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SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION
 12 Months Ended
Dec. 31, 2019
Supplemental balance sheet and cash flow information [Abstract]  
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION
Trade accounts receivable – Net trade accounts receivable was comprised of the following at December 31:
(in thousands)
 
2019
 
2018
Trade accounts receivable – gross
 
$
168,406

 
$
177,501

Allowances for uncollectible accounts
 
(4,985
)
 
(3,639
)
Trade accounts receivable – net
 
$
163,421

 
$
173,862



Changes in the allowances for uncollectible accounts for the years ended December 31 were as follows:
(in thousands)
 
2019
 
2018
 
2017
Balance, beginning of year
 
$
3,639

 
$
2,884

 
$
2,828

Bad debt expense
 
5,213

 
3,622

 
3,208

Write-offs, net of recoveries
 
(3,867
)
 
(2,867
)
 
(3,152
)
Balance, end of year
 
$
4,985

 
$
3,639

 
$
2,884



Inventories and supplies – Inventories and supplies were comprised of the following at December 31:
(in thousands)
 
2019
 
2018
Raw materials
 
$
6,977

 
$
7,543

Semi-finished goods
 
7,368

 
7,273

Finished goods
 
21,982

 
27,608

Supplies
 
3,594

 
4,017

Inventories and supplies
 
$
39,921

 
$
46,441



Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following:
 
 
December 31, 2019
(in thousands)
 
Cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
Funds held for customers:(1)
 
 
 
 
 
 
 
 
Domestic money market fund
 
$
18,000

 
$
—

 
$
—

 
$
18,000

Canadian and provincial government securities
 
9,056

 
—

 
(304
)
 
8,752

Canadian guaranteed investment certificates
 
7,698

 
—

 
—

 
7,698

Available-for-sale debt securities
 
$
34,754

 
$
—


$
(304
)

$
34,450


(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2019, also included cash of $83,191.

 
 
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 December 31, 2019 were as follows:
(in thousands)
 
Fair value
Due in one year or less
 
$
28,700

Due in two to five years
 
3,282

Due in six to ten years
 
2,468

Available-for-sale debt securities
 
$
34,450



Further information regarding the fair value of available-for-sale debt securities can be found in Note 8.

Revenue in excess of billings – Revenue in excess of billings was comprised of the following at December 31:

(in thousands)
 
2019
 
2018
Conditional right to receive consideration
 
$
24,499

 
$
19,705

Unconditional right to receive consideration
 
8,291

 
10,753

Revenue in excess of billings
 
$
32,790

 
$
30,458



Property, plant and equipment – Property, plant and equipment was comprised of the following at December 31:
 
 
2019
 
2018
(in thousands)
 
Gross carrying amount
 
Accumulated depreciation
 
Net carrying amount
 
Gross carrying amount
 
Accumulated depreciation
 
Net carrying amount
Machinery and equipment
 
$
327,151

 
$
(282,741
)
 
$
44,410

 
$
313,000

 
$
(275,721
)
 
$
37,279

Buildings and improvements
 
118,284

 
(86,162
)
 
32,122

 
116,348

 
(83,317
)
 
33,031

Land and improvements
 
28,212

 
(8,277
)
 
19,935

 
28,199

 
(8,167
)
 
20,032

Property, plant and equipment
 
$
473,647

 
$
(377,180
)
 
$
96,467

 
$
457,547

 
$
(367,205
)
 
$
90,342



Assets held for sale – Assets held for sale as of December 31, 2019 consisted of a Small Business Services customer list intangible asset and certain assets within Financial Services. The Small Business Services customer list was also held for sale as of December 31, 2018. We are actively marketing these assets and expect the selling prices will equal or exceed their current carrying values.

