10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2016

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________________ to ________________________

Commission file number: 1-7945

DELUXE CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota (State or other jurisdiction of incorporation or organization)	41-0216800 (I.R.S. Employer Identification No.)
3680 Victoria St. N., Shoreview, Minnesota (Address of principal executive offices)	55126-2966 (Zip Code)

(651) 483-7111

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þYes   o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

þYes   o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes þ  No

The number of shares outstanding of registrant’s common stock, par value $1.00 per share, at July 20, 2016 was 48,767,272.

1

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

DELUXE CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share par value)

(Unaudited)

	June 30, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	69,592		$	62,427
Trade accounts receivable (net of allowances for uncollectible accounts of $3,401 and $4,816, respectively)	108,938			123,654
Inventories and supplies	38,086			41,956
Funds held for customers	77,126			53,343
Other current assets	39,251			42,605
Total current assets	332,993			323,985
Deferred income taxes	1,756			1,238
Long-term investments (including $1,792 and $2,091 of investments at fair value, respectively)	42,423			41,691
Property, plant and equipment (net of accumulated depreciation of $346,906 and $344,785, respectively)	84,883			85,732
Assets held for sale	13,967			13,969
Intangibles (net of accumulated amortization of $444,945 and $407,747, respectively)	297,515			285,311
Goodwill	977,092			976,415
Other non-current assets	118,273			113,812
Total assets	$	1,868,902		$	1,842,153
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	83,341		$	87,575
Accrued liabilities	210,589			228,423
Long-term debt due within one year	1,041			1,045
Total current liabilities	294,971			317,043
Long-term debt	612,787			627,973
Deferred income taxes	80,962			81,076
Other non-current liabilities	63,440			70,992
Commitments and contingencies (Notes 11 and 12)
Shareholders’ equity:
Common shares $1 par value (authorized: 500,000 shares; outstanding: June 30, 2016 – 48,760; December 31, 2015 – 49,019)	48,760			49,019
Retained earnings	817,202			751,253
Accumulated other comprehensive loss	(49,220		)	(55,203		)
Total shareholders’ equity	816,742			745,069
Total liabilities and shareholders’ equity	$	1,868,902		$	1,842,153

See Condensed Notes to Unaudited Consolidated Financial Statements

2

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share amounts)

(Unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Product revenue	$	359,821		$	358,897		$	726,006		$	713,911
Service revenue	90,821			76,977			183,934			155,581
Total revenue	450,642			435,874			909,940			869,492
Cost of products	(126,939		)	(128,256		)	(257,533		)	(251,996		)
Cost of services	(32,893		)	(27,682		)	(66,604		)	(56,624		)
Total cost of revenue	(159,832		)	(155,938		)	(324,137		)	(308,620		)
Gross profit	290,810			279,936			585,803			560,872
Selling, general and administrative expense	(198,726		)	(190,091		)	(400,198		)	(385,469		)
Net restructuring charges	(1,135		)	(966		)	(2,014		)	(1,233		)
Operating income	90,949			88,879			183,591			174,170
Loss on early debt extinguishment	—			—			—			(8,917		)
Interest expense	(5,183		)	(4,420		)	(10,426		)	(10,935		)
Other income	442			824			593			1,254
Income before income taxes	86,208			85,283			173,758			155,572
Income tax provision	(27,819		)	(29,220		)	(57,267		)	(53,569		)
Net income	$	58,389		$	56,063		$	116,491		$	102,003
Comprehensive income	$	59,282		$	57,327		$	122,474		$	97,510
Basic earnings per share	1.19			1.12			2.37			2.04
Diluted earnings per share	1.18			1.11			2.36			2.02
Cash dividends per share	0.30			0.30			0.60			0.60

See Condensed Notes to Unaudited Consolidated Financial Statements

3

DELUXE CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(in thousands)

(Unaudited)

	Common shares		Common shares par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total
Balance, December 31, 2015	49,019		$	49,019		$	—		$	751,253		$	(55,203	)	$	745,069
Net income	—		—			—			116,491			—			116,491
Cash dividends	—		—			—			(29,446		)	—			(29,446		)
Common shares issued	356		356			8,457			—			—			8,813
Common shares repurchased	(513	)	(513		)	(8,372		)	(21,096		)	—			(29,981		)
Other common shares retired	(102	)	(102		)	(6,158		)	—			—			(6,260		)
Fair value of share-based compensation	—		—			6,073			—			—			6,073
Other comprehensive income	—		—			—			—			5,983			5,983
Balance, June 30, 2016	48,760		$	48,760		$	—		$	817,202		$	(49,220	)	$	816,742

See Condensed Notes to Unaudited Consolidated Financial Statements

4

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	116,491		$	102,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	7,561			7,939
Amortization of intangibles	37,091			27,739
Amortization of contract acquisition costs	9,485			9,697
Deferred income taxes	(1,032		)	(1,368		)
Employee share-based compensation expense	6,865			5,940
Loss on early debt extinguishment	—			8,917
Other non-cash items, net	2,829			139
Changes in assets and liabilities, net of effect of acquisitions:
Trade accounts receivable	14,038			19,434
Inventories and supplies	3,924			27
Other current assets	1,268			4,060
Non-current assets	(1,723		)	608
Accounts payable	(4,487		)	(11,576		)
Contract acquisition payments	(14,341		)	(5,848		)
Other accrued and non-current liabilities	(49,703		)	(20,804		)
Net cash provided by operating activities	128,266			146,907
Cash flows from investing activities:
Purchases of capital assets	(22,184		)	(19,307		)
Payments for acquisitions, net of cash acquired	(28,497		)	(35,800		)
Proceeds from company-owned life insurance policies	3,053			—
Other	2,087			339
Net cash used by investing activities	(45,541		)	(54,768		)
Cash flows from financing activities:
Proceeds from short-term borrowings	—			75,000
Proceeds from issuing long-term debt	107,000			211,500
Payments on long-term debt, including costs of debt reacquisition	(128,584		)	(346,021		)
Proceeds from issuing shares under employee plans	4,193			4,135
Excess tax benefit from share-based employee awards	—			1,557
Employee taxes paid for shares withheld	(2,260		)	(871		)
Payments for common shares repurchased	(29,981		)	—
Cash dividends paid to shareholders	(29,446		)	(30,043		)
Other	(417		)	(286		)
Net cash used by financing activities	(79,495		)	(85,029		)
Effect of exchange rate change on cash	3,935			(3,725		)
Net change in cash and cash equivalents	7,165			3,385
Cash and cash equivalents, beginning of year	62,427			61,541
Cash and cash equivalents, end of period	$	69,592		$	64,926

See Condensed Notes to Unaudited Consolidated Financial Statements

5

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Note 1: Consolidated financial statements

The consolidated balance sheet as of June 30, 2016, the consolidated statements of comprehensive income for the quarters and six months ended June 30, 2016 and 2015, the consolidated statement of shareholders’ equity for the six months ended June 30, 2016, and the consolidated statements of cash flows for the six months ended June 30, 2016 and 2015 are unaudited. The consolidated balance sheet as of December 31, 2015 was derived from audited consolidated financial statements, but does not include all disclosures required by generally accepted accounting principles (GAAP) in the United States of America. In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any discussed in the notes below. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q, and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”).

During the quarter ended June 30, 2016, we identified an error in the balance sheet presentation of borrowings under our credit facility and the related asset for debt issuance costs. These amounts were previously presented as current items in our consolidated balance sheets, and we have determined that they should have been presented as non-current. This change also corrects the presentation of the cash flows associated with borrowings under our credit facility. Previously these cash flows were presented on a net basis. The change in the balance sheet presentation requires that they be presented on a gross basis.

We assessed the materiality of this error on prior periods' financial statements in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality, codified in Accounting Standards Codification (ASC) 250, Presentation of Financial Statements. We concluded that the error was not material to any prior annual or interim period and therefore, amendments of previously filed reports are not required. In accordance with ASC 250, we have corrected the error for all prior periods presented by revising the consolidated financial statements appearing herein. Periods not presented herein will be revised, as applicable, in future filings. The revisions had no impact on total assets, total liabilities, shareholders' equity, net income or net cash used by financing activities.

The impact of this revision on our unaudited consolidated balance sheet as of December 31, 2015 was as follows:

	December 31, 2015
(in thousands)	As Previously Reported		Adjustment			As Revised
Other current assets	$	44,608	$	(2,003	)	$	42,605
Total current assets	325,988		(2,003		)	323,985
Other non-current assets	111,809		2,003			113,812
Short-term borrowings	434,000		(434,000		)	—
Total current liabilities	751,043		(434,000		)	317,043
Long-term debt	193,973		434,000			627,973

The impact of this revision on our unaudited consolidated statement of cash flows for the six months ended June 30, 2015 was as follows:

	Six Months Ended June 30, 2015
(in thousands)	As Previously Reported			Adjustment			As Revised
Proceeds from short-term borrowings	$	148,000		$	(73,000	)	$	75,000
Proceeds from issuing long-term debt	—			211,500			211,500
Payments on long-term debt, including costs of debt reacquisition	(207,521		)	(138,500		)	(346,021		)

6

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Note 2: New accounting pronouncements

Recently adopted accounting pronouncements – In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The standard requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. We adopted this standard on January 1, 2016. As our accounting treatment for these awards was in compliance with the new guidance, adoption of this standard had no impact on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the consolidated balance sheets as a direct reduction from the carrying amount of the debt liability. We adopted this standard on January 1, 2016, applying it retrospectively. The consolidated balance sheet as of December 31, 2015 reflects the reclassification of debt issuance costs of $2,249 from other non-current assets to long-term debt. The amount of debt issuance costs included in long-term debt as of June 30, 2016 was $2,021. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This standard adds SEC paragraphs pursuant to the SEC Staff announcement at the June 18, 2015 Emerging Issues Task Force (EITF) meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Under this guidance, the SEC Staff would not object to presenting such costs as an asset and subsequently amortizing the deferred costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the arrangement. Debt issuance costs of $1,687 as of June 30, 2016 and $2,003 as of December 31, 2015 related to our line-of-credit arrangement. We continue to include these costs within other non-current assets, amortizing them over the term of the arrangement.

In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses. We adopted this standard on January 1, 2016, applying it prospectively to all arrangements entered into or materially modified on or after January 1, 2016. Adoption of this standard did not have a significant impact on our results of operations or financial position.

In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent). Under the standard, investments measured at net asset value (NAV) as a practical expedient for fair value are excluded from the fair value hierarchy. As such, they are not assigned a fair value measurement level in financial statement disclosures of fair value. This standard was effective for us on January 1, 2016. It impacts the disclosures included in our Annual Report on Form 10-K regarding the plan assets of our postretirement benefit plan. As such, we will reflect this new guidance in the disclosures included in our Form 10-K for the year ending December 31, 2016, applying the guidance retrospectively to all periods presented.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The standard requires that inventory within the scope of the guidance be measured at the lower of cost or net realizable value. Previously, inventory was measured at the lower of cost or market. We elected to early adopt this standard on January 1, 2016, applying it prospectively. Application of this standard did not have a significant impact on our results of operations or financial position.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. When recording the purchase price allocation for a business combination in the financial statements, an acquirer may record preliminary amounts when measurements are incomplete as of the end of a reporting period. When the required information is received to finalize the purchase price allocation, the preliminary amounts are adjusted. These adjustments are referred to as measurement-period adjustments. This standard eliminates the requirement to restate prior period financial statements for measurement-period adjustments. Instead, it requires that the cumulative impact of a measurement-period adjustment be recognized in the reporting period in which the adjustment is identified. We adopted this standard on January 1, 2016, applying it prospectively. Application of this standard did not have a significant impact on our results of operations or financial position.

7

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The standard is intended to simplify various aspects of the accounting and presentation of share-based payments. We elected to early adopt this standard as of January 1, 2016. Adoption of this standard had the following impacts on our consolidated financial statements:

• Consolidated statements of comprehensive income – The new standard requires that the tax effects of share-based compensation be recognized in the income tax provision. Previously, these amounts were recognized in additional paid-in capital. Net tax benefits related to share-based compensation awards of $1,020 for the quarter ended June 30, 2016 and $1,512 for the six months ended June 30, 2016 were recognized as reductions of income tax expense in the consolidated statements of comprehensive income. These tax benefits reduced our effective income tax rate 1.2 points for the quarter ended June 30, 2016 and 0.9 points for the six months ended June 30, 2016. In addition, in calculating potential common shares used to determine diluted earnings per share, GAAP requires us to use the treasury stock method. The new standard requires that assumed proceeds under the treasury stock method be modified to exclude the amount of excess tax benefits that would have been recognized in additional paid-in capital. These changes were applied on a prospective basis and resulted in an increase in basic and diluted earnings per share of $0.02 for the quarter ended June 30, 2016 and $0.03 for the six months ended June 30, 2016.

In recording share-based compensation expense, the standard allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur. We have elected to include an estimate of forfeitures in the computation of our share-based compensation expense. As this treatment is consistent with previous guidance, this election had no impact on our consolidated financial statements.

• Consolidated statements of cash flows – The standard requires that excess tax benefits from share-based employee awards be reported as operating activities in the consolidated statements of cash flows. Previously, these cash flows were included in financing activities. We elected to apply this change on a prospective basis, resulting in an increase in net cash provided by operating activities and in net cash used by financing activities of $1,811 for the six months ended June 30, 2016.

The standard requires that employee taxes paid when an employer withholds shares for tax-withholding purposes be reported as financing activities in the consolidated statements of cash flows. Previously, these cash flows were included in operating activities. This change was required to be applied on a retrospective basis. As such, the consolidated statement of cash flows for the prior period was restated. This change resulted in an increase in net cash provided by operating activities and in net cash used by financing activities of $2,260 for the six months ended June 30, 2016 and $871 for the six months ended June 30, 2015.

Accounting pronouncements not yet adopted – In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard provides revenue recognition guidance for any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other accounting standards. The standard also expands the required financial statement disclosures regarding revenue recognition. The new guidance is effective for us on January 1, 2018. In addition, in March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), in April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, and in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients. These standards are intended to clarify aspects of ASU No. 2014-09 and are effective for us upon adoption of ASU No. 2014-09. We are currently assessing the impact of these standards on our consolidated financial statements, as well as the method of transition that we will use in adopting the new guidance.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The standard is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. The guidance is effective for us on January 1, 2018. We do not expect the application of this standard to have a significant impact on our results of operations or financial position.

In February 2016, the FASB issued ASU No. 2016-02, Leasing. The standard is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities for virtually all leases and by requiring the disclosure of key information about leasing arrangements. The guidance is effective for us on January 1, 2019, and

8

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

requires adoption using a modified retrospective approach. We are currently assessing the impact of this standard on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. The standard introduces new guidance for the accounting for credit losses on instruments within its scope, including trade and loans receivable and available-for-sale debt securities. The guidance is effective for us on January 1, 2020, and requires adoption using a modified retrospective approach. We do not expect the application of this standard to have a significant impact on our results of operations or financial position.

Note 3: Supplemental balance sheet information

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

(in thousands)	June 30, 2016		December 31, 2015
Raw materials	$	5,649	$	5,719
Semi-finished goods	8,353		8,208
Finished goods	20,993		24,955
Supplies	3,091		3,074
Inventories and supplies	$	38,086	$	41,956

Available-for-sale securities – Available-for-sale securities included within funds held for customers and other current assets were comprised of the following:

	June 30, 2016
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Funds held for customers:(1)
Canadian and provincial government securities	$	8,585	$	—	$	(39	)	$	8,546
Canadian guaranteed investment certificates	7,738		—		—			7,738
Available-for-sale securities	$	16,323	$	—	$	(39	)	$	16,284

⁽¹⁾ Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2016, also included cash of $60,842. This cash included amounts related to FISC Solutions, which was acquired in December 2015. This business provides cash receipt processing services. A portion of the cash receipts are remitted to our clients the business day following receipt. As such, the amounts on-hand are reported as funds held for customers in the consolidated balance sheets, with a corresponding liability included in accrued liabilities. The asset and liability of $18,743 were recorded as acquisition measurement-period balance sheet adjustments during 2016.

	December 31, 2015
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Canadian and provincial government securities	$	7,932	$	—	$	(91	)	$	7,841
Canadian guaranteed investment certificates	7,226		—		—			7,226
Available-for-sale securities (funds held for customers)(1)	15,158		—		(91		)	15,067
Canadian money market fund (other current assets)	1,616		—		—			1,616
Available-for-sale securities	$	16,774	$	—	$	(91	)	$	16,683

⁽¹⁾ Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2015, also included cash of $38,276.

9

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Expected maturities of available-for-sale securities as of June 30, 2016 were as follows:

(in thousands)	Fair value
Due in one year or less	$	9,148
Due in two to five years	4,556
Due in six to ten years	2,580
Available-for-sale securities	$	16,284

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

Assets held for sale – Assets held for sale as of June 30, 2016 and December 31, 2015 included the operations of one small business distributor that we previously acquired. The distributor is included in our Small Business Services segment and the assets acquired consisted primarily of a customer list intangible asset. We are actively marketing this distributor and expect the selling price will exceed its carrying value. Net assets held for sale consisted of the following:

(in thousands)	June 30, 2016			December 31, 2015			Balance sheet caption
Current assets	$	4		$	3		Other current assets
Intangibles	13,533			13,533			Assets held for sale
Other non-current assets	434			436			Assets held for sale
Accrued liabilities	(106		)	(366		)	Accrued liabilities
Deferred income tax liabilities	(5,777		)	(5,777		)	Other non-current liabilities
Net assets held for sale	$	8,088		$	7,829

Intangibles – Intangibles were comprised of the following:

	June 30, 2016							December 31, 2015
(in thousands)	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived intangibles:
Trade name	$	19,100	$	—		$	19,100	$	19,100	$	—		$	19,100
Amortizable intangibles:
Internal-use software	393,159		(328,038		)	65,121		375,037		(310,665		)	64,372
Customer lists/relationships	234,012		(70,568		)	163,444		202,682		(54,990		)	147,692
Trade names	64,881		(38,787		)	26,094		64,881		(36,325		)	28,556
Software to be sold	28,500		(5,349		)	23,151		28,500		(3,765		)	24,735
Other	2,808		(2,203		)	605		2,858		(2,002		)	856
Amortizable intangibles	723,360		(444,945		)	278,415		673,958		(407,747		)	266,211
Intangibles	$	742,460	$	(444,945	)	$	297,515	$	693,058	$	(407,747	)	$	285,311

10

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Amortization of intangibles was $18,943 for the quarter ended June 30, 2016 and $13,989 for the quarter ended June 30, 2015. Amortization of intangibles was $37,091 for the six months ended June 30, 2016 and $27,739 for the six months ended June 30, 2015. Based on the intangibles in service as of June 30, 2016, estimated future amortization expense is as follows:

(in thousands)	Estimated amortization expense
Remainder of 2016	$	33,703
2017	57,848
2018	43,803
2019	31,505
2020	26,382

During the six months ended June 30, 2016, we acquired internal-use software in the normal course of business. We also acquired intangible assets in conjunction with acquisitions (Note 6). The following intangible assets were acquired during the six months ended June 30, 2016:

(in thousands)	Amount		Weighted-average amortization period (in years)
Internal-use software	$	17,816	3
Customer lists/relationships	31,082		7
Acquired intangibles	$	48,898	6

Goodwill – Changes in goodwill during the six months ended June 30, 2016 were as follows:

(in thousands)	Small Business Services			Financial Services		Direct Checks		Total
Balance, December 31, 2015:
Goodwill, gross	$	671,295		$	176,614	$	148,506	$	996,415
Accumulated impairment charges	(20,000		)	—		—		(20,000		)
Goodwill, net of accumulated impairment charges	651,295			176,614		148,506		976,415
Acquisition of 180 Fusion (Note 6)	575			—		—		575
Currency translation adjustment	102			—		—		102
Balance, June 30, 2016:
Goodwill, gross	671,972			176,614		148,506		997,092
Accumulated impairment charges	(20,000		)	—		—		(20,000		)
Goodwill, net of accumulated impairment charges	$	651,972		$	176,614	$	148,506	$	977,092

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DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

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

(in thousands)	June 30, 2016		December 31, 2015
Contract acquisition costs	$	64,170	$	58,792
Loans and notes receivable from distributors	21,877		23,957
Postretirement benefit plan asset	18,596		16,250
Deferred advertising costs	6,980		7,500
Other	6,650		7,313
Other non-current assets	$	118,273	$	113,812

Changes in contract acquisition costs during the six months ended June 30, 2016 and 2015 were as follows:

	Six Months Ended June 30,
(in thousands)	2016			2015
Balance, beginning of year	$	58,792		$	74,101
Additions(1)	14,913			2,520
Amortization	(9,485		)	(9,697		)
Other	(50		)	(2,714		)
Balance, end of period	$	64,170		$	64,210

⁽¹⁾ Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $14,341 for the six months ended June 30, 2016 and $5,848 for the six months ended June 30, 2015.

Accrued liabilities – Accrued liabilities were comprised of the following:

(in thousands)	June 30, 2016		December 31, 2015
Funds held for customers	$	75,932	$	52,366
Deferred revenue	36,072		48,119
Employee profit sharing/cash bonus	18,463		40,683
Customer rebates	16,975		18,900
Wages, including vacation	12,113		5,731
Contract acquisition costs due within one year	8,740		9,045
Restructuring due within one year (Note 9)	2,310		3,864
Other	39,984		49,715
Accrued liabilities	$	210,589	$	228,423

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DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Note 4: Earnings per share

The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. 

	Quarter Ended June 30,						Six Months Ended June 30,
(dollars and shares in thousands, except per share amounts)	2016			2015			2016			2015
Earnings per share – basic:
Net income	$	58,389		$	56,063		$	116,491		$	102,003
Income allocated to participating securities	(493		)	(376		)	(954		)	(669		)
Income available to common shareholders	$	57,896		$	55,687		$	115,537		$	101,334
Weighted-average shares outstanding	48,611			49,770			48,699			49,732
Earnings per share – basic	$	1.19		$	1.12		$	2.37		$	2.04
Earnings per share – diluted:
Net income	$	58,389		$	56,063		$	116,491		$	102,003
Income allocated to participating securities	(489		)	(374		)	(948		)	(665		)
Re-measurement of share-based awards classified as liabilities	88			(132		)	293			47
Income available to common shareholders	$	57,988		$	55,557		$	115,836		$	101,385
Weighted-average shares outstanding	48,611			49,770			48,699			49,732
Dilutive impact of potential common shares	429			400			412			404
Weighted-average shares and potential common shares outstanding	49,040			50,170			49,111			50,136
Earnings per share – diluted	$	1.18		$	1.11		$	2.36		$	2.02
Antidilutive options excluded from calculation	236			260			236			260

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DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Note 5: Other comprehensive income

Reclassification adjustments– Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows:

Accumulated other comprehensive loss components	Amounts reclassified from accumulated other comprehensive loss												Affected line item in consolidated statements of comprehensive income
	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015
Amortization of postretirement benefit plan items:
Prior service credit	$	355		$	355		711			711			(1)
Net actuarial loss	(949		)	(780		)	(1,899		)	(1,560		)	(1)
Total amortization	(594		)	(425		)	(1,188		)	(849		)	(1)
Tax benefit	182			113			363			226			(1)
Total reclassifications, net of tax	$	(412	)	$	(312	)	$	(825	)	$	(623	)

⁽¹⁾ Amortization of postretirement benefit plan items is included in the computation of net periodic benefit income. Additional details can be found in Note 10.

Accumulated other comprehensive loss– Changes in the components of accumulated other comprehensive loss during the six months ended June 30, 2016 were as follows:

(in thousands)	Postretirement benefit plans, net of tax			Net unrealized loss on marketable securities, net of tax(1)			Currency translation adjustment			Accumulated other comprehensive loss
Balance, December 31, 2015	$	(38,822	)	$	(114	)	$	(16,267	)	$	(55,203	)
Other comprehensive income before reclassifications	—			43			5,115			5,158
Amounts reclassified from accumulated other comprehensive loss	825			—			—			825
Net current-period other comprehensive income	825			43			5,115			5,983
Balance, June 30, 2016	$	(37,997	)	$	(71	)	$	(11,152	)	$	(49,220	)

⁽¹⁾ Other comprehensive income before reclassifications is net of income tax expense of $15.

Note 6: Acquisitions

We periodically complete business combinations that align with our business strategy. The assets and liabilities acquired are recorded at their estimated fair values and the results of operations of each acquired business are included in our consolidated statements of comprehensive income from their acquisition dates. Transaction costs related to acquisitions were expensed as incurred and were not significant to the consolidated statements of comprehensive income for the six months ended June 30, 2016 and 2015.

During the first quarter of 2016, we completed the following acquisitions which are included within our Small Business Services segment:

• In February 2016, we acquired selected assets of Category 99, Inc., doing business as MacHighway®, a web hosting and domain registration service provider.

• In March 2016, we acquired selected assets of New England Art Publishers, Inc., doing business as Birchcraft Studios, a supplier of personalized invitations, holiday cards, all-occasion cards and social announcements. We expect to

14

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

finalize the allocation of the purchase price by the third quarter of 2016 when our valuation of the acquired inventory and fixed assets is complete.

During the second quarter of 2016, we completed several acquisitions which are included within our Small Business Services segment and for which we expect to finalize the allocation of the purchase price by the end of 2016 when our valuation of all of the acquired assets and liabilities is completed, as well as the determination of the estimated useful lives of the acquired customer lists. These acquisitions were as follows:

• In April 2016, we acquired selected assets of 180 Fusion LLC, a digital marketing services provider. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $575. The acquisition resulted in goodwill as we expect it will enhance our Small Business Services product set by providing valuable marketing tools to our customers, thus, enhancing customer acquisition and loyalty.

• In June 2016, we acquired selected assets of L.A.M. Enterprises, Inc., a provider of printed and promotional products.

• In June 2016, we acquired selected assets of Liquid Web, LLC, a web hosting services provider.

• In June 2016, we acquired selected assets of National Document Solutions, LLC, a provider of printing, promotional products, office products, scanning and document management solutions.

Also during the six months ended June 30, 2016, we acquired the operations of several small business distributors which are included in our Small Business Services segment. The assets acquired consisted primarily of customer list intangible assets. As these distributors were previously part of our Safeguard® distributor network, our revenue was not impacted by these acquisitions and the impact to our costs was not significant. We expect to finalize the allocations of the purchase price by the end of 2016 when our valuations of the acquired customer lists are completed, including the determination of the related estimated useful lives.

As our acquisitions were immaterial to our operating results both individually and in the aggregate, pro forma results of operations are not provided. The following illustrates the preliminary allocation as of June 30, 2016 of the aggregate purchase price for the above acquisitions to the assets acquired and liabilities assumed:

(in thousands)	2016 acquisitions
Net tangible assets acquired and liabilities assumed	$	(909	)
Identifiable intangible assets:
Customer lists/relationships	31,082
Internal-use software	1,250
Total intangible assets	32,332
Goodwill	575
Total aggregate purchase price	31,998
Liabilities for holdback payments	(3,016		)
Non-cash consideration(1)	(1,926		)
Net cash paid for 2016 acquisitions	27,056
Holdback payments for prior year acquisitions	1,441
Payments for acquisitions, net of cash acquired	$	28,497

⁽¹⁾ Consists of pre-acquisition amounts owed to us by certain of the acquired businesses.

Further information regarding the calculation of the estimated fair values of the intangibles acquired can be found in Note 8.

During the six months ended June 30, 2015, we acquired selected assets of Range, Inc., a marketing services provider; selected assets of Verify Valid LLC, a provider of electronic check payment services; and the operations of two small business distributors, one of which was previously part of our Safeguard distributor network. The assets acquired consisted primarily of customer list intangible assets and goodwill. Payments for acquisitions, net of cash acquired, as presented on the consolidated statement of cash flows for the six months ended June 30, 2015, included payments of $32,919 for these acquisitions and

15

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

$2,881 for holdback payments for prior year acquisitions. Further information regarding our 2015 acquisitions can be found under the caption “Note 5: Acquisitions” in the Notes to Consolidated Financial Statements appearing in the 2015 Form 10-K.

Note 7: Derivative financial instruments

We have entered into interest rate swaps, which we designated as fair value hedges, to hedge against changes in the fair value of a portion of our long-term debt. At the time we entered into these swaps in 2012, we were targeting a mix of fixed and variable rate debt, where we receive a fixed rate and pay a variable rate based on the London Interbank Offered Rate (LIBOR). The interest rate swaps related to our long-term debt due in 2020 have a notional amount of $200,000 and meet the criteria for using the short-cut method for a fair value hedge based on the structure of the hedging relationship. As such, changes in the fair value of the derivatives and the related long-term debt are equal. The fair value of these interest rate swaps was an asset of $858 as of June 30, 2016 and a liability of $4,842 as of December 31, 2015. These amounts were included in the consolidated balance sheets in other non-current assets and other non-current liabilities, respectively. As the short-cut method is being used to account for these hedges, the consolidated balance sheets included an increase in long-term debt of $858 as of June 30, 2016 and a decrease in long-term debt of $4,842 as of December 31, 2015 due to fair value adjustments.

Note 8: Fair value measurements

2016 acquisitions – For all acquisitions, we are required to measure the fair value of the net identifiable tangible and intangible assets and liabilities acquired, excluding goodwill and deferred income taxes. Information regarding the acquisitions completed during the six months ended June 30, 2016 can be found in Note 6. The identifiable net assets acquired during the six months ended June 30, 2016 were comprised primarily of customer lists with an aggregate fair value of $31,082. Fair value was estimated by discounting the estimated cash flows expected to be generated by the assets. Assumptions used in the calculations included same-customer revenue growth rates and estimated customer retention rates based on the acquirees' historical information. Information regarding the useful lives of acquired intangibles can be found in Note 3.

Recurring fair value measurements – Funds held for customers included available-for-sale marketable securities (Note 3). These securities consisted of a mutual fund investment that invests in Canadian and provincial government securities, as well as investments in Canadian guaranteed investment certificates (GICs) with maturities of one year or less. The mutual fund is not traded in an active market and its fair value is determined by obtaining quoted prices in active markets for the underlying securities held by the fund. The fair value of the GICs approximated cost due to their relatively short duration. Unrealized gains and losses, net of tax, are included in accumulated other comprehensive loss in the consolidated balance sheets. The cost of securities sold is determined using the average cost method. Realized gains and losses are included in revenue in the consolidated statements of comprehensive income and were not significant for the quarters or six months ended June 30, 2016 and 2015.

Other current assets as of December 31, 2015 included available-for-sale marketable securities (Note 3). These securities were sold during the first quarter of 2016, and consisted of a Canadian money market fund that was not traded in an active market. As such, the fair value of this investment was determined by obtaining quoted prices in active markets for the underlying securities held by the fund. Because of the short-term nature of the underlying investments, the cost of these securities approximated their fair value. No gains or losses on sales of these marketable securities were realized during the six months ended June 30, 2016 and 2015.

We have elected to account for a long-term investment in domestic mutual funds under the fair value option for financial assets and financial liabilities. The fair value option provides companies an irrevocable option to measure many financial assets and liabilities at fair value with changes in fair value recognized in earnings. The investment is included in long-term investments in the consolidated balance sheets. Long-term investments also include the cash surrender values of company-owned life insurance policies. Realized and unrealized gains and losses, as well as dividends earned by the mutual fund investment, are included in selling, general and administrative (SG&A) expense in the consolidated statements of comprehensive income. This investment corresponds to a liability under an officers’ deferred compensation plan that is not available to new participants and is fully funded by the investment in mutual funds. The liability under the plan equals the fair value of the investment in mutual funds. Thus, as the value of the investment changes, the value of the liability changes accordingly. As changes in the liability are reflected within SG&A expense in the consolidated statements of comprehensive income, the fair value option of accounting for the investment in mutual funds allows us to net changes in the investment and

16

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

the related liability in the statements of comprehensive income. The cost of securities sold is determined using the average cost method. During the six months ended June 30, 2016 and 2015, net realized gains were not significant. We recognized net unrealized losses of $234 during the six months ended June 30, 2016 and $191 during the six months ended June 30, 2015.

The fair value of interest rate swaps (Note 7) is determined at each reporting date by means of a pricing model utilizing readily observable market interest rates. The change in fair value is determined as the change in the present value of estimated future cash flows discounted using the LIBOR rate. Our interest rate swaps relate to our long-term debt due in 2020 and meet the criteria for using the short-cut method for a fair value hedge based on the structure of the hedging relationship. As such, the changes in the fair value of the derivative and related long-term debt are equal.

Liabilities for contingent consideration relate to acquisitions completed during 2015. Information concerning these acquisitions can be found under the caption "Note 5: Acquisitions" in the Notes to Consolidated Financial Statements included in the 2015 Form 10-K. Under the agreement related to the acquisition of Verify Valid, we are required to make annual contingent payments over a period of up to eight years, based on the revenue generated by the business. A specified payment percentage for each year is applied to the revenue generated by the business in that year to determine the amount of the payment. There is no maximum amount of contingent payments specified in the agreement. Under the agreement related to the acquisition of a small business distributor, we are required to make annual contingent payments over a period of up to three years, based on the gross profit generated by the business. A specified payment percentage for each year is applied to the gross profit generated by the business in that year to determine the amount of the payment. The maximum contingent payment in any year of the agreement is $925. The fair value of the liabilities for contingent payments is estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in the calculations include the discount rate, projected revenue or gross profit based on our most recent internal forecast, and factors indicating the probability of achieving the forecasted revenue or gross profit. The liabilities are remeasured each reporting period. Increases or decreases in projected revenue or gross profit and the related probabilities may result in a higher or lower fair value measurement. Changes in fair value resulting from changes in the timing, amount of, or likelihood of contingent payments are included in SG&A expense in the consolidated statements of comprehensive income. Changes in fair value resulting from accretion for the passage of time are included in interest expense in the consolidated statements of comprehensive income.

Information regarding recurring fair value measurements completed during each period was as follows:

				Fair value measurements using
	Fair value as of  June 30, 2016			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)				(Level 1)		(Level 2)		(Level 3)
Available-for-sale marketable securities (funds held for customers)	$	16,284		$	—	$	16,284	$	—
Long-term investment in mutual funds	1,792			1,792		—		—
Derivative assets	858			—		858		—
Accrued contingent consideration	(5,919		)	—		—		(5,919		)

				Fair value measurements using
	Fair value as of December 31, 2015			Quoted prices in active markets for identical assets		Significant other observable inputs			Significant unobservable inputs
(in thousands)				(Level 1)		(Level 2)			(Level 3)
Available-for-sale marketable securities (funds held for customers)	$	15,067		$	—	$	15,067		$	—
Available-for-sale marketable securities (other current assets)	1,616			—		1,616			—
Long-term investment in mutual funds	2,091			2,091		—			—
Derivative liabilities	(4,842		)	—		(4,842		)	—
Accrued contingent consideration	(5,861		)	—		—			(5,861		)

17

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Our policy is to recognize transfers between fair value levels as of the end of the reporting period in which the transfer occurred. There were no transfers between fair value levels during the six months ended June 30, 2016.

