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Supplemental balance sheet and cash flow information (Tables)
 3 Months Ended
Mar. 31, 2020
Inventories and supplies
Inventories and supplies – Inventories and supplies were comprised of the following:
(in thousands)
 
March 31,
2020
 
December 31,
2019
Raw materials
 
$
7,355

 
$
6,977

Semi-finished goods
 
7,532

 
7,368

Finished goods
 
24,091

 
21,982

Supplies
 
3,703

 
3,594

Inventories and supplies
 
$
42,681

 
$
39,921
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:
 
 
March 31, 2020
(in thousands)
 
Cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
Funds held for customers:(1)
 
 
 
 
 
 
 
 
Domestic money market fund
 
$
11,000

 
$
—

 
$
—

 
$
11,000

Canadian and provincial government securities
 
8,302

 
—

 
(38
)
 
8,264

Canadian guaranteed investment certificates
 
7,017

 
—

 
—

 
7,017

Available-for-sale debt securities
 
$
26,319

 
$
—

 
$
(38
)
 
$
26,281


(1) Funds held for customers, as reported on the consolidated balance sheet as of March 31, 2020, also included cash of $64,657.

 
 
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.
Expected maturities of available-for-sale debt securities
Expected maturities of available-for-sale debt securities as of March 31, 2020 were as follows:
(in thousands)
 
Fair value
Due in one year or less
 
$
20,323

Due in two to five years
 
2,884

Due in six to ten years
 
3,075

Available-for-sale debt securities
 
$
26,282
Revenue in excess of billings
Revenue in excess of billings – Revenue in excess of billings was comprised of the following:
(in thousands)
 
March 31,
2020
 
December 31,
2019
Conditional right to receive consideration
 
$
26,971

 
$
24,499

Unconditional right to receive consideration
 
6,725

 
8,291

Revenue in excess of billings
 
$
33,696

 
$
32,790
Intangibles
Intangibles – Intangibles were comprised of the following:
 
 
March 31, 2020
 
December 31, 2019
(in thousands)
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
 
Gross carrying amount
 
Accumulated amortization
 
Net carrying amount
Amortizable intangibles:
 
 

 
 

 
 

 
 

 
 

 
 

Internal-use software
 
$
387,356

 
$
(312,444
)
 
$
74,912

 
$
380,905

 
$
(299,698
)
 
$
81,207

Customer lists/relationships
 
307,372

 
(170,776
)
 
136,596

 
348,055

 
(187,462
)
 
160,593

Software to be sold
 
36,900

 
(20,714
)
 
16,186

 
36,900

 
(19,657
)
 
17,243

Technology-based intangibles
 
34,613

 
(23,763
)
 
10,850

 
34,780

 
(22,122
)
 
12,658

Trade names
 
29,512

 
(28,042
)
 
1,470

 
32,505

 
(28,084
)
 
4,421

Intangibles
 
$
795,753

 
$
(555,739
)

$
240,014


$
833,145


$
(557,023
)

$
276,122
Estimated future amortization expense
Based on the intangibles in service as of March 31, 2020, estimated future amortization expense is as follows:
(in thousands)
 
Estimated
amortization
expense
Remainder of 2020
 
$
65,994

2021
 
74,042

2022
 
50,325

2023
 
31,879

2024
 
15,013
Goodwill

Goodwill – Changes in goodwill by reportable segment and in total for the quarter ended March 31, 2020 were as follows :
(in thousands)
 
Payments
 
Cloud Solutions
 
Promotional Solutions
 
Checks
 
Total
Balance, December 31, 2019:
 
 
 
 
 
 
 
 
 
 
Goodwill, gross
 
$
168,165

 
$
432,984

 
$
252,834

 
$
434,812

 
$
1,288,795

Accumulated impairment charges
 
—

 
(357,741
)
 
(126,567
)
 
—

 
(484,308
)
Goodwill, net of accumulated impairment charges
 
168,165

 
75,243


126,267

 
434,812


804,487

Impairment charges (Note 7)
 
—

 
(4,317
)
 
(63,356
)
 
—

 
(67,673
)
Currency translation adjustment
 
—

 
—

 
(126
)
 
—

 
(126
)
Balance, March 31, 2020
 
$
168,165

 
$
70,926

 
$
62,785

 
$
434,812

 
$
736,688

 
 
 
 
 
 
 
 
 
 
 
Balance, March 31, 2020:
 
 

 
 

 
 

 
 
 
 

Goodwill, gross
 
$
168,165

 
$
432,984

 
$
252,708

 
$
434,812

 
$
1,288,669

Accumulated impairment charges
 
—

 
(362,058
)
 
(189,923
)
 
—

 
(551,981
)
Goodwill, net of accumulated impairment charges
 
$
168,165

 
$
70,926


$
62,785

 
$
434,812


$
736,688
Other non-current assets
Other non-current assets – Other non-current assets were comprised of the following:
(in thousands)
 
March 31,
2020
 
December 31,
2019
Postretirement benefit plan asset
 
$
58,130

 
$
56,743

Loans and notes receivable from Safeguard distributors, net of allowance for doubtful accounts(1)
 
55,861

 
66,872

Prepaid product discounts
 
45,994

 
51,145

Deferred sales commissions(2)
 
9,530

 
9,682

Other
 
19,738

 
13,428

Other non-current assets
 
$
189,253

 
$
197,870



(1) Amount Includes the non-current portion of loans and note receivablles. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $3,366 as of March 31, 2020 and $3,511 as of December 31, 2019.

