Supplemental guarantor financial information

Our long-term notes due in 2019 and 2020 (Note 11), as well as obligations under our credit facility, are jointly and severally guaranteed on a full and unconditional basis, subject to the release provisions described herein, by certain 100%-owned subsidiaries. The subsidiary guarantees with respect to our long-term notes are subject to release upon the occurrence of certain events: the sale of all or substantially all of a subsidiary's assets, when the requirements for defeasance of the guaranteed securities have been satisfied, when the subsidiary is declared an unrestricted subsidiary, or upon satisfaction and discharge of the indenture.

The following condensed supplemental consolidating financial information reflects the summarized financial information of Deluxe Corporation, the guarantors on a combined basis and the non-guarantor subsidiaries on a combined basis. Separate financial statements of the guarantors are not presented because the guarantors are jointly, severally, fully and unconditionally liable under the guarantees, subject to the release provisions described herein, and we believe that the condensed consolidating financial statements presented are sufficient to provide an understanding of the financial position, results of operations and cash flows of the guarantors.

We are an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations and the sharing of assets. Therefore, we do not represent that the financial information presented is indicative of the financial position, results of operations or cash flows which the entities would have reported if they had operated independently. The condensed consolidating financial statements should be read in conjunction with our consolidated financial statements.

Deluxe Corporation

Condensed Consolidating Balance Sheet

(Unaudited)



	September 30, 2014
	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	133,927	$	3,093	$	51,220	$	(239	)	$	188,001
Trade accounts receivable, net	—		77,046		14,322		—			91,368
Inventories and supplies	—		30,789		5,310		—			36,099
Deferred income taxes	2,722		2,911		62		—			5,695
Funds held for customers	—		—		39,546		—			39,546
Other current assets	11,678		19,268		3,341		—			34,287
Total current assets	148,327		133,107		113,801		(239		)	394,996
Deferred income taxes	—		—		1,510		—			1,510
Long-term investments	38,186		7,839		—		—			46,025
Property, plant and equipment, net	4,891		83,127		6,430		—			94,448
Assets held for sale	—		3,104		23,694		—			26,798
Intangibles, net	633		144,280		2,256		—			147,169
Goodwill	—		821,138		1,782		—			822,920
Investments in consolidated subsidiaries	1,106,617		89,487		—		(1,196,104		)	—
Intercompany receivable	8,168		—		—		(8,168		)	—
Other non-current assets	10,224		126,911		463		—			137,598
Total assets	$	1,317,046	$	1,408,993	$	149,936	$	(1,204,511	)	$	1,671,464

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	11,523	$	58,759	$	4,237	$	(239	)	$	74,280
Accrued liabilities	27,749		102,703		46,663		—			177,115
Long-term debt due within one year	254,282		—		9		—			254,291
Total current liabilities	293,554		161,462		50,909		(239		)	505,686
Long-term debt	390,305		—		16		—			390,321
Deferred income taxes	1,620		82,321		—		—			83,941
Intercompany payable	—		7,409		759		(8,168		)	—
Other non-current liabilities	27,399		51,184		8,765		—			87,348
Total shareholders' equity	604,168		1,106,617		89,487		(1,196,104		)	604,168
Total liabilities and shareholders' equity	$	1,317,046	$	1,408,993	$	149,936	$	(1,204,511	)	$	1,671,464

Deluxe Corporation

Condensed Consolidating Balance Sheet

(Unaudited)



	December 31, 2013
	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	71,972	$	6,991	$	45,229	$	(3,103	)	$	121,089
Trade accounts receivable, net	—		70,317		17,732		—			88,049
Inventories and supplies	—		24,173		4,793		—			28,966
Deferred income taxes	2,698		4,198		50		—			6,946
Funds held for customers	—		—		42,425		—			42,425
Other current assets	8,266		20,118		3,454		—			31,838
Total current assets	82,936		125,797		113,683		(3,103		)	319,313
Deferred income taxes	—		—		1,851		—			1,851
Long-term investments	35,155		9,296		—		—			44,451
Property, plant and equipment, net	—		93,472		7,871		—			101,343
Assets held for sale	—		4,046		21,405		—			25,451
Intangibles, net	—		151,361		2,215		—			153,576
Goodwill	—		820,898		1,879		—			822,777
Investments in consolidated subsidiaries	1,155,705		82,918		—		(1,238,623		)	—
Intercompany receivable	—		39,192		1,373		(40,565		)	—
Other non-current assets	8,077		92,461		229		—			100,767
Total assets	$	1,281,873	$	1,419,441	$	150,506	$	(1,282,291	)	$	1,569,529

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	11,831	$	54,655	$	8,109	$	(3,103	)	$	71,492
Accrued liabilities	13,794		97,577		51,619		—			162,990
Long-term debt due within one year	255,589		—		—		—			255,589
Total current liabilities	281,214		152,232		59,728		(3,103		)	490,071
Long-term debt	385,115		—		—		—			385,115
Deferred income taxes	2,821		79,993		—		—			82,814
Intercompany payable	40,565		—		—		(40,565		)	—
Other non-current liabilities	21,701		31,511		7,860		—			61,072
Total shareholders' equity	550,457		1,155,705		82,918		(1,238,623		)	550,457
Total liabilities and shareholders' equity	$	1,281,873	$	1,419,441	$	150,506	$	(1,282,291	)	$	1,569,529