Changes in accrued contingent consideration during the six months ended June 30, 2016 were as follows:

(in thousands)	Six Months Ended June 30, 2016
Balance, December 31, 2015	$	5,861
Change in fair value	434
Payments	(376		)
Balance, June 30, 2016	$	5,919

Fair value measurements of other financial instruments – The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate fair value.

Cash and cash included within funds held for customers – The carrying amounts reported in the consolidated balance sheets approximate fair value because of the short-term nature of these items.

Loans and notes receivable from distributors – We have receivables for loans made to certain of our Safeguard distributors. In addition, we have acquired the operations of several small business distributors, which we then sold to our Safeguard distributors. In most cases, we entered into notes receivable upon the sale of the assets to the distributors. The fair value of these loans and notes receivable is calculated as the present value of expected future cash flows, discounted using an estimated interest rate based on published bond yields for companies of similar risk.

Long-term debt – The carrying amounts reported in the consolidated balance sheets for the amount drawn on our credit facility approximates fair value because our interest rate is variable and reflects current market rates. The fair value of our long-term notes due in 2020 is based on significant observable market inputs other than quoted prices in active markets. The fair value of long-term debt included in the table below does not reflect the impact of hedging activity or debt issuance costs. The carrying amount of long-term debt includes the change in fair value of hedged long-term debt, as well as unamortized debt issuance costs related to our notes due in 2020 (Note 11).

The estimated fair values of these financial instruments were as follows:

					Fair value measurements using
	June 30, 2016				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)	Carrying value		Fair value		(Level 1)		(Level 2)		(Level 3)
Cash	$	69,592	$	69,592	$	69,592	$	—	$	—
Cash (funds held for customers)	60,842		60,842		60,842		—		—
Loans and notes receivable from distributors	23,740		20,897		—		—		20,897
Long-term debt(1)	611,837		620,900		—		620,900		—

⁽¹⁾ Amounts exclude capital lease obligations.

18

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

					Fair value measurements using
	December 31, 2015				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)	Carrying value		Fair value		(Level 1)		(Level 2)		(Level 3)
Cash	$	62,427	$	62,427	$	62,427	$	—	$	—
Cash (funds held for customers)	38,276		38,276		38,276		—		—
Loans and notes receivable from distributors	25,745		23,383		—		—		23,383
Long-term debt(1)	626,909		641,000		—		641,000		—

⁽¹⁾ Amounts exclude capital lease obligations.

Note 9: Restructuring charges

Net restructuring charges for each period consisted of the following components:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands, except number of employees)	2016			2015			2016			2015
Severance accruals	$	1,096		$	1,307		$	1,987		$	2,050
Severance reversals	(96		)	(170		)	(468		)	(694		)
Operating lease obligations	—			—			59			—
Net restructuring accruals	1,000			1,137			1,578			1,356
Other costs	217			17			507			62
Net restructuring charges	$	1,217		$	1,154		$	2,085		$	1,418
Number of employees included in severance accruals	40			110			65			150

The net restructuring charges are reflected in the consolidated statements of comprehensive income as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	2016		2015		2016		2015
Total cost of revenue	$	82	$	188	$	71	$	185
Operating expenses	1,135		966		2,014		1,233
Net restructuring charges	$	1,217	$	1,154	$	2,085	$	1,418

During the six months ended June 30, 2016 and June 30, 2015, the net restructuring accruals included severance charges related to employee reductions across functional areas as we continue to reduce costs, primarily within our sales and marketing, information technology and fulfillment functions. These charges were reduced by the reversal of restructuring accruals recorded in previous periods, as fewer employees received severance benefits than originally estimated. Other restructuring costs, which were expensed as incurred, included items such as information technology costs, employee and equipment moves, training and travel related to our restructuring activities.

Restructuring accruals of $2,310 as of June 30, 2016 and $3,864 as of December 31, 2015 are included in accrued liabilities in the consolidated balance sheets. The majority of the employee reductions are expected to be completed by the fourth quarter of 2016, and we expect most of the related severance payments to be paid by the first quarter of 2017, utilizing cash from operations. The remaining payments due under operating lease obligations will be paid by the end of 2016. As of June 30, 2016, approximately 25 employees had not yet started to receive severance benefits.

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DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Accruals for our restructuring initiatives, summarized by year, were as follows:

(in thousands)	2014  initiatives			2015  initiatives			2016 initiatives			Total
Balance, December 31, 2015	$	176		$	3,688		$	—		$	3,864
Restructuring charges	—			37			2,009			2,046
Restructuring reversals	(111		)	(310		)	(47		)	(468		)
Payments	(65		)	(2,554		)	(513		)	(3,132		)
Balance, June 30, 2016	$	—		$	861		$	1,449		$	2,310
Cumulative amounts:
Restructuring charges	$	8,242		$	6,164		$	2,009		$	16,415
Restructuring reversals	(1,444		)	(768		)	(47		)	(2,259		)
Payments	(6,798		)	(4,535		)	(513		)	(11,846		)
Balance, June 30, 2016	$	—		$	861		$	1,449		$	2,310

The components of our restructuring accruals, by segment, were as follows:

	Employee severance benefits												Operating lease obligations
(in thousands)	Small Business Services			Financial Services			Direct Checks			Corporate			Small Business Services			Financial Services			Total
Balance, December 31, 2015	$	1,023		$	884		$	—		$	1,859		$	56		$	42		$	3,864
Restructuring charges	892			510			135			450			59			—			2,046
Restructuring reversals	(93		)	(39		)	—			(336		)	—			—			(468		)
Payments	(994		)	(538		)	—			(1,483		)	(85		)	(32		)	(3,132		)
Balance, June 30, 2016	$	828		$	817		$	135		$	490		$	30		$	10		$	2,310
Cumulative amounts(1):
Restructuring charges	$	6,617		$	4,769		$	171		$	4,461		$	344		$	53		$	16,415
Restructuring reversals	(1,293		)	(350		)	(2		)	(614		)	—			—			(2,259		)
Inter-segment transfer	41			(14		)	—			(27		)	—			—			—
Payments	(4,537		)	(3,588		)	(34		)	(3,330		)	(314		)	(43		)	(11,846		)
Balance, June 30, 2016	$	828		$	817		$	135		$	490		$	30		$	10		$	2,310

⁽¹⁾ Includes accruals related to our cost reduction initiatives for 2014 through 2016.

Note 10: Postretirement benefits

We have historically provided certain health care benefits for a portion of our retired U.S. employees. In addition to our retiree health care plan, we also have a supplemental executive retirement plan in the United States. Further information regarding our postretirement benefit plans can be found under the caption “Note 12: Postretirement benefits” in the Notes to Consolidated Financial Statements appearing in the 2015 Form 10-K.

20

Postretirement benefit income for each period consisted of the following components:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015
Interest cost	$	780		$	859		$	1,559		$	1,719
Expected return on plan assets	(1,834		)	(1,958		)	(3,667		)	(3,917		)
Amortization of prior service credit	(355		)	(355		)	(711		)	(711		)
Amortization of net actuarial losses	949			780			1,899			1,560
Net periodic benefit income	$	(460	)	$	(674	)	$	(920	)	$	(1,349	)

Note 11: Debt

Debt outstanding was comprised of the following:

(in thousands)	June 30, 2016			December 31, 2015
6.0% senior notes due November 15, 2020, principal amount	$	200,000		$	200,000
Less unamortized debt issuance costs	(2,021		)	(2,249		)
Cumulative change in fair value of hedged debt (Note 7)	858			(4,842		)
6.0% senior notes, carrying value	198,837			192,909
Amount drawn on credit facility	413,000			434,000
Long-term portion of capital lease obligations	950			1,064
Long-term portion of debt	612,787			627,973
Capital lease obligations due within one year	1,041			1,045
Total debt	$	613,828		$	629,018

Our senior notes due in 2020 include covenants that place certain restrictions on the issuance of additional debt and limitations on certain liens. If our ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to interest expense, as defined in such instruments, falls below two to one, there would be additional limitations on our ability to issue additional debt. The notes due in 2020 also include limitations on our ability to issue redeemable stock and preferred stock, make loans and investments, and consolidate, merge or sell all or substantially all of our assets. Absent certain defined events of default under our debt instruments, and as long as our ratio of EBITDA to interest expense is in excess of two to one, our debt covenants do not restrict our ability to pay cash dividends at our current rate. There are currently no limitations on the amount of dividends and share repurchases under the terms of our credit facility agreement. However, if our leverage ratio, defined as total debt less unrestricted cash to EBITDA, should exceed 2.75 to one, there would be an annual limitation on the amount of dividends and share repurchases under the terms of this agreement.

In November 2012, we issued $200,000 of 6.0% senior notes maturing on November 15, 2020. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. These notes were subsequently registered with the Securities and Exchange Commission (SEC) via a registration statement that became effective on April 3, 2013. Interest payments are due each May and November. The notes are guaranteed by certain of our subsidiaries and place a limitation on restricted payments, including share repurchases and increases in dividend levels. The limitation on restricted payments does not apply if the notes are upgraded to an investment-grade credit rating. Financial information for the guarantor subsidiaries can be found in Note 15. At any time prior to November 15, 2016, we may redeem some or all of the notes at a price equal to 100% of the principal amount plus accrued and unpaid interest and a make-whole premium. At any time on or after November 15, 2016, we may redeem some or all of the notes at prices ranging from 100% to 103% of the principal amount. If at any time we sell certain of our assets or experience specific types of changes in control, we must offer to purchase all of the outstanding notes at 101% of the principal amount. We classify payments for early redemption premiums as financing activities in our consolidated statements of cash flows. Proceeds from the offering, net of offering costs, were $196,340. These proceeds were used to retire our senior notes that were due in June 2015. The fair value of the notes issued in November 2012 was $207,900 as

21

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

of June 30, 2016, based on quoted prices that are directly observable. As discussed in Note 7, we have entered into interest rate swaps to hedge these notes.

In March 2011, we issued $200,000 of 7.0% senior notes that were scheduled to mature on March 15, 2019. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. These notes were subsequently registered with the SEC via a registration statement that became effective on January 10, 2012. Proceeds from the offering, net of offering costs, were $196,195. These proceeds were used to retire a portion of our senior, unsecured notes due in 2012. In March 2015, we retired all of these notes, realizing a loss on early debt extinguishment of $8,917 during the six months ended June 30, 2015, consisting of a contractual call premium and the write-off of related debt issuance costs. This retirement was funded utilizing our credit facility and a short-term bank loan that we have since repaid.

We had capital lease obligations of $1,991 as of June 30, 2016 and $2,109 as of December 31, 2015 related to information technology hardware. The lease obligations will be paid through April 2020. The related assets are included in property, plant and equipment in the consolidated balance sheets. Depreciation of the leased assets is included in depreciation expense in the consolidated statements of cash flows.

As of June 30, 2016, we had a $525,000 credit facility, which is scheduled to expire in February 2019. Our quarterly commitment fee ranges from 0.20% to 0.40% based on our leverage ratio. Borrowings under the credit facility are collateralized by substantially all of our personal and intangible property. As of June 30, 2016, $413,000 was drawn on our credit facility at a weighted-average interest rate of 1.92%. As of December 31, 2015, $434,000 was drawn on our credit facility at a weighted-average interest rate of 1.89%.

The credit agreement governing our credit facility contains customary covenants regarding limits on levels of subsidiary indebtedness and capital expenditures, liens, investments, acquisitions, certain mergers, certain asset sales outside the ordinary course of business, and change in control as defined in the agreement. The agreement also contains financial covenants regarding our leverage ratio, interest coverage and liquidity.

In March 2015, we entered into a $75,000 short-term variable rate bank loan. Proceeds from this loan, net of related costs, were $74,880 and were used, along with a draw on our credit facility, to retire all $200,000 of our 7.0% senior notes that were scheduled to mature on March 15, 2019. During December 2015, we elected to repay this loan in full.

Daily average amounts outstanding under our credit facility and short-term borrowings were as follows:

(in thousands)	Six Months Ended June 30, 2016			Year Ended December 31, 2015
Credit facility:
Daily average amount outstanding	$	419,544		$	270,063
Weighted-average interest rate	1.86		%	1.66		%
Short-term bank loan:
Daily average amount outstanding	$	—		$	47,178
Weighted-average interest rate	—			1.59		%

As of June 30, 2016, amounts were available for borrowing under our credit facility as follows:

(in thousands)	Total available
Credit facility commitment	$	525,000
Amount drawn on credit facility	(413,000		)
Outstanding letters of credit(1)	(12,795		)
Net available for borrowing as of June 30, 2016	$	99,205

⁽¹⁾ We use standby letters of credit to collateralize certain obligations related primarily to our self-insured workers’ compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our credit facility.

22

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Note 12:  Other commitments and contingencies

Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnifications encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of the terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks, including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. While we do not believe that any liability under these indemnities would likely have a material adverse effect on our financial position, annual results of operations or annual cash flows, inherent uncertainties exist regarding the scope and nature of such indemnities that could lead to material unfavorable outcomes. We have recorded liabilities for known indemnifications related to environmental matters.

Environmental matters – We are currently involved in environmental compliance, investigation and remediation activities at some of our current and former sites, primarily printing facilities of our Financial Services and Small Business Services segments that have been sold. Remediation costs are accrued on an undiscounted basis when the obligations are either known or considered probable and can be reasonably estimated. Remediation or testing costs that result directly from the sale of an asset and which we would not have otherwise incurred are considered direct costs of the sale of the asset. As such, they are included in our measurement of the carrying value of the asset sold.

Accruals for environmental matters were $3,375 as of June 30, 2016 and $5,952 as of December 31, 2015, primarily related to facilities that have been sold. These accruals are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets. Accrued costs consist of direct costs of the remediation activities, primarily fees that will be paid to outside engineering and consulting firms. Although recorded accruals include our best estimates, our total costs cannot be predicted with certainty due to various factors such as the extent of corrective action that may be required, evolving environmental laws and regulations and advances in environmental technology. Where the available information is sufficient to estimate the amount of the liability, that estimate is used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range is recorded. We do not believe that the range of possible outcomes could have a material effect on our financial condition, results of operations or liquidity. The consolidated statement of comprehensive income for the six months ended June 30, 2016 included a benefit from environmental matters of $1,874, as we reversed a portion of the liability for one of our sold facilities. During the quarter ended June 30, 2016, we determined that it is no longer probable that a portion of the estimated environmental remediation costs for this location will be incurred. Environmental expense was $725 for the six months ended June 30, 2015.

We purchased an insurance policy during 2002 that covers up to $10,000 of third-party pollution claims through 2032 at certain owned, leased and divested sites. We also purchased an insurance policy during 2009 that covers up to $15,000 of third-party pollution claims through April 2019. This policy covers liability for claims of bodily injury or property damage arising from pollution events at the covered facilities. The policy also provides remediation coverage should we be required by a governing authority to perform remediation activities at the covered sites. No accruals have been recorded in our consolidated financial statements for any of the events contemplated in these insurance policies. We do not anticipate significant net cash outlays for environmental matters during 2016.

Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits for active employees and those employees on long-term disability. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported, and totaled $6,664 as of June 30, 2016 and $6,457 as of December 31, 2015. These accruals are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets. Our workers' compensation liability is accounted for on a present value basis. The difference between the discounted and undiscounted liability was not significant as of June 30, 2016 or December 31, 2015.

Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends.

23

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Litigation – On September 2, 2014, one of our suppliers filed a petition for binding arbitration under the Commercial Rules of the American Arbitration Association, alleging that it is entitled to additional payment from us under our reseller agreement and seeking damages of up to approximately $43,000. We did not record a liability for damages in connection with this matter in our consolidated balance sheets. In March 2016, the arbitrator rejected all of the supplier's claims and ruled in our favor.

Recorded liabilities for legal matters were not material to our financial position, results of operations or liquidity, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or liquidity upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or liquidity for the period in which the ruling occurs or in future periods.

Note 13: Shareholders’ equity

We have an outstanding authorization from our board of directors to purchase up to 10,000 shares of our common stock. This authorization has no expiration date, and 453 shares remained available for purchase under this authorization as of June 30, 2016. During the six months ended June 30, 2016, we repurchased 513 shares for $29,981.

In May 2016, our board of directors approved an additional authorization for the repurchase of up to $300,000 of our common stock, effective at the conclusion of our previous authorization. The additional authorization also has no expiration date.

Note 14: Business segment information

We operate three reportable business segments: Small Business Services, Financial Services and Direct Checks. Our business segments are generally organized by type of customer served and reflect the way we manage the company. Small Business Services promotes and sells products and services to small businesses via direct response mail and internet advertising; referrals from financial institutions, telecommunications clients and other partners; networks of distributors and independent dealers; a direct sales force that focuses on selling to and through major accounts; and an outbound telemarketing group. Financial Services' products and services are sold primarily through a direct sales force, which executes product and service supply contracts with our financial institution clients nationwide, including banks, credit unions and financial services companies. In the case of check supply contracts, once the financial institution relationship is established, consumers may submit their check orders through their financial institution or over the phone or internet. Direct Checks sells products and services directly to consumers using direct marketing, including print advertising and search engine marketing and optimization strategies. All three segments operate primarily in the United States. Small Business Services also has operations in Canada and portions of Europe.

Our product and service offerings are comprised of the following:

Checks – We remain one of the largest providers of checks in the United States. During 2015, checks represented 40.1% of our Small Business Services segment's revenue, 59.7% of our Financial Services segment's revenue and 84.6% of our Direct Checks segment's revenue.

Marketing solutions and other services – We offer products and services that help small businesses and/or financial institutions promote their businesses and acquire customers, as well as various other service offerings. Our Small Business Services segment offers services designed to fulfill the marketing and sales needs of small businesses, including logo and web design; hosting and other web services; search engine optimization; marketing programs, including email, mobile, social media and other self-service marketing solutions; and digital printing services. In addition, Small Business Services offers specialized services, including fraud protection and security, payroll services and electronic checks, as well as promotional solutions such as postcards, brochures, retail packaging supplies, apparel, greeting cards and business cards. Financial Services offers a suite of financial technology ("FinTech") solutions focused on enabling financial institutions to better manage the customer life cycle for their retail and commercial customers. These FinTech solutions include outsourced marketing campaign targeting and execution, digital channel onboarding, loyalty and rewards, technology-enabled treasury services, financial performance

24

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

management, and fraud protection and security services. Our Direct Checks segment provides fraud protection and security services, as well as package insert programs under which companies' marketing materials are included in our check packages.

Forms – Our Small Business Services segment provides printed forms to small businesses, including deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices and personnel forms. This segment also offers computer forms compatible with accounting software packages commonly used by small businesses. Forms sold by our Financial Services and Direct Checks segments include deposit tickets and check registers.

Accessories and other products – Small Business Services offers products designed to supply small business owners with the customized documents necessary to efficiently manage their business, including envelopes, office supplies, stamps and labels. Our Financial Services and Direct Checks segments offer checkbook covers and stamps.

The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2015 Form 10-K. We allocate corporate costs for our shared services functions to our business segments, including costs of our executive management, human resources, supply chain, finance, information technology and legal functions. Generally, where costs incurred are directly attributable to a business segment, primarily within the areas of information technology, supply chain, finance and legal, those costs are charged directly to that segment. Because we use a shared services approach for many of our functions, certain costs are not directly attributable to a business segment. These costs are allocated to our business segments based on segment revenue, as revenue is a measure of the relative size and magnitude of each segment and indicates the level of corporate shared services consumed by each segment. Corporate assets are not allocated to the segments and consist of property, plant and equipment; internal-use software; and inventories and supplies related to our corporate shared services functions of manufacturing, information technology and real estate, as well as long-term investments.

We are an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations and the sharing of assets. Therefore, we do not represent that these segments, if operated independently, would report the operating income and other financial information shown.

25

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

The following is our segment information as of and for the quarters ended June 30, 2016 and 2015:

		Reportable Business Segments
(in thousands)		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Total revenue from external	2016	$	288,182	$	124,230	$	38,230	$	—	$	450,642
customers:	2015	282,285		112,699		40,890		—		435,874
Operating income:	2016	48,956		29,034		12,959		—		90,949
	2015	48,225		25,506		15,148		—		88,879
Depreciation and amortization	2016	12,809		9,074		890		—		22,773
expense:	2015	11,231		5,791		973		—		17,995
Total assets:	2016	1,023,798		432,152		160,935		252,017		1,868,902
	2015	980,405		272,495		162,058		271,349		1,686,307
Capital asset purchases:	2016	—		—		—		11,995		11,995
	2015	—		—		—		9,795		9,795
The following is our segment information as of and for the six months ended June 30, 2016 and 2015:
		Reportable Business Segments
(in thousands)		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Total revenue from external	2016	$	578,453	$	251,478	$	80,009	$	—	$	909,940
customers:	2015	559,251		224,240		86,001		—		869,492
Operating income:	2016	100,106		55,759		27,726		—		183,591
	2015	97,672		45,916		30,582		—		174,170
Depreciation and amortization	2016	24,881		18,011		1,760		—		44,652
expense:	2015	21,440		11,781		2,457		—		35,678
Total assets:	2016	1,023,798		432,152		160,935		252,017		1,868,902
	2015	980,405		272,495		162,058		271,349		1,686,307
Capital asset purchases:	2016	—		—		—		22,184		22,184
	2015	—		—		—		19,307		19,307

Note 15: Supplemental guarantor financial information

Our long-term notes due in 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 supplemental condensed 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. During the quarter ended June 30, 2016, we identified an error in the balance sheet presentation of borrowings under our credit facility and the related asset for debt issuance costs. These amounts

26

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

were previously presented as current items in our consolidated balance sheets, and we have determined that they should have been presented as non-current. This change also corrects the presentation of the cash flows associated with borrowings under our credit facility. Previously these cash flows were presented on a net basis. The change in the balance sheet presentation requires that they be presented on a gross basis. Prior period consolidated amounts, as well as those for Deluxe Corporation, have been revised to reflect these changes. Further information about the revision can be found in Note 1.

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 that 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.

27

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Balance Sheet

(Unaudited)

	June 30, 2016
(in thousands)	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	5,851	$	2,041	$	63,585	$	(1,885	)	$	69,592
Trade accounts receivable, net	—		100,303		8,635		—			108,938
Inventories and supplies	—		35,832		2,254		—			38,086
Funds held for customers	—		20,342		56,784		—			77,126
Other current assets	5,815		31,602		1,834		—			39,251
Total current assets	11,666		190,120		133,092		(1,885		)	332,993
Deferred income taxes	14,083		—		1,756		(14,083		)	1,756
Long-term investments	34,686		7,737		—		—			42,423
Property, plant and equipment, net	10,253		69,652		4,978		—			84,883
Assets held for sale	—		—		13,967		—			13,967
Intangibles, net	16,298		277,709		3,508		—			297,515
Goodwill	—		975,548		1,544		—			977,092
Investments in consolidated subsidiaries	1,375,178		91,872		—		(1,467,050		)	—
Intercompany receivable	5,274		—		31		(5,305		)	—
Other non-current assets	6,738		111,440		95		—			118,273
Total assets	$	1,474,176	$	1,724,078	$	158,971	$	(1,488,323	)	$	1,868,902
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	17,139	$	65,707	$	2,380	$	(1,885	)	$	83,341
Accrued liabilities	13,624		138,132		58,833		—			210,589
Long-term debt due within one year	1,004		—		37		—			1,041
Total current liabilities	31,767		203,839		61,250		(1,885		)	294,971
Long-term debt	612,715		—		72		—			612,787
Deferred income taxes	—		95,045		—		(14,083		)	80,962
Intercompany payable	—		5,305		—		(5,305		)	—
Other non-current liabilities	12,952		44,711		5,777		—			63,440
Total shareholders' equity	816,742		1,375,178		91,872		(1,467,050		)	816,742
Total liabilities and shareholders' equity	$	1,474,176	$	1,724,078	$	158,971	$	(1,488,323	)	$	1,868,902

28

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Balance Sheet

(Unaudited)

	December 31, 2015
(in thousands)	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	5,187	$	940	$	56,422	$	(122	)	$	62,427
Trade accounts receivable, net	—		115,951		7,703		—			123,654
Inventories and supplies	—		39,758		2,198		—			41,956
Funds held for customers	—		—		53,343		—			53,343
Other current assets	7,230		32,765		2,610		—			42,605
Total current assets	12,417		189,414		122,276		(122		)	323,985
Deferred income taxes	13,498		—		1,238		(13,498		)	1,238
Long-term investments	34,304		7,387		—		—			41,691
Property, plant and equipment, net	10,111		71,017		4,604		—			85,732
Assets held for sale	—		—		13,969		—			13,969
Intangibles, net	9,066		273,051		3,194		—			285,311
Goodwill	—		974,973		1,442		—			976,415
Investments in consolidated subsidiaries	1,248,549		81,099		—		(1,329,648		)	—
Intercompany receivable	99,506		—		—		(99,506		)	—
Other non-current assets	5,861		107,767		184		—			113,812
Total assets	$	1,433,312	$	1,704,708	$	146,907	$	(1,442,774	)	$	1,842,153
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	15,625	$	69,809	$	2,263	$	(122	)	$	87,575
Accrued liabilities	23,567		148,279		56,577		—			228,423
Long-term debt due within one year	1,026		—		19		—			1,045
Total current liabilities	40,218		218,088		58,859		(122		)	317,043
Long-term debt	627,942		—		31		—			627,973
Deferred income taxes	—		94,574		—		(13,498		)	81,076
Intercompany payable	—		98,365		1,141		(99,506		)	—
Other non-current liabilities	20,083		45,132		5,777		—			70,992
Total shareholders' equity	745,069		1,248,549		81,099		(1,329,648		)	745,069
Total liabilities and shareholders' equity	$	1,433,312	$	1,704,708	$	146,907	$	(1,442,774	)	$	1,842,153

29

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Quarter Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	345,161		$	14,660		$	—		$	359,821
Service revenue	33,277			85,820			6,122			(34,398		)	90,821
Total revenue	33,277			430,981			20,782			(34,398		)	450,642
Cost of products	—			(120,533		)	(6,406		)	—			(126,939		)
Cost of services	(37,295		)	(31,189		)	(1,956		)	37,547			(32,893		)
Total cost of revenue	(37,295		)	(151,722		)	(8,362		)	37,547			(159,832		)
Gross profit	(4,018		)	279,259			12,420			3,149			290,810
Operating expenses	—			(187,953		)	(8,759		)	(3,149		)	(199,861		)
Operating (loss) income	(4,018		)	91,306			3,661			—			90,949
Interest expense	(4,917		)	(4,195		)	—			3,929			(5,183		)
Other income	3,680			541			150			(3,929		)	442
(Loss) income before income taxes	(5,255		)	87,652			3,811			—			86,208
Income tax benefit (provision)	3,529			(30,805		)	(543		)	—			(27,819		)
(Loss) income before equity in earnings of consolidated subsidiaries	(1,726		)	56,847			3,268			—			58,389
Equity in earnings of consolidated subsidiaries	60,115			3,268			—			(63,383		)	—
Net income	$	58,389		$	60,115		$	3,268		$	(63,383	)	$	58,389
Comprehensive income	$	59,282		$	60,957		$	3,751		$	(64,708	)	$	59,282

30

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Quarter Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	339,959		$	18,938		$	—		$	358,897
Service revenue	28,426			71,753			6,331			(29,533		)	76,977
Total revenue	28,426			411,712			25,269			(29,533		)	435,874
Cost of products	—			(118,527		)	(9,729		)	—			(128,256		)
Cost of services	(29,847		)	(26,174		)	(1,830		)	30,169			(27,682		)
Total cost of revenue	(29,847		)	(144,701		)	(11,559		)	30,169			(155,938		)
Gross profit	(1,421		)	267,011			13,710			636			279,936
Operating expenses	—			(180,869		)	(9,552		)	(636		)	(191,057		)
Operating (loss) income	(1,421		)	86,142			4,158			—			88,879
Interest expense	(4,104		)	(4,625		)	(1		)	4,310			(4,420		)
Other income	4,568			470			96			(4,310		)	824
(Loss) income before income taxes	(957		)	81,987			4,253			—			85,283
Income tax benefit (provision)	788			(28,960		)	(1,048		)	—			(29,220		)
(Loss) income before equity in earnings of consolidated subsidiaries	(169		)	53,027			3,205			—			56,063
Equity in earnings of consolidated subsidiaries	56,232			3,205			—			(59,437		)	—
Net income	$	56,063		$	56,232		$	3,205		$	(59,437	)	$	56,063
Comprehensive income	$	57,327		$	57,453		$	4,157		$	(61,610	)	$	57,327

31

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Six Months Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	697,834		$	28,172		$	—		$	726,006
Service revenue	67,095			173,937			12,235			(69,333		)	183,934
Total revenue	67,095			871,771			40,407			(69,333		)	909,940
Cost of products	—			(244,955		)	(12,578		)	—			(257,533		)
Cost of services	(75,323		)	(64,762		)	(3,666		)	77,147			(66,604		)
Total cost of revenue	(75,323		)	(309,717		)	(16,244		)	77,147			(324,137		)
Gross profit	(8,228		)	562,054			24,163			7,814			585,803
Operating expenses	—			(377,313		)	(17,085		)	(7,814		)	(402,212		)
Operating (loss) income	(8,228		)	184,741			7,078			—			183,591
Interest expense	(9,901		)	(6,965		)	(1		)	6,441			(10,426		)
Other income (expense)	6,308			867			(141		)	(6,441		)	593
(Loss) income before income taxes	(11,821		)	178,643			6,936			—			173,758
Income tax benefit (provision)	6,839			(62,786		)	(1,320		)	—			(57,267		)
(Loss) income before equity in earnings of consolidated subsidiaries	(4,982		)	115,857			5,616			—			116,491
Equity in earnings of consolidated subsidiaries	121,473			5,616			—			(127,089		)	—
Net income	$	116,491		$	121,473		$	5,616		$	(127,089	)	$	116,491
Comprehensive income	$	122,474		$	127,352		$	10,777		$	(138,129	)	$	122,474

32

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Six Months Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	672,698		$	41,213		$	—		$	713,911
Service revenue	55,111			144,993			12,929			(57,452		)	155,581
Total revenue	55,111			817,691			54,142			(57,452		)	869,492
Cost of products	—			(230,780		)	(21,216		)	—			(251,996		)
Cost of services	(60,130		)	(54,754		)	(3,920		)	62,180			(56,624		)
Total cost of revenue	(60,130		)	(285,534		)	(25,136		)	62,180			(308,620		)
Gross profit	(5,019		)	532,157			29,006			4,728			560,872
Operating expenses	—			(361,627		)	(20,347		)	(4,728		)	(386,702		)
Operating (loss) income	(5,019		)	170,530			8,659			—			174,170
Loss on early debt extinguishment	(8,917		)	—			—			—			(8,917		)
Interest expense	(10,601		)	(5,995		)	(1		)	5,662			(10,935		)
Other income	5,943			608			365			(5,662		)	1,254
(Loss) income before income taxes	(18,594		)	165,143			9,023			—			155,572
Income tax benefit (provision)	7,289			(58,401		)	(2,457		)	—			(53,569		)
(Loss) income before equity in earnings of consolidated subsidiaries	(11,305		)	106,742			6,566			—			102,003
Equity in earnings of consolidated subsidiaries	113,308			6,566			—			(119,874		)	—
Net income	$	102,003		$	113,308		$	6,566		$	(119,874	)	$	102,003
Comprehensive income	$	97,510		$	108,730		$	1,450		$	(110,180	)	$	97,510

33

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Statement of Cash Flows

(Unaudited)

	Six Months Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(10,443	)	$	135,686		$	4,786		$	(1,763	)	$	128,266
Cash flows from investing activities:
Purchases of capital assets	(12,493		)	(8,357		)	(1,334		)	—			(22,184		)
Payments for acquisitions, net of cash acquired	—			(28,497		)	—			—			(28,497		)
Proceeds from company-owned life insurance policies	3,053			—			—			—			3,053
Other	(195		)	633			1,649			—			2,087
Net cash (used) provided by investing activities	(9,635		)	(36,221		)	315			—			(45,541		)
Cash flows from financing activities:
Proceeds from issuing long-term debt	107,000			—			—			—			107,000
Payments on long-term debt, including costs of debt reacquisition	(128,571		)	—			(13		)	—			(128,584		)
Proceeds from issuing shares under employee plans	4,193			—			—			—			4,193
Employee taxes paid for shares withheld	(2,260		)	—			—			—			(2,260		)
Payments for common shares repurchased	(29,981		)	—			—			—			(29,981		)
Cash dividends paid to shareholders	(29,446		)	—			—			—			(29,446		)
Advances from (to) consolidated subsidiaries	99,848			(97,988		)	(1,860		)	—			—
Other	(41		)	(376		)	—			—			(417		)
Net cash provided (used) by financing activities	20,742			(98,364		)	(1,873		)	—			(79,495		)
Effect of exchange rate change on cash	—			—			3,935			—			3,935
Net change in cash and cash equivalents	664			1,101			7,163			(1,763		)	7,165
Cash and cash equivalents, beginning of year	5,187			940			56,422			(122		)	62,427
Cash and cash equivalents, end of period	$	5,851		$	2,041		$	63,585		$	(1,885	)	$	69,592

34

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in thousands, except per share amounts)

Condensed Consolidating Statement of Cash Flows

(Unaudited)

	Six Months Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(3,699	)	$	139,604		$	7,793		$	3,209		$	146,907
Cash flows from investing activities:
Purchases of capital assets	(905		)	(16,997		)	(1,405		)	—			(19,307		)
Payments for acquisitions, net of cash acquired	(26		)	(35,774		)	—			—			(35,800		)
Other	(286		)	619			6			—			339
Net cash used by investing activities	(1,217		)	(52,152		)	(1,399		)	—			(54,768		)
Cash flows from financing activities:
Proceeds from short-term borrowings	75,000			—			—			—			75,000
Proceeds from issuing long-term debt	211,500			—			—			—			211,500
Payments on long-term debt, including costs of debt reacquisition	(346,015		)	—			(6		)	—			(346,021		)
Proceeds from issuing shares under employee plans	4,135			—			—			—			4,135
Excess tax benefit from share-based employee awards	1,557			—			—			—			1,557
Employee taxes paid for shares withheld	(871		)	—			—			—			(871		)
Cash dividends paid to shareholders	(30,043		)	—			—			—			(30,043		)
Advances from (to) consolidated subsidiaries	88,650			(88,232		)	(418		)	—			—
Other	(136		)	—			(150		)	—			(286		)
Net cash provided (used) by financing activities	3,777			(88,232		)	(574		)	—			(85,029		)
Effect of exchange rate change on cash	—			—			(3,725		)	—			(3,725		)
Net change in cash and cash equivalents	(1,139		)	(780		)	2,095			3,209			3,385
Cash and cash equivalents, beginning of year	8,335			4,342			52,193			(3,329		)	61,541
Cash and cash equivalents, end of period	$	7,196		$	3,562		$	54,288		$	(120	)	$	64,926

35

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

EXECUTIVE OVERVIEW

We provide a suite of customer life cycle management solutions that help our customers acquire and engage their customers across multiple channels. To promote and sell a wide range of products and services, we use printed and electronic marketing; a direct sales force; referrals from financial institutions, telecommunication clients and other partners; purchased search results from online search engines; and networks of distributors and independent dealers. Our Small Business Services segment provides products and services to approximately 4.5 million small business customers and our Direct Checks segment has provided products and services to more than six million consumers. Through our Financial Services segment, we provide products and services to approximately 5,100 financial institution clients. We operate primarily in the United States. Small Business Services also has operations in Canada and portions of Europe. Our product and service offerings are comprised of the following:

Checks – We remain one of the largest providers of checks in the United States. During 2015, checks represented 40.1% of our Small Business Services segment's revenue, 59.7% of our Financial Services segment's revenue and 84.6% of our Direct Checks segment's revenue.