(2) Amortization of deferred sales commissions was $882 for the quarter ended March 31, 2020 and $697 for the quarter ended March 31, 2019.
Loans and notes receivable by credit quality Indicator
The following table presents loans and notes receivable from Safeguard distributors, including the current portion, by credit quality indicator and by year of origination, as of March 31, 2020. There were no write-offs or recoveries recorded during the quarter ended March 31, 2020.
 
 
Loans and notes receivable from distributors amortized cost basis by origination year
 
 
(in thousands)
 
2019
 
2018
 
2017
 
2016
 
Prior
 
Total
Risk rating:
 
 
 
 
 
 
 
 
 
 
 
 
1-2 internal grade
 
$
6,313

 
$
24,352

 
$
22,690

 
$
213

 
$
4,644

 
$
58,212

3-4 internal grade
 
—

 
7,673

 
—

 
—

 
3,757

 
11,430

Loans and notes receivable
 
$
6,313

 
$
32,025

 
$
22,690

 
$
213

 
$
8,401

 
$
69,642
Changes in prepaid product discounts
Changes in prepaid product discounts during the quarters ended March 31, 2020 and 2019 were as follows:
 
 
Quarter Ended March 31,
(in thousands)
 
2020
 
2019
Balance, beginning of year
 
$
51,145

 
$
54,642

Additions(1)
 
2,470

 
9,553

Amortization
 
(7,077
)
 
(5,757
)
Other
 
(544
)
 
(201
)
Balance, end of period
 
$
45,994

 
$
58,237

 
(1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $7,321 for the quarter ended March 31, 2020 and $9,189 for the quarter ended March 31, 2019.
Accrued liabilities
Accrued liabilities – Accrued liabilities were comprised of the following:
(in thousands)
 
March 31,
2020
 
December 31,
2019
Deferred revenue(1)
 
$
46,401

 
$
46,098

Employee cash bonuses
 
13,818

 
36,918

Operating lease liabilities
 
12,924

 
12,898

Prepaid product discounts due within one year
 
11,772

 
14,709

Customer rebates
 
7,857

 
8,944

Other
 
68,348

 
59,771

Accrued liabilities
 
$
161,120

 
$
179,338


 
(1) $20,672 of the December 31, 2019 amount was recognized as revenue during the quarter ended March 31, 2020.
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)
 
March 31,
2020
 
March 31,
2019
Cash and cash equivalents
 
$
310,146

 
$
61,529

Restricted cash and restricted cash equivalents included in funds held for customers
 
75,657

 
76,971

Total cash, cash equivalents, restricted cash and restricted cash equivalents
 
$
385,803

 
$
138,500
Trade accounts receivable [Member]  
Allowance for uncollectible accounts
Trade accounts receivable – Changes in the allowance for uncollectible accounts included within trade accounts receivable for the quarters ended March 31, 2020 and 2019 were as follows:
 
 
Quarter Ended March 31,
(in thousands)
 
2020
 
2019
Balance, beginning of year
 
$
4,985

 
$
3,639

Bad debt expense
 
1,059

 
1,248

Write-offs and other
 
(2,098
)
 
(423
)
Balance, end of period
 
$
3,946

 
$
4,464
Revenue in excess of billings [Member]  
Allowance for uncollectible accounts
Upon adoption of ASU No. 2016-13 and related amendments on January 1, 2020 (Note 2), we recorded an allowance for uncollectible accounts related to revenue in excess of billings. Changes in this allowance for the quarter ended March 31, 2020 were as follows:
(in thousands)
 
Quarter Ended
March 31, 2020
Balance, beginning of year
 
$
—

Adoption of ASU No. 2016-13 (Note 2)
 
808

Bad debt expense
 
22

Balance, end of period
 
$
830
Loans and notes receivable [Member]  
Allowance for uncollectible accounts
Upon adoption of ASU No. 2016-13 and related amendments on January 1, 2020 (Note 2), we recorded an additional allowance for uncollectible accounts related to loans and notes receivable from Safeguard distributors. Changes in this allowance for the quarters ended March 31, 2020 and 2019 were as follows:
 
 
Quarter Ended March 31,
(in thousands)
 
2020
 
2019
Balance, beginning of year
 
$
284

 
$
284

Adoption of ASU No. 2016-13 (Note 2)
 
4,749

 
—

Bad debt expense
 
5,382

 
—

Balance, end of period
 
$
10,415

 
$
284