Deluxe Corporation

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)



	Quarter Ended September 30, 2014
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	326,483		$	24,124		$	—		$	350,607
Service revenue	21,597			56,883			6,929			(22,812		)	62,597
Total revenue	21,597			383,366			31,053			(22,812		)	413,204
Cost of products	—			(113,576		)	(12,341		)	—			(125,917		)
Cost of services	(22,115		)	(22,878		)	(1,762		)	22,522			(24,233		)
Total cost of revenue	(22,115		)	(136,454		)	(14,103		)	22,522			(150,150		)
Gross profit	(518		)	246,912			16,950			(290		)	263,054
Operating expenses	—			(168,313		)	(11,831		)	290			(179,854		)
Asset impairment charge	—			(6,468		)	—			—			(6,468		)
Operating (loss) income	(518		)	72,131			5,119			—			76,732
Interest expense	(9,560		)	(4,161		)	—			4,141			(9,580		)
Other income	3,826			399			237			(4,141		)	321
(Loss) income before income taxes	(6,252		)	68,369			5,356			—			67,473
Income tax benefit (provision)	3,930			(25,524		)	(1,448		)	—			(23,042		)
(Loss) income before equity in earnings of consolidated subsidiaries	(2,322		)	42,845			3,908			—			44,431
Equity in earnings of consolidated subsidiaries	46,753			3,908			—			(50,661		)	—
Net income	$	44,431		$	46,753		$	3,908		$	(50,661	)	$	44,431

Comprehensive income	$	41,585		$	43,609		$	442		$	(44,051	)	$	41,585

Deluxe Corporation

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)



	Quarter Ended September 30, 2013
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	321,039		$	21,148		$	—		$	342,187
Service revenue	2,220			50,972			6,580			(3,879		)	55,893
Total revenue	2,220			372,011			27,728			(3,879		)	398,080
Cost of products	—			(106,523		)	(10,198		)	—			(116,721		)
Cost of services	(2,573		)	(23,516		)	(2,005		)	2,592			(25,502		)
Total cost of revenue	(2,573		)	(130,039		)	(12,203		)	2,592			(142,223		)
Gross profit	(353		)	241,972			15,525			(1,287		)	255,857
Operating expenses	—			(165,539		)	(11,887		)	1,287			(176,139		)
Operating (loss) income	(353		)	76,433			3,638			—			79,718
Interest expense	(9,632		)	(2,194		)	(3		)	2,167			(9,662		)
Other income (expense)	2,092			(162		)	794			(2,167		)	557
(Loss) income before income taxes	(7,893		)	74,077			4,429			—			70,613
Income tax benefit (provision)	5,439			(28,125		)	(1,024		)	—			(23,710		)
(Loss) income before equity in earnings of consolidated subsidiaries	(2,454		)	45,952			3,405			—			46,903
Equity in earnings of consolidated subsidiaries	49,357			3,405			—			(52,762		)	—
Net income	$	46,903		$	49,357		$	3,405		$	(52,762	)	$	46,903

Comprehensive income	$	48,907		$	51,093		$	4,622		$	(55,715	)	$	48,907

Deluxe Corporation

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)



	Nine Months Ended September 30, 2014
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	970,175		$	70,559		$	—		$	1,040,734
Service revenue	64,727			168,630			22,008			(70,530		)	184,835
Total revenue	64,727			1,138,805			92,567			(70,530		)	1,225,569
Cost of products	—			(328,277		)	(35,575		)	—			(363,852		)
Cost of services	(65,910		)	(72,083		)	(6,908		)	67,784			(77,117		)
Total cost of revenue	(65,910		)	(400,360		)	(42,483		)	67,784			(440,969		)
Gross profit	(1,183		)	738,445			50,084			(2,746		)	784,600
Operating expenses	—			(502,294		)	(36,097		)	2,746			(535,645		)
Asset impairment charge	—			(6,468		)	—			—			(6,468		)
Operating (loss) income	(1,183		)	229,683			13,987			—			242,487
Interest expense	(28,536		)	(10,632		)	—			10,491			(28,677		)
Other income	9,525			1,331			455			(10,491		)	820
(Loss) income before income taxes	(20,194		)	220,382			14,442			—			214,630
Income tax benefit (provision)	9,883			(78,691		)	(3,992		)	—			(72,800		)
(Loss) income before equity in earnings of consolidated subsidiaries	(10,311		)	141,691			10,450			—			141,830
Equity in earnings of consolidated subsidiaries	152,141			10,450			—			(162,591		)	—
Net income	$	141,830		$	152,141		$	10,450		$	(162,591	)	$	141,830

Comprehensive income	$	140,164		$	149,581		$	6,924		$	(156,505	)	$	140,164

Deluxe Corporation

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)