Marketing solutions and other services – We offer products and services that help small businesses and/or financial institutions promote their businesses and acquire customers, as well as various other service offerings. Our Small Business Services segment offers services designed to fulfill the marketing and sales needs of small businesses, including logo and web design; hosting and other web services; search engine optimization; marketing programs, including email, mobile, social media and other self-service marketing solutions; and digital printing services. In addition, Small Business Services offers specialized services, including fraud protection and security, payroll services and electronic checks, as well as promotional solutions such as postcards, brochures, retail packaging supplies, apparel, greeting cards and business cards. Financial Services offers a suite of financial technology ("FinTech") solutions focused on enabling financial institutions to better manage the customer life cycle for their retail and commercial customers. These FinTech solutions include outsourced marketing campaign targeting and execution, digital channel onboarding, loyalty and rewards, technology-enabled treasury services, financial performance management, and fraud protection and security services. Our Direct Checks segment provides fraud protection and security services, as well as package insert programs under which companies' marketing materials are included in our check packages.

Forms – Our Small Business Services segment is a leading provider of printed forms to small businesses, including deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices and personnel forms. This segment also offers computer forms compatible with accounting software packages commonly used by small businesses. Forms sold by our Financial Services and Direct Checks segments include deposit tickets and check registers.

Accessories and other products – Small Business Services offers products designed to provide small business owners with the customized documents necessary to efficiently manage their business, including envelopes, office supplies, stamps and labels. Our Financial Services and Direct Checks segments offer checkbook covers and stamps.

Throughout the past several years, we have focused on opportunities to increase revenue, while maintaining strong operating margins. These opportunities have included new product and service offerings, brand awareness and positioning initiatives, investing in technology for our service offerings, enhancing our internet capabilities, improving customer segmentation, adding new small business customers, and reducing costs. In addition, we invested in various acquisitions that extend the range of products and services we offer to our customers, primarily marketing solutions and other services offerings. Information about our acquisitions can be found under the caption “Note 6: Acquisitions” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report and under the caption "Note 5: Acquisitions" of the Notes to Consolidated Financial Statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2015 (the "2015 Form 10-K"). During the remainder of 2016, we plan to continue our focus in these areas, with an emphasis on profitable revenue growth and increasing the mix of marketing solutions and other services revenue. We also plan to continue small-to-medium-sized acquisitions that complement our large customer bases, with a focus on marketing solutions and other services.

Earnings for the first half of 2016, as compared to the first half of 2015, benefited from price increases and continuing initiatives to reduce our cost structure, primarily within our sales, marketing and fulfillment organizations. These increases in earnings were partially offset by volume reductions for both personal and business checks, due primarily to the continuing decline in check usage, as well as increased investments in revenue growth opportunities.

36

Certain amounts included in our consolidated balance sheet as of December 31, 2015 and our consolidated statement of cash flows for the first half of 2015 have been revised to correct the presentation of borrowings under our credit facility and the related asset for debt issuance costs. Further information can be found under the caption “Note 1: Consolidated financial statements” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report.

Our Strategies

Details concerning our strategies were provided under the caption "Business Segments" appearing in Item 1 of the 2015 Form 10-K. We made no significant changes to our strategies during the first half of 2016.

Consistent with our strategies, during the first half of 2016, we acquired selected assets of several businesses in our Small Business Services segment. Further information regarding these acquisitions can be found under the caption "Note 6: Acquisitions" of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report.

Cost Reduction Initiatives

As discussed in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the 2015 Form 10-K, we anticipated that we would realize net cost reductions of approximately $50 million in 2016, as compared to our 2015 results of operations. We are currently on track to realize these cost reductions, primarily from our sales, marketing and fulfillment organizations. Approximately 65% of these savings are expected to impact selling, general and administrative (SG&A) expense, with the remaining 35% affecting cost of revenue.

Outlook for 2016

We anticipate that consolidated revenue will be between $1.855 billion and $1.875 billion for 2016, compared to $1.773 billion for 2015. In Small Business Services, we expect revenue to increase between 5% and 6% compared to 2015 revenue of $1.152 billion. Volume declines in core business products and the negative impact of foreign exchange rates are expected to be more than offset by growth in our online, dealer and major accounts channels, price increases, and growth in our marketing solutions and other services offerings, as well as the impact of continued small tuck-in acquisitions. In Financial Services, we expect revenue to increase between 9% and 10% compared to 2015 revenue of $455.4 million. We expect continued growth in marketing solutions and other services, including incremental revenue from the acquisitions of Datamyx in October 2015 and FISC Solutions in December 2015, as well as growth in Wausau Financial Systems and Deluxe Rewards revenue and the impact of small tuck-in acquisitions. We expect these revenue increases to be partially offset by year-over-year secular check order declines between 4% and 5%, as well as the impact of expected contract renewal allowances. In Direct Checks, we expect revenue to decline between 7% and 8%, compared to 2015 revenue of $165.5 million, driven primarily by secular check order volume declines resulting from reduced check usage.

We expect that 2016 diluted earnings per share will be between $4.87 and $4.97, including charges of $0.03 per share for restructuring costs and transaction costs related to acquisitions, compared to $4.36 for 2015, which included total charges of $0.23 per share related to the loss on early debt extinguishment in the first quarter of 2015, as well as restructuring costs and transaction costs related to acquisitions. We expect that the benefits of our cost reduction activities will be partially offset by a continued sluggish economy and increases in medical expenses, material costs and delivery rates, as well as continued investments in revenue growth opportunities, including brand awareness, marketing solutions and other services offers, and enhanced internet capabilities. We estimate that our annual effective tax rate for 2016 will be approximately 33%, compared to 33.3% for 2015.

We anticipate that net cash provided by operating activities will be between $320 million and $330 million in 2016, compared to $308 million in 2015, driven by stronger operating performance and lower interest payments, partially offset by higher income tax, contract acquisition and employee medical payments. We anticipate contract acquisition payments of approximately $20 million in 2016, and we estimate that capital spending will be approximately $43 million in 2016, as we continue to invest in key revenue growth initiatives and order fulfillment and information technology infrastructure.

We believe that cash generated by operating activities, along with availability under our credit facility, will be sufficient to support our operations for the next 12 months, including dividend payments, capital expenditures, required interest payments, and periodic share repurchases, as well as possible small-to-medium-sized acquisitions. We expect to maintain a disciplined approach to capital deployment that focuses on our need to continue investing in initiatives to drive revenue growth, including small-to-medium-sized acquisitions and continued expansion of our distributor channel. We anticipate that our board of directors will maintain our current dividend level. However, dividends are approved by the board of directors on a quarterly basis, and thus are subject to change. As of June 30, 2016, $99.2 million was available for borrowing under our credit facility.

37

We may, from time to time, consider retiring outstanding debt through open market purchases, privately negotiated transactions or other means. Any such purchases or exchanges would depend on prevailing market conditions, our liquidity requirements and other potential uses of cash, including acquisitions and share repurchases.

BUSINESS CHALLENGES/MARKET RISKS

Information regarding business challenges/market risks was provided in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the 2015 Form 10-K. There were no significant changes in these items during the first half of 2016.

CONSOLIDATED RESULTS OF OPERATIONS

Consolidated Revenue

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands, except per order amounts)	2016		2015		Change		2016		2015		Change
Total revenue	$	450,642	$	435,874	3.4	%	$	909,940	$	869,492	4.7	%
Orders(1)	12,972		13,441		(3.5	%)	26,261		26,912		(2.4	%)
Revenue per order	$	34.74	$	32.43	7.1	%	$	34.65	$	32.31	7.2	%

⁽¹⁾ Orders is our company-wide measure of volume and includes both products and services.

The increase in total revenue for the second quarter and first half of 2016, as compared to the same periods in 2015, was primarily due to growth in marketing solutions and other services revenue of $20 million for the second quarter of 2016 and $44 million for the first half of 2016, including incremental revenue from businesses acquired during 2016 and 2015. Information regarding our acquisitions can be found under the caption “Note 6: Acquisitions” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report and under the caption "Note 5: Acquisitions" of the Notes to Consolidated Financial Statements appearing in the 2015 Form 10-K. In addition, revenue benefited from previous price increases. These revenue increases were partially offset by lower order volume for both personal and business checks, as well as contract renewal allowances within Financial Services.

Service revenue represented 20.2% of total revenue for the first half of 2016 and 17.9% for the first half of 2015. As such, the majority of our revenue is generated by product sales. We do not manage our business based on product versus service revenue. Instead, we analyze our products and services based on the following categories:

	Quarter Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Checks	47.9	%	50.4	%	48.3	%	51.1	%
Marketing solutions and other services	32.6	%	29.0	%	32.0	%	28.4	%
Forms	11.4	%	12.1	%	11.5	%	12.2	%
Accessories and other products	8.1	%	8.5	%	8.2	%	8.3	%
Total revenue	100.0	%	100.0	%	100.0	%	100.0	%

The number of orders decreased for the second quarter and first half of 2016, as compared to the same periods in 2015, due primarily to the continuing decline in check and forms usage, partially offset by growth in marketing solutions and other services, including the impact of acquisitions in 2016 and 2015. Revenue per order increased for the second quarter and first half of 2016, as compared to the same periods in 2015, primarily due to the benefit of previous price increases and favorable product and service mix, partially offset by the impact of Financial Services contract renewal allowances.

38

Consolidated Cost of Revenue

	Quarter Ended June 30,								Six Months Ended June 30,
(in thousands)	2016			2015			Change		2016			2015			Change
Total cost of revenue	$	159,832		$	155,938		2.5	%	$	324,137		$	308,620		5.0	%
Total cost of revenue as a percentage of total revenue	35.5		%	35.8		%	(0.3) pts.		35.6		%	35.5		%	0.1 pts.

Cost of revenue consists primarily of raw materials used to manufacture our products, shipping and handling costs, third-party costs for outsourced products and services, payroll and related expenses, information technology costs, depreciation and amortization of assets used in the production process and in support of our service offerings, and related overhead.

The increase in total cost of revenue for the second quarter and first half of 2016, as compared to the same periods in 2015, was primarily attributable to the growth in revenue, including an increase in outsourced product costs of $3 million for the second quarter of 2016 and $11 million for the first half of 2016, primarily resulting from investments to expand our distributor and major accounts channels. In addition, the businesses acquired in 2015 in our Financial Services segment incurred incremental costs of approximately $4 million for the second quarter of 2016 and $9 million for the first half of 2016, and delivery rates and material costs increased in 2016. Partially offsetting these increases in total cost of revenue were the impact of lower order volume for both personal and business checks, manufacturing efficiencies and other benefits resulting from our continued cost reduction initiatives of approximately $4 million for the second quarter of 2016 and $8 million for the first half of 2016, as well as a $2 million reduction in a liability for environmental remediation costs related to a manufacturing facility which we previously sold.

Consolidated Selling, General & Administrative Expense

	Quarter Ended June 30,								Six Months Ended June 30,
(in thousands)	2016			2015			Change		2016			2015			Change
SG&A expense	$	198,726		$	190,091		4.5	%	$	400,198		$	385,469		3.8	%
SG&A expense as a percentage of total revenue	44.1		%	43.6		%	0.5 pts.		44.0		%	44.3		%	(0.3) pts.

The increase in SG&A expense for the second quarter and first half of 2016, as compared to the same periods in 2015, was driven primarily by incremental operating expenses of the businesses we acquired in 2015 in our Financial Services segment of approximately $6 million for the second quarter of 2016 and $14 million for the first half of 2016, as well as investments in revenue growth opportunities, including investments to expand our major accounts channel. In addition, for the first half of 2016, Small Business Services commission expense increased $2 million due primarily to increased sales volume for our distributor channel. These increases were partially offset by various expense reduction initiatives of approximately $6 million for the second quarter of 2016 and $13 million for the first half of 2016, primarily within our sales and marketing organizations.

Net Restructuring Charges

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016		2015		Change		2016		2015		Change
Net restructuring charges	$	1,135	$	966	$	169	$	2,014	$	1,233	$	781

We recorded net restructuring charges related to the cost reduction initiatives discussed under ExecutiveOverview. The net charges for each period relate primarily to costs of our restructuring activities, such as employee severance benefits, information technology costs, employee and equipment moves, training and travel. Further information can be found under Restructuring Costs.

Loss on Early Debt Extinguishment

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016		2015		Change		2016		2015		Change
Loss on early debt extinguishment	$	—	$	—	$	—	$	—	$	8,917	$	(8,917	)

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During the first quarter of 2015, we retired all $200.0 million of our 7.0% senior notes due in March 2019, realizing a pre-tax loss of $8.9 million, consisting of a contractual call premium and the write-off of related debt issuance costs. We funded the retirement utilizing our credit facility and a short-term bank loan that we have since repaid. We may also, from time to time, consider retiring additional outstanding debt through open market purchases, privately negotiated transactions or other means. Any such purchases or exchanges would depend upon prevailing market conditions, our liquidity requirements and other potential uses of cash, including acquisitions and share repurchases.

Interest Expense

	Quarter Ended June 30,								Six Months Ended June 30,
(in thousands)	2016			2015			Change		2016			2015			Change
Interest expense	$	5,183		$	4,420		17.3	%	$	10,426		$	10,935		(4.7	%)
Weighted-average debt outstanding	614,311			528,273			16.3	%	621,501			580,587			7.0	%
Weighted-average interest rate	3.0		%	2.9		%	0.1 pts.		2.9		%	3.5		%	(0.6) pts.

The increase in interest expense for the second quarter of 2016, as compared to the second quarter of 2015, was primarily due to our higher weighted-average debt level in 2016.

The decrease in interest expense for the first half of 2016, as compared to the first half of 2015, was driven by changes in our debt structure. In March 2015, we retired $200.0 million of long-term debt with an interest rate of 7.0%. We utilized our credit facility and a short-term bank loan to fund this redemption. Amounts outstanding under these borrowings carried a weighted-average interest rate of 1.9% during the first half of 2016. Partially offsetting the decrease in interest expense resulting from our lower weighted-average interest rate, was our higher weighted-average debt level in 2016.

Income Tax Provision

	Quarter Ended June 30,								Six Months Ended June 30,
(in thousands)	2016			2015			Change		2016			2015			Change
Income tax provision	$	27,819		$	29,220		(4.8	%)	$	57,267		$	53,569		6.9	%
Effective income tax rate	32.3		%	34.3		%	(2.0) pts.		33.0		%	34.4		%	(1.4) pts.

The decrease in our effective tax rate for the second quarter and first half of 2016, as compared to the same periods in 2015, was primarily due to the adoption of Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which reduced income tax expense $1.0 million in the second quarter of 2016 and $1.5 million in the first half of 2016. This resulted in a reduction in our effective income tax rate of 1.2 points for the second quarter of 2016 and 0.9 points for the first half of 2016. Further information regarding the adoption of this accounting standard can be found under the caption "Note 2: New accounting pronouncements" of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report. In addition, our effective tax rate for the second quarter and first half of 2016 included the benefit of the federal research and development credit, which we were not able to record in the same periods in 2015, as legislation extending the credit had not yet been enacted. We expect that our annual effective tax rate for 2016 will be approximately 33%.

RESTRUCTURING COSTS

We have recorded expenses related to our restructuring activities, including accruals consisting primarily of employee severance benefits, as well as costs that are expensed when incurred, including information technology costs, employee and equipment moves, training and travel. Our restructuring activities are driven by our cost reduction initiatives and include employee reductions in various functional areas, as well as the closing of facilities. During the first half of 2016, we closed a call center, a fulfillment facility and a sales office. During 2015, we closed two call centers, a sales office, a warehouse, a fulfillment facility and one facility that contained both fulfillment and call center functions. Restructuring costs have been reduced by the reversal of severance accruals when fewer employees receive severance benefits than originally estimated.

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Net restructuring charges for each period were as follows:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands, except number of employees)	2016			2015			2016			2015
Severance accruals	$	1,096		$	1,307		$	1,987		$	2,050
Severance reversals	(96		)	(170		)	(468		)	(694		)
Operating lease obligations	—			—			59			—
Net restructuring accruals	1,000			1,137			1,578			1,356
Other costs	217			17			507			62
Net restructuring charges	$	1,217		$	1,154		$	2,085		$	1,418
Number of employees included in severance accruals	40			110			65			150

The majority of the employee reductions included in our restructuring accruals are expected to be completed by the fourth quarter of 2016, and we expect most of the related severance payments to be paid by the first quarter of 2017, utilizing cash from operations.

As a result of our employee reductions and facility closings, we expect to realize cost savings of approximately $3 million in total cost of revenue and $10 million in SG&A expense in 2016, in comparison to our 2015 results of operations, which represents a portion of the estimated $50 million of total net cost reductions we expect to realize in 2016. Expense reductions consist primarily of labor and facility costs. Information about the other initiatives driving our cost savings can be found in Executive Overview.

Further information regarding our restructuring charges can be found under the caption “Note 9: Restructuring charges” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report.

SEGMENT RESULTS

Additional financial information regarding our business segments appears under the caption “Note 14: Business segment information” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report.

Small Business Services

This segment's products and services are promoted through direct response mail and internet advertising; referrals from financial institutions, telecommunications clients and other partners; networks of distributors and independent dealers; a growing direct sales force that focuses on selling to and through major accounts; and an outbound telemarketing group. Results for this segment were as follows:

	Quarter Ended June 30,								Six Months Ended June 30,
(in thousands)	2016			2015			Change		2016			2015			Change
Total revenue	$	288,182		$	282,285		2.1	%	$	578,453		$	559,251		3.4	%
Operating income	48,956			48,225			1.5	%	100,106			97,672			2.5	%
Operating margin	17.0		%	17.1		%	(0.1) pts.		17.3		%	17.5		%	(0.2) pts.

The increase in total revenue for the second quarter and first half of 2016, as compared to the same periods in 2015, was due primarily to growth in marketing solutions and other services revenue of $8 million for the second quarter of 2016 and $17 million for the first half of 2016, including incremental revenue from businesses acquired in 2016 and 2015. Information about our acquisitions can be found under the caption “Note 6: Acquisitions” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report and under the caption "Note 5: Acquisitions" of the Notes to Consolidated Financial Statements appearing in the 2015 Form 10-K. In addition, revenue benefited from previous price increases. These increases in revenue were partially offset by a decrease in business check volume, as well as an unfavorable currency exchange rate impact of $1 million for the second quarter of 2016 and $3 million for the first half of 2016.

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The increase in operating income for the second quarter and first half of 2016, as compared to the same periods in 2015, was primarily due to price increases and benefits of our cost reduction initiatives. Partially offsetting these increases in operating income were increased investments in revenue growth opportunities, including investments to expand our major accounts channel. In addition, delivery rates and material costs increased in 2016, and for the first half of the year, commission expense increased $2 million due primarily to increased sales volume for our distributor channel.

Financial Services

Financial Services' products and services are sold primarily through a direct sales force, which executes product and service supply contracts with our financial institution clients nationwide, including banks, credit unions and financial services companies. In the case of check supply contracts, once the financial institution relationship is established, consumers may submit their check orders through their financial institution or over the phone or internet. Results for this segment were as follows:

	Quarter Ended June 30,								Six Months Ended June 30,
(in thousands)	2016			2015			Change		2016			2015			Change
Total revenue	$	124,230		$	112,699		10.2	%	$	251,478		$	224,240		12.1	%
Operating income	29,034			25,506			13.8	%	55,759			45,916			21.4	%
Operating margin	23.4		%	22.6		%	0.8 pts.		22.2		%	20.5		%	1.7 pts.

The increase in revenue for the second quarter and first half of 2016, as compared to the same periods in 2015, was driven by growth in marketing solutions and other services of $12 million for the second quarter of 2016 and $27 million for the first half of 2016, including incremental revenue from the acquisitions of Datamyx LLC and FISC Solutions in 2015 of $11 million for the second quarter of 2016 and $24 million for the first half of 2016. In addition, Wausau Financial Systems service offerings increased $1 million for the second quarter of 2016 and $4 million for the first half of 2016. Information about our acquisitions can be found under the caption "Note 5: Acquisitions" of the Notes to Consolidated Financial Statements appearing in the 2015 Form 10-K. Additionally, revenue benefited from previous price increases. Partially offsetting these revenue increases was lower check order volume due to the continued decline in check usage, as well as the impact of contract renewal allowances.

The increase in operating income and operating margin for the second quarter and first half of 2016, as compared to the same periods in 2015, was primarily due to previous price increases, the benefit of our continuing cost reduction initiatives and compensation expense in 2015 for an earn-out agreement related to a 2013 acquisition. Partially offsetting these increases in operating income was the impact of lower check order volume, contract renewal allowances and increased delivery and material costs in 2016. In addition, the operating results of our acquisitions, including acquisition-related amortization, reduced Financial Services' operating margin 1.9 points for both the second quarter and first half of 2016.

Direct Checks

Direct Checks sells products and services directly to consumers using direct marketing, including print advertising and search engine marketing and optimization strategies. Direct Checks sells under various brand names, including Checks Unlimited®, Designer® Checks, Checks.com, Check Gallery®, The Styles Check Company®, and Artistic Checks®, among others. Results for this segment were as follows:

	Quarter Ended June 30,								Six Months Ended June 30,
(in thousands)	2016			2015			Change		2016			2015			Change
Total revenue	$	38,230		$	40,890		(6.5	%)	$	80,009		$	86,001		(7.0	%)
Operating income	12,959			15,148			(14.5	%)	27,726			30,582			(9.3	%)
Operating margin	33.9		%	37.0		%	(3.1) pts.		34.7		%	35.6		%	(0.9) pts.

The decrease in revenue for the second quarter and first half of 2016, as compared to the same periods in 2015, was primarily due to a reduction in orders stemming from the continued decline in check usage. Partially offsetting the volume decline was higher revenue per order, driven by an improved call center incentive plan.

The decrease in operating income and operating margin for the second quarter and first half of 2016, as compared to the same periods in 2015, was due primarily to lower order volume and increased delivery rates and material costs in 2016, as

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well as increased advertising expense and restructuring costs in 2016. These decreases in operating income were partially offset by the benefits from our cost reduction initiatives and higher revenue per order.

CASH FLOWS AND LIQUIDITY

As of June 30, 2016, we held cash and cash equivalents of $69.6 million. The following table shows our cash flow activity for the six months ended June 30, 2016 and 2015, and should be read in conjunction with the consolidated statements of cash flows appearing in Item 1 of this report.

	Six Months Ended June 30,
(in thousands)	2016			2015			Change
Net cash provided by operating activities	$	128,266		$	146,907		$	(18,641	)
Net cash used by investing activities	(45,541		)	(54,768		)	9,227
Net cash used by financing activities	(79,495		)	(85,029		)	5,534
Effect of exchange rate change on cash	3,935			(3,725		)	7,660
Net change in cash and cash equivalents	$	7,165		$	3,385		$	3,780

The $18.6 million decrease in net cash provided by operating activities for the first half of 2016, as compared to the first half of 2015, was primarily due to a $14.0 million increase in income tax payments, an $8.5 million increase in contract acquisition payments and the payment in 2016 of an incentive related to a 2013 acquisition. These decreases in cash provided by operating activities were partially offset by stronger operating performance and a $4.9 million decrease in interest payments due primarily to the retirement of long-term notes in March 2015.

Included in net cash provided by operating activities were the following operating cash outflows:

	Six Months Ended June 30,
(in thousands)	2016		2015		Change
Income tax payments	$	65,898	$	51,937	$	13,961
Performance-based compensation payments(1)	32,652		31,046		1,606
Contract acquisition payments	14,341		5,848		8,493
Interest payments	10,225		15,158		(4,933		)
Incentive payment related to previous acquisition	5,434		—		5,434
Severance payments	3,015		3,578		(563		)

⁽¹⁾ Amounts reflect compensation based on total company performance.

Net cash used by investing activities for the first half of 2016 was $9.2 million lower than the first half of 2015, driven primarily by a $7.3 million decrease in payments for acquisitions, proceeds of $3.1 million from company-owned life insurance policies in 2016 and proceeds from the sale of Canadian marketable securities during 2016. Partially offsetting this decrease in cash used by investing activities was a $2.9 million increase in capital asset purchases.

Net cash used by financing activities for the first half of 2016 was $5.5 million lower than the first half of 2015 due primarily to a decrease of $217.4 million in payments on long-term debt driven primarily by the 2015 redemption of $200.0 million of long-term notes due in 2019. Partially offsetting this decrease in net cash used by financing activities was a decrease of $179.5 million in amounts borrowed under our credit facility and short-term borrowings, as we utilized these borrowings in 2015 to redeem the long-term notes due in 2019. In addition, payments to repurchase common shares increased $30.0 million in 2016, as we did not repurchase any shares during the first half of 2015.

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Significant cash inflows, excluding those related to operating activities, for each period were as follows:

	Six Months Ended June 30,
(in thousands)	2016		2015		Change
Proceeds from issuing long-term debt	$	107,000	$	211,500	$	(104,500	)
Proceeds from short-term borrowings	—		75,000		(75,000		)
Proceeds from issuing shares under employee plans	4,193		4,135		58
Proceeds from company-owned life insurance policies	3,053		—		3,053

Significant cash outflows, excluding those related to operating activities, for each period were as follows:

	Six Months Ended June 30,
(in thousands)	2016		2015		Change
Payments on long-term debt, including costs of debt reacquisition	$	128,584	$	346,021	$	(217,437	)
Payments for common shares repurchased	29,981		—		29,981
Cash dividends paid to shareholders	29,446		30,043		(597		)
Payments for acquisitions, net of cash acquired	28,497		35,800		(7,303		)
Purchases of capital assets	22,184		19,307		2,877

As of June 30, 2016, our subsidiaries located in Canada held cash and cash equivalents of $62.0 million. Deferred income taxes have not been recognized on unremitted earnings of our foreign subsidiaries, as these amounts are intended to be reinvested indefinitely in the operations of those subsidiaries. If we were to repatriate all of the Canadian cash and cash equivalents into the United States at one time, we would incur a federal tax liability of approximately $6.5 million, based on current federal tax law.

We anticipate that net cash provided by operating activities will be between $320 million and $330 million in 2016, compared to $308 million in 2015, driven by stronger operating performance and and lower interest payments, partially offset by higher income tax, contract acquisition and employee medical payments. We anticipate that net cash provided by operating activities in 2016 will be utilized for dividend payments, capital expenditures of approximately $43 million, periodic share repurchases and small-to-medium-sized acquisitions. We intend to focus our capital spending on key revenue growth initiatives and investments in order fulfillment and information technology infrastructure. As of June 30, 2016, $99.2 million was available for borrowing under our credit facility. We believe that cash generated by operating activities, along with availability under our credit facility, will be sufficient to support our operations for the next 12 months, including dividend payments, capital expenditures and required interest payments, as well as periodic share repurchases and small-to-medium-sized acquisitions.

CAPITAL RESOURCES

Our total debt was $613.8 million as of June 30, 2016, a decrease of $15.2 million from December 31, 2015. We have entered into interest rate swaps to hedge against changes in the fair value of a portion of our long-term debt. Further information concerning our outstanding debt and related interest rate swaps can be found under the captions “Note 11: Debt” and “Note 7: Derivative financial instruments” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report. Information regarding our debt service obligations can be found under Off-Balance Sheet Arrangements, Guarantees and Contractual Obligations in the 2015 Form 10-K.

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Our capital structure for each period was as follows:

	June 30, 2016				December 31, 2015
(in thousands)	Amount		Weighted- average interest rate		Amount		Weighted- average interest rate		Change
Fixed interest rate	$	1,991	2.0	%	$	2,109	2.0	%	$	(118	)
Floating interest rate	611,837		3.0	%	626,909		2.9	%	(15,072		)
Total debt	613,828		3.0	%	629,018		2.9	%	(15,190		)
Shareholders’ equity	816,742				745,069				71,673
Total capital	$	1,430,570			$	1,374,087			$	56,483

We have an outstanding authorization from our board of directors to purchase up to 10 million shares of our common stock. This authorization has no expiration date, and 0.5 million shares remained available for purchase under this authorization as of June 30, 2016. During the first half of 2016, we repurchased 0.5 million shares for $30.0 million. In May 2016, our board of directors approved an additional authorization for the repurchase of up to $300.0 million of our common stock, effective at the conclusion of our previous authorization. The additional authorization also has no expiration date. Information regarding changes in shareholders' equity can be found in the consolidated statement of shareholders' equity appearing in Item 1 of this report.

We may, from time to time, consider retiring outstanding debt through open market purchases, privately negotiated transactions or other means. Any such repurchases or exchanges would depend on prevailing market conditions, our liquidity requirements and other potential uses of cash, including acquisitions and share repurchases.

As of June 30, 2016, we had a $525.0 million credit facility, which is scheduled to expire in February 2019. Our quarterly commitment fee ranges from 0.20% to 0.40% based on our leverage ratio. Borrowings under the credit facility are collateralized by substantially all of our personal and intangible property. The credit agreement governing the credit facility contains customary covenants regarding limits on levels of subsidiary indebtedness and capital expenditures, liens, investments, acquisitions, certain mergers, certain asset sales outside the ordinary course of business, and change in control as defined in the agreement. The agreement also contains financial covenants regarding our leverage ratio, interest coverage and liquidity. We were in compliance with all debt covenants as of June 30, 2016, and we expect to remain in compliance with all debt covenants throughout the next 12 months.

As of June 30, 2016, $413.0 million was drawn on our credit facility at a weighted-average interest rate of 1.9%. As of December 31, 2015, $434.0 million was drawn on our credit facility at a weighted-average interest rate of 1.9%. As of June 30, 2016, amounts were available for borrowing under our credit facility as follows:

(in thousands)	Total available
Credit facility commitment	$	525,000
Amount drawn on credit facility	(413,000		)
Outstanding letters of credit(1)	(12,795		)
Net available for borrowing as of June 30, 2016	$	99,205

⁽¹⁾ We use standby letters of credit to collateralize certain obligations related primarily to our self-insured workers’ compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our credit facility.

OTHER FINANCIAL POSITION INFORMATION

Acquisitions – The impact of acquisitions on our consolidated balance sheet as of June 30, 2016 can be found under the caption “Note 6: Acquisitions” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report.

Contract acquisition costs – Other non-current assets include contract acquisition costs of our Financial Services segment. These costs, which are essentially pre-paid product discounts, are recorded as non-current assets upon contract execution and are amortized, generally on the straight-line basis, as reductions of revenue over the related contract term.

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Changes in contract acquisition costs during the six months ended June 30, 2016 and 2015 can be found under the caption "Note 3: Supplemental balance sheet information" of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report. Cash payments for contract acquisition costs were $14.3 million for the first half of 2016 and $5.8 million for the first half of 2015. We anticipate cash payments of approximately $20 million for the year ending December 31, 2016.

The number of checks being written has been declining, which has contributed to increased competitive pressure when attempting to retain or acquire clients. Both the number of financial institution clients requesting contract acquisition payments and the amount of the payments has fluctuated from year to year. Although we anticipate that we will selectively continue to make contract acquisition payments, we cannot quantify future amounts with certainty. The amount paid depends on numerous factors, such as the number and timing of contract executions and renewals, competitors’ actions, overall product discount levels and the structure of up-front product discount payments versus providing higher discount levels throughout the term of the contract.

Liabilities for contract acquisition payments are recorded upon contract execution. These obligations are monitored for each contract and are adjusted as payments are made. Contract acquisition payments due within the next year are included in accrued liabilities in our consolidated balance sheets. These accruals were $8.7 million as of June 30, 2016 and $9.0 million as of December 31, 2015. Accruals for contract acquisition payments included in other non-current liabilities in our consolidated balance sheets were $29.9 million as of June 30, 2016 and $29.2 million as of December 31, 2015.

Funds held for customers – Funds held for customers was $77.1 million as of June 30, 2016, an increase of $23.8 million from December 31, 2015. The increase was driven by amounts related to FISC Solutions, which was acquired in December 2015. This business provides cash receipt processing services. A portion of the cash receipts are remitted to our clients the business day following receipt. As such, the amounts on-hand are reported as funds held for customers in the consolidated balance sheets, with a corresponding liability included in accrued liabilities. The asset and liability of $18.7 million were recorded as acquisition measurement-period balance sheet adjustments during 2016.

OFF-BALANCE SHEET ARRANGEMENTS, GUARANTEES AND CONTRACTUAL OBLIGATIONS

It is not our general business practice to enter into off-balance sheet arrangements or to guarantee the performance of third parties. In the normal course of business we periodically enter into agreements that incorporate general indemnification language. These indemnifications encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks, including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. While we do not believe that any liability under these indemnities would likely have a material adverse effect on our financial position, annual results of operations or annual cash flows, inherent uncertainties exist regarding the scope and nature of such indemnities that could lead to material unfavorable outcomes. We have recorded liabilities for known indemnifications related to environmental matters. Further information regarding our environmental liabilities, as well as liabilities related to self-insurance and litigation, can be found under the caption “Note 12: Other commitments and contingencies” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in the Item 1 of this report.

We are not engaged in any transactions, arrangements or other relationships with unconsolidated entities or other third parties that are reasonably likely to have a material effect on our liquidity or on our access to, or requirements for, capital resources. In addition, we have not established any special purpose entities.

A table of our contractual obligations was provided in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the 2015 Form 10-K. There were no significant changes in these obligations during the first half of 2016.

RELATED PARTY TRANSACTIONS

We did not enter into any material related party transactions during the first half of 2016 or during 2015.

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CRITICAL ACCOUNTING POLICIES

A description of our critical accounting policies was provided in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the 2015 Form 10-K. There were no changes in these policies during the first half of 2016.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding accounting pronouncements adopted during the first half of 2016 and those not yet adopted can be found under the caption “Note 2: New accounting pronouncements” of the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Item 1 of this report.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 (the Reform Act) provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information. We are filing this cautionary statement in connection with the Reform Act. When we use the words or phrases “should result,” “believe,” “intend,” “plan,” “are expected to,” “targeted,” “will continue,” “will approximate,” “is anticipated,” “estimate,” “project,” “outlook,” "forecast" or similar expressions in this Quarterly Report on Form 10-Q, in future filings with the Securities and Exchange Commission, in our press releases and in oral statements made by our representatives, they indicate forward-looking statements within the meaning of the Reform Act.