During 2018, we sold 2 providers of printed and promotional products and 2 small business distributors, as well as several small business customer lists. During 2017, we sold a provider of printed and promotional products, assets associated with certain custom printing activities and 3 small business distributors. All of these assets were included in our Small Business Services segment and consisted primarily of intangible assets. We determined that these assets would be better positioned for long-term growth if they were managed by independent distributors. Subsequent to the sales, the assets were 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. During 2018, we entered into aggregate notes receivable of $35,616 in conjunction with these sales and we recognized aggregate net gains of $15,641 within SG&A expense on the consolidated statement of income. During 2017, we entered into aggregate notes receivable of $24,497 in conjunction with these sales and we recognized aggregate net gains of $8,703 within SG&A expense on the consolidated statement of income.

During 2017, we recorded aggregate pretax asset impairment charges of $8,250 related to a small business distributor sold during the second quarter of 2017. The impairment charges reduced the carrying value of the business to its fair value less costs to sell, as we finalized the sale of this business.

Intangibles – Amortizable intangibles were comprised of the following at December 31:
 
 
2019
 
2018
(in thousands)
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Internal-use software
 
$
380,905

 
$
(299,698
)
 
$
81,207

 
$
388,477

 
$
(308,313
)
 
$
80,164

Customer lists/relationships
 
348,055

 
(187,462
)
 
160,593

 
379,570

 
(170,973
)
 
208,597

Software to be sold
 
36,900

 
(19,657
)
 
17,243

 
36,900

 
(15,430
)
 
21,470

Technology-based intangibles
 
34,780

 
(22,122
)
 
12,658

 
40,000

 
(14,707
)
 
25,293

Trade names
 
32,505

 
(28,084
)
 
4,421

 
50,645

 
(26,204
)
 
24,441

Intangibles
 
$
833,145

 
$
(557,023
)

$
276,122


$
895,592


$
(535,627
)

$
359,965



In each of the past 3 years, we recorded asset impairment charges related to our intangible assets. Further information can be found in Note 8.

Amortization expense related to intangibles was as follows for the years ended December 31:
(in thousands)
 
2019
 
2018
 
2017
Customer lists/relationships
 
$
51,243

 
$
57,243

 
$
54,450

Internal-use software
 
41,258

 
38,307

 
35,952

Technology-based intangibles
 
7,415

 
7,607

 
6,400

Trade names
 
5,391

 
6,362

 
5,789

Software to be sold
 
4,227

 
5,009

 
4,193

Amortization of intangibles
 
$
109,534

 
$
114,528


$
106,784



Based on the intangibles in service as of December 31, 2019, estimated amortization expense for each of the next five years ending December 31 is as follows:
(in thousands)
 
Estimated
amortization
expense
2020
 
$
90,381

2021
 
69,249

2022
 
42,415

2023
 
28,133

2024
 
17,296



We acquire internal-use software in the normal course of business. We also acquire intangible assets in conjunction with acquisitions (Note 6). The following intangible assets were acquired during the years ended December 31:
 
 
2019
 
2018
 
2017
(in thousands)
 
Amount
 
Weighted-average amortization period
(in years)
 
Amount
 
Weighted-average amortization period
(in years)
 
Amount
 
Weighted-average amortization period
(in years)
Internal-use software
 
$
43,991

 
3
 
$
42,744

 
3
 
$
38,422

 
3
Customer lists/relationships(1)
 
17,771

 
8
 
60,775

 
8
 
60,034

 
7
Trade names
 
—

 
—
 
14,700

 
7
 
10,000

 
6
Technology-based intangibles
 
—

 
—
 
7,500

 
5
 
800

 
3
Software to be sold
 
—

 
—
 
—

 
—
 
2,200

 
5
Acquired intangibles
 
$
61,762

 
5
 
$
125,719

 
6
 
$
111,456

 
6


(1) We acquired customer lists that did not qualify as business combinations of $11,956 during 2019 and $1,188 during 2018.

Information regarding acquired intangibles does not include measurement-period adjustments for changes in the estimated fair values of intangibles acquired through acquisitions. Information regarding these adjustments can be found in Note 6.

