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Supplemental balance sheet information
 3 Months Ended
Mar. 31, 2018
Balance Sheet Related Disclosures [Abstract]  
Supplemental balance sheet information Supplemental balance sheet information

Allowance for uncollectible accounts – Changes in the allowance for uncollectible accounts for the quarters ended March 31, 2018 and 2017 was as follows:
 
 
Quarter Ended
March 31,
(in thousands)
 
2018
 
2017
Balance, beginning of year
 
$
2,884

 
$
2,828

Bad debt expense
 
875

 
692

Write-offs, net of recoveries
 
(905
)
 
(634
)
Balance, end of period
 
$
2,854

 
$
2,886



Inventories and supplies – Inventories and supplies were comprised of the following:
(in thousands)
 
March 31,
2018
 
December 31,
2017
Raw materials
 
$
6,949

 
$
7,357

Semi-finished goods
 
7,633

 
7,635

Finished goods
 
24,724

 
24,146

Supplies
 
3,078

 
3,111

Inventories and supplies
 
$
42,384

 
$
42,249



Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following:
 
 
March 31, 2018
(in thousands)
 
Cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
Funds held for customers:(1)
 
 
 
 
 
 
 
 
Domestic money market fund
 
$
15,000

 
$
—

 
$
—

 
$
15,000

Canadian and provincial government securities
 
8,867

 
—

 
(430
)
 
8,437

Canadian guaranteed investment certificates
 
7,752

 
—

 
—

 
7,752

Available-for-sale debt securities
 
$
31,619

 
$
—

 
$
(430
)
 
$
31,189


(1) Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2018, also included cash of $63,751.

 
 
December 31, 2017
(in thousands)
 
Cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
Funds held for customers:(1)
 
 
 
 
 
 
 
 
Domestic money market fund
 
$
17,300

 
$
—

 
$
—

 
$
17,300

Canadian and provincial government securities
 
9,051

 
—

 
(393
)
 
8,658

Canadian guaranteed investment certificates
 
7,955

 
—

 
—

 
7,955

Available-for-sale debt securities
 
$
34,306

 
$
—

 
$
(393
)
 
$
33,913

 
(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2017, also included cash of $52,279.
 
Expected maturities of available-for-sale debt securities as of March 31, 2018 were as follows:
(in thousands)
 
Fair value
Due in one year or less
 
$
24,760

Due in two to five years
 
3,586

Due in six to ten years
 
2,843

Available-for-sale debt securities
 
$
31,189



Further information regarding the fair value of available-for-sale debt securities can be found in Note 7.

Assets held for sale – Assets held for sale as of March 31, 2018 included 2 providers of printed and promotional products, a small business distributor and a small business customer list that was classified as held for sale during the first quarter of 2018. Assets held for sale as of December 31, 2017 included 2 providers of printed and promotional products and 2 small business distributors, 1 of which was sold during the first quarter of 2018. Also during the first quarter of 2018, we sold
the operations of a small business distributor that previously did not meet the requirements to be reported as assets held for sale in the consolidated balance sheets. We determined that these businesses would be better positioned for long-term growth if they were managed by independent distributors. Subsequent to the sales, these businesses are owned by distributors that are part of our Safeguard® distributor network. As such, our revenue is not impacted by these sales, and the impact to our costs is not significant. We entered into aggregate notes receivable of $10,215 in conjunction with these sales (non-cash investing activity), and we recognized aggregate net gains within SG&A expense of $7,228 during the quarter ended March 31, 2018. During the quarter ended March 31, 2017, we sold a provider of printed and promotional products and a small business distributor, realizing an aggregate net gain of $6,779 within SG&A expense in the consolidated statement of comprehensive income.

The businesses sold during 2018, as well as those held for sale as of March 31, 2018, were included in our Small Business Services segment, and their net assets consisted primarily of intangible assets. During the first quarter of 2017, we recorded a pre-tax asset impairment charge of $5,296 related to a small business distributor that was sold during the second quarter of 2017. The impairment charge reduced the carrying value of the business to its fair value less costs to sell, as we negotiated the sale of the business.

We are actively marketing the remaining assets held for sale, and we expect the selling prices will equal or exceed their current carrying values. Net assets held for sale consisted of the following:
(in thousands)
 
March 31,
2018
 
December 31,
2017
 
Balance sheet caption
Current assets
 
$
23

 
$
4

 
Other current assets
Intangibles
 
8,089

 
8,459

 
Assets held for sale
Goodwill
 
2,016

 
3,566

 
Assets held for sale
Other non-current assets
 
207

 
207

 
Assets held for sale
Net assets held for sale
 
$
10,335

 
$
12,236

 
 


Intangibles – Intangibles were comprised of the following:
 
 
March 31, 2018
 
December 31, 2017
(in thousands)
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Indefinite-lived intangibles:
 
 
 
 
 
 
 
 
 
 
 
 
Trade name
 
$
19,100

 
$
—

 
$
19,100

 
$
19,100

 
$
—

 
$
19,100

Amortizable intangibles:
 
 

 
 

 
 

 
 

 
 

 
 

Internal-use software
 
370,408

 
(293,628
)
 
76,780

 
359,079

 
(284,074
)
 
75,005

Customer lists/relationships(1)
 
350,586

 
(133,712
)
 
216,874

 
343,589

 
(121,729
)
 
221,860

Trade names
 
46,762

 
(21,204
)
 
25,558

 
36,931

 
(19,936
)
 
16,995

Technology-based intangibles
 
38,800

 
(8,017
)
 
30,783

 
31,800

 
(6,400
)
 
25,400

Software to be sold
 
36,900

 
(12,260
)
 
24,640

 
36,900

 
(11,204
)
 
25,696

Other
 
1,800

 
(1,645
)
 
155

 
1,800

 
(1,590
)
 
210

Amortizable intangibles
 
845,256

 
(470,466
)

374,790


810,099


(444,933
)

365,166

Intangibles
 
$
864,356

 
$
(470,466
)

$
393,890


$
829,199


$
(444,933
)

$
384,266



(1) During the first quarter of 2018, we recorded a pre-tax asset impairment charge of $2,149 for one of our customer lists. Further information can be found in Note 7.