We want to caution you that any forward-looking statements made by us or on our behalf are subject to uncertainties and other factors that could cause them to be incorrect. Known material risks are discussed in Item 1A of the 2015 Form 10-K and are incorporated into this Item 2 of this report on Form 10-Q as if fully stated herein. Although we have attempted to compile a comprehensive list of these important factors, we want to caution you that other factors may prove to be important in affecting future operating results. New factors emerge from time to time, and it is not possible for us to predict all of these factors, nor can we assess the impact each factor or combination of factors may have on our business.

You are further cautioned not to place undue reliance on those forward-looking statements because they speak only of our views as of the date the statements were made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to changes in interest rates primarily as a result of the borrowing activities used to support our capital structure, maintain liquidity and fund business operations. We do not enter into financial instruments for speculative or trading purposes. The nature and amount of debt outstanding can be expected to vary as a result of future business requirements, market conditions and other factors. As of June 30, 2016, our total debt was comprised of the following:

(in thousands)	Carrying amount		Fair value(1)		Weighted-average interest rate
Amount drawn on credit facility	$	413,000	$	413,000	1.9	%
Long-term notes maturing November 2020(2)	198,837		207,900		5.2	%
Capital lease obligations	1,991		1,991		2.1	%
Total debt	$	613,828	$	622,891	3.0	%

⁽¹⁾ For the amount drawn on our credit facility, fair value equals carrying value because our interest rate is variable and reflects current market rates. For our long-term notes, fair value is based on significant observable market inputs other than quoted prices in active markets. Capital lease obligations are presented at their carrying amount.

⁽²⁾ The carrying value has been reduced by unamortized debt issuance costs of $2.0 million and includes an increase of $0.9 million related to the cumulative change in the fair value of hedged debt.

We may, from time to time, retire outstanding debt through open market purchases, privately negotiated transactions or other means. Any such repurchases or exchanges would depend on prevailing market conditions, our liquidity requirements and other potential uses of cash, including acquisitions or share repurchases.

We have entered into interest rate swaps to hedge against changes in the fair value of a portion of our long-term debt. As of June 30, 2016, interest rate swaps with a notional amount of $200.0 million were designated as fair value hedges. The carrying amount of long-term debt as of June 30, 2016 included a $0.9 million increase related to adjusting the hedged debt for changes in its fair value. The interest rate swaps outstanding as of June 30, 2016 related to our long-term debt due in 2020 and meet the criteria for using the short-cut method of accounting for a fair value hedge based on the structure of the hedging relationship. As such, changes in the fair value of the derivative and the related long-term debt are equal.

Based on the daily average amount of outstanding variable rate debt in our portfolio, a one percentage point change in our weighted-average interest rates would have resulted in a $3.1 million change in interest expense for the first half of 2016.

We are exposed to changes in foreign currency exchange rates. Investments in, loans and advances to foreign subsidiaries and branches, as well as the operations of these businesses, are denominated in foreign currencies, primarily the Canadian dollar. The effect of exchange rate changes is expected to have a minimal impact on our earnings and cash flows, as our foreign operations represent a relatively small portion of our business. We have not entered into hedges against changes in foreign currency exchange rates.

Information regarding business challenges/market risks was provided in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the 2015 Form 10-K.

Item 4.  Controls and Procedures.

(a)  Disclosure Controls and Procedures — As of the end of the period covered by this report, June 30, 2016 (the “Evaluation Date”), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

48

(b) Internal Control Over Financial Reporting —There were no changes in our internal control over financial reporting identified in connection with our evaluation during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We record provisions with respect to identified claims or lawsuits when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Claims and lawsuits are reviewed quarterly and provisions are taken or adjusted to reflect the status of a particular matter. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable outcomes. Recorded liabilities were not material to our financial position, results of operations or liquidity, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or liquidity upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or liquidity in the period in which the ruling occurs or in future periods.

Item 1A.  Risk Factors.

Our risk factors are outlined in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”). There have been no significant changes to these risk factors since we filed the 2015 Form 10-K.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

The following table shows purchases of our own equity securities, based on trade date, that were completed during the second quarter of 2016:

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs(1)
April 1, 2016 – April 30, 2016	—	$	—	—	688,417
May 1, 2016 – May 31, 2016	171,076	63.01		171,076	517,341
June 1, 2016 – June 30, 2016	64,400	65.16		64,400	452,941
Total	235,476	63.60		235,476	452,941

⁽¹⁾ Amounts do not include shares which may be purchased under an additional authorization approved by our board of directors in May 2016 for the repurchase of up to $300 million of our common stock.

In August 2003, our board of directors approved an authorization to purchase up to 10 million shares of our common stock. This authorization has no expiration date and 452,941 shares remained available for purchase under this authorization as of June 30, 2016. In May 2016, our board of directors approved an additional authorization for the repurchase of up to $300 million of our common stock, effective at the conclusion of our previous authorization. This authorization also has no expiration date.

While not considered repurchases of shares, we do at times withhold shares that would otherwise be issued under equity-based awards to cover the withholding taxes due as a result of the exercising or vesting of such awards. During the quarter ended June 30, 2016, we withheld 21,591 shares in conjunction with the vesting and exercise of equity-based awards.

49

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.  Other Information.

None.

Item 6.  Exhibits.

Exhibit Number	Description	Method of Filing
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)	*
3.2	Bylaws (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Commission on October 23, 2008)	*
4.1	Amended and Restated Rights Agreement, dated as of December 20, 2006, by and between us and Wells Fargo Bank, National Association, as Rights Agent, which includes as Exhibit A thereto, the Form of Rights Certificate (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on December 21, 2006)	*
4.2	Indenture, dated as of April 30, 2003, by and between us and Wells Fargo Bank Minnesota, N.A., as trustee (incorporated by reference to Exhibit 4.8 to the Registration Statement on Form S-3 (Registration No. 333-104858) filed with the Commission on April 30, 2003)	*
4.3	Indenture, dated as of November 27, 2012, by and among us, the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (including form of 6.000% Senior Notes due 2020) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on November 27, 2012)	*
4.4	Supplemental Indenture, dated as of June 28, 2013, among us, VerticalResponse, Inc., the guarantors listed on the signature pages thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.14 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)	*
4.5	Second Supplemental Indenture, dated as of September 25, 2013, among us, ChecksByDeluxe.com, LLC, Direct Checks Unlimited, LLC, Direct Checks Unlimited Sales, Inc., Safeguard Acquisitions, Inc., Safeguard Franchise Systems, Inc., the guarantors listed on the signature pages thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.15 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013)	*
4.6	Third Supplemental Indenture, dated as of December 17, 2014, among us, Safeguard Franchise Sales, Inc., Wausau Financial Systems, Inc., the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.13 to the Annual Report on Form 10-K for the year ended December 31, 2014)	*
4.7	Fourth Supplemental Indenture, dated as of March 4, 2015, among us, AccuSource Solutions Corporation, SyncSuite, LLC, the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.13 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2015)	*

50

Exhibit Number	Description	Method of Filing
4.8	Fifth Supplemental Indenture, dated as of June 15, 2015, among us, Image Distribution Services, the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.14 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2015)	*
4.9	Sixth Supplemental Indenture, dated as of December 4, 2015, among us, Datamyx LLC, the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.15 to the Annual Report on Form 10-K for the year ended December 31, 2015)	*
12.1	Statement re: Computation of Ratios	Filed herewith
31.1	CEO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	CFO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	CEO and CFO Certification of Periodic Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015, (ii) Consolidated Statements of Comprehensive Income for the quarters and six months ended June 30, 2016 and 2015, (iii) Consolidated Statement of Shareholders' Equity for the six months ended June 30, 2016, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015, and (v) Condensed Notes to Unaudited Consolidated Financial Statements	Filed herewith

___________________

* Incorporated by reference

51

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DELUXE CORPORATION             (Registrant)
Date: August 5, 2016	/s/ Lee Schram
	Lee Schram Chief Executive Officer (Principal Executive Officer)
Date: August 5, 2016	/s/ Terry D. Peterson
	Terry D. Peterson Senior Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

52

INDEX TO EXHIBITS

Exhibit No.	Description
12.1	Statement re: Computation of Ratios
31.1	CEO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	CFO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	CEO and CFO Certification of Periodic Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015, (ii) Consolidated Statements of Comprehensive Income for the quarters and six months ended June 30, 2016 and 2015, (iii) Consolidated Statement of Shareholders' Equity for the six months ended June 30, 2016, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015, and (v) Condensed Notes to Unaudited Consolidated Financial Statements

53

EX-12.1

Exhibit 12.1

Deluxe Corporation

Computation of Ratio of Earnings to Fixed Charges

	Six Months Ended June 30,		Year Ended December 31,
	2016		2015		2014		2013		2012		2011
Earnings:
Income from continuing operations before income taxes	$	173,758	$	327,947	$	297,181	$	281,059	$	250,753	$	216,084
Interest expense (excluding capitalized interest)(1)	10,426		20,299		36,529		38,301		46,847		47,797
Portion of rent expense under long-term operating leases representative of an interest factor	2,838		5,124		4,366		3,952		4,463		3,215
Total earnings	$	187,022	$	353,370	$	338,076	$	323,312	$	302,063	$	267,096
Fixed charges:
Interest expense (including capitalized interest)(1)	$	10,426	$	20,299	$	36,529	$	38,301	$	46,847	$	47,797
Portion of rent expense under long-term operating leases representative of an interest factor	2,838		5,124		4,366		3,952		4,463		3,215
Total fixed charges	$	13,264	$	25,423	$	40,895	$	42,253	$	51,310	$	51,012
Ratio of earnings to fixed charges	14.1		13.9		8.3		7.7		5.9		5.2

⁽¹⁾ Does not include interest expense related to uncertain tax positions.

EX-31.1

Exhibit 31.1

CEO CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lee Schram, Chief Executive Officer of Deluxe Corporation, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Deluxe Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:     August 5, 2016	/s/ Lee Schram
	Lee Schram
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CFO CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Terry D. Peterson, Chief Financial Officer of Deluxe Corporation, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Deluxe Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:     August 5, 2016	/s/ Terry D. Peterson
	Terry D. Peterson
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CEO AND CFO CERTIFICATION OF PERIODIC REPORT

We, Lee Schram, Chief Executive Officer of Deluxe Corporation (the “Company”), and Terry D. Peterson, Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  August 5, 2016	/s/ Lee Schram
	Lee Schram
	Chief Executive Officer

/s/ Terry D. Peterson

Terry D. Peterson

Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 20, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	DELUXE CORP
Entity Central Index Key	0000027996
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		48,767,272

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 69,592	$ 62,427
Trade accounts receivable (net of allowances for uncollectible accounts of $3,401 and $4,816, respectively)	108,938	123,654
Inventories and supplies	38,086	41,956
Funds held for customers	77,126	53,343
Other current assets	39,251	42,605
Total current assets	332,993	323,985
Deferred income taxes	1,756	1,238
Long-term investments (including $1,792 and $2,091 of investments at fair value, respectively)	42,423	41,691
Property, plant and equipment (net of accumulated depreciation of $346,906 and $344,785, respectively)	84,883	85,732
Assets held for sale	13,967	13,969
Intangibles (net of accumulated amortization of $444,945 and $407,747, respectively)	297,515	285,311
Goodwill	977,092	976,415
Other non-current assets	118,273	113,812
Total assets	1,868,902	1,842,153
Current liabilities:
Accounts payable	83,341	87,575
Accrued liabilities	210,589	228,423
Long-term debt due within one year	1,041	1,045
Total current liabilities	294,971	317,043
Long-term debt	612,787	627,973
Deferred income taxes	80,962	81,076
Other non-current liabilities	63,440	70,992
Commitments and contingencies (Notes 11 and 12)
Shareholders' equity:
Common shares $1 par value (authorized: 500,000 shares; outstanding: June 30, 2016 - 48,760; December 31, 2015 - 49,019)	48,760	49,019
Retained earnings	817,202	751,253
Accumulated other comprehensive loss	(49,220)	(55,203)
Total shareholders' equity	816,742	745,069
Total liabilities and shareholders' equity	$ 1,868,902	$ 1,842,153

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Allowances for uncollectible accounts	$ 3,401	$ 4,816
Investments at fair value	1,792	2,091
Accumulated depreciation	346,906	344,785
Accumulated amortization	$ 444,945	$ 407,747
Shareholders' equity:
Common stock, par value (per share)	$ 1.00	$ 1.00
Common stock, shares authorized	500,000	500,000
Common stock, shares outstanding	48,760	49,019

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Product revenue	$ 359,821	$ 358,897	$ 726,006	$ 713,911
Service revenue	90,821	76,977	183,934	155,581
Total revenue	450,642	435,874	909,940	869,492
Cost of products	(126,939)	(128,256)	(257,533)	(251,996)
Cost of services	(32,893)	(27,682)	(66,604)	(56,624)
Total cost of revenue	(159,832)	(155,938)	(324,137)	(308,620)
Gross profit	290,810	279,936	585,803	560,872
Selling, general and administrative expense	(198,726)	(190,091)	(400,198)	(385,469)
Net restructuring charges	(1,135)	(966)	(2,014)	(1,233)
Operating income	90,949	88,879	183,591	174,170
Loss on early debt extinguishment	0	0	0	(8,917)
Interest expense	(5,183)	(4,420)	(10,426)	(10,935)
Other income	442	824	593	1,254
Income before income taxes	86,208	85,283	173,758	155,572
Income tax provision	(27,819)	(29,220)	(57,267)	(53,569)
Net income	58,389	56,063	116,491	102,003
Comprehensive income	$ 59,282	$ 57,327	$ 122,474	$ 97,510
Basic earnings per share	$ 1.19	$ 1.12	$ 2.37	$ 2.04
Diluted earnings per share	1.18	1.11	2.36	2.02
Cash dividends per share	$ 0.30	$ 0.30	$ 0.60	$ 0.60

XML

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands	Total	Common shares par value [Member]	Additional paid-in capital [Member]	Retained earnings [Member]	Accumulated other comprehensive loss [Member]
Balance at Dec. 31, 2015	$ 745,069	$ 49,019	$ 0	$ 751,253	$ (55,203)
Balance (in shares) at Dec. 31, 2015	49,019
Net income	$ 116,491	0	0	116,491	0
Cash dividends	(29,446)	0	0	(29,446)	0
Common shares issued	$ 8,813	356	8,457	0	0
Common shares issued (in shares)	356
Common shares repurchased	$ (29,981)	(513)	(8,372)	(21,096)	0
Common shares repurchased (in shares)	(513)
Other common shares retired	$ (6,260)	(102)	(6,158)	0	0
Other common shares retired (in shares)	(102)
Fair value of share-based compensation	$ 6,073	0	6,073	0	0
Other comprehensive income	5,983	0	0	0	5,983
Balance at Jun. 30, 2016	$ 816,742	$ 48,760	$ 0	$ 817,202	$ (49,220)
Balance (in shares) at Jun. 30, 2016	48,760

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 116,491	$ 102,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	7,561	7,939
Amortization of intangibles	37,091	27,739
Amortization of contract acquisition costs	9,485	9,697
Deferred income taxes	(1,032)	(1,368)
Employee share-based compensation expense	6,865	5,940
Loss on early debt extinguishment	0	8,917
Other non-cash items, net	2,829	139
Changes in assets and liabilities, net of effect of acquisitions:
Trade accounts receivable	14,038	19,434
Inventories and supplies	3,924	27
Other current assets	1,268	4,060
Non-current assets	(1,723)	608
Accounts payable	(4,487)	(11,576)
Contract acquisition payments	(14,341)	(5,848)
Other accrued and non-current liabilities	(49,703)	(20,804)
Net cash provided by operating activities	128,266	146,907
Cash flows from investing activities:
Purchases of capital assets	(22,184)	(19,307)
Payments for acquisitions, net of cash acquired	(28,497)	(35,800)
Proceeds from company-owned life insurance policies	3,053	0
Other	2,087	339
Net cash used by investing activities	(45,541)	(54,768)
Cash flows from financing activities:
Proceeds from short-term borrowings	0	75,000
Proceeds from issuing long-term debt	107,000	211,500
Payments on long-term debt, including costs of debt reacquisition	(128,584)	(346,021)
Proceeds from issuing shares under employee plans	4,193	4,135
Excess tax benefit from share-based employee awards	0	1,557
Employee taxes paid for shares withheld	(2,260)	(871)
Payments for common shares repurchased	(29,981)	0
Cash dividends paid to shareholders	(29,446)	(30,043)
Other	(417)	(286)
Net cash used by financing activities	(79,495)	(85,029)
Effect of exchange rate change on cash	3,935	(3,725)
Net change in cash and cash equivalents	7,165	3,385
Cash and cash equivalents, beginning of year	62,427	61,541
Cash and cash equivalents, end of period	$ 69,592	$ 64,926

XML

Consolidated financial statements

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated financial statements

Consolidated financial statements

The consolidated balance sheet as of June 30, 2016, the consolidated statements of comprehensive income for the quarters and six months ended June 30, 2016 and 2015, the consolidated statement of shareholders’ equity for the six months ended June 30, 2016, and the consolidated statements of cash flows for the six months ended June 30, 2016 and 2015 are unaudited. The consolidated balance sheet as of December 31, 2015 was derived from audited consolidated financial statements, but does not include all disclosures required by generally accepted accounting principles (GAAP) in the United States of America. In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any discussed in the notes below. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q, and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”).

During the quarter ended June 30, 2016, we identified an error in the balance sheet presentation of borrowings under our credit facility and the related asset for debt issuance costs. These amounts were previously presented as current items in our consolidated balance sheets, and we have determined that they should have been presented as non-current. This change also corrects the presentation of the cash flows associated with borrowings under our credit facility. Previously these cash flows were presented on a net basis. The change in the balance sheet presentation requires that they be presented on a gross basis.

We assessed the materiality of this error on prior periods' financial statements in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality, codified in Accounting Standards Codification (ASC) 250, Presentation of Financial Statements. We concluded that the error was not material to any prior annual or interim period and therefore, amendments of previously filed reports are not required. In accordance with ASC 250, we have corrected the error for all prior periods presented by revising the consolidated financial statements appearing herein. Periods not presented herein will be revised, as applicable, in future filings. The revisions had no impact on total assets, total liabilities, shareholders' equity, net income or net cash used by financing activities.

The impact of this revision on our unaudited consolidated balance sheet as of December 31, 2015 was as follows:

	December 31, 2015
(in thousands)	As Previously Reported		Adjustment			As Revised
Other current assets	$	44,608	$	(2,003	)	$	42,605
Total current assets	325,988		(2,003		)	323,985
Other non-current assets	111,809		2,003			113,812
Short-term borrowings	434,000		(434,000		)	—
Total current liabilities	751,043		(434,000		)	317,043
Long-term debt	193,973		434,000			627,973

The impact of this revision on our unaudited consolidated statement of cash flows for the six months ended June 30, 2015 was as follows:

	Six Months Ended June 30, 2015
(in thousands)	As Previously Reported			Adjustment			As Revised
Proceeds from short-term borrowings	$	148,000		$	(73,000	)	$	75,000
Proceeds from issuing long-term debt	—			211,500			211,500
Payments on long-term debt, including costs of debt reacquisition	(207,521		)	(138,500		)	(346,021		)

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New accounting pronouncements

6 Months Ended

Jun. 30, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New accounting pronouncements

New accounting pronouncements

Recently adopted accounting pronouncements – In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The standard requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. We adopted this standard on January 1, 2016. As our accounting treatment for these awards was in compliance with the new guidance, adoption of this standard had no impact on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the consolidated balance sheets as a direct reduction from the carrying amount of the debt liability. We adopted this standard on January 1, 2016, applying it retrospectively. The consolidated balance sheet as of December 31, 2015 reflects the reclassification of debt issuance costs of $2,249 from other non-current assets to long-term debt. The amount of debt issuance costs included in long-term debt as of June 30, 2016 was $2,021. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This standard adds SEC paragraphs pursuant to the SEC Staff announcement at the June 18, 2015 Emerging Issues Task Force (EITF) meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Under this guidance, the SEC Staff would not object to presenting such costs as an asset and subsequently amortizing the deferred costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the arrangement. Debt issuance costs of $1,687 as of June 30, 2016 and $2,003 as of December 31, 2015 related to our line-of-credit arrangement. We continue to include these costs within other non-current assets, amortizing them over the term of the arrangement.

In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses. We adopted this standard on January 1, 2016, applying it prospectively to all arrangements entered into or materially modified on or after January 1, 2016. Adoption of this standard did not have a significant impact on our results of operations or financial position.

In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent). Under the standard, investments measured at net asset value (NAV) as a practical expedient for fair value are excluded from the fair value hierarchy. As such, they are not assigned a fair value measurement level in financial statement disclosures of fair value. This standard was effective for us on January 1, 2016. It impacts the disclosures included in our Annual Report on Form 10-K regarding the plan assets of our postretirement benefit plan. As such, we will reflect this new guidance in the disclosures included in our Form 10-K for the year ending December 31, 2016, applying the guidance retrospectively to all periods presented.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The standard requires that inventory within the scope of the guidance be measured at the lower of cost or net realizable value. Previously, inventory was measured at the lower of cost or market. We elected to early adopt this standard on January 1, 2016, applying it prospectively. Application of this standard did not have a significant impact on our results of operations or financial position.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. When recording the purchase price allocation for a business combination in the financial statements, an acquirer may record preliminary amounts when measurements are incomplete as of the end of a reporting period. When the required information is received to finalize the purchase price allocation, the preliminary amounts are adjusted. These adjustments are referred to as measurement-period adjustments. This standard eliminates the requirement to restate prior period financial statements for measurement-period adjustments. Instead, it requires that the cumulative impact of a measurement-period adjustment be recognized in the reporting period in which the adjustment is identified. We adopted this standard on January 1, 2016, applying it prospectively. Application of this standard did not have a significant impact on our results of operations or financial position.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The standard is intended to simplify various aspects of the accounting and presentation of share-based payments. We elected to early adopt this standard as of January 1, 2016. Adoption of this standard had the following impacts on our consolidated financial statements:

• Consolidated statements of comprehensive income – The new standard requires that the tax effects of share-based compensation be recognized in the income tax provision. Previously, these amounts were recognized in additional paid-in capital. Net tax benefits related to share-based compensation awards of $1,020 for the quarter ended June 30, 2016 and $1,512 for the six months ended June 30, 2016 were recognized as reductions of income tax expense in the consolidated statements of comprehensive income. These tax benefits reduced our effective income tax rate 1.2 points for the quarter ended June 30, 2016 and 0.9 points for the six months ended June 30, 2016. In addition, in calculating potential common shares used to determine diluted earnings per share, GAAP requires us to use the treasury stock method. The new standard requires that assumed proceeds under the treasury stock method be modified to exclude the amount of excess tax benefits that would have been recognized in additional paid-in capital. These changes were applied on a prospective basis and resulted in an increase in basic and diluted earnings per share of $0.02 for the quarter ended June 30, 2016 and $0.03 for the six months ended June 30, 2016.

In recording share-based compensation expense, the standard allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur. We have elected to include an estimate of forfeitures in the computation of our share-based compensation expense. As this treatment is consistent with previous guidance, this election had no impact on our consolidated financial statements.

• Consolidated statements of cash flows – The standard requires that excess tax benefits from share-based employee awards be reported as operating activities in the consolidated statements of cash flows. Previously, these cash flows were included in financing activities. We elected to apply this change on a prospective basis, resulting in an increase in net cash provided by operating activities and in net cash used by financing activities of $1,811 for the six months ended June 30, 2016.

The standard requires that employee taxes paid when an employer withholds shares for tax-withholding purposes be reported as financing activities in the consolidated statements of cash flows. Previously, these cash flows were included in operating activities. This change was required to be applied on a retrospective basis. As such, the consolidated statement of cash flows for the prior period was restated. This change resulted in an increase in net cash provided by operating activities and in net cash used by financing activities of $2,260 for the six months ended June 30, 2016 and $871 for the six months ended June 30, 2015.

Accounting pronouncements not yet adopted – In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard provides revenue recognition guidance for any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other accounting standards. The standard also expands the required financial statement disclosures regarding revenue recognition. The new guidance is effective for us on January 1, 2018. In addition, in March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), in April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, and in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients. These standards are intended to clarify aspects of ASU No. 2014-09 and are effective for us upon adoption of ASU No. 2014-09. We are currently assessing the impact of these standards on our consolidated financial statements, as well as the method of transition that we will use in adopting the new guidance.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The standard is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. The guidance is effective for us on January 1, 2018. We do not expect the application of this standard to have a significant impact on our results of operations or financial position.

In February 2016, the FASB issued ASU No. 2016-02, Leasing. The standard is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities for virtually all leases and by requiring the disclosure of key information about leasing arrangements. The guidance is effective for us on January 1, 2019, and requires adoption using a modified retrospective approach. We are currently assessing the impact of this standard on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. The standard introduces new guidance for the accounting for credit losses on instruments within its scope, including trade and loans receivable and available-for-sale debt securities. The guidance is effective for us on January 1, 2020, and requires adoption using a modified retrospective approach. We do not expect the application of this standard to have a significant impact on our results of operations or financial position.

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Supplemental balance sheet information

6 Months Ended

Jun. 30, 2016

Balance Sheet Related Disclosures [Abstract]

Supplemental balance sheet information

Supplemental balance sheet information

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

(in thousands)	June 30, 2016		December 31, 2015
Raw materials	$	5,649	$	5,719
Semi-finished goods	8,353		8,208
Finished goods	20,993		24,955
Supplies	3,091		3,074
Inventories and supplies	$	38,086	$	41,956

Available-for-sale securities – Available-for-sale securities included within funds held for customers and other current assets were comprised of the following:

	June 30, 2016
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Funds held for customers:(1)
Canadian and provincial government securities	$	8,585	$	—	$	(39	)	$	8,546
Canadian guaranteed investment certificates	7,738		—		—			7,738
Available-for-sale securities	$	16,323	$	—	$	(39	)	$	16,284

⁽¹⁾ Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2016, also included cash of $60,842. This cash included amounts related to FISC Solutions, which was acquired in December 2015. This business provides cash receipt processing services. A portion of the cash receipts are remitted to our clients the business day following receipt. As such, the amounts on-hand are reported as funds held for customers in the consolidated balance sheets, with a corresponding liability included in accrued liabilities. The asset and liability of $18,743 were recorded as acquisition measurement-period balance sheet adjustments during 2016.

	December 31, 2015
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Canadian and provincial government securities	$	7,932	$	—	$	(91	)	$	7,841
Canadian guaranteed investment certificates	7,226		—		—			7,226
Available-for-sale securities (funds held for customers)(1)	15,158		—		(91		)	15,067
Canadian money market fund (other current assets)	1,616		—		—			1,616
Available-for-sale securities	$	16,774	$	—	$	(91	)	$	16,683

⁽¹⁾ Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2015, also included cash of $38,276.

Expected maturities of available-for-sale securities as of June 30, 2016 were as follows:

(in thousands)	Fair value
Due in one year or less	$	9,148
Due in two to five years	4,556
Due in six to ten years	2,580
Available-for-sale securities	$	16,284

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

Assets held for sale – Assets held for sale as of June 30, 2016 and December 31, 2015 included the operations of one small business distributor that we previously acquired. The distributor is included in our Small Business Services segment and the assets acquired consisted primarily of a customer list intangible asset. We are actively marketing this distributor and expect the selling price will exceed its carrying value. Net assets held for sale consisted of the following:

(in thousands)	June 30, 2016			December 31, 2015			Balance sheet caption
Current assets	$	4		$	3		Other current assets
Intangibles	13,533			13,533			Assets held for sale
Other non-current assets	434			436			Assets held for sale
Accrued liabilities	(106		)	(366		)	Accrued liabilities
Deferred income tax liabilities	(5,777		)	(5,777		)	Other non-current liabilities
Net assets held for sale	$	8,088		$	7,829

Intangibles – Intangibles were comprised of the following:

	June 30, 2016							December 31, 2015
(in thousands)	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived intangibles:
Trade name	$	19,100	$	—		$	19,100	$	19,100	$	—		$	19,100
Amortizable intangibles:
Internal-use software	393,159		(328,038		)	65,121		375,037		(310,665		)	64,372
Customer lists/relationships	234,012		(70,568		)	163,444		202,682		(54,990		)	147,692
Trade names	64,881		(38,787		)	26,094		64,881		(36,325		)	28,556
Software to be sold	28,500		(5,349		)	23,151		28,500		(3,765		)	24,735
Other	2,808		(2,203		)	605		2,858		(2,002		)	856
Amortizable intangibles	723,360		(444,945		)	278,415		673,958		(407,747		)	266,211
Intangibles	$	742,460	$	(444,945	)	$	297,515	$	693,058	$	(407,747	)	$	285,311

Amortization of intangibles was $18,943 for the quarter ended June 30, 2016 and $13,989 for the quarter ended June 30, 2015. Amortization of intangibles was $37,091 for the six months ended June 30, 2016 and $27,739 for the six months ended June 30, 2015. Based on the intangibles in service as of June 30, 2016, estimated future amortization expense is as follows:

(in thousands)	Estimated amortization expense
Remainder of 2016	$	33,703
2017	57,848
2018	43,803
2019	31,505
2020	26,382

During the six months ended June 30, 2016, we acquired internal-use software in the normal course of business. We also acquired intangible assets in conjunction with acquisitions (Note 6). The following intangible assets were acquired during the six months ended June 30, 2016:

(in thousands)	Amount		Weighted-average amortization period (in years)
Internal-use software	$	17,816	3
Customer lists/relationships	31,082		7
Acquired intangibles	$	48,898	6

Goodwill – Changes in goodwill during the six months ended June 30, 2016 were as follows:

(in thousands)	Small Business Services			Financial Services		Direct Checks		Total
Balance, December 31, 2015:
Goodwill, gross	$	671,295		$	176,614	$	148,506	$	996,415
Accumulated impairment charges	(20,000		)	—		—		(20,000		)
Goodwill, net of accumulated impairment charges	651,295			176,614		148,506		976,415
Acquisition of 180 Fusion (Note 6)	575			—		—		575
Currency translation adjustment	102			—		—		102
Balance, June 30, 2016:
Goodwill, gross	671,972			176,614		148,506		997,092
Accumulated impairment charges	(20,000		)	—		—		(20,000		)
Goodwill, net of accumulated impairment charges	$	651,972		$	176,614	$	148,506	$	977,092

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

(in thousands)	June 30, 2016		December 31, 2015
Contract acquisition costs	$	64,170	$	58,792
Loans and notes receivable from distributors	21,877		23,957
Postretirement benefit plan asset	18,596		16,250
Deferred advertising costs	6,980		7,500
Other	6,650		7,313
Other non-current assets	$	118,273	$	113,812

Changes in contract acquisition costs during the six months ended June 30, 2016 and 2015 were as follows:

	Six Months Ended June 30,
(in thousands)	2016			2015
Balance, beginning of year	$	58,792		$	74,101
Additions(1)	14,913			2,520
Amortization	(9,485		)	(9,697		)
Other	(50		)	(2,714		)
Balance, end of period	$	64,170		$	64,210

⁽¹⁾ Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $14,341 for the six months ended June 30, 2016 and $5,848 for the six months ended June 30, 2015.

Accrued liabilities – Accrued liabilities were comprised of the following:

(in thousands)	June 30, 2016		December 31, 2015
Funds held for customers	$	75,932	$	52,366
Deferred revenue	36,072		48,119
Employee profit sharing/cash bonus	18,463		40,683
Customer rebates	16,975		18,900
Wages, including vacation	12,113		5,731
Contract acquisition costs due within one year	8,740		9,045
Restructuring due within one year (Note 9)	2,310		3,864
Other	39,984		49,715
Accrued liabilities	$	210,589	$	228,423

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Earnings per share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings per share

Earnings per share

The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. 

	Quarter Ended June 30,						Six Months Ended June 30,
(dollars and shares in thousands, except per share amounts)	2016			2015			2016			2015
Earnings per share – basic:
Net income	$	58,389		$	56,063		$	116,491		$	102,003
Income allocated to participating securities	(493		)	(376		)	(954		)	(669		)
Income available to common shareholders	$	57,896		$	55,687		$	115,537		$	101,334
Weighted-average shares outstanding	48,611			49,770			48,699			49,732
Earnings per share – basic	$	1.19		$	1.12		$	2.37		$	2.04
Earnings per share – diluted:
Net income	$	58,389		$	56,063		$	116,491		$	102,003
Income allocated to participating securities	(489		)	(374		)	(948		)	(665		)
Re-measurement of share-based awards classified as liabilities	88			(132		)	293			47
Income available to common shareholders	$	57,988		$	55,557		$	115,836		$	101,385
Weighted-average shares outstanding	48,611			49,770			48,699			49,732
Dilutive impact of potential common shares	429			400			412			404
Weighted-average shares and potential common shares outstanding	49,040			50,170			49,111			50,136
Earnings per share – diluted	$	1.18		$	1.11		$	2.36		$	2.02
Antidilutive options excluded from calculation	236			260			236			260

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Other comprehensive income

6 Months Ended

Jun. 30, 2016

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Other comprehensive income

Other comprehensive income

Reclassification adjustments– Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows:

Accumulated other comprehensive loss components	Amounts reclassified from accumulated other comprehensive loss												Affected line item in consolidated statements of comprehensive income
	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015
Amortization of postretirement benefit plan items:
Prior service credit	$	355		$	355		711			711			(1)
Net actuarial loss	(949		)	(780		)	(1,899		)	(1,560		)	(1)
Total amortization	(594		)	(425		)	(1,188		)	(849		)	(1)
Tax benefit	182			113			363			226			(1)
Total reclassifications, net of tax	$	(412	)	$	(312	)	$	(825	)	$	(623	)

⁽¹⁾ Amortization of postretirement benefit plan items is included in the computation of net periodic benefit income. Additional details can be found in Note 10.

Accumulated other comprehensive loss– Changes in the components of accumulated other comprehensive loss during the six months ended June 30, 2016 were as follows:

(in thousands)	Postretirement benefit plans, net of tax			Net unrealized loss on marketable securities, net of tax(1)			Currency translation adjustment			Accumulated other comprehensive loss
Balance, December 31, 2015	$	(38,822	)	$	(114	)	$	(16,267	)	$	(55,203	)
Other comprehensive income before reclassifications	—			43			5,115			5,158
Amounts reclassified from accumulated other comprehensive loss	825			—			—			825
Net current-period other comprehensive income	825			43			5,115			5,983
Balance, June 30, 2016	$	(37,997	)	$	(71	)	$	(11,152	)	$	(49,220	)

⁽¹⁾ Other comprehensive income before reclassifications is net of income tax expense of $15.

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Acquisitions

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisitions

Acquisitions

We periodically complete business combinations that align with our business strategy. The assets and liabilities acquired are recorded at their estimated fair values and the results of operations of each acquired business are included in our consolidated statements of comprehensive income from their acquisition dates. Transaction costs related to acquisitions were expensed as incurred and were not significant to the consolidated statements of comprehensive income for the six months ended June 30, 2016 and 2015.

During the first quarter of 2016, we completed the following acquisitions which are included within our Small Business Services segment:

• In February 2016, we acquired selected assets of Category 99, Inc., doing business as MacHighway®, a web hosting and domain registration service provider.