Goodwill – 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, 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

Impairment charge (Note 8)
 
(78,188
)
 
—

 
—

 
(78,188
)
Goodwill resulting from acquisitions (Note 6)
 
59,488

 
46,419

 
—

 
105,907

Measurement-period adjustments for prior year acquisitions (Note 6)
 
1,420

 
2,763

 
—

 
4,183

Adjustment of assets held for sale
 
635

 
—

 
—

 
635

Currency translation adjustment
 
(2,845
)
 
—

 
—

 
(2,845
)
Balance, December 31, 2018
 
$
638,699

 
$
373,421

 
$
148,506

 
$
1,160,626

 
 
 
 
 
 
 
 
 
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
)
Goodwill resulting from acquisitions (Note 6)
 
—

 
4,174

 
—

 
4,174

Measurement-period adjustments for prior year acquisitions (Note 6)
 
(340
)
 
(1,426
)
 
—

 
(1,766
)
Currency translation adjustment
 
(806
)
 
—

 
—

 
(806
)
Balance, December 31, 2019
 
$
395,286

 
$
260,695

 
$
148,506

 
$
804,487

 
 
 
 
 
 
 
 
 
Balance, December 31, 2019:
 

 


 


 


Goodwill, gross
 
$
764,120

 
$
376,169

 
$
148,506

 
$
1,288,795

Accumulated impairment charges
 
(368,834
)
 
(115,474
)
 
—

 
(484,308
)
Goodwill, net of accumulated impairment charges
 
$
395,286

 
$
260,695


$
148,506


$
804,487



Other non-current assets – Other non-current assets were comprised of the following at December 31:
(in thousands)
 
2019
 
2018
Loans and notes receivable from Safeguard distributors
 
$
66,872

 
$
78,693

Postretirement benefit plan asset (Note 14)
 
56,743

 
41,259

Prepaid product discounts
 
51,145

 
54,642

Deferred sales commissions(1)
 
9,682

 
6,482

Other
 
13,428

 
15,032

Other non-current assets
 
$
197,870

 
$
196,108



(1) Amortization of deferred sales commission was $3,108 for 2019 and $2,722 for 2018.

Changes in prepaid product discounts were as follows for the years ended December 31:
(in thousands)
 
2019
 
2018
 
2017
Balance, beginning of year
 
$
54,642

 
$
63,895

 
$
65,792

Additions(1)
 
21,068

 
14,023

 
18,224

Amortization
 
(24,055
)
 
(22,941
)
 
(19,969
)
Other
 
(510
)
 
(335
)
 
(152
)
Balance, end of year
 
$
51,145

 
$
54,642

 
$
63,895

 
(1) Prepaid product discounts are generally accrued upon contract execution. Cash payments made for prepaid product discounts were $25,637 for 2019, $23,814 for 2018 and $27,079 for 2017.

Accrued liabilities – Accrued liabilities were comprised of the following at December 31:
(in thousands)
 
2019
 
2018
Deferred revenue(1)
 
$
46,098

 
$
54,313

Employee cash bonuses
 
36,918

 
31,286

Prepaid product discounts due within one year
 
14,709

 
10,926

Operating lease liabilities
 
12,898

 
—

Customer rebates
 
8,944

 
9,555

Other
 
59,771

 
78,383

Accrued liabilities
 
$
179,338

 
$
184,463



(1) $51,386 of the December 31, 2018 amount was recognized as revenue during 2019.

Supplemental cash flow information – Supplemental cash flow information was as follows for the years ended December 31:
(in thousands)
 
2019
 
2018
 
2017
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
73,620

 
$
59,740

 
$
59,240

Restricted cash and restricted cash equivalents included in funds held for customers
 
101,191

 
85,519

 
69,579

Total cash, cash equivalents, restricted cash and restricted cash equivalents
 
$
174,811

 
$
145,259

 
$
128,819

Income taxes paid
 
$
60,764

 
$
88,253

 
$
124,878

Interest paid
 
33,227

 
25,910

 
19,465

Non-cash investing activities:
 
 
 
 
 
 
Proceeds from sales of assets – notes receivable
 
1,685

 
35,616

 
24,497