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Supplemental balance sheet and cash flow information
 3 Months Ended
Mar. 31, 2019
Supplemental balance sheet and cash flow information [Abstract]  
Supplemental balance sheet and cash flow information Supplemental balance sheet and cash flow information

Allowance for uncollectible accounts – Changes in the allowance for uncollectible accounts for the quarters ended March 31, 2019 and 2018 were as follows:
 
 
Quarter Ended
March 31,
(in thousands)
 
2019
 
2018
Balance, beginning of year
 
$
3,639

 
$
2,884

Bad debt expense
 
1,248

 
875

Write-offs, net of recoveries
 
(423
)
 
(905
)
Balance, end of period
 
$
4,464

 
$
2,854



Inventories and supplies – Inventories and supplies were comprised of the following:
(in thousands)
 
March 31,
2019
 
December 31,
2018
Raw materials
 
$
7,818

 
$
7,543

Semi-finished goods
 
7,496

 
7,273

Finished goods
 
25,767

 
27,608

Supplies
 
3,971

 
4,017

Inventories and supplies
 
$
45,052

 
$
46,441



Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following:
 
 
March 31, 2019
(in thousands)
 
Cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
Funds held for customers:(1)
 
 
 
 
 
 
 
 
Domestic money market fund
 
$
16,000

 
$
—

 
$
—

 
$
16,000

Canadian and provincial government securities
 
8,711

 
—

 
(219
)
 
8,492

Canadian guaranteed investment certificates
 
7,491

 
—

 
—

 
7,491

Available-for-sale debt securities
 
$
32,202

 
$
—

 
$
(219
)
 
$
31,983


(1) Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2019, also included cash of $60,971.

 
 
December 31, 2018
(in thousands)
 
Cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
Funds held for customers:(1)
 
 
 
 
 
 
 
 
Domestic money market fund
 
$
16,000

 
$
—

 
$
—

 
$
16,000

Canadian and provincial government securities
 
8,485

 
—

 
(355
)
 
8,130

Canadian guaranteed investment certificates
 
7,333

 
—

 
—

 
7,333

Available-for-sale debt securities
 
$
31,818

 
$
—

 
$
(355
)
 
$
31,463

 
(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2018, also included cash of $69,519.
 
Expected maturities of available-for-sale debt securities as of March 31, 2019 were as follows:
(in thousands)
 
Fair value
Due in one year or less
 
$
25,614

Due in two to five years
 
4,102

Due in six to ten years
 
2,267

Available-for-sale debt securities
 
$
31,983



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

Revenue in excess of billings – Revenue in excess of billings was comprised of the following:
(in thousands)
 
March 31,
2019
 
December 31,
2018
Conditional right to receive consideration
 
$
20,364

 
$
19,705

Unconditional right to receive consideration
 
13,547

 
10,753

Revenue in excess of billings
 
$
33,911

 
$
30,458



Assets held for sale – During the quarter ended March 31, 2018, we sold the assets of 2 small business distributors. We determined that these businesses would be better positioned for long-term growth if they were managed by independent distributors. Subsequent to the sales, the businesses are owned by independent distributors that are part of our Safeguard® distributor network. As such, our revenue was not impacted by these sales and the impact to our costs was not significant. These sales resulted in aggregate net gains within SG&A expense of $7,228 for the quarter ended March 31, 2018.

Assets held for sale as of March 31, 2019 and December 31, 2018 consisted of 1 small business customer list with a carrying value of $1,350. We are actively marketing this asset, and we expect the selling price will equal or exceed its current carrying value.

Intangibles – Intangibles were comprised of the following:
 
 
March 31, 2019
 
December 31, 2018
(in thousands)
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Amortizable intangibles:
 
 

 
 

 
 

 
 

 
 

 
 

Internal-use software
 
$
397,667

 
$
(318,273
)
 
$
79,394

 
$
388,477

 
$
(308,313
)
 
$
80,164

Customer lists/relationships
 
377,877

 
(184,144
)
 
193,733

 
379,570

 
(170,973
)
 
208,597

Trade names
 
50,706

 
(27,923
)
 
22,783

 
50,645

 
(26,204
)
 
24,441

Technology-based intangibles
 
39,300

 
(15,984
)
 
23,316

 
39,300

 
(14,007
)
 
25,293

Software to be sold
 
36,900

 
(16,487
)
 
20,413

 
36,900

 
(15,430
)
 
21,470

Other
 
700

 
(700
)
 