• In March 2016, we acquired selected assets of New England Art Publishers, Inc., doing business as Birchcraft Studios, a supplier of personalized invitations, holiday cards, all-occasion cards and social announcements. We expect to finalize the allocation of the purchase price by the third quarter of 2016 when our valuation of the acquired inventory and fixed assets is complete.

During the second quarter of 2016, we completed several acquisitions which are included within our Small Business Services segment and for which we expect to finalize the allocation of the purchase price by the end of 2016 when our valuation of all of the acquired assets and liabilities is completed, as well as the determination of the estimated useful lives of the acquired customer lists. These acquisitions were as follows:

• In April 2016, we acquired selected assets of 180 Fusion LLC, a digital marketing services provider. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in tax-deductible goodwill of $575. The acquisition resulted in goodwill as we expect it will enhance our Small Business Services product set by providing valuable marketing tools to our customers, thus, enhancing customer acquisition and loyalty.

• In June 2016, we acquired selected assets of L.A.M. Enterprises, Inc., a provider of printed and promotional products.

• In June 2016, we acquired selected assets of Liquid Web, LLC, a web hosting services provider.

• In June 2016, we acquired selected assets of National Document Solutions, LLC, a provider of printing, promotional products, office products, scanning and document management solutions.

Also during the six months ended June 30, 2016, we acquired the operations of several small business distributors which are included in our Small Business Services segment. The assets acquired consisted primarily of customer list intangible assets. As these distributors were previously part of our Safeguard® distributor network, our revenue was not impacted by these acquisitions and the impact to our costs was not significant. We expect to finalize the allocations of the purchase price by the end of 2016 when our valuations of the acquired customer lists are completed, including the determination of the related estimated useful lives.

As our acquisitions were immaterial to our operating results both individually and in the aggregate, pro forma results of operations are not provided. The following illustrates the preliminary allocation as of June 30, 2016 of the aggregate purchase price for the above acquisitions to the assets acquired and liabilities assumed:

(in thousands)	2016 acquisitions
Net tangible assets acquired and liabilities assumed	$	(909	)
Identifiable intangible assets:
Customer lists/relationships	31,082
Internal-use software	1,250
Total intangible assets	32,332
Goodwill	575
Total aggregate purchase price	31,998
Liabilities for holdback payments	(3,016		)
Non-cash consideration(1)	(1,926		)
Net cash paid for 2016 acquisitions	27,056
Holdback payments for prior year acquisitions	1,441
Payments for acquisitions, net of cash acquired	$	28,497

⁽¹⁾ Consists of pre-acquisition amounts owed to us by certain of the acquired businesses.

Further information regarding the calculation of the estimated fair values of the intangibles acquired can be found in Note 8.

During the six months ended June 30, 2015, we acquired selected assets of Range, Inc., a marketing services provider; selected assets of Verify Valid LLC, a provider of electronic check payment services; and the operations of two small business distributors, one of which was previously part of our Safeguard distributor network. The assets acquired consisted primarily of customer list intangible assets and goodwill. Payments for acquisitions, net of cash acquired, as presented on the consolidated statement of cash flows for the six months ended June 30, 2015, included payments of $32,919 for these acquisitions and $2,881 for holdback payments for prior year acquisitions. Further information regarding our 2015 acquisitions can be found under the caption “Note 5: Acquisitions” in the Notes to Consolidated Financial Statements appearing in the 2015 Form 10-K.

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Derivative financial instruments

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative financial instruments

Derivative financial instruments

We have entered into interest rate swaps, which we designated as fair value hedges, to hedge against changes in the fair value of a portion of our long-term debt. At the time we entered into these swaps in 2012, we were targeting a mix of fixed and variable rate debt, where we receive a fixed rate and pay a variable rate based on the London Interbank Offered Rate (LIBOR). The interest rate swaps related to our long-term debt due in 2020 have a notional amount of $200,000 and meet the criteria for using the short-cut method for a fair value hedge based on the structure of the hedging relationship. As such, changes in the fair value of the derivatives and the related long-term debt are equal. The fair value of these interest rate swaps was an asset of $858 as of June 30, 2016 and a liability of $4,842 as of December 31, 2015. These amounts were included in the consolidated balance sheets in other non-current assets and other non-current liabilities, respectively. As the short-cut method is being used to account for these hedges, the consolidated balance sheets included an increase in long-term debt of $858 as of June 30, 2016 and a decrease in long-term debt of $4,842 as of December 31, 2015 due to fair value adjustments.

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Fair value measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair value measurements

Fair value measurements

2016 acquisitions – For all acquisitions, we are required to measure the fair value of the net identifiable tangible and intangible assets and liabilities acquired, excluding goodwill and deferred income taxes. Information regarding the acquisitions completed during the six months ended June 30, 2016 can be found in Note 6. The identifiable net assets acquired during the six months ended June 30, 2016 were comprised primarily of customer lists with an aggregate fair value of $31,082. Fair value was estimated by discounting the estimated cash flows expected to be generated by the assets. Assumptions used in the calculations included same-customer revenue growth rates and estimated customer retention rates based on the acquirees' historical information. Information regarding the useful lives of acquired intangibles can be found in Note 3.

Recurring fair value measurements – Funds held for customers included available-for-sale marketable securities (Note 3). These securities consisted of a mutual fund investment that invests in Canadian and provincial government securities, as well as investments in Canadian guaranteed investment certificates (GICs) with maturities of one year or less. The mutual fund is not traded in an active market and its fair value is determined by obtaining quoted prices in active markets for the underlying securities held by the fund. The fair value of the GICs approximated cost due to their relatively short duration. Unrealized gains and losses, net of tax, are included in accumulated other comprehensive loss in the consolidated balance sheets. The cost of securities sold is determined using the average cost method. Realized gains and losses are included in revenue in the consolidated statements of comprehensive income and were not significant for the quarters or six months ended June 30, 2016 and 2015.

Other current assets as of December 31, 2015 included available-for-sale marketable securities (Note 3). These securities were sold during the first quarter of 2016, and consisted of a Canadian money market fund that was not traded in an active market. As such, the fair value of this investment was determined by obtaining quoted prices in active markets for the underlying securities held by the fund. Because of the short-term nature of the underlying investments, the cost of these securities approximated their fair value. No gains or losses on sales of these marketable securities were realized during the six months ended June 30, 2016 and 2015.

We have elected to account for a long-term investment in domestic mutual funds under the fair value option for financial assets and financial liabilities. The fair value option provides companies an irrevocable option to measure many financial assets and liabilities at fair value with changes in fair value recognized in earnings. The investment is included in long-term investments in the consolidated balance sheets. Long-term investments also include the cash surrender values of company-owned life insurance policies. Realized and unrealized gains and losses, as well as dividends earned by the mutual fund investment, are included in selling, general and administrative (SG&A) expense in the consolidated statements of comprehensive income. This investment corresponds to a liability under an officers’ deferred compensation plan that is not available to new participants and is fully funded by the investment in mutual funds. The liability under the plan equals the fair value of the investment in mutual funds. Thus, as the value of the investment changes, the value of the liability changes accordingly. As changes in the liability are reflected within SG&A expense in the consolidated statements of comprehensive income, the fair value option of accounting for the investment in mutual funds allows us to net changes in the investment and the related liability in the statements of comprehensive income. The cost of securities sold is determined using the average cost method. During the six months ended June 30, 2016 and 2015, net realized gains were not significant. We recognized net unrealized losses of $234 during the six months ended June 30, 2016 and $191 during the six months ended June 30, 2015.

The fair value of interest rate swaps (Note 7) is determined at each reporting date by means of a pricing model utilizing readily observable market interest rates. The change in fair value is determined as the change in the present value of estimated future cash flows discounted using the LIBOR rate. Our interest rate swaps relate to our long-term debt due in 2020 and meet the criteria for using the short-cut method for a fair value hedge based on the structure of the hedging relationship. As such, the changes in the fair value of the derivative and related long-term debt are equal.

Liabilities for contingent consideration relate to acquisitions completed during 2015. Information concerning these acquisitions can be found under the caption "Note 5: Acquisitions" in the Notes to Consolidated Financial Statements included in the 2015 Form 10-K. Under the agreement related to the acquisition of Verify Valid, we are required to make annual contingent payments over a period of up to eight years, based on the revenue generated by the business. A specified payment percentage for each year is applied to the revenue generated by the business in that year to determine the amount of the payment. There is no maximum amount of contingent payments specified in the agreement. Under the agreement related to the acquisition of a small business distributor, we are required to make annual contingent payments over a period of up to three years, based on the gross profit generated by the business. A specified payment percentage for each year is applied to the gross profit generated by the business in that year to determine the amount of the payment. The maximum contingent payment in any year of the agreement is $925. The fair value of the liabilities for contingent payments is estimated by discounting to present value the probability-weighted contingent payments expected to be made. Assumptions used in the calculations include the discount rate, projected revenue or gross profit based on our most recent internal forecast, and factors indicating the probability of achieving the forecasted revenue or gross profit. The liabilities are remeasured each reporting period. Increases or decreases in projected revenue or gross profit and the related probabilities may result in a higher or lower fair value measurement. Changes in fair value resulting from changes in the timing, amount of, or likelihood of contingent payments are included in SG&A expense in the consolidated statements of comprehensive income. Changes in fair value resulting from accretion for the passage of time are included in interest expense in the consolidated statements of comprehensive income.

Information regarding recurring fair value measurements completed during each period was as follows:

				Fair value measurements using
	Fair value as of  June 30, 2016			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)				(Level 1)		(Level 2)		(Level 3)
Available-for-sale marketable securities (funds held for customers)	$	16,284		$	—	$	16,284	$	—
Long-term investment in mutual funds	1,792			1,792		—		—
Derivative assets	858			—		858		—
Accrued contingent consideration	(5,919		)	—		—		(5,919		)

				Fair value measurements using
	Fair value as of December 31, 2015			Quoted prices in active markets for identical assets		Significant other observable inputs			Significant unobservable inputs
(in thousands)				(Level 1)		(Level 2)			(Level 3)
Available-for-sale marketable securities (funds held for customers)	$	15,067		$	—	$	15,067		$	—
Available-for-sale marketable securities (other current assets)	1,616			—		1,616			—
Long-term investment in mutual funds	2,091			2,091		—			—
Derivative liabilities	(4,842		)	—		(4,842		)	—
Accrued contingent consideration	(5,861		)	—		—			(5,861		)

Our policy is to recognize transfers between fair value levels as of the end of the reporting period in which the transfer occurred. There were no transfers between fair value levels during the six months ended June 30, 2016.

Changes in accrued contingent consideration during the six months ended June 30, 2016 were as follows:

(in thousands)	Six Months Ended June 30, 2016
Balance, December 31, 2015	$	5,861
Change in fair value	434
Payments	(376		)
Balance, June 30, 2016	$	5,919

Fair value measurements of other financial instruments – The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate fair value.

Cash and cash included within funds held for customers – The carrying amounts reported in the consolidated balance sheets approximate fair value because of the short-term nature of these items.

Loans and notes receivable from distributors – We have receivables for loans made to certain of our Safeguard distributors. In addition, we have acquired the operations of several small business distributors, which we then sold to our Safeguard distributors. In most cases, we entered into notes receivable upon the sale of the assets to the distributors. The fair value of these loans and notes receivable is calculated as the present value of expected future cash flows, discounted using an estimated interest rate based on published bond yields for companies of similar risk.

Long-term debt – The carrying amounts reported in the consolidated balance sheets for the amount drawn on our credit facility approximates fair value because our interest rate is variable and reflects current market rates. The fair value of our long-term notes due in 2020 is based on significant observable market inputs other than quoted prices in active markets. The fair value of long-term debt included in the table below does not reflect the impact of hedging activity or debt issuance costs. The carrying amount of long-term debt includes the change in fair value of hedged long-term debt, as well as unamortized debt issuance costs related to our notes due in 2020 (Note 11).

The estimated fair values of these financial instruments were as follows:

					Fair value measurements using
	June 30, 2016				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)	Carrying value		Fair value		(Level 1)		(Level 2)		(Level 3)
Cash	$	69,592	$	69,592	$	69,592	$	—	$	—
Cash (funds held for customers)	60,842		60,842		60,842		—		—
Loans and notes receivable from distributors	23,740		20,897		—		—		20,897
Long-term debt(1)	611,837		620,900		—		620,900		—

⁽¹⁾ Amounts exclude capital lease obligations.

					Fair value measurements using
	December 31, 2015				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)	Carrying value		Fair value		(Level 1)		(Level 2)		(Level 3)
Cash	$	62,427	$	62,427	$	62,427	$	—	$	—
Cash (funds held for customers)	38,276		38,276		38,276		—		—
Loans and notes receivable from distributors	25,745		23,383		—		—		23,383
Long-term debt(1)	626,909		641,000		—		641,000		—

⁽¹⁾ Amounts exclude capital lease obligations.

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Restructuring charges

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring charges

Restructuring charges

Net restructuring charges for each period consisted of the following components:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands, except number of employees)	2016			2015			2016			2015
Severance accruals	$	1,096		$	1,307		$	1,987		$	2,050
Severance reversals	(96		)	(170		)	(468		)	(694		)
Operating lease obligations	—			—			59			—
Net restructuring accruals	1,000			1,137			1,578			1,356
Other costs	217			17			507			62
Net restructuring charges	$	1,217		$	1,154		$	2,085		$	1,418
Number of employees included in severance accruals	40			110			65			150

The net restructuring charges are reflected in the consolidated statements of comprehensive income as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	2016		2015		2016		2015
Total cost of revenue	$	82	$	188	$	71	$	185
Operating expenses	1,135		966		2,014		1,233
Net restructuring charges	$	1,217	$	1,154	$	2,085	$	1,418

During the six months ended June 30, 2016 and June 30, 2015, the net restructuring accruals included severance charges related to employee reductions across functional areas as we continue to reduce costs, primarily within our sales and marketing, information technology and fulfillment functions. These charges were reduced by the reversal of restructuring accruals recorded in previous periods, as fewer employees received severance benefits than originally estimated. Other restructuring costs, which were expensed as incurred, included items such as information technology costs, employee and equipment moves, training and travel related to our restructuring activities.

Restructuring accruals of $2,310 as of June 30, 2016 and $3,864 as of December 31, 2015 are included in accrued liabilities in the consolidated balance sheets. The majority of the employee reductions are expected to be completed by the fourth quarter of 2016, and we expect most of the related severance payments to be paid by the first quarter of 2017, utilizing cash from operations. The remaining payments due under operating lease obligations will be paid by the end of 2016. As of June 30, 2016, approximately 25 employees had not yet started to receive severance benefits.

Accruals for our restructuring initiatives, summarized by year, were as follows:

(in thousands)	2014  initiatives			2015  initiatives			2016 initiatives			Total
Balance, December 31, 2015	$	176		$	3,688		$	—		$	3,864
Restructuring charges	—			37			2,009			2,046
Restructuring reversals	(111		)	(310		)	(47		)	(468		)
Payments	(65		)	(2,554		)	(513		)	(3,132		)
Balance, June 30, 2016	$	—		$	861		$	1,449		$	2,310
Cumulative amounts:
Restructuring charges	$	8,242		$	6,164		$	2,009		$	16,415
Restructuring reversals	(1,444		)	(768		)	(47		)	(2,259		)
Payments	(6,798		)	(4,535		)	(513		)	(11,846		)
Balance, June 30, 2016	$	—		$	861		$	1,449		$	2,310

The components of our restructuring accruals, by segment, were as follows:

	Employee severance benefits												Operating lease obligations
(in thousands)	Small Business Services			Financial Services			Direct Checks			Corporate			Small Business Services			Financial Services			Total
Balance, December 31, 2015	$	1,023		$	884		$	—		$	1,859		$	56		$	42		$	3,864
Restructuring charges	892			510			135			450			59			—			2,046
Restructuring reversals	(93		)	(39		)	—			(336		)	—			—			(468		)
Payments	(994		)	(538		)	—			(1,483		)	(85		)	(32		)	(3,132		)
Balance, June 30, 2016	$	828		$	817		$	135		$	490		$	30		$	10		$	2,310
Cumulative amounts(1):
Restructuring charges	$	6,617		$	4,769		$	171		$	4,461		$	344		$	53		$	16,415
Restructuring reversals	(1,293		)	(350		)	(2		)	(614		)	—			—			(2,259		)
Inter-segment transfer	41			(14		)	—			(27		)	—			—			—
Payments	(4,537		)	(3,588		)	(34		)	(3,330		)	(314		)	(43		)	(11,846		)
Balance, June 30, 2016	$	828		$	817		$	135		$	490		$	30		$	10		$	2,310

⁽¹⁾ Includes accruals related to our cost reduction initiatives for 2014 through 2016.

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Postretirement benefits

6 Months Ended

Jun. 30, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Postretirement benefits

Postretirement benefits

We have historically provided certain health care benefits for a portion of our retired U.S. employees. In addition to our retiree health care plan, we also have a supplemental executive retirement plan in the United States. Further information regarding our postretirement benefit plans can be found under the caption “Note 12: Postretirement benefits” in the Notes to Consolidated Financial Statements appearing in the 2015 Form 10-K.

Postretirement benefit income for each period consisted of the following components:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015
Interest cost	$	780		$	859		$	1,559		$	1,719
Expected return on plan assets	(1,834		)	(1,958		)	(3,667		)	(3,917		)
Amortization of prior service credit	(355		)	(355		)	(711		)	(711		)
Amortization of net actuarial losses	949			780			1,899			1,560
Net periodic benefit income	$	(460	)	$	(674	)	$	(920	)	$	(1,349	)

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Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt

Debt

Debt outstanding was comprised of the following:

(in thousands)	June 30, 2016			December 31, 2015
6.0% senior notes due November 15, 2020, principal amount	$	200,000		$	200,000
Less unamortized debt issuance costs	(2,021		)	(2,249		)
Cumulative change in fair value of hedged debt (Note 7)	858			(4,842		)
6.0% senior notes, carrying value	198,837			192,909
Amount drawn on credit facility	413,000			434,000
Long-term portion of capital lease obligations	950			1,064
Long-term portion of debt	612,787			627,973
Capital lease obligations due within one year	1,041			1,045
Total debt	$	613,828		$	629,018

Our senior notes due in 2020 include covenants that place certain restrictions on the issuance of additional debt and limitations on certain liens. If our ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to interest expense, as defined in such instruments, falls below two to one, there would be additional limitations on our ability to issue additional debt. The notes due in 2020 also include limitations on our ability to issue redeemable stock and preferred stock, make loans and investments, and consolidate, merge or sell all or substantially all of our assets. Absent certain defined events of default under our debt instruments, and as long as our ratio of EBITDA to interest expense is in excess of two to one, our debt covenants do not restrict our ability to pay cash dividends at our current rate. There are currently no limitations on the amount of dividends and share repurchases under the terms of our credit facility agreement. However, if our leverage ratio, defined as total debt less unrestricted cash to EBITDA, should exceed 2.75 to one, there would be an annual limitation on the amount of dividends and share repurchases under the terms of this agreement.

In November 2012, we issued $200,000 of 6.0% senior notes maturing on November 15, 2020. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. These notes were subsequently registered with the Securities and Exchange Commission (SEC) via a registration statement that became effective on April 3, 2013. Interest payments are due each May and November. The notes are guaranteed by certain of our subsidiaries and place a limitation on restricted payments, including share repurchases and increases in dividend levels. The limitation on restricted payments does not apply if the notes are upgraded to an investment-grade credit rating. Financial information for the guarantor subsidiaries can be found in Note 15. At any time prior to November 15, 2016, we may redeem some or all of the notes at a price equal to 100% of the principal amount plus accrued and unpaid interest and a make-whole premium. At any time on or after November 15, 2016, we may redeem some or all of the notes at prices ranging from 100% to 103% of the principal amount. If at any time we sell certain of our assets or experience specific types of changes in control, we must offer to purchase all of the outstanding notes at 101% of the principal amount. We classify payments for early redemption premiums as financing activities in our consolidated statements of cash flows. Proceeds from the offering, net of offering costs, were $196,340. These proceeds were used to retire our senior notes that were due in June 2015. The fair value of the notes issued in November 2012 was $207,900 as of June 30, 2016, based on quoted prices that are directly observable. As discussed in Note 7, we have entered into interest rate swaps to hedge these notes.

In March 2011, we issued $200,000 of 7.0% senior notes that were scheduled to mature on March 15, 2019. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. These notes were subsequently registered with the SEC via a registration statement that became effective on January 10, 2012. Proceeds from the offering, net of offering costs, were $196,195. These proceeds were used to retire a portion of our senior, unsecured notes due in 2012. In March 2015, we retired all of these notes, realizing a loss on early debt extinguishment of $8,917 during the six months ended June 30, 2015, consisting of a contractual call premium and the write-off of related debt issuance costs. This retirement was funded utilizing our credit facility and a short-term bank loan that we have since repaid.

We had capital lease obligations of $1,991 as of June 30, 2016 and $2,109 as of December 31, 2015 related to information technology hardware. The lease obligations will be paid through April 2020. The related assets are included in property, plant and equipment in the consolidated balance sheets. Depreciation of the leased assets is included in depreciation expense in the consolidated statements of cash flows.

As of June 30, 2016, we had a $525,000 credit facility, which is scheduled to expire in February 2019. Our quarterly commitment fee ranges from 0.20% to 0.40% based on our leverage ratio. Borrowings under the credit facility are collateralized by substantially all of our personal and intangible property. As of June 30, 2016, $413,000 was drawn on our credit facility at a weighted-average interest rate of 1.92%. As of December 31, 2015, $434,000 was drawn on our credit facility at a weighted-average interest rate of 1.89%.

The credit agreement governing our credit facility contains customary covenants regarding limits on levels of subsidiary indebtedness and capital expenditures, liens, investments, acquisitions, certain mergers, certain asset sales outside the ordinary course of business, and change in control as defined in the agreement. The agreement also contains financial covenants regarding our leverage ratio, interest coverage and liquidity.

In March 2015, we entered into a $75,000 short-term variable rate bank loan. Proceeds from this loan, net of related costs, were $74,880 and were used, along with a draw on our credit facility, to retire all $200,000 of our 7.0% senior notes that were scheduled to mature on March 15, 2019. During December 2015, we elected to repay this loan in full.

Daily average amounts outstanding under our credit facility and short-term borrowings were as follows:

(in thousands)	Six Months Ended June 30, 2016			Year Ended December 31, 2015
Credit facility:
Daily average amount outstanding	$	419,544		$	270,063
Weighted-average interest rate	1.86		%	1.66		%
Short-term bank loan:
Daily average amount outstanding	$	—		$	47,178
Weighted-average interest rate	—			1.59		%

As of June 30, 2016, amounts were available for borrowing under our credit facility as follows:

(in thousands)	Total available
Credit facility commitment	$	525,000
Amount drawn on credit facility	(413,000		)
Outstanding letters of credit(1)	(12,795		)
Net available for borrowing as of June 30, 2016	$	99,205

⁽¹⁾ We use standby letters of credit to collateralize certain obligations related primarily to our self-insured workers’ compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our credit facility.

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Other commitments and contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Other commitments and contingencies

Other commitments and contingencies

Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnifications encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of the terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks, including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. While we do not believe that any liability under these indemnities would likely have a material adverse effect on our financial position, annual results of operations or annual cash flows, inherent uncertainties exist regarding the scope and nature of such indemnities that could lead to material unfavorable outcomes. We have recorded liabilities for known indemnifications related to environmental matters.

Environmental matters – We are currently involved in environmental compliance, investigation and remediation activities at some of our current and former sites, primarily printing facilities of our Financial Services and Small Business Services segments that have been sold. Remediation costs are accrued on an undiscounted basis when the obligations are either known or considered probable and can be reasonably estimated. Remediation or testing costs that result directly from the sale of an asset and which we would not have otherwise incurred are considered direct costs of the sale of the asset. As such, they are included in our measurement of the carrying value of the asset sold.

Accruals for environmental matters were $3,375 as of June 30, 2016 and $5,952 as of December 31, 2015, primarily related to facilities that have been sold. These accruals are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets. Accrued costs consist of direct costs of the remediation activities, primarily fees that will be paid to outside engineering and consulting firms. Although recorded accruals include our best estimates, our total costs cannot be predicted with certainty due to various factors such as the extent of corrective action that may be required, evolving environmental laws and regulations and advances in environmental technology. Where the available information is sufficient to estimate the amount of the liability, that estimate is used. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range is recorded. We do not believe that the range of possible outcomes could have a material effect on our financial condition, results of operations or liquidity. The consolidated statement of comprehensive income for the six months ended June 30, 2016 included a benefit from environmental matters of $1,874, as we reversed a portion of the liability for one of our sold facilities. During the quarter ended June 30, 2016, we determined that it is no longer probable that a portion of the estimated environmental remediation costs for this location will be incurred. Environmental expense was $725 for the six months ended June 30, 2015.

We purchased an insurance policy during 2002 that covers up to $10,000 of third-party pollution claims through 2032 at certain owned, leased and divested sites. We also purchased an insurance policy during 2009 that covers up to $15,000 of third-party pollution claims through April 2019. This policy covers liability for claims of bodily injury or property damage arising from pollution events at the covered facilities. The policy also provides remediation coverage should we be required by a governing authority to perform remediation activities at the covered sites. No accruals have been recorded in our consolidated financial statements for any of the events contemplated in these insurance policies. We do not anticipate significant net cash outlays for environmental matters during 2016.

Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits for active employees and those employees on long-term disability. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported, and totaled $6,664 as of June 30, 2016 and $6,457 as of December 31, 2015. These accruals are included in accrued liabilities and other non-current liabilities in the consolidated balance sheets. Our workers' compensation liability is accounted for on a present value basis. The difference between the discounted and undiscounted liability was not significant as of June 30, 2016 or December 31, 2015.

Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends.

Litigation – On September 2, 2014, one of our suppliers filed a petition for binding arbitration under the Commercial Rules of the American Arbitration Association, alleging that it is entitled to additional payment from us under our reseller agreement and seeking damages of up to approximately $43,000. We did not record a liability for damages in connection with this matter in our consolidated balance sheets. In March 2016, the arbitrator rejected all of the supplier's claims and ruled in our favor.

Recorded liabilities for legal matters were not material to our financial position, results of operations or liquidity, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or liquidity upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or liquidity for the period in which the ruling occurs or in future periods.

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Shareholders' equity

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Note [Abstract]

Shareholders' equity

Shareholders’ equity

We have an outstanding authorization from our board of directors to purchase up to 10,000 shares of our common stock. This authorization has no expiration date, and 453 shares remained available for purchase under this authorization as of June 30, 2016. During the six months ended June 30, 2016, we repurchased 513 shares for $29,981.

In May 2016, our board of directors approved an additional authorization for the repurchase of up to $300,000 of our common stock, effective at the conclusion of our previous authorization. The additional authorization also has no expiration date.

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Business segment information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business segment information

Business segment information

We operate three reportable business segments: Small Business Services, Financial Services and Direct Checks. Our business segments are generally organized by type of customer served and reflect the way we manage the company. Small Business Services promotes and sells products and services to small businesses via direct response mail and internet advertising; referrals from financial institutions, telecommunications clients and other partners; networks of distributors and independent dealers; a direct sales force that focuses on selling to and through major accounts; and an outbound telemarketing group. Financial Services' products and services are sold primarily through a direct sales force, which executes product and service supply contracts with our financial institution clients nationwide, including banks, credit unions and financial services companies. In the case of check supply contracts, once the financial institution relationship is established, consumers may submit their check orders through their financial institution or over the phone or internet. Direct Checks sells products and services directly to consumers using direct marketing, including print advertising and search engine marketing and optimization strategies. All three segments operate primarily in the United States. Small Business Services also has operations in Canada and portions of Europe.

Our product and service offerings are comprised of the following:

Checks – We remain one of the largest providers of checks in the United States. During 2015, checks represented 40.1% of our Small Business Services segment's revenue, 59.7% of our Financial Services segment's revenue and 84.6% of our Direct Checks segment's revenue.

Marketing solutions and other services – We offer products and services that help small businesses and/or financial institutions promote their businesses and acquire customers, as well as various other service offerings. Our Small Business Services segment offers services designed to fulfill the marketing and sales needs of small businesses, including logo and web design; hosting and other web services; search engine optimization; marketing programs, including email, mobile, social media and other self-service marketing solutions; and digital printing services. In addition, Small Business Services offers specialized services, including fraud protection and security, payroll services and electronic checks, as well as promotional solutions such as postcards, brochures, retail packaging supplies, apparel, greeting cards and business cards. Financial Services offers a suite of financial technology ("FinTech") solutions focused on enabling financial institutions to better manage the customer life cycle for their retail and commercial customers. These FinTech solutions include outsourced marketing campaign targeting and execution, digital channel onboarding, loyalty and rewards, technology-enabled treasury services, financial performance management, and fraud protection and security services. Our Direct Checks segment provides fraud protection and security services, as well as package insert programs under which companies' marketing materials are included in our check packages.

Forms – Our Small Business Services segment provides printed forms to small businesses, including deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices and personnel forms. This segment also offers computer forms compatible with accounting software packages commonly used by small businesses. Forms sold by our Financial Services and Direct Checks segments include deposit tickets and check registers.

Accessories and other products – Small Business Services offers products designed to supply small business owners with the customized documents necessary to efficiently manage their business, including envelopes, office supplies, stamps and labels. Our Financial Services and Direct Checks segments offer checkbook covers and stamps.

The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2015 Form 10-K. We allocate corporate costs for our shared services functions to our business segments, including costs of our executive management, human resources, supply chain, finance, information technology and legal functions. Generally, where costs incurred are directly attributable to a business segment, primarily within the areas of information technology, supply chain, finance and legal, those costs are charged directly to that segment. Because we use a shared services approach for many of our functions, certain costs are not directly attributable to a business segment. These costs are allocated to our business segments based on segment revenue, as revenue is a measure of the relative size and magnitude of each segment and indicates the level of corporate shared services consumed by each segment. Corporate assets are not allocated to the segments and consist of property, plant and equipment; internal-use software; and inventories and supplies related to our corporate shared services functions of manufacturing, information technology and real estate, as well as long-term investments.

We are an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations and the sharing of assets. Therefore, we do not represent that these segments, if operated independently, would report the operating income and other financial information shown.

The following is our segment information as of and for the quarters ended June 30, 2016 and 2015:

		Reportable Business Segments
(in thousands)		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Total revenue from external	2016	$	288,182	$	124,230	$	38,230	$	—	$	450,642
customers:	2015	282,285		112,699		40,890		—		435,874
Operating income:	2016	48,956		29,034		12,959		—		90,949
	2015	48,225		25,506		15,148		—		88,879
Depreciation and amortization	2016	12,809		9,074		890		—		22,773
expense:	2015	11,231		5,791		973		—		17,995
Total assets:	2016	1,023,798		432,152		160,935		252,017		1,868,902
	2015	980,405		272,495		162,058		271,349		1,686,307
Capital asset purchases:	2016	—		—		—		11,995		11,995
	2015	—		—		—		9,795		9,795
The following is our segment information as of and for the six months ended June 30, 2016 and 2015:
		Reportable Business Segments
(in thousands)		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Total revenue from external	2016	$	578,453	$	251,478	$	80,009	$	—	$	909,940
customers:	2015	559,251		224,240		86,001		—		869,492
Operating income:	2016	100,106		55,759		27,726		—		183,591
	2015	97,672		45,916		30,582		—		174,170
Depreciation and amortization	2016	24,881		18,011		1,760		—		44,652
expense:	2015	21,440		11,781		2,457		—		35,678
Total assets:	2016	1,023,798		432,152		160,935		252,017		1,868,902
	2015	980,405		272,495		162,058		271,349		1,686,307
Capital asset purchases:	2016	—		—		—		22,184		22,184
	2015	—		—		—		19,307		19,307

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Supplemental guarantor financial information

6 Months Ended

Jun. 30, 2016

Supplemental guarantor financial information [Abstract]

Supplemental guarantor financial information

Supplemental guarantor financial information

Our long-term notes due in 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 supplemental condensed 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. During the quarter ended June 30, 2016, we identified an error in the balance sheet presentation of borrowings under our credit facility and the related asset for debt issuance costs. These amounts were previously presented as current items in our consolidated balance sheets, and we have determined that they should have been presented as non-current. This change also corrects the presentation of the cash flows associated with borrowings under our credit facility. Previously these cash flows were presented on a net basis. The change in the balance sheet presentation requires that they be presented on a gross basis. Prior period consolidated amounts, as well as those for Deluxe Corporation, have been revised to reflect these changes. Further information about the revision can be found in Note 1.

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 that 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.

