accumulated impairment charges
  (20,000 )  —   —   (20,000 )
    576,429   —   82,237   658,666 
Acquisition of Custom Direct, Inc. (see Note 4)
  —   —   66,269   66,269 
Acquisition of Cornerstone Customer Solutions, LLC (see Note 4)
  —   897   —   897 
Currency translation adjustment
  105   —   —   105 
Balance, December 31, 2010:
                
Goodwill
  596,534   897   148,506   745,937 
Accumulated impairment charges
  (20,000 )  —   —   (20,000 )
   $576,534  $897  $148,506  $725,937 
 
Other non-current assets – Other non-current assets as of December 31 were comprised of the following:

(in thousands)
 
2010
  
2009
 
Contract acquisition costs
 $57,476  $45,701 
Deferred advertising costs
  15,832   14,455 
Other
  20,939   21,455 
Other non-current assets
 $94,247  $81,611 

See Note 17 for a discussion of market risks related to contract acquisition costs. Changes in contract acquisition costs were as follows:

(in thousands)
 
2010
  
2009
  
2008
 
Balance, beginning of year
 $45,701  $37,706  $55,516 
Additions(1)
  31,520   32,545   8,808 
Amortization
  (19,745 )  (24,550 )  (26,618 )
Balance, end of year
 $57,476  $45,701  $37,706 

(1) Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $22,087 in 2010, $29,250 in 2009 and $9,008 in 2008.
 
Accrued liabilities – Accrued liabilities as of December 31 were comprised of the following:

(in thousands)
 
2010
  
2009
 
Funds held for customers
 $35,475  $26,901 
Employee profit sharing/cash bonus and pension
  34,109   36,594 
Customer rebates
  19,201   21,861 
Contract acquisition costs due within one year
  8,550   2,795 
Deferred revenue
  6,875   23,720 
Restructuring due within one year (see Note 8)
  6,435   11,151 
Wages, including vacation
  5,898   5,272 
Interest
  5,227   5,227 
Other
  22,264   22,887 
Accrued liabilities
 $144,034  $156,408 

Deferred revenue as of December 31, 2010 decreased $16.8 million from December 31, 2009 due primarily to the recognition of revenue related to a contract settlement executed in the fourth quarter of 2009. The revenue from the contract settlement was recognized over the contract’s remaining service period of six months. The remaining deferred revenue as of December 31, 2010 relates primarily to web hosting service contracts.

Supplemental cash flow disclosures – Cash payments for interest and income taxes were as follows for the years ended December 31:

(in thousands)
 
2010
  
2009
  
2008
 
Interest paid
 $44,054  $43,513  $50,441 
Income taxes paid
  70,246   56,060   59,997