	Nine Months Ended September 30, 2013
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	962,380		$	52,473		$	—		$	1,014,853
Service revenue	6,570			137,517			19,632			(11,505		)	152,214
Total revenue	6,570			1,099,897			72,105			(11,505		)	1,167,067
Cost of products	—			(317,908		)	(22,534		)	—			(340,442		)
Cost of services	(5,227		)	(62,567		)	(6,452		)	5,621			(68,625		)
Total cost of revenue	(5,227		)	(380,475		)	(28,986		)	5,621			(409,067		)
Gross profit	1,343			719,422			43,119			(5,884		)	758,000
Operating expenses	—			(491,374		)	(32,598		)	5,884			(518,088		)
Operating income	1,343			228,048			10,521			—			239,912
Interest expense	(28,655		)	(7,016		)	(3		)	6,970			(28,704		)
Other income (expense)	6,184			(510		)	2,344			(6,970		)	1,048
(Loss) income before income taxes	(21,128		)	220,522			12,862			—			212,256
Income tax benefit (provision)	12,018			(80,048		)	(3,296		)	—			(71,326		)
(Loss) income before equity in earnings of consolidated subsidiaries	(9,110		)	140,474			9,566			—			140,930
Equity in earnings of consolidated subsidiaries	150,040			9,566			—			(159,606		)	—
Net income	$	140,930		$	150,040		$	9,566		$	(159,606	)	$	140,930

Comprehensive income	$	140,945		$	149,253		$	7,221		$	(156,474	)	$	140,945

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

(Unaudited)



	Nine Months Ended September 30, 2014
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(227	)	$	191,159		$	9,563		$	2,864		$	203,359

Cash flows from investing activities:
Purchases of capital assets	(560		)	(27,910		)	(1,179		)	—			(29,649		)
Payments for acquisitions, net of cash acquired	—			(12,144		)	—			—			(12,144		)
Proceeds from company-owned life insurance policies	897			—			—			—			897
Other	(319		)	770			11			—			462
Net cash provided (used) by investing activities	18			(39,284		)	(1,168		)	—			(40,434		)
Cash flows from financing activities:
Net payments on short-term debt	—			(125		)	—			—			(125		)
Payments on long-term debt	(645		)	(170		)	(5		)	—			(820		)
Payments for debt issue costs	(1,085		)	—			—			—			(1,085		)
Proceeds from issuing shares under employee plans	8,814			—			—			—			8,814
Excess tax benefit from share-based employee awards	2,581			—			—			—			2,581
Payments for common shares repurchased	(60,119		)	—			—			—			(60,119		)
Cash dividends paid to shareholders	(42,631		)	—			—			—			(42,631		)
Advances from (to) consolidated subsidiaries	155,249			(155,478		)	229			—			—
Net cash provided (used) by financing activities	62,164			(155,773		)	224			—			(93,385		)

Effect of exchange rate change on cash	—			—			(2,628		)	—			(2,628		)

Net change in cash and cash equivalents	61,955			(3,898		)	5,991			2,864			66,912
Cash and cash equivalents, beginning of year	71,972			6,991			45,229			(3,103		)	121,089
Cash and cash equivalents, end of period	$	133,927		$	3,093		$	51,220		$	(239	)	$	188,001

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

(Unaudited)



	Nine Months Ended September 30, 2013
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(4,192	)	$	172,604		$	15,561		$	—		$	183,973

Cash flows from investing activities:
Purchases of capital assets	—			(23,645		)	(3,141		)	—			(26,786		)
Payments for acquisitions, net of cash acquired	—			(48,114		)	—			—			(48,114		)
Proceeds from company-owned life insurance policies	3,641			958			—			—			4,599
Other	1,260			204			8			—			1,472
Net cash provided (used) by investing activities	4,901			(70,597		)	(3,133		)	—			(68,829		)
Cash flows from financing activities:
Payments on long-term debt	(125		)	—			(1,331		)	—			(1,456		)
Payments for debt issue costs	(236		)	—			—			—			(236		)
Change in book overdrafts	(270		)	(3,066		)	—			3,066			(270		)
Proceeds from issuing shares under employee plans	12,881			—			—			—			12,881
Excess tax benefit from share-based employee awards	1,582			—			—			—			1,582
Payments for common shares repurchased	(33,798		)	—			—			—			(33,798		)
Cash dividends paid to shareholders	(38,027		)	—			—			—			(38,027		)
Advances from (to) consolidated subsidiaries	97,427			(98,606		)	1,179			—			—
Net cash provided (used) by financing activities	39,434			(101,672		)	(152		)	3,066			(59,324		)

Effect of exchange rate change on cash	—			—			(1,215		)	—			(1,215		)

Net change in cash and cash equivalents	40,143			335			11,061			3,066			54,605
Cash and cash equivalents, beginning of year	14,862			3,228			31,346			(4,001		)	45,435
Cash and cash equivalents, end of period	$	55,005		$	3,563		$	42,407		$	(935	)	$	100,040