Condensed Consolidating Balance Sheet

(Unaudited)

	June 30, 2016
(in thousands)	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	5,851	$	2,041	$	63,585	$	(1,885	)	$	69,592
Trade accounts receivable, net	—		100,303		8,635		—			108,938
Inventories and supplies	—		35,832		2,254		—			38,086
Funds held for customers	—		20,342		56,784		—			77,126
Other current assets	5,815		31,602		1,834		—			39,251
Total current assets	11,666		190,120		133,092		(1,885		)	332,993
Deferred income taxes	14,083		—		1,756		(14,083		)	1,756
Long-term investments	34,686		7,737		—		—			42,423
Property, plant and equipment, net	10,253		69,652		4,978		—			84,883
Assets held for sale	—		—		13,967		—			13,967
Intangibles, net	16,298		277,709		3,508		—			297,515
Goodwill	—		975,548		1,544		—			977,092
Investments in consolidated subsidiaries	1,375,178		91,872		—		(1,467,050		)	—
Intercompany receivable	5,274		—		31		(5,305		)	—
Other non-current assets	6,738		111,440		95		—			118,273
Total assets	$	1,474,176	$	1,724,078	$	158,971	$	(1,488,323	)	$	1,868,902
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	17,139	$	65,707	$	2,380	$	(1,885	)	$	83,341
Accrued liabilities	13,624		138,132		58,833		—			210,589
Long-term debt due within one year	1,004		—		37		—			1,041
Total current liabilities	31,767		203,839		61,250		(1,885		)	294,971
Long-term debt	612,715		—		72		—			612,787
Deferred income taxes	—		95,045		—		(14,083		)	80,962
Intercompany payable	—		5,305		—		(5,305		)	—
Other non-current liabilities	12,952		44,711		5,777		—			63,440
Total shareholders' equity	816,742		1,375,178		91,872		(1,467,050		)	816,742
Total liabilities and shareholders' equity	$	1,474,176	$	1,724,078	$	158,971	$	(1,488,323	)	$	1,868,902

Condensed Consolidating Balance Sheet

(Unaudited)

	December 31, 2015
(in thousands)	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	5,187	$	940	$	56,422	$	(122	)	$	62,427
Trade accounts receivable, net	—		115,951		7,703		—			123,654
Inventories and supplies	—		39,758		2,198		—			41,956
Funds held for customers	—		—		53,343		—			53,343
Other current assets	7,230		32,765		2,610		—			42,605
Total current assets	12,417		189,414		122,276		(122		)	323,985
Deferred income taxes	13,498		—		1,238		(13,498		)	1,238
Long-term investments	34,304		7,387		—		—			41,691
Property, plant and equipment, net	10,111		71,017		4,604		—			85,732
Assets held for sale	—		—		13,969		—			13,969
Intangibles, net	9,066		273,051		3,194		—			285,311
Goodwill	—		974,973		1,442		—			976,415
Investments in consolidated subsidiaries	1,248,549		81,099		—		(1,329,648		)	—
Intercompany receivable	99,506		—		—		(99,506		)	—
Other non-current assets	5,861		107,767		184		—			113,812
Total assets	$	1,433,312	$	1,704,708	$	146,907	$	(1,442,774	)	$	1,842,153
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	15,625	$	69,809	$	2,263	$	(122	)	$	87,575
Accrued liabilities	23,567		148,279		56,577		—			228,423
Long-term debt due within one year	1,026		—		19		—			1,045
Total current liabilities	40,218		218,088		58,859		(122		)	317,043
Long-term debt	627,942		—		31		—			627,973
Deferred income taxes	—		94,574		—		(13,498		)	81,076
Intercompany payable	—		98,365		1,141		(99,506		)	—
Other non-current liabilities	20,083		45,132		5,777		—			70,992
Total shareholders' equity	745,069		1,248,549		81,099		(1,329,648		)	745,069
Total liabilities and shareholders' equity	$	1,433,312	$	1,704,708	$	146,907	$	(1,442,774	)	$	1,842,153

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Quarter Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	345,161		$	14,660		$	—		$	359,821
Service revenue	33,277			85,820			6,122			(34,398		)	90,821
Total revenue	33,277			430,981			20,782			(34,398		)	450,642
Cost of products	—			(120,533		)	(6,406		)	—			(126,939		)
Cost of services	(37,295		)	(31,189		)	(1,956		)	37,547			(32,893		)
Total cost of revenue	(37,295		)	(151,722		)	(8,362		)	37,547			(159,832		)
Gross profit	(4,018		)	279,259			12,420			3,149			290,810
Operating expenses	—			(187,953		)	(8,759		)	(3,149		)	(199,861		)
Operating (loss) income	(4,018		)	91,306			3,661			—			90,949
Interest expense	(4,917		)	(4,195		)	—			3,929			(5,183		)
Other income	3,680			541			150			(3,929		)	442
(Loss) income before income taxes	(5,255		)	87,652			3,811			—			86,208
Income tax benefit (provision)	3,529			(30,805		)	(543		)	—			(27,819		)
(Loss) income before equity in earnings of consolidated subsidiaries	(1,726		)	56,847			3,268			—			58,389
Equity in earnings of consolidated subsidiaries	60,115			3,268			—			(63,383		)	—
Net income	$	58,389		$	60,115		$	3,268		$	(63,383	)	$	58,389
Comprehensive income	$	59,282		$	60,957		$	3,751		$	(64,708	)	$	59,282

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Quarter Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	339,959		$	18,938		$	—		$	358,897
Service revenue	28,426			71,753			6,331			(29,533		)	76,977
Total revenue	28,426			411,712			25,269			(29,533		)	435,874
Cost of products	—			(118,527		)	(9,729		)	—			(128,256		)
Cost of services	(29,847		)	(26,174		)	(1,830		)	30,169			(27,682		)
Total cost of revenue	(29,847		)	(144,701		)	(11,559		)	30,169			(155,938		)
Gross profit	(1,421		)	267,011			13,710			636			279,936
Operating expenses	—			(180,869		)	(9,552		)	(636		)	(191,057		)
Operating (loss) income	(1,421		)	86,142			4,158			—			88,879
Interest expense	(4,104		)	(4,625		)	(1		)	4,310			(4,420		)
Other income	4,568			470			96			(4,310		)	824
(Loss) income before income taxes	(957		)	81,987			4,253			—			85,283
Income tax benefit (provision)	788			(28,960		)	(1,048		)	—			(29,220		)
(Loss) income before equity in earnings of consolidated subsidiaries	(169		)	53,027			3,205			—			56,063
Equity in earnings of consolidated subsidiaries	56,232			3,205			—			(59,437		)	—
Net income	$	56,063		$	56,232		$	3,205		$	(59,437	)	$	56,063
Comprehensive income	$	57,327		$	57,453		$	4,157		$	(61,610	)	$	57,327

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Six Months Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	697,834		$	28,172		$	—		$	726,006
Service revenue	67,095			173,937			12,235			(69,333		)	183,934
Total revenue	67,095			871,771			40,407			(69,333		)	909,940
Cost of products	—			(244,955		)	(12,578		)	—			(257,533		)
Cost of services	(75,323		)	(64,762		)	(3,666		)	77,147			(66,604		)
Total cost of revenue	(75,323		)	(309,717		)	(16,244		)	77,147			(324,137		)
Gross profit	(8,228		)	562,054			24,163			7,814			585,803
Operating expenses	—			(377,313		)	(17,085		)	(7,814		)	(402,212		)
Operating (loss) income	(8,228		)	184,741			7,078			—			183,591
Interest expense	(9,901		)	(6,965		)	(1		)	6,441			(10,426		)
Other income (expense)	6,308			867			(141		)	(6,441		)	593
(Loss) income before income taxes	(11,821		)	178,643			6,936			—			173,758
Income tax benefit (provision)	6,839			(62,786		)	(1,320		)	—			(57,267		)
(Loss) income before equity in earnings of consolidated subsidiaries	(4,982		)	115,857			5,616			—			116,491
Equity in earnings of consolidated subsidiaries	121,473			5,616			—			(127,089		)	—
Net income	$	116,491		$	121,473		$	5,616		$	(127,089	)	$	116,491
Comprehensive income	$	122,474		$	127,352		$	10,777		$	(138,129	)	$	122,474

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Six Months Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	672,698		$	41,213		$	—		$	713,911
Service revenue	55,111			144,993			12,929			(57,452		)	155,581
Total revenue	55,111			817,691			54,142			(57,452		)	869,492
Cost of products	—			(230,780		)	(21,216		)	—			(251,996		)
Cost of services	(60,130		)	(54,754		)	(3,920		)	62,180			(56,624		)
Total cost of revenue	(60,130		)	(285,534		)	(25,136		)	62,180			(308,620		)
Gross profit	(5,019		)	532,157			29,006			4,728			560,872
Operating expenses	—			(361,627		)	(20,347		)	(4,728		)	(386,702		)
Operating (loss) income	(5,019		)	170,530			8,659			—			174,170
Loss on early debt extinguishment	(8,917		)	—			—			—			(8,917		)
Interest expense	(10,601		)	(5,995		)	(1		)	5,662			(10,935		)
Other income	5,943			608			365			(5,662		)	1,254
(Loss) income before income taxes	(18,594		)	165,143			9,023			—			155,572
Income tax benefit (provision)	7,289			(58,401		)	(2,457		)	—			(53,569		)
(Loss) income before equity in earnings of consolidated subsidiaries	(11,305		)	106,742			6,566			—			102,003
Equity in earnings of consolidated subsidiaries	113,308			6,566			—			(119,874		)	—
Net income	$	102,003		$	113,308		$	6,566		$	(119,874	)	$	102,003
Comprehensive income	$	97,510		$	108,730		$	1,450		$	(110,180	)	$	97,510

Condensed Consolidating Statement of Cash Flows

(Unaudited)

	Six Months Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(10,443	)	$	135,686		$	4,786		$	(1,763	)	$	128,266
Cash flows from investing activities:
Purchases of capital assets	(12,493		)	(8,357		)	(1,334		)	—			(22,184		)
Payments for acquisitions, net of cash acquired	—			(28,497		)	—			—			(28,497		)
Proceeds from company-owned life insurance policies	3,053			—			—			—			3,053
Other	(195		)	633			1,649			—			2,087
Net cash (used) provided by investing activities	(9,635		)	(36,221		)	315			—			(45,541		)
Cash flows from financing activities:
Proceeds from issuing long-term debt	107,000			—			—			—			107,000
Payments on long-term debt, including costs of debt reacquisition	(128,571		)	—			(13		)	—			(128,584		)
Proceeds from issuing shares under employee plans	4,193			—			—			—			4,193
Employee taxes paid for shares withheld	(2,260		)	—			—			—			(2,260		)
Payments for common shares repurchased	(29,981		)	—			—			—			(29,981		)
Cash dividends paid to shareholders	(29,446		)	—			—			—			(29,446		)
Advances from (to) consolidated subsidiaries	99,848			(97,988		)	(1,860		)	—			—
Other	(41		)	(376		)	—			—			(417		)
Net cash provided (used) by financing activities	20,742			(98,364		)	(1,873		)	—			(79,495		)
Effect of exchange rate change on cash	—			—			3,935			—			3,935
Net change in cash and cash equivalents	664			1,101			7,163			(1,763		)	7,165
Cash and cash equivalents, beginning of year	5,187			940			56,422			(122		)	62,427
Cash and cash equivalents, end of period	$	5,851		$	2,041		$	63,585		$	(1,885	)	$	69,592

Condensed Consolidating Statement of Cash Flows

(Unaudited)

	Six Months Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(3,699	)	$	139,604		$	7,793		$	3,209		$	146,907
Cash flows from investing activities:
Purchases of capital assets	(905		)	(16,997		)	(1,405		)	—			(19,307		)
Payments for acquisitions, net of cash acquired	(26		)	(35,774		)	—			—			(35,800		)
Other	(286		)	619			6			—			339
Net cash used by investing activities	(1,217		)	(52,152		)	(1,399		)	—			(54,768		)
Cash flows from financing activities:
Proceeds from short-term borrowings	75,000			—			—			—			75,000
Proceeds from issuing long-term debt	211,500			—			—			—			211,500
Payments on long-term debt, including costs of debt reacquisition	(346,015		)	—			(6		)	—			(346,021		)
Proceeds from issuing shares under employee plans	4,135			—			—			—			4,135
Excess tax benefit from share-based employee awards	1,557			—			—			—			1,557
Employee taxes paid for shares withheld	(871		)	—			—			—			(871		)
Cash dividends paid to shareholders	(30,043		)	—			—			—			(30,043		)
Advances from (to) consolidated subsidiaries	88,650			(88,232		)	(418		)	—			—
Other	(136		)	—			(150		)	—			(286		)
Net cash provided (used) by financing activities	3,777			(88,232		)	(574		)	—			(85,029		)
Effect of exchange rate change on cash	—			—			(3,725		)	—			(3,725		)
Net change in cash and cash equivalents	(1,139		)	(780		)	2,095			3,209			3,385
Cash and cash equivalents, beginning of year	8,335			4,342			52,193			(3,329		)	61,541
Cash and cash equivalents, end of period	$	7,196		$	3,562		$	54,288		$	(120	)	$	64,926

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New accounting pronouncements (Policies)

6 Months Ended

Jun. 30, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New accounting pronouncements

New accounting pronouncements

Recently adopted accounting pronouncements – In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The standard requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. We adopted this standard on January 1, 2016. As our accounting treatment for these awards was in compliance with the new guidance, adoption of this standard had no impact on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the consolidated balance sheets as a direct reduction from the carrying amount of the debt liability. We adopted this standard on January 1, 2016, applying it retrospectively. The consolidated balance sheet as of December 31, 2015 reflects the reclassification of debt issuance costs of $2,249 from other non-current assets to long-term debt. The amount of debt issuance costs included in long-term debt as of June 30, 2016 was $2,021. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This standard adds SEC paragraphs pursuant to the SEC Staff announcement at the June 18, 2015 Emerging Issues Task Force (EITF) meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Under this guidance, the SEC Staff would not object to presenting such costs as an asset and subsequently amortizing the deferred costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the arrangement. Debt issuance costs of $1,687 as of June 30, 2016 and $2,003 as of December 31, 2015 related to our line-of-credit arrangement. We continue to include these costs within other non-current assets, amortizing them over the term of the arrangement.

In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses. We adopted this standard on January 1, 2016, applying it prospectively to all arrangements entered into or materially modified on or after January 1, 2016. Adoption of this standard did not have a significant impact on our results of operations or financial position.

In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent). Under the standard, investments measured at net asset value (NAV) as a practical expedient for fair value are excluded from the fair value hierarchy. As such, they are not assigned a fair value measurement level in financial statement disclosures of fair value. This standard was effective for us on January 1, 2016. It impacts the disclosures included in our Annual Report on Form 10-K regarding the plan assets of our postretirement benefit plan. As such, we will reflect this new guidance in the disclosures included in our Form 10-K for the year ending December 31, 2016, applying the guidance retrospectively to all periods presented.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The standard requires that inventory within the scope of the guidance be measured at the lower of cost or net realizable value. Previously, inventory was measured at the lower of cost or market. We elected to early adopt this standard on January 1, 2016, applying it prospectively. Application of this standard did not have a significant impact on our results of operations or financial position.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. When recording the purchase price allocation for a business combination in the financial statements, an acquirer may record preliminary amounts when measurements are incomplete as of the end of a reporting period. When the required information is received to finalize the purchase price allocation, the preliminary amounts are adjusted. These adjustments are referred to as measurement-period adjustments. This standard eliminates the requirement to restate prior period financial statements for measurement-period adjustments. Instead, it requires that the cumulative impact of a measurement-period adjustment be recognized in the reporting period in which the adjustment is identified. We adopted this standard on January 1, 2016, applying it prospectively. Application of this standard did not have a significant impact on our results of operations or financial position.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The standard is intended to simplify various aspects of the accounting and presentation of share-based payments. We elected to early adopt this standard as of January 1, 2016. Adoption of this standard had the following impacts on our consolidated financial statements:

• Consolidated statements of comprehensive income – The new standard requires that the tax effects of share-based compensation be recognized in the income tax provision. Previously, these amounts were recognized in additional paid-in capital. Net tax benefits related to share-based compensation awards of $1,020 for the quarter ended June 30, 2016 and $1,512 for the six months ended June 30, 2016 were recognized as reductions of income tax expense in the consolidated statements of comprehensive income. These tax benefits reduced our effective income tax rate 1.2 points for the quarter ended June 30, 2016 and 0.9 points for the six months ended June 30, 2016. In addition, in calculating potential common shares used to determine diluted earnings per share, GAAP requires us to use the treasury stock method. The new standard requires that assumed proceeds under the treasury stock method be modified to exclude the amount of excess tax benefits that would have been recognized in additional paid-in capital. These changes were applied on a prospective basis and resulted in an increase in basic and diluted earnings per share of $0.02 for the quarter ended June 30, 2016 and $0.03 for the six months ended June 30, 2016.

In recording share-based compensation expense, the standard allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur. We have elected to include an estimate of forfeitures in the computation of our share-based compensation expense. As this treatment is consistent with previous guidance, this election had no impact on our consolidated financial statements.

• Consolidated statements of cash flows – The standard requires that excess tax benefits from share-based employee awards be reported as operating activities in the consolidated statements of cash flows. Previously, these cash flows were included in financing activities. We elected to apply this change on a prospective basis, resulting in an increase in net cash provided by operating activities and in net cash used by financing activities of $1,811 for the six months ended June 30, 2016.

The standard requires that employee taxes paid when an employer withholds shares for tax-withholding purposes be reported as financing activities in the consolidated statements of cash flows. Previously, these cash flows were included in operating activities. This change was required to be applied on a retrospective basis. As such, the consolidated statement of cash flows for the prior period was restated. This change resulted in an increase in net cash provided by operating activities and in net cash used by financing activities of $2,260 for the six months ended June 30, 2016 and $871 for the six months ended June 30, 2015.

Accounting pronouncements not yet adopted – In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard provides revenue recognition guidance for any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other accounting standards. The standard also expands the required financial statement disclosures regarding revenue recognition. The new guidance is effective for us on January 1, 2018. In addition, in March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), in April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, and in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients. These standards are intended to clarify aspects of ASU No. 2014-09 and are effective for us upon adoption of ASU No. 2014-09. We are currently assessing the impact of these standards on our consolidated financial statements, as well as the method of transition that we will use in adopting the new guidance.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The standard is intended to improve the recognition, measurement, presentation and disclosure of financial instruments. The guidance is effective for us on January 1, 2018. We do not expect the application of this standard to have a significant impact on our results of operations or financial position.

In February 2016, the FASB issued ASU No. 2016-02, Leasing. The standard is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities for virtually all leases and by requiring the disclosure of key information about leasing arrangements. The guidance is effective for us on January 1, 2019, and requires adoption using a modified retrospective approach. We are currently assessing the impact of this standard on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. The standard introduces new guidance for the accounting for credit losses on instruments within its scope, including trade and loans receivable and available-for-sale debt securities. The guidance is effective for us on January 1, 2020, and requires adoption using a modified retrospective approach. We do not expect the application of this standard to have a significant impact on our results of operations or financial position.

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Long-term investments (Policies)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Long-term investments

We have elected to account for a long-term investment in domestic mutual funds under the fair value option for financial assets and financial liabilities. The fair value option provides companies an irrevocable option to measure many financial assets and liabilities at fair value with changes in fair value recognized in earnings. The investment is included in long-term investments in the consolidated balance sheets. Long-term investments also include the cash surrender values of company-owned life insurance policies. Realized and unrealized gains and losses, as well as dividends earned by the mutual fund investment, are included in selling, general and administrative (SG&A) expense in the consolidated statements of comprehensive income. This investment corresponds to a liability under an officers’ deferred compensation plan that is not available to new participants and is fully funded by the investment in mutual funds. The liability under the plan equals the fair value of the investment in mutual funds. Thus, as the value of the investment changes, the value of the liability changes accordingly. As changes in the liability are reflected within SG&A expense in the consolidated statements of comprehensive income, the fair value option of accounting for the investment in mutual funds allows us to net changes in the investment and the related liability in the statements of comprehensive income. The cost of securities sold is determined using the average cost method.

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Recurring fair value measurements (Policies)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair value level transfers

Our policy is to recognize transfers between fair value levels as of the end of the reporting period in which the transfer occurred.

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Consolidated financial statements (Tables)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Impact of revision

The impact of this revision on our unaudited consolidated balance sheet as of December 31, 2015 was as follows:

	December 31, 2015
(in thousands)	As Previously Reported		Adjustment			As Revised
Other current assets	$	44,608	$	(2,003	)	$	42,605
Total current assets	325,988		(2,003		)	323,985
Other non-current assets	111,809		2,003			113,812
Short-term borrowings	434,000		(434,000		)	—
Total current liabilities	751,043		(434,000		)	317,043
Long-term debt	193,973		434,000			627,973

The impact of this revision on our unaudited consolidated statement of cash flows for the six months ended June 30, 2015 was as follows:

	Six Months Ended June 30, 2015
(in thousands)	As Previously Reported			Adjustment			As Revised
Proceeds from short-term borrowings	$	148,000		$	(73,000	)	$	75,000
Proceeds from issuing long-term debt	—			211,500			211,500
Payments on long-term debt, including costs of debt reacquisition	(207,521		)	(138,500		)	(346,021		)

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Supplemental balance sheet information (Tables)

6 Months Ended

Jun. 30, 2016

Balance Sheet Related Disclosures [Abstract]

Inventories and supplies

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

(in thousands)	June 30, 2016		December 31, 2015
Raw materials	$	5,649	$	5,719
Semi-finished goods	8,353		8,208
Finished goods	20,993		24,955
Supplies	3,091		3,074
Inventories and supplies	$	38,086	$	41,956

Available-for-sale securities

Available-for-sale securities – Available-for-sale securities included within funds held for customers and other current assets were comprised of the following:

	June 30, 2016
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Funds held for customers:(1)
Canadian and provincial government securities	$	8,585	$	—	$	(39	)	$	8,546
Canadian guaranteed investment certificates	7,738		—		—			7,738
Available-for-sale securities	$	16,323	$	—	$	(39	)	$	16,284

⁽¹⁾ Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2016, also included cash of $60,842. This cash included amounts related to FISC Solutions, which was acquired in December 2015. This business provides cash receipt processing services. A portion of the cash receipts are remitted to our clients the business day following receipt. As such, the amounts on-hand are reported as funds held for customers in the consolidated balance sheets, with a corresponding liability included in accrued liabilities. The asset and liability of $18,743 were recorded as acquisition measurement-period balance sheet adjustments during 2016.

	December 31, 2015
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Canadian and provincial government securities	$	7,932	$	—	$	(91	)	$	7,841
Canadian guaranteed investment certificates	7,226		—		—			7,226
Available-for-sale securities (funds held for customers)(1)	15,158		—		(91		)	15,067
Canadian money market fund (other current assets)	1,616		—		—			1,616
Available-for-sale securities	$	16,774	$	—	$	(91	)	$	16,683

⁽¹⁾ Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2015, also included cash of $38,276.

Expected maturities of available-for-sale securities

Expected maturities of available-for-sale securities as of June 30, 2016 were as follows:

(in thousands)	Fair value
Due in one year or less	$	9,148
Due in two to five years	4,556
Due in six to ten years	2,580
Available-for-sale securities	$	16,284

Assets held for sale

Net assets held for sale consisted of the following:

(in thousands)	June 30, 2016			December 31, 2015			Balance sheet caption
Current assets	$	4		$	3		Other current assets
Intangibles	13,533			13,533			Assets held for sale
Other non-current assets	434			436			Assets held for sale
Accrued liabilities	(106		)	(366		)	Accrued liabilities
Deferred income tax liabilities	(5,777		)	(5,777		)	Other non-current liabilities
Net assets held for sale	$	8,088		$	7,829

Intangibles

Intangibles – Intangibles were comprised of the following:

	June 30, 2016							December 31, 2015
(in thousands)	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived intangibles:
Trade name	$	19,100	$	—		$	19,100	$	19,100	$	—		$	19,100
Amortizable intangibles:
Internal-use software	393,159		(328,038		)	65,121		375,037		(310,665		)	64,372
Customer lists/relationships	234,012		(70,568		)	163,444		202,682		(54,990		)	147,692
Trade names	64,881		(38,787		)	26,094		64,881		(36,325		)	28,556
Software to be sold	28,500		(5,349		)	23,151		28,500		(3,765		)	24,735
Other	2,808		(2,203		)	605		2,858		(2,002		)	856
Amortizable intangibles	723,360		(444,945		)	278,415		673,958		(407,747		)	266,211
Intangibles	$	742,460	$	(444,945	)	$	297,515	$	693,058	$	(407,747	)	$	285,311

Estimated future amortization expense

Based on the intangibles in service as of June 30, 2016, estimated future amortization expense is as follows:

(in thousands)	Estimated amortization expense
Remainder of 2016	$	33,703
2017	57,848
2018	43,803
2019	31,505
2020	26,382

Acquired intangibles

The following intangible assets were acquired during the six months ended June 30, 2016:

(in thousands)	Amount		Weighted-average amortization period (in years)
Internal-use software	$	17,816	3
Customer lists/relationships	31,082		7
Acquired intangibles	$	48,898	6

Goodwill

Goodwill – Changes in goodwill during the six months ended June 30, 2016 were as follows:

(in thousands)	Small Business Services			Financial Services		Direct Checks		Total
Balance, December 31, 2015:
Goodwill, gross	$	671,295		$	176,614	$	148,506	$	996,415
Accumulated impairment charges	(20,000		)	—		—		(20,000		)
Goodwill, net of accumulated impairment charges	651,295			176,614		148,506		976,415
Acquisition of 180 Fusion (Note 6)	575			—		—		575
Currency translation adjustment	102			—		—		102
Balance, June 30, 2016:
Goodwill, gross	671,972			176,614		148,506		997,092
Accumulated impairment charges	(20,000		)	—		—		(20,000		)
Goodwill, net of accumulated impairment charges	$	651,972		$	176,614	$	148,506	$	977,092

Other non-current assets

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

(in thousands)	June 30, 2016		December 31, 2015
Contract acquisition costs	$	64,170	$	58,792
Loans and notes receivable from distributors	21,877		23,957
Postretirement benefit plan asset	18,596		16,250
Deferred advertising costs	6,980		7,500
Other	6,650		7,313
Other non-current assets	$	118,273	$	113,812

Changes in contract acquisition costs

Changes in contract acquisition costs during the six months ended June 30, 2016 and 2015 were as follows:

	Six Months Ended June 30,
(in thousands)	2016			2015
Balance, beginning of year	$	58,792		$	74,101
Additions(1)	14,913			2,520
Amortization	(9,485		)	(9,697		)
Other	(50		)	(2,714		)
Balance, end of period	$	64,170		$	64,210

⁽¹⁾ Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $14,341 for the six months ended June 30, 2016 and $5,848 for the six months ended June 30, 2015.

Accrued liabilities

Accrued liabilities – Accrued liabilities were comprised of the following:

(in thousands)	June 30, 2016		December 31, 2015
Funds held for customers	$	75,932	$	52,366
Deferred revenue	36,072		48,119
Employee profit sharing/cash bonus	18,463		40,683
Customer rebates	16,975		18,900
Wages, including vacation	12,113		5,731
Contract acquisition costs due within one year	8,740		9,045
Restructuring due within one year (Note 9)	2,310		3,864
Other	39,984		49,715
Accrued liabilities	$	210,589	$	228,423

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Earnings per share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings per share

The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. 

	Quarter Ended June 30,						Six Months Ended June 30,
(dollars and shares in thousands, except per share amounts)	2016			2015			2016			2015
Earnings per share – basic:
Net income	$	58,389		$	56,063		$	116,491		$	102,003
Income allocated to participating securities	(493		)	(376		)	(954		)	(669		)
Income available to common shareholders	$	57,896		$	55,687		$	115,537		$	101,334
Weighted-average shares outstanding	48,611			49,770			48,699			49,732
Earnings per share – basic	$	1.19		$	1.12		$	2.37		$	2.04
Earnings per share – diluted:
Net income	$	58,389		$	56,063		$	116,491		$	102,003
Income allocated to participating securities	(489		)	(374		)	(948		)	(665		)
Re-measurement of share-based awards classified as liabilities	88			(132		)	293			47
Income available to common shareholders	$	57,988		$	55,557		$	115,836		$	101,385
Weighted-average shares outstanding	48,611			49,770			48,699			49,732
Dilutive impact of potential common shares	429			400			412			404
Weighted-average shares and potential common shares outstanding	49,040			50,170			49,111			50,136
Earnings per share – diluted	$	1.18		$	1.11		$	2.36		$	2.02
Antidilutive options excluded from calculation	236			260			236			260

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Other comprehensive income (Tables)

6 Months Ended

Jun. 30, 2016

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Reclassification adjustments

Reclassification adjustments– Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows:

Accumulated other comprehensive loss components	Amounts reclassified from accumulated other comprehensive loss												Affected line item in consolidated statements of comprehensive income
	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015
Amortization of postretirement benefit plan items:
Prior service credit	$	355		$	355		711			711			(1)
Net actuarial loss	(949		)	(780		)	(1,899		)	(1,560		)	(1)
Total amortization	(594		)	(425		)	(1,188		)	(849		)	(1)
Tax benefit	182			113			363			226			(1)
Total reclassifications, net of tax	$	(412	)	$	(312	)	$	(825	)	$	(623	)

⁽¹⁾ Amortization of postretirement benefit plan items is included in the computation of net periodic benefit income. Additional details can be found in Note 10.

Accumulated other comprehensive loss

Accumulated other comprehensive loss– Changes in the components of accumulated other comprehensive loss during the six months ended June 30, 2016 were as follows:

(in thousands)	Postretirement benefit plans, net of tax			Net unrealized loss on marketable securities, net of tax(1)			Currency translation adjustment			Accumulated other comprehensive loss
Balance, December 31, 2015	$	(38,822	)	$	(114	)	$	(16,267	)	$	(55,203	)
Other comprehensive income before reclassifications	—			43			5,115			5,158
Amounts reclassified from accumulated other comprehensive loss	825			—			—			825
Net current-period other comprehensive income	825			43			5,115			5,983
Balance, June 30, 2016	$	(37,997	)	$	(71	)	$	(11,152	)	$	(49,220	)

⁽¹⁾ Other comprehensive income before reclassifications is net of income tax expense of $15.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Allocation of the aggregate purchase price for acquisitions completed during the current period

The following illustrates the preliminary allocation as of June 30, 2016 of the aggregate purchase price for the above acquisitions to the assets acquired and liabilities assumed:

(in thousands)	2016 acquisitions
Net tangible assets acquired and liabilities assumed	$	(909	)
Identifiable intangible assets:
Customer lists/relationships	31,082
Internal-use software	1,250
Total intangible assets	32,332
Goodwill	575
Total aggregate purchase price	31,998
Liabilities for holdback payments	(3,016		)
Non-cash consideration(1)	(1,926		)
Net cash paid for 2016 acquisitions	27,056
Holdback payments for prior year acquisitions	1,441
Payments for acquisitions, net of cash acquired	$	28,497

⁽¹⁾ Consists of pre-acquisition amounts owed to us by certain of the acquired businesses.

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Fair value measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Recurring fair value measurements

Information regarding recurring fair value measurements completed during each period was as follows:

				Fair value measurements using
	Fair value as of  June 30, 2016			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)				(Level 1)		(Level 2)		(Level 3)
Available-for-sale marketable securities (funds held for customers)	$	16,284		$	—	$	16,284	$	—
Long-term investment in mutual funds	1,792			1,792		—		—
Derivative assets	858			—		858		—
Accrued contingent consideration	(5,919		)	—		—		(5,919		)

				Fair value measurements using
	Fair value as of December 31, 2015			Quoted prices in active markets for identical assets		Significant other observable inputs			Significant unobservable inputs
(in thousands)				(Level 1)		(Level 2)			(Level 3)
Available-for-sale marketable securities (funds held for customers)	$	15,067		$	—	$	15,067		$	—
Available-for-sale marketable securities (other current assets)	1,616			—		1,616			—
Long-term investment in mutual funds	2,091			2,091		—			—
Derivative liabilities	(4,842		)	—		(4,842		)	—
Accrued contingent consideration	(5,861		)	—		—			(5,861		)

Changes in accrued contingent consideration

Changes in accrued contingent consideration during the six months ended June 30, 2016 were as follows:

(in thousands)	Six Months Ended June 30, 2016
Balance, December 31, 2015	$	5,861
Change in fair value	434
Payments	(376		)
Balance, June 30, 2016	$	5,919

Estimated fair value of other financial instruments

The estimated fair values of these financial instruments were as follows:

					Fair value measurements using
	June 30, 2016				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)	Carrying value		Fair value		(Level 1)		(Level 2)		(Level 3)
Cash	$	69,592	$	69,592	$	69,592	$	—	$	—
Cash (funds held for customers)	60,842		60,842		60,842		—		—
Loans and notes receivable from distributors	23,740		20,897		—		—		20,897
Long-term debt(1)	611,837		620,900		—		620,900		—

⁽¹⁾ Amounts exclude capital lease obligations.

					Fair value measurements using
	December 31, 2015				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(in thousands)	Carrying value		Fair value		(Level 1)		(Level 2)		(Level 3)
Cash	$	62,427	$	62,427	$	62,427	$	—	$	—
Cash (funds held for customers)	38,276		38,276		38,276		—		—
Loans and notes receivable from distributors	25,745		23,383		—		—		23,383
Long-term debt(1)	626,909		641,000		—		641,000		—

⁽¹⁾ Amounts exclude capital lease obligations.

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Restructuring charges (Tables)

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Components of net restructuring charges

Net restructuring charges for each period consisted of the following components:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands, except number of employees)	2016			2015			2016			2015
Severance accruals	$	1,096		$	1,307		$	1,987		$	2,050
Severance reversals	(96		)	(170		)	(468		)	(694		)
Operating lease obligations	—			—			59			—
Net restructuring accruals	1,000			1,137			1,578			1,356
Other costs	217			17			507			62
Net restructuring charges	$	1,217		$	1,154		$	2,085		$	1,418
Number of employees included in severance accruals	40			110			65			150

The net restructuring charges are reflected in the consolidated statements of comprehensive income as follows:

	Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	2016		2015		2016		2015
Total cost of revenue	$	82	$	188	$	71	$	185
Operating expenses	1,135		966		2,014		1,233
Net restructuring charges	$	1,217	$	1,154	$	2,085	$	1,418

Restructuring accruals, initiatives summarized by year

Accruals for our restructuring initiatives, summarized by year, were as follows:

(in thousands)	2014  initiatives			2015  initiatives			2016 initiatives			Total
Balance, December 31, 2015	$	176		$	3,688		$	—		$	3,864
Restructuring charges	—			37			2,009			2,046
Restructuring reversals	(111		)	(310		)	(47		)	(468		)
Payments	(65		)	(2,554		)	(513		)	(3,132		)
Balance, June 30, 2016	$	—		$	861		$	1,449		$	2,310
Cumulative amounts:
Restructuring charges	$	8,242		$	6,164		$	2,009		$	16,415
Restructuring reversals	(1,444		)	(768		)	(47		)	(2,259		)
Payments	(6,798		)	(4,535		)	(513		)	(11,846		)
Balance, June 30, 2016	$	—		$	861		$	1,449		$	2,310

Restructuring accruals, by segment

The components of our restructuring accruals, by segment, were as follows:

	Employee severance benefits												Operating lease obligations
(in thousands)	Small Business Services			Financial Services			Direct Checks			Corporate			Small Business Services			Financial Services			Total
Balance, December 31, 2015	$	1,023		$	884		$	—		$	1,859		$	56		$	42		$	3,864
Restructuring charges	892			510			135			450			59			—			2,046
Restructuring reversals	(93		)	(39		)	—			(336		)	—			—			(468		)
Payments	(994		)	(538		)	—			(1,483		)	(85		)	(32		)	(3,132		)
Balance, June 30, 2016	$	828		$	817		$	135		$	490		$	30		$	10		$	2,310
Cumulative amounts(1):
Restructuring charges	$	6,617		$	4,769		$	171		$	4,461		$	344		$	53		$	16,415
Restructuring reversals	(1,293		)	(350		)	(2		)	(614		)	—			—			(2,259		)
Inter-segment transfer	41			(14		)	—			(27		)	—			—			—
Payments	(4,537		)	(3,588		)	(34		)	(3,330		)	(314		)	(43		)	(11,846		)
Balance, June 30, 2016	$	828		$	817		$	135		$	490		$	30		$	10		$	2,310

⁽¹⁾ Includes accruals related to our cost reduction initiatives for 2014 through 2016.