Amortization of intangibles was $27,466 for the quarter ended March 31, 2018 and $25,555 for the quarter ended March 31, 2017. Based on the intangibles in service as of March 31, 2018, estimated future amortization expense is as follows:
(in thousands)
 
Estimated
amortization
expense
Remainder of 2018
 
$
73,428

2019
 
81,231

2020
 
62,617

2021
 
49,222

2022
 
35,337



During the quarter ended March 31, 2018, we acquired internal-use software in the normal course of business. We also acquired intangible assets in conjunction with acquisitions (Note 6). The following intangible assets were acquired during the quarter ended March 31, 2018:
(in thousands)
 
Amount
 
Weighted-average amortization period
(in years)
Internal-use software
 
$
10,842

 
3
Customer lists/relationships(1)
 
13,001

 
7
Trade names
 
10,000

 
8
Technology-based intangibles
 
7,000

 
5
Acquired intangibles
 
$
40,843

 
6


(1) Includes the purchase of a customer list for $650 that did not qualify as a business combination.

Information regarding acquired intangibles does not include measurement-period adjustments recorded during the quarter ended March 31, 2018 for changes in the estimated fair values of intangibles acquired during 2017 through acquisitions. Information regarding these adjustments can be found in Note 6.

Goodwill – Changes in goodwill during the quarter ended March 31, 2018 were as follows:
(in thousands)
 
Small
Business
Services
 
Financial
Services
 
Direct
Checks
 
Total
Balance, December 31, 2017:
 
 
 
 
 
 
 
 
Goodwill, gross
 
$
706,568

 
$
324,239

 
$
148,506

 
$
1,179,313

Accumulated impairment charges
 
(48,379
)
 
—

 
—

 
(48,379
)
Goodwill, net of accumulated impairment charges
 
658,189

 
324,239


148,506


1,130,934

Goodwill resulting from acquisitions
 
28,293

 
—

 
—

 
28,293

Measurement-period adjustments for previous acquisitions (Note 6)
 
(173
)
 
2,763

 
—

 
2,590

Currency translation adjustment
 
(492
)
 
—

 
—

 
(492
)
Balance, March 31, 2018:
 
 

 
 

 
 

 
 

Goodwill, gross
 
734,196

 
327,002

 
148,506

 
1,209,704

Accumulated impairment charges
 
(48,379
)
 
—

 
—

 
(48,379
)
Goodwill, net of accumulated impairment charges
 
$
685,817

 
$
327,002


$
148,506


$
1,161,325


Other non-current assets – Other non-current assets were comprised of the following:
(in thousands)
 
March 31,
2018
 
December 31,
2017
Prepaid product discounts(1)
 
$
65,954

 
$
63,895

Loans and notes receivable from Safeguard distributors
 
55,648

 
44,276

Postretirement benefit plan asset
 
42,224

 
39,849

Deferred advertising costs
 
5,924

 
6,135

Deferred sales commissions(2)
 
5,216

 
—

Other
 
7,857

 
5,601

Other non-current assets
 
$
182,823

 
$
159,756



(1) In our prior period financial statements, we referred to this asset as contract acquisition costs.

(2) Amortization of deferred sales commissions was $694 for the quarter ended March 31, 2018.

Changes in prepaid product discounts during the quarters ended March 31, 2018 and 2017 were as follows:
 
 
Quarter Ended
March 31,
(in thousands)
 
2018
 
2017
Balance, beginning of year
 
$
63,895

 
$
65,792

Additions(1)
 
7,492

 
4,043

Amortization
 
(5,408
)
 
(4,967
)
Other
 
(25
)
 
(76
)
Balance, end of period
 
$
65,954

 
$
64,792

 
(1) Prepaid product discounts are accrued upon contract execution. Cash payments made for prepaid product discounts were $5,364 for the quarter ended March 31, 2018 and $6,099 for the quarter ended March 31, 2017.

Accrued liabilities – Accrued liabilities were comprised of the following:
(in thousands)
 
March 31,
2018
 
December 31,
2017
Funds held for customers
 
$
93,867

 
$
85,091

Deferred revenue
 
49,630

 
47,021

Acquisition-related liabilities(1)
 
24,893

 
23,878

Income tax
 
19,204

 
17,827

Prepaid product discounts due within one year(2)
 
15,510

 
11,670

Employee profit sharing/cash bonus
 
12,358

 
31,312

Customer rebates
 
10,856

 
11,508

Restructuring due within one year (Note 8)
 
2,326

 
4,380

Other
 
46,684

 
44,566

Accrued liabilities
 
$
275,328

 
$
277,253



(1) Consists of holdback payments due at future dates and liabilities for contingent consideration. Further information regarding liabilities for contingent consideration can be found in Note 7.

(2) In our prior period financial statements, we referred to this liability as contract acquisition costs due within one year.


Other non-current liabilities – Other non-current liabilities were comprised of the following:
(in thousands)
 
March 31,
2018
 
December 31,
2017
Prepaid product discounts(1)
 
$
19,922

 
$
21,658

Other
 
28,190

 
30,583

Other non-current liabilities
 
$
48,112

 
$
52,241


(1) In our prior period financial statements, we referred to this liability as contract acquisition costs.