Supplemental balance sheet and cash flow information (Tables)

9 Months Ended

Sep. 30, 2019

Supplemental balance sheet and cash flow information [Abstract]

Allowance for uncollectible accounts

Allowance for uncollectible accounts – Changes in the allowance for uncollectible accounts for the nine months ended September 30, 2019 and 2018 were as follows:

	Nine Months Ended September 30,
(in thousands)	2019			2018
Balance, beginning of year	$	3,639		$	2,884
Bad debt expense	3,718			2,275
Write-offs, net of recoveries	(2,537		)	(2,036		)
Balance, end of period	$	4,820		$	3,123

Inventories and supplies

Inventories and supplies – Inventories and supplies were comprised of the following:

(in thousands)	September 30, 2019		December 31, 2018
Raw materials	$	7,537	$	7,543
Semi-finished goods	7,396		7,273
Finished goods	23,719		27,608
Supplies	3,542		4,017
Inventories and supplies	$	42,194	$	46,441

Available-for-sale debt securities

Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following:

	September 30, 2019
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Funds held for customers:(1)
Domestic money market fund	$	14,000	$	—	$	—		$	14,000
Canadian and provincial government securities	8,856		—		(199		)	8,657
Canadian guaranteed investment certificates	7,552		—		—			7,552
Available-for-sale debt securities	$	30,408	$	—	$	(199	)	$	30,209

⁽¹⁾ Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2019, also included cash of $64,639.

	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

Expected maturities of available-for-sale debt securities as of September 30, 2019 were as follows:

(in thousands)	Fair value
Due in one year or less	$	24,019
Due in two to five years	3,550
Due in six to ten years	2,640
Available-for-sale debt securities	$	30,209

Revenue in excess of billings

Revenue in excess of billings – Revenue in excess of billings was comprised of the following:

(in thousands)	September 30, 2019		December 31, 2018
Conditional right to receive consideration	$	16,032	$	19,705
Unconditional right to receive consideration	9,713		10,753
Revenue in excess of billings	$	25,745	$	30,458

Intangibles

Intangibles – Intangibles were comprised of the following:

	September 30, 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	$	417,098	$	(334,336	)	$	82,762	$	388,477	$	(308,313	)	$	80,164
Customer lists/relationships	357,809		(190,993		)	166,816		379,570		(170,973		)	208,597
Trade names	32,361		(27,048		)	5,313		50,645		(26,204		)	24,441
Technology-based intangibles	34,080		(19,772		)	14,308		39,300		(14,007		)	25,293
Software to be sold	36,900		(18,601		)	18,299		36,900		(15,430		)	21,470
Other	700		(700		)	—		700		(700		)	—
Intangibles	$	878,948	$	(591,450	)	$	287,498	$	895,592	$	(535,627	)	$	359,965

Estimated future amortization expense

Based on the intangibles in service as of September 30, 2019, estimated future amortization expense is as follows:

(in thousands)	Estimated amortization expense
Remainder of 2019	$	27,463
2020	89,907
2021	68,423
2022	41,251
2023	26,533

Acquired intangibles

The following intangibles were acquired during the nine months ended September 30, 2019:

(in thousands)	Amount		Weighted-average amortization period (in years)
Internal-use software	$	33,370	3
Customer lists/relationships(1)	11,970		8
Acquired intangibles	$	45,340	5

⁽¹⁾ These asset purchases did not qualify as business combinations.

Goodwill

Goodwill – Changes in goodwill during the nine months ended September 30, 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
Impairment charges (Note 8)	(242,267		)	(115,474		)	—		(357,741		)
Measurement-period adjustments for prior year acquisitions (Note 6)	(340		)	(1,427		)	—		(1,767		)
Currency translation adjustment	(832		)	—			—		(832		)
Balance, September 30, 2019	$	395,260		$	256,520		$	148,506	$	800,286
Balance, September 30, 2019:
Goodwill, gross	764,094			371,994			148,506		1,284,594
Accumulated impairment charges	(368,834		)	(115,474		)	—		(484,308		)
Goodwill, net of accumulated impairment charges	$	395,260		$	256,520		$	148,506	$	800,286

Other non-current assets

Other non-current assets – Other non-current assets were comprised of the following:

(in thousands)	September 30, 2019		December 31, 2018
Loans and notes receivable from Safeguard distributors	$	67,924	$	78,693
Prepaid product discounts	51,748		54,642
Postretirement benefit plan asset	45,808		41,259
Deferred sales commissions(1)	10,603		6,482
Deferred advertising costs	4,089		5,746
Other	9,431		9,286
Other non-current assets	$	189,603	$	196,108

⁽¹⁾ Amortization of deferred sales commissions was $2,246 for the nine months ended September 30, 2019 and $2,033 for the nine months ended September 30, 2018.

Changes in prepaid product discounts

Changes in prepaid product discounts during the nine months ended September 30, 2019 and 2018 were as follows:

	Nine Months Ended September 30,
(in thousands)	2019			2018
Balance, beginning of year	$	54,642		$	63,895
Additions(1)	15,275			11,695
Amortization	(17,861		)	(16,976		)
Other	(308		)	(75		)
Balance, end of period	$	51,748		$	58,539

⁽¹⁾ Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $20,370 for the nine months ended September 30, 2019 and $19,125 for the nine months ended September 30, 2018.

Accrued liabilities

Accrued liabilities – Accrued liabilities were comprised of the following:

(in thousands)	September 30, 2019		December 31, 2018
Funds held for customers	$	93,337	$	99,818
Deferred revenue(1)	39,845		54,313
Employee profit sharing/cash bonus	31,323		31,286
Wages	13,055		6,359
Operating lease liabilities	12,840		—
Prepaid product discounts due within one year	11,221		10,926
Customer rebates	9,845		9,555
Restructuring and integration (Note 9)	6,138		3,320
Other	46,655		68,704
Accrued liabilities	$	264,259	$	284,281

⁽¹⁾ $45,032 of the December 31, 2018 amount was recognized as revenue during the nine months ended September 30, 2019.

Other non-current liabilities

Other non-current liabilities – Other non-current liabilities were comprised of the following:

(in thousands)	September 30, 2019		December 31, 2018
Prepaid product discounts	$	6,860	$	12,513
Other	28,038		27,367
Other non-current liabilities	$	34,898	$	39,880

Supplemental cash flow information

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)	September 30, 2019		September 30, 2018
Cash and cash equivalents	$	73,472	$	57,851
Restricted cash and restricted cash equivalents included in funds held for customers	78,639		68,263
Total cash, cash equivalents, restricted cash and restricted cash equivalents	$	152,111	$	126,114