—

 
700

 
(700
)
 
—

Intangibles
 
$
903,150

 
$
(563,511
)

$
339,639


$
895,592


$
(535,627
)

$
359,965



During the quarter ended March 31, 2019, we purchased internal-use software of $9,018, with a weighted-average amortization period of 3 years. Amortization of intangibles was $28,174 for the quarter ended March 31, 2019 and $27,466 for the quarter ended March 31, 2018. Based on the intangibles in service as of March 31, 2019, estimated future amortization expense is as follows:
(in thousands)
 
Estimated
amortization
expense
Remainder of 2019
 
$
64,770

2020
 
73,171

2021
 
56,320

2022
 
40,094

2023
 
29,628



Goodwill – Changes in goodwill during the quarter ended March 31, 2019 were as follows:
(in thousands)
 
Small
Business
Services
 
Financial
Services
 
Direct
Checks
 
Total
Balance, December 31, 2018:
 
 
 
 
 
 
 
 
Goodwill, gross
 
$
765,266

 
$
373,421

 
$
148,506

 
$
1,287,193

Accumulated impairment charges
 
(126,567
)
 
—

 
—

 
(126,567
)
Goodwill, net of accumulated impairment charges
 
638,699

 
373,421


148,506


1,160,626

Currency translation adjustment
 
195

 
—

 
—

 
195

Balance, March 31, 2019:
 
 

 
 

 
 

 
 

Goodwill, gross
 
765,461

 
373,421

 
148,506

 
1,287,388

Accumulated impairment charges
 
(126,567
)
 
—

 
—

 
(126,567
)
Goodwill, net of accumulated impairment charges
 
$
638,894

 
$
373,421


$
148,506


$
1,160,821


Other non-current assets – Other non-current assets were comprised of the following:
(in thousands)
 
March 31,
2019
 
December 31,
2018
Loans and notes receivable from Safeguard distributors
 
$
79,191

 
$
78,693

Prepaid product discounts
 
58,237

 
54,642

Postretirement benefit plan asset
 
43,165

 
41,259

Deferred sales commissions(1)
 
7,454

 
6,482

Deferred advertising costs
 
5,009

 
5,746

Other
 
9,453

 
9,286

Other non-current assets
 
$
202,509

 
$
196,108



(1) Amortization of deferred sales commissions was $697 for the quarter ended March 31, 2019 and $694 for the quarter ended March 31, 2018.

Changes in prepaid product discounts during the quarters ended March 31, 2019 and 2018 were as follows:
 
 
Quarter Ended
March 31,
(in thousands)
 
2019
 
2018
Balance, beginning of year
 
$
54,642

 
$
63,895

Additions(1)
 
9,553

 
7,492

Amortization
 
(5,757
)
 
(5,408
)
Other
 
(201
)
 
(25
)
Balance, end of period
 
$
58,237

 
$
65,954

 
(1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $9,189 for the quarter ended March 31, 2019 and $5,364 for the quarter ended March 31, 2018.

Accrued liabilities – Accrued liabilities were comprised of the following:
(in thousands)
 
March 31,
2019
 
December 31,
2018
Funds held for customers
 
$
91,552

 
$
99,818

Deferred revenue(1)
 
49,428

 
54,313

Employee profit sharing/cash bonus
 
14,442

 
31,286

Operating lease liabilities
 
13,008

 
—

Prepaid product discounts due within one year
 
12,244

 
10,926

Customer rebates
 
8,725

 
9,555

Restructuring and integration (Note 8)
 
3,687

 
3,320

Other
 
71,582

 
75,063

Accrued liabilities
 
$
264,668

 
$
284,281


 
(1) $23,225 of the December 31, 2018 amount was recognized as revenue during the quarter ended March 31, 2019.

Other non-current liabilities – Other non-current liabilities were comprised of the following:
(in thousands)
 
March 31,
2019
 
December 31,
2018
Prepaid product discounts
 
$
11,358

 
$
12,513

Other
 
25,387

 
27,367

Other non-current liabilities
 
$
36,745

 
$
39,880



Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows:
(in thousands)
 
March 31,
2019
 
March 31,
2018
Cash and cash equivalents
 
$
61,529

 
$
67,728

Restricted cash and restricted cash equivalents included in funds held for customers
 
76,971

 
78,751

Total cash, cash equivalents, restricted cash and restricted cash equivalents
 
$
138,500

 
$
146,479