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Postretirement benefits (Tables)

6 Months Ended

Jun. 30, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Components of net periodic benefit income

Postretirement benefit income for each period consisted of the following components:

	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015
Interest cost	$	780		$	859		$	1,559		$	1,719
Expected return on plan assets	(1,834		)	(1,958		)	(3,667		)	(3,917		)
Amortization of prior service credit	(355		)	(355		)	(711		)	(711		)
Amortization of net actuarial losses	949			780			1,899			1,560
Net periodic benefit income	$	(460	)	$	(674	)	$	(920	)	$	(1,349	)

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Debt (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt outstanding

Debt outstanding was comprised of the following:

(in thousands)	June 30, 2016			December 31, 2015
6.0% senior notes due November 15, 2020, principal amount	$	200,000		$	200,000
Less unamortized debt issuance costs	(2,021		)	(2,249		)
Cumulative change in fair value of hedged debt (Note 7)	858			(4,842		)
6.0% senior notes, carrying value	198,837			192,909
Amount drawn on credit facility	413,000			434,000
Long-term portion of capital lease obligations	950			1,064
Long-term portion of debt	612,787			627,973
Capital lease obligations due within one year	1,041			1,045
Total debt	$	613,828		$	629,018

Daily average amounts outstanding

Daily average amounts outstanding under our credit facility and short-term borrowings were as follows:

(in thousands)	Six Months Ended June 30, 2016			Year Ended December 31, 2015
Credit facility:
Daily average amount outstanding	$	419,544		$	270,063
Weighted-average interest rate	1.86		%	1.66		%
Short-term bank loan:
Daily average amount outstanding	$	—		$	47,178
Weighted-average interest rate	—			1.59		%

Credit facility, amount available for borrowing

As of June 30, 2016, amounts were available for borrowing under our credit facility as follows:

(in thousands)	Total available
Credit facility commitment	$	525,000
Amount drawn on credit facility	(413,000		)
Outstanding letters of credit(1)	(12,795		)
Net available for borrowing as of June 30, 2016	$	99,205

⁽¹⁾ We use standby letters of credit to collateralize certain obligations related primarily to our self-insured workers’ compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our credit facility.

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Business segment information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business segment information

The following is our segment information as of and for the quarters ended June 30, 2016 and 2015:

		Reportable Business Segments
(in thousands)		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Total revenue from external	2016	$	288,182	$	124,230	$	38,230	$	—	$	450,642
customers:	2015	282,285		112,699		40,890		—		435,874
Operating income:	2016	48,956		29,034		12,959		—		90,949
	2015	48,225		25,506		15,148		—		88,879
Depreciation and amortization	2016	12,809		9,074		890		—		22,773
expense:	2015	11,231		5,791		973		—		17,995
Total assets:	2016	1,023,798		432,152		160,935		252,017		1,868,902
	2015	980,405		272,495		162,058		271,349		1,686,307
Capital asset purchases:	2016	—		—		—		11,995		11,995
	2015	—		—		—		9,795		9,795
The following is our segment information as of and for the six months ended June 30, 2016 and 2015:
		Reportable Business Segments
(in thousands)		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Total revenue from external	2016	$	578,453	$	251,478	$	80,009	$	—	$	909,940
customers:	2015	559,251		224,240		86,001		—		869,492
Operating income:	2016	100,106		55,759		27,726		—		183,591
	2015	97,672		45,916		30,582		—		174,170
Depreciation and amortization	2016	24,881		18,011		1,760		—		44,652
expense:	2015	21,440		11,781		2,457		—		35,678
Total assets:	2016	1,023,798		432,152		160,935		252,017		1,868,902
	2015	980,405		272,495		162,058		271,349		1,686,307
Capital asset purchases:	2016	—		—		—		22,184		22,184
	2015	—		—		—		19,307		19,307

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Supplemental guarantor financial information (Tables)

6 Months Ended

Jun. 30, 2016

Supplemental guarantor financial information [Abstract]

Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheet

(Unaudited)

	June 30, 2016
(in thousands)	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	5,851	$	2,041	$	63,585	$	(1,885	)	$	69,592
Trade accounts receivable, net	—		100,303		8,635		—			108,938
Inventories and supplies	—		35,832		2,254		—			38,086
Funds held for customers	—		20,342		56,784		—			77,126
Other current assets	5,815		31,602		1,834		—			39,251
Total current assets	11,666		190,120		133,092		(1,885		)	332,993
Deferred income taxes	14,083		—		1,756		(14,083		)	1,756
Long-term investments	34,686		7,737		—		—			42,423
Property, plant and equipment, net	10,253		69,652		4,978		—			84,883
Assets held for sale	—		—		13,967		—			13,967
Intangibles, net	16,298		277,709		3,508		—			297,515
Goodwill	—		975,548		1,544		—			977,092
Investments in consolidated subsidiaries	1,375,178		91,872		—		(1,467,050		)	—
Intercompany receivable	5,274		—		31		(5,305		)	—
Other non-current assets	6,738		111,440		95		—			118,273
Total assets	$	1,474,176	$	1,724,078	$	158,971	$	(1,488,323	)	$	1,868,902
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	17,139	$	65,707	$	2,380	$	(1,885	)	$	83,341
Accrued liabilities	13,624		138,132		58,833		—			210,589
Long-term debt due within one year	1,004		—		37		—			1,041
Total current liabilities	31,767		203,839		61,250		(1,885		)	294,971
Long-term debt	612,715		—		72		—			612,787
Deferred income taxes	—		95,045		—		(14,083		)	80,962
Intercompany payable	—		5,305		—		(5,305		)	—
Other non-current liabilities	12,952		44,711		5,777		—			63,440
Total shareholders' equity	816,742		1,375,178		91,872		(1,467,050		)	816,742
Total liabilities and shareholders' equity	$	1,474,176	$	1,724,078	$	158,971	$	(1,488,323	)	$	1,868,902

Condensed Consolidating Balance Sheet

(Unaudited)

	December 31, 2015
(in thousands)	Deluxe Corporation		Guarantor subsidiaries		Non-guarantor subsidiaries		Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	5,187	$	940	$	56,422	$	(122	)	$	62,427
Trade accounts receivable, net	—		115,951		7,703		—			123,654
Inventories and supplies	—		39,758		2,198		—			41,956
Funds held for customers	—		—		53,343		—			53,343
Other current assets	7,230		32,765		2,610		—			42,605
Total current assets	12,417		189,414		122,276		(122		)	323,985
Deferred income taxes	13,498		—		1,238		(13,498		)	1,238
Long-term investments	34,304		7,387		—		—			41,691
Property, plant and equipment, net	10,111		71,017		4,604		—			85,732
Assets held for sale	—		—		13,969		—			13,969
Intangibles, net	9,066		273,051		3,194		—			285,311
Goodwill	—		974,973		1,442		—			976,415
Investments in consolidated subsidiaries	1,248,549		81,099		—		(1,329,648		)	—
Intercompany receivable	99,506		—		—		(99,506		)	—
Other non-current assets	5,861		107,767		184		—			113,812
Total assets	$	1,433,312	$	1,704,708	$	146,907	$	(1,442,774	)	$	1,842,153
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	15,625	$	69,809	$	2,263	$	(122	)	$	87,575
Accrued liabilities	23,567		148,279		56,577		—			228,423
Long-term debt due within one year	1,026		—		19		—			1,045
Total current liabilities	40,218		218,088		58,859		(122		)	317,043
Long-term debt	627,942		—		31		—			627,973
Deferred income taxes	—		94,574		—		(13,498		)	81,076
Intercompany payable	—		98,365		1,141		(99,506		)	—
Other non-current liabilities	20,083		45,132		5,777		—			70,992
Total shareholders' equity	745,069		1,248,549		81,099		(1,329,648		)	745,069
Total liabilities and shareholders' equity	$	1,433,312	$	1,704,708	$	146,907	$	(1,442,774	)	$	1,842,153

Condensed Consolidating Statements of Comprehensive Income

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Quarter Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	345,161		$	14,660		$	—		$	359,821
Service revenue	33,277			85,820			6,122			(34,398		)	90,821
Total revenue	33,277			430,981			20,782			(34,398		)	450,642
Cost of products	—			(120,533		)	(6,406		)	—			(126,939		)
Cost of services	(37,295		)	(31,189		)	(1,956		)	37,547			(32,893		)
Total cost of revenue	(37,295		)	(151,722		)	(8,362		)	37,547			(159,832		)
Gross profit	(4,018		)	279,259			12,420			3,149			290,810
Operating expenses	—			(187,953		)	(8,759		)	(3,149		)	(199,861		)
Operating (loss) income	(4,018		)	91,306			3,661			—			90,949
Interest expense	(4,917		)	(4,195		)	—			3,929			(5,183		)
Other income	3,680			541			150			(3,929		)	442
(Loss) income before income taxes	(5,255		)	87,652			3,811			—			86,208
Income tax benefit (provision)	3,529			(30,805		)	(543		)	—			(27,819		)
(Loss) income before equity in earnings of consolidated subsidiaries	(1,726		)	56,847			3,268			—			58,389
Equity in earnings of consolidated subsidiaries	60,115			3,268			—			(63,383		)	—
Net income	$	58,389		$	60,115		$	3,268		$	(63,383	)	$	58,389
Comprehensive income	$	59,282		$	60,957		$	3,751		$	(64,708	)	$	59,282

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Quarter Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	339,959		$	18,938		$	—		$	358,897
Service revenue	28,426			71,753			6,331			(29,533		)	76,977
Total revenue	28,426			411,712			25,269			(29,533		)	435,874
Cost of products	—			(118,527		)	(9,729		)	—			(128,256		)
Cost of services	(29,847		)	(26,174		)	(1,830		)	30,169			(27,682		)
Total cost of revenue	(29,847		)	(144,701		)	(11,559		)	30,169			(155,938		)
Gross profit	(1,421		)	267,011			13,710			636			279,936
Operating expenses	—			(180,869		)	(9,552		)	(636		)	(191,057		)
Operating (loss) income	(1,421		)	86,142			4,158			—			88,879
Interest expense	(4,104		)	(4,625		)	(1		)	4,310			(4,420		)
Other income	4,568			470			96			(4,310		)	824
(Loss) income before income taxes	(957		)	81,987			4,253			—			85,283
Income tax benefit (provision)	788			(28,960		)	(1,048		)	—			(29,220		)
(Loss) income before equity in earnings of consolidated subsidiaries	(169		)	53,027			3,205			—			56,063
Equity in earnings of consolidated subsidiaries	56,232			3,205			—			(59,437		)	—
Net income	$	56,063		$	56,232		$	3,205		$	(59,437	)	$	56,063
Comprehensive income	$	57,327		$	57,453		$	4,157		$	(61,610	)	$	57,327

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Six Months Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	697,834		$	28,172		$	—		$	726,006
Service revenue	67,095			173,937			12,235			(69,333		)	183,934
Total revenue	67,095			871,771			40,407			(69,333		)	909,940
Cost of products	—			(244,955		)	(12,578		)	—			(257,533		)
Cost of services	(75,323		)	(64,762		)	(3,666		)	77,147			(66,604		)
Total cost of revenue	(75,323		)	(309,717		)	(16,244		)	77,147			(324,137		)
Gross profit	(8,228		)	562,054			24,163			7,814			585,803
Operating expenses	—			(377,313		)	(17,085		)	(7,814		)	(402,212		)
Operating (loss) income	(8,228		)	184,741			7,078			—			183,591
Interest expense	(9,901		)	(6,965		)	(1		)	6,441			(10,426		)
Other income (expense)	6,308			867			(141		)	(6,441		)	593
(Loss) income before income taxes	(11,821		)	178,643			6,936			—			173,758
Income tax benefit (provision)	6,839			(62,786		)	(1,320		)	—			(57,267		)
(Loss) income before equity in earnings of consolidated subsidiaries	(4,982		)	115,857			5,616			—			116,491
Equity in earnings of consolidated subsidiaries	121,473			5,616			—			(127,089		)	—
Net income	$	116,491		$	121,473		$	5,616		$	(127,089	)	$	116,491
Comprehensive income	$	122,474		$	127,352		$	10,777		$	(138,129	)	$	122,474

Condensed Consolidating Statement of Comprehensive Income

(Unaudited)

	Six Months Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Product revenue	$	—		$	672,698		$	41,213		$	—		$	713,911
Service revenue	55,111			144,993			12,929			(57,452		)	155,581
Total revenue	55,111			817,691			54,142			(57,452		)	869,492
Cost of products	—			(230,780		)	(21,216		)	—			(251,996		)
Cost of services	(60,130		)	(54,754		)	(3,920		)	62,180			(56,624		)
Total cost of revenue	(60,130		)	(285,534		)	(25,136		)	62,180			(308,620		)
Gross profit	(5,019		)	532,157			29,006			4,728			560,872
Operating expenses	—			(361,627		)	(20,347		)	(4,728		)	(386,702		)
Operating (loss) income	(5,019		)	170,530			8,659			—			174,170
Loss on early debt extinguishment	(8,917		)	—			—			—			(8,917		)
Interest expense	(10,601		)	(5,995		)	(1		)	5,662			(10,935		)
Other income	5,943			608			365			(5,662		)	1,254
(Loss) income before income taxes	(18,594		)	165,143			9,023			—			155,572
Income tax benefit (provision)	7,289			(58,401		)	(2,457		)	—			(53,569		)
(Loss) income before equity in earnings of consolidated subsidiaries	(11,305		)	106,742			6,566			—			102,003
Equity in earnings of consolidated subsidiaries	113,308			6,566			—			(119,874		)	—
Net income	$	102,003		$	113,308		$	6,566		$	(119,874	)	$	102,003
Comprehensive income	$	97,510		$	108,730		$	1,450		$	(110,180	)	$	97,510

Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statement of Cash Flows

(Unaudited)

	Six Months Ended June 30, 2016
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(10,443	)	$	135,686		$	4,786		$	(1,763	)	$	128,266
Cash flows from investing activities:
Purchases of capital assets	(12,493		)	(8,357		)	(1,334		)	—			(22,184		)
Payments for acquisitions, net of cash acquired	—			(28,497		)	—			—			(28,497		)
Proceeds from company-owned life insurance policies	3,053			—			—			—			3,053
Other	(195		)	633			1,649			—			2,087
Net cash (used) provided by investing activities	(9,635		)	(36,221		)	315			—			(45,541		)
Cash flows from financing activities:
Proceeds from issuing long-term debt	107,000			—			—			—			107,000
Payments on long-term debt, including costs of debt reacquisition	(128,571		)	—			(13		)	—			(128,584		)
Proceeds from issuing shares under employee plans	4,193			—			—			—			4,193
Employee taxes paid for shares withheld	(2,260		)	—			—			—			(2,260		)
Payments for common shares repurchased	(29,981		)	—			—			—			(29,981		)
Cash dividends paid to shareholders	(29,446		)	—			—			—			(29,446		)
Advances from (to) consolidated subsidiaries	99,848			(97,988		)	(1,860		)	—			—
Other	(41		)	(376		)	—			—			(417		)
Net cash provided (used) by financing activities	20,742			(98,364		)	(1,873		)	—			(79,495		)
Effect of exchange rate change on cash	—			—			3,935			—			3,935
Net change in cash and cash equivalents	664			1,101			7,163			(1,763		)	7,165
Cash and cash equivalents, beginning of year	5,187			940			56,422			(122		)	62,427
Cash and cash equivalents, end of period	$	5,851		$	2,041		$	63,585		$	(1,885	)	$	69,592

Condensed Consolidating Statement of Cash Flows

(Unaudited)

	Six Months Ended June 30, 2015
(in thousands)	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Net cash (used) provided by operating activities	$	(3,699	)	$	139,604		$	7,793		$	3,209		$	146,907
Cash flows from investing activities:
Purchases of capital assets	(905		)	(16,997		)	(1,405		)	—			(19,307		)
Payments for acquisitions, net of cash acquired	(26		)	(35,774		)	—			—			(35,800		)
Other	(286		)	619			6			—			339
Net cash used by investing activities	(1,217		)	(52,152		)	(1,399		)	—			(54,768		)
Cash flows from financing activities:
Proceeds from short-term borrowings	75,000			—			—			—			75,000
Proceeds from issuing long-term debt	211,500			—			—			—			211,500
Payments on long-term debt, including costs of debt reacquisition	(346,015		)	—			(6		)	—			(346,021		)
Proceeds from issuing shares under employee plans	4,135			—			—			—			4,135
Excess tax benefit from share-based employee awards	1,557			—			—			—			1,557
Employee taxes paid for shares withheld	(871		)	—			—			—			(871		)
Cash dividends paid to shareholders	(30,043		)	—			—			—			(30,043		)
Advances from (to) consolidated subsidiaries	88,650			(88,232		)	(418		)	—			—
Other	(136		)	—			(150		)	—			(286		)
Net cash provided (used) by financing activities	3,777			(88,232		)	(574		)	—			(85,029		)
Effect of exchange rate change on cash	—			—			(3,725		)	—			(3,725		)
Net change in cash and cash equivalents	(1,139		)	(780		)	2,095			3,209			3,385
Cash and cash equivalents, beginning of year	8,335			4,342			52,193			(3,329		)	61,541
Cash and cash equivalents, end of period	$	7,196		$	3,562		$	54,288		$	(120	)	$	64,926

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Consolidated financial statements (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Impact of revision [Line Items]
Other current assets	$ 39,251		$ 42,605
Total current assets	332,993		323,985
Other non-current assets	118,273		113,812
Short-term borrowings			0
Total current liabilities	294,971		317,043
Long-term debt	612,787		627,973
Proceeds from short-term borrowings	0	$ 75,000
Proceeds from issuing long-term debt	107,000	211,500
Payments on long-term debt, including costs of debt reacquisition	$ (128,584)	(346,021)
As Previously Reported [Member]
Impact of revision [Line Items]
Other current assets			44,608
Total current assets			325,988
Other non-current assets			111,809
Short-term borrowings			434,000
Total current liabilities			751,043
Long-term debt			193,973
Proceeds from short-term borrowings		148,000
Proceeds from issuing long-term debt		0
Payments on long-term debt, including costs of debt reacquisition		(207,521)
Adjustment [Member]
Impact of revision [Line Items]
Other current assets			(2,003)
Total current assets			(2,003)
Other non-current assets			2,003
Short-term borrowings			(434,000)
Total current liabilities			(434,000)
Long-term debt			$ 434,000
Proceeds from short-term borrowings		(73,000)
Proceeds from issuing long-term debt		211,500
Payments on long-term debt, including costs of debt reacquisition		$ (138,500)

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New accounting pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Senior notes due 2020 [Member]
New accounting pronouncements [Line Items]
Debt issuance costs, long-term	$ 2,021	$ 2,021		$ 2,249
Credit facility [Member] | Other non-current assets [Member]
New accounting pronouncements [Line Items]
Debt issuance costs, short-term	1,687	1,687		2,003
Accounting Standards Update No. 2015-03 [Member] | Senior notes due 2020 [Member] | Other non-current assets [Member]
New accounting pronouncements [Line Items]
Debt issuance costs, long-term	(2,021)	(2,021)		(2,249)
Accounting Standards Update No. 2015-03 [Member] | Senior notes due 2020 [Member] | Long-term debt [Member]
New accounting pronouncements [Line Items]
Debt issuance costs, long-term	2,021	2,021		$ 2,249
Accounting Standards Update No. 2016-09 [Member]
New accounting pronouncements [Line Items]
New accounting pronouncement, effect of change on net income	$ 1,020	$ 1,512
New accounting pronouncement effect of change on effective income tax rate	1.20%	0.90%
New accounting pronouncement, effect of change on basic earnings per share	$ 0.02	$ 0.03
New accounting pronouncement, effect of change on diluted earnings per share	$ 0.02	$ 0.03
New accounting pronouncement, effect on net cash provided by operating activities, excess tax benefits		$ 1,811
New accounting pronouncement, effect on net cash used by financing activities, excess tax benefits		1,811
New accounting pronouncement, effect on net cash provided by operating activities. shares withheld		2,260	$ 871
New accounting pronouncement effect on net cash used by financing activities, shares withheld		$ 2,260	$ 871

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Supplemental balance sheet information (inventories and supplies) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Inventories and supplies
Raw materials	$ 5,649	$ 5,719
Semi-finished goods	8,353	8,208
Finished goods	20,993	24,955
Supplies	3,091	3,074
Inventories and supplies	$ 38,086	$ 41,956

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Supplemental balance sheet information (available-for-sale securities) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016		Dec. 31, 2015
Available-for-sale securities [Line Items]
Cost	$ 16,323		$ 16,774
Gross unrealized gains	0		0
Gross unrealized losses	(39)		(91)
Fair value	16,284		16,683
Measurement period adjustment, funds held for customers	18,743
Measurement period adjustment, liability for funds held for customers	18,743
Expected maturities of available-for-sale securities
Due in one year or less	9,148
Due in two to five years	4,556
Due in six to ten years	2,580
Fair value	16,284		16,683
Funds held for customers [Member]
Available-for-sale securities [Line Items]
Cost	16,323	[1]	15,158	[2]
Gross unrealized gains	0	[1]	0	[2]
Gross unrealized losses	(39)	[1]	(91)	[2]
Fair value	16,284	[1]	15,067	[2]
Cash	60,842		38,276
Expected maturities of available-for-sale securities
Fair value	16,284	[1]	15,067	[2]
Funds held for customers [Member] | Canadian and provincial government securities [Member]
Available-for-sale securities [Line Items]
Cost	8,585	[1]	7,932
Gross unrealized gains	0	[1]	0
Gross unrealized losses	(39)	[1]	(91)
Fair value	8,546	[1]	7,841
Expected maturities of available-for-sale securities
Fair value	8,546	[1]	7,841
Funds held for customers [Member] | Canadian guaranteed investment certificates [Member]
Available-for-sale securities [Line Items]
Cost	7,738	[1]	7,226
Gross unrealized gains	0	[1]	0
Gross unrealized losses	0	[1]	0
Fair value	7,738	[1]	7,226
Expected maturities of available-for-sale securities
Fair value	$ 7,738	[1]	7,226
Other current assets [Member] | Money market securities [Member] | Canadian [Member]
Available-for-sale securities [Line Items]
Cost			1,616
Gross unrealized gains			0
Gross unrealized losses			0
Fair value			1,616
Expected maturities of available-for-sale securities
Fair value			$ 1,616

[1] Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2016, also included cash of $60,842. This cash included amounts related to FISC Solutions, which was acquired in December 2015. This business provides cash receipt processing services. A portion of the cash receipts are remitted to our clients the business day following receipt. As such, the amounts on-hand are reported as funds held for customers in the consolidated balance sheets, with a corresponding liability included in accrued liabilities. The asset and liability of $18,743 were recorded as acquisition measurement-period balance sheet adjustments during 2016.

[2] Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2015, also included cash of $38,276.

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Supplemental balance sheet information (assets held for sale) (Details) - Assets held for sale [Member] - Small business distributors [Member] $ in Thousands	Jun. 30, 2016 USD ($) business	Dec. 31, 2015 USD ($) business
Assets held for sale [Line Items]
Number of businesses held for sale | business	1	1
Current assets	$ 4	$ 3
Intangibles	13,533	13,533
Other non-current assets	434	436
Accrued liabilities	(106)	(366)
Deferred income tax liabilities	(5,777)	(5,777)
Net assets held for sale	$ 8,088	$ 7,829

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Supplemental balance sheet information (intangibles) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Intangibles [Line Items]
Amortizable intangibles, gross carrying amount	$ 723,360		$ 723,360		$ 673,958
Accumulated amortization	(444,945)		(444,945)		(407,747)
Amortizable intangibles, net carrying amount	278,415		278,415		266,211
Gross carrying amount, total	742,460		742,460		693,058
Net carrying amount, total	297,515		297,515		285,311
Amortization of intangibles	18,943	$ 13,989	37,091	$ 27,739
Amount acquired			$ 48,898
Amount acquired, weighted-average amortization period (in years)			6 years
Estimated future amortization expense
Remainder of 2016	33,703		$ 33,703
2017	57,848		57,848
2018	43,803		43,803
2019	31,505		31,505
2020	26,382		26,382
Trade names [Member]
Intangibles [Line Items]
Indefinite-lived intangibles, carrying amount	19,100		19,100		19,100
Internal-use software [Member]
Intangibles [Line Items]
Amortizable intangibles, gross carrying amount	393,159		393,159		375,037
Accumulated amortization	(328,038)		(328,038)		(310,665)
Amortizable intangibles, net carrying amount	65,121		65,121		64,372
Amount acquired			$ 17,816
Amount acquired, weighted-average amortization period (in years)			3 years
Customer lists/relationships [Member]
Intangibles [Line Items]
Amortizable intangibles, gross carrying amount	234,012		$ 234,012		202,682
Accumulated amortization	(70,568)		(70,568)		(54,990)
Amortizable intangibles, net carrying amount	163,444		163,444		147,692
Amount acquired			$ 31,082
Amount acquired, weighted-average amortization period (in years)			7 years
Trade names [Member]
Intangibles [Line Items]
Amortizable intangibles, gross carrying amount	64,881		$ 64,881		64,881
Accumulated amortization	(38,787)		(38,787)		(36,325)
Amortizable intangibles, net carrying amount	26,094		26,094		28,556
Software to be sold [Member]
Intangibles [Line Items]
Amortizable intangibles, gross carrying amount	28,500		28,500		28,500
Accumulated amortization	(5,349)		(5,349)		(3,765)
Amortizable intangibles, net carrying amount	23,151		23,151		24,735
Other [Member]
Intangibles [Line Items]
Amortizable intangibles, gross carrying amount	2,808		2,808		2,858
Accumulated amortization	(2,203)		(2,203)		(2,002)
Amortizable intangibles, net carrying amount	$ 605		$ 605		$ 856

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Supplemental balance sheet information (goodwill) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Roll Forward]
Goodwill, gross, beginning of year	$ 996,415
Accumulated impairment charges, beginning of year	(20,000)
Goodwill, net of accumulated impairment charges, beginning of year	976,415
Currency translation adjustment	102
Goodwill, gross, end of period	997,092
Accumulated impairment charges, end of period	(20,000)
Goodwill, net of accumulated impairment charges, end of period	977,092
180 Fusion LLC [Member]
Goodwill [Roll Forward]
Goodwill acquired during period	575
Small Business Services [Member]
Goodwill [Roll Forward]
Goodwill, gross, beginning of year	671,295
Accumulated impairment charges, beginning of year	(20,000)
Goodwill, net of accumulated impairment charges, beginning of year	651,295
Currency translation adjustment	102
Goodwill, gross, end of period	671,972
Accumulated impairment charges, end of period	(20,000)
Goodwill, net of accumulated impairment charges, end of period	651,972
Small Business Services [Member] | 180 Fusion LLC [Member]
Goodwill [Roll Forward]
Goodwill acquired during period	575
Financial Services [Member]
Goodwill [Roll Forward]
Goodwill, gross, beginning of year	176,614
Accumulated impairment charges, beginning of year	0
Goodwill, net of accumulated impairment charges, beginning of year	176,614
Currency translation adjustment	0
Goodwill, gross, end of period	176,614
Accumulated impairment charges, end of period	0
Goodwill, net of accumulated impairment charges, end of period	176,614
Direct Checks [Member]
Goodwill [Roll Forward]
Goodwill, gross, beginning of year	148,506
Accumulated impairment charges, beginning of year	0
Goodwill, net of accumulated impairment charges, beginning of year	148,506
Currency translation adjustment	0
Goodwill, gross, end of period	148,506
Accumulated impairment charges, end of period	0
Goodwill, net of accumulated impairment charges, end of period	$ 148,506

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Supplemental balance sheet information (other) (Details) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Dec. 31, 2015
Other non-current assets
Contract acquisition costs		$ 58,792	$ 74,101	$ 64,170	$ 58,792
Loans and notes receivable from distributors				21,877	23,957
Postretirement benefit plan asset				18,596	16,250
Deferred advertising costs				6,980	7,500
Other				6,650	7,313
Other non-current assets				118,273	113,812
Contract acquisition costs [Roll Forward]
Balance, beginning of year		58,792	74,101
Additions	[1]	14,913	2,520
Amortization		(9,485)	(9,697)
Other		(50)	(2,714)
Balance, end of period		64,170	64,210
Contract acquisition payments		$ 14,341	$ 5,848
Accrued liabilities
Funds held for customers				75,932	52,366
Deferred revenue				36,072	48,119
Employee profit sharing/cash bonus				18,463	40,683
Customer rebates				16,975	18,900
Wages, including vacation				12,113	5,731
Contract acquisition costs due within one year				8,740	9,045
Restructuring due within one year (Note 9)				2,310	3,864
Other				39,984	49,715
Accrued liabilities				$ 210,589	$ 228,423

[1] Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $14,341 for the six months ended June 30, 2016 and $5,848 for the six months ended June 30, 2015.

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Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per share - basic:
Net income	$ 58,389	$ 56,063	$ 116,491	$ 102,003
Income allocated to participating securities	(493)	(376)	(954)	(669)
Income available to common shareholders	$ 57,896	$ 55,687	$ 115,537	$ 101,334
Weighted-average shares outstanding	48,611	49,770	48,699	49,732
Earnings per share - basic	$ 1.19	$ 1.12	$ 2.37	$ 2.04
Earnings per share - diluted:
Net income	$ 58,389	$ 56,063	$ 116,491	$ 102,003
Income allocated to participating securities	(489)	(374)	(948)	(665)
Re-measurement of share-based awards classified as liabilities	88	(132)	293	47
Income available to common shareholders	$ 57,988	$ 55,557	$ 115,836	$ 101,385
Weighted-average shares outstanding	48,611	49,770	48,699	49,732
Dilutive impact of potential common shares	429	400	412	404
Weighted-average shares and potential common shares outstanding	49,040	50,170	49,111	50,136
Earnings per share - diluted	$ 1.18	$ 1.11	$ 2.36	$ 2.02
Antidilutive options excluded from calculation	236	260	236	260

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Other comprehensive income (reclassification adjustments) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification adjustments [Line Items]
Total reclassifications, net of tax				$ 825
Amortization of postretirement benefit plan items [Member]
Reclassification adjustments [Line Items]
Total reclassifications, net of tax				825
Amounts reclassified from accumulated other comprehensive loss [Member] | Amortization of postretirement benefit plan items [Member]
Reclassification adjustments [Line Items]
Prior service credit	[1]	$ 355	$ 355	711	$ 711
Net actuarial loss	[1]	(949)	(780)	(1,899)	(1,560)
Total amortization	[1]	(594)	(425)	(1,188)	(849)
Tax benefit	[1]	182	113	363	226
Total reclassifications, net of tax		$ (412)	$ (312)	$ (825)	$ (623)

[1] Amortization of postretirement benefit plan items is included in the computation of net periodic benefit income. Additional details can be found in Note 10.

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Other comprehensive income (accumulated other comprehensive loss) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Accumulated other comprehensive loss [Line Items]
Accumulated other comprehensive loss, beginning of year	$ (55,203)
Other comprehensive income before reclassifications	5,158
Amounts reclassified from accumulated other comprehensive loss	825
Net current-period other comprehensive income	5,983
Accumulated other comprehensive loss, end of period	(49,220)
Postretirement benefit plans, net of tax [Member]
Accumulated other comprehensive loss [Line Items]
Accumulated other comprehensive loss, beginning of year	(38,822)
Other comprehensive income before reclassifications	0
Amounts reclassified from accumulated other comprehensive loss	825
Net current-period other comprehensive income	825
Accumulated other comprehensive loss, end of period	(37,997)
Net unrealized loss on marketable securities, net of tax [Member]
Accumulated other comprehensive loss [Line Items]
Accumulated other comprehensive loss, beginning of year	(114)	[1]
Other comprehensive income before reclassifications	43	[1]
Amounts reclassified from accumulated other comprehensive loss	0	[1]
Net current-period other comprehensive income	43	[1]
Accumulated other comprehensive loss, end of period	(71)	[1]
Unrealized holding gains on securities arising during the period, tax	15
Currency translation adjustment [Member]
Accumulated other comprehensive loss [Line Items]
Accumulated other comprehensive loss, beginning of year	(16,267)
Other comprehensive income before reclassifications	5,115
Amounts reclassified from accumulated other comprehensive loss	0
Net current-period other comprehensive income	5,115
Accumulated other comprehensive loss, end of period	$ (11,152)

[1] Other comprehensive income before reclassifications is net of income tax expense of $15.

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Acquisitions (Details) $ in Thousands		6 Months Ended
		Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($) business
Acquisitions [Line Items]
Intangibles acquired		$ 48,898
Payments for acquisitions, net of cash acquired		28,497	$ 35,800
Holdback payments for prior year acquisitions		1,441	$ 2,881
Customer lists/relationships [Member]
Acquisitions [Line Items]
Intangibles acquired		31,082
Internal-use software [Member]
Acquisitions [Line Items]
Intangibles acquired		17,816
180 Fusion LLC [Member]
Acquisitions [Line Items]
Goodwill acquired during period		575
2016 acquisitions [Member]
Acquisitions [Line Items]
Net tangible assets acquired and liabilities assumed		(909)
Intangibles acquired		32,332
Goodwill acquired during period		575
Total aggregate purchase price		31,998
Liabilities for holdback payments		(3,016)
Non-cash consideration	[1]	(1,926)
Payments for acquisitions, net of cash acquired		27,056
2016 acquisitions [Member] | Customer lists/relationships [Member]
Acquisitions [Line Items]
Intangibles acquired		31,082
2016 acquisitions [Member] | Internal-use software [Member]
Acquisitions [Line Items]
Intangibles acquired		$ 1,250
Small business distributors [Member]
Acquisitions [Line Items]
Number of businesses acquired | business			2
Small business distributors previously in Safeguard network [Member]
Acquisitions [Line Items]
Number of businesses acquired | business			1
2015 acquisitions [Member]
Acquisitions [Line Items]
Payments for acquisitions, net of cash acquired			$ 32,919

[1] Consists of pre-acquisition amounts owed to us by certain of the acquired businesses.

