Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 116

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 116
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 swaps, designated as cash flow hedges, to reduce the fluctuations in interest payments on a portion of our variable-rate debt. In December 2024, coinciding with the refinancing of our debt (Note 13), we terminated these agreements and incurred an immaterial loss.

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DELUXE CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)

Our derivative instruments were comprised of the following at December 31, 2023:December 31, 2023(in thousands)Notional amountInterest RateMaturityBalance Sheet LocationFair ValueAsset / (Liability)June 2023 amortizing interest rate swap:$271,659 4.249 %June 2026Other non-current liabilities$(2,158)March 2023 interest rate swap:200,000 4.003 %March 2026Other non-current assets287 September 2022 interest rate swap:300,000 3.990 %September 2025Other non-current assets1,519 Changes in the fair values of the interest rate swaps were recorded in accumulated other comprehensive loss on the consolidated balance sheets and were subsequently reclassified to interest expense as interest payments were made on the variable-rate debt. The fair values of these derivatives were calculated based on the applicable reference rate curve on the measurement date. As of December 31, 2023, the cash flow hedges were fully effective, and their effect on consolidated net income and our consolidated statements of cash flows during each of the past three years was not material.

NOTE 8: FAIR VALUE MEASUREMENTS

Goodwill impairment analysesWe assess the carrying value of goodwill annually as of July 31 and between annual evaluations if events or changes in circumstances suggest a potential impairment. Our policy on impairment of goodwill, detailed in Note 1, outlines our methodology for evaluating goodwill impairment.2024 annual goodwill impairment analyses – For the 2024 annual goodwill analysis, we chose to perform quantitative analyses for certain reporting units: Merchant Services, Treasury Management, and Business Essentials. These analyses indicated that the estimated fair values of these reporting units exceeded their carrying values. Estimating the fair values of our reporting units requires us to estimate several factors, including revenue growth rates, EBITDA margins, terminal growth rates, discount rates, and the allocation of shared and corporate items. These assumptions require significant judgment, and actual results may differ, potentially leading to future impairment charges.For our other reporting units with goodwill, we completed qualitative