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Derivative financial instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Senior notes due 2020 [Member]
Derivative financial instruments [Line Items]
Increase (decrease) in debt due to fair value adjustments	$ 858	$ (4,842)
Fair value hedge related to long-term debt due in 2020 [Member]
Derivative financial instruments [Line Items]
Notional amount	200,000
Fair value of interest rate swaps, asset	858
Fair value of interest rate swaps, liability		(4,842)
Fair value hedge related to long-term debt due in 2020 [Member] | Senior notes due 2020 [Member]
Derivative financial instruments [Line Items]
Increase (decrease) in debt due to fair value adjustments	$ 858	$ (4,842)

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Fair value measurements (acquisitions) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Acquisitions [Line Items]
Intangibles acquired	$ 48,898
2016 acquisitions [Member]
Acquisitions [Line Items]
Intangibles acquired	32,332
Customer lists/relationships [Member]
Acquisitions [Line Items]
Intangibles acquired	31,082
Customer lists/relationships [Member] | 2016 acquisitions [Member]
Acquisitions [Line Items]
Intangibles acquired	$ 31,082

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Fair value measurements (recurring fair value measurements) (Details) - USD ($) $ in Thousands	6 Months Ended			12 Months Ended
	Jun. 30, 2016		Jun. 30, 2015	Dec. 31, 2015
Recurring fair value measurements [Line Items]
Net unrealized loss on investment in mutual funds	$ 234		$ 191
Available-for-sale marketable securities	16,284			$ 16,683
Long-term investment in mutual funds	1,792			$ 2,091
Verify Valid [Member]
Recurring fair value measurements [Line Items]
Contingent consideration, period				8 years
Liability for contingent consideration, maximum unlimited				There is no maximum amount of contingent payments specified in the agreement
Small business distributors [Member]
Recurring fair value measurements [Line Items]
Contingent consideration, period				3 years
Liability for contingent consideration, maximum amount				$ 925
Funds held for customers [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities	$ 16,284	[1]		15,067	[2]
Funds held for customers [Member] | Guaranteed investment certificates [Member]
Recurring fair value measurements [Line Items]
Maximum maturity period, debt securities	1 year
Available-for-sale marketable securities	$ 7,738	[1]		7,226
Other current assets [Member]
Recurring fair value measurements [Line Items]
Realized gain (loss) on available-for-sale securities	0		$ 0
Recurring fair value measurements [Member]
Recurring fair value measurements [Line Items]
Long-term investment in mutual funds	1,792			2,091
Derivative assets	858
Derivative liabilities				(4,842)
Accrued contingent consideration	(5,919)			(5,861)
Transfers between fair value levels	0
Recurring fair value measurements [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Recurring fair value measurements [Line Items]
Long-term investment in mutual funds	1,792			2,091
Derivative assets	0
Derivative liabilities				0
Accrued contingent consideration	0			0
Recurring fair value measurements [Member] | Significant other observable inputs (Level 2) [Member]
Recurring fair value measurements [Line Items]
Long-term investment in mutual funds	0			0
Derivative assets	858
Derivative liabilities				(4,842)
Accrued contingent consideration	0			0
Recurring fair value measurements [Member] | Significant unobservable inputs (Level 3) [Member]
Recurring fair value measurements [Line Items]
Long-term investment in mutual funds	0			0
Derivative assets	0
Derivative liabilities				0
Accrued contingent consideration	(5,919)			(5,861)
Recurring fair value measurements [Member] | Funds held for customers [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities	16,284			15,067
Recurring fair value measurements [Member] | Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities	0			0
Recurring fair value measurements [Member] | Funds held for customers [Member] | Significant other observable inputs (Level 2) [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities	16,284			15,067
Recurring fair value measurements [Member] | Funds held for customers [Member] | Significant unobservable inputs (Level 3) [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities	$ 0			0
Recurring fair value measurements [Member] | Other current assets [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities				1,616
Recurring fair value measurements [Member] | Other current assets [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities				0
Recurring fair value measurements [Member] | Other current assets [Member] | Significant other observable inputs (Level 2) [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities				1,616
Recurring fair value measurements [Member] | Other current assets [Member] | Significant unobservable inputs (Level 3) [Member]
Recurring fair value measurements [Line Items]
Available-for-sale marketable securities				$ 0

[1] Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2016, also included cash of $60,842. This cash included amounts related to FISC Solutions, which was acquired in December 2015. This business provides cash receipt processing services. A portion of the cash receipts are remitted to our clients the business day following receipt. As such, the amounts on-hand are reported as funds held for customers in the consolidated balance sheets, with a corresponding liability included in accrued liabilities. The asset and liability of $18,743 were recorded as acquisition measurement-period balance sheet adjustments during 2016.

[2] Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2015, also included cash of $38,276.

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Fair value measurements (changes in Level 3 recurring fair value measurement) (Details) - Accrued contingent consideration [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Change in accrued contingent consideration
Balance, beginning of year	$ 5,861
Change in fair value	434
Payments	(376)
Balance, end of period	$ 5,919

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Fair value measurements (other financial instruments) (Details) - USD ($) $ in Thousands		Jun. 30, 2016	Dec. 31, 2015
Carrying value [Member]
Fair value measurements, other financial instruments [Line Items]
Loans and notes receivable from distributors		$ 23,740	$ 25,745
Long-term debt	[1]	611,837	626,909
Carrying value [Member] | Cash [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		69,592	62,427
Carrying value [Member] | Funds held for customers [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		60,842	38,276
Fair value [Member]
Fair value measurements, other financial instruments [Line Items]
Loans and notes receivable from distributors		20,897	23,383
Long-term debt	[1]	620,900	641,000
Fair value [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Fair value measurements, other financial instruments [Line Items]
Loans and notes receivable from distributors		0	0
Long-term debt	[1]	0	0
Fair value [Member] | Significant other observable inputs (Level 2) [Member]
Fair value measurements, other financial instruments [Line Items]
Loans and notes receivable from distributors		0	0
Long-term debt	[1]	620,900	641,000
Fair value [Member] | Significant unobservable inputs (Level 3) [Member]
Fair value measurements, other financial instruments [Line Items]
Loans and notes receivable from distributors		20,897	23,383
Long-term debt	[1]	0	0
Fair value [Member] | Cash [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		69,592	62,427
Fair value [Member] | Cash [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		69,592	62,427
Fair value [Member] | Cash [Member] | Significant other observable inputs (Level 2) [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		0	0
Fair value [Member] | Cash [Member] | Significant unobservable inputs (Level 3) [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		0	0
Fair value [Member] | Funds held for customers [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		60,842	38,276
Fair value [Member] | Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		60,842	38,276
Fair value [Member] | Funds held for customers [Member] | Significant other observable inputs (Level 2) [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		0	0
Fair value [Member] | Funds held for customers [Member] | Significant unobservable inputs (Level 3) [Member]
Fair value measurements, other financial instruments [Line Items]
Cash		$ 0	$ 0

[1] Amounts exclude capital lease obligations.

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Restructuring charges (Details) $ in Thousands	3 Months Ended		6 Months Ended		30 Months Ended
	Jun. 30, 2016 USD ($) Employees	Jun. 30, 2015 USD ($) Employees	Jun. 30, 2016 USD ($) Employees	Jun. 30, 2015 USD ($) Employees	Jun. 30, 2016 USD ($) Employees		Dec. 31, 2015 USD ($)
Restructuring charges [Line Items]
Restructuring charges	$ 1,217	$ 1,154	$ 2,085	$ 1,418
Restructuring reversals			(468)		$ (2,259)	[1]
Net restructuring accruals	$ 1,000	$ 1,137	$ 1,578	$ 1,356
Number of employees in severance accruals | Employees	40	110	65	150
Other restructuring charges disclosures
Restructuring accruals, total	$ 2,310		$ 2,310		$ 2,310		$ 3,864
Number of employees that have not started to receive severance benefits | Employees	25		25		25
Total cost of revenue [Member]
Restructuring charges [Line Items]
Restructuring charges	$ 82	$ 188	$ 71	$ 185
Operating expenses [Member]
Restructuring charges [Line Items]
Restructuring charges	1,135	966	2,014	1,233
Severance [Member]
Restructuring charges [Line Items]
Restructuring charges	1,096	1,307	1,987	2,050
Restructuring reversals	(96)	(170)	(468)	(694)
Operating lease obligations [Member]
Restructuring charges [Line Items]
Restructuring charges	0	0	59	0
Other costs [Member]
Restructuring charges [Line Items]
Restructuring charges	$ 217	$ 17	$ 507	$ 62

[1] Includes accruals related to our cost reduction initiatives for 2014 through 2016.

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Restructuring charges (restructuring accruals by year and by segment) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended		18 Months Ended	30 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2016
Restructuring accruals [Line Items]
Balance, beginning of year				$ 3,864
Restructuring charges				2,046			$ 16,415	[1]
Restructuring reversals				(468)			(2,259)	[1]
Inter-segment transfer	[1]						0
Payments				(3,132)			(11,846)	[1]
Balance, end of period		$ 2,310		2,310		$ 2,310	2,310
2014 initiatives [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				176
Restructuring charges				0			8,242
Restructuring reversals				(111)			(1,444)
Payments				(65)			(6,798)
Balance, end of period		0		0		0	0
2015 initiatives [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				3,688
Restructuring charges				37		6,164
Restructuring reversals				(310)		(768)
Payments				(2,554)		(4,535)
Balance, end of period		861		861		861	861
2016 initiatives [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				0
Restructuring charges				2,009
Restructuring reversals				(47)
Payments				(513)
Balance, end of period		1,449		1,449		1,449	1,449
Employee severance benefits [Member]
Restructuring accruals [Line Items]
Restructuring reversals		(96)	$ (170)	(468)	$ (694)
Employee severance benefits [Member] | Small Business Services [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				1,023
Restructuring charges				892			6,617	[1]
Restructuring reversals				(93)			(1,293)	[1]
Inter-segment transfer	[1]						41
Payments				(994)			(4,537)	[1]
Balance, end of period		828		828		828	828
Employee severance benefits [Member] | Financial Services [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				884
Restructuring charges				510			4,769	[1]
Restructuring reversals				(39)			(350)	[1]
Inter-segment transfer	[1]						(14)
Payments				(538)			(3,588)	[1]
Balance, end of period		817		817		817	817
Employee severance benefits [Member] | Direct Checks [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				0
Restructuring charges				135			171	[1]
Restructuring reversals				0			(2)	[1]
Inter-segment transfer	[1]						0
Payments				0			(34)	[1]
Balance, end of period		135		135		135	135
Employee severance benefits [Member] | Corporate [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				1,859
Restructuring charges				450			4,461	[1]
Restructuring reversals				(336)			(614)	[1]
Inter-segment transfer	[1]						(27)
Payments				(1,483)			(3,330)	[1]
Balance, end of period		490		490		490	490
Operating lease obligations [Member] | Small Business Services [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				56
Restructuring charges				59			344	[1]
Restructuring reversals				0			0	[1]
Inter-segment transfer	[1]						0
Payments				(85)			(314)	[1]
Balance, end of period		30		30		30	30
Operating lease obligations [Member] | Direct Checks [Member]
Restructuring accruals [Line Items]
Balance, beginning of year				42
Restructuring charges				0			53	[1]
Restructuring reversals				0			0	[1]
Inter-segment transfer	[1]						0
Payments				(32)			(43)	[1]
Balance, end of period		$ 10		$ 10		$ 10	$ 10

[1] Includes accruals related to our cost reduction initiatives for 2014 through 2016.

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Postretirement benefits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net periodic benefit income
Interest cost	$ 780	$ 859	$ 1,559	$ 1,719
Expected return on plan assets	(1,834)	(1,958)	(3,667)	(3,917)
Amortization of prior service credit	(355)	(355)	(711)	(711)
Amortization of net actuarial losses	949	780	1,899	1,560
Net periodic benefit income	$ (460)	$ (674)	$ (920)	$ (1,349)

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Debt (Details) $ in Thousands		1 Months Ended			3 Months Ended		6 Months Ended		12 Months Ended
		Mar. 31, 2015 USD ($)	Nov. 30, 2012 USD ($)	Mar. 31, 2011 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Debt instruments [Line Items]
Long-term portion of debt					$ 612,787		$ 612,787		$ 627,973
Capital lease obligations due within one year					1,041		1,041		1,045
Total debt					$ 613,828		$ 613,828		629,018
Ratio of EBITDA to interest expense					2		2
Ratio of total debt less unrestricted cash to EBITDA					2.75		2.75
Loss on early debt extinguishment					$ 0	$ 0	$ 0	$ (8,917)
Capital lease obligations					1,991		$ 1,991		$ 2,109
Capital lease obligations, expiration date							Apr. 30, 2020
Credit facility commitment					$ 525,000		$ 525,000
Credit facility, date of expiration							Feb. 21, 2019
Credit facility, interest rate, amount outstanding					1.92%		1.92%		1.89%
Credit facility, daily average amount outstanding							$ 419,544		$ 270,063
Credit facility, weighted-average interest rate							1.86%		1.66%
Outstanding letters of credit	[1]				$ (12,795)		$ (12,795)
Credit facility, net available for borrowing at end of period					99,205		$ 99,205
Minimum [Member]
Debt instruments [Line Items]
Credit facility, commitment fee							0.20%
Maximum [Member]
Debt instruments [Line Items]
Credit facility, commitment fee							0.40%
Senior notes due 2020 [Member]
Debt instruments [Line Items]
Principal amount issued			$ 200,000		200,000		$ 200,000		$ 200,000
Less unamortized debt issuance costs					(2,021)		(2,021)		(2,249)
Cumulative change in fair value of hedged debt (Note 7)					858		858		(4,842)
Long-term portion of debt					198,837		198,837		192,909
Debt issuance date			Nov. 27, 2012
Stated interest rate			6.00%
Debt maturity date			Nov. 15, 2020
Proceeds from offering, net of offering costs			$ 196,340
Fair value of notes outstanding					207,900		207,900
Senior notes due 2020 [Member] | First optional redemption period [Member]
Debt instruments [Line Items]
Redemption period, end date			Nov. 15, 2016
Redemption price, percentage			100.00%
Senior notes due 2020 [Member] | Second optional redemption period [Member]
Debt instruments [Line Items]
Redemption period, start date			Nov. 15, 2016
Senior notes due 2020 [Member] | Second optional redemption period [Member] | Minimum [Member]
Debt instruments [Line Items]
Redemption price, percentage			100.00%
Senior notes due 2020 [Member] | Second optional redemption period [Member] | Maximum [Member]
Debt instruments [Line Items]
Redemption price, percentage			103.00%
Senior notes due 2020 [Member] | Mandatory redemption [Member]
Debt instruments [Line Items]
Redemption price, percentage			101.00%
Senior notes due 2019 [Member]
Debt instruments [Line Items]
Principal amount issued				$ 200,000
Debt issuance date				Mar. 15, 2011
Stated interest rate				7.00%
Debt maturity date				Mar. 15, 2019
Proceeds from offering, net of offering costs				$ 196,195
Principal amount retired		$ 200,000
Loss on early debt extinguishment								$ 8,917
Capital lease obligations [Member]
Debt instruments [Line Items]
Long-term portion of debt					950		950		1,064
Credit facility [Member]
Debt instruments [Line Items]
Long-term portion of debt					$ 413,000		413,000		434,000
Short-term bank loan [Member]
Debt instruments [Line Items]
Principal amount issued		$ 75,000
Debt issuance date		Mar. 05, 2015
Proceeds from offering, net of offering costs		$ 74,880
Short-term borrowings, daily average amount outstanding							$ 0		$ 47,178
Short-term borrowings, weighted-average interest rate							0.00%		1.59%

[1] We use standby letters of credit to collateralize certain obligations related primarily to our self-insured workers’ compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our credit facility.

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Other commitments and contingencies (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Sep. 30, 2014	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Environmental matters [Line Items]
Accruals for environmental matters		$ 3,375		$ 5,952
Expense for environmental matters		(1,874)	$ 725
Self-insurance
Self-insurance liabilities		6,664		$ 6,457
Litigation
Damages sought	$ 43,000
Environmental insurance policy purchased during 2002 [Member]
Environmental matters [Line Items]
Environmental insurance coverage		10,000
Environmental insurance policy purchased during 2009 [Member]
Environmental matters [Line Items]
Environmental insurance coverage		15,000
Environmental insurance policies in effect [Member]
Environmental matters [Line Items]
Accruals for environmental matters		$ 0

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Shareholders' equity (Details) - USD ($) shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	May 04, 2016	Aug. 01, 2003
Stockholders' Equity Note [Abstract]
Common shares authorized for repurchase				10,000
Common shares that remain available for repurchase	453
Common shares repurchased (in shares)	513
Payments for common shares repurchased	$ 29,981	$ 0
Share repurchase program, authorized amount			$ 300,000

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Business segment information (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Business segment information [Line Items]
Number of reportable business segments			3
Total revenue from external customers:	$ 450,642	$ 435,874	$ 909,940	$ 869,492
Operating income	90,949	88,879	183,591	174,170
Depreciation and amortization expense:	22,773	17,995	44,652	35,678
Total assets	1,868,902	1,686,307	1,868,902	1,686,307	$ 1,842,153
Capital asset purchases:	11,995	9,795	22,184	19,307
Reportable Business Segments [Member] | Small Business Services [Member]
Business segment information [Line Items]
Total revenue from external customers:	288,182	282,285	578,453	559,251
Operating income	48,956	48,225	100,106	97,672
Depreciation and amortization expense:	12,809	11,231	24,881	21,440
Total assets	1,023,798	980,405	1,023,798	980,405
Capital asset purchases:	0	0	0	0
Reportable Business Segments [Member] | Small Business Services [Member] | Checks [Member] | Product concentration risk [Member]
Business segment information [Line Items]
Percentage of revenue					40.10%
Reportable Business Segments [Member] | Financial Services [Member]
Business segment information [Line Items]
Total revenue from external customers:	124,230	112,699	251,478	224,240
Operating income	29,034	25,506	55,759	45,916
Depreciation and amortization expense:	9,074	5,791	18,011	11,781
Total assets	432,152	272,495	432,152	272,495
Capital asset purchases:	0	0	0	0
Reportable Business Segments [Member] | Financial Services [Member] | Checks [Member] | Product concentration risk [Member]
Business segment information [Line Items]
Percentage of revenue					59.70%
Reportable Business Segments [Member] | Direct Checks [Member]
Business segment information [Line Items]
Total revenue from external customers:	38,230	40,890	80,009	86,001
Operating income	12,959	15,148	27,726	30,582
Depreciation and amortization expense:	890	973	1,760	2,457
Total assets	160,935	162,058	160,935	162,058
Capital asset purchases:	0	0	0	0
Reportable Business Segments [Member] | Direct Checks [Member] | Checks [Member] | Product concentration risk [Member]
Business segment information [Line Items]
Percentage of revenue					84.60%
Corporate [Member]
Business segment information [Line Items]
Total revenue from external customers:	0	0	0	0
Operating income	0	0	0	0
Depreciation and amortization expense:	0	0	0	0
Total assets	252,017	271,349	252,017	271,349
Capital asset purchases:	$ 11,995	$ 9,795	$ 22,184	$ 19,307

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Supplemental guarantor financial information (Condensed Consolidating Balance Sheets) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 69,592	$ 62,427	$ 64,926	$ 61,541
Trade accounts receivable, net	108,938	123,654
Inventories and supplies	38,086	41,956
Funds held for customers	77,126	53,343
Other current assets	39,251	42,605
Total current assets	332,993	323,985
Deferred income taxes	1,756	1,238
Long-term investments	42,423	41,691
Property, plant and equipment, net	84,883	85,732
Assets held for sale	13,967	13,969
Intangibles, net	297,515	285,311
Goodwill	977,092	976,415
Investments In consolidated subsidiaries	0	0
Intercompany receivable	0	0
Other non-current assets	118,273	113,812
Total assets	1,868,902	1,842,153	1,686,307
Current liabilities:
Accounts payable	83,341	87,575
Accrued liabilities	210,589	228,423
Long-term debt due within one year	1,041	1,045
Total current liabilities	294,971	317,043
Long-term debt	612,787	627,973
Deferred income taxes	80,962	81,076
Intercompany payable	0	0
Other non-current liabilities	63,440	70,992
Total shareholders' equity	816,742	745,069
Total liabilities and shareholders' equity	1,868,902	1,842,153
Eliminations [Member]
Current assets:
Cash and cash equivalents	(1,885)	(122)	(120)	(3,329)
Trade accounts receivable, net	0	0
Inventories and supplies	0	0
Funds held for customers	0	0
Other current assets	0	0
Total current assets	(1,885)	(122)
Deferred income taxes	(14,083)	(13,498)
Long-term investments	0	0
Property, plant and equipment, net	0	0
Assets held for sale	0	0
Intangibles, net	0	0
Goodwill	0	0
Investments In consolidated subsidiaries	(1,467,050)	(1,329,648)
Intercompany receivable	(5,305)	(99,506)
Other non-current assets	0	0
Total assets	(1,488,323)	(1,442,774)
Current liabilities:
Accounts payable	(1,885)	(122)
Accrued liabilities	0	0
Long-term debt due within one year	0	0
Total current liabilities	(1,885)	(122)
Long-term debt	0	0
Deferred income taxes	(14,083)	(13,498)
Intercompany payable	(5,305)	(99,506)
Other non-current liabilities	0	0
Total shareholders' equity	(1,467,050)	(1,329,648)
Total liabilities and shareholders' equity	(1,488,323)	(1,442,774)
Deluxe Corporation [Member]
Current assets:
Cash and cash equivalents	5,851	5,187	7,196	8,335
Trade accounts receivable, net	0	0
Inventories and supplies	0	0
Funds held for customers	0	0
Other current assets	5,815	7,230
Total current assets	11,666	12,417
Deferred income taxes	14,083	13,498
Long-term investments	34,686	34,304
Property, plant and equipment, net	10,253	10,111
Assets held for sale	0	0
Intangibles, net	16,298	9,066
Goodwill	0	0
Investments In consolidated subsidiaries	1,375,178	1,248,549
Intercompany receivable	5,274	99,506
Other non-current assets	6,738	5,861
Total assets	1,474,176	1,433,312
Current liabilities:
Accounts payable	17,139	15,625
Accrued liabilities	13,624	23,567
Long-term debt due within one year	1,004	1,026
Total current liabilities	31,767	40,218
Long-term debt	612,715	627,942
Deferred income taxes	0	0
Intercompany payable	0	0
Other non-current liabilities	12,952	20,083
Total shareholders' equity	816,742	745,069
Total liabilities and shareholders' equity	1,474,176	1,433,312
Guarantor subsidiaries [Member]
Current assets:
Cash and cash equivalents	2,041	940	3,562	4,342
Trade accounts receivable, net	100,303	115,951
Inventories and supplies	35,832	39,758
Funds held for customers	20,342	0
Other current assets	31,602	32,765
Total current assets	190,120	189,414
Deferred income taxes	0	0
Long-term investments	7,737	7,387
Property, plant and equipment, net	69,652	71,017
Assets held for sale	0	0
Intangibles, net	277,709	273,051
Goodwill	975,548	974,973
Investments In consolidated subsidiaries	91,872	81,099
Intercompany receivable	0	0
Other non-current assets	111,440	107,767
Total assets	1,724,078	1,704,708
Current liabilities:
Accounts payable	65,707	69,809
Accrued liabilities	138,132	148,279
Long-term debt due within one year	0	0
Total current liabilities	203,839	218,088
Long-term debt	0	0
Deferred income taxes	95,045	94,574
Intercompany payable	5,305	98,365
Other non-current liabilities	44,711	45,132
Total shareholders' equity	1,375,178	1,248,549
Total liabilities and shareholders' equity	1,724,078	1,704,708
Non-guarantor subsidiaries [Member]
Current assets:
Cash and cash equivalents	63,585	56,422	$ 54,288	$ 52,193
Trade accounts receivable, net	8,635	7,703
Inventories and supplies	2,254	2,198
Funds held for customers	56,784	53,343
Other current assets	1,834	2,610
Total current assets	133,092	122,276
Deferred income taxes	1,756	1,238
Long-term investments	0	0
Property, plant and equipment, net	4,978	4,604
Assets held for sale	13,967	13,969
Intangibles, net	3,508	3,194
Goodwill	1,544	1,442
Investments In consolidated subsidiaries	0	0
Intercompany receivable	31	0
Other non-current assets	95	184
Total assets	158,971	146,907
Current liabilities:
Accounts payable	2,380	2,263
Accrued liabilities	58,833	56,577
Long-term debt due within one year	37	19
Total current liabilities	61,250	58,859
Long-term debt	72	31
Deferred income taxes	0	0
Intercompany payable	0	1,141
Other non-current liabilities	5,777	5,777
Total shareholders' equity	91,872	81,099
Total liabilities and shareholders' equity	$ 158,971	$ 146,907

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Supplemental guarantor financial information (Condensed Consolidating Statements of Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Consolidating Statements of Comprehensive Income [Abstract]
Product revenue	$ 359,821	$ 358,897	$ 726,006	$ 713,911
Service revenue	90,821	76,977	183,934	155,581
Total revenue	450,642	435,874	909,940	869,492
Cost of products	(126,939)	(128,256)	(257,533)	(251,996)
Cost of services	(32,893)	(27,682)	(66,604)	(56,624)
Total cost of revenue	(159,832)	(155,938)	(324,137)	(308,620)
Gross profit	290,810	279,936	585,803	560,872
Operating expenses	(199,861)	(191,057)	(402,212)	(386,702)
Operating income	90,949	88,879	183,591	174,170
Loss on early debt extinguishment	0	0	0	(8,917)
Interest expense	(5,183)	(4,420)	(10,426)	(10,935)
Other income (expense)	442	824	593	1,254
Income before income taxes	86,208	85,283	173,758	155,572
Income tax benefit (provision)	(27,819)	(29,220)	(57,267)	(53,569)
(Loss) income before equity in earnings of consolidated subsidiaries	58,389	56,063	116,491	102,003
Equity in earnings of consolidated subsidiaries	0	0	0	0
Net income	58,389	56,063	116,491	102,003
Comprehensive income	59,282	57,327	122,474	97,510
Eliminations [Member]
Condensed Consolidating Statements of Comprehensive Income [Abstract]
Product revenue	0	0	0	0
Service revenue	(34,398)	(29,533)	(69,333)	(57,452)
Total revenue	(34,398)	(29,533)	(69,333)	(57,452)
Cost of products	0	0	0	0
Cost of services	37,547	30,169	77,147	62,180
Total cost of revenue	37,547	30,169	77,147	62,180
Gross profit	3,149	636	7,814	4,728
Operating expenses	(3,149)	(636)	(7,814)	(4,728)
Operating income	0	0	0	0
Loss on early debt extinguishment				0
Interest expense	3,929	4,310	6,441	5,662
Other income (expense)	(3,929)	(4,310)	(6,441)	(5,662)
Income before income taxes	0	0	0	0
Income tax benefit (provision)	0	0	0	0
(Loss) income before equity in earnings of consolidated subsidiaries	0	0	0	0
Equity in earnings of consolidated subsidiaries	(63,383)	(59,437)	(127,089)	(119,874)
Net income	(63,383)	(59,437)	(127,089)	(119,874)
Comprehensive income	(64,708)	(61,610)	(138,129)	(110,180)
Deluxe Corporation [Member]
Condensed Consolidating Statements of Comprehensive Income [Abstract]
Product revenue	0	0	0	0
Service revenue	33,277	28,426	67,095	55,111
Total revenue	33,277	28,426	67,095	55,111
Cost of products	0	0	0	0
Cost of services	(37,295)	(29,847)	(75,323)	(60,130)
Total cost of revenue	(37,295)	(29,847)	(75,323)	(60,130)
Gross profit	(4,018)	(1,421)	(8,228)	(5,019)
Operating expenses	0	0	0	0
Operating income	(4,018)	(1,421)	(8,228)	(5,019)
Loss on early debt extinguishment				(8,917)
Interest expense	(4,917)	(4,104)	(9,901)	(10,601)
Other income (expense)	3,680	4,568	6,308	5,943
Income before income taxes	(5,255)	(957)	(11,821)	(18,594)
Income tax benefit (provision)	3,529	788	6,839	7,289
(Loss) income before equity in earnings of consolidated subsidiaries	(1,726)	(169)	(4,982)	(11,305)
Equity in earnings of consolidated subsidiaries	60,115	56,232	121,473	113,308
Net income	58,389	56,063	116,491	102,003
Comprehensive income	59,282	57,327	122,474	97,510
Guarantor subsidiaries [Member]
Condensed Consolidating Statements of Comprehensive Income [Abstract]
Product revenue	345,161	339,959	697,834	672,698
Service revenue	85,820	71,753	173,937	144,993
Total revenue	430,981	411,712	871,771	817,691
Cost of products	(120,533)	(118,527)	(244,955)	(230,780)
Cost of services	(31,189)	(26,174)	(64,762)	(54,754)
Total cost of revenue	(151,722)	(144,701)	(309,717)	(285,534)
Gross profit	279,259	267,011	562,054	532,157
Operating expenses	(187,953)	(180,869)	(377,313)	(361,627)
Operating income	91,306	86,142	184,741	170,530
Loss on early debt extinguishment				0
Interest expense	(4,195)	(4,625)	(6,965)	(5,995)
Other income (expense)	541	470	867	608
Income before income taxes	87,652	81,987	178,643	165,143
Income tax benefit (provision)	(30,805)	(28,960)	(62,786)	(58,401)
(Loss) income before equity in earnings of consolidated subsidiaries	56,847	53,027	115,857	106,742
Equity in earnings of consolidated subsidiaries	3,268	3,205	5,616	6,566
Net income	60,115	56,232	121,473	113,308
Comprehensive income	60,957	57,453	127,352	108,730
Non-guarantor subsidiaries [Member]
Condensed Consolidating Statements of Comprehensive Income [Abstract]
Product revenue	14,660	18,938	28,172	41,213
Service revenue	6,122	6,331	12,235	12,929
Total revenue	20,782	25,269	40,407	54,142
Cost of products	(6,406)	(9,729)	(12,578)	(21,216)
Cost of services	(1,956)	(1,830)	(3,666)	(3,920)
Total cost of revenue	(8,362)	(11,559)	(16,244)	(25,136)
Gross profit	12,420	13,710	24,163	29,006
Operating expenses	(8,759)	(9,552)	(17,085)	(20,347)
Operating income	3,661	4,158	7,078	8,659
Loss on early debt extinguishment				0
Interest expense	0	(1)	(1)	(1)
Other income (expense)	150	96	(141)	365
Income before income taxes	3,811	4,253	6,936	9,023
Income tax benefit (provision)	(543)	(1,048)	(1,320)	(2,457)
(Loss) income before equity in earnings of consolidated subsidiaries	3,268	3,205	5,616	6,566
Equity in earnings of consolidated subsidiaries	0	0	0	0
Net income	3,268	3,205	5,616	6,566
Comprehensive income	$ 3,751	$ 4,157	$ 10,777	$ 1,450

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Supplemental guarantor financial information (Condensed Consolidating Statements of Cash Flows) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Condensed Consolidating Statements of Cash Flows [Abstract}
Net cash provided by operating activities			$ 128,266	$ 146,907
Cash flows from investing activities:
Purchases of capital assets	$ (11,995)	$ (9,795)	(22,184)	(19,307)
Payments for acquisitions, net of cash acquired			(28,497)	(35,800)
Proceeds from company-owned life insurance policies			3,053	0
Other			2,087	339
Net cash used by investing activities			(45,541)	(54,768)
Cash flows from financing activities:
Proceeds from short-term borrowings			0	75,000
Proceeds from issuing long-term debt			107,000	211,500
Payments on long-term debt, including costs of debt reacquisition			(128,584)	(346,021)
Proceeds from issuing shares under employee plans			4,193	4,135
Excess tax benefit from share-based employee awards			0	1,557
Employee taxes paid for shares withheld			(2,260)	(871)
Payments for common shares repurchased			(29,981)	0
Cash dividends paid to shareholders			(29,446)	(30,043)
Advances from (to) consolidated subsidiaries			0	0
Other			(417)	(286)
Net cash used by financing activities			(79,495)	(85,029)
Effect of exchange rate change on cash			3,935	(3,725)
Net change in cash and cash equivalents			7,165	3,385
Cash and cash equivalents, beginning of year			62,427	61,541
Cash and cash equivalents, end of period	69,592	64,926	69,592	64,926
Eliminations [Member]
Condensed Consolidating Statements of Cash Flows [Abstract}
Net cash provided by operating activities			(1,763)	3,209
Cash flows from investing activities:
Purchases of capital assets			0	0
Payments for acquisitions, net of cash acquired			0	0
Proceeds from company-owned life insurance policies			0
Other			0	0
Net cash used by investing activities			0	0
Cash flows from financing activities:
Proceeds from short-term borrowings				0
Proceeds from issuing long-term debt			0	0
Payments on long-term debt, including costs of debt reacquisition			0	0
Proceeds from issuing shares under employee plans			0	0
Excess tax benefit from share-based employee awards				0
Employee taxes paid for shares withheld			0	0
Payments for common shares repurchased			0
Cash dividends paid to shareholders			0	0
Advances from (to) consolidated subsidiaries			0	0
Other			0	0
Net cash used by financing activities			0	0
Effect of exchange rate change on cash			0	0
Net change in cash and cash equivalents			(1,763)	3,209
Cash and cash equivalents, beginning of year			(122)	(3,329)
Cash and cash equivalents, end of period	(1,885)	(120)	(1,885)	(120)
Deluxe Corporation [Member]
Condensed Consolidating Statements of Cash Flows [Abstract}
Net cash provided by operating activities			(10,443)	(3,699)
Cash flows from investing activities:
Purchases of capital assets			(12,493)	(905)
Payments for acquisitions, net of cash acquired			0	(26)
Proceeds from company-owned life insurance policies			3,053
Other			(195)	(286)
Net cash used by investing activities			(9,635)	(1,217)
Cash flows from financing activities:
Proceeds from short-term borrowings				75,000
Proceeds from issuing long-term debt			107,000	211,500
Payments on long-term debt, including costs of debt reacquisition			(128,571)	(346,015)
Proceeds from issuing shares under employee plans			4,193	4,135
Excess tax benefit from share-based employee awards				1,557
Employee taxes paid for shares withheld			(2,260)	(871)
Payments for common shares repurchased			(29,981)
Cash dividends paid to shareholders			(29,446)	(30,043)
Advances from (to) consolidated subsidiaries			99,848	88,650
Other			(41)	(136)
Net cash used by financing activities			20,742	3,777
Effect of exchange rate change on cash			0	0
Net change in cash and cash equivalents			664	(1,139)
Cash and cash equivalents, beginning of year			5,187	8,335
Cash and cash equivalents, end of period	5,851	7,196	5,851	7,196
Guarantor subsidiaries [Member]
Condensed Consolidating Statements of Cash Flows [Abstract}
Net cash provided by operating activities			135,686	139,604
Cash flows from investing activities:
Purchases of capital assets			(8,357)	(16,997)
Payments for acquisitions, net of cash acquired			(28,497)	(35,774)
Proceeds from company-owned life insurance policies			0
Other			633	619
Net cash used by investing activities			(36,221)	(52,152)
Cash flows from financing activities:
Proceeds from short-term borrowings				0
Proceeds from issuing long-term debt			0	0
Payments on long-term debt, including costs of debt reacquisition			0	0
Proceeds from issuing shares under employee plans			0	0
Excess tax benefit from share-based employee awards				0
Employee taxes paid for shares withheld			0	0
Payments for common shares repurchased			0
Cash dividends paid to shareholders			0	0
Advances from (to) consolidated subsidiaries			(97,988)	(88,232)
Other			(376)	0
Net cash used by financing activities			(98,364)	(88,232)
Effect of exchange rate change on cash			0	0
Net change in cash and cash equivalents			1,101	(780)
Cash and cash equivalents, beginning of year			940	4,342
Cash and cash equivalents, end of period	2,041	3,562	2,041	3,562
Non-guarantor subsidiaries [Member]
Condensed Consolidating Statements of Cash Flows [Abstract}
Net cash provided by operating activities			4,786	7,793
Cash flows from investing activities:
Purchases of capital assets			(1,334)	(1,405)
Payments for acquisitions, net of cash acquired			0	0
Proceeds from company-owned life insurance policies			0
Other			1,649	6
Net cash used by investing activities			315	(1,399)
Cash flows from financing activities:
Proceeds from short-term borrowings				0
Proceeds from issuing long-term debt			0	0
Payments on long-term debt, including costs of debt reacquisition			(13)	(6)
Proceeds from issuing shares under employee plans			0	0
Excess tax benefit from share-based employee awards				0
Employee taxes paid for shares withheld			0	0
Payments for common shares repurchased			0
Cash dividends paid to shareholders			0	0
Advances from (to) consolidated subsidiaries			(1,860)	(418)
Other			0	(150)
Net cash used by financing activities			(1,873)	(574)
Effect of exchange rate change on cash			3,935	(3,725)
Net change in cash and cash equivalents			7,163	2,095
Cash and cash equivalents, beginning of year			56,422	52,193
Cash and cash equivalents, end of period	$ 63,585	$ 54,288	$ 63,585	$ 54,288